Prescription Drug Control: DEA Has Enhanced Efforts to Combat Diversion, but Could Better Assess and Report Program Results
Published: 2011-08-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Drug Enforcement Administration's (DEA) Diversion Control Program is responsible for enforcing the Controlled Substances Act (CSA) and ensuring the availability of prescription drugs such as pain relievers and stimulants while preventing their diversion for abuse. The CSA requires entities handling controlled substances--such as manufacturers, pharmacies, and physicians, among others-- to register with DEA, which conducts regulatory investigations of registrants, as well as criminal investigations. GAO was asked (1) how DEA manages diversion investigation efforts, and (2) how DEA ensures policies and procedures are followed for investigations and the extent to which it determines the results of its efforts. GAO reviewed DEA policies and procedures, and interviewed DEA, state, and local officials at eleven locations which were selected on the basis of volume of cases handled, geographic diversity, and other considerations. These observations are not generalizable, but provided insights on DEA operations.
section_title: What GAO Found
paragraphs: To respond to the increasing rate of criminal diversion of prescription drugs and a growing registrant population, DEA has expanded its resources and targeted its investigation strategies to collaborate with state and local entities and enhance the effectiveness of its diversion investigations. Specifically, the agency expanded its use of Tactical Diversion Squads (squads) of DEA personnel as well as other federal, state, and local partners investigating diversion schemes to maximize resources and improve efforts to investigate criminal diversion. DEA currently has 40 squads across the country and plans to establish more. According to squad participants and DEA officials GAO contacted, the squads have improved communication and coordination and simplified information sharing for investigations. Because of the growing registrant population and noncompliance by some with the CSA and implementing regulations, DEA renewed its focus on regulatory oversight of registrants to better ensure compliance. By using the squads to free up resources previously dedicated to both criminal and regulatory cases, DEA used those resources to increase regulatory investigations of the registrants. As a result, the number of regulatory investigations more than tripled between fiscal years 2009 and 2010. DEA also conducted outreach to specific registrant types to inform them of regulatory responsibilities and prepare them for regulatory investigations. DEA has taken steps to ensure that investigators follow policies and procedures for such investigations, but could better assess how its efforts are reducing the diversion of prescription drugs. To ensure that diversion investigators and special agents have the necessary skills to carry out their responsibilities and that DEA monitors the extent to which policies and procedures are followed during investigations, DEA has established internal controls related to guidance, training, and oversight of investigations. These controls include providing and updating guidance to investigators to follow during investigations, providing initial and on-going training to investigators, and monitoring the quality of investigations through a combination of direct supervisory reviews, self-inspections, and on-site internal inspections by DEA's Office of Inspections. Recent reports from on-site internal inspections of each of DEA's field divisions did not identify any widespread or systematic issues related to the timeliness and overall quality of diversion investigations. Given DEA's increased focus on investigations in response to growing prescription drug diversion, it is critical for DEA to determine the extent to which these additional efforts are reducing diversion. DEA has established performance measures for the Diversion Control Program, but these measures do not clearly demonstrate the effect the additional efforts are having on the diversion problem the program seeks to address. For example, for its overall performance measure of the diversion control program, DEA is tracking the development and implementation of an internal information technology project. By more closely linking performance measures to the goal of reducing diversion, DEA could better capture the results of the Diversion Control program to help inform decision makers in allocating resources.
section_title: What GAO Recommends
paragraphs: GAO recommends DEA reassess the program's performance measures to better link them to the goal of reducing diversion. DEA did not concur. GAO continues to believe the measures could be enhanced as discussed in this report.

section_title: Letter
paragraphs: According to the Office of National Drug Control Policy (ONDCP), the  abuse of controlled prescription drugs such as pain relievers,  depressants, and stimulants is the nation’s fastest-growing drug problem.  Although such prescription drugs have legitimate medical uses, they also  pose a potential for abuse and addiction and, thus, being diverted for  nonmedical illicit uses. To prevent diversion, the Controlled Substances  Act (CSA) was enacted in 1970 to regulate and facilitate the use of  controlled substances, including certain drugs, for legitimate medical,  scientific, research, and industrial purposes while preventing them from  being diverted for illegal uses. However, according to recent government  data, the diversion of such drugs has risen in recent years as have the  corresponding prevalence of addiction and the cost of lives lost. ONDCP  has reported that prescription drugs now rank second for the most  commonly abused category of drugs, behind only marijuana. In 2010, the  Substance Abuse and Mental Health Services Administration reported  that the proportion of all substance abuse treatment admissions aged 12  or older that reported any pain reliever abuse increased more than  fourfold from 1998 to 2008. In terms of the economic costs, a study by the University of Washington estimated the cost of the abuse of  prescription pain relievers in 2006 to be $53.4 billion.
Controlled substances can be diverted in many different ways, and new  methods continue to evolve over time. Diversion can occur as a result of  illegal or improper prescribing, prescription forgery, pharmacy thefts, or  “doctor shopping” where an individual—who may or may not have  legitimate medical needs—goes to several doctors to obtain a  prescription from each doctor. Diversion can also occur through illegal  sales of controlled substances, such as drugs sold by physicians,  patients, or pharmacists, as well as individuals obtaining these  substances without a valid prescription through Internet pharmacies or  pain clinics. According to DEA, from fiscal years 2006 through 2009,  rogue Internet pharmacies were a major source of this problem, where  individuals could obtain controlled substances through Internet  pharmacies without establishing a legitimate doctor/patient relationship.  Following increased enforcement actions against rogue Internet  pharmacies, another source emerged in the form of rogue pain clinics  where prescriptions for controlled substances could similarly be obtained  without a legitimate medical need. These pain clinics have proliferated in  states such as Florida and Texas.
Controlled substance diversion poses a unique challenge because of the  need to balance prevention, education, and enforcement with the need for  legitimate access. Within the Drug Enforcement Administration (DEA), the  Office of Diversion Control is directly responsible for enforcing the  provisions of the CSA as they pertain to ensuring the availability of  substances such as prescription drugs and listed chemicals for legitimate  uses while preventing their diversion. As part of the provisions to control  access to such substances, the CSA requires businesses, entities, or  individuals that import, export, manufacture, distribute, dispense, conduct  research with respect to, or administer controlled substances to register  with the DEA. One of the key activities of the Office of Diversion Control is  to conduct investigations—regulatory investigations to monitor  compliance of the registrants with the CSA and its implementing  regulations, and criminal investigations into instances of potential criminal  diversion.
Because of the rising diversion and illicit use of controlled prescription  drugs, you asked us to review DEA’s management of its diversion control  investigations to combat this problem. Specifically, this report answers  the following questions:  1.  How does DEA manage its investigation efforts to address the  growing and evolving nature of prescription drug diversion?  2.  How does DEA help ensure that policies and procedures are followed  for diversion investigations and to what extent does it determine the  results of its efforts on the diversion problem?
