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. agenda
overview of diversion impact on retail pharmacy
retail Rx diversion countermeasure strategies
case reviews
October 2010
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
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Counterfeit video 1
October 2010
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. 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. 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:
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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
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Facility Theft Video
October 2010
10. manufacturer/wholesaler level diversion
Countermeasures
Physical security measures
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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. 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. 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
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October 2010
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
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October 2010
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
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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. 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.
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October 2010
16. anatomy of a self medication case
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October 2010
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
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Changes to a legitimate script typically to increase
dosage quantity
Doctor Shopping Video
October 2010
19. countermeasures
physical security
system controls & integration
SOP and process controls
vulnerability aligned audit process
pre-employment screening
pharmacy theft specific training programs
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recognizing signs of abuse
robbery incident management training
recognizing suspicious prescriptions
comprehensive data analysis
October 2010
23. system control and integration
unique user identification for inventory,
dispensing and POS transactions
transaction thresholds
systems integration
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October 2010
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
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What is the medicaid co-pay waiver process?
What are the SRA management thresholds?
October 2010
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?
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October 2010
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
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October 2010
27. script awareness training
Pharmacists
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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. script awareness training
Physicians – pad/identity theft
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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. script awareness training
Physicians – doctor shopping
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PMP
38 states and counting have PMP programs
Patient contract
NADDI membership excellent resource for effective contract
examples/experiences
Chart documentation
October 2010
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
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October 2010
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
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October 2010
32. robbery incident mgmt training
staff cooperation
observation
Physical characteristics
Tatoos
Birthmarks
Height/weight
Hair/eye color
clothing
reporting
Rx Patrol
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October 2010
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
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October 2010
34. data analytics case review
columbus, OH
3 retail pharmacy locations involved
October 2010
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. 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
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. 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. 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
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Jason
Courtney’s BF
October 2010