0
retail pharmacy drug diversion:
issues and countermeasures

October 2010
about






 Disclosure: I am NOT an RPh, MD or attorney. Contents of this
presentation are not intended to constitut...
agenda
overview of diversion impact on retail pharmacy
retail Rx diversion countermeasure strategies
case reviews

Octo...
retail pharmacy supply chain
physician
trading
partners

manufacturers

counterfeiters/
diverters

secondary
wholesalers

...
key issues
counterfeits
manufacturer/wholesale level diversion
facility theft
cargo theft
internal theft

retail lev...
counterfeits
Counterfeits
worldwide counterfeit market penetration difficult to gauge
<1% of US market estimated as cou...
counterfeits
primary wholesaler risk
purchases from secondary market

secondary wholesaler risk
drug pedigree and whol...
counterfeits
primary wholesaler risk countermeasures
<2% combined (‘big 3’) purchases from secondary market
Exclusive d...
manufacturer/wholesaler level diversion
facility/cargo theft risk
For the first 6 months of 2009 pharmaceutical cargo th...
manufacturer/wholesaler level diversion
Countermeasures
Physical security measures
11

Site design
Physical barriers (...
retail pharmacy level diversion
vendor/distribution theft
 Drivers, couriers, outside vendors facility vendors

robbery...
drugs of diversion interest
high abuse items
 hydrocodone, soma, xanax, viagra etc.

high resale value items
 high cos...
drug street prices
 hydromorphone (dilaudid®4mg) $60
 hydrocodone (vicodin®, lortab®, lorcet® $6 –$8
 oxycodone (percod...
robbery/burglary
The National Community Pharmacists
Association noted a rise in incidents in 2008.
The target of pharmac...
Internal theft
self medication
 according to the National Institute on Drug abuse 11-15%
of pharmacists will confront al...
anatomy of a self medication case

16

October 2010
retail level frauds
billing fraud
 brand “swapping”
 fictitious billing

co-pay theft
 medicaid co-pay waivers
 regi...
patient/physician level frauds
doctor shopping
 Seeking prescriptions from multiple physicians for the
same complaint or...
countermeasures
physical security
system controls & integration
SOP and process controls
vulnerability aligned audit p...
pre-employment screening
drug testing for Rx employees (at minimum)
background checks
participation in ESTEEM
license ...
physical security
security inventory
pharmacy area enclosure/locks
camera coverage
 Bench, Drive-thru, Waiting Bin, C2...
physical security

22

October 2010
system control and integration
unique user identification for inventory,
dispensing and POS transactions
transaction thr...
SOP and process controls
 receiving/reverse distribution



Who is doing the receiving?
What is the level of check in?
...
aligned audit process
content
 Does it fully capture system and process vulnerabilities?

trigger
 What is the process...
Training programs
 HIPAA
 CPhT
 regulatory training
 compliance, DEA forms, biennials etc.
 Altered/fake script/docto...
script awareness training
Pharmacists

15







Confirm unusual Rx’s with physician
Seize Rx (where allowable by la...
script awareness training
Physicians – pad/identity theft

15







Store Controlled Substance blanks in secure loc...
script awareness training
Physicians – doctor shopping

15

 PMP
 38 states and counting have PMP programs

 Patient c...
data analytics
 technology integration
 Critical transactions electronic or paper based
 data capture
 Multi source da...
recognizing signs of abuse
 personality changes or mood swings
 frequent absences from work
 volunteering to check in n...
robbery incident mgmt training
staff cooperation
observation
 Physical characteristics
 Tatoos
 Birthmarks
 Height/w...
data analytics case review
the following case was presented to NADDI in
2009.
there are three key take-aways
 it is an ...
data analytics case review
columbus, OH
 3 retail pharmacy locations involved

October 2010
data analytics case review
4 employees were involved
 3 females, 1 male
 3 <1 year of employment, 1 <2 years
 All 4 we...
case initiation
1st case was initiated by the pharmacy
Loss Prevention department using a data
analysis model)
 This mod...
example data model