To address the first objective, we reviewed DEA policies and procedures  on how DEA carries out its investigative responsibilities, including  program documents such as DEA’s current strategic plan and budget  justification submissions for fiscal years 2008 to 2012. We also analyzed  DEA data for fiscal years 2007 to 2010 on case volumes for investigations  and data on number of personnel working on DEA’s Tactical Diversion  Squads (squads). We reviewed information from agency officials  regarding the data and the systems and procedures used to maintain it.  From this review we determined that the data were sufficiently reliable for  the purposes of this report. We also interviewed DEA program officials  involved in overseeing and managing diversion control investigations and  program officials involved in diversion investigations at 5 of DEA’s 21 field  divisions. These included Seattle, Washington; Houston, Texas; Miami,  Florida; Washington, D.C.; and Atlanta, Georgia. As part of these  interviews, we obtained DEA program officials’ perspectives on how they  carry out diversion investigations and how they work with other federal,  state, and local agencies, as well as registrants in carrying out  investigatory activities. These field divisions were selected on the basis of  a mix of criteria such as the range of the highest volumes of regulatory  and criminal cases and civil penalties; geographic diversity; and other  considerations. Within each field division, we also contacted and  interviewed officials of state boards of pharmacy and medicine to obtain  information on how DEA coordinates with their agencies. In order to  better understand how DEA is using its squads to respond to criminal  diversion, we interviewed DEA officials and officials from state and local  agencies participating in the squads to obtain information on how criminal  diversion investigations are carried out and how DEA coordinates those  investigations. The 10 squads selected for these interviews were  Baltimore, Maryland; Worcester, Massachusetts; Houston, Texas; Kansas  City, Missouri; Miami, Florida; New Orleans, Louisiana; Oakland,  California; Seattle, Washington; Tampa, Florida; and Washington, D.C.,  and were chosen based on a mix of criteria such as the range of the  highest volume of cases handled, length of time in operation, and the  participation of state and local agencies. Our results are not generalizable  across all field divisions or squads but provide a broad overview and  understanding of diversion investigations, as well as how DEA has  managed these investigations and coordinates with other non-DEA  partners. We also interviewed officials with associations representing  pharmacies and distributors, as well as pharmacies and distributors  identified by these associations, to obtain regulated industry’s perspective  on how DEA carries out its regulatory responsibilities and interacts with  this industry. The information we obtained from interviewing officials with  these associations as well as officials with pharmacies and distributors  that were identified by the associations, cannot be generalized across the  entire population of pharmacy and distributor operators. However, the  information gathered in these interviews provided us with perspectives  from regulated industry on how DEA has implemented its diversion  control efforts and how it interacts with industry in monitoring compliance  with the CSA.
To address the second objective, we compared criteria in Standards for  Internal Control in the Federal Government to (1) DEA’s control activities  related to human capital management and (2) DEA’s monitoring  mechanisms to identify what actions it has taken to ensure its employees  are informed and follow required policies and procedures. We also  reviewed DEA policies and procedures in its manuals for Diversion  Investigators and Special Agents, as well as documents related to DEA  training courses conducted for program personnel to determine DEA’s  efforts to ensure its employees have the required knowledge to conduct  diversion investigations. We reviewed the most recent on-site internal  inspection reports for each of DEA’s 21 field divisions, ranging from fiscal  years 2005 to 2010 to determine what issues, if any, were identified with  respect to diversion investigations. At headquarters, we interviewed DEA  program officials in the Office of Training, Office of Inspections, and the  Regulatory Section. Our purpose was to determine what actions they take  to train employees on required policies and procedures and conduct  reviews of employee work products. We also reviewed DEA’s Strategic  Plan Fiscal Years 2009-2014 to identify DEA’s plans for ongoing  monitoring efforts. To determine how DEA measures the results of its  efforts against the diversion problem, we reviewed DEA’s Strategic Plan  Fiscal Years 2009-2014, as well as the corresponding performance  measures DEA has designated for the diversion control program as  reported in its budget justifications for fiscal years 2008 through 2012. We  compared DEA’s identified performance measures with best practices for  performance measurement identified in our previous guidance and work  regarding the implementation of the Government Performance and  Results Act to determine the extent to which the measures could be used  to demonstrate program results. We also interviewed DEA officials  within the Office of Diversion Control and the Office of Resource  Management to determine how they use these measures, and what  plans, among other things, they had to evaluate the usefulness of the  measures as indicators to track results towards the program’s overall  performance goal of reducing the diversion of licit drugs.
We conducted this performance audit from May 2010 through August  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: The CSA and DEA’s Office of Diversion Control
paragraphs: The CSA places various plants, drugs, and chemicals such as narcotics,  stimulants, depressants, hallucinogens, and anabolic steroids, into one of  five schedules based on the substance’s medical use or lack thereof,  potential for abuse, and safety or potential for dependence. The act  requires persons who handle controlled substances and/or listed  chemicals (such as manufacturers, wholesale distributors, physicians who  dispense controlled substances, hospitals, pharmacies,  importers/exporters, and scientific researchers) to register with the DEA.  This agency, by delegation from the U.S. Attorney General, is responsible  for administering and enforcing the CSA and its implementing regulations.  Through its Office of Diversion Control, DEA administers the Diversion  Control Program whose mission is to prevent, detect, and investigate the  diversion of controlled pharmaceuticals and listed chemicals into the illicit  market, while ensuring an adequate and uninterrupted supply for  legitimate needs. In addition to conducting investigations, the office  conducts a variety of activities such as the establishment of production  quotas, drafting and promulgating regulations for handling controlled  substances, regulating handlers of controlled substances, and monitoring  and tracking the production and distribution of certain controlled  substances, among other things. To carry out this mission, the Office of  Diversion Control is authorized approximately 1,300 full-time equivalent  positions and a budget of approximately $292 million. The program is  funded through the Diversion Control Fee Account, which consists of  registration fees paid by registrants.
section_title: DEA Registers Entities Authorized to Handle Controlled Substances
paragraphs: As required by the CSA, businesses, individuals, or entities that import,  export, manufacture, distribute, dispense, conduct research with respect  to controlled substances and/or listed chemicals must register with the  DEA. DEA has more than 1.3 million individuals and companies that are  registered to handle controlled substances or regulated chemicals. These  registrants include manufacturers, distributors, and importers/exporters of  controlled substances or medications; pharmacies, hospitals, narcotic  treatment programs, and clinics that dispense controlled medications;  practitioners who prescribe and administer or dispense controlled  medications; and researchers who use controlled substances or  medications in their research or analyses (see table 1.)
In order to maintain their registration, DEA registrants must comply with a  variety of regulatory requirements imposed by the CSA and its  implementing regulations. Examples of these regulatory requirements  include:    Recordkeeping: A registrant must keep accurate records and maintain  detailed inventories of controlled substances in compliance with  applicable federal and state laws. For example, the registrant must  maintain accurate records of each substance manufactured, received,  sold, delivered, or otherwise disposed of by the registrant.    Reporting: Manufacturers and distributors must report acquisition or  distribution transactions of certain controlled substances, such as  Schedule I and II drugs and Schedule III narcotics, to DEA through  the Automated Reports and Consolidated Orders System (ARCOS).  ARCOS is an automated reporting system to monitor the flow of  controlled substances from their point of manufacture to the point of  sale or distribution at the dispensing/retail level such as hospitals,  retail pharmacies, practitioners, midlevel practitioners, and teaching  institutions. Manufacturing transactions of Schedule I and II controlled  substances, as well as Schedule III and IV narcotics, among others  are also covered by the ARCOS reporting requirements.    Dispensing of controlled substances: The CSA provides special  requirements for licensed practitioners and pharmacists who dispense  controlled substances in Schedules II-V to patients. For example, a  prescription for a controlled substance must be “issued for a legitimate  medical purpose by an individual practitioner acting in the usual  course of his professional practice.” Accordingly, practitioners also  have a responsibility to ensure that the controlled substance is  properly prescribed and dispensed while a corresponding  responsibility exists with the pharmacist filling the prescription.    Security of controlled substances: For the purposes of ensuring the  secure storage and distribution of controlled substances, all  registrants must “provide effective controls and procedures to guard  against theft and diversion of controlled substances.” Among other  things, DEA regulations also detail specific security requirements for  the different types of applicants and registrants. For example,  nonpractitioners (i.e., manufacturers, distributors, and narcotic  treatment programs) are required to store Schedule I and II  substances in electronically monitored safes, steel cabinets, or vaults  that meet or exceed certain specifications. Licensed practitioners  must store controlled substances in a “securely locked, substantially  constructed cabinet” and must notify DEA of the theft or significant  loss of any controlled substances.   Regulatory Investigations: DEA conducts scheduled investigations  or inspections (depending on the registrants, the frequency of the  scheduled investigations can range from every 3 years to every 5  years) of wholesale registrants who include manufacturers,  distributors, importer/exporters, and narcotic treatment programs as  well as other registrants such as researchers, analytical labs, and  teaching institutions, among others. Retail level registrants such as  pharmacies and physicians—with the exception of physicians  permitted to treat narcotic dependence—do not receive regulatory  investigations by the DEA. These registrants are regularly  investigated by the states in which they conduct business. According  to DEA officials, they focus their efforts related to regulatory  investigations on the wholesale registrants because such registrants  are the sources of supply to criminal schemes such as rogue  pharmacies and pill mills. To conduct these investigations, DEA  Diversion Investigators arrive at the registrant unannounced and  inspect and verify the registrant’s records, take a physical inventory of  the registrant’s controlled substances, and inspect any other items  necessary to verify the registrant’s compliance with the CSA and its  implementing regulations. If deficiencies are found during the  investigation, DEA may work with the registrant to correct the  deficiencies. DEA may also take administrative, civil, or criminal action  against the registrant depending on the type, severity, and frequency  of the deficiencies found.    Complaint Investigations: Complaint investigations are  investigations that are started on the basis of information or a tip  provided to DEA or state regulators, or other information DEA has  regarding purchases or losses of controlled substances. The origin of  the information could be from any number of sources, such as a state  or local official or citizen that saw something suspicious, employees of  a registrant, the identification of unusual purchasing trends by a  registrant such as a pharmacy tracked by DEA through its ARCOS, or  a report of a loss of controlled substances by a registrant. Diversion  Investigators conduct preliminary investigative work to determine  whether the information is valid and warrants a full investigation.  Depending on the outcome of the preliminary complaint investigation,  DEA determines whether the investigation will be handled as a  regulatory noncompliance issue, a criminal case, or a dismissal.    Criminal Investigations: DEA also conducts investigations into  criminal activities involving diversion of controlled substances.  Criminal diversion may involve DEA registrants such as pharmacies  and practitioners and nonregistrants such as pharmacy burglars or  doctor shoppers, among others.
