Common Examples of Non-Compliance in DEA Pharmacy Audits
Pharmacy owners and pharmacists are entrusted, among other things, with the sensitive task of managing controlled substances responsibly and in accordance with the law.
This reality places them under the watchful eye of the Drug Enforcement Administration (DEA), which is constantly on the lookout for signs of abuse and corruption, especially with regard to addictive substances and fueling the ongoing opioid epidemic.
If you're a pharmacy owner, you may be subject to DEA pharmacy audits, often without advance notice. These audits focus on monitoring the pharmacy's handling, recordkeeping, storage, and distribution of controlled substances.
Instances of non-compliance identified during the audit, whether intentional or unintentional, can result in significant legal and professional consequences.
Simply put, DEA audits focus on ensuring compliance with the Controlled Substances Act (CSA) and its regulations. Non-compliance can lead to significant consequences, including fines, legal action, and potential loss of DEA registration.
By understanding and addressing common areas of non-compliance, pharmacies can strengthen their compliance programs, minimize risks, and prepare effectively for DEA audits. Establishing a culture of compliance and prioritizing accurate record-keeping, along with robust security measures, are crucial steps in this process.
Let's take a closer look at some of the more common non-compliance issues so you can be better prepared.
Inaccurate Controlled Substance Records
Accurate recordkeeping is not just a requirement, but a key responsibility in controlled substance compliance. Federal law mandates pharmacies to maintain detailed and precise records for all controlled substances received, dispensed, or destroyed.
These records, which must be readily retrievable and retained for a minimum of two years, serve as a testament to your pharmacy's commitment to safety and compliance with the law. Unfortunately, recordkeeping errors are pervasive. Some common examples include the following:
- Failure to document prescriptions properly, especially the documentation required to validate narcotics prescriptions.
- Missing or improperly completed DEA Form 222s.
- Absence of biennial inventory records.
Even minor lapses can be interpreted as negligence or a red flag for diversion, potentially escalating the audit into a deeper investigation.
When facing a DEA audit, being able to use records to demonstrate compliance is one of the most effective ways to avoid losing your pharmacy's DEA registration and facing other penalties.
Notably, it isn't just what records you keep that matters, but also how you keep them. If you cannot quickly locate your pharmacy's registration documents, compliance documents, or inventory records, the DEA's Diversion Investigators will likely view this as a sign that they may not be sufficient.
Lack of Written Policies
Opioid prescription practices are closely scrutinized during DEA audits. To provide a clear path to compliance, pharmacies must not only have appropriate safeguards in place to prevent theft and misuse of opioid medications but also have written policies that outline their pharmacy's procedures and protocols.
These policies serve as a guide, ensuring that everyone in the pharmacy is aligned and working towards the same goal of compliance. Similarly, the DEA's Diversion Investigators will review to ensure that your pharmacy's compliance program includes adequate provisions regarding diversion control.
Under federal law, pharmacies are obligated to play an active role in preventing the diversion of opioids and other commonly abused drugs. If your pharmacy simply fills prescriptions as they come in, this will not be viewed favorably by the DEA.
Whether a referring physician has, or has been offered, an ownership interest in the pharmacy or has another financial interest in directing patients to the pharmacy under audit, the pharmacy's owners will need to be prepared to demonstrate how and why the relationship is legally permissible.
Lack of Documentation
This refers to the lack of documentation showing how the pharmacy validates narcotics prescriptions. Pharmacies must have adequate measures in place to validate all narcotics prescriptions.
When one of these prescriptions comes in, the pharmacy must confirm that the prescription is medically necessary, and it must take certain other steps in order to mitigate the chances of the drug ending up in the hands of a dependent user.
Notably, however, simply having a compliance protocol isn't enough; the protocol also needs to be clearly documented.
As part of the pharmacy's regular process for validating narcotic prescriptions, maintaining regular, ongoing communication with prescribing physicians should be a key component. This communication not only ensures the validity of the prescriptions but also fosters a collaborative relationship, demonstrating your pharmacy's commitment to patient care and safety.
Thus, documentation is critical, as the DEA's Diversion Investigators will be looking for proof that your pharmacists routinely contact patients' doctors to confirm the validity of their prescriptions.
Inventory Discrepancies
Pharmacies are required to maintain precise inventory counts for all controlled substances. The DEA expects the actual inventory on hand to match the documented quantities. Any discrepancy, no matter how small, can raise concerns about potential diversion. Common causes of inventory discrepancies include:
- Miscounts during inventory checks.
- Failure to update inventory after returns or transfers.
- Loss of controlled substances due to theft or human error.
Mistakes happen, and even the DEA gives pharmacies a certain amount of leeway. However, if you make too many mistakes, then the DEA will dig deeper to find out why your pharmacy has made so many mistakes.
This is particularly true with regard to inventory errors. As a general rule, the DEA expects pharmacies to maintain accurate records of the drugs they have in stock. If investigators identify a disproportionate number of errors, they will determine the cause so that the DEA can take appropriate action.
Prescriptions for Cash-Paying Patients
There is nothing wrong with a patient paying in cash. But if too many patients pay in cash, then the DEA will view this as a red flag. There is no specific number, and DEA investigators will generally conduct a smell test, a subjective evaluation taking into account the volume of cash payments within the context of other relevant factors.
