US Pharm. 2012;37(5):56-58.

In March and April 2012, the Drug Enforcement Administration (DEA) started investigating the largest retail chain-store pharmacy in the United States, Walgreen Co., for evidence that the company had engaged in the practice of distributing “too much” oxycodone from a Florida distribution facility and dispensing it from its retail operations in the area.1 Walgreens owns more than 8,000 locations in 50 states and operates the most 24-hour and drive-through pharmacies in the nation.

If this sounds somewhat familiar, it is because the previous edition of this column focused on the DEA’s charges against Cardinal Health and CVS.2 In that case, the DEA also claimed that the two companies distributed and dispensed too much oxycodone from their operations in Florida. In the Walgreens case, the DEA is probing whether the chain allowed suspiciously high sales of the medication, claiming the quantities alone are indicative of diversion into illicit channels.

The Walgreens Case

Unlike the CVS case, which centered on two pharmacies that were supplied with oxycodone by another company, Cardinal Health, the DEA said it is investigating both retail and distribution facilities within Walgreens. According to the Miami Herald, the DEA confirmed it has searched six Walgreens community pharmacies located between Fort Pierce and Tampa Bay as well as the distribution warehouse in Jupiter, Florida, as part of its crackdown on illicit prescription drug traffic in these areas.3 The probe is focusing on the amount of oxycodone being distributed and dispensed. In conducting this investigation the DEA searches for and takes “business records from the locations, trying to determine, among other things, what portion of customers pay for oxycodone with cash” under the theory that a “high percentage of customers paying cash—as opposed to using insurance—is often a sign of drugs being diverted to the black market.”4

One of the Walgreens stores involved in the investigation is located in Oviedo, Florida. In 2009, that pharmacy ordered approximately 80,000 oxycodone tablets. In 2011, the number jumped to 1.7 million pills. The DEA fears that pharmacies could be illegally filling prescriptions for unscrupulous physicians involved in trafficking the pills or selling them directly to addicts. “I don’t think there’s any question about it that you have rogue pharmacies and rogue physicians,” Brad Garrett, a former FBI officer, opined. “This is all about money.”5

In Fort Myers, Florida, another Walgreens pharmacy ordered 95,800 oxycodone doses in 2009. In 2011, the number jumped to 2.1 million tablets. This one store accounted for 67% of all oxycodone medications dispensed in the same zip code for that year.6

In 2009, no Walgreens pharmacies were listed in the DEA’s top 100 purchasers of oxycodone in Florida. However, during the first three months of 2012, 53 Walgreens stores appeared on that list. According to DEA Special Agent in Charge Mark Trouville, the agency is “concerned about the recent significant rise in the number of oxycodone tablets purchased by Walgreens in Florida.” Walgreens has had a reputation for carefully monitoring its narcotics sales and being suspicious of prescriptions from pain clinics. In fact, court records show that undercover agents investigating a West Palm Beach clinic in 2010 overheard nurses coaching their patients to avoid taking their prescriptions to Walgreens pharmacies.7

It must be noted that in the Walgreens case, the DEA’s investigation is at an early step in a regulatory, but not criminal, probe. In contrast, during the CVS investigation, search warrants were issued by an administrative law judge, followed by orders from a federal magistrate and a
federal district court judge, with a decision by a federal court of appeals upholding the lower proceedings months after DEA officers took the necessary stops to bar the sale or distribution of controlled substances from those stores and from the distribution center.

The DEA is claiming that all pharmacies—from mom-and-pop pharmacies to multibillion-dollar firms—have a duty to help police the distribution of the highly addictive drugs, and investigate or take action when sales orders spike at one store or in one area. Both distributors and dispensers claim that the DEA has not clearly outlined what it wants them to do and does not share information that would make it easier to police pharmacies and patients. The DEA argues that disclosure of information, such as customer data and details of other distributors’ sales to pharmacies, would reveal proprietary data, and adds that it meets frequently with companies to discuss compliance issues.