Within its 21 field divisions, DEA utilizes a variety of personnel to carry  out these investigative responsibilities:    Diversion Investigators conduct investigations of regulatory, civil, and  criminal issues pertaining to DEA registrants. The investigators do not  have law enforcement authority and cannot perform law enforcement  functions such as making arrests and conducting surveillance.    Special Agents conduct diversion investigations and assist Diversion  Investigators by performing law enforcement functions such as  serving search warrants and making arrests.    Diversion Program Managers oversee diversion control activities in  their field division.    Special Agents-in-Charge manage the activities of the DEA field  division including diversion control activities.    Assistant Special Agents-in-Charge assist the Special Agents-in- Charge in managing activities of the field division including diversion  control activities.
section_title: DEA Has Expanded Its Resources and Targeted Its Investigation Strategies to Respond to Rising Criminal Diversion and Growing Registrant Population
paragraphs: To respond to the increasing rate of criminal diversion and a growing  registrant population, DEA has expanded its resources and targeted  investigation strategies in ways to collaborate with state and local entities  and enhance the effectiveness of its Diversion Control Program.  Specifically, DEA has expanded its use of Tactical Diversion Squads,  which work with DEA’s state, local, and other federal partners, to  maximize resources and improve efforts to investigate, disrupt, and  dismantle individuals or organizations involved in diversion schemes  related to controlled substances and listed chemicals. DEA has also  renewed its focus on regulatory oversight of the more than 1.3 million  DEA registrants to ensure registrants comply with the CSA and  implementing regulations. DEA accomplished this by increasing the  frequency of scheduled investigations of DEA registrants that are  registered to handle controlled prescription drugs.
subsections: section_title: Tactical Diversion Squad Expansion Provides Additional Resources and Facilitates Coordination and Information Sharing for Criminal Investigations
paragraphs: To help respond to the ever-changing methods of criminal diversion such  as rogue pain clinics and rogue Internet pharmacy schemes, in October  2008 the DEA acting Administrator authorized the expansion of squads  devoted to addressing criminal diversion of controlled substances and  listed chemicals across the United States. DEA has historically utilized  these squads, called Tactical Diversion Squads (squads), as a  collaborative mechanism to address the criminal diversion of controlled  substances. The squads are teams of DEA diversion personnel (such as  Special Agents and Diversion Investigators), as well as state and local  law enforcement personnel (task force officers) whose mission is to  detect, investigate, and refer for prosecution, violators of federal and state  statutes pertaining to diversion. They also develop investigative leads  from information and intelligence obtained from participating agencies,  undercover operations, and the use of informants. This multiagency effort  helps coordinate the investigative activities of the participating agencies.  According to DEA, the squads also allow DEA to provide manpower for  diversion investigations at reduced costs to DEA because task force  officer positions are less expensive than Special Agents or Diversion  Investigators. For example, DEA compensates state and local Tactical  Diversion Squad task force officers for overtime, use of a vehicle,  equipment, and diversion training, while the parent agencies are  responsible for their task force officers’ salary and benefits. requested an additional 60 Special Agent, 37 Diversion Investigator, and   64 task force officer positions for fiscal year 2011, and an additional 50  Special Agent, 16 Diversion Investigator, and 64 task force officer  positions for fiscal year 2012. Because the Diversion Control program is  funded through its fee account, DEA officials noted that such increases in  personnel are contingent on the revision of the schedule of fees charged  registrants, which is currently underway. They anticipate beginning to  collect fees under the revised fee schedule in fiscal year 2012. DEA’s  current annual registrant fees range from $184 to $2,293. The last time  DEA revised its fees was in 2006.
States such as Florida have experienced  significant diversion problems through illegal  pain clinics. According to DEA officials,  Florida physicians order the majority of  oxycodone compared to the rest of the  country.  In 2010, Florida dispensing  physicians ordered over 41 million dosage  units of oxycodone, while the rest of the  country ordered a total of 4 million dosage  units. Some of these physicians are reported  to have links to illegal pain clinics where they  either dispensed or wrote prescriptions that  were not for legitimate medical purposes.  Individuals from other states would come to  Florida to visit the clinics to obtain controlled  substances for abuse or resale. Florida  recently enacted legislation to address these  clinics.  Similarly, Texas and Louisiana have  experienced problems with illegal pain clinics  and also enacted legislation to address this  roblem. Among other things, the legislation  for these states requires pain clinics to be  owned and operated by licensed physicians  with no previous medical board action, and to  register with state regulators. squad has enabled local law enforcement agencies to carry out more  complex investigations into diversion within their localities. For example,  although some local law enforcement agencies had conducted  investigations of lower level diverters such as doctor shoppers prior to the  establishment of squads, they did not have the resources on their own to  carry out the longer, more complex investigations required for targeting  higher level diverters such as physicians and their clinics. DEA officials  noted that state and local agencies also lack the administrative authorities  DEA has to take action against a DEA registrant when necessary. The  squad provided a means for state and local law enforcement to  collectively pool their resources with DEA to investigate higher level  diverters.
Based on feedback from squad participants and DEA officials we  interviewed, coordination and information sharing within the squads were  reported as excellent and an improvement over presquad times.  According to DEA and local officials we interviewed, the establishment of  the squads has been a means to improve communication, coordination,  and simplify information sharing as the squads have become the  clearinghouse for diversion-related investigative information. As a result,  information is now shared more rapidly and broadly between law  enforcement agencies, according to these officials we interviewed. These  squads have also become an important deconfliction mechanism for law  enforcement agencies regarding the diversion cases they are working or  information they receive from other sources. For example, one local law  enforcement official with a task force officer on a squad stated that all  leads his department receives for potential diversion investigations are  first referred to the squad to determine whether there are any links to  ongoing squad investigations or if the lead would be an appropriate target  for it to take on as a new investigation.
