Address of Gene R. Haislip, Esq. before the Annual Meeting of National Association of State Controlled Substances Authorities in Charleston, South Carolina, Oct. 27, 1998

Dear Friends and Colleagues,

It is an honor and a pleasure to be invited to address you on this occasion. Of course, I have given many speeches in my career, including also previous meetings of this organization. But, in those days, many people felt constrained to tolerate me a bit out of deference to the fact that someone in Washington had given me a title and a little authority. Now that I am just a private citizen, I feel honored that you may still wish to hear from me. Moreover, it is important to me because, although I have retired from DEA, I am no less interested and committed to our common cause than ever was the case and I am pleased to continue to make some contribution to it.

When I first retired and began my current consulting business, I was sometimes asked how it felt "to change sides". I always quickly responded that I didn't know, because I hadn't changed sides. But let me just as quickly add that I never considered "my side" to be just DEA or the government. Whether I served well or ill, I was always on the side of the people and their needs and aspirations, especially for their protection from crime, ignorance and ill health; which includes the proper use of drugs, just as it excludes their improper use. In this way I know that however I may fall short, it will not be from want of the right cause. Nor do I find that this is in any way incompatible with honest, professional service to honorable clients.

It happens that this year, I have also been privileged to continue my long years of cooperation with the United Nations Drug Control Program. I am pleased that they have called upon my services to help in the design of a chemical control program for the new Central Asian republics. This is the area where just now, a great mass of illegal chemical commerce is flowing into Afghanistan to support the world's largest heroin industry. And so I have been able to resume my travels to the former socialist countries, which have interested me for some years. There one may see graphically what happens to a people and culture which has been robbed of initiative and every nickel for over seventy years.

Shuttling between the East and West in this fashion, one may see such stark contrasts of want and abundance on such a pervasive scale as to constitute a new experience. To a considerable extent, what we see is a direct result of the two different social systems that have produced this marked contrast. And, whereas the problems of need are all so pervasive and easy to recognize, nevertheless there are significant, if more subtle problems that arise from abundance. I think that this thought is extremely relevant to some of the issues which are of concern to all of us. These are the problems of keeping the right balance between government and private enterprise.

Just here, I'm reminded of a little anecdote that a venerable and wise colleague, learned in the socialist system, related to me some years ago. His name is Istvan Bayer and he was then the Director General of the Hungarian pharmaceutical industry. He said, "Gene, do you understand the difference between regulation in The United States and regulation under the socialist system?" I replied that I wasn't really sure what he was referring to, and he answered in the following manner: "Well, it's like this: in The United States there is so much activity and so many people always doing things, that you require government regulation just to maintain some semblance of order; whereas in the socialist countries regulations are required just for the purpose of trying to get someone to do something." It is a simple concept, but believe me, the more you see, the more you realize just how profound the difference is.

So, we are talking about the regulation of the great, natural energy of our system, and we should be seeking what Aristotle always referred to as 'The Golden Mean', or what Goldilocks called "just right" in that famous case of stolen porridge. If one were to speak of regulating the flow of automobile traffic, it might be understood as maintaining the maximum ease of transportation at the lowest cost, consistent with reducing injury to the minimum. As applied to the control of potentially harmful drugs, we might think of it as facilitating the maximum benefit to public health, at a conveniently low price, while safeguarding against drug abuse, crime and injury.

Not Too Hot, Not Too Cold, but Just Right

Inadequacy of regulation, or regulations imposed too late, generally result in a lot of collateral damage when the situation is finally remedied. This is usually in terms of excessive injury to the public, damage to reputation of both business and government and the imposition by the legislature and the 'politics of the press' of rules and requirements that are more restrictive than would have otherwise been necessary. The winners, if any, are usually those persons and businesses of short-term commitment who are looking for quick profits with a quick exit. But sometimes their only gain is a lap full of lawsuits.

On the other hand, excessive regulation discourages innovation and initiative and greatly increases the cost to the public for no real benefit. This is a grave danger because making regulations is the main profession of a large group of bureaucrats in every government. Since government itself does not make a profit, the enactment of a regulation is a kind of visible performance achievement. In the long run, excessive regulation alienates the people from their government and undermines the very basis of civil order and democracy. If a regulation is needed, then the regulators must do the job of informing the public. People must be able to say that, even if they don't like it, and it isn't necessary to their behavior, it is nevertheless necessary in the greater scheme of things.

Obviously, what we must all desire is that regulatory decisions are based upon a wise and judicious assessment of the facts. But there are a number of serious problems involved in following such an obviously righteous policy, especially in the area of drug and chemical control. Much of the available scientific evidence has been developed by those who are engaged in the marketing of the substance that may not have been reviewed or tested by an objective authority. This is increasingly true with regard to the growing practice of so-called 'off label' uses of approved drugs. At present we have a strange system of marketing which requires an FDA review of scientific evidence for initial marketing for specific purposes, but thereafter permits physicians to employ the drug for any purpose which he or she may be persuaded by whomever, based on whatever.

