Part 2: Employing Advanced Analytics to Help Fight the Opioid Crisis

May 09, 2019

For the first time in the Drug Enforcement Administration’s fight against the opioid crisis, the agency has criminally charged a pharmaceutical distributor. In late April, the agency arrested Laurence Doud, the former CEO of Rochester Drug Cooperative (RDC). The DEA charged him and former chief compliance officer William Pietruszewski, who pled guilty and is cooperating, with conspiracy to distribute controlled substances and willfully misrepresenting RDC’s opioid distribution. RDC will pay a $20-million fine. As the opioid crisis continues to escalate, the DEA has become more aggressive in holding pharmaceutical distributors and manufacturers liable for failure to adequately monitor and control their supply of controlled substances. Advanced analytics and a consistent process can help companies keep on top of suspicious orders and comply with DEA guidelines.

Per DEA guidelines, a distributor is required to cancel any suspicious orders and report them to the agency. The DEA defines suspicious orders as those “of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.” It is up to distributors to interpret those guidelines and develop an analytic model that can monitor orders in real-time, based on the best data available. Real-time monitoring is key. In 2013, McKesson was fined $150 million for failing to report suspicious orders to the DEA. Instead, their monitoring system focused on flagging suspicious customers and dealing with them after the fact. The DEA deemed this approach insufficient, claiming that McKesson reported too few suspicious orders and gave too much leeway for their customers, causing them to miss obvious bad actors. A robust suspicious order monitoring system should look at each order individually, comparing it to past orders --not just previous orders, while also comparing it to the orders of the customer’s peer group. This allows distributors to set accurate benchmarks for suspicious order sizes and frequencies, reporting orders with consistency rather than having to make value judgements in hindsight.

The DEA expects distributors and wholesalers to make use of the all the data available to them. Whether that is downstream data from vendors and pharmacies or regional trend data, the more data a distributor can bring into their analysis, the better they can manage their risk. Underutilization of available information can open distributors to liability, such as the case with Masters Pharmaceuticals, who selectively utilized downstream pharmacy utilization data. The DEA found this inconsistency to be inadequate. However, full synthesis of additional data increases the accuracy of reporting, both protecting distributors from liability and minimizing interruptions for legitimate clients.

Full compliance with the DEA’s suspicious order reporting requires a comprehensive analytical model, which can flag orders based on a variety of dimensions, and a consistent policy and process to follow-up on the results of that analysis. Backed by strong analytics, distributors can ensure they are following DEA regulations without disrupting their work with law abiding customers.

To learn how ASR Analytics can build a dynamic model that best suites the needs of your business, contact us here.