Prescription Drug Wholesale Distributors: Vigilance is More Important than Ever Before

This post is an entry for our $25,000 scholarship contest. The post was created by Rachael Summers and may not always reflect the views of JW Surety Bonds.

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A quick survey of the Drug Enforcement Agency’s (DEA’s) news releases reveals a handful of events repeated over and over again: violations of the US Controlled Substance Act, arrests, sentencing, and prominently, the names of well known Prescription Drug Wholesale Distributors and Retail Chains.

In one example from 2012, one of Cardinal Health’s facilities was suspended for two years from selling controlled-substance (CS) medications. The settlement included a signed Administrative Memorandum of Agreement (MOA), the terms of which applied to all of Cardinal’s 28 registered distribution facilities.

In the agreement, Cardinal admitted that its due diligence efforts for some pharmacy customers then and in 2008 for similar violations were inadequate.

Joseph Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control said “Regardless of the size of a company or its profitability, organizations that fail to prevent the diversion of powerful controlled substances will be held accountable.”

The DEA news release adds that “allegations included that this distribution center failed to maintain effective controls against the diversion of controlled substances, specifically oxycodone. In just three years, Cardinal’s Lakeland, Florida center supplied more than 12 million dosage units of oxycodone, a highly addictive, powerful painkiller, to just four area pharmacies. “

Florida and other states have been at the center of this crisis, particularly for the CS products oxycodone and hydrocodone. In addition to legal problems come the moral issues of overdosing and criminal activity. These products fall into the hands of people who could abuse them.

In July of 2013, pharmacy retail giant Walgreens agreed to pay $80 million in civil penalties under the Controlled Substances Act for record keeping violations. Just three months earlier, the CVS retail chain agreed to pay $11 million for its record keeping violations.

There is no shortage of news about pharmacists, physicians, clinic owners and “pill mill” operators going to jail over the short-sighted promise of high profits from illegal activity. But these pill mills get their product from distributors, another concern for legitimate distributors who need to make sure that their customers are as legitimate as they are. In one example, a “pill-mill” medical clinic in Georgia was closed down; the doctor found guilty of 49 counts of dispensing without legitimate medical purpose and conspiracy to launder money.  He faces up to 20 years imprisonment on each count. The company that financed the clinic was fined $2 million for its part in the crimes.

In August of 2014, the DEA made the popular opiate hydrocodone more restrictive, changing it from Schedule III to II. This will certainly change how Prescription Drug Wholesale Distributors store, ship and track this product.

For these reasons and many others, Prescription Drug Wholesale Distributors need to stay abreast of news, legal requirements and the latest trends. Analysis is needed to detect “pill mills” and other anomalies that attempt to buy and sell CS products in volumes not possible for legitimate businesses.

As Bishop Desmond Tutu said, “the price of freedom is eternal vigilance,” and vigilance is more important than ever before, for you and your company.