The diversion of medications from legitimate channels has increased as drug costs rise for both legitimate and illegitimate users. This, in turn, has resulted in more opportunities to obtain and sell diverted drugs through e-commerce and global trading channels. Although the diversion of narcotics and other controlled prescription medications has been getting much of the attention, there are many other ways medications leave the legitimate supply chain.
Explore This IssueOctober 2012
“Diversion is when a pharmaceutical product is illegally transferred from one market to another,” said Sebastian J. Mollo, MD, intelligence director for the Americas at the Pharmaceutical Security Institute in Vienna, Va. “This can take many forms, such as smuggling from one country to another or when transferred from institutional markets, such as Medicaid or Medicare, to the private market through fraud or illegal claim.”
This tends to break down into legitimate trade, gray market trade and illegal trade. The first is where the manufacturer of a product hands it off to a known wholesaler or distributor, who then gets it to the final customer. For the entire time, it is under the control of regulated and vetted entities that make sure it is not adulterated, that it is stored properly and that there is a high degree of certainty that the patient is getting a genuine product that is still efficacious.
“The gray market includes legitimate product, but you can’t be certain how it was handled during distribution,” said David Kent, vice-president and head of security at Sanofi North America, Cambridge, Mass. “It might have left the legitimate supply chain by any number of means and now is in the hands of the patient. You don’t know for sure if proper temperature, humidity or other factors that impact efficacy have been maintained.”
The third arm is illegal trade. This can take many forms, such as the counterfeiting of medications or the diversion and selling of narcotic drugs.
DEA and FDA Involvement
The Drug Enforcement Administration (DEA) and the U.S. Food and Drug Administration (FDA) look at different parts of the diversion problem. Under their enabling legislation, the DEA enforces the Controlled Substances Act and deals mainly with scheduled medications with varying potentials for abuse that are removed from the legitimate supply chain. The FDA is tasked by the Food, Drug and Cosmetic Act to grant pre-market approval to all drugs based on a demonstration of safety and efficacy for the intended indication, as well as to ensure compliance with federal regulatory standards for manufacturing quality, purity and potency of all approved medications.
The FDA has estimated that medications with a value of around $700 million entered the United States from Canada alone in 2003, and an equivalent amount may be entering from the rest of the world.
FDA Mission Is Drug Safety
For medications that are not controlled substances, the FDA is the lead agency. Although the DEA and the Department of Health and Human Services (HHS) deal largely with the illegal use of drugs, the FDA’s mission is drug safety.
“The FDA cannot ensure the safety and effectiveness of products that are not FDA approved and come from unknown sources and foreign locations, or that may not have been manufactured under proper conditions,” said Sarah Clark-Lynn, a spokesperson from the FDA’s Office of Public Affairs. “These unknowns put a patient at risk if they cannot be sure of the product’s identity, purity and source.”
One of the concerns in this area is counterfeit or fake medicine. It may be contaminated or contain the wrong or no active ingredient. They could have the right ingredient but at less-than-therapeutic or even fatal doses. Medications can also degrade if not stored and transported in compliance with established standards.
Misbranding is also a problem. This occurs when the labeling on the medication does not correspond to the requirements of the law. It ranges from a type size that is too small to improper directions for taking the drug.
“Just because medications have been approved by another country’s regulators does not automatically mean they are okay for use in this country,” said Dr. Mollo. “For example, the U.S. has high standards for bioequivalency in generic medications. It can be legal in one country and still not acceptable for use in this one.”
HHS Also Has Concerns
The Office of Inspector General (OIG) for the HHS is another group that may be involved in drug diversion if the scam includes payment from either Medicare or Medicaid.
“We are brought in when the medication is paid for using funds from Medicare or Medicaid sources,” said Ryan Lynch, assistant special agent-in-charge of the Office of Investigations at the OIG’s Tampa office. “Sometimes, the patient obtains the medications using a legitimate prescription and then sells them on the street. In other instances, there may be collusion between the patient, doctor and/or their pharmacy.”
The OIG looks for certain indicators that the physician knows the diversion is taking place. Among these are the charging of exorbitant fees: as much as $500 for a routine visit or for multiple services that they did not render.
