How to Survive a DEA Inspection Series Maintaining

How to Survive a DEA Inspection Series: “Maintaining Your Pharmacy’s DEA Compliance” Independent Pharmacy Alliance of America Inc. (IPA) June 24, 2015 1

James R. Schiffer, Esq. Member of Allegaert Berger & Vogel LLP New York, NY Carlos M. Aquino Compliance Consultant Pharma. Diversion, LLC Media, PA Individuals may not modify or use this presentation without the expressed written consent of Pharma. Diversion, LLC. 2

PHARMADIVERSION DISCLAIMERS - We Do Not Represent DEA - We Do Not Speak on Behalf of DEA - We Suggest You Read the Mentioned Federal Laws and Regulations www. deadiversion. usdoj. gov 3

DISCLAIMERS “Neither Counsel Schiffer or Consultant Aquino have any affiliation or financial relationship with IPA or any sponsor of this program. ” 4

My Experience 24 Years with Philadelphia Police (Last 10 years assigned to DEA Task Force) 12 Years with PFD DEA Diversion (8 as an Investigator & 4 as a Supervisor) 4 Years with Pharma. Diversion LLC as a DEA Compliance Consultant 2 Years with Pharma Compliance Group LLC as a DEA Compliance Consultant 5

LEARNING OBJECTIVES - Criminal & Civil Actions - Role of DEA Office of Diversion Control - Record-Keeping Requirements - Security Requirements - Prescriptions Issues - Records for DEA Audit - Use of CSOS 6

www. deadiversion. usdoj. gov (Answer for Restless Night) INFO & LEGAL RESOURCES - Title 21 Regulations & Codified CSA - Questions & Answers - Significant Document Guidance - Pharmacist’s Manual 2010 7

DRUG ENFORCEMENT ADMINISTRATION (DEA) OFFICE OF DIVERSION CONTROL Responsible to Prevent, Detect, and Investigate Diversion of Pharmaceutical Controlled Substances & Regulated Chemicals While Ensuring an Adequate Supply for Legitimate Medical and Scientific Purposes - Enforcing the Federal Laws & Regulations relating to Schedules I to V Controlled Substances and Regulated Chemicals (Tactical Diversion Squad) 8 - On-Site Audits and Inspections of Controlled Substances

ACTIONS BY DEA - Criminal Investigation - Civil Action through USAO - Administrative Actions - Referral to State Regulatory Agency 9

DEA ADMINISTRATIVE ACTIONS - Letter of Admonition - Memorandum of Understanding - Voluntary Surrender of Registration (Never Surrender – Consult Attorney) - Order To Show Cause - Immediate Suspension - Revocation of Registration 10

DEFINITION OF A PRESCRIPTION “A prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, 11

but a corresponding responsibility rests with the pharmacist who fills the prescription. An order purporting to be a prescription issued not in the usual course of professional treatment or in legitimate and authorized research is not a prescription within the meaning and intent of section 309 of the Act (21 U. S. C. 829) and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances. ” Title 21, Code of Federal Regulations Section 1306. 04(a) 12

CSA LAW & CFR REGULATIONS 13

Title 21, United States Codes (Controlled Substances Act 1970) is the LAW Title 21, Code of Federal Regulations Part 1300 to End is the REGULATIONS 14

Title 21, United States Codes Section 829 – Prescriptions Title 21, Code of Federal Regulations Section 1306 - Prescriptions 15

Its Time to Scare Your Checkbook !! 16

CIVIL ACTIONS Title 21, United States Codes Section 842. Prohibited Acts B a) Unlawful Acts It shall be unlawful for any person – 17

(5) To refuse or negligently fail to make, keep, or furnish any record, report, notification, declaration, order or order form, statement, invoice, or information required under this subchapter or subchapter II of this chapter; (10) Negligently to fail to keep a record or make a report under Section 830 of this title 18

c) Penalties (B) In the case of a violation of paragraph (5) or (10) of subsection (a) of this section, the civil penalty shall not exceed $10, 000 YES - $10, 000 per Violation 19

What does this mean to you? 20

That a statement like, “I don’t have the time to keep track of my records” should never be part of your vocabulary. 21

