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PRESCRIPTION DRUG DIVERSION: COMBATING 

THE SCOURGE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MARCH 1, 2012 

Serial No. 112–122 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MARY BONO MACK, California 

Chairman 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

CLIFF STEARNS, Florida 

CHARLES F. BASS, New Hampshire 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

G.K. BUTTERFIELD, North Carolina 

Ranking Member 

CHARLES A. GONZALEZ, Texas 

JIM MATHESON, Utah 

JOHN D. DINGELL, Michigan 

EDOLPHUS TOWNS, New York 

BOBBY L. RUSH, Illinois 

JANICE D. SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Mary Bono Mack, a Representative in Congress from the State of 

California, opening statement ............................................................................. 1 

Prepared statement .......................................................................................... 4 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 6 

Prepared statement .......................................................................................... 8 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 13 

Hon. Edolphus Towns, a Representative in Congress from the State of New 

York, prepared statement .................................................................................... 172 

WITNESSES

R. Gil Kerlikowski, Director, Office of National Drug Control Policy ................. 13 

Prepared statement .......................................................................................... 16 

Answers to submitted questions ...................................................................... 175 

Pamela Jo Bondi, Attorney General, State of Florida .......................................... 35 

Prepared statement .......................................................................................... 37 

Answers to submitted questions ...................................................................... 183 

Jack Conway, Attorney General, Commonwealth of Kentucky ........................... 44 

Prepared statement .......................................................................................... 47 

Answers to submitted questions ...................................................................... 189 

Aaron E. Haslam, Senior Assistant Attorney General, State of Ohio ................. 54 

Prepared statement .......................................................................................... 56 

Answers to submitted questions ...................................................................... 194 

Joseph T. Rannazzasi, Deputy Assistant Administrator, Drug Enforcement 

Administration ..................................................................................................... 78 

Prepared statement .......................................................................................... 80 

Answers to submitted questions ...................................................................... 199 

John M. Gray, President and Chief Executive Officer, Healthcare Distribution 

Management Association ..................................................................................... 105 

Prepared statement .......................................................................................... 108 

Answers to submitted questions ...................................................................... 210 

Joseph H. Harmison, Owner, DFW Prescriptions, on Behalf of National Community Pharmacists Association ......................................................................... 116 

Prepared statement .......................................................................................... 118 

Answers to submitted questions ...................................................................... 246 

Kevin N. Nicholson, Vice President, National Association of Chain Drug 

Stores .................................................................................................................... 125 

Prepared statement .......................................................................................... 127 

Answers to submitted questions ...................................................................... 249 

Kendra A. Martello, Assistant General Counsel, Pharmaceutical Research 

and Manufacturers of America ........................................................................... 140 

Prepared statement .......................................................................................... 142 

Answers to submitted questions ...................................................................... 252 

David R. Gaugh, Vice President for Regulatory Sciences, Generic Pharmaceuticals Association ............................................................................................ 154 

Prepared statement .......................................................................................... 156 

Answers to submitted questions ...................................................................... 255 

(1) 

PRESCRIPTION DRUG DIVERSION: 

COMBATING THE SCOURGE 

THURSDAY, MARCH 1, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 11:10 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Mary Bono Mack 

(chairman of the subcommittee) presiding. 

Members present: Representatives Bono Mack, Blackburn, 

Stearns, Harper, Lance, Cassidy, McKinley, and Butterfield. 

Staff present: Paige Anderson, Policy Coordinator, Commerce, 

Manufacturing, and Trade; Charlotte Baker, Press Secretary; Kirby 

Howard, Legislative Clerk; Brian McCullough, Senior Professional 

Staff Member, Commerce, Manufacturing, and Trade; Gib Mullan, 

Chief Counsel, Commerce, Manufacturing, and Trade; Shannon 

Weinberg, Counsel, Commerce, Manufacturing, and Trade; 

Michelle Ash, Democratic Chief Counsel, Commerce, Manufacturing, and Trade; and Will Wallace, Democratic Policy Analyst. 

Mrs. BONO MACK. Good morning. If statistics hold true, by the 

time this hearing is over 10 Americans will have tragically and I 

believe needlessly died from prescription drug overdoses. Today 

prescription drug abuse is a deadly, serious, and rapidly escalating 

problem all across our Nation. We have a solemn obligation to tackle this growing epidemic head on, and I am going to keep beating 

the drums until Congress, the FDA, and the DEA come up with a 

comprehensive plan for action. 

The Chair now recognizes herself for an opening statement, and 

the clock is not working. That is all right for me. It won’t be all 

right for you all, though, so don’t get too comfortable. 

OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

As Americans we rally around efforts to fight breast cancer, 

childhood diseases, and other serious health threats. But for far too 

long there have been only hushed whispers about prescription drug 

abuse, now the fastest-growing drug problem in America according 

to the CDC. 

Today as the death toll from prescription drug overdoses continues to rise sharply, it is time to move the story from the obituary page to the front page where it belongs. It is time to realize 

2 

that we can’t simply wish this horrific problem away, not with 

nearly 30,000 people a year dying from it. See no evil, hear no evil 

often leads to a society’s unspoken evil, indifference. 

We can do better than that, and we must. Just about everyone 

knows someone who is affected by prescription drug abuse, which 

impacts an estimated 12.5 million Americans and is now considered a health epidemic by the CDC. According to a recent, ‘‘Monitoring the Future,’’ national survey nearly one in four twelfth-graders have abused prescription drugs. 

Today two classes of medicines, painkillers and insomnia and 

anxiety drugs, are responsible for about 70 deaths and nearly 3,000 

emergency room visits a day. These are stunning numbers, but 

here is what is even more alarming. The death toll from overdoses 

of these powerfully-addictive medicines is now more than double 

the death toll from heroin, cocaine, and all other illegal drugs combined. As a result, for the first time ever drug deaths outnumber 

traffic fatalities and has become the leading cause of accidental 

death in America. 

So what is the answer? When it comes to prescription drug 

abuse, where are the safety belts and the airbags that we need to 

deploy? First, like anyone in recovery knows we have to admit we 

have a serious problem. Americans today simply are prescribed too 

many medicines. There is a pill for just about every ache, pain, and 

malady. 

So what is wrong with that? Well, consider this. Not long ago the 

DEA conducted three national drug take-back days, and I applaud 

them for that, and at those 3 take-back days they collected an astonishing 995,815 pounds of unused and unneeded medicines. That 

is 995,000 pounds, not pills, in just 3 days. 

Today doctor shopping is a widespread problem which contributes to our Nation’s alarming prescription drug addiction rate, increases costs to all of us through higher insurance rates, and 

makes it extremely difficult for the DEA to crack down on abusers. 

Compounding the problem is an oftentimes false sense of security. 

‘‘If it is approved by the FDA and prescribed by a doctor, then it 

must be OK.’’ Wrong. Too many pills taken at once or combining 

them with other drugs and alcohol can have a serious and even 

deadly consequence. 

But the issue confronting us today is much more complex and involved than just what have you found lately in Grandma’s medicine 

cabinet. The black market sale of powerful and highly-addictive 

narcotic painkillers such as OxyContin and Vicodin is big business, 

prompting the DEA to attack the problem on multiple fronts from 

street-level sales all the way to the top of the supply chain. Targeted first were the so-called, ‘‘pill mills’’ in Florida which were 

largely unregulated until last year, and they routinely dispensed 

painkillers like they were M&Ms from a gumball machine. 

There is yet another, more insidious side of the story as well. 

After becoming addicted to prescription painkillers, law enforcement authorities say more and more people are now switching to 

heroin. In San Diego County, which borders my district, drug treatment experts say the use of heroin by young adults has more than 

tripled since 2006. Much of this growth is due to people who have 

switched to heroin as a cheaper alternative to OxyContin, now 

3 

going on the street for as much as $80 for an 80-milligram tablet. 

By contrast, OxyContin sells for about $6 a tablet in pharmacies. 

Personally, I will never forget the very chilling phone call I received one night from a constituent of mine who told me that his 

son had had a gun put to his head because he couldn’t pay the 

street price any long for his OxyContin. 

So what is the answer? I believe my legislation, the Ryan 

Creedon Act, H.R. 2119, and the Stop Oxy Abuse Act, H.R. 1316, 

are good starting points. My goal is to improve prescriber education 

by getting doctors, dentists, nurse practitioners, and other prescribers up to speed on the dangers of addiction and to make certain that powerful and seductive narcotic prescription drug such as 

OxyContin are used to treat severe pain only, not moderate pain 

like a toothache or a sore knee. In far too many cases addiction becomes a much greater health threat than the original pain itself, 

and in far too many cases death is the final result of a failed rehab. 

So let us not continue to blame this on Grandma and her medicine chest. She knows better, and in our hearts Americans do, too. 

[The prepared statement of Mrs. Bono Mack follows:] 

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Mrs. BONO MACK. And I am happy to recognize the gentleman 

from North Carolina, the ranking member of our subcommittee, 

Mr. Butterfield, for his 5 minutes. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Thank you. Let me thank the chairman for 

holding today’s hearing on this very important subject of prescription drug diversion, and I know that this issue is very important 

to you, and I admire your work on it. 

Prescription drug diversion is an ever-growing problem in our 

country. In fact, a couple years ago in 2010, seven million people, 

seven million, over the age of 12 were considered current users of 

a prescription pain reliever; tranquilizers, stimulant, or a sedative, 

that was not prescribed to them. Sadly, it has become clear that 

as legitimate prescription drug use rises, so, too, does the number 

of people who abuse these drugs and so, too, does the number of 

people who accidentally die from prescription drug overdose. It is 

unconscionable that since 1990, a little over 20 years ago, the 

deaths resulting from an overdose of prescription drugs have risen. 

It has risen five-fold. Sometimes must be done, and I agree with 

that. 

But the question is what and by whom. Some of the testimony 

we will hear today comes from manufacturers and distributors of 

prescription drugs. It seems to me that the security and safeguards 

these entities employ is very impressive and goes beyond what 

might be expected. The use, layers upon layers of—they use layers 

upon layers of security. They hire third parties to audit the processes and make immediate changes if a vulnerability is indentified. 

They track shipments with GPS precision and have built in a lot 

of redundancy in their security procedures. 

Understandably, though, the further down the supply chain a 

particular drug travels the greater are the opportunities for diversion. The National Survey on Drug Use and Health reported that 

76 percent, more than three-quarters of people who use prescription drugs non-medically, gain access to them from someone they 

know. I think this needs to be our focus as we go forward. 

To that end, we need to focus on anti-diversion efforts, and I am 

pleased that the director from the White House Office of National 

Drug Control Policy is here today to tell us about their action plan. 

In a perfect world the answer to this problem is personal responsibility, but in the real world it is clear the Federal Government 

does have a defined role to play. We need to provide greater support for education programs for young people so they can learn at 

an early age the dangers of misusing prescription drugs. We need 

to provide greater support for rehabilitation initiatives so those 

who are addicted to prescription drugs have access to the help they 

medically need, and we need to make sure DEA has access to the 

resources it needs to scrutinize all the players involved and the 

manufacturer, distribution, and dispensing of controlled substances. Most involved in this process are good and honest people. 

DEA needs to find the ones who are not. 

7 

And so I would like to personally on behalf of the Democrats on 

this committee thank all of you for coming today, and I look forward to your testimony. I stand ready to work with each of you, 

Madam Chair, and our colleagues and witnesses to curtail prescription drug abuse in the United States of America. 

Thank you so very much. I yield back. 

[The prepared statement of Mr. Butterfield follows:] 

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Mrs. BONO MACK. Thank you, Mr. Butterfield. Chairman Upton 

has yielded his 5 minutes for an opening statement to me in accordance with committee rules, and as his designee I now recognize 

Mr. Stearns for 2 minutes for an opening statement. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Thank you, Madam Chair, and just wanted to compliment you for this hearing on prescription drug diversion. Very 

important and I am also very pleased to have and welcome our attorney general, Florida’s own attorney general, Pam Bondi. She is 

here to testify on this important hearing. She is Florida’s 37th attorney general, sworn in in January of last year. She is a native 

of Florida, and she graduated from the University of Florida, which 

I represent, so I am proud to have her as a so-called constituent. 

She also graduated from Stetson Law School and was a prosecutor 

for almost 18 years. 

Among her top priorities is strengthening penalties to stop pill 

mills in the Sunshine State, which from our last hearing, Madam 

Chair, on this issue was a prevalent problem in our State, and with 

her dedication and leadership against prescription drug abuse, 

Florida went from having 98 of the top 100 dispensing physicians 

for oxycodone pills to have 13 dispensing physicians residing in 

Florida. 

So frankly her success in this effort resulted in recognition from 

the National Association of Drug Diversion Investigators, Florida 

Police Chiefs Association, and from the Florida Board of Medicine. 

So I want to welcome her, and I thank you, Madam Chair, for the 

opportunity to do so. 

Mrs. BONO MACK. Thank you, and I just want to point out that 

there is a hearing going on in the Health Subcommittee with the 

Cabinet Secretary. So a lot of members are bouncing in and out. 

If they are able to attend, I just want to thank the members who 

are here. 

Mr. BUTTERFIELD. Madam Chairman, that is where I was until 

I figured out I was in the wrong place. 

Mrs. BONO MACK. I am glad you figured it out. But we do have 

three panels before us today. Each of our witnesses has prepared 

an opening statement. They will be placed into the record. Each of 

you will have 5 minutes to summarize that statement in your remarks. The good news is the clock is working, and there is a timer 

in front of you now. 

On our first panel we have the Honorable Gil Kerlikowske, Director of the Office of National Drug Control Policy. Good morning, 

Director, and once again, thank you very much for being here. I am 

happy to recognize you now for 5 minutes for your statement. 

STATEMENT OF R. GIL KERLIKOWSKE, DIRECTOR, OFFICE OF 

NATIONAL DRUG CONTROL POLICY 

Mr. KERLIKOWSKE. Thank you, Chairman Bono Mack and Ranking Member Butterfield and distinguished members of the subcommittee. It is a great opportunity for us to update you on this 

important issue of prescription drug abuse in the United States. 

14 

Prescription drug abuse has been a major focus of the Office of 

National Drug Control Policy since my confirmation. I am particularly indebted to Chairman Bono Mack for calling me up to her office in the first week that I was in the office to really begin to educate me about an issue that, frankly, 3 years ago was not on the 

public’s radar screen, but it is clearly in front of the public today. 

I included prescription drug abuse as a signature initiative as 

part of the administration’s National Drug Control Strategy. As 

been mentioned, it has been categorized as a public health epidemic by the Centers for Disease Control and Prevention. 

The scope of non-medical use of pharmaceuticals is striking. CBC 

found in 2008, that the opioid pain relievers were involved in 

14,800 deaths, and opioid pain relievers are now involved in more 

overdose deaths as has been mentioned in heroin and cocaine combined. The vast majority of abused pharmaceutical drugs originally 

enter into circulation through a prescription. The quantity of prescription painkillers sold to pharmacies, hospitals, and doctors’ offices has quadrupled from 1999, to 2010. 

When I testified last year before this subcommittee in April, the 

administration had just released that month its Comprehensive 

Prescription Drug Abuse Prevention Plan. The plan focuses on four 

major pillars. 

The first pillar is education. Most prescription painkillers are 

prescribed by primary care doctors, internists, and dentists, not 

pain specialists. The FDA is requiring manufacturers of these 

opioids to develop educational materials and training for prescribers. The administration is working with Congress to amend 

the Federal law to require mandatory education and training for 

prescribers, and we are also working very hard to educate the general public about the risks and the prevalence of prescription drug 

abuse and about the safe use and proper storage and disposal of 

these medications. 

The second pillar, monitoring. We focused on expanding and improving State prescription drug-monitoring programs. Forty-eight 

states have those laws. Despite the progress, some states lack operational programs. Many states operate PDMPs that lack interoperability with other states. But I am pleased to report the administration worked with Congress to secure legislative language to 

allow the Department of Veterans’ Affairs to share prescription 

drug data with these PDMPs. 

Our third pillar focuses on safe disposal of unused and expired 

medications and through the National Prescription Drug Take 

Back Days that the DEA has collected and was talked about by the 

chair. The administration also recognizes the significant role that 

pill mills and rogue prescribers play in this issue. Our surveys and 

research show that with chronic addiction to prescription drug they 

are more likely to obtain their drugs from the pill mills than the 

recent initiates. 

And final pillar of the administration’s plan focuses on improving 

law enforcement capabilities to address diversion. Across the country law enforcement regulatory and legislative actions are forcing 

doctors and shoppers and doctor shoppers and others seeking these 

sources of prescription drugs to be apprehended. 

15 

The problem, of course, was highlighted in the State of Florida, 

which was in 2010, the epicenter of the Nation’s pill mill epidemic, 

but I have to tell you that working with the attorney general in the 

State of Florida has led to marked changes in that State, and I 

couldn’t be more pleased that not only she, but Attorney General 

Conway are also here. 

In 2011, ONDCP, our office, supported training events because 

we know if you are going to do the enforcement, it can’t be just at 

the Federal level. It has to be at the State and local level also, and 

experts in law enforcement need that kind of training in order to 

investigate these complex cases. 

We are undertaking a data analysis project right now to examine 

the ways that prescription drugs are purchased, purchasing behaviors, and whether those patterns are indicative of suspicious behavior. We held a round table with members of the pharmacy community and law enforcement to discuss pharmacy robberies and burglaries. We called in the heads of organizations that worked on the 

security of the manufacturers and distributors to make sure that 

we were knowledgeable about what they were doing to secure these 

very potent pharmaceuticals. 

