retail pharmacy drug diversion: issues and countermeasures

October 2010

October 2010

about

Disclosure: I am NOT an RPh, MD or attorney. Contents of this presentation are not intended to constitute legal or medical advice.

BS Accounting, MBA Concentration Economic Crime, CFE Licensure

Data analyst specializing in pharmacy forensics and the integration of business intelligence with traditional security strategies

Spent 7 years working for a large retail pharmacy chain managing pharmacy loss forensics program and designing a data led countermeasure model and training pharmacy operators on application and awareness

Currently employed as a consultant providing profit improvement and fraud detection technology integration business services.

October 2010

agenda

overview of diversion impact on retail pharmacyretail Rx diversion countermeasure strategiescase reviews

October 2010

retail pharmacy supply chain

manufacturers

trading partners

secondary wholesalers

retail pharmacy patient

physician

counterfeiters/diverters

parallel importslegitimate

non wholesale sources

October 2010

key issuescounterfeitsmanufacturer/wholesale level diversion

facility theftcargo theftinternal theft

retail level diversionVendor theft Robbery/burglaryInternal theft

retail level fraudsinternal frauds – script, co-pay, billing, identity theft

patient/physician level fraudsdoctor shoppingpad/physician identity theftscript alteration

October 2010

counterfeits

Counterfeitsworldwide counterfeit market penetration difficult to gauge <1% of US market estimated as counterfeit90% of the US market supply is sourced from the “big three” primary wholesalers – Cardinal, McKesson and AmerisourceBergen6% of the US market is sourced from secondary wholesalers

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Counterfeit video 1

October 2010

counterfeits

primary wholesaler riskpurchases from secondary market

secondary wholesaler riskdrug pedigree and wholesale license assurance

potential counterfeit point of entrypotential parallel import point of entry

Counterfeit Video 1

Counterfeit Video 2

October 2010

counterfeits

primary wholesaler risk countermeasures<2% combined (‘big 3’) purchases from secondary marketExclusive direct manufacture purchase

For ‘product safety list’ itemsExcept where manufacturers require use of exclusive distributorExcept in cases of purchases from long standing key alternate source vendors with strong background check and receiving due diligence practices

secondary wholesaler risk countermeasuresPrescription Drug Marketing Act (PDMA) updates

Places pedigree requirements on small to mid sized wholesalers.RFID, ePedigree and mass serialization technologies867, 844 & 852 manufacturer data analysis & manufacturer investigations

Internet pharmacy note: internet pharmacies are also a potential source of counterfeits in the US market with their own unique set of risks and countermeasures

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October 2010

manufacturer/wholesaler level diversion

facility/cargo theft riskFor the first 6 months of 2009 pharmaceutical cargo theft incidents declined 44% from 25 reported incidents in 2009 to 14 for the same period in 2008The average reported pharmaceutical cargo theft was valued at a loss of over $6 million dollars vs. an 08’ average of approx $700KDiverted US product destinations:

overseas black marketsback into legitimate US market via secondary market entry

Consider this: “Oxycontin has a street value between $40 and 80 per pill and Purdue Pharma typically ships 50 - 100 DRUMS worth on a single tractor trailer load.” – Chuck Forsaith, New Hampshire State Police

Facility Theft Video

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October 2010

manufacturer/wholesaler level diversion

CountermeasuresPhysical security measuresSite design

Physical barriers (fences, doors)Entry control (access authorization, locks) Intrusion detection (alarms)Lighting Surveillance (video, human security personnel)

Redundant systems etc.Delivery/Shipping controls

Controlled areasPick integrity measuresPersonnel screening

Technology based cargo tracking solutions

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October 2010

retail pharmacy level diversionvendor/distribution theft

Drivers, couriers, outside vendors facility vendors

robbery/burglary External incident

internal theft Pharmacy employee diversion

Unlike counterfeits and large scale wholesale/manufacturer thefts retail level diversions are generally undertaken for personal use/abuse or “streel level” small quantity resales.

October 2010

drugs of diversion interesthigh abuse items

hydrocodone, soma, xanax, viagra etc.

high resale value items high cost/specialty items

i.e. Serostim, Xenical, Phentermine

high turn “blockbusters” or maintenance items

i.e. Lipitor

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October 2010

drug street prices

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hydromorphone (dilaudid®4mg) $60

hydrocodone (vicodin®, lortab®, lorcet® $6 –$8

oxycodone (percodan®, percocet®) $6 -$8

oxycontin® $ .50 -$1/mg

roxicodone 30mg $20+

fentanyl patches from $25 to $100 for 25mcg/hr to 100mcg hr for brand, generics $15 -$40 $15 -$40

actiq® $8

methadone wafers$6 -$10, $40 in some areas

APAP w/codeine (tylenol® #3/#4)$3 -$5

propoxyphene (darvocet®N-100) $2 -$4

serostim $1000 - $2000 per week supply

October 2010

robbery/burglaryThe National Community Pharmacists

Association noted a rise in incidents in 2008.