DEA RECORD-KEEPING COMPLIANCE Free Advice from Jim & Carlos 22

RECORD-KEEPING REQUIREMENTS Biennial Inventory Executed or Voided DEA Forms 222 Invoices for C-III to C-V Drugs CMEA Certification (Annually) Power of Attorney Theft and Lost Reports 23

Title 21 CFR 1304. 04 – Maintenance of records and inventories “(a) Every inventory and other records required to be kept under this part must be kept by the registrant and be available, for at least 2 years from the date of such inventory or records, for inspection and copying by authorized employees of the Administration. ” Civil Action = 5 Years 24

READILY RETRIEVABLE The term readily retrievable means that certain records are kept by automatic data processing systems or other electronic or mechanized record-keeping systems in such a manner that they can be separated out from all other records in a reasonable time and/or records are kept on which certain items are asterisked, redlined, or in some other manner visually identifiable apart from other items appearing on the records. Title 21, Code of Federal Regulations Section 1300. 01(38) 25

Biennial Inventory - Required every two year after the Initial Inventory - Physical Inventory of all C-II through C-V on hand including Outdated Controlled Substances Title 21, Code of Federal Regulations Section 1304. 11 (a) & (b)26

ORDER FORMS (DEA Form 222) “Must be Available for Inspection” Electronic vs. Paper DEA 222 Proper notation includes: -Date Drugs were Received -Quantity Received 27

PURPOSE OF CSOS - Eliminate the cost of mailing order requisitions - Reduce the time to get you the Schedule II orders - Not to make your life easier 28

Title 21 CFR 1305. 22 – Procedure for filling electronic orders “(g) When a purchaser receives a shipment, the purchaser must create a record of the quantity of each item received and the date received. The record must be electronically linked to the original order and archived. ” 29

Title 21 CFR 1305. 27 – Preservation of electronic orders “(a) A purchaser must, for each order filled, retain the original signed order and all linked records for that order for two years. ” “(c) If electronic order records are maintained on a central server, the records must be readily retrievable at the registered location” 30

Title 21 CFR 1305. 28 – Canceling and voiding electronic orders “(b) The purchaser must retain an electronic copy of the voided order. ” 31

Title 21 CFR 1305. 22 – Procedure for filling electronic order “(e) If an order cannot be filled in its entirely, a supplier may fill it in part and supply the balance by additional shipments within 60 days following the date of the order. ” 32

“The following information is being given to you free of charge and will save you lots of headaches, aggravation, money, attorney fees, consultant fees and payment to the U. S. government in the form of a fine. You are not required to follow their advice” Jim & Carlos June 24, 2015 33

YOU RECEIVED THE DRUGS - Print out a copy of the order form - Verify the contents of the tote with invoice - Confirm order on CSOS - Staple electronic order form to invoice (Optional) - Indicate date received, amount received and who verified the order on order form 34

C-III THROUGH C-V INVOICES “Must be Available for Inspection” Proper notation includes: -Date Drugs were Received -Quantity Received -Initials of Person Receiving the Drugs Title 21, CFR Section 1304. 21 &. 22 35

POWER OF ATTORNEY “(a) A registrant may authorize one or more individuals, whether or not located at his or her registered location, to issue orders for Schedule I and II controlled substances on the registrant's behalf by executing a power of attorney for each such individual, if the power of attorney is retained in the files, with executed Forms 222 where applicable, for the same period as any order bearing the signature of the attorney. The power of attorney must be available for inspection together with other order records. ” 21 CFR Section 1305. 05 - Power of Attorney 36

THEFT & LOSS REPORT “Any Theft or Significant Loss Should be Reported” “Always Maintain a Copy of the DEA Form 106 with Your Inventory” Title 21, Code of Federal Regulations Section 1301. 76(b) DEA Pharmacist Manual April 2010 37

What is significant loss? Pharmacist Manual 2010 38

WHAT IS REQUIRED - Notify your local DEA Office, in writing, within one business day of discovery - 21 CFR 1301. 76(b) - Submit a DEA Form 106 on DEA Diversion Website DEA FORM 106 INFORMATION Drug, Quantity, Strength, NDC Number Explanation of Theft/Loss Police Department You Reported the Theft/Loss 39 Number of Previous Theft/Loss