Federal agencies such as the Federal Bureau of Investigation (FBI), the  U.S. Department of Health and Human Services (HHS), and the Internal  Revenue Service (IRS) may also be involved in the squads’ criminal  investigations depending on the case and if their expertise is needed. For  example, FBI agents will generally join a squad’s investigation if fraud is  involved; HHS investigators may become involved in investigations  related to health care fraud; and IRS agents may assist in investigations  involving tax evasion and money laundering. In March 2011, for example,  the DEA in conjunction with the FBI and HHS, among other agencies,  concluded an investigation into a Detroit physician for unlawfully  distributing controlled substances, including the Schedule II controlled  substance OxyContin (oxycodone), and fraudulently billing Medicare.
According to DEA, a conviction of this offense carries a maximum of 20  years in prison, a fine of $1 million, or both. In another example,  according to DEA squad officials, DEA, FBI, and IRS, among others,  conducted a joint criminal investigation into a Texas business owner’s  rogue Internet pharmacy scheme. The investigation resulted in a guilty  plea to several offenses including unlawfully distributing controlled  substances, money laundering, and fraudulently billing healthcare  providers, among other offenses. According to DEA officials, joint  investigations with other federal agencies are very helpful for the squad in  advancing the investigation because the other federal agencies bring  specific subject matter expertise in areas that DEA staff do not have.
section_title: DEA Has Significantly Increased the Number of Regulatory Investigations to Help Ensure Growing Registrant Population Complies with CSA
paragraphs: In addition to the expansion of the squads in October 2008, the DEA  acting Administrator also called for an enhanced focus on DEA’s  regulatory oversight aimed at ensuring that the more than 1.3 million DEA  registrants comply with the CSA and its implementing regulations.  According to DEA, the overall registrant population tends to grow at a rate  of 2 to 2.5 percent annually; however, registrants such as Drug Addiction  Treatment Act  waived physicians (DWPs) have grown faster. For  example, from fiscal year 2002 to fiscal year 2010 the number of DEA  registered DWPs increased from 1,451 to 19,211, an increase of about  1,300 percent. DWPs are physicians who dispense or prescribe Federal  Food and Drug Administration approved buprenorphine products for  treatment of narcotic addiction/dependence on an outpatient basis. In an  effort to help meet the demand for this specialty, the Drug Addiction  Treatment Act of 2000 waived the requirement for qualified physicians to  obtain a separate DEA registration as a Narcotic Treatment Program in  order to provide medication-assisted chemical substance therapy. With  the enactment of the act, the Substance Abuse and Mental Health  Services Administration within HHS aggressively pursued training for  interested physicians to help meet this demand. As a result, there was a  significant increase in the number of physicians who registered with DEA  as DWPs. In response to this growing registrant population, DEA  increased the frequency of scheduled investigations of DWPs as part of  the enhanced regulatory oversight called for by the acting Administrator.  For example, in October 2008, DEA decided to move towards conducting  regulatory investigations of all DWPs every 5 years to monitor for  compliance. Previously DEA was conducting regulatory investigations of  only one DWP in each of its 21 Field Divisions annually, a rate that, given  the growth of that registrant type, would have taken decades for DEA to  investigate all registered DWPs, according to the Executive Assistant to  the Deputy Assistant Administrator for the Diversion Control Program.  According to DEA’s Chief of the Regulatory Section, the decision to  increase the rate for conducting regulatory investigations of DWPs was  also due, in part, to some DWPs not complying with regulatory  requirements relating to recordkeeping and the loss of controlled  substances used to treat patients.
DEA also increased the frequency of regulatory investigations for other  registrant types as well, such as registrants involved in the manufacture  and distribution of drugs (from once every 5 years to once every 3 years),  and chemicals (from once every 3 years to once every 2 years). For  some registrant types that had not previously been subject to regulatory  investigation, such as researchers, analytical labs, and teaching  institutions, DEA required that regulatory investigations be conducted  once every 5 years. According to DEA’s Chief of the Regulatory Section,  the increase in the frequency of regulatory investigations for some  registrant types was also due to the registrants’ noncompliance with the  CSA and DEA’s implementing regulations. For example, some  distributors did not report suspicious orders for controlled substances to  DEA, as required by regulation. Reflecting the changes in requirements  for regulatory investigations, DEA more than tripled the number of  regulatory investigations from 1,173 in fiscal year 2009 to 3,731 in fiscal  year 2010 (see fig. 2 below).
According to the Executive Assistant to the Deputy Assistant  Administrator for Diversion Control, DEA was able to increase its  regulatory investigations primarily by using the squads to free up  Diversion Investigator resources that had previously been working both  criminal and regulatory cases and DEA plans to hire additional diversion  staff in the future to conduct investigations. To keep up with the level of  regulatory investigations to be completed in the future, DEA plans to hire  additional staff. For example, for fiscal year 2011 DEA requested 60  Diversion Investigator positions and for fiscal year 2012 requested an  additional 50 Diversion Investigator positions, pending completion of the  revision of the schedule of fees charged registrants, which must provide  the funding necessary to fill those positions. According to DEA officials,  of the 60 Diversion Investigator positions requested for fiscal year 2011,  23 were requested to support regulatory activities while 37 were to  support the squads; for fiscal year 2012, of the 50 Diversion Investigator  positions requested, 34 were for regulatory activities and 16 for support of  the squads.
In addition to conducting regulatory investigations, DEA has also actively  engaged registrants and their industry associations to help the registrants  understand current trends in diversion and the regulatory obligations they  must demonstrate that they have fulfilled during regulatory investigations.  For example, DEA periodically hosts conferences for the chemical and  pharmaceutical industries to share information on current trends, issues,  federal laws, and regulations, and to discuss practices to prevent  diversion. Industry associations reported that DEA also attends industry- sponsored conferences and shares useful information and guidance. In  addition, regulated industry reported that DEA provides information to  registrants on DEA’s Web site as well as through policy letters and  correspondence. According to DEA officials, they also speak at  conferences such as the National Association of Boards of Pharmacy, the  American Society of Interventional Pain Physicians, pharmacy schools,  and other industry venues.
Furthermore, DEA has conducted other targeted outreach efforts to  specific registrant types to inform them of specific regulatory  responsibilities or help them prepare for regulatory investigations:  In 2005 DEA established an initiative to better inform wholesale  distributors of controlled substances of their responsibilities under the  CSA to report suspicious orders from pharmacies that are possibly  filling invalid prescriptions. As part of this initiative, DEA created a  presentation explaining the laws, regulations, and DEA policies. The  presentation provided examples of Internet pharmacies and rogue  pain clinics as well as their purchase patterns and methods of  operation. The presentation was designed to emphasize the need for  wholesalers to utilize due diligence, and when appropriate, stop  supplying retail outlets with controlled substances where diversion is  occurring. From August 2005 through March 2011, DEA reported  briefing 74 corporations concerning illegal Internet pharmacy  operations and rogue pain clinics. Since the launch of the program,  DEA reports that distributors have voluntarily stopped selling or  restricted sales of controlled substances to approximately 1,390  customers believed to be placing suspicious orders for such  substances.    During 2009 and 2010, DEA’s Office of Diversion Control officials met  with a number of DWPs and industry associations that represent  DWPs to inform them about the regulatory investigation process and  regulatory requirements. They discussed recordkeeping and the  security of controlled substances, among other items, that DWPs  must meet to comply with the CSA and its implementing regulations.
section_title: DEA’s Internal Controls Help to Ensure the Quality of Investigations, but DEA Could Enhance Efforts to Measure Program Results
paragraphs: DEA helps to ensure the quality of its diversion control investigations  through the use of internal controls, but could enhance its efforts to  measure the results of its Diversion Control Program. To ensure that  Diversion Investigators and Special Agents have the necessary skills to  carry out their responsibilities and that DEA monitors the results of its  employee guidance and training, DEA has established internal control  activities, which are consistent with Standards for Internal Control in the  Federal Government. DEA has established performance measures to  assess and report on its progress toward meeting its performance goal of  reducing the diversion of licit drugs, but could reassess the measures to  identify ways to better capture and report on the results of DEA’s  investigations.
subsections: section_title: DEA’s Efforts to Ensure Its Staff Have the Necessary Guidance, Training, and Oversight Are Consistent with Internal Control Standards
paragraphs: Diversion investigations are the primary means DEA uses to monitor  registrant compliance with the CSA and to identify diversion activities. As  such, it is important that the employees responsible for conducting  investigations—Diversion Investigators and Special Agents—have the  necessary skills to carry out their responsibilities and that DEA  management monitors the results of its investigative efforts. To  accomplish this, DEA has established internal control activities related to  guidance, training, and monitoring. Given DEA’s increased focus on  regulatory and criminal investigations in response to growing and evolving  diversion, these internal controls help to provide reasonable assurance  that investigators and agents have the necessary skill levels to meet  existing program requirements for diversion investigations and changing  organizational priorities as new trends in diversion emerge.
