Mitigating drug diversion risks

Mitigating drug diversion risk: more than just controlled substances

In a recent survey of hospital pharmacy executives conducted by Porter Research, 78% of respondents answered “yes” when asked, “Are you aware the Federal DEA agency has created a task force seeking to identify diversion fraud in hospitals today…and there are penalties in the millions of dollars as well as prison sentences for potential violators?” And 56% said “yes” when asked, “Would knowing about the DEA Drug Diversion Task Force affect your opinion about the importance of analytics to identify diversion in your system?”1

“Many problems associated with drug abuse are the result of legitimately made controlled substances being diverted from their lawful purpose into illicit drug traffic,” reads the opening of the US Drug Enforcement Administration’s (DEA) Diversion Control Division web page. “The mission of DEA’s Diversion Control Division is to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs.”2

This description likely first calls to mind what the media and medical community are now referring to as the “opioid crisis” in the US. And it’s certainly true that this is more than hype; it’s an epidemic. According to the NIH, more than 90 Americans die from opioid overdose every day, and the CDC estimates that the “total economic burden of prescription opioid misuse alone in the United States is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement.”3

But, unfortunately for hospital executives, as if the financial and legal risks with controlled substances were not enough, expensive specialty drugs are now a growing concern that have traditionally been overlooked in drug diversion efforts.

Specialty drugs: a growing business

Specialty drugs are often used to treat conditions such as cancer, HIV, hemophilia, and multiple sclerosis. Because these are chronic conditions, drug therapies are often required for the duration of a patient’s life. These treatments are commonly more expensive than other medications. According to a report from IMS Health, “Medicines Use and Spending in the US: A Review of 2015 and Outlook to 2020,” specialty drug spending grew more than 15% from 2014 to 2015, contributing $150.8 billion to total US drug spending in 2015.4

Drug diversion in hospitals occurs in many different forms, some intentional and some accidental. It can often be a case of medications simply not being tracked or followed along the journey of care correctly or completely. With the increasing use of specialty drugs across disease indications, hospitals must develop solid protocols for these medications, just as they do for controlled substances.

Looking at the standard operating procedures and challenges around maintaining records and preventing drug diversion with controlled substances gives us a good idea of what the obstacles will be in terms of managing specialty drugs, as well. It’s common enough to track inventory — what did I buy? What’s more complicated is comparing that purchasing data to the actual use of the medication. Optimally, we would even want to track which physicians prescribe which medications the most often? At what dose, For what disease indications? Does the amount I buy match up with the amount that is, according to my records, being used? It’s these kinds of gaps in data, as well as how the data is managed and tracked, that leave a health system open to drug diversion risks.

Checks and balances: using analytics to stay on track

As hospitals and health systems contemplate which protocols need to be in place to mitigate risk of drug diversion and maintain accurate records on their specialty medications, several angles should be considered.

First, hospitals should identify the right personnel. Who’s involved with mitigating drug diversion will largely depend on the size of the organization and the resources available. Ideally, staff members from different departments should be involved in data tracking, logging, analysis, etc., with an eye out for drug diversion. This should include team members from the pharmacy department, including pharmacists and technicians, as well as risk or compliance representatives within the hospital system but outside of the pharmacy. It’s about covering all your bases; the more people a hospital can include in this process, the less likely that any one person is able to intentionally manipulate the system or make an inadvertent data tracking or processing error.

Next, drug storage and utilization protocols should be reviewed. It’s likely that most hospitals have a strong system already in place, based on their experience with handling controlled substances. Hospital leaders should ask themselves, “Where do we keep our controlled substances and our high-cost specialty drugs, and how are we managing and tracking their use on a daily, monthly, quarterly, and annual basis?”

Overall, a successful drug diversion mitigation strategy is all about having checks and balances in place — different people on different levels responsible for various parts of the puzzle.

A solid compliance solution coupled with robust analytics tools is necessary to effectively identify and manage drug diversion activity within an organization. Many issues must be considered: Can your system follow a high-cost drug from purchase to the patient? Are your processes manual or electronic? Do you have access to a longitudinal patient database, to compare costs and utilization patterns, that includes NDC codes and prescribing information? Can you efficiently sift through your data to look for patterns and outliers? Will your system spot a potential drug diversion problem and bring it to your attention before it spirals, or will you only know about the issue once it is too late?

The big picture: a high-stakes game

The risk that hospitals run in not having a strong, strategic plan in place for drug diversion is high. They risk compromising patient safety, developing a negative reputation that can hurt business in the long term, lost revenue in high-cost controlled substances and specialty drugs that don’t make it to the patients who need them, and legal and financial fallout if the DEA should become involved.

Profit margins for hospitals across the country are already thin and continue to diminish, particularly in rural areas, where prescription drug abuse may be especially high; “Rural Relevance 2017: Assessing the State of Rural Healthcare in America,” a report from the Chartis Center for Rural Health, notes that 80 rural hospitals across the US have closed since 2010, many more struggle to remain open, and “41 percent of rural hospitals operate at a negative margin.”5

And it’s possible that the financial picture could get worse before it gets better, according to another report, “Pharmacy Forecast 2018: Trends That Will Shape Your Future,” from the American Society of Hospital Pharmacists (ASHP). For the report, the ASHP surveyed 165 experts in “an area of pharmacy practice,” including chief pharmacy officers and directors of pharmacy from teaching hospitals, non-teaching hospitals, and academia, in settings including home health care, specialty pharmacy, and ambulatory, pediatric, and hospice care. In the ASHP survey, 61 percent of respondents said they felt it was “very likely” or “somewhat likely” that the annual number of hospital and health system bankruptcies will increase by at least 25 percent over the next five years. In response to this prediction, the ASHP report recommended that health systems “be prepared for significant reductions in revenue by ensuring good stewardship of your organization’s financial resources” focusing on areas including “optimal inventory management.”6

With reports and projections like these, drug diversion is a risk the industry simply cannot afford to take. What’s your strategy?