Ultimately, all cash payments must be fully documented, and the DEA will verify that the pharmacy does not routinely accept cash payments under suspicious circumstances or specifically cater to clients who pay cash.
Improper Controlled Substances Storage
Controlled substances must be stored in a manner that minimizes the risk of diversion and theft. This typically involves securing drugs in a locked, substantially constructed cabinet. Failure to comply with these requirements is a common finding in audits.
Examples of improper handling or storage include:
- Leaving controlled substances unsecured or unattended.
- Allowing unauthorized personnel access to controlled substances.
- Failing to document the destruction or disposal of expired drugs.
Failure to Report Theft or Loss
Pharmacies are legally required to notify the DEA immediately in the event of theft or significant loss of controlled substances. This notification must include the submission of the DEA Form 106.
Failing to report such incidents can lead to serious allegations of diversion or negligence, potentially resulting in the loss of DEA registration and other severe penalties.
Another similar issue is having a history of admonishment or failed inspections. Once your pharmacy falls out of favor with the DEA, it can be a lengthy and challenging process to regain its reputation. If your pharmacy has a history of admonishment or failed inspections, this will follow you into subsequent DEA audits.
If your pharmacy is now fully compliant and you have the documentation to prove it, you can use this to resolve the audit without monetary liability or other penalties.
Dispensing Violations
Dispensing controls are stringent. Pharmacies must ensure that prescriptions for controlled substances are legitimate and issued for a valid medical purpose. Common dispensing violations include:
- Filling prescriptions that are incomplete, fraudulent, or electronically altered.
- Dispensing quantities that exceed state or federal limits.
- Failing to verify the legitimacy of high-risk or suspicious prescriptions.
One particular red flag DEA looks for is the dispensing of inordinate quantities of high-risk drugs (such as OxyContin), whether it's large amounts in single prescriptions or multiple prescriptions for these drugs.
Even if the prescriptions are legitimate and properly documented, this situation can lead to further suspicion and investigation.
Before providing refills, pharmacies are required to verify that the refills are medically necessary. Pharmacies that indiscriminately provide refills, especially for repeat customers, are likely to face allegations that they are not doing enough to prevent prescription fraud and mitigate the risk of the drugs they dispense being diverted or abused.
Dispensing Certain High-Risk Drugs
Notably, certain drugs are well-known as being particularly sought-after among drug abusers and dependent patients. Dispensing a high volume of these drugs, such as Oxy 30g, will raise questions during a DEA pharmacy audit.
Clearly, these drugs all have legitimate medical uses, and patients can have valid prescriptions. But if a pharmacy's overall dispensing volume is too high, or if the same patients are consistently receiving) refills, then the pharmacy could be at risk for allegations of criminal drug diversion.
Just as dispensing certain drugs can increase a pharmacy's risks during a DEA audit, so can dispensing certain drug combinations. Specifically, this includes the "Holy Trinity," which is a combination of a benzodiazepine, an opioid, and a muscle relaxant.
These combinations are highly sought after, but they are also highly dangerous, which puts them at the top of the DEA's list of enforcement priorities.
Inadequate Staffing
To meet their statutory and regulatory compliance obligations, pharmacies must have adequate staffing. If a pharmacy isn't adequately staffed, the DEA's Diversion Investigators will assume that this means the pharmacy is incapable of managing compliance.
Clearly, different pharmacies will have different staffing needs, and it may be the case that a pharmacy is capable of operating with fewer personnel than a similarly sized pharmacy that dispenses a similar number of prescriptions.
A similar issue is inadequate training of staff by the supervising pharmacist in charge. Pharmacies must provide their staff with adequate training on compliance.
Different personnel will need to be trained on various aspects of compliance; however, all personnel should receive appropriate training and have ongoing access to relevant training materials and compliance documentation.
If a pharmacy does not have recent, up-to-date training logs, this will be viewed as a possible indication that compliance deficiencies may exist.
Consequences of Non-Compliance
The consequences of DEA non-compliance depend on the severity of the violations. Potential penalties include:
- Civil Fines: Non-compliance can result in substantial civil fines, ranging from thousands to millions of dollars, depending on the severity of the violations.
- Administrative Penalties: Pharmacies may face the suspension or revocation of their DEA registration, which would effectively prevent them from dispensing controlled substances.
- Criminal Charges: Serious violations, especially those involving intentional diversion, can result in criminal prosecution. This could lead to imprisonment for pharmacy owners or employees found guilty.
Responding to allegations of non-compliance can be a frightening prospect for pharmacy owners who may already be overwhelmed with operational responsibilities, especially considering the high stakes involved. A federal criminal defense attorney experienced in DEA cases can provide invaluable assistance by:
- Reviewing and analyzing DEA audit findings or allegations.
- Identifying and addressing compliance gaps.
- Negotiating with DEA officials to resolve minor violations and reduce penalties.
- Representing pharmacies in administrative hearings or criminal proceedings.
- Advising on best practices to prevent future issues
For more information, contact our federal criminal defense law firm, Eisner Gorin LLP, located in Los Angeles, CA.
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