October 2010
case investigation
2nd case was initiated from information
from the 1st case and was confirmed with
LP data.
 1st Subjec...
case investigation
3rd case was initiated from information
from the 2nd case “backed up” by LP data
 PIC in 2nd case sto...
distribution channel
Courtney

Sunny

Chris

Rx Tech

Rx Tech

Rx Tech

Store #2

Store #3

Store #2

Heather’s friend

Ch...
Questions

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October 2010
footnotes
1. http://www.who.int/mediacentre/factsheets/fs275/en/index.html
2. http://www.who.int/mediacentre/factsheets/fs...
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2010 International Symposium on Safe Medicine

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Transcript of "2010 International Symposium on Safe Medicine"

  1. 1. retail pharmacy drug diversion: issues and countermeasures October 2010
  2. 2. 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
  3. 3. agenda overview of diversion impact on retail pharmacy retail Rx diversion countermeasure strategies case reviews October 2010
  4. 4. retail pharmacy supply chain physician trading partners manufacturers counterfeiters/ diverters secondary wholesalers legitimate non wholesale sources retail pharmacy patient parallel imports October 2010
  5. 5. key issues counterfeits manufacturer/wholesale level diversion facility theft cargo theft internal theft retail level diversion Vendor theft Robbery/burglary Internal theft retail level frauds internal frauds – script, co-pay, billing, identity theft patient/physician level frauds doctor shopping pad/physician identity theft script alteration October 2010
  6. 6. counterfeits Counterfeits worldwide counterfeit market penetration difficult to gauge <1% of US market estimated as counterfeit 90% of the US market supply is sourced from the “big three” primary wholesalers – Cardinal, McKesson and Amerisource Bergen 6% of the US market is sourced from secondary wholesalers 1 2 3 4 Counterfeit video 1 October 2010
  7. 7. counterfeits primary wholesaler risk purchases from secondary market secondary wholesaler risk drug pedigree and wholesale license assurance potential counterfeit point of entry potential parallel import point of entry Counterfeit Video 1 Counterfeit Video 2 October 2010
  8. 8. counterfeits primary wholesaler risk countermeasures <2% combined (‘big 3’) purchases from secondary market Exclusive direct manufacture purchase For ‘product safety list’ items Except where manufacturers require use of exclusive distributor Except in cases of purchases from long standing key alternate source vendors with strong background check and receiving due diligence practices 5 6 7 secondary wholesaler risk countermeasures Prescription Drug Marketing Act (PDMA) updates Places pedigree requirements on small to mid sized wholesalers. RFID, ePedigree and mass serialization technologies 867, 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 October 2010
  9. 9. manufacturer/wholesaler level diversion facility/cargo theft risk For 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 2008 The average reported pharmaceutical cargo theft was valued at a loss of over $6 million dollars vs. an 08’ average of approx $700K Diverted US product destinations: 8 overseas black markets back 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 9 Facility Theft Video October 2010
  10. 10. manufacturer/wholesaler level diversion Countermeasures Physical security measures 11 Site 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 areas Pick integrity measures Personnel screening Technology based cargo tracking solutions October 2010
  11. 11. retail pharmacy level diversion vendor/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
  12. 12. drugs of diversion interest high 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 12 October 2010
  13. 13. drug street prices  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 13 October 2010
  14. 14. robbery/burglary The 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 12 14 13  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 October 2010
  15. 15. Internal theft self 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. 10 15 October 2010
  16. 16. anatomy of a self medication case 16 October 2010
  17. 17. retail level frauds billing 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 17 October 2010
  18. 18. patient/physician level frauds doctor 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 18  Changes to a legitimate script typically to increase dosage quantity Doctor Shopping Video October 2010