In closing just let me thank the members of Congress for their 

support on the ONDCP and my Executive Branch colleagues who 

know that without your efforts and without your support we would 

not make a difference in this very important area. 

Thank you. 

[The prepared statement of Mr. Kerlikowske follows:] 

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Mrs. BONO MACK. Thank you very much, Director. I will recognize myself now for 5 minutes for questioning. 

And just ask you with everything that your office is doing together, the DEA and the FDA, why are we losing this battle 

against the prescription drug epidemic, and you have mentioned a 

lot of progress we have made, but you do live in Florida, but prescription drug abuse has not decreased. What is the next step? 

Mr. KERLIKOWSKE. I think the fact that all of these things are 

coming together, that we actually are starting to see some fruition 

to all of the work that has been going on. For instance, in the most 

recent Monitoring the Future Survey, eighth, tenth, and twelfth 

graders have actually reduced their level of use of prescription 

drugs, but I couldn’t agree with the chair more that it is an epidemic, that it is so wide spread and that people still don’t get it. 

They don’t understand that these are dangerous, they can be deadly, and they can certainly be addictive. 

I think that one of the greatest hopes will be in the next step 

forward, and that is mandatory prescriber education. Physicians 

must be told and must have unequivocal information about the 

dangers of addiction, pain management, tolerance, dependence, and 

they really don’t get that in medical school. The second part I know 

you will hear form the Drug Enforcement administration as nonenforcement. The laws have to be enforced, and people have to be 

prosecuted. 

Mrs. BONO MACK. I appreciate that and especially your viewpoint 

on prescriber education, but a problem for me, too, is we examined 

this problem. There are clearly gaps in the data, and we don’t really know the extent of the problem. 

What are the gaps, and how can they be filled? 

Mr. KERLIKOWSKE. Well, quite often we rely, for instance, on fatality data to come from the individual states, and we know that 

depending on the particular State, whether it is a medical examiner system or others, those states can often be delayed. 

We also know that at times, whether it is from fatalities from 

driving accidents or others, that the level of examinations to determine what the cause and whether or not that person had the drugs 

in their system is not always as thorough as it can and should be. 

There are data gaps, but I will be happy at another time to tell you 

about this new initiative to take some of the data and really identify and drill down into it. 

Mrs. BONO MACK. I would be happy to work with you on that. 

I think they are critical even for policymakers. We need that data 

critically. 

The DEA is going to testify that there are 1.4 million DEA registrants. That seems awfully high. Do you think that 1.4 million 

registrants is about right for America, or is that kind of a crazy 

number? 

Mr. KERLIKOWSKE. Chairman, I actually wouldn’t know what the 

right number would be, but I think when you look at nurse practitioners, physicians, and all of the other people that hold those DEA 

registration licenses across the country in the healthcare field, that 

the number doesn’t seem completely out of line to me. I think more 

importantly is how they are policed. 

27 

Mrs. BONO MACK. Thank you, and lastly, should we be thinking 

about creating new classification schedules under the Controlled 

Substance Act with stricter regimes for the drugs that are clearly 

the biggest problems? 

Mr. KERLIKOWSKE. I know that issue has come up before to put 

those into the higher schedule. I think the more important part is 

to try and keep them out of the hands of the abusers but not at 

the same time they get so restrictive that the issues that led us to 

where we are today 15 years ago, which was the clear indication 

that pain was not being adequately treated in the United States, 

I think the pendulum was too far over there. Clearly today the pendulum is too far over here when it comes to the availability of 

these. 

I am not sure scheduling would be the right answer, but we have 

to bring this back to some equilibrium. 

Mrs. BONO MACK. Are you working with the physicians who are 

saying that pain shouldn’t always be treated solely with opioids 

and that there have to be other ways of treating pain, that this is 

creating an epidemic that is hurting more people than it is saving? 

Mr. KERLIKOWSKE. I have. I have heard from a number of physicians that want to be much more flexible and understanding and 

treating pain rather than writing prescriptions for 30, 60, or 90 

days worth of very powerful painkillers. They also want to make 

sure that there are systems in place where they can be adequately 

reimbursed for treatments other than what right now seems to be 

a very simple and quick method but not always particularly effective in treating pain by writing a script. 

Mrs. BONO MACK. In the last 22 more seconds that I do have 

something Attorney General Bondi cares deeply about are the opiate babies. Can you speak briefly to what you have learned about 

opiate babies? 

Mr. KERLIKOWSKE. I can. I can tell you that in the past and having visited in one of the centers for newborns in Seattle the issue 

always centered around newborns and the addiction through heroin. Today when I met and saw all of those infants and actually 

held one of those infants, the issue was all about prescription 

drugs, and there was very little discussion about mothers using 

heroin. 

And so we are building some tremendous healthcare costs as a 

result of not treating this adequately. 

Mrs. BONO MACK. Thank you very much, Director, and happy to 

recognize Mr. Butterfield for 5 minutes. 

Mr. BUTTERFIELD. Thank you. Again, thank you very much for 

coming forward today with your testimony. We have heard your 

testimony, and we appreciate so much what you do. 

I have a question that I would like to ask, and I may even ask 

it of the other panels as well, but I believe it is very critical, and 

it is central to the problem that we are dealing with. 

Efforts in one state may yield declines in the number of pills dispensed, hospitalizations, or deaths, any of which are very commendable achievements within that state’s border, but how can we 

be sure that addicted individuals simply don’t go to another state? 

Mr. KERLIKOWSKE. I think the key would be on the example 

would be the fact that Florida had become such as has been talked 

28 

about, so publicly an epicenter for not only the use of these very 

powerful, misuse and abuse of these very powerful prescription 

drugs for people within the State of Florida but for people traveling 

all the way through Appalachia and actually New York, Connecticut, and other places. 

The regulation of medicine is done at the state level. It is not 

done at the Federal level, and we have to provide the training, the 

technical assistance, the start-up money for the computer systems, 

and the assistance to law enforcement, particularly state and local 

law enforcement to understand how to investigate these complex 

cases. 

I would tell you that greater use of the PDMPs is necessary. Not 

as many physicians or people in the healthcare industry utilize 

them as should and that they need to be real time and that they 

need to be interoperable across states. 

When those things come together and I think we are seeing some 

of this in the number of states that are sharing the information, 

I think that that way we can stop that balloon effect that you were 

talking about, Congressman. 

Mr. BUTTERFIELD. We have been looking at the data in our office, 

and the data seems to suggest that the total number of elicit drug 

users was constant for 2 years, even though we have seen great 

strides in states like Kentucky and Florida and even Ohio. 

Are we on the right path with this? 

Mr. KERLIKOWSKE. I think we are on the right path with this 

with what I believe is a very balanced way and a very comprehensive way of looking at this. I think that if I go back and look at 

where we were, and believe me, I am the first one to tell you that 

a lot more has to be done, particularly in redoubling our efforts in 

some of these areas, but I look at where we were 3 years ago. As 

a chief of police of a city of almost 700,000 people, I was really unaware of this prescription drug problem. I think that my colleagues 

who were sworn to protect people in the city and learn about what 

are the dangers when you don’t realize it, when we didn’t realize 

it and prosecutors and judges and many others did not realize it, 

we weren’t paying attention to it because after all, it is a prescription, it is coming out of the medicine cabinet. It was a huge mistake. 

This is on the front page of every major newspaper on a regular 

basis. It is on television. We are moving in the right direction. 

Mr. BUTTERFIELD. Let me talk about tribal communities for a 

minute, and I only have a minute 50 left. As the National Drug 

Control Strategy points out, tribal communities have been particularly hard hit by unemployment and combined with problems accessing healthcare, education, and other services, tribal communities can be disproportionately vulnerable to prescription drug 

abuse. 

A 2009, study by the Substance Abuse and Mental Health Administration found that American Indians are more than twice as 

likely as whites to abuse prescription drugs. What is the administration doing to help tribal communities address these unique challenges? 

Mr. KERLIKOWSKE. We started looking at that almost immediately and a couple things that are done. First Assistant Secretary 

29 

Echo Hawk from the Department of Interior has been a great partner, along with the Indian Health Service and along with the Bureau of Indian Affairs. We have made trips to a number of the tribal lands, for example, the Tohono O’odham Nation in Arizona, and 

the issues around dietary issues, alcohol issues, and illegal drugs 

was significant, but the growing problem that was pointed out to 

us is exactly as you said, and that is around the prescription drug 

issues. 

Mr. BUTTERFIELD. But are you working with them to set up databases? 

Mr. KERLIKOWSKE. Education, so the education and prevention 

and working through the Indian Health Service and the Treatment 

Service, and let me just mention on the enforcement side for the 

first time one of our high-intensity drug trafficking groups, HIDTA, 

in Portland includes a member of—a tribal chief to help direct 

those needed enforcement resources back onto tribal lands. 

Mr. BUTTERFIELD. That includes databases and other resources? 

Mr. KERLIKOWSKE. I don’t know about the database in particular. 

I would think that the health service would probably be more 

knowledgeable about that. 

Mr. BUTTERFIELD. All right. Thank you. You have been very 

kind. 

Mr. KERLIKOWSKE. Thank you. 

Mrs. BONO MACK. Thank you, Mr. Butterfield. 

The Chair recognizes Mr. Stearns for 5 minutes. 

Mr. STEARNS. Thank you, Madam Chair. 

Is it true that prescription drug overdose deaths now surpass our 

car-related fatalities? 

Mr. KERLIKOWSKE. It is true that all overdose deaths are now the 

leading, from drugs, misuse and abuse, not accidental, are the 

number one cause of accidental death in this country, ahead of 

gunshot wounds and ahead of car crash deaths, driven by prescription drugs. 

Mr. STEARNS. That is a startling fact, don’t you think? 

Mr. KERLIKOWSKE. Yes. 

Mr. STEARNS. Do you think based upon that that we should have 

a radical change in our approach? 

Mr. KERLIKOWSKE. I think that we haven’t gotten anywhere near 

the attention or near the traction to something that is killing more 

people in this country than car—— 

Mr. STEARNS. And, in fact, 10 or 20 years ago I wouldn’t find the 

statistics like it is today? 

Mr. KERLIKOWSKE. Not at all. 

Mr. STEARNS. And why do you think that occurred? 

Mr. KERLIKOWSKE. One, I think that the driver of the prescription drugs as we have been, as has been mentioned a little bit, people don’t see them as addictive, they don’t see them as dangerous, 

and they don’t see them as deadly, because they are, after all, a 

prescription. 

Mr. STEARNS. I think in your opening statement you were talking 

about opiates were sold in 2010, to medicate every American adult 

six times a day for a month. That was in your statement. 

Mr. KERLIKOWSKE. Yes. 

30 

Mr. STEARNS. Doesn’t that put a line to the claim that we are 

just getting better at pain management? 

Mr. KERLIKOWSKE. When I have spoken with the physicians who 

looked at and were instrumental in the early days of under-treating and the recognition of under-treating pain, I think that a clear 

recognition, and as I mentioned a minute ago I think that the pendulum was there and that in very good faith ways they worked 

very hard to make sure that people actually were adequately treated for pain. 

A few things were missing. One is the amount of education that 

a physician would need to clearly understand and recognize some 

of the dangers of these. The other is that as many people have 

mentioned, we have become kind of an overmedicated society. 

Mr. STEARNS. How would we educate Americans to not be an 

overly medicated society? 

Mr. KERLIKOWSKE. It is a pretty tough issue. It is kind of like 

dealing with the obesity issue. 

Mr. STEARNS. Do you think it is something to do with our culture 

today that—— 

Mr. KERLIKOWSKE. I think that the more important part is to 

educate the physicians around this, as physicians are so much 

more knowledgeable about dietary issues and the causes, I don’t 

see the same level of knowledge among them and among 

healthcare practitioners when it comes to the addictive properties 

of these drugs. 

Mr. STEARNS. Could you from your department make it more difficult for the doctors to provide prescription drugs in the areas that 

are causing the overdoses? Is there something that you could do? 

Mr. KERLIKOWSKE. I—we are kind of a small policy shop that—— 

Mr. STEARNS. You couldn’t make any recommendations? 

Mr. KERLIKOWSKE [continuing]. We bring all of these folks together. I think the key will be education and then making sure 

that they follow the rules, and I think that we are well on the way 

to hopefully getting that done. 

Mr. STEARNS. You mentioned in your opening statement the actual cost to society is estimated at $56 billion in 2007, and maybe 

likely higher today. Do you have any idea what the cost in terms 

of devastating affects on families and communities—so if it is $56 

million [sic] in 2007, what do you think it is today? 

Mr. KERLIKOWSKE. Well, and I think that the most recent study 

on the costs to the United States taxpayer on drug abuse is well 

around $190 billion that—— 

Mr. STEARNS. One hundred and ninety billion. 

Mr. KERLIKOWSKE. For—and that includes all types of heroin, cocaine, marijuana issues, et cetera, but I think that you couldn’t be 

more correct in putting forward the fact that it is not only a huge 

cost in our healthcare system, it is a huge personal cost and a huge 

personal tragedy the child that doesn’t graduate from high school, 

the employer that wants to start a new business and can’t find people that are drug free so that they will have less accidents and be 

more productive. All of these things play a huge part, and so the 

dollar cost is one thing. The tragedy to this country is another important part. 

31 

Mr. STEARNS. Lots of times all of us talk about the legal war on 

drugs, but we are also—I think we have to consider a war on prescription drugs, and so I guess the question is where does the current prescription drug war rank compared to our war on illegal 

drugs? 

Mr. KERLIKOWSKE. I think my colleagues, particularly in the 

Drug Enforcement Administration, when they set their goals and 

they move forward each year in recognizing what the drug threat 

is, several years ago they recognized this issue much more quickly 

and actually changed their direction and focus. I think you will 

hear about the number of what are called tactical diversion squads, 

the number of investigations, the number of local law enforcement 

and prosecutors that have been trained in how to investigate these 

complex cases, because these are actually legal drugs that are manufactured and often through prescriptions or pill mills. So those are 

important steps forward. 

Mr. STEARNS. Are we winning or losing? 

Mr. KERLIKOWSKE. We are moving ahead. I am encouraged by a 

couple of things. One, the number of dispensed opioid prescriptions 

has flattened, and if you looked at the charts in a number of years, 

it looked like the space shuttle taking off. The amount of opioids 

manufactured has flattened, and the fact that in this most recent 

monitor in the future, eighth, tenth, and twelfth graders actually 

decreased in their use of one of the very powerful painkillers, 

Vicodin. 

I think we are moving there, but as the chair and others know 

so well, it is not enough, and it is not fast enough. 

Mrs. BONO MACK. Thank you very much, Mr. Stearns, and I am 

pleased to recognize Mr. McKinley for 5 minutes for his questions. 

Mr. MCKINLEY. Thank you, Madam Chairman. 

Briefly, I think you and I had a little conversation beforehand, 

before we began, and we were concerned about privacy. I still 

would, I would like you to expand a little bit about that. What— 

to me from an engineering for small business perspective, I am a 

little concerned about, very concerned about the privacy, but I 

know and I think you would recognize that if there were a national 

registry of all the prescription drug used in America, the pharmacies would be held responsible to check that registry to find out 

that they just got OxyContin just one day earlier for a 3-months’ 

supply, and they would be able to say no. 

Isn’t there something, some form, I know we don’t want to have 

FDA, because as we have had other hearings here, someone being 

able to hack into that information. 

Mr. KERLIKOWSKE. Right. 

Mr. MCKINLEY. There were penalties according—that are related 

to that, but we all know if we had a list, if someone had a list, we 

could go hold those people responsible more so than the distributors that are doing the best they can to curtail that. 

Tell me a little bit about what efforts we can do in security 

privatizing those names so that individuals can’t be identified but 

yet we—a pharmacy would be able to know that they have now, 

this is their third prescription for the same medicine in the last 2 

weeks. Isn’t there something you are doing on that? 

Mr. KERLIKOWSKE. I think—— 

32 

Mr. MCKINLEY. I saw this the other night. I just think that is 

just great, education. It works so well with teenage pregnancies 

and everything else, hasn’t it? Sanctions against governments that 

they continue to—so I really want something with more substance 

to it that is going to solve the problem. 

Mr. KERLIKOWSKE. Sure. I think the answer is the prescription 

drug monitoring plans that are done by the state. Since the Federal 

Government doesn’t regulate the practice of medicine and the state 

does, having the PDMP, that electronic database that would be 

used by all physicians and healthcare professionals that would be 

real time and that in states, particularly neighboring states, that 

information could be shared across the states. 

When it is led and directed and the start-up money comes from 

the Federal Government but led and directed by the state government, they can put in the protections about patient confidentiality 

and privacy. I think in the best of all worlds that national database 

would be a wonderful thing. I think it would be difficult to implement because of the protections that would be needed to prevent 

exactly as you said hacking, and I think that part of that national 

database would be the fact that it would be 5 or 6 or 7 years in 

the making. Right now we have all but two states that have 

PDMPs, and as they become more well used and more well robust, 

it will actually make a difference with their use. 

Mr. MCKINLEY. So are you suggesting, and I think I understand, 

something that would not work with mail orders because they are 

ordered someplace else other than just in the state, but tell me 

again, you think that if pharmacists knew by looking at computer 

screen that that person got—would he or she still fill that prescription if he knew it was being violated? 

Mr. KERLIKOWSKE. When I speak with all of the different groups 

and the individual pharmacists, and you look at their ethical standards and their patient safety practices and the number of pharmacists that have picked up the phone and either said, either 

called the physician saying something isn’t right or the ones that 

have told that patient, you know what, I am not going to fill that 

because I have that information, I am pretty heartened by where 

the pharmacists are. 

