Prescription Drugs: State Monitoring Programs May Help to Reduce Illegal Diversion
Published: 2004-03-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The increasing diversion of prescription drugs for illegal purposes or abuse is a disturbing trend in the nation's battle against drug abuse. Diversion can include such activities as prescription forgery and "doctor shopping" by individuals who visit numerous physicians to obtain multiple prescriptions. The most frequently diverted prescription drugs are controlled substances that are prone to abuse, addiction, and dependence, such as hydrocodone (the active ingredient in Lortab and many other drugs) and oxycodone (the active ingredient in OxyContin and many other drugs). Some states use prescription drug monitoring programs to control illegal diversion of prescription drugs that are controlled substances. GAO was asked to examine (1) how state monitoring programs compare in terms of their objectives and operation and (2) the impact of state monitoring programs on illegal diversion of prescription drugs. This testimony is based on GAO's report, Prescription Drugs: State Monitoring Programs Provide Useful Tool to Reduce Diversion, GAO-02-634 (May 17, 2002). In that report, the programs in Kentucky, Utah, and Nevada were selected for more in-depth study because they were the most recently established programs at the time.
section_title: What GAO Found
paragraphs: GAO found that the 15 state monitoring programs in place in 2002 differed in their objectives and operation. The programs were intended to facilitate the collection, analysis, and reporting of information about the prescribing, dispensing, and use of controlled substances. They provided data and analysis to state law enforcement and regulatory agencies to assist in identifying and investigating activities potentially related to illegal drug diversion. The programs could be used by physicians to check a patient's prescription drug history to determine if the individual was doctor shopping to seek multiple controlled substances. Some programs also offered educational programs for the public, physicians, and pharmacists regarding the nature and extent of the problem and medical treatment options for abusers of diverted drugs. The programs varied primarily in terms of the specific drugs they covered and the type of state agency in which they were housed. Some programs covered only those prescription drugs that are most prone to abuse and addiction, whereas others provided more extensive coverage. In addition, most programs were administered by a state law enforcement agency, a state department of health, or a state board of pharmacy. GAO also found that state monitoring programs may have realized benefits in their efforts to reduce drug diversion. These included improving the timeliness of law enforcement and regulatory investigations. Each of the three states studied reduced its investigation time by at least 80 percent. In addition, law enforcement officials told GAO that they view the programs as a deterrent to doctor shopping, because potential diverters are aware that any physician from whom they seek a prescription may first examine their prescription drug utilization histories based on monitoring program data. For example, as drug diverters became aware of Kentucky's ability to trace their drug histories, they tended to move their diversion activities to nearby nonmonitored states.

section_title: Letter
paragraphs: I am pleased to be here today and thank you for the opportunity to discuss  our work on state prescription drug monitoring programs and their use in  addressing the diversion of prescription drugs for illegal use.
The increasing diversion of prescription drugs for illegal purposes or  abuse is a disturbing trend in the nation’s battle against drug abuse.  Diversion activities can include “doctor shopping” by individuals who visit  numerous physicians to obtain multiple prescriptions, illegal sales of  prescription drugs by physicians or pharmacists, prescription forgery, and  purchasing drugs from Internet pharmacies without valid prescriptions.  The most frequently diverted prescription drugs are controlled substances  that are prone to abuse, addiction, and dependence, such as hydrocodone  (the active ingredient in Lortab and many other drugs), diazepam  (Valium), methylphenidate (Ritalin), and oxycodone (the active ingredient  in OxyContin and many other drugs). According to the Drug Enforcement  Administration (DEA), increases in the extent of prescription drug abuse  and in emergency room visits related to prescription drug abuse, as well as  an increase in the theft and illegal resale of prescription drugs, indicate  that drug diversion is a growing problem nationwide.
Some states operate prescription drug monitoring programs as a means to  control the illegal diversion of prescription drugs. My remarks today will  focus on (1) how state monitoring programs compare in terms of their  objectives and operation and (2) the overall impact of state monitoring  programs on illegal diversion of prescription drugs. My comments are  based on our May 2002 report on state monitoring programs and their  usefulness as a tool for reducing diversion. For that report we reviewed  information from DEA and the National Alliance for Model State Drug  Laws on the features of existing programs. To gain a more in-depth  understanding of these programs and the challenges they face, we also  studied the programs in Kentucky, Nevada, and Utah. We selected these  three states because at the time they had the most recently established  programs.
