Two New DEA Revocation Orders: An Expansion of Authority Over NTPs and a Red-Flag Standard DEA Quietly Kept Alive

By Hunter DeKoninck

Published: October 2, 2026

DEA published two Decisions today—one revoking a narcotic treatment program’s (“NTP”) registration and the other revoking a pharmacy’s registration. Clients have asked whether either decision signals a new DEA enforcement theory or a novel position the agency hasn’t historically taken. From my read, one of the decisions signals something “new” for NTPs.  The other is a quieter story: DEA reasserting a legal standard that a controlling federal appeals court rejected eight months ago, in a case arising in the very circuit that rejected it—and getting away with it only because nobody was there to object.

This post is for general informational purposes and does not constitute legal advice. Consult counsel regarding your specific compliance obligations.

The Two Cases at a Glance

By Grace Inc. Counseling Services — The registrant was an NTP in Baltimore, Maryland. DEA alleged nearly a decade of recordkeeping violations (e.g. unexplained overages and shortages, commingled tablets from different manufacturers, incomplete dispensing logs, defective powers of attorney, and botched DEA Forms 222) and, in addition, “material falsification” (the clinic's owner answered "no" to the criminal conviction question on at least 17 registration applications despite a 1991 controlled-substance conviction). DEA revoked the registration.

St. Michael's Pharmacy — The registrant was a retail pharmacy in Rosenberg, Texas. DEA alleged the pharmacy filled Schedule II opioid prescriptions for nearly two years despite textbook red flags, including 65% of all oxycodone 30mg prescriptions came from just six physicians, multiple patients were filling overlapping opioid prescriptions from five or six different doctors at five to seven different pharmacies, and the pharmacy's inventory records couldn't account for over 73,000 dosage units of controlled substances. Notably, Texas had already revoked the pharmacy’s state license, which made DEA’s pursuant of revocation pretty simple. The pharmacy never requested a hearing, so it defaulted.

By Grace - DEA Expands its Reach Over NTPs

For years, DEA's own precedent (cases like Turning Tide and Houston Maintenance Clinic) treated NTPs as a special category with a narrower revocation standard: NTPs could lose their registration for failing to meet the treatment standards requirements in 21 U.S.C. § 823(h). However, it was an open question whether the other four grounds for revocation in § 824(a) (including material falsification of an application) extended to NTPs.

That ambiguity was real enough that the administrative law judge who heard By Grace's case declined to even reach the falsification charge, reasoning that DEA lacked authority to apply it to an NTP in the first place. However, on review, DEA Administrator Terrance C. Cole rejected that limitation outright. Reading the statute's plain text and the legislative history of the 1974 Narcotic Addict Treatment Act, Cole determined that nothing carves NTPs out of § 824(a)(1)-(5) and, thus, they are subject to the full menu of revocation grounds like any other registrant, material falsification included.

This is a genuine expansion of DEA’s toolkit against methadone and buprenorphine clinics specifically, decided over the objection of the agency's own ALJ. Going forward, DEA no longer needs to fit issues like falsification into the narrower treatment standards argument.

St. Michael’s Pharmacy - DEA Deploys the "Red Flags" Doctrine for the First Time Post-Neumann’s Pharmacy…And it Does So in a Slam Dunk, Uncontested Case

This one is worth paying closest attention to, and it isn't on the face of the St. Michael's decision — it only shows up when you read it against the federal court’s Neumann’s Pharmacy ruling from eight months earlier. Post-Neumann’s Pharmacy, it has remained unclear what DEA’s red flag doctrine will look like going forward or what parts of it will survive federal court scrutiny when challenged further. This case serves as an early read for how DEA will handle corresponding responsibility cases in this new environment and, based on my read, it signals that DEA may be inclined to reserve the doctrine for slam-dunk cases. St. Michael's is such a slam-dunk case where DEA had no likelihood of losing.

On February 13, 2026, the Fifth Circuit decided Neumann's Pharmacy, L.L.C. v. Drug Enforcement Administration, No. 25-60068 — a case out of Louisiana, squarely within the Fifth Circuit. The court vacated DEA's revocation order on two grounds that go directly to the heart of the "corresponding responsibility" doctrine. First, it held that 21 C.F.R. § 1306.04(a) requires a pharmacist to have actually known a prescription was invalid — DEA's long-used "reason to know" standard, built on negligence and red flags, doesn't satisfy what the regulation's text actually says. Second, it held that "usual course of professional practice" isn't a vehicle for federalizing state standard-of-care negligence: violating a state pharmacy board guideline alone doesn't establish a CSA violation. The court declined to "convert every act of negligence under state law into a federal felony."

That is a direct hit on the exact legal theory DEA has used against pharmacies for over a decade: that careless or negligent handling of controlled substances, without proof of actual knowledge or intent, is enough to support revocation.

St. Michael's cites Neumann's just one time. That citation is for a single, favorable line: "DEA unquestionably has broad authority to deregister pharmacies and substantial discretion to shape policy within statutory bounds." Nowhere in the decision does DEA engage with, distinguish, or even acknowledge Neumann's actual holding on the knowledge requirement. In the very same decision, DEA reasserts, unchanged, that "the Agency is not only concerned with acts of intentional diversion," because "careless or negligent handling of controlled substances creates the opportunity for diversion" and can justify revocation — citing older agency precedent as though Neumann's had never been decided.

St. Michael's Pharmacy is in Texas, which is inside the Fifth Circuit, the same court that decided Neumann's and the court that would hear any appeal of a Texas registrant's order under 21 U.S.C. § 877. DEA was able to apply a legal standard that circuit had just rejected, in a case arising in that circuit, only because St. Michael's defaulted. No hearing was requested by the pharmacy, no response was filed by it, and no one was in a position to raise Neumann's against DEA. Had the pharmacy actually litigated, Neumann's would have been a live (arguably dispositive) defense on exactly the theory DEA relied on.

My Read

Put the two decisions together and the real story isn't that DEA announced some bold new enforcement theory. It's that current DEA leadership is willing to push its authority into corners it hasn't fully occupied before (narcotic treatment programs), while, in the pharmacy space, continuing to rely on a legal standard it is no longer clearly entitled to use — at least in Texas, Louisiana, and Mississippi — and getting away with it through selective citation and the good fortune of an uncontested default. That is a meaningfully different posture than "DEA's doctrine is unaffected." It suggests the agency is prepared to keep using the old playbook anywhere a registrant doesn't fight back, while quietly hoping the Neumann's problem never has to be confronted head-on in a litigated case.

For any client with a pharmacy registration in the Fifth Circuit facing an Order to Show Cause built on red flags and negligence rather than proof of actual knowledge, that is a real, currently-live argument and defaulting, as St. Michael's did, forfeits it entirely.