GPOS fear ac­tion against Car­di­nal

Will Car­di­nal rul­ing rein­vent roles, DEA strat­egy?

Modern Healthcare - - FRONT PAGE - Jaimy Lee

Ajudge’s rul­ing that Car­di­nal Health is re­spon­si­ble for self-polic­ing drug diver­sion ac­tiv­i­ties may have a broader im­pact on the ex­tent to which a whole­sale drug dis­trib­u­tor is re­spon­si­ble for de­tect­ing sus­pected diver­sion.

The Feb. 29 rul­ing al­lowed the Drug En­force­ment Ad­min­is­tra­tion to sus­pend Car­di­nal Health’s drug dis­tri­bu­tion li­cense at its fa­cil­ity in Lake­land, Fla., a decision that Car­di­nal Health said it plans to ap­peal.

The DEA had filed the im­me­di­ate sus­pen­sion or­der in Fe­bru­ary, al­leg­ing that the Dublin, Ohio-based dis­trib­u­tor failed to main­tain ef­fec­tive con­trols against drug diver­sion and that it failed to con­duct due dili­gence in the de­liv­ery of high vol­umes of oxy­codone to four phar­ma­cies in Florida.

Car­di­nal Health had won a tem­po­rary re­strain­ing or­der that lifted the sus­pen­sion un­til a judge in U.S. Dis­trict Court in Washington is­sued last week’s rul­ing.

“I think DEA is cor­rect that com­pa­nies have an obli­ga­tion to po­lice them­selves ... and to be proac­tive in as­sess­ing whether diver­sion (of con­trolled sub­stances) is tak­ing place,” Judge Reg­gie Wal­ton said in court, ac­cord­ing to Reuters.

The case ad­dresses the DEA’S ap­proach to fight­ing pre­scrip­tion-drug abuse by iden­ti­fy­ing de­fi­cien­cies within the health­care sup­ply chain, notably by pur­su­ing large dis­trib­u­tors and phar­macy re­tail­ers for the roles they play in mon­i­tor­ing drug diver­sion. It also raises ques­tions about a dis­trib­u­tor’s de­gree of re­spon­si­bil­ity in com­bat­ing the is­sue.

“We have gen­uine re­spect for the work of the DEA, but ef­fec­tively ad­dress­ing pre­scrip­tion-drug abuse re­quires a very dif­fer­ent ap­proach than does the war on il­licit drugs,” ac­cord­ing to a Car­di­nal Health state­ment re­spond­ing to the rul­ing.

At a House sub­com­mit­tee hear­ing last week about pre­scrip­tion drug diver­sion, DEA Deputy As­sis­tant Ad­min­is­tra­tor Joseph Ran­nazz­isi said dis­trib­u­tors are not mon­i­tor­ing cus­tomers as closely as they should. “If ev­ery­body within that sup­ply chain would po­lice each other, we wouldn’t have that prob­lem,” he said.

Lee Perl­man, pres­i­dent of GNYHA Ven­tures, the group pur­chas­ing or­ga­ni­za­tion for the Greater New York Hospi­tal As­so­ci­a­tion, said there is con­cern the case could lead some com­pa­nies to exit the dis­tri­bu­tion busi­ness, which could neg­a­tively af­fect pa­tients. “It sets a stan­dard of rein­vent­ing what the busi­ness of sup­ply chain is,” he said. “It re­de­fines what a dis­trib­u­tor is re­spon­si­ble for.”

Doc­u­ments Car­di­nal Health filed in the case ar­gue that the com­pany is proac­tive in its

ef­forts to de­tect and pre­vent drug diver­sion. The com­pany said it has sus­pended ship­ments of con­trolled sub­stances to at least 375 cus­tomers, in­clud­ing 180 phar­ma­cies in Florida, since Jan­uary 2007.

Car­di­nal Health, as well as Amerisource­Ber­gen and Mckes­son Corp., has been more ag­gres­sive in mon­i­tor­ing signs of drug diver­sion in re­cent years, said Thomas Gal­lucci, an an­a­lyst with Lazard Cap­i­tal Mar­kets. The three com­pa­nies make up about 90% of the drug dis­tri­bu­tion mar­ket in the U.S.

Even with poli­cies in place, the rul­ing raises tech­ni­cal ques­tions about what con­sti­tutes a red flag and how quickly a dis­trib­u­tor is ex­pected to respond to in­stances of sus­pected drug diver­sion, Gal­lucci said.

Ac­cord­ing to Car­di­nal Health, the DEA’S im­me­di­ate sus­pen­sion or­der in the cur­rent case “re­lies pri­mar­ily” on the high-vol­ume or­ders of con­trolled sub­stances made by the phar­ma­cies.

“The gov­ern­ment sug­gests that the vol­ume of the or­der gave way to a duty of due dili­gence,” said Bar­bara Ry­land, a lawyer in Crow­ell & Mor­ing’s Washington of­fice. Ry­land also noted that it may be eas­ier for the gov­ern­ment to pur­sue big­ger tar­gets rather than in­di­vid­ual providers or pa­tients.

The DEA also is­sued sus­pen­sion or­ders to two Cvs/phar­macy fa­cil­i­ties in San­ford, Fla., both of which are cus­tomers of Car­di­nal Health. The phar­ma­cies or­dered about 3 mil- lion oxy­codone dosage units in 2011. The av­er­age phar­macy in the U.S. or­dered about 69,000 dosage units last year.

Cvs/phar­macy, which was granted a tem­po­rary re­strain­ing or­der, said in a state­ment that is “is un­wa­ver­ing in its com­pli­ance with and sup­port of the mea­sures taken by fed­eral and state law en­force­ment of­fi­cials to pre­vent drug abuse and keep con­trolled sub­stances out of the wrong hands,” and that the two phar­ma­cies vol­un­tar­ily of­fered to not fill pre­scrip­tions for some con­trolled sub­stances un­til fur­ther res­o­lu­tion of the case.

Fac­tors such as vol­umes of cer­tain con­trolled sub­stances or the per­cent­age of cash trans­ac­tions may in­di­cate diver­sion, although high­vol­ume or­ders for con­trolled sub­stances can also be ex­plained by prox­im­ity to on­col­ogy clin­ics and re­gional de­mo­graph­ics, Car­di­nal Health said in a post to its web­site re­gard­ing the sit­u­a­tion in Florida. The DEA takes a “one-size-fit­sall” ap­proach to vol­ume av­er­ages but the agency has not set vol­ume lim­its on reg­is­tra­tions they grant to phar­ma­cies, the com­pany said.

The im­pact of the rul­ing is not yet clear. The DEA is sched­uled to hold an ad­min­is­tra­tive hear­ing April 3, which will lead to a final rul­ing from the DEA ad­min­is­tra­tor.

USED WITH PER­MIS­SION OF THE OR­LANDO SEN­TINEL, COPY­RIGHT (2012), STEPHEN M. DOW­ELL/OR­LANDO SEN­TINEL

DEA agents in Fe­bru­ary raided one of two Cvs/phar­macy fa­cil­i­ties in Florida. This is the first time drug en­forcers have tar­geted a ma­jor chain, DEA of­fi­cials say.

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