In brief, we found that 15 states operated monitoring programs in 2002 as a  means to control the illegal diversion of prescription drugs that are  controlled substances. Although these programs were all intended to  facilitate the collection, analysis, and reporting of information about the  prescribing, dispensing, and use of controlled substances, they differed in  their objectives and operation. They all provided data and analysis to state  law enforcement and regulatory agencies in order to assist in identifying  and investigating activities potentially related to the illegal prescribing,  dispensing, and procuring of controlled substances. Further, some  programs could be used by physicians to check a patient’s prescription  drug history to determine if the individual may have been doctor shopping  to seek multiple controlled substances. Some programs also offered  educational programs for the public, physicians, and pharmacists  regarding the nature and extent of the problem and medical treatment  options for abusers of diverted drugs. The operation of the monitoring  programs varied primarily in terms of the specific drugs they covered and  the type of state agency in which they were housed. Some programs  covered only those prescription drugs that are most prone to abuse and  addiction, whereas others provided more extensive coverage. In addition,  most programs were administered by a state law enforcement agency, a  state department of health, or a state board of pharmacy.
We found that state monitoring programs realized benefits in their efforts  to reduce drug diversion. These included improving the timeliness of law  enforcement and regulatory investigations. Each of the three states we  studied reduced its investigation time by at least 80 percent. In addition,  law enforcement officials told us that they view the programs as a  deterrent to doctor shopping, because potential diverters are aware that  any physician from whom they seek a prescription may first examine their  prescription drug utilization histories based on monitoring program data.  For example, as drug diverters became aware of Kentucky’s ability to trace  their drug histories, they tended to move their diversion activities to  nearby nonmonitored states.
subsections: section_title: Background
paragraphs: The diversion and abuse of prescription drugs are associated with  incalculable costs to society in terms of addiction, overdose, death, and  related criminal activities. DEA has stated that the diversion and abuse of  legitimately produced controlled pharmaceuticals constitute a  multibillion-dollar illicit market nationwide. One recent example of this  growing diversion problem concerns the controlled substance oxycodone,  the active ingredient in over 20 prescription drugs, including OxyContin,  Percocet, and Percodan. OxyContin is the number one prescribed narcotic  medication for treating moderate-to-severe pain in the United States.  Currently, a single 20-milligram OxyContin tablet legally selling for about  $2 can be sold for as much as $25 on the illicit market in some parts of  Kentucky.
Combating the illegal diversion of prescription drugs while ensuring that  the pharmaceuticals remain available for those with legitimate medical  need involves the efforts of both federal and state government agencies.  The Controlled Substances Act of 1970 provides the legal framework for  the federal government’s oversight of transactions involving the sale and  distribution of controlled substances at the manufacturer and wholesale  distributor levels. The states address these issues through their regulation  of the practice of medicine and pharmacy.
subsections: section_title: Controlled Substances Act
paragraphs: The Controlled Substances Act established a classification structure for  drugs and chemicals used in the manufacture of drugs that are designated  as controlled substances. Controlled substances are classified by DEA  into five schedules on the basis of their medicinal value, potential for  abuse, and safety or dependence liability. Schedule I drugs—including  heroin, marijuana, and hallucinogens such as LSD and PCP—have a high  potential for abuse and no currently accepted medical use. Schedule II  drugs—including methylphenidate (Ritalin) and opiates such as  hydrocodone, morphine, and oxycodone—have a high potential for abuse  among drugs with an accepted medical use and may lead to severe  psychological and physical dependence. Drugs on schedules III through V  have accepted medical uses and successively lower potentials for abuse  and dependence. Schedule III drugs include anabolic steroids, codeine,  hydrocodone in combination with aspirin or acetaminophen, and some  barbiturates. Schedule IV contains such drugs as the antianxiety  medications diazepam (Valium) and alprazolam (Xanax). Schedule V  includes preparations such as cough syrups with codeine. All scheduled  drugs except those in schedule I are legally available to the public with a  prescription.