But I think going upstream a little bit, that doctor that realizes 

that that patient that has come into his or her office has been to 

two or three other physicians or that patient that walks in on Friday evening to an emergency department and says, gee, I am traveling or I have lost my prescription or I need something like that, 

when that frontline, upstream person can take a look at that system and say, well, this is the third hospital you have been to this 

weekend or you are seeing two other doctors with a similar complaint, I am not going to be dealing with this, I think that is a help 

also. 

Mr. MCKINLEY. So what do we do with that individual when they 

come in? Are they held? 

Mr. KERLIKOWSKE. They are not held because I think that unless 

they actually get, unless there is a law violation, they are not going 

to be charged or they are not going to be held, but I think the other 

important part of this education piece is that they need to get into 

the treatment. I have met so many people now across this country 

33 

on these travels that have become addicted to prescription drugs, 

have received proper quality treatment, and they are back. I mean, 

they are back taking care of their families, they are back paying 

taxes, they are back working, and I think that this is the entry 

point to get them the help that they are needed, because we are 

talking about a disease. We are talking about addiction. 

Mr. MCKINLEY. OK. I guess we have run out of time. Thank you 

very much. 

Mr. KERLIKOWSKE. Thank you, Congressman. 

Mrs. BONO MACK. Thank you. Mr. Harper, you are recognized for 

5 minutes. 

Mr. HARPER. Thank you, Madam Chair. 

Director Kerlikowske, thank you for your time here and all that 

you are trying to do in a very serious situation. You know, with regard to the PDMPs, what do you think the biggest barrier is in the 

implementation of a drug-monitoring program for states whose programs have yet to go online? 

Mr. KERLIKOWSKE. One of the barriers is the fact that it needs 

to be real time, and it needs to be ease of use. Physicians have 

about, as I have been told, about 16 minutes with a new patient 

to assess everything. These are busy practices and busy offices, and 

they need to be given a tool that is easy, that is accessible in order 

to use it and of course, once they do and they become schooled in 

it and rely on it, the physicians that I have spoken with tell me 

that it is a patient safety tool. 

Mr. HARPER. OK. Now, we have 48 states that have authorized 

programs, 40, I understand, have operational programs. Are all of 

these state PDMPs created equal? 

Mr. KERLIKOWSKE. No. 

Mr. HARPER. OK. 

Mr. KERLIKOWSKE. They are not, but we are fortunate at Rice 

University to have a center of excellence that takes the best practices that helps those that are—and of course, the heads of each 

of these agencies come together several times a year for us to be 

able to speak with them. We want to be able to make them as robust and helpful as possible, but I would be the first to tell you 

that some are better than others. 

Mr. HARPER. Well, are there some that you would hold out as a 

role model for the other states or for those that have yet to go operational? 

Mr. KERLIKOWSKE. I think you will hear from Attorney General 

Conway, and I think Kentucky is clearly one of those states that 

has addressed this not just with a very robust and smart PDMP 

and some pending changes that they have planned in their laws to 

make it an even better system. I would tell you that from what I 

have looked at in California, the CURES System, is another one. 

The Center for Excellence, they have done a very good job of putting in the hands of the people that use these, develop these systems, information that is necessary. 

Mr. HARPER. What are you seeing as strengths and weaknesses 

as communication between the various states with their monitoring 

programs? Is that a weak link? Do you feel like that the communication between those states can be improved, and if so, what 

would you suggest? 

34 

Mr. KERLIKOWSKE. Now, you ask the million-dollar question, and 

I think you are exactly right. Some states are easier to get along 

with amongst each other on this particular issue and to work together. Some states when you look at these systems and it is not 

a huge amount of money but every state is facing difficult budget 

times, how much of a priority is it. But when I talked to these physicians or listen to these physicians in all these states, I said, look. 

If I am in eastern Kentucky, I really don’t want to spend the time 

to check Ohio, West Virginia. I need to get to a system that is already linked to those neighboring states. 

Mr. HARPER. Uh-huh. Do you—are the PDMPs the only option 

out there for states to implement the sharing of this information? 

Mr. KERLIKOWSKE. Right now on the prescription drug abuse 

issue, those are the options. I think the healthcare technology in 

the future, e-prescribing, all of these other things will play a big 

role in the future and make it easier and more helpful. 

Mr. HARPER. We want to thank you for your work on this very 

important topic, and with that I yield back, Madam Chair. 

Mrs. BONO MACK. Thank you, Mr. Harper. 

Director Kerlikowske, thank you so much for being here today 

and all of your hard work. You have been generous not only today 

but every day in working with me on these issues. I applaud you 

for raising the profile for many years and especially coming from 

somebody who said you didn’t know 3 years ago, you certainly 

know now. I don’t know that we have all the answers, but at least 

we are finally starting to confront it, and I look forward to working 

with you. 

Thank you, again, very much for being here today. Is there anything you would like to close—rather than a second round of questions, something you just need to say that you didn’t get to say? 

Mr. KERLIKOWSKE. Madam Chair, one—I am indebted to the 

committee and the members of Congress that take this issue on. 

You have so many issues in front of you, and yet as I mentioned 

to the President on the drug issue, when we think about keeping 

our kids in school and we think about who is going to be the workforce that we are all going to depend on in the future, I think about 

healthcare costs, I think about law enforcement issues. 

The more that we can do on the drug prevention side and the 

more that we can do to get people adequate treatment and get 

them back into the—into being productive members of society, none 

of that could happen without the will and the support and the help 

of members like you all. 

Thank you. 

Mrs. BONO MACK. Thank you very much. 

And with that we are going to take a very, very brief recess just 

while we seat the second panel. Hopefully it is 30 seconds or so, 

and we ask the second panel to join the table. 

[Recess] 

Mrs. BONO MACK. All right. On our second panel we have four 

very distinguished witnesses who are very deeply involved in the 

issues of prescription drug abuse and prescription drug diversion, 

which clearly go hand in hand. We are honored today to have with 

us the Honorable Pamela Jo Bondi, attorney general for the State 

of Florida, the Honorable Jack Conway, attorney general for the 

35 

State of Kentucky. Also joining us are Aaron Haslam, Senior Assistant attorney general for the State of Ohio, and Joseph 

Rannazzisi, Deputy Administrator for the Drug Enforcement Administration. 

Thank you all, again, for being with us this morning. To help you 

keep track of time there is a timer light on your table. When it 

turns yellow, you have a minute to wrap up. So, again, you don’t 

have to come to a screeching halt when it turns red, but if you can 

wrap up your comments, we would appreciate it. 

So with that we are happy to recognize Attorney General Bondi 

for her 5 minutes, and please just remember to turn your microphones on, and you may begin. 

STATEMENTS OF PAMELA JO BONDI, ATTORNEY GENERAL, 

STATE OF FLORIDA; JACK CONWAY, ATTORNEY GENERAL, 

COMMONWEALTH OF KENTUCKY; AARON E. HASLAM, SENIOR ASSISTANT ATTORNEY GENERAL, STATE OF OHIO; AND 

JOSEPH T. RANNAZZISI, DEPUTY ASSISTANT ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION 

STATEMENT OF PAMELA JO BONDI 

Ms. BONDI. Thank you, Congresswoman Bono Mack, and thank 

you for championing this cause on behalf of our country, and thank 

you as well, Ranking Member Butterfield, for having us here today 

and also to Congressman Stearns from Florida and to all the committee members. We truly appreciate this. 

I am here to tell you about what Florida is doing to try to stop 

prescription drug abuse. As Congressman Stearns told you, just to 

put it in perspective, of the top 100 oxycodone dealers in the entire 

country, 98 of them were in Florida. Now we have 13, and that is 

with legislation that has been in effect barely a year. So last year 

we had over 900 pain management clinics registered within our 

state. Today we have 580, and I guarantee you that number is 

going to continue to plummet. 

I want to outline now briefly our comprehensive legislation and 

what we have done in our state. As you know, we have become the 

Oxy Express, and that is why I worked so closely with General 

Conway, with General DeWine in Ohio because what was happening, people were buying their drugs in Florida, taking them to 

Kentucky. I had to hug a mother in Kentucky when I was with 

General Conway who lost her daughter 2 years ago to prescription 

drugs that were bought in Florida, and that had to stop. 

So we passed, with that we passed tough new legislation in our 

state, and we are very proud of that legislation. Long, long overdue, let me tell you that. 

The common characteristics of a pill mill in Florida were cash 

business, $200 to $300 cash, armed guards at the door, little to no 

medical equipment at all. Just shelves and shelves of pills. These 

doctors who we call drug dealers wearing white coats are sitting in 

a back room just signing prescription pads, and it was legal, and 

it was killing our kids. 

So we had very weak regulatory oversight of the pain management clinics. We had limited oversights of the physicians who were 

36 

dispensing, which was very important, and we had a non-operational prescription drug monitoring program. 

So with that we have now passed some very tough legislation, 

and we are very proud of that. One of the most important things 

to me was that we banned doctors from dispensing most abused 

narcotics, and we made that a violation of the ban, both a third degree felony and how do you hurt a bad doctor? Take their license 

away. So with that dispensing ban we feel that we have been very 

successful as well. 

We also have—we created a standard of care for physicians prescribing controlled substances. We require these doctors to either 

electronically prescribe or to use counterfeit-proof prescription 

pads, none of which had been done in our state. We also added, as 

I said, enhanced criminal penalties, which were very important and 

required all of these pharmacies to be re-permitted by the State of 

Florida. 

We did great things. We now have the PDMP up and running, 

which if you have any questions, I can discuss that with you as 

well, and with that, you know, we can always create tough new 

laws and onto something else, but what we did in Florida with 

Governor Scott’s help, we started a strike force, and that is joint 

with Federal, state, and local officials all working together. You can 

pass these laws and move on, and it is not going to work. We are 

targeting these guys, and we are putting them out of business. 

And with that just—we have seven strike forces throughout our 

state, and if you have questions about the strike force, I can explain that in greater detail, but what we have done, since we have 

had the strike force is we have truly gone in and started putting 

these guys out of business. We are targeting them, and we are not 

letting up on them. 

We also have an educational component of this legislation, and 

that involves narcotics overdose prevention education, NOPE, and 

this task force, these remarkable people have done an amazing job 

of going into our schools and educating our children about this. 

We have also instituted along with DEA state drug take back 

days. I have participated personally in as many of those as I could. 

You would not believe the drugs that are being turned in, and it 

has gotten so successful that we plan on putting permanent drop 

boxes up at our police stations and our sheriff’s offices as well. At 

two drug take back days alone we seized over five tons of prescription drugs. Unbelievable. 

So and we are very pleased to announce that as of February, 

2012, our strike force efforts have resulted in 2,040 arrests, 34 of 

those are doctors. We have seized 390 weapons, almost $5 million, 

but there is one other problem. I have run out of time, but that is 

the babies being born addicted to prescription drugs, and that is 

our newest fight this session, and we are not going to give up on 

that as well. 

Thank you for all of your efforts, and we do know we have a long 

way to go, but I don’t think any of us in this room are going to 

stop. 

Thank you. 

[The prepared statement of Ms. Bondi follows:] 

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Mrs. BONO MACK. Thank you very much. 

And General Conway, you are recognized for 5 minutes. 

STATEMENT OF JACK CONWAY 

Mr. CONWAY. Well, thank you, Chairwoman Bono Mack and Representative Butterfield for your commitment to this issue. I also 

want to recognize Congressman Guthrie, who is not here, but who 

is a fellow Kentuckian who works with our drug task forces on this 

very important issue. 

Prescription pill abuse is a reality that has touched the lives of 

just about every Kentucky family. It has touch my family’s life in 

a very personal way. It has ravaged our communities, it has shattered families, and it has fueled crime. 

Depending on which study you believe, Kentucky is either the 

most third- or fourth-most medicated State in the entire country, 

and the four you always hear at the top of the list are Kentucky, 

West Virginia, Tennessee, and Oklahoma. Last year in Kentucky 

we had over 1,000 people that we documented died from prescription painkiller overdoses. That is more than we lost to auto accidents. 

And Madam Chairman, we actually think that is underreported, 

because our estimates are that only about half the people that actually die from overdoses autopsied by a medical examiner’s offices. 

And when you take a look at the unnatural deaths in the Commonwealth of Kentucky, what you see over and over is not heroin or 

not cocaine, not even alcohol as much as you see Xanax, oxycodone, 

Methadone, and hydrocodone. Last year, Kentucky hospitals treated over 5,000 overdose patients. 

Now, this is an epidemic we first started to see in the 1990s in 

eastern Kentucky. Eastern Kentucky is a region of heavy industry, 

of laborers, of coal mines. We have more injury-prone jobs, but it 

is also an area of economic depression, and we have too many doctors who overprescribed and too many people became hooked. And 

because of the economic depression, people figured out they could 

sell their pills on the street, and a black market was born. And 

today when you go through eastern Kentucky, which I do on a regular basis, you will find that about 80 percent of the crime according to law enforcement and prosecutors is fueled by the abuse and 

the insidious addiction to prescription painkillers. 

The problem has spread across the Commonwealth. It is not just 

in eastern Kentucky. According to a ‘‘Lexington Herald’’ leader 

study not too long ago in 120 of our counties which we have total, 

118 were up in the number of schedule two and three narcotics prescribed, and I am sad to report that estimates from law enforcement and those in the healthcare community say that we have only 

about 10 percent of the treatment beds that we actually need in the 

Commonwealth of Kentucky. 

You know, I am sick and tired of hearing about losing an entire 

generation to prescription pill abuse in the Commonwealth of Kentucky, so we have started a public education program for doctors 

and also for school children in Kentucky. I actually travel across 

the Commonwealth with two mothers from Morehead, Kentucky, 

who lost their daughters to prescription pill abuse, and it is really 

important to get people like that who look like the mothers of these 

45 

kids to tell them their story, because they will listen to an elected 

official for 5 minutes or so, but when the mothers talk, they really 

listen. 

And here is what is disheartening. You can look at these kids, 

middle schoolers, high schoolers, and say, OK, you know, tell the 

truth. Just because I am the attorney general, tell the truth. How 

many of you have used a prescription pill or your best friend has 

used it for an off-label purpose. I am sad to report 70 or 80 percent 

of the hands go up. I ask them how many think that prescription 

pills are easy to get. Seventy or 80 percent of the hands will stay 

up. Then I will ask them how many of their parents lock up their 

medicine cabinets. All the hands will go down. I realize it is not 

a problem that starts with Grandma, but in some instances, particularly in Kentucky, it is an addiction that is starting in our 

homes. 

I have tried to do all I can. I have created the State’s first prescription pill task force. That is my drug investigators working 

with local law enforcement. We are trying to collaborate and share 

resources in a time of dwindling law enforcement resources. We 

participated in Operation Flamingo Road, where we partnered with 

the DEA and the Kentucky State Police to round up 500 individuals who were vanning pills up from Florida in 2009. 

At that point we thought about 60 percent of our pills in our 

streets were coming from Florida. Pam Bondi told me a story one 

time that they executed a search warrant on a pain management 

clinic in Broward County, Florida, and they seized 1,700 patient 

records. Of those 1,700 individuals they seized the records 1,100 of 

them are from the Commonwealth of Kentucky. That is what we 

in law enforcement call ‘‘a clue.’’ We had people by the vanload 

going to Kentucky to bring pills back. 

And that is why I am not only happy to a friendship with Pam 

or General Bondi I should say, I am grateful that she came along 

at this time. She has done a tremendous job of taking on these pill 

pushers in her State. As she said, Florida was home to 97 or 98 

of the Nation’s top 100 prescribers of oxycodone. Now they are 

down to 13. 

This issue knows no party. It is an American tragedy. We are 

doing all we can. We have new legislation in the Commonwealth 

of Kentucky to reregulate our pill mills. We have entrepreneurs 

getting in the pill mill business. We need to stop them. We have 

the issue of the mail order forms cease shipping 90-day supplies of 

schedule two and three narcotics. I understand the issue of efficiency in our healthcare system, but that needs to be 30 days, and 

we need to make certain that we get doctors using these systems. 

Yes, we have KASPER, our PDMP. It is a good system, but only 

about 25 percent of our doctors are using it, and on top of that 

those of us in law enforcement can’t see the data to do the investigations that we need to do, and I would be happy to talk with 

you a little bit more about that. 

I have heard the questioning here today, and I am out of time, 

so I am going to wrap up, but if you want to know what you can 

do to help, help us get all 50 states up with PDMPs and with systems that talk to one another. We can do our jobs if we can get 

46 

those systems up and running and if we can get the doctors to use 

them. 

Thank you very much for the opportunity to appear. 

[The prepared statement of Mr. Conway follows:] 

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Mrs. BONO MACK. Thank you very much, General Conway. 

Mr. Haslam, you are recognized for 5 minutes. 

STATEMENT OF AARON E. HASLAM 

Mr. HASLAM. Thank you Chairman Bono Mack, Ranking Member 

Butterfield, and distinguished members of this committee. I thank 

you on behalf of Ohio attorney general Mike DeWine and all of 

Ohio for the opportunity to address you today. 

As the Chief Assistant Prosecutor and later the elected Prosecutor in Adams County, Ohio, I had a front row seat for the devastation that this scourge can cause on a community. In February, 

2011, Ohio attorney general Mike DeWine recruited me to lead his 

prescription drug task force. Attorney General DeWine has been 

committed to using every resource Ohio has to fight this scourge. 

In Ohio we have taken nationwide—a nationwide stance in fighting back through changes in legislation, proactive law enforcement 

actions, partnering with prescribers and dispensers and being 

proactive with awareness, education, and treatment. 

Through this effort Ohio has raised public awareness, increased 

public education, and improved Ohio’s investigations and prosecutions in both criminal and regulatory cases. 