DEA has established internal control activities related to guidance and  training such as program policy and procedures manuals and diversion  investigation courses. These efforts are consistent with Standards for  Internal Control in the Federal Government, which state that agency  management should help to ensure it has a workforce that has the  required skills that match those necessary to achieve organizational  goals. Specifically, DEA provides guidance in the form of manuals to its  Diversion Investigators and Special Agents on the policies and  procedures they are to follow in conducting diversion investigations. DEA  officials told us that they use this guidance for conducting diversion  investigations and reviewing employee work products. The Diversion  Investigator Manual describes and explains the policies and procedures  for Diversion Investigators in carrying out their regulatory and  investigative responsibilities, the processes for conducting diversion  investigations, and the procedures for developing investigative reports.  The Special Agent Manual describes and explains the responsibilities of  Special Agents in diversion investigations.
In order to familiarize employees with the process for conducting  diversion investigations and related policies and procedures, DEA  requires basic training for new employees and offers advanced and  supplemental training courses to existing personnel within the Diversion  Control Program to help them maintain the knowledge and skills  necessary to conduct diversion investigations. Specifically, DEA’s Office  of Training provides a 12-week basic course to newly hired Diversion  Investigator personnel, which includes techniques for diversion  investigations among other relevant subjects, to help ensure that they  have the required skills for performing investigator responsibilities. The  training is provided through a combination of in-classroom lessons and  practical application; direct observation; and instructor-to-trainee  feedback. Course trainees must maintain an 80 percent average on  exams and simulated on-site investigations in order to pass the course  and be certified as a Diversion Investigator. After the completion of basic  training, the investigators enter into duty under a 1-year probationary  period with a midpoint review provided after 6 months of duty. In addition,  according to DEA officials we spoke with, group supervisors may go on- site with newly hired employees to help ensure that they are familiar with  the requirements of investigations.
DEA also requires its Diversion Investigators to complete an advanced (or  in-service refresher) training course every 2 years to help ensure their  investigative skills and knowledge remain current. The advanced training  course is a 1-week course that focuses on current legal issues in  diversion, recent updates to DEA program policies and technology,  investigative techniques, and any other new initiatives or programs that  DEA has incorporated as part of the diversion control program within the  previous 2 years. Officials in DEA’s Office of Training told us that the  topics that are covered during the advanced training course are identified  through a biannual survey of Diversion Investigators and group  supervisors to find out what issues they are facing in their work or what  additional guidance is needed. DEA’s efforts to help ensure Diversion  Investigators maintain their investigative skills and are informed of new  program initiatives and program policy changes are consistent with  federal internal controls standards which state that training should be  aimed at developing and retaining employee skill levels to meet changing  organizational needs.
Beyond the required basic and advanced training courses, Diversion  Investigators and supervisors may take additional courses in other  relevant subject matter areas as time, resources, and needs permit. For  example, officials in DEA’s Office of Training told us that they offer  specialized courses on specific issues related to diversion control  investigations such as interviewing techniques, chemical investigations,  techniques for financial investigations, and asset forfeiture, among others.  Furthermore, the Diversion Control Program’s field divisions may  occasionally sponsor supplemental training for personnel that they  determine would be beneficial. Typically, such training is shorter in  duration and narrowly focused on topics such as report writing,  interviewing techniques, or legal or investigative issues specific to that  division.
Group supervisors of Diversion Investigators also receive supervisory  training to help ensure that they have the requisite knowledge to perform  their supervisory responsibilities, including those responsibilities related to  reviewing the work of Diversion Investigators. Specifically, when first  promoted, supervisors attend a supervisory institute to learn their new  roles and responsibilities as supervisors as well as receive training in  management and leadership techniques. Group supervisors also have  electronic access to PowerPoint presentations, handouts, and  administrative manuals to help guide them in carrying out these  responsibilities once they return to duty. As with the Diversion  Investigators, supervisors also receive a 1-week advanced supervisor  refresher course every 2 years.
Special Agents assigned to the Diversion Control Program are also  provided training related to conducting criminal diversion investigations.  The training for Special Agents includes a 1-week course to provide them  with an in-depth understanding of criminal diversion investigations and  includes instruction on methods of diversion, Internet investigations, and  the investigative techniques to develop criminal investigations, among  other issue areas related to diversion control.
Furthermore, DEA’s Office of Diversion Control recently developed and  implemented a new training curriculum designed to retrain and retool all  Diversion Investigators. According to DEA officials, as the reorganization  of the diversion program required Diversion Investigators to conduct more  regulatory investigations than previously, the retraining was developed to  refresh the investigators’ skills and abilities for conducting the  investigations. DEA officials reported that as of December 2010, all  Diversion Investigators completed this training. These efforts are  consistent with federal internal control standards which provide that  training should help to retain employee skill levels in order to meet  changes in organizational needs.
To assess the effectiveness of its training courses, officials in DEA’s  Office of Training stated that they obtain student feedback on a training  course evaluation form at the conclusion of each training course.  Additionally, DEA training officials review the curriculum for basic  Diversion Investigator training every 3 years using feedback from  students and input from a training working group comprised of Diversion  Investigators and group supervisors to ensure that the material being  presented is relevant and up to date. DEA officials also reported that the  Office of Training is in constant communication with diversion  management staff at headquarters and in the field to ensure that the  training curriculums include updated policies relating to diversion  operations.
As DEA continues to enhance its diversion control efforts, it is important  that it has controls in place to review the quality of its diversion  investigations and to test the effectiveness of its review process in order  to readily identify and resolve deficiencies related to its key compliance  activity. Standards for internal control in the federal government provide  that internal control monitoring should assess the quality of performance  over time and ensure that findings of audits and other reviews are  promptly resolved. DEA’s internal control monitoring activities collectively  are consistent with these standards, which also state that internal controls  should generally be designed to assure that ongoing monitoring occurs in  the normal course of operations. Internal control monitoring includes  regular management and supervisory activities among other activities and  is performed continually. DEA has implemented a multilayered approach  to monitor the work of its Diversion Control Program personnel to help  ensure that they are following policies and procedures for diversion  investigations. The monitoring process includes direct supervisory review,  self-inspection/peer review, and on-site internal inspection. Additionally,  DEA assesses the effectiveness of its monitoring process by reviewing  the results of inspections conducted as a part of the overall program  evaluation responsibilities of DEA’s Office of Inspections (IN) and  determining actions necessary for improvement and additional employee  training needs. Furthermore, DEA’s 2009-2014 Strategic Plan reflects that  the agency plans to use the Office of Inspections to help ensure effective  and efficient program oversight through its on-site inspections.
DEA field division supervisory officials reported that they directly review  employee work products to assess the extent to which employees are  following required policies and procedures for diversion investigations.  Specifically, these supervisory officials review reports and active case  files submitted by their employees for completeness, accuracy, and  adherence to reporting procedures. If any discrepancies are found that  need to be corrected, feedback is provided to employees as appropriate  detailing what needs to be revised or clarified. Additionally, supervisory  officials in three of the five field divisions we spoke with reported that they  maintain regular communication to help ensure that employees are  completing investigations in an accurate and timely manner. DEA officials  also reported that group supervisors work with Diversion Investigators on- site when necessary to help advise them on the appropriate steps to take  during an investigation. Whenever a case is being elevated for  disciplinary action (civil or criminal), Division management presents a  summary of the case to the program manager detailing the facts and  rationale for the disciplinary action. Division management reviews the  case summary and determines approval for further action (e.g.,  prosecution).