“The take away is that as long as prescriptions are written in good faith based upon an examination of the patient, and if the doctor has established a legitimate medical purpose, there is no reason for concern,” said Lynch.
Diversion Occurs All Along Supply Chain
“Diversion can happen at so many places along the chain,” said Rusty Payne, a spokesman for the DEA drug diversion program in Washington, D.C. “People think it is just a doctor issue or a pharmacy issue, but it is that and much more.”
Specific to the diversion of narcotics, it can take the form of patients who “doc shop,” pharmacy theft and stolen prescription pads. Payne noted that around 70% of all abusers get their pills from friends or family.
He also stressed that the focus of the diversion project is not to stand between the patient and needed pain help. Much of their work involves inadequate record keeping and is dealt with administratively.
“It is important to understand that the laws are also there to protect the physician,” he noted. “We are law enforcers and do not get involved in legitimate doctor/patient relationships or decisions made about medical treatments.”
If physicians think there may be diversion problems occurring in their practice, they can contact the area DEA office and ask for the Office of Diversion Control. They can also visit www.deadiversion.usdoj.gov or call 1-800-882-9539.
According to a 1999 article published by the DEA, some of the signs of drug abuse and possible diversion of narcotics include patients who:
- Demand immediate attention;
- Have an unusually deep knowledge of controlled substances;
- Frequently give a medical history with textbook symptoms or a vague medical history;
- Have no family doctor or health insurance;
- Request a specific drug and are reluctant to take or say they have an allergy to other options;
- Fail to keep appointments for further diagnostic tests or refuse to see another specialist;
- Have cutaneous signs of abuse such as track marks or related scars on the body;
- Must be seen right away, often near the end of or after normal office hours; and
- Need a replacement for a prescription that has been lost or stolen.
For the physician, there are certain things to look for when evaluating sources for medication supply. Physicians must first check to see whether or not the potential vendor is licensed by the appropriate federal and state authorities. If there are doubts, contact the maker of the medication to confirm that you are dealing with an established source of the company’s product.
Other indicators include:
- Packaging materials in an unexpected language;
- Spelling or grammatical errors on the insert or the outside packaging;
- Packages that are in poor condition;
- Seals that are not intact; and
- A product look, color or consistency that does not match what you have seen previously.
“Price should be another red flag,” noted Kent. “There is a reason that these drugs are being sold so cheaply. They are not having to pay the costs associated with a regulated supply chain that produces a secure product.”
For the physician-administered medications, there are liability concerns that accrue when buying medications outside normal channels.
“It is a very high-risk activity,” said Dr. Mollo. “It brings exposure to malpractice if the medication is adulterated or the wrong strength. There is also the potential for criminal liability when submitting payment claims if products are not approved for use in the U.S.”
Diverting medication samples sits at the cusp of legal and illegal uses. On the one hand, samples obtained from the pharmaceutical company or their proxies most often flow through legitimate markets. On the other, selling medications obtained for free constitutes fraud when paid for by Medicare, Medicaid or insurance companies.
The rise of mail order and Internet-based sources for medications has further muddied the waters, especially when patients are involved. Although many of these advertise cheap medicines, it is very much a buyer-beware endeavor.
“The FDA advises consumers to use caution when buying prescription medicines online, as many websites that appear to be reputable and similar to legitimate retail pharmacies actually operate from outside the United States,” said Clark-Lynn. “It is very easy for these online resellers to pretend to be from Canada or another country when they are really operating from the far reaches of the globe. Although a country may have a strong regulatory process, U.S. consumers cannot rely on the fact that the products they are buying have been approved in that country.”
Internet and Mail Order Sources
The experts agree that the Internet sites of established national, regional and local pharmacies are as safe as their brick-and-mortar affiliates. A person can also confidently use the mail order outlets of these companies and any mail order pharmacies endorsed by their insurance companies.
The FDA recommends that physicians suggest to their patients that they buy only from pharmacies that are located in the U.S. and are licensed by the state board of pharmacy where the pharmacy is operating. The pharmacy should require a prescription from a physician or other appropriately licensed practitioner before sending the medications. Finally, it should provide contact information that allows the consumer to talk to a pharmacist if they have problems or questions. Additional information about buying prescription drugs over the Internet can be found online at www.fda.gov/drugs.
Reprinted with permission from the American College of Rheumatology.