DRUG DESTRUCTION Only those persons registered with and authorized by DEA to handle controlled substances may utilize & submit DEA Form 41 DEA Closed Loop System - DEA is Now a Friend of the Environment - Use of Reverse Distributors are Encouraged - Must be Maintained with Inventory Records 40

CMEA Requirements (Combat Methamphetamine Epidemic Act) - Valid Annual Certification - Employee Required CMEA Training - Limits Daily Sales to 3. 6 Grams - Placement of Products - Sales (DEA 2 Years of Records) 41

SECURITY 42

SECURITY REQUIREMENTS All applicants and registrant shall provide effective controls and procedures to guard against theft and diversion of controlled substances. In order to determine whether a registrant has provided effective control against diversion, the Administration shall use the security requirements set forth in Sections 1301. 72 – 1301. 76 as standards for the physical security control and operating procedures necessary to prevent diversion. Title 21, Code of Federal Regulations Section 1301. 71(a) 43

Security Requirements Alarm Systems CCTV Systems Employee Background 44

ALARM SYSTEM - Include a Back-Up Cell System - Should be Tested Often - Limit Employee Access 45

USE OF CCTV SYSTEM Sufficient Cameras to Cover - Front of Store - Front Counter - Pharmacy Counter - Rear of Pharmacy - Dispensing Area - C-II Cabinet or Storage Room 46

FELONY CONVICTION FOR CS “The registrant shall not employ, as an agent or employee who has access to controlled substances, any person who has been convicted of a felony offense relating to controlled substances or who, at any time, had an application for registration with the DEA denied, had a registration revoked or has surrendered a DEA registration revoked or has surrendered a registration for cause …” Title 21, Code of Federal Regulations Section 1301. 75(a) 47

EMPLOYEE BACKGROUND - Every Five Years - Verify the Last Two Employers - Don’t Hire Anyone with a Controlled Substance Conviction (DEA Waiver) - Pre-Employment Agreement 48

PRESCRIPTIONS 49

Data Waived Physicians - Treat Opiate Dependency - 30/100 Patient Limit - Only Subutex/Suboxone - Require DEA “X” Number Title 21, CFR Section 1301. 28 50

PHARMACIST IS NEVER PERMITTED TO CHANGE - Patient’s Name - Controlled Substance - Prescriber’s Signature Source: DEA Information & Legal Resources 51 General Q&A

PRESCRIPTION ISSUES “All prescriptions for controlled substances shall be dated as of, and signed on, the day when issued and shall bear the full name and address of the patient, the drug name, strength, dosage form, quantity prescribed, direction for use, and the name, address and registration number of the practitioner. ” Title 21, CFR 1306. 05 (a) Manner of issuance of prescription 52

PRESCRIPTION ISSUES - Date Patient saw Physician - Verify with Physician or Office Manager - Write Name of Office Person Verifying the Prescription - Receptionist May Be Part of Diversion 53

PHARMACY AUDIT BY PBM - Make sure the required information is on the front of prescription (contact physician for concurrence) - You have the right to dispute their findings - They have the right to deny your claim for a prescription written without a legitimate medical purpose 54

MAILING OUT OF STATE - Need to be Registered with State as an “Out-of-State Pharmacy” - Request Confirmation Service or Signature (Fed. Ex, UPS, etc. ) - Pharmacy Must Comply with State PMP 55

DEA AUDIT - Biennial Inventory Report - CMEA Certificate for Pharmacy - Executed DEA Forms 222 & Invoices - Power of Attorney Notice - C-II to C-V Filled Prescriptions - Theft and Loss Reports (DEA Form 106) - Destruction Reports (DEA Form 41) 56

PRESCRIPTION FOR BREAKTHROUGH MEDICATION My Personal Opinion & How Law Enforcement Sees It 57

QUESTIONS & ANSWERS 58

James R. Schiffer, Esq. Member of Allegaert Berger & Vogel LLP New York, NY Main: 212 -571 -0550 Email: jschiffer@abv. com Carlos M. Aquino Compliance Consultant Pharma. Diversion, LLC Media, PA Direct: 610 -487 -4663 Email: carlos@pharmadiversion. com 59