In response to the opioid crisis, the Department of Justice (DOJ) has made it a priority to target different components of the opioid supply chain for their contributing roles to the crisis. To date, these efforts primarily focused on prescribers, manufacturers, and distributors. However, recent enforcement efforts by DOJ have now unambiguously demonstrated its intent to target pharmacies and pharmacists.
In 2020, DOJ announced it would pursue aggressive enforcement against pharmacies and pharmacists who violate the Controlled Substances Act (CSA) by abdicating their responsibility to ensure opioids and other controlled substances are not diverted for unlawful purposes. These efforts, led by DOJ and the Drug Enforcement Agency (DEA), are already underway across the country.
Pharmacies Pursued for Ignoring Prescription “Red Flags”
One questionable legal theory supported by the government is establishing pharmacy liability under the CSA for ignoring red flags that might indicate drug abuse or drug diversion. Under DOJ’s theory, ignoring the presence of red flags may constitute filling prescriptions that are not issued for a legitimate purpose and that are not written by prescribers acting in the normal course of their professional practice, all in violation of 21 C.F.R. § 1306.04 of the CSA.
Prescriber Red Flags:
- Prescription written by a prescriber outside of the pharmacy’s trade area.
- Prescriber routinely prescribes a large number (or percentage) of prescriptions for controlled substances relative to prescriptions for non-controlled substances.
- Prescriber prescribes the same medication, with the same directions, for the same quantity for a large number of individuals.
- Prescriber routinely writes for large doses of controlled substances.
- Prescriber provides the same diagnosis for the majority of individuals.
- Prescriber engages in the unauthorized practice of medicine, including writing prescriptions outside the scope of practice and/or not having a proper relationship with the patient.
Patient Red Flags:
- Individual insists on paying cash, or insists on paying cash for controlled substances even though insurance is on file.
- Evidence of “doctor shopping” or “pharmacy shopping” exists.
- Individual resides outside of the pharmacy trade area.
- The individual’s statements and conduct or behavior suggest abuse of controlled substances.
- Individual asks for certain drugs prone to abuse by color, trade name or markings, and/or uses “street names.”
- Individual routinely attempts to obtain an early refill on controlled substances.
- Individuals have suspicious relationships with each other. For example: multiple patients filling prescriptions from one address, prescriptions being presented by someone other than the patient, or groups of patients arriving all with prescriptions for the same medication from the same doctor.
Prescription Red Flags:
- Prescriptions presented represent a “cocktail” of commonly abused drugs or are presented in a combination that can cause medical complications.
- Prescription presented is for an unusually large quantity or high starting dose.
- Prescription appears to be altered or duplicated.
- Prescription has an electronically generated or rubber-stamped signature.
Applying this red flag theory, DOJ has already successfully recovered against several pharmacies.
Most recently, in December 2020, DOJ obtained a consent judgment against Seashore Drugs, Inc., a North Carolina pharmacy, for ignoring signs of drug diversion and drug-seeking behavior.2 Ultimately, the pharmacy, owner/pharmacist, and pharmacist-in-charge were required to pay over $1 million in civil penalties as well as cease dispensing opioids and other controlled substances. Notably, the individual pharmacists were specifically penalized for their conduct, including being prohibited from dispensing opioids and controlled substances and being subject to DEA monitoring and other restrictions. Similarly, DOJ obtained a consent judgment against another North Carolina pharmacy, Farmville Discount Drug, Inc., and its owner/pharmacist in February 2020 resolving similar red flag allegations.3
In March 2020, the United States Attorney’s Office for the Southern District of Georgia settled a civil lawsuit filed against Chip’s Discount Drugs and its pharmacist-in-charge for over $2.1 million.4 The pharmacy dispensed thousands of illegitimate prescriptions for controlled substances allegedly ignoring red flags such as patients traveling long distances to fill prescriptions, patients being prescribed the “holy trinity” drug cocktail of opioids/benzodiazepines/Soma, and multiple individuals in the same household receiving similar prescriptions. It was disputed whether and to what degree the pharmacy should have known about these red flags.
In a further escalation of its enforcement efforts, in December 2020, DOJ filed a civil action against Walmart, alleging, in part, that Walmart pharmacies abrogated their responsibility under the CSA to act as a gatekeeper and knowingly filled prescriptions that were not medically necessary.5 According to DOJ, Walmart’s compliance department purportedly had “knowledge of red flags” regarding certain prescribers and, despite red flag reporting policies and procedures in place, failed to prevent invalid prescriptions from being filled. For example, pharmacists were required to complete “refusal to fill forms” when they declined to fill a prescription. The red flag information contained on these forms was allegedly not shared between pharmacies or amongst co-workers at the pharmacy completing the form. In its defense, Walmart issued a statement criticizing DOJ lawsuit as “misguided” and “forcing pharmacists to come between patients and their doctors.” 6
The government’s effectiveness in prosecuting pharmacies under this suspect red flag theory is yet to be determined. It seems tenuous to assert that failing to identify certain alleged red flags is enough in and of itself to render a prescription invalid. The CSA was originally implemented to provide a regulatory framework for recordkeeping and distribution of controlled substances. Indeed, if filling a particular prescription is so egregious, or even criminal, then there are other laws that are better suited to address that type of conduct. Challenges to DOJ’s theories of liability can be expected.
Pharmacies Should Be Prepared for Investigations and Audits
These recent actions demonstrate DOJ’s intention to hold pharmacies and pharmacists accountable for CSA violations and contributing to the ongoing public health emergency. Pharmacists must exercise sound professional judgment whenever they fill prescriptions, particularly those involving addictive controlled substances. Under the current enforcement environment, the burden is being placed on pharmacists to take appropriate steps to scrutinize and identify individual prescribers, patients, or prescriptions evidencing drug abuse or drug diversion.
In recent earnings reports, several of the nationwide pharmacy chains have disclosed that they received civil investigative demands and/or subpoenas regarding their sales of controlled substances. Accordingly, other pharmacies should be prepared to receive and respond to similar inquiries from their local United States Attorney’s Office, DEA, and other government agencies. Pharmacies should ensure appropriate policies and procedures are in place and being followed. In states such as Georgia and North Carolina, the state prescription drug databanks should be consulted before filling prescriptions for controlled substances as these databases may contain red flag information. In addition, pharmacies should be considerate in their hiring practices, including performing necessary background checks for any employee involved in pharmacy operations or dispensing.
If you have any questions or concerns raised by these recent enforcement efforts, please contact the authors for assistance.