Under the act, DEA provides legitimate handlers of controlled  substances—including manufacturers, distributors, hospitals, pharmacies,  practitioners, and researchers—with registration numbers, which are used  in all transactions involving controlled substances. Registrants must  comply with a series of regulatory requirements relating to drug security  and accountability through the maintenance of inventories and records.  Although all registrants, including pharmacies, are required to maintain  records of controlled substance transactions, only manufacturers and  distributors are required to report their transactions involving schedule II  drugs and schedule III narcotics, including sales to the retail level, to DEA.  The data provided to DEA are available for use in monitoring the  distribution of controlled substances throughout the United States, in  identifying retail-level registrants that received unusual quantities of  controlled substances, and in investigations of illegal diversions at the  manufacturer and wholesaler levels. Although data are reported to DEA  regarding purchases by pharmacies, the act does not require the reporting  of dispensing information by pharmacies at the patient level to DEA.
section_title: State Regulation of the Practice of Medicine and Pharmacy
paragraphs: State laws govern the prescribing and dispensing of prescription drugs by  licensed health care professionals. State medical practice laws generally  delegate the responsibility of regulating physicians to state medical  boards, which license physicians and grant them prescribing privileges.  In addition, state medical boards investigate complaints and impose  sanctions for violations of the state medical practice laws. States regulate  the practice of pharmacy based on state pharmacy practice acts and  regulations enforced by the state boards of pharmacy. The state boards of  pharmacy are also responsible for ensuring that pharmacists and  pharmacies comply with applicable state and federal laws and for  investigating and disciplining those that fail to comply. According to the  National Association of Boards of Pharmacy, all state pharmacy laws  require that records of prescription drugs dispensed to patients be  maintained and that state pharmacy boards have access to the prescription  records.
section_title: State Monitoring Programs Varied in Objectives and Operation
paragraphs: State prescription drug monitoring programs varied in their objectives and  operation. While all programs were intended to help law enforcement  identify and prevent prescription drug diversion, some programs also  included education objectives to provide information to physicians,  pharmacies, and the public. Program operation also varied across states,  in terms of which drugs were covered and how prescription information  was collected. Which agency, such as a pharmacy board or public health  department, was given responsibility for the program also varied across  states. Additionally, methods for analyzing the data to detect potential  diversion activity differed among state programs.
State monitoring programs are intended to facilitate the collection,  analysis, and reporting of information on the prescribing, dispensing, and  use of prescription drugs within a state. The first state monitoring program  was established in California in 1940, and the number of programs has  grown slowly. We reported that the number of states with programs has  grown from 10 in 1992 to 15 in 2002; the number of programs stands at 16  in 2004.
We found that state programs varied in their objectives. All states used  monitoring programs primarily to assist law enforcement in detecting and  preventing drug diversion, and but some also used the programs for  educational purposes. Programs assisted law enforcement authorities both  by providing information in response to requests for assistance on specific  investigations and by referring matters to law enforcement officials when  evaluations of program data revealed atypical prescribing or dispensing  patterns that suggested possible illegal diversion. The programs evaluated  prescribing patterns to identify medical providers who may have been  overprescribing and inform them that their patterns were unusual. They  also identified patients who may have been abusing or diverting  prescription drugs and provided this information to practitioners. For  example, the programs in Nevada and Utah sent letters to physicians  containing patient information that could signal potential diversion  activity, including the number and types of drugs prescribed to the patient  during a given time period and the pharmacies that dispensed the drugs.  Monitoring programs have also been used to educate physicians,  pharmacies, and the public about the existence and extent of diversion,  diversion scams, the drugs most likely to be diverted by individuals, and  ways to prevent drug diversion.
Monitoring programs also differed in operational factors, some of which  have cost implications. These factors included the choice of controlled  substance schedules monitored, approaches to analyzing and using data,  computer programming choices, number and type of staff and contractors,  turnaround times and report transmittal methods, and number and type of  requests for information.
State programs varied in the controlled substances they covered, in part  because of differences in available resources and other state-specific  factors such as level of drug abuse. Two of the states we studied— Kentucky and Utah—covered schedules II through V. These states’  program officials told us that covering those schedules allowed them  flexibility to respond if drugs on other schedules became targets for  diversion. Most experts agree that covering all controlled substance  schedules prevents drug diverters from avoiding detection by bypassing  schedule II drugs and switching to drugs in other schedules.
States used different approaches to analyze the prescription information  they received. A few states used a proactive approach, routinely analyzing  prescription data collected by the programs to identify individuals,  physicians, or pharmacies that had unusual use, prescribing, or dispensing  patterns that could suggest potential drug diversion, abuse, or doctor  shopping. Trend analyses were shared with appropriate entities, such as  law enforcement, practitioners, and regulatory and licensing boards. In  contrast, most state programs generally used the prescription data in a  reactive manner to respond to requests for information. These requests  may have come from physicians or from law enforcement or state officials  based on leads about potential instances of diversion. According to state  program officials, most programs operated in a reactive fashion because of  the increased amount of resources required to operate a proactive system.