However, to make a real difference we must limit the availability 

of prescription drugs to those individuals in actual need and in the 

proper quantities. In Ohio unintentional fatal and non-fatal drug 

poisoning has cost Ohioans $3.6 billion annually. Between the 

years of 1999, and 2007, Ohio’s rate of opioid distribution increased 

325 percent. During that same time period Ohio’s unintentional 

drug overdose death rate increased 305 percent. If you will look to 

my left, you can see this remarkable correlation on the graph located closest to the back of the room. 

In 1997, Ohio averaged seven doses of opioids per capita. In 

2010, our average dose of opioid per capita increased to 67. In less 

than 15 years Ohio watched that average dose of opioids per capital increase almost 900 percent. 

The chart to my left, the closest to the front of the room, will illustrate that the death rates during the current prescription drug 

scourge is much higher in Ohio than the death rates in Ohio during the heroin epidemic in the ’70s and the crack cocaine epidemic 

in the 1990s. 

Ohio’s leaders recognize the seriousness of Ohio’s prescription 

drug problem. On February 8, 2011, Representatives Terry Johnson and Dave Burke, a physician and a pharmacist, introduced 

what is known as House Bill 93 in Ohio. The bill passed through 

the House and the Senate unanimously. With the support of the attorney general, Governor John Kasich signed the bill into effect on 

May 20, 2011, and it became law. 

Much like Florida, our pain clinics, our pill mills were not regulated. House Bill 93 for the first time regulated pain clinics in 

Ohio. It required physician ownership of pain clinics. It required 

prescribers to review our PMDP—sorry, our Prescription Drug 

Monitoring Program, which is known as OARRS in Ohio, and they 

had to do that when they were treating chronic pain patients. 

Attorney General DeWine has worked tirelessly to create a multidisciplinary approach to the investigation and prosecution of preVerDate Aug 31 2005 09:49 Jun 10, 2013 Jkt 037690 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 F:\112-12~1\112-12~1 WAYNE
55 

scription drug cases. Attorney General DeWine has worked with 

law enforcement at the local, State, and Federal levels in Ohio to 

investigate prescription drug cases. We are currently working with 

county prosecutors and Federal prosecutors all across Ohio to prosecute these cases. He is proud to be a part of the State-wide team 

in an effort to protect Ohio’s families. 

Our next step the attorney general believes is to build a bridge 

with State and Federal officials across the Nation. To have a true 

impact we must collaborate on a multi-State approach to combat 

this scourge. Ohio and the Nation must be proactive working with 

all the stakeholders to tackle this epidemic. When this happens you 

will see success. 

For example, in Scioto County, one of Ohio’s hardest hit counties, 

also a border county to Kentucky, the last pill mill was closed this 

past December. Scioto County has a population of approximately 

78,000 residents. At one time it housed 12 pill mills prior to Ohio’s 

efforts. Today it houses zero pill mills. Just last week Scioto County learned that accidental overdoses decreased 17 percent and 

drug-related deaths decreased 42 percent in 2011. This was the 

first decrease Scioto County had seen in the past decade in these 

numbers. It had been a steady increase prior to 2011. 

I will end with a quote from Reverend Martin Luther King Jr., 

who said, ‘‘We may have all come on different ships, but we are in 

the same boat now.’’ Each of us may have arrived at the prescription drug scourge on a different ship, but today we are all in the 

same boat, and more importantly, people will die if we continue to 

ignore the scourge. 

Thank you. 

[The prepared statement of Mr. Haslam follows:] 

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Mrs. BONO MACK. Thank you very much. 

Mr. Rannazzisi, you are recognized for 5 minutes. 

STATEMENT OF JOSEPH T. RANNAZZISI 

Mr. RANNAZZISI. Thank you. Chairman Bono Mack, Ranking 

Member Butterfield, distinguished members, on behalf of Administrator Michele Leonhart and the men and women of the Drug Enforcement Administration, I would like to thank you for the opportunity to appear today to discuss prescription drug diversion and 

the critical role the DEA plays in securing the integrity of the controlled substance supply chain and delivery system. 

Before I get going I would just like to thank the chairman and 

this committee for their leadership on this problem, and I also 

want to thank you for promoting the National Take Back Program. 

If I may throw in a plug, we will doing it again April 28, Saturday, 

State, Federal, local agencies with community groups working together to collect those drugs, and I want to thank you again for 

that. 

Also, I would like to thank the leadership of Director 

Kerlikowske, who has gone out of his way to ensure that we get 

the—all of the resources that we need to do our job. 

The abuse of pharmaceuticals continues to be a significant problem in the United States, and it is based on pharmaceutical diversion from the supply chain and the medication delivery system, and 

we believe that is the major reason. There is just holes in the system. Over the last few years individuals and organizations have 

created schemes within the healthcare delivery system that appear 

legitimate but are nothing more than illegal operations to facilitate 

the illegal distribution of pharmaceuticals. Pharmaceutical diversion facilitated by these operations can be prevented if DEA registrants would just fulfill their obligations under the Controlled 

Substances Act. 

The act was designed so that each DEA registrant is a link in 

the closed system of distribution. Each registrant, manufacturers, 

wholesalers, distributors, practitioners, and pharmacies have a critical role to play in keeping the distribution chain closed. 

Two major schemes have emerged to divert millions of dosigents, 

powerful addictive drugs. The first one a few years back was the 

internet pharmacy scheme. You could go online, and you could purchase pretty much any schedule three, four, or five controlled substance you would like. hydrocodone was the drug of choice, and it 

came out of the distribution chain, and really no one fulfilled their 

obligations to the chain. You had distributors that weren’t doing 

due diligence on pharmacies that were ordering huge amounts of 

hydrocodone. The pharmacists weren’t checking those prescriptions 

to ensure they were valid, that is they were issued for legitimate 

medical purposes in the usual course of professional practice, and 

the doctors weren’t doing the same thing. They were just prescribing without a legitimate reason for prescribing. There was no 

medical determination made. It was a major breech in the system. 

But because of law enforcement’s focus on that problem and then 

Congress coming in and passing the Ryan Haight Act, we basically 

shut down that system. Unfortunately, that system moved back to 

Florida and turned into pain clinics, and pain clinics grew. 

79 

Now, these pain clinics, besides the fact that they are operating 

illegally, they were doing the same thing that the internet pharmacies did. The only difference is on the internet pharmacies there 

was no face-to-face visit. In pain clinics they actually see patients, 

but, again, the doctors are moving huge amounts of prescriptions 

out the door. Pharmacists are not checking the validity of those 

prescriptions. They are not ensuring they are valid prescriptions, 

and the wholesalers and distributors just continue to ship large 

amounts of drugs to those pharmacies without doing due diligence, 

without knowing their customer, without saying, well, why are you 

ordering? Why are you ordering this amount of drug when every 

other average pharmacy in the U.S. only orders this, and you are 

ten, 12, 14 times more than that? They have a responsibility under 

the act. They choose not to comply with that obligation. 

We are fighting this problem through education and regulatory 

control and enforcement. Since 2005, we have a distributor initiative that has educated distributors of their obligations under the 

act. When distributors fail to adhere to their obligations, DEA 

takes administrative or civil action against their registration. From 

mid 2010, through the end of 2011, we took action against five 

wholesaler distributors for unlawfully supplying Florida-based pain 

clinics or associated pharmacies with controlled substances. These 

actions included the issuance of immediate suspension orders and 

result in the restriction and loss of DEA registrations. 

We also focus our resources on practitioners that issue those prescriptions not for legitimate medical purpose. These practitioners 

feed the addiction of drug seekers and allow drugs to enter the elicit market and facilitate overdose and death. Rogue practitioner activity is not limited to Florida. In fact, rogue pain clinics are moving northward, and they operate in Georgia, Tennessee, Kentucky, 

and southern Ohio now in addition to out west. A DEA investigation with State and local and Federal agencies of a pain clinic doctor operating in Portsmouth, Ohio, culminated this February with 

the doctor being sentenced to four life terms for overdose deaths of 

four individuals. 

I have to wrap it up here, but we are making progress. DEA is 

using its regulatory authority to ensure compliance with the CSA 

and its implementing regulations. These measures that we are taking are beginning to show promise. We are strengthening the integrity of the system through registrant compliance. 

In closing I want to assure you that DEA is working closely with 

all of our counterparts; Federal, State, and local, and our regulatory counterparts as part of the Administrator’s comprehensive 

approach to combating prescription drug abuse. We are committed 

to balancing the need for diversion control enforcement with the 

need for access to these important medications by legitimate users. 

Thank you for this opportunity to appear, and I look forward to 

answering any questions. 

[The prepared statement of Mr. Rannazzisi follows:] 

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Mrs. BONO MACK. Thank you very much. 

I am going to recognize myself for 5 minutes of questioning, and 

I would like to begin with General, Attorney General Bondi, and 

I know you care passionately and you and I have spoken about the 

opiate babies, and it is my belief that when people dabble with heroin or cocaine, they understand they are dabbling with a potential 

addiction. They don’t necessarily think that when they start playing around with pharmaceuticals. 

Can you speak to why you are so focused on the opiate babies? 

I mean, you really are passionate about it. I would love for you to— 

you ran out of time, so please talk about it for a little bit if you 

could. 

Ms. BONDI. Absolutely. You know, right after we passed our legislation last session I started getting calls from neonatal intensive 

care nurses, neonatologists, and said there is another problem, and 

you have got to come see this. I went to Saint Joseph’s Hospital 

in Tampa. Twenty percent of the babies going through the neonatal 

intensive care unit are born addicted to prescription drugs. 

Now, imagine the worst addict you can see on TV going through 

those withdrawals, that is how these babies are born into this 

world. Their incubators have to be covered with blankets. They are 

sensitive to light, to sound, to touch. Instead of milk, they are getting morphine or methadone. That is how these kids are coming 

into this world. 

All Children’s Hospital in St. Petersburg, that is a premiere hospital for children, 30 percent of the babies going through the neonatal intensive care unit born addicted to prescription drugs, and 

it has to stop. Take it from a cost perspective. I take it from a life, 

babies’ lives, but if you look at it from a cost perspective, Saint 

Joe’s had to expand their NICU just to accommodate these babies. 

So it is costing taxpayers a fortune, and I think a lot of it really 

has to do with education, and that is why we have legislation proposed this session. I have talked to adoption lawyers, I have talked 

to nurses, we brought in the Board of Health, we brought in the 

Board of Medicine. It is all about working together to educate these 

women, because unfortunately, I think some of these women will 

say I have stopped drinking alcohol, I have stopped smoking marijuana, but because it is the word prescription drugs, they don’t realize the harm that it is doing to their unborn child. 

What scared me to death, Chairman Bono Mack, was when I 

asked a doctor, I said, we can’t let this become the next crack baby 

epidemic, and he said, we have already surpassed it. 

Mrs. BONO MACK. Thank you. I just wanted to say we don’t even 

know the long-term consequences for these opiate babies, and I just 

want to turn with my limited time to Mr.—and hopefully we will 

have a second round of questioning, but Mr. Rannazzisi, you and 

I have had multiple discussions, and we are not always on the 

same page, but I applaud some of your efforts recently. 

You and I have talked about quotas. If Florida is having success 

at shutting down their pill mills, wouldn’t the quotas show a correlating reduction in the quotas that you do allow the manufacturing 

of these drugs? Are you seeing that? 

Mr. RANNAZZISI. Actually, we are seeing a decrease somewhat in 

Florida, but we are seeing the expansion of these pill mills 

91 

throughout the country. If you go to Tennessee, Kentucky, southern 

Ohio, and most of those in southern Ohio were shut down, but we 

still continue to see those flow out, and I just right now, even 

though Florida is on the going downhill, states north of Florida are 

starting on the rise. This problem is just, again, just moving north 

and west. 

Mrs. BONO MACK. Well, I am just glad you hear you admit that 

and to say that. That is encouraging to me, but can you speak 

briefly about the Cardinal Case? Now that the district court has 

dissolved the temporary restraining order, what are the next steps 

in the Cardinal Case, and apparently Cardinal plans to appeal. If 

the district court’s order is upheld, what is the next step? 

Mr. RANNAZZISI. Because that case is in active litigation, I am 

not allowed to answer questions, however, I can tell you we have 

had cases similar to Cardinal in the case in the last 2 or 3 years. 

They are exercising their appeal rights, and we respect that. We 

will continue on with this program. Looking at our distributors, 

making sure that they meet their obligations under the act, and if 

they don’t meet their obligations under the act, we will take the 

same action that we have taken. 

Mrs. BONO MACK. I am just encouraged because long ago you 

and I argued that it was all coming out of Grandma’s medicine 

chest. Correct? 

Mr. RANNAZZISI. Yes, ma’am, and not that I don’t still believe it 

is coming out of the medicine chest, but I believe that we are handling it upstream now to prevent it from getting down to that level. 

Mrs. BONO MACK. Thank you for that. 

Mr. Haslam, you talk about shipments, whole cargo containers 

that go missing but they are unreported. Do you want to speak to 

that? 

Mr. HASLAM. Anecdotally, law enforcement throughout Ohio has 

told us that they, that cargo shipments are falling off the trucks. 

We have heard—— 

Mrs. BONO MACK. Just magically. 

Mr. HASLAM. Just magically. We have heard—— 

Mrs. BONO MACK. Yes. 

Mr. HASLAM [continuing]. Through conversations with manufacturers about their security measures, and they do seem to be very 

good security measures as Director Kerlikowske alluded to earlier. 

However, there seems to be a point as it gets further down the 

chain that the security measures either weaken or are not as efficient, and once it gets to the distributors and then they send it to 

their distributors who send it out, there appear to be security 

measures that aren’t in place that allow shipments to fall off of 

trucks. 

Mrs. BONO MACK. Thank you very much. My time is up, and I 

would like to recognize Mr. Butterfield for 5 minutes. 

Mr. BUTTERFIELD. Thank you. Let me go to the gentleman from 

the DEA. How do you pronounce your name? Is it Rannazzisi? 

Mr. RANNAZZISI. Rannazzisi. Yes. 

Mr. BUTTERFIELD. Yes. All right. Thank you. Let me talk with 

you about the security procedures followed by the prescription drug 

manufacturers, specifically how the drug moves from raw materials 

to usable medicine, then to distributors, and then down to the 

92 

wholesalers. Are you comfortable, sir, with the security mechanisms employed by these companies? 

Mr. RANNAZZISI. The physical securities for the most, the physical security systems for the most part I am. We do onsite inspections every 3 years or so for manufacturers, importers, exporters, 

any other raw material holders, and if there is problems in physical 

security, we handle it onsite. We make suggestions, and generally 

it is corrected. 

Mr. BUTTERFIELD. All right. What kind of relationship does the 

DEA have with the prescription drug industry? Specifically, what 

programs does DEA employ to educate DEA manufacturers and 

distributors? How closely, if at all, does DEA audit or approve security measures employed by the manufacturers and distributors, and 

is there a difference in procedure for authorized distributors versus 

secondary distributors? 

Mr. RANNAZZISI. Well, first of all, we are on site for these distribution and manufacturing facilities every 3 years. In addition, 

for instance, the wholesalers and the distributors, we have a program called the Distributor Initiative where we sit down, not as a 

group, but individually with each company, and we go over their 

distributions, and we talk to them about what to look for when 

they are sending their drugs downstream. We offer them assistance 

to help them identify what diversion is and where it is, and that 

is done individually by company. 

The manufacturers, we have an open door as far as the manufacturers go. I don’t think we have ever had a problem with the manufacturers where we haven’t rectified that problem. 

So we are regulators. We have a relationship between regulators 

and the industry, and we oversee them and make sure that they 

are operating under the act, in compliance with the act. 

Mr. BUTTERFIELD. All right. Technology advances have enabled 

new abuse deterrent drugs to take the place of conventional pills. 

I am encouraged by the addition of abuse-deterrent drugs into the 

marketplace, and while it is not a silver or magic bullet in completely stopping prescription drug abuse, it seems to be a tool that 

can greatly help. 

Some medications have been reformulated to be extremely difficult to crush and dissolve. These are what we call abuse deterrent 

drugs and new additions to the prescription drug marketplace and 

have not yet been widely adopted. But things are moving in the 

right direction. 

Question. How do you think abuse-deterrent formulations will 

have an impact on reducing opiate abuse, and how do we ensure 

that those who are addicted do not just switch to a new drug such 

as Fentanyl or heroin? 

Mr. RANNAZZISI. I think that the abuse, well, first of all, we are 

very supportive of these assistance formulations. We think that is 

the future that will curb drug abuse. 

However, we also know that abuse-resistance formulations tend 

to stop drug abusers from ingesting the drug in certain manners, 

for instance, injection or snorting the drug. When they need to, 

they take it orally, and abuse-resistant medication generally does 

not affect how you take it orally. 

93 

What we are seeing in the field is they are taking the drug orally 

with an agent that will give it a synergistic property to enhance 

the, for instance, for a drug like oxycodone, they will take it with 

an Alprazolam product or Carisoprodol, which is a muscle relaxant 

to enhance the product, the effects of the product. 

Mr. BUTTERFIELD. Thank you. I yield back. 

Mrs. BONO MACK. Thank you, Mr. Butterfield. 

Mr. Harper, you are recognized for 5 minutes. 

Mr. HARPER. Thank you, Madam Chair, and if I could, Mr. 

Rannazzisi, if you I could ask you a few questions. 

First, what regulation does DEA have that specifically outlined 

the legal requirements that pharmacies, distributors, and manufacturers are required to take to avoid drug diversion? 

