Pharmacy Law Update

Roger Bates

Hand Arendall, LLC

Objectives

• Introduce new Bill being offered by the Alabama Board of Pharmacy.

• Review the CDC’s new Guideline for Prescribing Opioids for Chronic Pain and discuss the pharmacist’s role in preventing opioid use disorder and overdose.

• Discuss the increased DEA scrutiny on record keeping and introduce related requirements that pharmacists should keep in mind.

• Identify and explain the latest government actions against pharmacies and pharmacy personnel.

ALBOP Bill

• A new bill is being offered in 2017 by the Alabama Board of Pharmacy

• The proposed bill would amend numerous sections of the Ala. Code relating to the Alabama Board of Pharmacy.

ALBOP Bill

• The proposed bill would make changes, including:

– Amend Ala. Code § 34-23-131 to require pharmacy technicians to renew licenses biennially and to complete six hours of continuing education biennially.

– Amend Ala. Code § 34-23-1 to clarify that a pharmacist is a health care provider.

ALBOP Bill

• This bill would prohibit any entity identified within a drug supply chain from shipping a legend drug or device into the state without a valid permit issued by the board and would provide a civil penalty for each violation.

• This bill would require each holder of a permit to ship a legend drug or device into the state, upon request of the board, to provide a list of all trading partners.

• This bill would authorize the board to discipline any pharmacist who obtains registration from the board by fraudulent means.

ALBOP Bill

• This bill would rename drug inspectors employed by the board as drug investigators.

• This bill would specify the qualifications a laboratory must satisfy for the board to use its product analysis data.

• This bill would increase the maximum fee the board may charge for certain new pharmacy permit, permit renewal, and permit transfer applications and would specify fee ranges the board may charge for certain out-of-state pharmacy permit and permit renewal applications.

ALBOP Bill

Add Definitions for:

(23) PRIVATE LABEL DISTRIBUTOR. A firm that does not participate in the manufacture or processing of a drug but instead markets and distributes under its own trade name, and labels a drug product made by someone else The private label distributor is responsible for the products it introduces into interstate commerce and for compliance with FDCA requirements and cGMP regulations.

(27) THIRD-PARTY LOGISTICS PROVIDER.-- means an entity that provides or coordinates warehousing, or other logistics services of a product in interstate commerce on behalf of a manufacturer, wholesale distributor, or dispenser of a product, but does not take ownership of the product, nor have responsibility to direct the sale or disposition of the product.

ALBOP Bill• Amend Definitions: (11) MANUFACTURER. A person or entity, except a pharmacy, who prepares,

derives, produces, researches, tests, labels, compounds, or packages any drug,

medicine, chemical, or poison.

(28) WHOLESALE DRUG DISTRIBUTORS. A person (other than a manufacturer, a

manufacturer's co-licensed partner, a third-party logistics provider, or repackager)

engaged in the business of distributing drugs and medicines for resale to

pharmacies, hospitals, practitioners, government agencies, or other lawful

outlets permitted to sell drugs or medicines. The sale, purchase, or trade of a drug

by a retail pharmacy to another retail pharmacy or practitioner, for relief of

temporary shortages, is exempt from this definition. Also exempt from this

definition shall be (a) intracompany sales, (b) manufacturer and distributor sales

representatives who distribute drug samples, (c) charitable organizations

distributing to nonprofit affiliates of that organization, (d) certain purchases by

hospitals or other health care entities that are members of a group purchasing

organization, and (e) the distributors of blood and blood components.

ALBOP Bill

• This bill would prohibit a prescriber from reselling a compound drug product administered in his or her office and would clarify that the board recognizes and enforces the provisions of the United States Pharmacopoeia or National Formulary relating to drug handling or compounding processes.

• This bill would also authorize the board to permit any manufacturer, manufacturer affiliate, bottler, packager, repackager, third party logistic provider, wholesale drug distributor, private label distributor, or pharmacy business identified in the supply chain of any drugs, legend drugs, medicines, chemicals, or poisons for medicinal purposes and would clarify adherence to requirements established by the FDA Guidelines in the Drug Quality and Security Act.

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CDC’s Guideline for Prescribing Opioids for Chronic Pain

• The CDC published this guideline in March 2016.

• Although focus is on primary care clinicians, the CDC states that the recommendations are meant to promote collaborative relationships with other providers, like pharmacists.

• Pharmacists should become familiar with the guidelines and understand the recommendations for appropriate opioid prescribing.

CDC’s Guideline for Prescribing Opioids for Chronic Pain

• The Guideline sets out 12 recommendations, including:

– Opioids are not first-line therapy• Non-opioid therapy is preferred for chronic pain outside

of active cancer, palliative care and end-of-life care.