In addition to direct supervisory review of work products, DEA’s Office of  Inspections also has a Self-Inspection Program (SIP) in which DEA field  divisions are required to conduct annual self-inspections of five major  program areas: enforcement management; enforcement effectiveness;  financial management; confidential source management; and evidence.
According to the DEA officials we spoke with, during the on-site  inspection process, field division group supervisors inspect each others’  group case files to determine if investigations were conducted in  accordance with required policies and procedures. Supervisory officials in  all five field divisions we spoke with stated that they conduct the self- inspections on an annual basis. The results of the self-inspection reports  are reviewed by the Office of Inspections. According to DEA’s 2009-2014  Strategic Plan, information related to the SIP is used as the starting point  for the Office of Inspection’s cyclic, on-site inspections.
The Chief of the Diversion Control Program’s Regulatory Section reported  that field division officials submit to headquarters for review a copy of the  investigative reports for every regulatory investigation that has been  conducted. DEA officials then conduct a quality review of these reports  which assists them in identifying deficiencies and determine the training  needs of diversion personnel as they relate to completing regulatory  investigations. The chief of the Diversion Control Program’s Regulatory  Section stated that if report errors are identified during the review  process, officials in the Regulatory Section follow up with the respective  field division to address the issue and submit supplemental report  information.
The Office of Inspections also conducts on-site internal inspections of  DEA’s 21 field divisions to ensure that employees are following required  program policies and procedures—in accordance with the Diversion  Investigator manual. The office’s primary objective for on-site inspections  of the diversion control program is to determine how the diversion control  work is being conducted by the field divisions and identify and address  any problems. According to the Chief Inspector the Office of Inspections,  it is the Office of Inspection’s goal to conduct on-site inspections every 3  years as resources allow. See figure 3 for a description of the steps  involved in the internal inspection report process:  According to DEA officials, the Office of Inspections briefs headquarters- level management about the issues identified, and sends the report to the  field division. For findings, the field division then has 60 days to provide a  written response about the corrective actions that the field division has  taken or plans to take. DEA officials also reported that they use internal  inspections as an internal management tool to review their areas of  responsibility. We reviewed DEA’s most recent inspection reports  available for each of its 21 field divisions which summarized the results of  interviews with management and staff, reviews of program operations,  and case files reviews for policy compliance, among other items. We  found that the inspections did not identify widespread findings or issues  related to the timeliness and overall quality of the diversion investigations.
section_title: DEA Could Better Identify and Report on the Results of Its Diversion Control Efforts
paragraphs: Given DEA’s increased focus on regulatory and criminal investigations in  response to growing prescription drug diversion, it is critical for DEA to  determine and report on the extent to which these additional efforts are  helping to reduce diversion. In this regard, DEA has established  performance measures to assess and report on its progress towards  meeting its performance goal of reducing the diversion of licit drugs, but  could enhance its set of performance measures to better capture and  report on investigative outcomes and their results on diversion. We have  previously reported that performance information can be used to help  decide among competing priorities and allocate resources in a results- oriented management system. Such performance information allows  program managers to compare their programs’ results with goals and  thus help determine where to target resources to improve performance. In  addition, one of the key characteristics of successful hierarchies of  performance measures is the ability of the measures to demonstrate how  well a program is achieving its goals. As shown in table 2, DEA has  developed five measures to track and publicly report the progress and  results of its efforts in reducing the diversion of licit drugs.
According to DEA program officials, these measures were selected as a  result of a performance measure review by the Department of Justice  (DOJ) in 2009. For this review, DOJ asked all of its components to  reexamine their performance measures to identify and discontinue  performance measures that were confusing or did not adequately reflect  the core mission. In place of such measures, DOJ asked the components  to develop five core measures that are easy to understand and explain  what is being accomplished with the resources expended. Our analysis of  the measures found that while some indicate results, such as the number  of organizations disrupted or dismantled that were involved in diverting  prescription drugs, when taken together, the set of measures does not  clearly demonstrate to what extent the additional efforts DEA has made in  investigations in recent years are having an effect on the diversion  problem. As a result, the set of measures do not clearly explain how they  demonstrate progress towards the overall program performance goal of  reducing diversion. DEA program officials acknowledged that these  measures do not fully reflect the results of the program towards the  reduction of diversion and as a result, they do not rely on them  exclusively for managing the program or determining where best to  allocate program resources. They stated that for the purposes of internal  program planning and management, they have access to and utilize other  data and measures not reported, or can pull up additional information on  investigative results that provide more detail on what the program is  achieving towards the reduction of diversion.
DEA has designated an overall outcome measure to track the results of  the diversion control program as a whole; however, this measure does  not demonstrate program results. This measure—Milestones for  Development, Implementation, and Maintenance of Data Warehouse to  Monitor Closed Distribution System—tracks the development of an  information warehouse system DEA is developing for use in diversion  investigations. According to DEA officials, when completed, this  warehouse—known as the Rapid Targeting Online Reports Tool  (RapTOR)—will facilitate data and trends analysis as part of diversion  investigations. DEA officials explained that RapTOR is intended to  streamline the investigation process by providing a comprehensive data  warehouse tool that is linked to other DEA databases such as ARCOS,  the drug theft/loss reporting system, and a system that tracks the number  of asset forfeitures, arrests, and other enforcement data.
While the RapTOR appears to hold promise as a useful tool in diversion  investigations, tracking the milestones of its development as the outcome  measure for the overall diversion program does not demonstrate results  or capture outcomes from the program as a whole as it is only one project  within the program. According to OMB guidance to agencies on preparing  strategic plans and performance reports, outcome measures are to  describe the intended result of carrying out a program and define an  event or condition that is external to the program and is of direct  importance to the intended beneficiaries or the public. While tracking  milestones for the RapTOR’s deployment may be useful as project- specific outcome measures, due to their focused nature they do not  provide information on results of the diversion control program as a  whole. For instance, reporting on RapTOR’s testing and deployment  status does not provide program management or other decision makers  such as Congress information to indicate the results of DEA’s regulatory  and criminal investigations are having towards the reduction of diversion  of licit drugs, the program’s performance goal. Development of an  outcome measure that more directly demonstrates the external results of  the overall program could provide better information to DEA program  managers and other decision makers such as Congress about program  successes which could also help determine how to most effectively use  resources. According to DEA’s fiscal year 2012 budget submission, the  RapTOR will allow for the development of an outcome measure. When  asked if they planned to develop an outcome measure to replace the  RapTOR, DEA officials indicated that until RapTOR is fully developed and  implemented, it would be too soon to tell when a replacement outcome  measure would be necessary. Furthermore, DEA officials could not  explain how they use the RapTOR measure to show overall program  results or outcomes or how it will be used to develop a measure that  reports such results or outcomes.
Two of DEA’s performance measures track results DEA has achieved  through criminal investigations of priority targets. In April 2001, DEA  implemented the Priority Target Organization (PTO) program as a  strategic initiative to identify, target, investigate, and disrupt or dismantle  drug trafficking and/or money laundering organizations having a  significant impact on drug availability within the United States. Although  the Diversion Control Program was not officially part of the DEA’s Priority  Targeting Program prior to fiscal year 2010, with the creation of Tactical  Diversion Squads in every domestic DEA field division, the Diversion  Control Program has since begun focusing on the identification of PTOs  and their eventual disruption and dismantlement.