Some state programs had electronic reporting systems, while others were  paper-based. If data are reported electronically, there are ongoing  computer maintenance and programming choices and their attendant  costs. Similarly, some state programs engaged private contractors to  collect and maintain the data, while others did so in-house. If a private  contractor collects the raw data from dispensers and converts them to a  standardized format, the program pays annual contracting costs for  database maintenance. Kentucky and Nevada privately contracted with the  same company to collect data for their program databases. Utah, in  contrast, collected and maintained drug dispensing data in-house, using its  own software and hardware.
The number and type of staff a state chose to operate its monitoring  program also varied. In 2002, Kentucky’s program employed four full-time  and four part-time staff to help ensure the accuracy of its reports,  including a pharmacist-investigator who reviewed each report before it  was sent. Nevada’s program operated with one employee because a  private contractor collected the data. In contrast, in 2002 Utah’s program,  with three full-time employees and no private contractor, had one program  administrator who collected all dispensing data, converted them to a  standardized format for monitoring, and maintained the database. The two  other staff answered requests.
If the program seeks to provide more timely responses to report requests,  such as same-day responses, the costs involved in returning the response  to the requester may increase. For example, in 2001 Kentucky spent up to  $12,000 in 1 month for faxing reports. Monitoring program officials from  Kentucky, Nevada, and Utah told us in 2002 that they estimated 3- to 4- hour turnaround times for program data requests, and all mainly used  faxing, rather than more costly mailing, to send reports to requesters.  Same-day responses may be preferable for physicians who want the  prescription drug history for a patient being seen that day and for law  enforcement users who need immediate data for investigations of  suspected illegal activity.
As users become more familiar with the benefits of monitoring program  report data, requests for information and other demands on the programs  may increase. In Kentucky, Nevada, and Utah, use had increased  substantially, mostly because of an increase in the number of requests by  physicians to check patients’ prescription drug histories. In Kentucky,  these physician requests increased from 28,307 in 2000, the first full year of  operation, to 56,367 in 2001, an increase of nearly 100 percent. Law  enforcement requests increased from 4,567 in 2000 to 5,797 in 2001, an  increase of 27 percent. Similarly, Nevada’s requests from all authorized  users also increased—from 480 in 1997, its first full year, to 6,896 in 2001,  an increase of about 1,300 percent.
Additionally, as drug marketing practices change and monitoring programs  mature, the operational needs may shift as well. For example, states face  new challenges with the advent of Internet pharmacies, because they  enable pharmacies and physicians to anonymously reach across state  borders to prescribe, sell, and dispense prescription drugs without  complying with state requirements. In addition, if users want program  reports to reflect more timely information, dispensing entities would have  to report their data at the time of sale, rather than submitting data  biweekly or monthly, to capture the most recent prescription dispensing.  If users want to be alerted if a certain drug, practitioner, or pharmacy may  be involved in a developing diversion problem, programs would have to  initiate periodic data analysis to determine trends or patterns. Such  program enhancements would entail additional costs, however, including  costs for computer programming, and data analysis.
States that are considering establishing or expanding a monitoring  program face a variety of other challenges. One challenge is the lack of  awareness of the extent to which prescription drug abuse and diversion is  a significant public health and law enforcement problem. States also face  concerns about the confidentiality of the information gathered by the  program, voiced by patients who are legitimately using prescription drugs  and by physicians and pharmacists who are legitimately prescribing and  dispensing them. Another challenge states face is securing adequate  funding to initiate and develop the program and to maintain and modify it  over time.
section_title: State Monitoring Programs Have Helped Shorten Investigation Times and May Reduce Illegal Drug Diversion
paragraphs: We found that states with monitoring programs have experienced  considerable reductions in the time and effort required by law  enforcement and regulatory investigators to explore leads and the merits  of possible drug diversion cases. We also found that the presence of a  monitoring program in a state may help reduce illegal drug diversion there,  but that diversion activities may increase in contiguous states without  programs.