Mr. RANNAZZISI. Well, for starters, pharmacists are held pretty 

much to the same standard that doctors are under 1306.04, 

1306.04 says a prescription is not valid unless it is issued for legitimate medical purpose and use, of course, a professional practice. It 

also goes on to say that a corresponding responsibility exists with 

the pharmacist to ensure that the prescription is valid. 

Mr. HARPER. OK. 

Mr. RANNAZZISI. The manufacturers under 1301.71 and 1301.74 

have to maintain a system that stops diversion or the diversion of 

controlled substances into other than a legitimate marketplace. 

And it also goes on to say that you also have to maintain a system 

of suspicious ordering monitoring, and they leave it up to the manufacturers and distributors to determine how to set up that system 

of suspicious ordering and monitoring. 

Mr. HARPER. You know, I know the DEA has the ability to see 

unusual ordering patterns. Are there certain thresholds or levels 

that you pass on to the distributors to look for? Are you giving 

them guidelines to—that you pass off? 

Mr. RANNAZZISI. No. I think what distributors have to do is look 

at their customers. They know their customers. I don’t know all of 

their customers. They do. If they went onsite and looked at their 

customers, they could make a determination of what thresholds 

should be maintained for those individual registrant customers. 

The problem is is I don’t believe that the distributors and the 

wholesalers are actually looking at their customers as closely as 

they should. If you have customers that on the average purchase, 

I don’t know, 70,000 oxycodone tablets a year and you have customers purchasing well in excess of a million a year, I think that 

would trigger something where you should go onsite and find out 

why that is the issue. 

Mr. HARPER. Does the DEA have those volume parameters that 

it uses but are not shared with manufacturers or distributors? 

Mr. RANNAZZISI. No. We—no, we don’t share, we don’t give them 

volume parameters. That is up to them. It is their system that they 

are setting up. 

Mr. HARPER. All right. Well, what guidance has DEA provided to 

the manufacturers, distributors, pharmacies, or whatever on the 

specific steps that they should be taking to identify fraudulent prescriptions? What advice are you giving them to look for or suggestions? 

Mr. RANNAZZISI. Well, there are certain red flags. 

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Mr. HARPER. OK. 

Mr. RANNAZZISI. For instance, a pharmacy. If you have, if you are 

sitting in we will say Portsmouth, Ohio, and all of your customers 

are coming from, I don’t know, 80 or 100 miles away, and the doctor you are filling for is 100 miles the opposite way, and it is all 

cash transactions, and you are seeing this over and over again, you 

know, I am not the smartest guy, but red flags pop up in my mind 

when that happens. 

Mr. HARPER. Yes. 

Mr. RANNAZZISI. And I think those are typical red flags, and Attorney General Bondi I am sure, or any one of these distinguished 

gentlemen could tell they are seeing the same thing that I am seeing. So over and over again we see these red flags. The pharmacists 

should see them, too. 

Mr. HARPER. Would you favor under the Controlled Substance 

Act to create a stricter requirement, legal requirement for the most 

problematic drugs? 

Mr. RANNAZZISI. I think the requirements that are in place right 

now for these drugs are fine if the individuals within the supply 

chain and healthcare delivery system would follow them. The problem is that the doctors continue, not all doctors, 99 percent of the 

doctors are perfect. It is that small percentage of doctors that just 

don’t want to fulfill their obligation. What they do is prescribe for 

illegitimate purposes, or they don’t make a medical determination. 

They just go with patient-directed prescribing, which is just wrong. 

I think that if everybody within that supply chain would just police 

each other, we wouldn’t have the problem that we have right now. 

Mr. HARPER. I thank each of the witnesses for being here today 

and for your insight, and with that I yield back. 

Mrs. BONO MACK. Thank you, Mr. Harper. 

Mr. McKinley, you are recognized for 5 minutes. 

Mr. MCKINLEY. Thank you again. 

Let us go back to Florida or maybe Kentucky, but let us start 

with Florida. When you have your program, your PDMP, do you 

have an identification system? Is that how—is that included in it? 

Ms. BONDI. We, as I am sure you are aware, we had some very 

difficult problems getting our PDMP in place, our Prescription 

Drug Monitoring Program. It was, you know, 48 states have a 

PDMP but many weren’t up and running, and ours was one of 

them. 

We received some resistance. What we have done now is that it 

is up and running. We had some issues with getting it funded. Do 

you know who came forward? 

Mr. MCKINLEY. Wait a minute. Do you have an identification so 

when someone comes in, is this—do they enter their name or something into—— 

Ms. BONDI. Yes. 

Mr. MCKINLEY [continuing]. A file? 

Ms. BONDI. Yes, and it used—— 

Mr. MCKINLEY. It is available for everyone in the State of Florida? 

Ms. BONDI. Absolutely, and it used to be 15-day reporting, and 

now we have limited that down to 7-day reporting. 

Mr. MCKINLEY. OK. So—— 

95 

Ms. BONDI. So we have shortened the reporting period. 

Mr. MCKINLEY [continuing]. If it works in your State, why 

wouldn’t that work nationally? 

Ms. BONDI. Well, and this is, like I said, brand new in our State 

because it had never been funded. So now it is funded by forfeiture 

funds from our sheriff for the next few years. 

Mr. MCKINLEY. What about Kentucky? What are you doing in 

Kentucky? Do you have the database or names? 

Mr. CONWAY. We have the database, and what happens in Kentucky, we were one of the first states to bring a PDMP online, Congressman, but our doctors will go in and enter a patient name to 

see if that particular patient is doctor shopping. The problem we 

have in Kentucky is, it is a pretty good system, but only about 25 

percent of our doctors are using it. It is not mandatory. It is not 

mandatory that ER docs, for example—— 

Mr. MCKINLEY. OK. Thank you. 

What concerns me some is you have done a great job in Florida. 

You just chased them to another State. That is what I am hearing 

from the other testimony here, and what we are hearing from 

around the country is that you did a great job. It happens in law 

enforcement when you start performing your duties, they go someplace else because they are not going to change their behavior. 

They just transfer to another State. 

I am looking to see how we can capture them nationally. 

Ms. BONDI. And we still have a long way to go in Florida, but 

I think what we are doing is we are working together, and as long 

as I can tell you the two of us are still alive, we are going to put 

this, we are going to put these guys out of business. I mean, we 

work together constantly, we share ideas, we share thoughts, and 

we frankly in Florida we work great with the DEA. We—you have 

to work as a team, and I don’t know if you were here earlier for 

that part of it, but you have to bring State, local, and Federal authorities and now wrap all of our states into this, because this is 

a national crisis, and I mean, we are in a war with drugs, and just 

the drug has changed. 

Mr. CONWAY. If I may address that point, Congressman, not to 

take up too much of your time, but Kentucky borders seven states, 

and the pharmacists when they fill a script, enter the data that 

goes into the system that doctors later check. 

The problem for us has been that the docs feel like it is too time 

consuming. The docs don’t want to be forced to do this, and they 

don’t have a system that they think is user friendly that they can 

type in, takes 30 seconds or less, and tells you if you are in eastern 

Kentucky whether or not this patient has been to West Virginia, 

Ohio, or Virginia or Tennessee. 

And that is what we don’t have, and really a State like Kentucky 

can’t get to where we need to be. We can’t get 50 states with a good 

system that is interoperable unless we have the help of the Federal 

Government. 

Mr. MCKINLEY. And Ohio, do you have the names up on—do you 

have with your program, do you have the names, the individual, so 

they know, we know what prescription drug they are acquiring? 

Mr. HASLAM. We do, Congressman, and our program has been up 

and running for many years as well just as Kentucky’s has. 

96 

Mr. MCKINLEY. Do you see a problem with that going nationally? 

Mr. HASLAM. I don’t. I think it is one of the necessary tools that 

we are going to need to fight this epidemic. 

Mr. MCKINLEY. How do you deal with the privacy matter, because that seems to be the hang up, the confidentiality of people 

to access. What—how did you get around that for the State of 

Ohio? 

Mr. HASLAM. Well, it is very protected by—our Ohio State Pharmacy Board houses that program, and they are very protective over 

the information and who it goes to and how it is distributed, and 

that is how they get around it. They make sure that it is protected, 

but it is, it is a necessary tool in this battle as we move forward. 

Mr. MCKINLEY. So you are saying some states, in your three 

states, you all have that. You are doing something along that line. 

Mr. CONWAY. The information is protected. Only the doctor is 

going to see it, and if we have a designated case open on a specific 

target, we can ask to see the KASPER data, but one of the problems we have seen is that the Board of Medical Licensure when 

they see disturbing trends are not forwarding onto law enforcement. We have that problem in Kentucky. 

Mr. HASLAM. That is the same issue in Ohio, Congressman. It is 

a great tool. It is under-utilized by our physicians. House Bill 93 

required physicians that are treating pain management to utilize 

it, but as, exactly as you have alluded to, as we have success in 

law enforcement, we are squeezing the balloon and people are just 

moving to other states. 

And what has happened, the three states represented here today 

have all worked wonderfully together to tackle this issue and to 

share that information and investigations. 

Mr. MCKINLEY. I know the time. I think you are great models. 

I just want to see it replicated in all 50 states so we can protect 

this thing. We can’t have you operating in the middle. So thank 

you. I yield back my time. 

Mrs. BONO MACK. Thank you, and Dr. Cassidy, you are recognized for 5 minutes. 

Mr. CASSIDY. Thank you, Madam Chair. First I will say that we 

are introducing Mike Ross and I from the other side of the aisle, 

H.R. 4095, which is the Stop Online Pharmacy Safety Act, which 

attempts to close down or at least prevent the publicizing of these 

rogue pharmacies. So hopefully we will get some cosponsors on 

this. 

Secondly, Mr. Rannazzisi, man, I keep on thinking with the databases you all have, if we gave them to Google, I have no doubt that 

Google knows what color dress my daughter has on today. And so 

it seems like data mining could really go a long way to pinpointing 

these problems for a specific intervention. I am told by industry 

that you all have lots of data forwarded to you regularly. 

My question is why not? 

Mr. RANNAZZISI. I think the data they are referring to is our 

ARCOS System. 

Mr. CASSIDY. Yes. 

Mr. RANNAZZISI. Yes. Under 827(D) they are required to send all 

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97 

base, and we do have that information, and quite frankly, we use 

that information to assist us in investigations. 

However, that information is proprietary. It is protected information. I can’t release that information to industry, and they have 

asked—— 

Mr. CASSIDY. But you could release it to local law enforcement. 

Mr. RANNAZZISI. If local law enforcement is involved in investigation and they request the information, yes, we can. 

Mr. CASSIDY. Let me ask because as I go through the testimony 

you have rank ordered states in which there is the highest prescriptions per capita of controlled substances, you have related it 

to over 65 how many people on Medicare Part D are getting X 

amount per, in a certain region. I also see other statistics where 

you speak about three or four physicians moving from one State to 

another, so you have physician level, and I am sure you also have 

a pharmacy level. It just seems, again, if Google had that or some 

other data miner had that, we could have a specific intervention 

here. Boom. And then there and then there. I seems like there is 

missed opportunities. What am I missing on this? 

Mr. RANNAZZISI. I don’t believe there is missed opportunities. 

The data that we have is very narrow. It is for the narcotic controlled substances. For instance, I am dealing with a pharmacy or 

a group of pharmacies and manufacturers or distributors that are 

selling Fentermine or Alprazolam or drugs like that. I have no way 

of tracking because it is not entered into the system. 

Mr. CASSIDY. But if we just took those which are narcotics, I 

mean, probably there is going to be a correlation between somebody 

getting an illegal prescription for Ativan as well as an illegal prescription for OxyContin. So I am not saying you have to do the 

breath, but, again, if you have reported to you the narcotics for 

OxyContin—— 

Mr. RANNAZZISI. Uh-huh. 

Mr. CASSIDY [continuing]. Again, knowing that you just from 

here have a heck of a lot of data—— 

Mr. RANNAZZISI. Uh-huh. 

Mr. CASSIDY [continuing]. Why aren’t we doing every week another intervention at another pharmacy, because it seems like it is 

a target-rich environment. 

Mr. RANNAZZISI. We are. We have active investigations across the 

country based on complaints and our ARCOS data. Now, sometimes the ARCOS data might show up with a pharmacy that is, indeed, a legitimate pharmacy that does have a high volume, and the 

reason they have a high volume is because they are next to a hospital or oncology—— 

Mr. CASSIDY. And that is a fair statement. I can imagine a cross 

tab which would say, OK, here are the variables that we find associated with, you know, again, I can see Google with an algorithm 

that you give them. 

Mr. RANNAZZISI. Right. 

Mr. CASSIDY. Which would data mine. Are you all data mining 

on that, formally data mining? 

Mr. RANNAZZISI. Yes. We look at that, we look at ARCOS data 

on a regular basis. We look at the top 50, top 100 in different areas 

of the country. We make sure that, you know, we do background 

98 

and make sure those pharmacies and wholesalers are operating 

within the confines of the law, and if we have further information 

on it, we open investigations. Yes. That is what ARCOS is for. 

ARCOS is a targeting tool. 

Mr. CASSIDY. How many active investigations do you all have 

right now? 

Mr. RANNAZZISI. I would have to get back. I don’t want to throw 

out a number. 

Mr. CASSIDY. Ballpark, 50, 100, or 1,000? 

Mr. RANNAZZISI. Oh, we have a lot. Many more than 1,000. 

Mr. CASSIDY. Now, kind of a recurring theme from these folks is 

that people go from one State, they go to another. I live in Louisiana, my pain doc is legitimate and tell me that illegitimate patients, if you will, go to Mississippi or Houston and then back 

again. 

So is Federal, in your mind is Federal legislation required that 

would almost mandate some sort of standard so that Texas, Louisiana, Mississippi, Arkansas, or Kentucky with every State bordering it would be in some sort of interchangeable information? 

Mr. RANNAZZISI. I think—my personal opinion is, yes, I would 

love to see that because I think doctors need that additional tool. 

I think there as a practitioner you would agree that I want to know 

what my patient is doing and who my patient is seeing, whether 

it is in Kentucky, Ohio, or, you know, four states over. 

The problem is interconnectivity, and the problem is is a lot of 

these states have different State laws and different laws regarding 

the information and how it could be distributed. So I don’t think 

it is—I think the problem lies within the states. They have to work 

it out. This is not a Federal Government system, and while we support the states and we want the states to get that interconnectivity, 

that is a question better asked to the states. It is their decisions. 

Mr. CASSIDY. Just if I may have a few more seconds, I will say 

that after Hurricane Katrina and all my patients were displaced to 

other states, I found that those, there is something that happened, 

a switch was turned, and a doctor in Oklahoma could find out the 

drugs I was prescribing for my patients in Louisiana, and so it does 

seem as if that interoperability could occur in a fairly straightforward fashion if we had, you know, a little direction. 

Mr. RANNAZZISI. I remember that, and that State boards were 

working extremely well together, and I don’t know how that information was passed because we don’t have dispensing information, 

but I do know that we were working with the—— 

Mr. CASSIDY. I think it was through E-scripts. I think that there 

was something like that. 

Mr. RANNAZZISI. But the State boards really came together, and 

they did a fine job getting everybody in line. 

Mr. CASSIDY. So there is a chance we just need those folks to talk 

to their State boards. 

Thank you. I yield back. 

Mrs. BONO MACK. Thank you, Dr. Cassidy. 

The chair recognizes Ms. Blackburn for 5 minutes. 

Mrs. BLACKBURN. Thank you so much, and I want to thank you 

all for your patience today. As you know, we have had other hearings downstairs. We had Secretary Sebelius and looking at the 

99 

budget that is there, and I know that those of you at the State 

level are quite concerned about the Obama Care impact that is 

coming to a State near you very quickly. 

Mr. Rannazzisi, am I saying your name correctly? 

Mr. RANNAZZISI. Yes, ma’am. 

Mrs. BLACKBURN. I am close enough. 

Mr. RANNAZZISI. Perfect. 

Mrs. BLACKBURN. OK. On the Ryan Haight Act how many online 

pharmacies have registered under that act? What is—how is that 

being built out? 

Mr. RANNAZZISI. Currently I—we have no registered pharmacies 

under the act. We have I think four or five applications pending 

but no pharmacies have been registered. Now, remember there are 

a lot of provisions in the act that allow you to do certain things online that is not, that you don’t—the Act was written so it would 

prevent the rogue pharmacies from jumping online and continuing 

practice, and it has done that. There is no domestic pharmacies 

currently there operational that are under—— 

Mrs. BLACKBURN. OK. Then let me ask you this another way. 

How many enforcement actions has DEA taken against online 

pharmacies or rogue pharmacies under the act? 

Mr. RANNAZZISI. I would have to get back to you, ma’am. Very 

few because the act pretty much shut down the domestic online 

pharmacy problem, and the problem moved overseas. 

Mrs. BLACKBURN. OK. Are you having difficulty in sorting and 

finding out which are the rouge foreign-based pharmacies or—I 

would like to visit with you more about that. I think that it is an 

issue that is of concern to us and being able to see where we have 

these online pharmacies, find out who is registering or not. That 

would be helpful and instructive to us. 

So let us look at that a little bit and then if you could quantify 

the kind of actions that have been taken against some of these 

rogue pharmacies, just—it allows us to do a little bit of due diligence and see if decisions we are making are working or having an 

impact or not. So I would appreciate having that time with you. 

I want to talk with you for just a little bit, if you can answer this 

within the allotted time, that is great, and if you need to get back 

to me, that would be great. I am no cheerleader for the FDA, but 

I understand their philosophy and approach that, in that an agency 

as it applies to controlled substances seems much more measured 

than that of the DEA at times, and my understanding is I want 

to talk about this post-inspection feedback in the form of what is 

known as the FDA form 483, Inspection Report. 