DEA has two separate measures to track the number of PTOs disrupted  and dismantled—one for those with identified links to Consolidated  Priority Organization Targets (CPOTs) and another for those without links  to CPOTs. As a participant in the PTO program, the Diversion Control  Program is required to report on these performance measures. Whereas  PTOs are organizations with an identified hierarchy engaged in drug  trafficking or drug money laundering operations, CPOTs are the  command and control elements of a major international drug trafficking  organization and/or money laundering enterprise that significantly impacts  the U.S. drug supply. An example of a diversion PTO cited by DEA  officials was a practitioner who prescribed large quantities of controlled  substance pharmaceuticals for nonmedical purposes to “patients” from at  least five different states. DEA officials stated examples of CPOTs  involved in diversion include international chemical distributors that traffic  in chemicals used to manufacture methamphetamine while other CPOTs  traffic in pharmaceuticals or counterfeit pharmaceuticals.
Specifically, these measures report the extent to which DEA disrupted  (disrupt) or stopped (dismantle) the operations of PTOs and these  organizations’ ability to divert controlled substances, which helps to  reduce the diversion of licit drugs, the program’s overall performance  goal. For example in fiscal year 2010, DEA reported that it disrupted  one PTO with linkages to a CPOT and dismantled one PTO with CPOT  linkages. For PTOs without linkages to a CPOT, DEA reported disrupting  96 and dismantling 65 in fiscal year 2010. According to DEA officials, the  PTO-related measures are useful in helping the program to focus criminal  investigations on those priority targets against which they are likely to  have the greatest impact on the diversion of licit drugs.
While DEA has some performance measures to demonstrate the results  of its criminal investigations, it lacks measures that clearly track resulting  outcomes DEA has achieved through its additional regulatory  investigations. For example, DEA has a measure that provides a  numerical count of the scheduled or regulatory investigations completed.  According to DEA’s Fiscal Year 2009-2014 Strategic Plan, one of the  objectives for the diversion control program is to ensure 98 percent  compliance of all registrants by fiscal year 2014. However, while the  performance measure is focused on the regulatory investigations and  provides a count of the number of investigations completed, this measure  does not demonstrate the results of those completed investigations or  give a sense as to the extent to which registrants were found to comply  with the CSA and thereby the extent to which DEA is achieving its stated  objective. According to DEA officials, while they previously reported on  the compliance rate of a subset of wholesale registrants as the program’s  outcome measure, the reexamination of program performance measures  in 2009 resulted in discontinuing use of the measure. DEA officials stated  that because the compliance level among registrants tends to be very  high in general, the values of the measure did not significantly change  from year to year. Consequently, they stated, the measure did not provide  a meaningful gauge of the results regulatory investigations were having.  However, DEA data reported before it discontinued use of this measure  showed that the compliance rate, while always relatively high, fluctuated  between 88.5 percent to as high as 97.7 percent between fiscal years  2003 and 2008. Further, as stated in DEA’s strategic plan, one of the key  objectives of the program is to ensure a certain level of compliance  among registrants. Without the reporting of a measure that directly  tracks a level of compliance among registrants, the public and other  external stakeholders such as Congress will not be able to determine the  extent to which DEA is achieving that specific objective. In addition, given  that DEA more than tripled the number of regulatory investigations  conducted from fiscal year 2009 to fiscal year 2010 including  investigations of previously excluded registrant groups as well as  increasing the frequency of investigations for a rapidly growing DWP  registrant group—it will be important for DEA to be able to assess and  report on the potential results these additional investigations are having  on regulatory compliance.
In addition, the other performance measure reports on the number of  sanctions DEA has taken against diverters or noncompliant registrants  over the past year. As such, it is one indicator of the results of DEA  investigations. However, as it is a count of the sanctions, it only  demonstrates the number of sanctions taken, but does not provide  context as to the severity of the sanctions or the reason for the sanctions.  For example, administrative sanctions resulting from deficiencies in a  registrant’s recordkeeping found during regulatory inspections may reflect  a lack of compliance with the CSA but not necessarily instances of actual  diversion. In contrast, criminal sanctions, such as prison time given to an  individual or registrant for diversion of controlled substances, reflect  sanctions taken against actual diversion that has occurred and identified  during a criminal investigation. Because the sanctions are tallied together  for the performance measure, it is difficult to determine to what extent  they have resulted from regulatory noncompliance issues or instances of  criminal diversion.
Another difficulty with combining the total number of administrative, civil,  and criminal sanctions in one total is that changes in the number of the  respective type of penalties mean different things in terms of what they  indicate about the potential risk for diversion. For example, an increase in  the number of criminal sanctions resulting from DEA’s criminal  investigations indicates that individuals or PTOs involved in diversion  have been disrupted or dismantled, reducing the potential risk for future  diversionary activities, and is therefore a desirable change. However, an  increase in the number of administrative sanctions resulting from  regulatory investigations could indicate a trend of rising noncompliance  among registrants, which is an undesirable change as it implies that  DEA’s outreach efforts with industry may not have been effective and the  potential risk for diversion is higher as a result of registrants’  noncompliance. As a result, this measure does not provide a clear  indication as to the effect DEA’s investigative efforts are having on the  problem of diversion. By tracking sanctions resulting from regulatory  noncompliance combined with sanctions resulting from criminal diversion,  program managers and other decision makers may lack information on  what type of noncompliance is increasing and be able to determine what  adjustments to the program’s efforts, if any, might be necessary to  address the root causes of increases in the number of sanctions.
DEA officials acknowledged that this measure by itself is not detailed  enough to provide that information. However, they stated they  supplement the measure for internal program planning and management  functions by conducting analyses that separate out the different types of  sanctions and provide more meaningful data on the sanctions to identify  diversion trends, determine the results of their efforts, and inform future  program plans and policy decisions. Officials also noted that providing a  single count of sanctions without breaking them out helped simplify the  measure and meet DOJ’s goal of limiting the number of overall  performance measures to five. While this may be more manageable for  the purpose of providing performance information, the measure does not  clearly tie to outcomes and demonstrate program performance—a key  goal of DOJ’s performance measure reexamination effort—and does not  provide sufficiently meaningful information and data to external  stakeholders and policy makers such as Congress about the types of  sanctions DEA has taken as a result of both regulatory and criminal  investigations.
section_title: Conclusions
paragraphs: The growing problem of controlled substance diversion presents a serious  and constantly evolving threat to public health and safety. In responding  to this threat, DEA faces a unique challenge in being proactive to  investigate and stop the diversion of controlled prescription drugs and  substances, while at the same time, ensure that individuals with legitimate  needs and uses for such substances can obtain them. In recent years,  DEA has taken steps to adjust its approach to increase its efforts in  conducting regulatory and criminal investigations to facilitate registrant  compliance with the CSA and enhance coordination and leverage the  resources and abilities of other federal, state, and local partners when  conducting investigations into criminal diversion. Given the steps DEA  has taken, it is important for DEA management to track the results its  efforts are having against diversion in order to determine what benefits  are being realized and what, if any, adjustments need to be made to  make them more effective.
DEA has established a set of performance measures for the program, but  the link between most of the measures and how they demonstrate the  progress DEA is making towards the overall goal of reducing diversion is  unclear. Making more meaningful information available externally about  the program’s results would enable program managers and external  stakeholders to better understand what the program is accomplishing and  provide more effective oversight. By developing an outcome measure that  demonstrates programwide results of benefit to the public and revising  other performance measures to better track and report on the results of  investigations and their results on reducing diversion of prescription  drugs, DEA could make the measures more effective for demonstrating  results. Doing so could also provide DEA program managers and other  decision makers such as Congress better information to target program  approaches accordingly to further optimize results against diversion.
section_title: Recommendation for Executive Action
paragraphs: In order for DEA to better determine to what extent its efforts are  decreasing diversions and to inform future program decisions, we  recommend that the Administrator of DEA strengthen the agency’s  performance measurement for the Diversion Control Program by  reassessing its set of performance measures for the program to identify  ways to enhance the measures and their link to the program outcome  goal of reducing diversion.
section_title: Agency Comments and Our Evaluation
paragraphs: We requested comments on a draft of this report from DOJ. DEA  provided written comments, which are summarized below and reprinted in  full in appendix I. In its comments, DEA stated it would take action to  address the recommendation to strengthen its set of performance  measures for the Diversion Control Program but that it disagreed with the  finding that its performance measures do not adequately measure how its  efforts reduce diversion or that such deficiencies impede resource  allocation decisions. In an e-mail received on August 4, 2011, the Acting  Assistant Director of DOJ’s Audit Liaison Group clarified DEA’s position  stating that DEA did not concur with the recommendation.
