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LEGAL AND REGULATORY ISSUES IN PAIN AND PALLAIATIVE CARE

The Supply Chain of Medicinal Controlled Substances: Addressing the Achilles Heel of Drug Diversion

Pages 233-250 | Received 05 Apr 2012, Accepted 12 Jun 2012, Published online: 13 Sep 2012
 

ABSTRACT

The escalation of prescription drug abuse in the U.S. has attracted the attention of public health and safety officials as well as others puzzled by how such a tightly regulated enterprise could so easily be breached by those seeking controlled substances for nonmedical use. Prescribers and patients who use, misuse, or, in some cases, redistribute or divert these drugs have figured prominently in government strategies aimed at addressing this issue. This review departs from this paradigm and focuses on wholesale drug distributors, a highly efficient and largely behinds-the-scene link in the supply chain of controlled substances. By law, distributors are required to identify and report to the Drug Enforcement Administration (DEA) orders for controlled substances that are suspicious and may indicate drug diversion. Ten cases are examined in which distributors were each charged with failing to prevent the diversion of millions of doses of controlled substances. Special attention is given to a payment system employed by the industry that may encourage this unlawful commerce. Court records, agency and industry reports, and other published sources are used to document referenced cases and their disposition, and recommendations are offered for improving distributors’ compliance with the law.

Notes

a By law, controlled substances are classified according to five classes (“C”) or “schedules.” Schedule I drugs, also known as C-I drugs, are not approved for medical use because of their high abuse potential and no currently accepted medical use. Schedule II drugs have the same abuse potential as Schedule I drugs but are approved for medical use because their benefits outweigh their risks. Schedule III drugs have lower abuse potential compared with Schedules I and II drugs and Schedule IV drugs have lower abuse potential than Schedule III drugs. Schedule V drugs have lower abuse potential than Schedule IV drugs. The production and distribution of Schedule I and II drugs are tightly regulated by federal and state laws, as is the prescribing, storage, and dispensing of Schedule II drugs. The other classes of controlled substances are also regulated but to a lesser extent (see: 21 USC 801, et seq.).

b Oxycodone is marketed in single entity and combination formulations. Hydrocodone is marketed only in combination forms. In this paper, the terms oxycodone and hydrocodone refer to finished drug products containing these drugs regardless of their formulation.

c For example, the Florida statute expressly requires that “A wholesale distributor must assess orders for greater than 5,000 unit doses of any one controlled substance in any one month to determine whether the purchase is reasonable (Citation13).”

d As of May 2012, the Drug Enforcement Administration (DEA) reports that there are 67,192 DEA-registered pharmacies, 15,709 DEA-registered hospitals/clinics, and 1.3 million DEA-registered practitioners (including 206,736 mid-level practitioners) (Citation14). It is unknown how many practitioners dispense drugs but industry estimates range as high as 10%. Dispensing of controlled substances by practitioners is controlled by state laws that differ from state to state.

e As of October 2011, there were 37 states with operational Prescription Drug Monitoring Programs (PDMP) and another 11 states that have authorized PDMPs that are not yet operational (Citation23). These state-managed systems may be accessed by DEA investigators to obtain, for example, additional evidence of improper prescribing and/or drug diversion.

f Although primarily a central-fill pharmacy, Omnicare also is registered by DEA as a distributor of controlled substances. In 2008, Omnicare had sales of $6.3 billion, of which 97% were derived from its pharmacy services. Omnicare operates more than 350 institutional pharmacies supplying approximately 1.4 million patients (Citation42).

g “Controlled premises” is defined in the statute (21 USC 880) as: “(1) places where original or other records or documents required under this subchapter are kept or required to be kept, and (2) places, including factories, warehouses, and other establishments, and conveyances, where persons registered under section 823 of this title (or exempt from registration under section 822(d) of this title or by regulation of the Attorney General) or regulated persons may lawfully hold, manufacture, distribute, dispense, administer, or otherwise dispose of controlled substances or listed chemicals or where records relating to those activities are maintained” (21 USC 880).

h According to the CSA, “For the purposes of this section (i.e., pertaining to administrative inspection warrants), the term ‘probable cause’ means a valid public interest in the effective enforcement of this subchapter or regulations thereunder sufficient to justify administrative inspections of the area, premises, building, or conveyance, or contents thereof, in the circumstances specified in the application for the warrant” (21 USC 880(d)(1)). By regulation, “administrative probable cause shall not mean criminal probable cause as described by Federal statute or case law” (21 CFR 1316.10).

i An example of this may be seen in a 2007–2008 DEA regulatory case brought against CVS Caremark, the parent firm of the CVS pharmacy chain, for violating provisions of the Combat Methamphetamine Epidemic Act (Title VII of Public Law 109–177) by failing to properly monitor retail sales of pseudoephedrine, a regulated substance, sold by CVS pharmacies in California, Nevada, and 23 other states. In 2010, DEA and CVS Caremark reached a settlement in which CVS Caremark paid a civil fine of $75 million along with an additional $2.6 million in profit forfeitures. In a press release issued October 14, 2010, announcing the settlement, CVS Caremark described the financial impact on the company as follows: “The settlement does not impact any other business conducted by CVS Caremark or any of its affiliated companies. In addition, the settlement amount has been fully reserved, as previously disclosed, and should have no further effect on the company's financial results (Citation61).”

j Pursuant to 21 CFR 1305.29, for each electronic order filled, a supplier must forward to DEA either a copy of the electronic order or an electronic report of the order in a format that DEA specifies within two business days.

k In some states, it is a misdemeanor or third class felony for a person to fail to disclose to a prescriber that he or she has obtained a prescription for a controlled substance from another practitioner within the past 30 days.

l It is worth noting that regulations like those pertaining to the ARCOS system were enacted in the 1970s, following passage of the CSA. This was before the era of modern information technology when the ability to collect and process large amounts of data was limited. With modern systems in use by the industry and DEA, these limitations no longer are justified and the benefits today of collecting all transaction data for all controlled substances far outweigh the miniscule extra cost of doing so.

m Pursuant to 21 USC 877, any person aggrieved by a final determination before a DEA administrative law judge may obtain a review of the decision by petitioning the U.S. Court of Appeals for the District of Columbia or for the circuit in which the aggrieved party has its principal place of business.

n Sunrise voluntarily surrendered its registration and did not request that it be restored. On May 15, 2012, DEA and Cardinal Health signed an MOA that permits Cardinal Health's Lakeland center to have its DEA registration restored in May 2014. DEA/Department of Justice settled out of court with Omnicare and there is no indication in the public record that Omnicare's DEA registration was suspended even briefly.

o DEA is authorized two categories or series of investigators, identified as GS-1810 (Diversion Investigator) and GS-1811 (Criminal Investigator or Special Agent). Series GS-1810 Diversion Investigators plan and conduct investigations of DEA registrants to make or invoke administrative judgments, sanctions, or penalties. Series GS-1811 Criminal Investigators or Special Agents plan and conduct investigations relating to alleged or suspected violations of criminal laws, specifically the CSA. In Fiscal Year (FY) 2010, DEA had 495 allocated positions for GS-1810 Diversion Investigators and 4533 allocated positions for GS-1811 Special Agents. To combat prescription drug abuse, DEA has reallocated Diversion Investigator positions to Special Agent positions and added Special Agents to programs directed at criminal diversion cases. The latter, however, mainly involve practitioners. Cases against distributors generally are pursued only by Diversion Investigators (Citation78).

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