And my understanding on this FDA form 83 [sic] is that it sets 

out with specificity the agency’s concerns and the parties have the 

opportunity to meet with the FDA and discuss any issues that may 

be before them, that companies are given the opportunity to address issues and solve problems in a collaborative dialogue. 

And if the company were to choose not to address the issues, the 

agency then typically takes further action in the form of a warning 

letter and proceeds with prosecution and consent decrees as appropriate. And I think that that FDA-type approach is different from 

the DEA approach when there are problems, which his just enforcement and not the opportunity to address concerns. 

100 

So it seems like DEA there is no post-inspection give and take 

or dialogue that may be there and no information sharing or the 

opportunity to address issues or—that are out there. So my question to you is this, and you mentioned Tennessee as one of the 

states with the pill mills, and you know, we all are concerned about 

patients that are in pain that need medication, companies that are 

trying to meet those needs, and here, again, want companies to do 

the right thing, want them to spend the money wisely, want individuals to be safe, want there to be protections that are in place. 

So my question is is there a more surgical approach? Should we 

be thinking of a more surgical approach to addressing the issue of 

prescription drug abuse rather than just looking at suspension of 

licenses? You know, where is the right balance in a vetting process? 

Is there a more proportional approach to take rather than just 

going to an immediate suspension? 

Mr. RANNAZZISI. Yes. I would love to answer that question. First 

of all, the FDA deals mostly with legend drugs, and they do have 

manufacturing processes they do with controlled substances, but 

the vast majority of their authority is over legend drugs and prescription drugs, making sure they have good manufacturing processes, maybe making sure that labeling is correct, putting the drug 

through the appropriate validation process. 

My responsibility under the act is to ensure that there is no diversion of highly-addictive medications into an elicit marketplace. 

We do give chances to companies. If you look at our history, we 

went onsite on many of these companies that we have taken action 

against and pharmacies and explained to them what their obligations were. We sat down with them and talked to them of what 

their obligations were. They just—— 

Mrs. BLACKBURN. OK. So your response then would be that you 

all are carrying out that dialogue? 

Mr. RANNAZZISI. Yes. 

Mrs. BLACKBURN. OK. All right. 

Mr. RANNAZZISI. Yes. I look at Florida and the millions of tablets 

that are going into the elicit marketplace in Florida, not only from 

the pharmacies but also from the distributors and the doctors. And 

I think we have to hold the line somewhere. These are drugs that 

are killing people. It is not Amoxicillin, and you know, we have to 

take a stand. 

Mrs. BLACKBURN. OK. Do any of the others of you want to make 

a response to that? No? OK. 

Madam Chairman, I will yield back. 

Mrs. BONO MACK. Thank you, and I am going to recognize myself 

for 5 minutes for a second round and any other member who wants 

to ask a second round, I will yield to you for your own 5, and then 

we will move to the third panel. 

My, first of all, my comment on what Dr. Cassidy had to say, I 

think he brought up a good point, and I think it is fair to ask if 

the DEA data mining capabilities are as robust and clever as you 

would suspect. Googles are and perhaps we can visit that in the 

days ahead, but this is a, sort of a general question to each of you, 

and thank you, Mr. Rannazzisi, for mentioning my support of your 

take back days, but 995,000 pounds of drugs in 3 days. 

101 

The question I want to ask each of you if you would care to comment or weigh in is who is paying for those pills? Are we paying 

for them in the form of healthcare premiums? Are we paying for 

them through diversion out of Medicare Part D and Medicaid? Who 

is paying for all of those pills? Why are there 995,000 pounds of 

extra pills being turned back in? What is the overall toll in 

healthcare in our country just from this problem? 

Anybody? 

Ms. BONDI. I can tell you from our local take back days these are 

good, solid citizens who are coming in with brown paper bags filled 

with prescriptions that they have had and that they are concerned 

because they know you cannot flush prescription drugs down your 

toilet, and they don’t know what to do with them, and they don’t 

want their grandkids to get a hold of them, and you know, when 

I speak to people, I say, no one ever wants to believe it is their 

kids, so I say, your kid’s friends can get into your medicine cabinet. 

So people—it is our citizens, and I think a lot of them are getting 

them from their doctors, their dentists for legitimate purposes. 

They are taking one or two of them, and they are just stockpiling 

them because they don’t know what to do with them, but we have 

had remarkable results with good citizens turning them in to have 

them properly disposed of. 

Mrs. BONO MACK. But the question is is why is there so many 

left over in the medicine chest to turn back in? Who is paying for— 

what is the cost, and General Conway, you mentioned this is an 

American tragedy, and I couldn’t agree with you more. There is no 

question our doctors are working too hard, and ultimately this 

comes out of their patient visit, they are scrambling because 

healthcare is squeezed more and more and more, and this is a part 

of the problem. But $148 million diverted out of Medicare Part D 

in 2008, alone. 

So are we really, I mean, General Conway, do you want to weigh 

in on—— 

Mr. CONWAY. Well, I don’t know that I can quantify the cost. I 

mean, sitting here as the attorney general of Kentucky I can’t 

quantify the cost, but my experience is similar to General Bondi’s. 

When I go to one of our drug take back days and sit there with 

my plastic gloves on, it is the concerned mother who doesn’t want 

her kids and realized she saw something on TV and her 

hydrocodone she got for a broken arm is expired. 

The cost comes in crime. People are committing thefts to get access to resources to buy pills. The cost comes in cash. A lot of these 

pill mills deal on a purely cash basis. When you have healthcare 

companies that are trying to get more efficient in mandating 90- 

day supplies of some of these mail order pills, a 90-day supply in 

Kentucky of hydrocodone or oxycodone, chances are about 50 percent of that is hitting the streets. That is what my law enforcement 

officials are telling me. That is something that we need to quantify. 

And certainly Medicare and Medicaid are paying some of that. 

Ms. BONDI. And Chair Bono Mack, I think what you are saying 

is if you go in for a routine dental surgery, why do you need 60 

oxycodone pills. 

Mrs. BONO MACK. Exactly. 

Ms. BONDI. You don’t. 

102 

Mrs. BONO MACK. Thank you. Thank you, and Mr. Haslam, you 

speak on this, to this in your testimony, too. You suggest that 

maybe they have sort of a tiered approach into needing the drugs. 

Do you want to speak a little bit about your beliefs on this, too? 

Mr. HASLAM. Absolutely, Madam Chairman. The—what we see 

in Ohio we see—to answer your original question, the taxpayers at 

some level is paying for the problem. No matter how you look at 

it when you boil it down to the common denominator, it is the taxpayer that is paying for it, whether it is Medicaid costs in Ohio, 

especially in southern Ohio, which is economically depressed, it 

borders eastern Kentucky as we have heard Attorney General 

Conway elude to is an economically-depressed area. That—it is a 

huge burden on the Medicaid System there, and as you move 

across the State of Ohio, though, it is not limited to that socioeconomic class. It goes all through all the way to the middle class 

up to the upper class, and whether it is a company that has to pay 

increased healthcare premiums that is I providing for its employees 

because of the number of pills their employees are receiving as part 

of a prescription or the insurance companies, the cost to those 

folks. The insurance companies in Ohio have recently reached out 

to the attorney general’s office to talk with us and say what role 

do we play in this? This is a huge cost to our bottom line. It touches everybody. 

So at the end of the day it is the taxpayer that is footing the bill 

for this prescription drug problem and for those large amounts of 

pills that are on the street. 

Mrs. BONO MACK. Thank you. So when we win the day with the 

arguments of the human suffering of the budgetary tolls, there is 

no rhyme or reason why we wouldn’t be tackling this head on as 

a Nation, and again, Mr. Rannazzisi, one last question to you. 

This committee has been investigating nano encryption, 

intagence, and other technologies coming out. Can you speak briefly about future technologies that you might be exploring like this 

on tracking drugs? 

Mr. RANNAZZISI. Ma’am, I can’t take that question for the record. 

I am not an expert on—— 

Mrs. BONO MACK. OK. 

Mr. RANNAZZISI. But I do have experts on staff. 

Mrs. BONO MACK. That is fair. You know we will be submitting 

plenty of questions to each of you for the record. 

Mr. Butterfield, did you have—— 

Mr. BUTTERFIELD. I have one. 

Mrs. BONO MACK. All right. I will yield to you—— 

Mr. BUTTERFIELD. Thank you. 

Mrs. BONO MACK [continuing]. For 5 minutes. 

Mr. BUTTERFIELD. Thank you. Under the careful supervision of 

a doctor, prescription drugs can alleviate severe pain or help those 

suffering from mental disorders like psychosis or depression or anxiety or insomnia or attention deficit disorder. Unfortunately, there 

are true stories of these drugs being prescribed inappropriately or 

not for their intended use. 

Only 54 percent of physicians ask about prescription drug abuse 

when taking a patient’s medical history, and only 55 percent reguVerDate Aug 31 2005 09:49 Jun 10, 2013 Jkt 037690 PO 00000 Frm 00106 Fmt 6633 Sfmt 6633 F:\112-12~1\112-12~1 WAYNE
103 

larly contact their patients’ previous doctor before prescribing controlled pain medication. 

Question. State entities certify and regulate both doctors and 

pharmacies. Through this role, General Conway, what do you think 

State authorities can do to educate medical practitioners? 

Mr. CONWAY. Well, the thing about the medical community, Congressman, is that it is not a one-size-fits-all approach, and we have 

a piece of legislation we are considering right now in the general 

assembly that I am supportive of that would require anyone who 

wants to prescribe a schedule two or three narcotic to mandatorily 

register with our PDMP. 

But I think that the education component for the medical community is important. The Chairwoman talked about what needs to 

happen with short-term prescriptions. Our ER docs need to have 

standards for how much should they prescribe if someone shows up 

at the ER. They ought to do mandatory PDMP checks. 

The problem for us in law enforcement and in Kentucky, and I 

can’t speak to it in other states, but in Kentucky we have a little 

bit of a battle with our medical community in that the KASPER 

System, our PDMP, is housed over in a cabinet of Health and Family Services. They have the data. They observe the trends that are 

problematic. They are supposed to take actions against licenses if 

they spot problematic trends and then refer them to law enforcement if necessary. 

Until this issue received increased scrutiny here in the last couple of months, in my first 4 years as attorney general, I didn’t have 

a single law enforcement referral from the Board of Medical Licensure. 

So the doctors, if they are going to be prescribing, you know, 

there are different standards for an oncologist or pain management 

doctor from a podiatrist and an allergist. But the doctors that are 

going to be prescribing have an obligation to use the system, to 

check their patients, and to help us police their profession, because 

they are under-utilizing the system right now, and they need to 

work with us so that we can see the data. 

I cannot ask who are the two largest prescribers of schedule two 

and three narcotics in Pike County. I would love to, but the law 

prohibits me from doing it, and the Board of Medical Licensure is 

not sending me the data. So I am using old-fashioned surveillance 

and talking to people about where are they getting the pills in 

order to figure it out, and we have a great system, and all the data 

is right there. We are just under-utilizing it, and we are under-utilizing it because we don’t have the partnership we need with the 

medical community to make certain that that is getting addressed 

in Kentucky. 

Mr. BUTTERFIELD. Would it be helpful to work with some of the 

medical schools, the dental schools to develop a curricula in this 

area? 

Mr. CONWAY. Oh, absolutely. I speak to the pharmacy students, 

and I speak to a lot of medical students on an annual basis to tell 

them how big the problem is and to look out for this. You know, 

it is a balance here. The medical community gets nervous whenever 

an attorney general or a lawmaker gets in the middle of the doctor, 

patient relationship, and I respect that. I respect that, but there 

104 

ought to be some way for us to see the disturbing trends so that 

we can do our job in law enforcement, and right now in Kentucky 

our data monitoring law says I have to have a designated case, a 

bona fide case open on a designated target. I can’t look at trends. 

I can’t see where the problems are. I have to ask about Mr. Smith, 

and the data is all there, and I can’t use it, and I can’t tell you 

how incredibly frustrating that is. 

Mr. BUTTERFIELD. Do you believe the Federal Government 

should consider certain minimum standards for doctors, for doctor 

education or training in the area of addiction medications? 

Mr. CONWAY. I don’t think it is a bad idea. Traditionally the regulation of the practice in medicine has been left to the states. I respect that. I think we are doing all we can in the Commonwealth 

of Kentucky to educate doctor. A lot of the healthcare organizations 

are starting to set up—some of our larger hospital companies are 

starting to set up standards for their ER docs. I think that is great. 

I think it is something probably best left to the states, but I would 

welcome some Federal guidance on that. 

Mr. BUTTERFIELD. All right. Thank you. I understand you may 

have spent some time at Duke University. 

Mr. CONWAY. I did, sir. I did, sir, and I don’t know your allegiance. One of the toughest things I have to do is get elected statewide in the Commonwealth of Kentucky being a graduate of Duke 

University. It is—basketball passions being what they are. 

Mr. BUTTERFIELD. The State legislature has just added Duke 

University to my district. 

Mr. CONWAY. Well, Roy Cooper and I have a running argument 

every time we see each other, and I am going to see him this weekend. I am sure we will be arguing over that little game this weekend. 

Mr. BUTTERFIELD. All right. Thank you. 

Mrs. BONO MACK. Thank you. Mr. McKinley? No? 

OK. Well, we—the next panel. OK. We want to thank you all 

very, very much for your expertise and your hard work on this. We 

look forward to working with you. Please anticipate further questions in writing. We look forward to getting your responses. 

Again, thank you for fighting this battle, and we look forward to 

partnering with you in the future. Safe travels home. 

Ms. BONDI. Thank you, Chair. 

Mr. CONWAY. Thank you. 

Mrs. BONO MACK. We will take quick 30-second break while we 

seat the next panel. 

[Recess] 

Mrs. BONO MACK. On our third panel we have five witnesses. 

First is John Gray, President and CEO of Healthcare Distribution 

Management Association. Our next witness is Joseph Harmison, a 

Pharmacist and Owner of DFW, it sounds like Dallas Fort Worth 

Airport—oh, it is. OK. Of DFW Prescriptions, who is testifying on 

behalf of the National Community Pharmacists Association. Hopefully I will be flying through DFW later today. 

We also have another pharmacist joining us, Kevin Nicholson, 

Vice President of the National Association of Chain Drug Stores. 

Next is Kendra Martello, Assistant General Counsel, Pharmaceutical Research and Manufacturers of America, and our final witVerDate Aug 31 2005 09:49 Jun 10, 2013 Jkt 037690 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 F:\112-12~1\112-12~1 WAYNE
105 

ness is David Gaugh, Vice President for Regulatory Science of the 

Generic Pharmaceuticals Association. 

Welcome everyone. I think you know the drill. The 5 minutes. 

There is the timer, and with that we will be happy to turn to you, 

Mr. Gray, for your 5 minutes. Please make sure your microphone 

is on. 

STATEMENTS OF JOHN M. GRAY, PRESIDENT AND CHIEF EXECUTIVE OFFICER, HEALTHCARE DISTRIBUTION MANAGEMENT ASSOCIATION; JOSEPH H. HARMISON, OWNER, DFW 

PRESCRIPTIONS, ON BEHALF OF NATIONAL COMMUNITY 

PHARMACISTS ASSOCIATION; KEVIN N. NICHOLSON, VICE 

PRESIDENT, NATIONAL ASSOCIATION OF CHAIN DRUG 

STORES; KENDRA A. MARTELLO, ASSISTANT GENERAL 

COUNSEL, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA; AND DAVID R. GAUGH, VICE PRESIDENT FOR REGULATORY SCIENCES, GENERIC PHARMACEUTICALS ASSOCIATION 

STATEMENT OF JOHN M. GRAY 

Mr. GRAY. Now it is greener. Thank you. Good afternoon, Chairman Bono Mack and Ranking Member Butterfield and members of 

the Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade. I am John Gray, President and CEO of the 

Healthcare Distribution Management Association, and I want to 

thank you all for the opportunity to come here today and talk 

about this critically important problem of prescription drug abuse 

and diversion, and most importantly, what my members are doing 

to combat that problem. 

The pharmaceutical distribution industry’s primary mission is 

operate the safest, most secure, and efficient supply chain in the 

world. As part of this mission HDMA and its members are committed to addressing the serious national problem of prescription 

drug abuse and to being a part of the solution. 

HDMA members have not only statutory and regulatory responsibilities to detect and prevent diversion and control prescription 

drugs, but to undertake such efforts as responsible members of our 

society. 

To address the issue of prescription drug abuse, distributors have 

developed complex systems to help prevent diversion of medicines 

and to comply with the DEA’s expanded expectation for suspicious 

order in monitoring and reporting. 

To aid in the development and implementation of these systems, 

in 2008, HDMA and its member companies developed the Industry 

Compliance Guidelines to support the distribution industry practices on the evaluation of customer orders for controlled substances 

and the reporting of so-called suspicious orders to the DEA. The 

ICGs, as we call them, were vetted with the DEA in advance to 

their publication. 

These guidelines emphasize the concept of ‘‘know your customer.’’ 

That is obtaining and reviewing thorough background information 

about a perspective healthcare provider prior to doing business 

with them. Therefore, in many cases potential problems can be 

avoided even before an order is placed. 

106 

Because the advanced systems now in place and the industry’s 

proactive efforts, the DEA reported last year that since 2006, and 

2011, distributors in this country stopped shipping controlled substances to more than 1,500 customers that could have posed an unreasonable risk of diversion. 

Let me add it is critical that the anti-diversion efforts of our industry, as well as the enforcement actions of DEA, should always 

carefully balance the need to cut of supply to any customer engaged 

in diversion while not limiting access to appropriately-prescribed 

and legally-dispensed medicines for seriously ill patients or potentially putting legitimate pharmacies out of the business. 

