Adjust Order Size, Frequency, Pattern to Release

Section 1301.74 b

The registrant shall design and operate a system to disclose to the registrant suspicious orders of controlled substances.

• SOMLink from e-SupplyLink is the first commercially available solution.

The registrant shall inform the Field Division Office of the Administration in his area of suspicious orders when discovered by the registrant.

• This second sentence of 1301.74 b  leads us to today’s issue:

When should a suspicious order be reported to the DEA?

SOMLink and other Suspicious Order Monitoring solutions identify potentially suspicious orders before they are shipped.  SOMLink then gives the user the opportunity to research and document a potentially suspicious order.  The user can then act on a suspicious order in 3 ways:

• Approve the order
• Reject the order
• ERP Adjust the order

ERP Adjust

What is known as “ERP Adjust” in SOMLink gives the user the opportunity to send the original order back to the ERP system so that the order can be modified. For example, the user adjusts the quantity to a lesser amount, or deletes a line item entirely. (SOMLink then sends the adjusted order through the Suspicious Order Analysis a second time.)

THE QUESTIONS:

• Should a user be able to adjust an order that has been identified as potentially suspicious?
• What rights should the buyer have in requesting adjustments to the order?
• What are examples of reasonable explanations for making adjustments?

We have heard differing views on this subject.

VIEW 1: An order, with its original items and quantities, is suspicious when it is placed.  The original order should be reported to the DEA as suspicious.

VIEW 2: During the process of research and documentation, the order may need to be updated.  If a buyer requests to make a change to a potentially suspicious order, the order should be adjusted and re-analyzed.

What is your view?
Comment below.

Background:

The Food and Drug Administration oversees the National Drug Code (NDC) System, a directory of select OTC and prescription drug products. Pharmaceutical manufacturers register unique NDC’s in the directory to identify each of their drug products. Manufacturers are required to update their NDC registrations to remove expired products and register new ones.

Drugs listed in the NDC are identified by an 11-digit number divided into three segments. The first segment, assigned by the FDA, identifies the vendor (or labeler) involved with the manufacturing, packaging, or distribution of the drug. The manufacturer assigns the second and third segments of the code for a given product. Product codes in the second segment describe the generic entity, strength, and dosage form. The third segment, or package code, indicates the package size.

Wholesale distributors order products from manufacturers by NDC.

Wholesale distributors may order similar products such as analgesics, muscle relaxants, and antidepressants from multiple manufacturers, each having unique NDC’s.

Hospitals, clinics, pharmacies and doctors (generally “dispensers”) may order similar analgesics, muscle relaxants, and antidepressants by brand name from multiple wholesale distributors.

The DEA requires CS Registrant manufacturers and distributors to report suspicious orders of controlled substances.

Narcotic analgesics with different NDC’s or brand names can contain the same active ingredient such as hydrocodone, oxycodone or tramadol. Excessive quantities destined for illegal markets are difficult to detect.

If orders are placed by a buyer according to NDC or brand name, it is possible an excessive amount of a CS II-V drug could be ordered unnoticed and be diverted undetected to illegal markets.

Today’s DEA Blog Questions:

• How does your CS II-V order management system monitor suspicious orders of multiple NDC’s within the same drug family?

• Does your system cross reference NDC’s to the Generic Product Identifier for the active ingredient?

• Should the FDA or DEA develop standards for cross referencing NDA’s and active ingredients of concern?

Background:

Traditional “know your customer” due diligence has been at the foundation of pharma supply chain SOP for decades. All reputable pharmaceutical manufacturers and distributors have invested significant resources in developing best practices for maintaining the integrity of their order fulfillment process.

Monthly averaging and thresholds have traditionally provided account managers with the tools necessary to effectively identify orders with characteristics well outside the norm. As the size and complexity of the pharmaceutical industry grew, along with the demand for shorter order-to-cash sales cycles, account managers lacked the time and resources to thoroughly validate unusual orders prior to shipment.

Unfortunately, the criminal element was becoming increasingly bold and creative in their efforts to obtain drugs for illegal markets. In response, the DEA enacted a number of compliance and regulatory measures to increase pharma supply security and reduce illegal activity.

The combination of unabated illegal activity, increased legitimate market demand, and higher compliance and regulatory standards quickly undermined the relevance of traditional order monitoring techniques. The DEA demanded proactive interception of suspicious orders, not reports of suspicious sales after the fact.

Statistically Defensible Computational Analysis:

Those manufacturers and distributors of CS II-V with sufficient resources have responded to DEA mandates for upgrading suspicious order monitoring by developing and applying statistical analysis of every new order for controlled substances coming into their order management system.

Today’s DEA Compliance Blog Question:

Algorithms typically test each new order for significant deviation in order size, frequency and pattern. The tests are compared with the sales order history for a specific line item and specific ship to location. In this example the customer is being compared to itself.

The question is:  Are there benefits to comparing a new order not only to the buyer’s history for that specific item and destination, but also to the history of a group of peers within the supplier’s universe of buyers?

SomLink will support Peer Group Analysis for at least one early adopter. What is your assessment of this test?

How would your company respond to this DEA Notice?

…pursuant to 21 U.S.C. 823(f) and 824(a)(4), it is my preliminary finding that the continued registration of ABC123 Pharmaceutical Wholesale Company is inconsistent with the public interest.

…the Special Agents and Diversion Investigators of the DEA who serve this Order to Show Cause and Immediate Suspension of Registration are authorized to place under seal or to remove for safekeeping all controlled substances that Registrant possess . . .

Last month Harvard Drug Group responded by filing a plea in US District Court seeking relief from their Immediate Suspension Order. Before the week was over, DEA had reinstated Harvard’s CS III-V registration.

How did Harvard mitigate the DEA suspension so quickly? Court records indicate Harvard produced abundant evidence of the extraordinary measures they had taken to comply with DEA anti-diversion mandates, including the design and installation of “a comprehensive, state of the art suspicious order system to monitor orders for controlled substances.”

Does your company have the IT resources to hard code suspicious order analytic tools for your order management system? Are you comfortable with your 21 CFR 1301.74b SOM compliance?

If you have been thinking about an upgrade to your monthly averaging, thresholds, and exceptions reporting system, please consider SOMLink™ automated compliance toolset developed for CS II-V manufacturers and distributors. http://www.e-supplylink.com/som.htm

» Read more: Lessons from Harvard Drug’s Suspension

A Sunrise company surrendered its license to sell narcotic medications after a federal agency accused it of improperly supplying painkillers to South Florida clinics, officials said Monday.

DEA Accuses Sunrise Company of Supplying Oxycodone to ‘pill mills’

The U.S. Drug Enforcement Administration suspended Sunrise Wholesale Inc. from selling controlled substances on June 10, saying in an order that the company had supplied excessive amounts of the narcotic painkiller oxycodone to so-called pill mills operating in questionable ways.

Controlled Substance Registrants are required to place on hold, investigate, and disclose to the DEA all suspicious ORDERS of controlled sustances; NOT suspicious SALES after the fact.

SOMLink from e-SupplyLink does just that. SOMLink™ is a suite of analytic and order management tools designed to automate suppliers’ compliance with DEA 21 CFR 1301.74b.

“Using a computer to manage and report on high volume transaction business activities with extremely short order cycle times (receipt to delivery) is the only viable, cost effective methodology for the reporting of orders which may be considered excessive or suspicious.” -DEA