In its comment letter and attachment, DEA stated that the report  demonstrated that its management is appropriately directing its resources  towards key points of diversion and confirms that DEA has been  successful in accomplishing its objectives. DEA reiterated that  performance measures must be viewed within the context of other  information to assess the results that DEA efforts have on public health  and safety as well as the reduction of diversion. To this end, DEA stated  that its leadership provides policy makers and legislators information  though a variety of other sources such as budget requests, intelligence  reports, briefings, and testimonies. They also noted that the majority of  such information presented to policy makers is based on investigative  data and intelligence which is broader in scope than performance  measures. In regards to developing or implementing measures to track  regulatory performance, DEA stated that further strengthening the current  performance measures to include regulatory performance measures  would not provide any additional benefit in assisting the agency or other  decision makers in the allocation of resources or targeting of program  approaches to further optimize results. DEA stated that it would be  extremely difficult to do so because the vast majority of registrant  inspections do not uncover serious violations of the CSA and thus a very  small number of registrants are subject to sanctions during the annual  inspection cycle. Further, DEA stated that the deterrent effect of  regulatory investigations cannot be quantified making it impossible to  measure the lack of diversion resulting from DEA’s efforts.
As the report indicates, we recognize that DEA has taken steps to  allocate resources and position the program to respond to emerging  diversion trends. However, the report does not state that DEA  management has appropriately directed its resources or confirm that DEA  has been successful in accomplishing its objectives. The review on which  this report is based describes how DEA manages its investigations to  address the growing and evolving nature of diversion and did not evaluate  those actions for their efficiency or effectiveness as implied by DEA. At  the same time, as our evidence did not suggest that DEA’s use of current  performance measures has directly impeded its resource allocation  decisions to date, we made changes to the report to minimize any  inference of such a finding. Moreover, the fact that a program may appear  well managed on the basis of anecdotal and qualitative evidence does not  negate the need or obligation for an agency to develop and use  performance measures that hold it accountable for determining,  articulating, and reporting what a program is accomplishing.
As performance measurement is a key part of an agency being results- oriented, that is, tracking and being held accountable for the results or  outcomes an agency produces through its programs, our  recommendation is intended to ensure that the program’s performance  measures meet the standards for performance measures established by  DOJ and OMB and are the best measures possible to demonstrate and  report the program’s results to program management, other external  decision makers such as Congress, as well as the public. We agree that  program managers and decision makers can and should use other  relevant program information in addition to performance measures when  allocating resources and making program decisions. However, this also  does not negate the need or obligation for an agency to develop and use  performance measures that meet the standards established by DOJ and  OMB. On the basis of our evaluation of the program’s performance  measures against the guidance and criteria for performance measures  provided by DOJ and OMB, as well as our previous work on performance  measurement, we believe that further refinements to the program’s  performance measures are merited and have the potential to help make  the measures provide more useful information on the achievements of the  program.
Because many outside parties, such as industry members and the  American public, may not have access to other contextual information  DEA may provide policy makers and legislators, refinement of the current  set of program performance measures could enable DEA to better assess  and externally report on the results of the program in a more meaningful  and understandable way. As DOJ guidance to component agencies  suggests, performance measures should clearly articulate what an  agency is accomplishing with the resources used in language outsiders  can understand. Some of the key measures DEA is using do not meet  this standard. For example, according to DEA, tracking the milestones for  the development, implementation, and maintenance of the program’s  Rapid Targeting Online Reports Tool (RapTOR) was chosen as the  program’s outcome measure so that managers could monitor the  development and implementation of the system to ensure it was done in a  timely and cost-efficient manner. While we agree that project schedule  and cost should be closely monitored, this measure does not articulate to  outsiders what the program is accomplishing as called for by DOJ’s  guidance for performance measures. Further, given that the RapTOR is  an internal data warehouse tool DEA is developing, the reporting of  milestones for the development, implementation, and maintenance of the  tool does not provide an overall indicator of success for DEA’s diversion  program or its stated goal of reducing the diversion of licit drugs. As a  result, it also does not meet OMB’s criteria that requires outcome  measures to describe or capture an event or condition external to the  program that is of importance to the public. Indeed, DEA program officials  could not describe how they use this measure more broadly beyond  tracking the progress of the project itself.
In regards to developing or implementing a performance measure to track  the impact of the regulatory inspection process, we disagree with DEA  that including a regulatory performance measure would not provide any  additional benefit. DEA stated that it would be extremely difficult to  develop such a measure because the vast majority of registrant  inspections do not uncover serious violations and thus sanctions are  taken against a very small number of registrants. While this may be the  case, reporting the number of administrative, civil, and criminal sanctions  taken as a single count as DEA currently does, does not provide  perspective as to how many sanctions are a result of regulatory  infractions and how many are a result of criminal infractions. Also, as  DEA points out, the severity of sanctions and their impacts can vary  greatly ranging from requiring on-site corrections by a registrant for minor  infractions to DEA pursuing legal sanctions against a registrant which  could have a profound effect on the wider registrant population as a  whole. Given the differences between regulatory sanctions and criminal  sanctions and the potential severity of different sanction types, we  continue to believe it would be useful for DEA to develop a measure that  separately tracks the results of regulatory investigations or the number  and severity of regulatory sanctions taken for identified infractions. With  such a measurement, more information would be available to program  managers, other decision makers, and the public on what type of  noncompliance, if any, is increasing and thereby decision makers would  be better able to determine what adjustments to the program’s efforts, if  any, might be necessary to address the causes of increases in the  number of sanctions.
In terms of tracking the lack of diversion or similarly, the reduction in  diversion resulting from DEA’s efforts, DEA stated that it would be  impossible to measure. However, given that one of the key program  objectives DEA identified in its strategic plan is ensuring a level of  compliance with the CSA among DEA registrants, whose compliance in  turn directly maintains the closed system of distribution established by the  CSA, it is important that DEA have a performance measure that directly  links to this objective. We and OMB have acknowledged the difficulty in  developing measures for programs that aim to deter or prevent specific  behaviors, and have reported that in such instances proxy measures  should be designed to assess the effectiveness of program functions.  Proxy measures can be used to assess the effectiveness of program  functions rather than directly assess the effectiveness of the program. In  this regard, one possible approach DEA could use is to develop a proxy  measure that tracks the compliance rate of wholesale registrants based  on the results of regulatory investigations completed that year. Also, OMB  has pointed out, it may be necessary to have a number of proxy  measures to help ensure sufficient safeguards are in place to account for  performance results.
Given the significant and growing problem of the diversion and abuse of  pharmaceutical-controlled substances in the United States, having a set  of performance measures that clearly conveys the accomplishments of  the Diversion Control program is perhaps even more important now. By  reassessing the program’s current performance measures and making  changes where necessary to the measures, DEA will be in a better  position to provide enhanced information to program managers, other  decision makers such as Congress, and the public on the extent to which  the program is achieving its stated longer range performance goal of  reducing diversion.
DEA also provided technical comments, which we incorporated as  appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from its  issue date. At that time, we will send copies of this report to interested  congressional committees, the Attorney General, the Administrator of the  DEA, and other interested parties. In addition, the report will be made  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions concerning this report or wish to  discuss the matter further, please contact me at (202) 512-8777, or  larencee@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Key contributors to this report are listed in appendix II.
section_title: Appendix I: Comments from the Drug Enforcement Administration
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Kirk Kiester, Assistant Director,  and Christopher Hatscher, Analyst-in-Charge, managed this assignment.  Frances Cook, Vanessa Dillard, Sally Gilley, Jessica Orr, and Alechia  Smith made significant contributions to the report.