Despite the best efforts of our industry, we find ourselves today 

in a conundrum. Pharmaceutical distributors do not manufacture 

legal controlled substances. We do not license pharmacies or 

healthcare providers. We do not write prescriptions for patients. 

We do not dispense these products to patients. We do not see the 

prescription a patient presents for filling at a pharmacy. A single 

pharmaceutical distributor does not know and has no way of knowing if a pharmacy customer is purchasing prescription drugs from 

other distributors. 

Furthermore, we do not determine or set prescription drug fill 

rates. 

However, the DEA receives information from each distributor 

that sells controlled substances to a particular pharmacy or prescriber. The agency also sets annual allowable production quotas 

for manufacturers of these controlled substances. Distributors are 

often held accountable with incomplete information for diversion 

from parts of the supply chain they simply do not control. 

To comply with DEA’s expectations, distributors are being asked 

to judge the diagnosis, intent, medical knowledge, experience of 

doctors and pharmacists. 

Furthermore, the DEA’s emphasis on volumes and national averages to determine suspicious orders may simply over simplify the 

problem for schedule two controlled prescription drugs. Our members have found the analysis of a single pharmacy’s controlled substance ordering pattern is simply far more complex and includes 

critical factors such as the size of the pharmacy, the patient demographics, the geographic proximity to the hospitals or surgery centers, nursing homes, cancer clinics, hospice providers, and other 

major urban areas. 

Now, as was stated earlier today, I need to correct that. We do 

not choose not to comply with these laws of suspicious ordering. 

The fact is our members have many questions about the compliance. You have heard this is a relatively new process, a new procedure, and unfortunately, today with the questions we have remaining each distributor essentially operates in an information silo. We 

are unaware if a new pharmacy customer may have been cut off 

by another distributor who had concern about potential diversion 

at the pharmacy, or we are unaware that an existing pharmacy 

customer is ordering controlled substances from multiple distributors. Or we are also unaware that specific pharmacies may be dispensing controlled substances for physicians who are writing prescriptions for patients when there is no legitimate medical need. 

107 

So in an effort to break down these walls and get this new program going, HDMA has asked DEA in face-to-face meetings over 

the last several years as well as in written communications to provide some clarification and guidance on the agency’s expanded expectations of an anti-diversion program for wholesale distributors, 

and we have sought greater information sharing in the process between the agency and our industry. 

Throughout these communications HDMA and its members have 

also asked DEA to provide aggregated and critically-important 

blinded data from the ARCOS System that could be used to further 

assess product orders and provide supportive information for the 

agency and for the members. 

A distributor does not have the independent ability to determine 

whether a pharmacy or a physician customer is ordering from multiple distributors. Only the DEA possesses that information. 

In closing, we strongly believe that all stakeholders, doctors, 

pharmacists, distributors, manufacturers, and indeed, the government must work together to achieve this shared goal to ensure a 

sufficient, safe supply of medicines for legitimate patients while 

keeping those same drugs out of the hands of individuals who will 

abuse them. 

Ms. Chairman, thank you for your time. 

[The prepared statement of Mr. Gray follows:] 

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Mrs. BONO MACK. Thank you, Mr. Gray. 

Mr. Harmison, you are recognized for 5 minutes. 

STATEMENT OF JOSEPH H. HARMISON 

Mr. HARMISON. Thank you, Madam Chairwoman. 

Mrs. BONO MACK. Turn the mic on and pull it close to you, 

please. 

Mr. HARMISON. Does it help if I get it closer? 

Mrs. BONO MACK. Yes. Thank you. 

Mr. HARMISON. I am sorry. I have a hearing deficit, and people 

say I talk too softly. Sorry. Good afternoon, Madam Chairwoman 

Bono Mack, Ranking Member Butterfield, and Members of the subcommittee. I am Joe Harmison. I am a practicing pharmacist. I am 

a pharmacy owner and past President of the National Community 

Pharmacists Association. NCPA is a national organization representing the owners and pharmacists of the non-publically traded 

community pharmacies. 

Everyone here today is in agreement that the United States has 

a problem with drugs abuse, misuse, and diversion. I hope we will 

also acknowledge that the drugs we are discussing today when 

used appropriately are extremely beneficial. When they are not 

used as intended, they are destructive in many ways. 

As has been stated over and over, the majority of people that 

abuse prescription drugs get them from the family medicine cabinet 

or friends. This shines a very bright light on how we need to destroy these drugs. The community pharmacists in the United 

States have been excited, willing participants in the Drug Take 

Back Program for Destruction. 

The problem we have, we are not allowed to take back the controlled substances of what—those are the drugs we really want to 

get off the street. We can’t handle that. We are anxiously awaiting 

the rules we have been told with DEA they are promulgating to 

allow us to participate in this process. 

The pharmacists of America interact with millions of patients 

every day and advises them on how to use their medicine correctly 

and what can happen if they don’t. We cannot cure the problem we 

are addressing today by ourselves. We use the tools we have, but 

we need more tools. 

There have been many suggestions on how you can get more or 

people can get more information to us. I am very much in agreement that the most readily-implementable procedure we have out 

now is the PDMPs. Every pharmacist in I believe it has been stated 48 states has to submit on a regular basis the information on 

the controlled substances they dispense. This goes into some giant 

computer somewhere. 

The problem the pharmacists have with it is most of us don’t 

have access to that information. It is certainly not in real time, and 

it is not able to be incorporated into our workflow systems. If you 

can find a way to get that to us, we will be your greatest advocates 

in using it. We do not want to be the drug police. We would be very 

willing to work with all parties to prevent abuse, misuse, and diversion. 

Another thing with this computer database, it must not be the 

deciding factor on whether a patient gets their medicine. That deciVerDate Aug 31 2005 09:49 Jun 10, 2013 Jkt 037690 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 F:\112-12~1\112-12~1 WAYNE
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sion must be left to the responsible parties, the prescribers and the 

pharmacists. We are the ones that know the patients best. We 

know their conditions. 

Another very important part of this equation is pharmacy burglaries and robberies. In 2010, there were 686 armed robberies of 

pharmacies in the United States, and unfortunately, some of these 

end up with murders involved with them. Unfortunately, I have 

way too much experience first hand with pharmacy burglaries. One 

of my pharmacies has been burglarized three times since December 

1, 2011. This is one small pharmacy, and from what I can determine the street value of the drugs taken from my pharmacy is in 

excess of $575,000. And more onerous than that, there were almost 

10,000 doses of controlled substances potentially put on the street. 

I would like to make a few recommendations for your consideration. One, require mandatory minimum sentences for robberies 

and burglaries involving controlled substances. Find some way to 

give Federal, State, and local law enforcement and prosecutors the 

ability to better communicate and coordinate their efforts to do 

their work. 

Third, shut down the pill mills. Get the back actors out of the 

process. Leave those of us that are trying to do the best we know 

how, what we are trained to do, care for patients, to do our job. Another is consider a change to the tax code to allow those of us that 

have put out the money to have different security systems, to depreciate those in 1 year. Don’t make us depreciate it over 7, 10, or 

more years. 

And also we would hope that you might reconsider allocating 

some of the money taken from forfeiture from crimes related to 

controlled substance, put that in a pot somewhere and let pharmacists apply for some of that money. If they can’t afford security 

systems, let them apply to use some of that forfeiture money. 

NCPA and the Community Pharmacists of the United States 

will—are committed to working with Congress and law enforcement to combat drug use, abuse, and diversion, but we need your 

help. 

Thank you for the ability to be here today and your attention. 

[The prepared statement of Mr. Harmison follows:] 

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Mrs. BONO MACK. Thank you, and Mr. Nicholson, you are recognized for 5 minutes. 

STATEMENT OF KEVIN N. NICHOLSON 

Mr. NICHOLSON. Chairman Bono Mack, Ranking Member 

Butterfield, and subcommittee members, thank you for the opportunity to testify. My name is Kevin Nicholson. I am a pharmacist 

and Vice President of Government Affairs and Public Policy for the 

Nationals Association of Chain Drug Stores. NACDS represents 

traditional drug stores, supermarkets, and mass merchants with 

pharmacies. Our members operate more than 40,000 pharmacies 

and employ more than 3.5 million employees, including 130,000 

pharmacists. 

Our members are deeply committed to serving the healthcare 

needs of Americans. We are serious about the trust our patients 

impart upon us and about our responsibilities to provide the highest quality care. We are keenly aware of the scourge of prescription 

drug diversion, and our members actively work on numerous solutions. We also support a number of new and Federal-State policy 

initiatives. 

DEA has implemented comprehensive regulations for a closed 

system to minimize the diversion of controlled drugs. Our members 

have developed extensive policies and procedures to comply with 

DEA’s regulatory regime and similar requirements from State 

agencies such as board’s pharmacy and narcotic drug agencies. A 

complex regulatory and policy matrix of checks and balances protects Americans. 

Chain pharmacies have zero tolerance for prescription drug diversion. We have implemented a variety of extensive and robust 

loss prevention and internal security systems from our prescription 

drug distribution centers to the point of dispensing to patients. Examples include that we conduct background checks and random 

drug testing, extensive DEA training within 30 days of hire, maintaining electronic inventories of controlled substances with random 

auditing, use of camera surveillance closer to television, heavy-duty 

safes, and complete alarm systems, training employees on how to 

handle suspicious prescriptions, and internally investigating unusually large drug orders. 

Chain pharmacies support and comply with State prescription 

drug monitoring programs. We support policies to prevent illegitimate internet drug sellers from illegally selling prescription drugs 

to consumers, and we support efforts to provide consumers with the 

means for proper disposal of unwanted medications in ways authorized by law enforcement. 

NACDS is pleased to offer our support for the Online Pharmacy 

Safety Act, which would take important steps to shut down the illegitimate internet sellers that prey on consumers. We applaud subcommittee members Bill Cassidy and Mike Ross for their strong 

commitment to protecting the American public. Approximately 36 

million Americans have purchased prescription medications online 

without a prescription. Americans are being harmed by these rouge 

internet sites daily. 

We also look forward to DEA’s upcoming regulations to allow 

consumers to safely dispose their unwanted controlled prescription 

126 

drugs. DEA recognizes that consumers’ inability to safely dispose 

of controlled prescription drugs contributes to prescription drug diversion. 

NACDS routinely meets with DEA officials to learn about diversion trends and to develop strategies to mitigate and reduce problems, and although we support the mission and objectives of DEA, 

we do have concerns with DEA’s recent policies surrounding the 

volumes of controlled substances ordered by pharmacies. 

Every pharmacy environment is different, and enforcement action should not be brought against a pharmacy merely based on the 

number of controlled substances ordered or dispensed. Certain 

pharmacy locations will have higher-than-average volumes of controlled substances. For the ultimate good of patients who rely on 

access to controlled substances for legitimate purposes such as pain 

management, we urge DEA to take a holistic approach when developing policies to pursue enforcement actions. 

We have worked over the past few years to develop prescription 

drug risk management programs with FDA called REMS to reduce 

the potential for addiction and abuse of prescription drugs, and we 

will continue to work with FDA on future similar risk management 

programs. We also meet routinely with the White House Office of 

National Drug Control Policy on trends and solutions. 

We are proud of the comprehensive approach that our chain 

pharmacies have taken and look forward to continuing our work 

with Federal and State policymakers to implement solutions, including expanding prescription drug monitoring programs, shutting 

down illegitimate internet sites, and providing consumers with the 

ability to safety dispose unwanted prescription drugs. 

I thank you for the opportunity to appear and welcome your 

questions. 

[The prepared statement of Mr. Nicholson follows:] 

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Mrs. BONO MACK. Thank you, Mr. Nicholson. 

Ms. Martello, you are recognized. 

STATEMENT OF KENDRA A. MARTELLO 

Ms. MARTELLO. Thank you. Chairman Bono Mack, Ranking 

Member Butterfield, and distinguished members of the subcommittee, my name is Kendra Martello, and I am pleased to offer 

this testimony today on behalf of the Pharmaceutical Research and 

Manufacturers of America or PhRMA. Our members represent 

America’s leading pharmaceutical research and biotechnology companies. 

Our prescription drug distribution system is a closed system. 

This means that all entities engaged in the manufacture, distribution, and dispensing of pharmaceutical products, including controlled substances, must be licensed, registered, or approved by 

FDA, DEA, or the states. Thus, each entity has a shared responsibility to prevent diversion of pharmaceutical products. 

When an authentic product is diverted, it could be mishandled 

and potentially cause patient harm if reintroduced into the legitimate supply chain. Additionally, the diverted medicine can be misused or abused. 

The Controlled Substances Act and DEA regulations require entities handling these products to register and to have in place effective controls and security measures to protect against theft, loss, or 

diversion of controlled substances. The DEA also has authority over 

Web sites dispensing controlled substances and recent additional 

authority to supervise return of unused controlled substances for 

disposal. 

PhRMA member companies engage in a variety of activities to 

help prevent diversion of their products from the regulated supply 

chain. Our companies take these efforts seriously because fundamentally patient safety and the public health demand no less. 

Our members employ a range of measures to prevent diversion 

from facility security including uniformed guards, fences, and extensive access control and video surveillance systems to strict controls over in-process manufacturing operations to in-transit security measures such as the use of GPS tracking devices on 18 wheelers that carry medicines across the country to enhancing enforcement by information sharing with law enforcement officials and to 

helping educate other on best practices. Our companies work to 

help secure the products we manufacture in the regulated supply 

chain. 

Because of the number of independent actors in the drug distribution chain, preventing diversion of medicines from the regulated supply chain is a shared responsibility. Recognizing this 

PhRMA members participate in broad-based coalitions to help address specific aspects of prescription drug diversion. These include 

coalitions to increase penalties for cargo theft, groups to facilitate 

information sharing and best practices, and participation in stakeholder coalitions that are pursuing new authorities in a variety of 

related and significant areas. These activities are detailed further 

in my written testimony submitted for the record. 

We do believe that there are additional authorities that could 

also have a significant impact on reducing diversion as well as reVerDate Aug 31 2005 09:49 Jun 10, 2013 Jkt 037690 PO 00000 Frm 00144 Fmt 6633 Sfmt 6633 F:\112-12~1\112-12~1 WAYNE
141 

ducing the non-medical use of prescription drugs. These include, 

first, increase the use of and improvements to State prescription 

drug monitoring programs, which can be an important tool to prevent and detect abusers and refer them for treatment. 

Second, reauthorize NASPER, which provides grants for these 

State’s monitoring tools and which is legislation we have supported. Third, increase penalties for and enforcement against criminal cargo theft, Rogan mine drug sellers, and criminal counterfeiters. Fourth, fully implement DEA authorities over online sales 

of controlled substances and responsible secure disposal of unused 

controlled substances. And finally, increase licensure requirements 

for wholesale distributors to prevent unscrupulous actors from 

moving their operations across State lines. 

In conclusion, PhRMA and its member companies are dedicated 

to improving the lives of patients. This emphasis on the patient extends throughout the product life cycle, from researching and developing new medicines, including abuse-resistant formulations, to 

helping ensure medicines are used appropriately, to helping prevent diversion from the regulated supply chain. 

At the same time addressing the growing problem of prescription 

drug abuse is also a shared responsibility, and patients need continued access to the medicines they need to allow them to live 

longer, healthier lives. We remain committed to addressing the 

issues surrounding prescription drug diversion and inappropriate 

use of prescription medicines, and we look forward to continuing to 

work with the subcommittee, members of Congress, and other 

stakeholders on these important issues. Thank you. 

[The prepared statement of Ms. Martello follows:] 

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Mrs. BONO MACK. Thank you, Ms. Martello. 

Mr. Gaugh, you are recognized. 

STATEMENT OF DAVID R. GAUGH 

Mr. GAUGH. Thank you. Good afternoon, Chairman Bono Mack, 

Ranking Member Butterfield, and members of the Energy and 

Commerce Subcommittee on Commerce, Manufacturing, and Trade. 

I am David Gaugh, Vice President of Regulatory Sciences at the 

Generic Pharmaceutical Association and a licensed pharmacist. 

GPhA represents the manufacturers, distributors, the finished 

dose generic pharmaceuticals bulk chemicals, and also suppliers of 

other goods and services to the generic pharmaceutical industry. 

Generic pharmaceuticals now fill about 80 percent of all prescriptions dispensed in the United States but consume just 25 percent 

of the total drugs spent for the prescriptions. GPhA’s member companies manufacture FDA-approved generic versions of brand-name 

drugs in all therapeutic classes, including prescription painkillers. 

We share the concern of the members of the committee when medications that are made to improve the quality of life and alleviate 

pain are abused. We believe that addressing this issue will require 

continued coordination among Federal agencies, State, local, and 

Federal law enforcement, healthcare professionals, drug manufacturers, patients, and even the caregivers. And we will work together to shape policy. 

To control the misuse of pain medications we must recognize that 

the overwhelming majority of individuals, including millions of senior and cancer patients, rely on these important medications to 

help treat their pain. In our collective efforts to curb drug diversion, we must carefully but not inadvertently punish the patients 

who need these medications. Rather we should punish the criminals who illegally acquire and sell these products outside the normal chains of distribution. 

GPhA member companies are absolutely committed to the safe 

and reliable manufacturing and delivery of generic drugs. As an industry we have invested millions of dollars in technologies and delivery systems to help assure that our products reach their destinations safely and securely. 

For example, our industry works with the DEA through the 

closed system that you have heard about before of distribution to 

prevent a diversion and also to assure that these products do not 

fall in the hands of abusers. 

The DEA also administers drug allotment and accountability systems to ensure against lost and diversion of controlled substances. 