Then too, the marketers of the substance are often not familiar with either the standards or purposes for which controls are imposed and, since such decisions may adversely affect their commercial prospects, may be inclined to opposition. There is also an often legitimate concern about the quality of evidence relating to problems of abuse. This is by nature, a clandestine behavior that may result in a great deal of anecdotal, but unorganized evidence. These problems can be overcome in a context that emphasizes knowledge, wisdom and experience. But it requires patience, study, communication and determination. In the end, the legitimate industry does not want a situation that will result in injuries, recriminations, adverse publicity, lawsuits and overreaction.

Some Special Problems

But although we might all agree on the principals that should govern our bountiful system, it is always difficult to apply them in practice. In a fundamental way the character of our problems always remain the same, but each moment and each season produces its own unique variations of the age-old challenge. In this vein, I would like to suggest to you some of the features that I think, if not new, are nevertheless uniquely characteristic of the present.


Money has a uniquely consistent relationship to every kind of drug problem. Actually, 'money' is often sticking its nose in where it doesn't belong and we see this is becoming increasingly true in the case of government decisions and 'non-decisions'. I would like to give two examples that, together, could compromise the efforts of everyone here.

It has become painfully evident that influence in Washington is for sale to a degree beyond previous memory. We see such scandals in the efforts of politicians to raise money as cannot be recalled by living persons; foreign governments corrupting our political process, fund raising found to involve drug traffickers and suspected spies, our highest officials accused of lying and winking at the law. And as everyone knows, fund raising has become a major time commitment of the President and most other elected officials in Washington. In such an atmosphere, it is not surprising that many resort to lobbying, and influence peddling involving both the Whitehouse and members of Congress.

Nor is the drug control process or promulgation of regulations immune from such influence. Although in my experience, most of industry does not resort routinely to such activities, I believe that there has been a marked increase relative to the past. I suspect that some important delays in regulations and some pressured control decisions may be traced to an increase in such activities.

But government is affected by the pull of money in another way which has even less precedent and is less well known. It is no secret that we are in a period of declining growth in the size and expansion of the federal budget, and it may be that similar trends are occurring in many states. One consequence has been the search for new sources of revenue. In Washington, this has often taken the form of the imposition of 'user fees' for everything from admittance to national parks to the support of DEA's drug diversion program. This was an interesting event that occurred during my service and which has caused some ill will within some registrant groups. This was a decision of Congress, apparently resulting from the ideas of DOJ and DEA budget officers to use DEA registration fees for the support of the diversion program and thereby release appropriated money for other purposes.

The problem of course is in the questionable assumption that the diversion program exits for the benefit of the registrants instead of the public health and safety, or alternatively that registrants ought to pay for the problems which the drugs they handle cause society, even when this represents someone else's criminal behavior. Well, there is no need to explore the issue here, but it is sufficient to note that the realities of program administration are often unknown to budget officers and seldom matches up with simplistic concepts of raising money. It is perhaps one of the lesser examples of the contortions that result from those who place money above traditional public policy.

But in my view, a more troubling problem for drug control has resulted from a new idea of using civil fines, not simply to impose deserved punishment, but to help raise revenue. To my knowledge, this has never been a policy within DEA; but during recent years in Washington, such a government program was formally initiated. As described in speeches, civil fines were to be levied upon industry at every opportunity in order to enhance revenues. Again, this is a poor approach to public policy designed to alienate the people from its government.

Given the amount of fine print contained in the drug regulations, and the numerous activities of business and professional enterprises, some violations of a technical sort are frequently to be found. I have always felt, and it has been DEA policy, that where such violations were minor, of an innocent nature, and had not resulted in diversion, that persons should be given an opportunity to correct their mistakes with a minimum of hassle. But now, sometimes we see that major demands are made by prosecutors with the result that little can be done other than in an adversarial way. And the worst is that DEA is usually blamed for this. Indeed, there are some people and institutions that, in their anger at such fines and their indifference to public welfare, would gladly eliminate drug controls; or so they have said.

I hope that you will forgive me for dealing primarily with problems which have arisen at the federal level, but these are naturally the ones with which I am most familiar. However, I think that they affect everyone here in some way. Also I suspect that there are similar concerns that exist at the State level as well.


In business, it is impossible to separate money from marketing; and in fact, the pharmaceutical industry is much concerned with marketing. As in all areas of the private enterprise system, competitive pressures result in advantages to the consumer in terms of new innovations and new products, choices of products, and lower prices. This is certainly the case with regard to the development and distribution of pharmaceuticals where, from time to time we are all pleased to see the development of new and effective remedies for vexatious, painful and debilitating maladies.

