As the nation continues to grapple with the opioid abuse crisis, both regulators and enforcement officials are taking steps to prevent the diversion of controlled substances. At the federal level, the Drug Enforcement Administration (DEA) and Department of Justice (DOJ) are cracking down and enforcing existing controlled substance requirements.

Meanwhile, state regulators and legislatures are considering new requirements for controlled substance prescribing and reporting. Specialty pharmacies must stay abreast of these developments to ensure compliance and effective partnerships with prescribers.

Enforcement

Distributing controlled substances legally requires compliance with certain DEA procedures designed to catch suspicious orders and diversion of opioids. The DEA and DOJ have been focusing on opioid-related cases, with an explosion of enforcement activity in recent months. As with any drug, pharmacies and manufacturers cannot induce doctors to prescribe a drug. Now more than ever, pharmacies, wholesalers, and manufacturers are coming under fire for their role in the opioid epidemic.

One example of the crackdown occurred when the DEA revoked the registration of wholesaler, Masters Pharmaceutical Inc. On June 30, 2017, the Court of Appeals for the DC Circuit upheld the decision to revoke Masters' DEA registration for failing to adequately report and investigate suspicious orders for controlled substances. Despite several red flags (eg, unusual prescription order size, frequency, or pattern), Masters is alleged to have failed to comply with DEA regulations that require DEA registrants to have systems in place to identify suspicious orders and report them to the agency.

Perhaps more striking than the revocation of Masters' DEA registration is the language of the decision, which appears to broaden monitoring and reporting requirements. The order characterizes the reporting requirement as "a relatively modest one," but if an order is flagged as suspicious, the registrant should either not ship or conduct due diligence. Only if the entity is "able to determine that the order is not likely to be diverted," may it then ship the order.

The order also interprets "suspicion," which is the trigger for the due diligence obligation, indicating that suspicion "is merely the apprehension or imagination of the existence of something wrong based on inconclusive or slight evidence." Specialty pharmacies should consider this language when establishing or revisiting current scheduled drug monitoring systems and reporting thresholds. There is no sign of enforcement activities slowing down, as July saw action on several fronts:

  • The DOJ announced, on July 13, a "nationwide takedown" consisting of 400 arrests, more than 120 of which were for opioid-related crimes. This is the eighth year that the DOJ has coordinated mass arrests, and it is the first time the department has focused on opioid crimes.
  • Two former sales representatives for Insys Therapeutics Inc pleaded guilty to kickback violations of bribing doctors to prescribe the opioid, Subsys (fentanyl). A DOJ press release indicated that one defendant taught other sales reps "how to entice doctors" by finding out what motivated the doctor, such as money and chocolate. The other sales representative reportedly induced the physicians with "hundreds of sham speaker programs" that involved dinner at high-end restaurants where no educational activities took place. The charges carry up to a 5-year sentence.
  • Drug manufacturer Mallinckrodt agreed to a $35-million settlement of claims that it failed to notify the DEA of suspicious orders, which a DOJ press release characterized as an "increasingly excessive quantity of oxycodone pills." The press release also indicated that the settlement requires Mallinckrodt to utilize chargeback and similar data to monitor and report suspicious sales of its oxycodone from providers and suppliers to the DEA.
  • CVS Pharmacy Inc, a subsidiary of CVS Health, agreed to pay $5 million to settle allegations that it did not adequately document on form DEA-222 the date and quantity of Schedule II drugs it received and did not maintain its documentation separate from other records.

State E-Prescribing Legislation

Last year, New York became the first state to require (and enforce) that prescribers issue all prescriptions electronically. Generally speaking, electronic prescribing (e-prescribing) is the creation and transmission of a patient's prescription using a secure electronic platform. E-prescribing is meant to reduce certain risks associated with traditional paper prescriptions, including forgery and medication errors due to unclear written scripts. One impetus behind the shift to e-prescribing is the prevention of fraudulent opioid prescriptions. Since this requirement took effect, additional states have passed legislation requiring e-prescribing:

  • Maine. Starting July 1, prescribers in Maine are required to issue opioid prescriptions electronically. Prescribers without the "capability to electronically prescribe" may request a waiver from the Maine Commissioner of Human Services. Additionally, the law requires that pharmacies, including nonresident pharmacies dispensing in Maine, be able to receive electronic prescriptions. Just as for prescribers, there is a waiver procedure available for pharmacies. Unlike the New York requirement, the Maine e-prescribing mandate applies only to opioid drug products.
  • Connecticut. Effective January 1, 2018, Connecticut prescribers must issue electronic prescriptions for all controlled substances, subject to limited exceptions. Prescriptions dispensed by a nonresident pharmacy are exempt from the electronic prescription requirement. However, prescribers who utilize this exemption have to document the reason for not sending the prescription electronically and include such documentation in the patient's medical record. As a result, nonresident specialty pharmacies servicing Connecticut patients may find that their prescribers expect the pharmacy to be able to receive scripts electronically.
  • Virginia. Effective July 1, 2020, a recently passed law mandates that all opioid prescriptions be prescribed electronically. The law also creates a "work group" to study how best to implement e-prescribing policies. Specialty pharmacies should expect more details on this requirement in the years to come.

In addition to state-specific technical requirements for e-prescribing platforms, these systems must be compliant with the DEA's regulations on e-prescribing.

Beyond e-prescribing mandates, states are employing a variety of tools to prevent and punish controlled substance diversion. A Tennessee law went into effect on July 1, 2017, requiring licensed health care facilities and providers to report to the appropriate licensing agency (subject to limited exceptions) if a licensed employee fails a drug test or refuses to submit to a requested drug test. The purpose of this new requirement is to allow licensing agencies to more quickly limit a health care provider's license in the event of suspected abuse. Although the primary burden of this requirement will fall on providers, pharmacies licensed by the Tennessee Board of Pharmacy will also be required to report a failed or refused drug test associated with their Tennessee-licensed pharmacist-in-charge. Specialty pharmacies must be alert to continuing regulatory and legislative developments that may affect pharmacy operations and compliance requirements.

Practical Steps for Specialty Pharmacies

In response to the rapidly evolving landscape of opioid laws and the acute enforcement focus on opioids, specialty pharmacies should be vigilant in monitoring changes in state laws and changing interpretations of existing laws. As the opioid epidemic continues to grip the country, regulators and enforcement agencies are not likely to turn their attention away from opioids. While most specialty pharmacies and others in the space are aligned with fighting the epidemic, it can be easy to get tripped up on technical or new regulations. Periodic compliance audits and utilization of external resources to stay on top of new laws are important tools for staying on the right side of the law.