– Use the lowest effective dose• Clinicians should prescribe the lowest effective dosage

and should carefully reassess when considering increasing dosage to ≥50 MME/day

– Use immediate-release opioids when starting

• The CDC’s Guideline is available at:– https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm

CDC’s Guideline for Prescribing Opioids for Chronic Pain

• Pharmacists: On the Front Lines– CDC brochure that outlines aspects of a pharmacist’s role

– https://www.cdc.gov/drugoverdose/pdf/pharmacists_brochure-a.pdf

• A pharmacist’s role includes:– Evaluating new prescription orders with concurrent

treatments

– Determining whether medication is improperly prescribed

– Assessing prescription orders for forgery/alteration.

• Pharmacists are a first-line defense in prevention and treatment of opioid use disorder and overdose.

CDC’s Guideline for Prescribing Opioids for Chronic Pain

• Don’t forget the requirements under 21 C.F.R. 1306.04(a):– The law mandates that pharmacists assess

whether controlled substance prescriptions are written for a legitimate medical purpose in the usual course of professional practice.

– The responsibility for proper prescribing is on the clinician, but a corresponding responsibility rests with the pharmacist who fills the prescription.

DEA Scrutiny on Record Keeping

• The DEA is increasing its efforts to stop the illicit flow of prescription drugs from pharmacies.

• As a result, inspections of pharmacy record keeping systems are on the rise.

– Violations can be costly!

DEA Scrutiny on Record Keeping

• Recent DEA crackdowns on record keeping– $34 Million settlement with Cardinal Health

• Settlement included violations for failure to maintain adequate records concerning Class II controlled substances

– $42,500 settlement with pharmacy in Mass.

• Failure to keep proper records

– Did not account for hundreds of pills in inventory, including oxycodone and alprazolam

– Failed to maintain invoices, document substituted meds, and account for meds that were not picked up.

DEA Scrutiny on Record Keeping

• Key Record Keeping Requirements:

– Controlled Substances Act

• Must maintain complete and accurate record of each substance manufactured, received, sold, delivered, etc. (21 C.F.R. § 1304.21(a))

• In addition, records must be kept and made available for 2 years for inspection. (21 C.F.R. §1304.04(a))

• It is unlawful for any person to refuse or negligently fail to make, keep, or furnish any record or report. (21 U.S.C. § 842(a))

DEA Scrutiny on Record Keeping

• Other Key Record Keeping Requirements:

– Combat Methamphetamine Epidemic Act of 2005

• Logbook requirement for the sale of products containing the List I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine.

• Seller must maintain written or electronic list (logbook) of sales that identifies:

– (1) Products by name;

– (2) Quantity sold;

– (3) Names and addresses of purchasers; and,

– (4) Date and time of the sales.

Recent Cases Involving Pharmacies

• Costco Settlement– January 2017 – DOJ announced a settlement with

Costco for alleged violations of the Controlled Substances Act.

• Costco admitted to violations including:– Filling prescriptions from practitioners who did not

have a valid DEA number

– Failing to maintain accurate dispensing records

– Failing to maintain records for their central fill locations

Recent Cases Involving Pharmacies

• Costco Settlement Cont.

– As a result of the violations, Costco will pay $11.75 million.

– Costco purchased a new pharmacy management system to address inadequacies.

– DEA will be allowed to conduct unannounced and unrestricted inspections of all DEA registered Costco pharmacy locations.

Recent Cases Involving Pharmacies

• McKesson Corporation– January 2017 – McKesson agreed to pay $150

Million in civil penalties for violations of the Controlled Substances Act.

• In addition, McKesson is required to suspend sales of controlled substances from distribution centers in four states for multiple years.

– Allegations:

• McKesson failed to design and implement an effective system to detect and report suspicious orders for controlled substances distributed to its independent and small chain pharmacy customers.

Recent Cases Involving Pharmacies

• Don’t end up like McKesson, comply with security requirements under the CSA

– § 1301.74(b) – “The registrant shall design and operate a system to disclose to the registrant suspicious orders of controlled substances. . . . Suspicious orders include orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.

Recent Cases Involving Pharmacies

• CVS Pharmacy Settlements– October 2016 - $600,000 for numerous failures to

keep paper Schedule III-V prescriptions either in a separate file or readily retrievable location and away from other prescription records, in violation of the CSA.

– June 2016 - $3.5 Million for allegations that it filled more than 500 forged prescriptions between 2011 and 2014. • “When pharmacies ignore red flags that a prescription is

fraudulent, they miss a critical opportunity to prevent prescription drugs from entering the stream of illegal opiates on the black market.” – U.S. Attorney’s Office