Expensive specialty drugs are a growing concern that are traditionally overlooked in drug diversion efforts.
In a recent survey of hospital pharmacy executives, 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?” Additionally, 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
The Drug Enforcement Administration’s (DEA) Diversion Control Division web page (deadiversion.usdoj.gov/) states that challenges related to drug abuse stem from legitimately made controlled substances that are diverted via illicit drug traffic. The mission statement further notes that this division of the DEA seeks “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 calls to mind what the media and medical community are now referring to as the opioid crisis in the United States. According to the National Institutes of Health, more than 90 Americans die from opioid overdose every day. The CDC estimates that the economic burden associated with the opioid epidemic, including the cost of care, addiction treatment, and involvement in the criminal justice system, totals $78.5 billion per year.3
Unfortunately for stakeholders, the focus on pain medications is only part of the problem because expensive specialty drugs are a growing concern that is traditionally 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 and are commonly more expensive than other medications. According to a report from IMS Health, 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 forms, some intentional and some accidental. It can often be a case of medications not being tracked or followed correctly or completely along the journey of care. With the increasing use of specialty drugs across disease indications, hospital leaders must develop solid protocols for these medications, just as they do for narcotics.
Looking at the standard operating procedures and challenges around maintaining records and preventing drug diversion with opioids and narcotics gives us a good idea of what the obstacles will be in terms of managing specialty drugs. It’s common enough to track inventory. What’s more complicated is comparing purchasing data to the actual use of the medication. Optimally, we also want to track which physicians prescribe which medications the most often as well as dosage, disease indications, and whether the amount purchased matches what is received. It’s these types of gaps in data, along with how the data are 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 the risk of drug diversion and maintain accurate records on their specialty medications, several angles should be considered.
First, it’s vital to identify the right personnel. Who is involved with mitigating drug diversion largely depends 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, both pharmacists and technicians, as well as risk or compliance representatives within the hospital system but outside the pharmacy. It’s about covering all bases. The more people included in this process, the less likely that any single 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 narcotics. Hospital leaders should evaluate where they keep high-cost specialty drugs and how they manage and track usage 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, such as:
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. These risks include compromising patient safety, developing a negative reputation that can hurt business in the long term, lost revenue in high-cost narcotics, specialty drugs that do not make it to the patients who need them, and legal and financial fallout should the DEA become involved.
Profit margins for hospitals across the country are already thin and continue to diminish, particularly in rural areas where prescription drug abuse is especially high. A report from the Chartis Center for Rural Health notes that 80 rural hospitals across the United States have closed since 2010 and many are struggling to remain open, with 41% of rural hospitals operating at a negative margin.5
It’s possible that the financial picture could get worse before it gets better, according to another report from the American Society of Hospital Pharmacists (ASHP). For the report, the ASHP surveyed 165 experts in multiple areas of pharmacy practice, including chief pharmacy officers and directors of pharmacy from teaching hospitals, nonteaching hospitals, and academia. These experts work in multiple settings, including home health care, specialty pharmacy, and ambulatory, pediatric, and hospice care.
In the ASHP survey, 61% 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% over the next 5 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 that include “optimal inventory management.”6
With reports and projections such as these, drug diversion is a risk the industry simply cannot afford to take. What’s your strategy?