  19. 19. countermeasures physical security system controls & integration SOP and process controls vulnerability aligned audit process pre-employment screening pharmacy theft specific training programs     19 recognizing signs of abuse robbery incident management training recognizing suspicious prescriptions comprehensive data analysis October 2010
  20. 20. pre-employment screening drug testing for Rx employees (at minimum) background checks participation in ESTEEM license validation 20 October 2010
  21. 21. physical security security 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 21 October 2010
  22. 22. physical security 22 October 2010
  23. 23. system control and integration unique user identification for inventory, dispensing and POS transactions transaction thresholds systems integration 23 October 2010
  24. 24. 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   24 What is the medicaid co-pay waiver process? What are the SRA management thresholds? October 2010
  25. 25. aligned audit process content  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? 25 October 2010
  26. 26. Training programs  HIPAA  CPhT  regulatory training  compliance, DEA forms, biennials etc.  Altered/fake script/doctor shopping awareness training  www.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 26 October 2010
  27. 27. script awareness training Pharmacists 15      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 description  Clothing, speech, tattoos, glasses, hair style  Do not fill Rx’s improperly written  Notify prescribing physician/LE October 2010
  28. 28. script awareness training Physicians – pad/identity theft 15      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. October 2010
  29. 29. script awareness training Physicians – doctor shopping 15  PMP  38 states and counting have PMP programs  Patient contract  NADDI membership excellent resource for effective contract examples/experiences  Chart documentation October 2010
  30. 30. 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 30 October 2010
  31. 31. 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 10 31 October 2010
  32. 32. robbery incident mgmt training staff cooperation observation  Physical characteristics  Tatoos  Birthmarks  Height/weight  Hair/eye color  clothing reporting Rx Patrol 32 October 2010
  33. 33. data analytics case review the 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 33 October 2010
  34. 34. data analytics case review columbus, OH  3 retail pharmacy locations involved October 2010
  35. 35. data analytics case review 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 October 2010
  36. 36. case initiation 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 October 2010
  37. 37. example data model October 2010
  38. 38. case investigation 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 October 2010
  39. 39. case investigation 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 October 2010
  40. 40. distribution channel Courtney Sunny Chris Rx Tech Rx Tech Rx Tech Store #2 Store #3 Store #2 Heather’s friend Chris’s Cousin Heather Rx Tech Store #1 Billy Outside seller Outside seller Heather’s Cousin 40 Jason Courtney’s BF October 2010
  41. 41. Questions ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? October 2010
  42. 42. footnotes 1. http://www.who.int/mediacentre/factsheets/fs275/en/index.html 2. http://www.who.int/mediacentre/factsheets/fs275/en/index.html 3. http://www.kff.org/rxdrugs/upload/Follow-The-Pill-Understanding-the-U-S-Commercial-Pharmaceutical-Supply-Chain-Report.pdf 5 4. http://www.integrichain.com/documents/whitepaper_secondarymarket.pdf 5. http://logisticstoday.com/operations_strategy/outlog_story_6299/ 6. http://www.thestreet.com/story/10244388/amerisourcebergen-dims-gray-market-for-drugs.html 7. http://findarticles.com/p/articles/mi_qn4180/is_20061228/ai_n17078016/?tag=content;col1 8. http://securepharmachain.blogspot.com/2009/07/bi-annual-cargo-theft-report-value-of.html 9. http://blog.fleetowner.com/trucks_at_work/2009/10/21/cargo-theft-and-trucking/ 10. http://www.pharmacytimes.com/issue/pharmacy/2006/2006-11/2006-11-6061 11. “Physical Security 101”, Presented at ASIS International Conference, June 30th, 2010, James Greer & David Brandt 12. http://drugtopics.modernmedicine.com/drugtopics/Modern+Medicine+Now/Pharmacy-robberies-force-new-focus-onprevention/ArticleStandard/Article/detail/585677 13. http://www.cdc.gov/niosh/blog/nsb021709_pharm.html 14. http://www.justice.gov/ndic/pubs/651/related.htm 15. http://associationdatabase.com/aws/NADDI/asset_manager/get_file/6898/street_issues_with_doctor_shoppers.pdf October 2010
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