Restrictions upon a distribution center limiting its ability to ship controlled substances of any kind could have a significant impact on Walgreens’ business because it could complicate the company’s ability to supply stores in a broad region. According to the Wall Street Journal, “Distribution centers like the one in Jupiter service drugstores in multiple states. The company declined to say how many stores are served by the Jupiter facility, or how many similar controlled-substance distribution centers the company has.”8

Perhaps more telling of the potential impact, lawyers in the CVS-Cardinal case argued that stopping controlled-substance shipments from its distribution facility would cause major disruption for pharmacy and hospital customers. As reported in the Wall Street Journal, “The DEA earlier moved to block the sale of controlled substances from the two CVS stores in Florida as well as one Cardinal Health distribution center. The companies are trying to reverse the DEA’s decision in court, but the first judge to review the case said the DEA acted appropriately. CVS and Cardinal officials insist they took aggressive measures to investigate any potential diversion of drugs, and said the DEA had been unclear in what it expected them to do. The CVS and Cardinal locations are currently blocked from distributing controlled substances pending administrative hearings within the next month.”9

From the perspective of Walgreen Co., the DEA investigation could not have come at a worse time. The company reported March sales of $6.02 billion, a 4.3% decrease from the same month last year. The decline has been attributed to the fact that Walgreens and Express Scripts, a pharmacy benefit management (PBM) company, failed to reach a contractual agreement, resulting in a decision by Walgreens to stop filling the prescriptions presented by Express Script customers. When news of this decision became public, several other large pharmacy chains, including CVS, embarked on national or regional advertising campaigns to bring the patients who could no longer use a Walgreens store into their own base. It might be noteworthy that CVS Caremark, the third largest chain pharmacy behind Walgreens and Rite Aid, also has financial concerns, posting losses every year since 2007 when it acquired the Brooks Eckerd chain.10

Beyond “Pill Mills”

Over the last few years, Florida has become a major source of black-market opioid products that have been traced across the eastern part of the U.S. from Kentucky to Massachusetts. The state and local police authorities, as well as the DEA, have noted that efforts to clear out the “pill mills” where physicians prescribed and dispensed oxycodone pain drugs for cash-paying “patients” has caused some of the illicit market to shift into retail pharmacies. According to the Miami Herald, “As state lawmakers and police have cracked down on these clinics—their numbers have dropped from more than 800 in 2010 to 500 today, state officials say—the DEA has turned its attention to the other links in the chain: pharmacies and drug distributors.”11

Walgreens has allegedly been purchasing larger quantities of oxycodone more recently than in prior years. A spokesperson for the company stated that it is working with the DEA to complete its investigation. The federal crackdown on oxycodone use comes as it focuses on what has been characterized as “one of the nation’s most serious medical issues.”12,13

Relative to the 1.5 million people estimated to be addicted to cocaine in this country, there are approximately 7 million individuals who are using prescription drugs for nonmedical purposes. In the last decade, the number of people dying from prescription-drug abuse has quadrupled to nearly 15,000 per year, now surpassing those who die from heroin and cocaine use combined. In 2007, approximately 27,000 unintentional drug overdose deaths occurred in the U.S. The CDC regards the increase in unintentional drug overdose death rates in recent years to be driven by increased use of opioids.14

The CDC has data showing that for every unintentional overdose death related to an opioid analgesic, nine persons are admitted for substance abuse treatment, 35 visit emergency departments, 161 report drug abuse or dependence, and 461 report nonmedical uses of opioid analgesics.15 It concludes that implementing strategies that target those persons at greatest risk will require strong coordination and collaboration at the federal, state, local, and community levels, as well as engagement of parents, youth influencers, health care professionals, and policy makers.

Analysis

Acknowledging that corrective action must be taken to halt this drug abuse epidemic and viewing the Walgreens, CVS, and Cardinal cases together, it seems that perhaps the DEA is taking a cue from the FDA to hold corporations and
executives of those corporations responsible for the alleged misdeeds of the companies.16 This theory of corporate social responsibility is trending into untried waters. It sounds like an ethically “green,” politically correct thing to do. Holding companies civilly and/or criminally accountable for violations of laws and policies makes a good argument for common sense. But the real challenge is whether or not the theory will pass legal muster. At this moment, that is the great unknown.

The DEA might also be taking another cue from the Internal Revenue Service (IRS), the tax collectors who tell us what kinds of things we can deduct and let us get away with whatever seems reasonable as long as we do not cross the “too much” line of demarcation. If the theory works for the IRS, why not let the DEA try it out? There are some fundamental differences. The DEA has to deal with this nasty little Constitutional standard that a person (i.e., an individual or any legal entity such as a corporation) is presumed innocent until found guilty. The IRS, on the other hand, takes money away from you before you get it and makes you prove that the government owes you money before releasing it to you. Do we want that kind of standard being used by the DEA?

Let’s be very clear about this message. Nothing here should be construed to defend any of the organizations mentioned in this article; these companies should have known they were distributing, dispensing, and selling “too much” oxycodone. In addition, nothing here should be considered as a denial of the horrible epidemic that oxycodone abuse has created, emotionally and financially. But just as clearly, it must be understood that this is a country where the rights of all persons are based on the notion of not being guilty until adjudged to be so and that everyone, including the giant corporations, is entitled to due process. The problem with “too much” is that there is no objective standard to base this judgment on.