The ability of the programs to focus law enforcement and regulatory  investigators who are working on suspected drug diversion cases on  specific physicians, pharmacies, and patients who may be involved in the  alleged activities is crucial to shortened investigation time and  improvements in productivity. States that do not have programs must rely  on tips from patients, practitioners, or law enforcement authorities to  identify possible prescription drug abuse and diversion. Following up on  these leads requires a lengthy, labor-intensive investigation. In contrast,  the programs can provide information that allows investigators to pinpoint  the physicians’ offices and pharmacies where drug records must be  reviewed to verify suspected diversion and thus can eliminate the need to  search records at physicians’ offices and pharmacies that have no  connection to a case.
In each of the three states we studied, state monitoring programs led to  reductions in investigation times. For example, prior to implementation of  Kentucky’s monitoring program, its state drug control investigators took  an average of 156 days to complete the investigation of alleged doctor  shoppers. Following the implementation, the average investigation time  dropped to 16 days, or a 90 percent reduction in investigation time.  Similarly, Nevada reduced its investigation time from about 120 days to  about 20 days, a reduction of 83 percent, and a Utah official told us that it  experienced an 80 percent reduction in investigation time.
Officials from Kentucky, Nevada, and Utah told us in 2002 that their  programs may have helped reduce the unwarranted prescribing and  subsequent diversion of abused drugs in their states. In both Kentucky and  Nevada, an increased number of program reports were being used by  physicians to check the prescription drug use histories of current and  prospective patients when deciding whether to prescribe certain drugs  that are subject to abuse. Law enforcement officials told us that they view  these drug history checks as initial deterrents— a front-line defense—to  prevent individuals from visiting multiple physicians to obtain  prescriptions, because patients are aware that physicians can review their  prescription drug history. For an individual who may be seeking multiple  controlled substance prescriptions, the check allows a physician to  analyze the prescription drug history to determine whether drug treatment  appears questionable, and if so, to verify it with the listed physicians. In  Kentucky, a physician could request a drug history report on the same day  as the patient’s appointment, and usually received the report within 4  hours of the request. In 2002, Kentucky’s program typically received about  400 physician requests daily, and provided data current to the most recent  2 to 4 weeks.
The presence of a monitoring program may also have an impact on the  prescribing of drugs more likely to be diverted. For example, DEA ranked  all states for 2000 by the number of OxyContin prescriptions per 100,000  people. Eight of the 10 states with the highest numbers of prescriptions— West Virginia, Alaska, Delaware, New Hampshire, Florida, Pennsylvania,  Maine, and Connecticut—had no monitoring programs, and only 2 did— Kentucky and Rhode Island. Six of the 10 states with the lowest numbers  of prescriptions—Michigan, New Mexico, Texas, New York, Illinois, and  California—had programs, and 4—Kansas, Minnesota, Iowa, and South  Dakota—did not.
Another indication of the effectiveness of a monitoring program is that its  existence in one state appears to increase drug diversion activities in  contiguous states without programs. When states begin to monitor drugs,  drug diversion activities tend to spill across boundaries to states without  programs. One example is provided by Kentucky, which shares a boundary  with seven states, only two of which had programs in 2002—Indiana and  Illinois. As drug diverters became aware of the Kentucky program’s ability  to trace their drug histories, they tended to move their diversion activities  to nearby nonmonitored states. OxyContin diversion problems worsened  in Tennessee, West Virginia, and Virginia—all contiguous states without  programs—because of the presence of Kentucky’s program, according to a  2001 joint federal, state, and local drug diversion report.
section_title: Concluding Observations
paragraphs: Although monitoring programs can enhance the ability of states to detect  and deter illegal diversion of prescription drugs, the number of states with  such programs has grown only slightly over the past 12 years from 10 in  1992 to 16 in 2004. A lack of awareness of the magnitude of the problem;  concerns about confidentiality on the part of patients, physicians,  pharmacists, and legislators; and difficulty in accessing funding have kept  the numbers of monitoring programs low. Cooperative efforts at the state  and national levels are seeking to overcome these challenges and increase  the number of states with programs.
Mr. Chairman, this concludes my prepared statement. I would be pleased  to respond to any questions you or other Members of the Subcommittee  may have.
section_title: Contact and Acknowledgments
paragraphs: For more information regarding this testimony, please contact Marcia  Crosse at (202) 512-7119. Individuals making key contributions to this  testimony include Martin T. Gahart, Roseanne Price, and Opal  Winebrenner.
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