The target of pharmacy robberies generally appears to be primarily drugs of abuse

A comprehensive database of pharmacy robberies does not exist A private voluntary database, Rx Patrol www.rxpatrol.com

collects incident information for use by pharmacy staff and law enforcement as well as prevention resources

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October 2010

Internal theftself medication

according to the National Institute on Drug abuse 11-15% of pharmacists will confront alcohol or drug dependency problems at some time in their career

in 1982 the American Pharmacists Association established the Pharmacy Recovery Network to assist those in the pharmacy profession with substance abuse intervention and treatment

approximately two thirds of impaired pharmacists in recovery treatment programs were discovered by their local state board of pharmacy, a peer, or another health care professional.

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October 2010

anatomy of a self medication case

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October 2010

retail level fraudsbilling fraud

brand “swapping”

fictitious billing

co-pay theft medicaid co-pay waivers

register cash thefts

medical identity theft insurance “borrowing”

internal prescription fraud Fictitious or altered employee scripts

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October 2010

patient/physician level fraudsdoctor shopping

Seeking prescriptions from multiple physicians for the same complaint or fictitious complaints without their knowledge of concurrent treatments

pad/physician identity theft Creation of fraudulent prescriptions using a legitimate

physicians prescribing credentials

“How to Get Arrested” – You Tube video

script alteration Changes to a legitimate script typically to increase

dosage quantity

Doctor Shopping Video18

October 2010

countermeasuresphysical security

system controls & integration

SOP and process controls

vulnerability aligned audit process

pre-employment screening

pharmacy theft specific training programs recognizing signs of abuse

robbery incident management training

recognizing suspicious prescriptions

comprehensive data analysis19

October 2010

pre-employment screening

drug testing for Rx employees (at minimum)

background checks

participation in ESTEEM

license validation

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October 2010

physical securitysecurity inventory

pharmacy area enclosure/locks

camera coverage Bench, Drive-thru, Waiting Bin, C2 safe, POS

Blind spots notation

Covert placement availability

cII storage Type and key policy

pharmacy specific alarms

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October 2010

physical security

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October 2010

system control and integrationunique user identification for inventory,

dispensing and POS transactions

transaction thresholds

systems integration

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October 2010

SOP and process controls receiving/reverse distribution

Who is doing the receiving?

What is the level of check in?

inventory Who is conducting counts?

How are they audited?

ordering/on hand management Who is responsible for ordering?

Who can make adjustments?

How are adjustments monitored?

dispensing What is the partial fill process?

What is the NDC integrity check process?

POS What is the medicaid co-pay waiver process?

What are the SRA management thresholds?

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October 2010

aligned audit processcontent

Does it fully capture system and process vulnerabilities?

trigger What is the process for initiating an audit?

accountability What is the process for managing audit failures?

analysis Are results being monitored to improve results and

addressed specific overall areas of weakness?

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October 2010

Training programs HIPAA

CPhT

regulatory training

compliance, DEA forms, biennials etc.

Altered/fake script/doctor shopping awareness trainingwww.naddi.org

dispensing system training

in house Rx technician training

Rx specific data analysis training

Rx specific interview/investigation training

effective audit count practices & synergistic drug combinations

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October 2010

script awareness trainingPharmacists

Confirm unusual Rx’s with physician

Seize Rx (where allowable by law)

Notify applicable LE prior to fill

Do not write on Rx

Obtain license number and vehicle description (where possible)

Copy photo ID

Write down physical descriptionClothing, speech, tattoos, glasses, hair style

Do not fill Rx’s improperly writtenNotify prescribing physician/LE

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October 2010

script awareness trainingPhysicians – pad/identity theft

Store Controlled Substance blanks in secure location.

Inventory and number blanks. (Theft issues)

Do not have DEA #’s preprinted.

Write Rx’s with unique pen (color or tip).

DO NOT WRITE “Rx ONLY” MEDS ON CONTROLLED SUBSTANCE BLANKS.

CONTROLLED SUBSTANCE BLANK = ANY DRUG OF CHOICE FOR ADDICT.