There is one whole entire piece of the pie that has been ignored in the creation of this awful mess. It would probably be impossible to get anyone from the DEA or the Department of Justice (to which the DEA reports) to admit this, but in at least one way, this agency is, in part, also blameworthy for failing to exercise its regulatory powers to stop the manufacturers of oxycodone from producing “too much” of this painkiller through its quota system for Schedule II drugs.17 The quota system is supposed to establish limits on the amount of any single Schedule II drug that can be manufactured in a year and that amount is supposed to be based on an estimation of how much of each drug is necessary to treat the legitimate needs of the U.S. population, not the amount that the market will bear.18,19 At least an acknowledgment that this is a very big part of the problem would help everyone understand how to go about managing it and eradicating it to the best extent possible.

REFERENCES

1. DEA searches Florida Walgreens. UPI. April 7, 2012. www.upi.com/Top_News/US/2012/04/07/DEA-searches-Florida-Walgreens/UPI-76811333844848/?spt=hs&or=tn. Accessed April 15, 2012.
2. Vivian JC. Corporate social responsibility: justice without due process? US Pharm. 2012;37(4):61-62. www.uspharmacist.com/content/d/pharmacy_law/c/33684/. Accessed April 23, 2012.
3. Hiaasen S. Walgreen pharmacies draw scrutiny in Florida pill investigation. Miami Herald. April 6, 2012. www.miamiherald.com/2012/04/06/2735540/walgreen-pharmacies-draw-scrutiny.html. Accessed April 16, 2012.
4. Barrett D. Pain-pill crackdown spreads: federal agents search six Walgreen pharmacies, distribution center in Florida. Wall Street Journal. April 5, 2012. http://online.wsj.com/article/SB10001424052702303302504577325750218701694.html. Accessed April 16, 2012.
5. DEA investigates Oviedo Walgreens for oxycodone orders. WFTV. April 6, 2012. www.wftv.com/news/news/local/dea-inspects-oviedo-walgreens-oxycodone-probe/nMLg8/. Accessed April 16, 2012.
6. DEA investigating Florida Walgreens store & distribution center. CBS Miami Radio. April 6, 2012. http://miami.cbslocal.com/2012/04/06/report-dea-investigating-florida-walgreens-store-distribution-center/. Accessed April 16, 2012.
7. See Note 3, supra.
8. See Note 4, supra.
9. See Note 4, supra.
10. UPDATE: Rite Aid 4Q loss narrows amid sales growth, tax benefit. Wall Street Journal. April 12, 2012. http://online.wsj.com/article/BT-CO-20120412-711339.html?mg=reno64-wsj. Accessed April 17, 2012.
11. See Note 3, supra.
12. See Note 4, supra.
13. CDC grand rounds: prescription drug overdoses—a U.S. epidemic. MMWR. January 13, 2012. www.cdc.gov/mmwr/preview/mmwrhtml/mm6101a3.htm. Accessed April 16, 2012.
14. Policy impact: prescription painkiller overdoses. CDC. November 2011. www.cdc.gov/homeandrecreationalsafety/rxbrief/index.html. Accessed April 16, 2012.
15. The DAWN Report: Highlights of the 2009 Drug Abuse Warning Network (DAWN) Findings on Drug-Related Emergency Department Visits. Rockville, MD: Substance Abuse and Mental Health Services Administration; 2010. www.samhsa.gov/data/2k10/dawnsr034edhighlights/edhighlights.htm. Accessed April 17, 2012.
16. Vivian JC. New FDA strategy: criminal charges against pharma executives. US Pharm. 2011;36(6):58-62. http://uspharmacist.com/content/d/pharmacy_law/c/28619/. Accessed April 16, 2012.
17. Controlled substances: established aggregate production quotas for 2012. Docket No. DEA 358E. www.deadiversion.usdoj.gov/fed_regs/quotas/2011/fr1215.htm. Accessed April 17, 2012.
18. Sullum J. Does the DEA know what quota means? Reason. January 3, 2012. http://reason.com/blog/2012/01/03/does-the-dea-know-what-quota-means. Accessed April 17, 2012.
19. Taylor G. As abuse mounted, DEA boosted painkiller supply. Salon. October 11, 2011. www.salon.com/2011/10/11/as_abuse_mounted_dea_boosted_painkiller_supply/. Accessed April 18, 2012.

To comment on this article, contact rdavidson@uspharmacist.com.