But these same pressures can also produce distortions and excesses that result in over-marketing and unwise consumption. Many wise observers have long noted that the US has developed a 'pill culture' in which every patient wants and expects a prescription for every complaint. Today this trend is sometimes encouraged by a new wave of vigorous advertising to the public and the growth of the so-called 'off-label' prescribing of drugs. Unfortunately for our concerns here, there is a tendency to overlook the distinction between controlled substances and other pharmaceuticals so that we see cases in which controlled drugs appear to be excessively prescribed and at least some interest in finding mechanisms of directly proselytizing the public for their use.

Perhaps one of the best examples of this phenomenon is to be found in the sudden, explosive prescribing of Schedule II stimulants to young children on a maintenance basis for the loosely defined condition of Attention Deficit Hyperactivity Disorder (ADHD). Although many authorities feel that this is a real condition that may require medication, the pattern of massive prescribing which has emerged within a few short years would suggest the sudden onset of a new epidemic. Moreover, it would appear to be an epidemic unique to the United States and unique to little boys who are the main target of all of this medication. Further, it is an epidemic peculiar to some localities where perhaps 15% to 20% of all the students are on stimulants such as Ritalin and now amphetamines, while those who live in adjacent communities appear to have been spared. In one private school in Pennsylvania, it was found that 70% of all the students had been diagnosed as being afflicted with ADHD and had been prescribed stimulants.

However, if we look at the genesis of this explosion, we see that it was preceded by the enunciation of very subjective diagnostic criteria, the misrepresentation of the nature of the drug, establishment of special interest groups with ties to commercial interests and active programs of proselytizing. Clinical practices have been established with no other purpose than to diagnose and treat ADHD, almost invariably with prescriptions for stimulants, and of course, off-label uses now extend to prescribing for many children under six years of age for whom such drugs have never been approved, studied or recommended. The result is a massive infusion of drugs into juvenile brains and money into adult pockets. And what good are all of our drug controls of quota setting, security, and prescription monitoring when they can be so easily circumvented by such slick propaganda machines which make direct appeal to the public without calling itself advertising.

Government and Private Enterprise

I cite these examples because I believe them to be destructive anomalies within an otherwise marvelous system; a system that has created the great wealth and choice which we all enjoy. And I do firmly believe that we can have the fruits of this system while minimizing these destructive departures, through the application of wise regulatory controls that mark out the bounds of safe and ethical activity without disrupting the flow of natural human energy and creativity. Indeed, in my view the worst feature of the socialist system was precisely what my Hungarian colleague inferred; it imposed such absolute, centralized authority from those so far removed from actual labor, that it not only crippled the production of goods, but the very human initiative required to conceive them. This is the greatest poverty that one encounters.

I do think however, that the political system of the United States, and the sheer magnitude of our country, creates problems of government and regulation that are unique; and these are also reflected at the global level when we speak of treaties and international controls. The system has the virtue of maintaining authority at a local level where solutions can be tailored to local problems, but it is often ill suited for dealing with the problems of commerce that has largely become nationally and globally integrated. For example in our own area of concern, what is the value of California applying tough controls to the commerce in critical chemicals if other states do not? We know for a fact that the methamphetamine laboratories have often been supplied by distributors and mail order businesses operating in those states which have no chemical law and no methamphetamine problem.

But on the other hand, we should come to grips with the great difficulty of legitimate companies, engaged in national commerce, seeking to discover and comply with a complexity of laws that span fifty-one jurisdictions. And the same problems exist at the international level for those firms that are engaged in global commerce. I submit that, in most cases, the logic for uniformity of controls and control lists is overwhelming and we should strive to that end. And with this concluding observation, I hope I have once more emphasized the balance that is so essential to our deliberations in determining regulatory policy and Aristotle's Golden mean.


As is obvious from my remarks, I believe that a keynote speaker is entitled to give vent to his own opinions and represent them as the accumulated wisdom of experience. In this vein, I want to conclude by stating in the briefest possible manner the advice that I would give to each of you.

To my colleagues who labor in the field of drug control, I advise study, objectivity, preparation and a broad consideration of society's needs in formulating decisions. Be open to entertain the opinions of all who have experience and the conviction of their views. Having thus decided, be firm, cultivate the interest and support of sincere political leaders and the media, and be prepared, if necessary to suffer adversity, and even unjust treatment in an important cause; for this is your sworn duty.

To my colleagues who labor in the private sector, I advise that it is both necessary and appropriate to advocate the reasonable needs of science, medicine, industry and commerce; for these are activities vital to the health and well being of society. Moreover, it is right and proper that you should question and seek to verify the facts and assumptions upon which it is proposed to establish government policy as a safeguard against error and arrogance. But remember also, that government is a necessary endeavor to protect the people and preserve order, and it is both necessary and patriotic to accept reasonable sacrifice and burdens for the public good.

To all of you collectively, I urge that you communicate with each other at length and patiently before taking positions, and that you seek to resolve disputes among yourselves within an ethical framework that makes use of, and does not corrupt our wonderful system.

Thank You,

Gene R. Haislip