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October 2010

script awareness trainingPhysicians – doctor shopping

PMP38 states and counting have PMP programs

Patient contractNADDI membership excellent resource for effective contract

examples/experiences

Chart documentation

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October 2010

data analytics technology integration

Critical transactions electronic or paper based

data capture

Multi source database

POS

Rx Dispensing

Inventory Transactions

Case management

HR

User interface/accessibility

key KPI monitoring

trend analyses

predictive modeling

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October 2010

recognizing signs of abuse personality changes or mood swings

frequent absences from work

volunteering to check in narcotics or do inventory on them

long or frequent disappearances from the work station

increase in medication errors

changes in physical appearance (eg, weight loss or poor hygiene)

showing signs of forgetfulness, irritability, and tardiness

decrease in work performance

excessive ordering of certain drugs

overreaction to criticism

increased complaints from patients 31

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October 2010

robbery incident mgmt trainingstaff cooperation

observation Physical characteristics

Tatoos

Birthmarks

Height/weight

Hair/eye color

clothing

reporting

Rx Patrol

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October 201033

data analytics case reviewthe following case was presented to NADDI in

2009.

there are three key take-aways it is an example of successful loss prevention & regulatory

collaboration

it is an example of street level distribution of prescription drugs diverted from retail pharmacies

it is an example of effective retail pharmacy trend analysis of data to identify potential diversion issues

October 2010

columbus, OH 3 retail pharmacy locations involved

data analytics case review

October 2010

4 employees were involved 3 females, 1 male

3 <1 year of employment, 1 <2 years

All 4 were Pharmacy Technicians

Stolen drugs were being re-sold

Stolen drugs were in the hydrocodone family

data analytics case review

October 2010

1st case was initiated by the pharmacy

Loss Prevention department using a data

analysis model) This model tracked all methods of obtaining inventory

above “suggested” levels.

It also tracked overall estimated “in stock” position

based on shipments vs. sales

case initiation

October 2010

example data model

October 2010

2nd case was initiated from information

from the 1st case and was confirmed with

LP data. 1st Subject in 2nd case discussed her “surprise” to

another employee that a friend of hers (subject from

1st case) had been termed for drug theft

LP received a tip that 2nd subject in 2nd case was

selling drugs that 1st and 2nd subject were stealing

data was consistent with estimated loss

case investigation

October 2010

3rd case was initiated from information

from the 2nd case “backed up” by LP data PIC in 2nd case store advised LP that 2nd subject in

2nd case had a cousin (subject in 3rd case) in 3rd case

store

data also reflected potential loss in 3rd store within the

same timeframe

case investigation

October 2010

distribution channelCourtney

Rx Tech

Store #2

Heather’s friend

Chris

Rx Tech

Store #2

Sunny

Rx Tech

Store #3

Chris’s Cousin

Heather

Rx Tech

Store #1

Billy

Outside seller

Heather’s Cousin

Jason

Outside seller

Courtney’s BF

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October 2010

Questions

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October 2010

footnotes1. http://www.who.int/mediacentre/factsheets/fs275/en/index.html2. http://www.who.int/mediacentre/factsheets/fs275/en/index.html3. http://www.kff.org/rxdrugs/upload/Follow-The-Pill-Understanding-the-U-S-Commercial-Pharmaceutical-Supply-Chain-Report.pdf4. http://www.integrichain.com/documents/whitepaper_secondarymarket.pdf5. http://logisticstoday.com/operations_strategy/outlog_story_6299/6. http://www.thestreet.com/story/10244388/amerisourcebergen-dims-gray-market-for-drugs.html7. http://findarticles.com/p/articles/mi_qn4180/is_20061228/ai_n17078016/?tag=content;col18. http://securepharmachain.blogspot.com/2009/07/bi-annual-cargo-theft-report-value-of.html9. http://blog.fleetowner.com/trucks_at_work/2009/10/21/cargo-theft-and-trucking/10. http://www.pharmacytimes.com/issue/pharmacy/2006/2006-11/2006-11-606111. “Physical Security 101”, Presented at ASIS International Conference, June 30th, 2010, James Greer & David Brandt12. http://drugtopics.modernmedicine.com/drugtopics/Modern+Medicine+Now/Pharmacy-robberies-force-new-focus-on-

prevention/ArticleStandard/Article/detail/58567713. http://www.cdc.gov/niosh/blog/nsb021709_pharm.html14. http://www.justice.gov/ndic/pubs/651/related.htm15. http://associationdatabase.com/aws/NADDI/asset_manager/get_file/6898/street_issues_with_doctor_shoppers.pdf

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