While some have questioned whether the quota system needs to be 

reevaluated, we do not believe that doing so is an appropriate way 

to address concerns with prescription drug abuse. Further restrictions of the quota system could actually hinder access to important 

medical therapies for the patients who rely on them. 

For example, there are drugs specifically designed for attention 

deficit disorder and attention deficit hyperactive disorder in the 

quota system that are currently on the FDA’s drug shortage list. 

Thus we are concerned that if Congress starts to tip the balance 

in the quota system, it could actually have unintended consequences on the patients who need these medications. 

155 

GPhA has also been participating in the Pharmaceutical Distribution Security Alliance or the PDSA to develop a consensus 

technology model for increasing the security of the drug supply 

chain in the United States. As part of this model manufacturers 

have committed to maintaining a database that would associate 

unit level data and lot number association. GPhA believes this 

model will deliver greater safety to the patients and help to achieve 

FDA’s stated goals of enhancing the identification of suspect products. 

But no matter how secure we make the supply chain for prescription drugs, ensuring safe use of these drugs is a responsibility that 

rests on all of us. In fact, recent studies suggest that the problem 

with prescription drug abuse in the United States today primarily 

stems not from drugs that are outside the legitimate supply chain 

or have been obtained illegally through the black market, but instead from those who legally prescribe and are available in the 

homes. 

According to a 2010, national survey of health more than 70 percent of people abusing prescription drugs are doing so with products that were obtained either from friends or relatives. 

The general drug industry has been a leader in addressing the 

problem on drug diversion. We believe that education is the key 

component to addressing this issue and as such support efforts 

such as the American Medicine Chest Challenge, Smart Rx, and 

the National Council on Prescription Information and Education. 

In addition, our industry has focused its efforts in the area by 

joining the brand industry, patient groups, and the FDA to develop 

the REMS Program, which addresses long-acting and extended-release opioid medications. REMS, which is short for Risk Evaluation 

and Medication Strategies, are special programs that are used by 

the FDA to help prevent adverse outcomes for the patients and 

through the education of key participants about the risks that are 

associated with the medications and the proper and legitimate use 

of these medications. 

Madam Chairman, thank you for the tireless efforts to combat 

the problems of the prescription drug abuse in this country. You 

know more than anyone that this is very much a multi-faceted 

issue that will require multi-stakeholders to solution. 

Thank you, and I will be happy to answer any questions. 

[The prepared statement of Mr. Gaugh follows:] 

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Mrs. BONO MACK. Thank you, Mr. Gaugh, and I recognize myself 

for 5 minutes for questioning, and I just want to say I get very 

frustrated anytime I hear denial from anybody in front of this committee, as if they don’t have a role in this. I think that there is 

plenty of blame to go around. There is no doubt, and in the private 

sector if anybody was analyzing statistics and looking at the number of overdose deaths screaming upward, I mean, Donald Trump 

would say, ‘‘You are fired.’’ 

These statistics are staggering. The attorney general pointed 

that out. They did a fantastic job. I, you know, something that really struck me to the pharmacy, the two pharmacy representatives, 

the murders of the four people in New York, how the bad guy, the 

assailant, whatever you want to call him, was an addict, too. Correct? And it seems that—are these robberies, are these crimes on 

the uptick because of the prescription drug epidemic? Are they addicts themselves, and are they actually—which is worse? Are they, 

you know, I have seen people trying to go through withdrawal. 

They will do anything to get the drug, anything at all. So are you 

seeing it because they are addicts or just people who are trying to 

divert it to the black market? 

Mr. HARMISON. I can’t speak with a great deal of authority here. 

I think that it is a combination. To the best of my knowledge I 

have never seen a patient come in that I could say this person is 

in withdrawal. I think that there is so much money involved with 

the black market of this, I think there are so many people that 

enjoy the euphoria. There is a demand, and somebody is going to 

meet that demand. Some of them are evil enough they will do 

whatever it takes to get it. 

Mrs. BONO MACK. But it is not the euphoria. They need a basic 

level to sustain themselves, so let us make it clear that it is not 

to sustain the euphoria. At any point in time it becomes so that 

they can live. Correct? 

Mr. HARMISON. Yes, ma’am, but what I mean by euphoria, it has 

been proven over and over people in true organic pain do not get 

euphoria from the pain-relieving drugs. If they are an addict, they 

do—the threshold to keep down the withdrawal syndromes does 

keep rising. They do have to have more and more, probably more 

often and more often. 

Mrs. BONO MACK. Right. 

Mr. HARMISON. But I don’t know the people committing the 

crimes are addicts or salespeople. 

Mrs. BONO MACK. Mr. Nicholson, do you want to weigh in on 

that? 

Mr. NICHOLSON. Thank you, Madam Chairwoman. First I would 

add that I start off by saying that nothing is more important to our 

members than the safety of their patients and their employees, and 

I would also add that the incidents that you are talking about with 

respect to deaths from pharmacy robberies, the pharmacy robbery 

problem is, in fact, not, from what we are hearing is not at a nationwide spike, but it is spiking in certain geographic areas such 

as in the greater, in the northeast and in the New York metropolitan area. 

To help address these issues, you know, we work on a number 

of initiatives. We have been recently meeting with the officials at 

167 

the HIDTA Office in that area to develop solutions that would help 

pharmacies to prevent these types of circumstances in the future. 

Mrs. BONO MACK. Do you all flag and identify willingly if an addict is willing to disclose to you he is addicted to opiates and I just 

want to know in my record that I am asking for these, I know it 

presents a whole host of other problems, but there are these sorts 

of things that pharmacies are not addressing right now currently. 

Correct? Are you able to say, I know you can say you have an allergy to iodine, and you can put that on a patient’s record. Correct? 

But can you say none addiction to a substance with a patient’s willingness to provide that kind of information? Do you track that 

data? 

Mr. NICHOLSON. Well, we, I mean, the information that goes to 

a patient profile is provided either by the patient themselves—— 

Mrs. BONO MACK. That is what I am asking you. Do you, but do 

you specifically if a patient says to you, I am in recovery for an opiate addiction, if I come to you with a prescription for Opana, 

Opana, whatever—— 

Mr. NICHOLSON. Right. 

Mrs. BONO MACK [continuing]. Or Vicodin, whatever opiates—— 

Mr. NICHOLSON. I mean—— 

Mrs. BONO MACK [continuing]. Please talk to me, counsel me 

first, call my doctor and say, ‘‘Doc, I want you to know.’’ Do you 

do that now? I mean, that is a basic, simple step. 

Mr. NICHOLSON. The basic practice would be in a situation where 

a patient comes to you and says they are an addict, you would— 

the ultimate goal would be to refer them to treatment. 

Mrs. BONO MACK. Do you keep it on their record? It is a yes or 

no question. 

Mr. NICHOLSON. I can’t answer. I mean—— 

Mrs. BONO MACK. Yes, because the answer is no, but let me just 

move on because my time is limited. I just want to go down the 

line if I might and get a yes or no answer out of each of you. 

Do you agree with me that there is, is there an epidemic on prescription drug abuse? 

Mr. GRAY. Yes. 

Mr. HARMISON. Absolutely yes. 

Mr. NICHOLSON. Yes. 

Ms. MARTELLO. Yes. 

Mr. GAUGH. Yes. 

Mrs. BONO MACK. Do you agree each of you have a responsibility 

in finding a solution to this problem? 

Mr. HARMISON. Yes. 

Mr. NICHOLSON. Yes. 

Ms. MARTELLO. Yes. 

Mr. GAUGH. Yes. 

Mrs. BONO MACK. Thank you. Lastly I am just going to close 

with this one thought that I am a little bit frustrated by the notion 

that a prescription drug monitoring program is punitive. It 

shouldn’t be. My daughter was a professor of, I mean, excuse me, 

my father was a professor of medicine, and I really hold in very 

high regard doctors and understand their limited time. Same with 

pharmacists. 

168 

But when we are thinking this is a cumulative measure rather 

than a holistic approach, the ability for each of you to see a patient 

in their entirety, perhaps if we changed the language, it is not punitive but it is supposed to be an added tool that will actually help 

you provide better healthcare to your patients, your consumers, 

your customers. I think that that would help if we could change the 

feeling and the language, and I am happy to work with all of you 

on that. 

My time has expired. I am happy to yield to Mr. Butterfield for 

5 minutes. 

Mr. BUTTERFIELD. Thank you. I am happy that the chairman 

went a little bit over time because that kept me from having to ask 

each of you the question about whether or not you feel some shared 

responsibility in curving the abuse of drugs, and each one of you 

answered the question as I thought you would. I don’t get the sense 

for 1 minute that any of you are not sensitive to what we are talking about today, and so I thank you for coming. I thank you for 

what you do in your industry and just encourage you to—let us 

work together to try to solve this huge problem that we are facing. 

I asked this question of the first panel, and I am going to try it 

again, and then I will close it out and head to the airport. Law enforcement efforts in one State may certainly yield reductions in the 

number of pills dispensed or hospitalizations or deaths. All of this 

is commendable if it happens within the State’s border, but how 

can we be sure that addicted individuals simply don’t go to another 

State and continue to commit the crime? We have asked other panels about that, and it is the elephant in the room. I mean, that is 

the big problem. If we fix the problem in one State, it is very simple for the addict to go to a neighboring State. 

Now, help us with some of your ideas on that very quickly. Mr. 

Gray. 

Mrs. BONO MACK. Please make sure your microphone is on. 

Mr. GRAY. All they have to do is get in a car and go, and I think 

ultimately the solution is going to be the ability to link up these 

PDMP Systems and what other health IT record systems can be 

done across the country, and where doctors in Florida or doctors in 

Michigan can look at, you know, can go online and see what each 

individual patient is doing, I mean, that is the only way to kind 

of link up the information flow so a pharmacist in Tennessee can 

look up and understand that this patient was also just recently at 

a pharmacy in Florida, and now they are up here. 

But right now as you heard the earlier panel, these systems are 

discreet by their states. They are not connected, so the information 

flow isn’t there. 

Mr. BUTTERFIELD. Thank you. 

Mr. HARMISON. Is it on? 

Mr. BUTTERFIELD. Yes. 

Mr. HARMISON. I don’t know why they can’t be connected. There 

are nationwide systems right now that we deal with every day with 

insurance that will feed back to us in a matter of seconds. There 

is drug allergy on record to this. They have had it refilled too soon. 

It is not on our formulary. There is all sorts of information that 

comes back in seconds. I don’t know why something like this—but 

169 

I am the most technologically illiterate person in this room, but I 

don’t know why it can’t be done. 

Mr. NICHOLSON. I would agree with, you know, my—Mr. Gray 

and Mr. Harmison that, yes, I mean, we definitely need, you know, 

the mater solution is to connect the prescription drug monitoring 

programs. At NACDS we support appropriations for NASPER and 

for the Harold Rogers Prescription Drug Monitoring Program to 

provide funding to the states so that they can upgrade and better 

maintain their prescription drug monitoring programs and work on 

programs to interconnect them with each other. 

I also would add that we are hopeful that as the healthcare delivery system becomes more interoperable that pharmacies and 

prescribers and hospitals and you know, other entities will have 

better access to patient’s full, the patient’s full record so that there 

won’t be gaps that would allow a patient to go from prescriber to 

prescriber or from State to State. 

Mr. BUTTERFIELD. OK. Counsel. 

Ms. MARTELLO. Similarly prescription drug monitoring programs, 

we think that they can be an efficient and effective tool in helping 

to identify folks for treatment as well, and some of the solutions 

that have been talked about today include making sure that information is provided to these State prescription drug-monitoring programs in real time but also enhancing their interoperability across 

State lines so that you can utilize this data to its maximum effect. 

Mr. BUTTERFIELD. All right. Fifty seconds. 

Mr. GAUGH. I would concur with my colleagues on the panel that 

PDMP is a system that is in place, but it does not cross borders 

at this point in time, and as Mr. Harmison said, the reimbursements are instantaneously, why can’t this be instantaneously. 

Mr. BUTTERFIELD. Very well. Thank you. 

Mrs. BONO MACK. Thank you. 

Mr. McKinley, you are recognized for 5 minutes. 

Mr. MCKINLEY. Thank you. Mr. Gray, I think you started in a 

direction, and I want to follow back up again. Maybe—but then you 

stopped short of going that direction. 

Question. When we have spoken with the DEA, they claim for 

the distribution groups they give you very specific suggestions for 

improvements or otherwise how to—I have a feeling that there is 

a breakdown from what they say they are doing and what you in 

the distribution business—are the distributors getting good advice, 

good direction when they go to the DEA and ask for improvements 

to their delivery system before they pull the registration? 

Mr. GRAY. That is the big debate, and if you talk to my members, 

they would tell you that those meetings, particularly at the regional level, tend to be deficient in solid advice at the end of the 

day as to whether or not a particular pharmacy should be—have 

a stop order as far as delivery. 

You know, our members started in this process with the DEA 4 

years ago as they said. This is a relatively new program. It was 

certainly a novel idea to consider the distributor as a choke point. 

I think that is kind of a pejorative term for what we are trying to 

do as a team as Attorney General Bondi said. We should be working in cooperation and collaboration with the DEA, and we 

170 

shouldn’t be in an adversarial posture, which these things, when 

you issue an ISO, that is where you end up as was stated earlier. 

So what happens then, and I have heard, I have talked to most 

of my members about this, and a common situation that will occur 

is that there will be a discussion, the distributor will sit down and 

say, we have reason to believe, we see some spikes, something is 

wrong with the ordering of this particular pharmacy. We think 

maybe they should be cut off. What do you think? And the common 

refrain, I have heard this more than once so there has got to be 

some element of truth to it, the common refrain is, that is a business decision for the distributor to make. 

Well, sure it is, but then that business decision can be used 

against you if you decide not to, and the questions that we submitted to the DEA last June 1 to Administrator Leonhart attempted to get to answer some of those specific questions within 

the confines of these meetings. A question the distributor would obviously have about a pharmacy practice, and this all stems to the 

data discussion earlier. 

They have data we cannot see. We cannot see that a pharmacy 

may be delivering, may be receiving deliveries from more than one 

wholesaler. All we see is our numbers, and it—that has been a 

source of frustration. I am hoping today we can turn the dialogue 

into a constructive one. It is not us versus them, but how can we 

work together. I think we can make a lot of progress working together. 

Mr. MCKINLEY. Let me stay on that question. If the—there are 

two other issues with it. First, are the pharmaceuticals that distributors, are they compensated for doing this police work for the 

DEA? 

Mr. GRAY. Oh, no. This is all out of the distributor’s pocketbook. 

We have—our companies have invested tens of millions of dollars 

in doing this. 

Mr. MCKINLEY. Thank you. So a smaller distribution firm, how 

do they do that? 

Mr. GRAY. Very expensive. If you want to talk to some of them, 

I can make that happen. 

Mr. MCKINLEY. Well, I just wonder—— 

Mr. GRAY. Yes. 

Mr. MCKINLEY [continuing]. Is the long and the short of this 

with the DEA trying to put the smaller distributors out of business? 

Mr. GRAY. I wouldn’t want to speculate on that. I can’t imagine 

that that would be the case. I think the DEA is absolutely, you 

know, fervent and correctly so in attempting to stop this problem, 

but I think like any new initiative, we are in our dating period trying to figure out how to get along. 

Mr. MCKINLEY. Is this an—is this one of those unfunded mandates that we are passing onto the companies to do, and we are not 

going to compensate them. Then we are going to turn around and 

criticize them for the cost of pharmaceuticals? 

Mr. GRAY. Well, that is an interesting way to put it, but, well, 

I mean, as I say, the hardcore fact is when we put in these monitoring systems, it is at the company’s expense to do so. 

171 

Mr. MCKINLEY. I want to see this in a most robust way to try 

to correct the problem, but I just have, I have this nagging feeling 

here that there are parts of the chain that are not being treated 

equally, and I hope that the DEA will revisit how they work with 

each—— 

Mr. GRAY. Well, we do, too, because we have a long history since 

I have been onboard in ’04, we have worked more than—we were 

the first responders in Katrina, our companies are the ones that 

got in there and got—we were the only ones that got in and got 

medicines to the people stranded in New Orleans. We were the 

ones that set up the vaccine tracking system with the CDC in a 

cooperative effort. We worked cooperatively with the Secretary of 

HHS to develop the system for bird flu maintenance and stockpiling around the country. We have a long track record in the last 

5 years of working hugely cooperatively with Federal agencies and 

the government. I would love to see that same level of participation 

and cooperation with the DEA, because I believe they are correct. 

Together we can solve a lot of this problem. If they help us help 

them, we can make a lot of strides to solving this problem, but we 

are working in a vacuum. 

Mrs. BONO MACK. Thank you very much, and I would like to 

begin wrapping things up, and I thank all of our panelists very 

much for being here today, for your time, and for your commitment 

to this critically-important issue. If 30,000 Americans died every 

year from food poisoning, Congress would take action. If 30,000 

Americans died from pesticide exposure, Congress would take action. For that matter, if 30,000 dolphins died and washed up on our 

beaches every year, Congress would take action. 

So why are the victims of prescription drug abuse treated any 

differently? But working together as we have all said I know that 

we can come up with some good answers, and we can save lives. 

So I again thank you all very much for being here and especially 

for weathering the delay that we had this morning. I would like to 

remind members they have 10 business days to submit questions 

for the record. I know we will have one specifically about undosed 

marking, and so we will submit questions to you, and I would ask 

the witnesses to please respond promptly to any questions you 

might receive. 

Again, thank you, and the hearing is now adjourned. 

[Whereupon, at 1:50 p.m., the subcommittee was adjourned.] 

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