Drug Diversion: Preventing Retail Pharmacy Theft

An increase in prescription drug abuse has led to greater concerns about drug diversion.

drug diversion

As loss prevention professionals, we are all familiar with the nuts and bolts of running an investigation for a concealed shortage, cash register shortage, or a robbery. We have become the subject-matter experts with regard to merchandise or cash losses as well as developing an expanded role in safety.

One area with which we may not be familiar, but one of growing concern, is that of prescription drug diversion. Drug diversion is the unlawful removal of prescription product from a pharmacy for personal use or sale. In short, a person is stealing prescription products. In particular, thieves focus on controlled substances.

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While all prescription products in the United States are regulated, controlled substances have more regulatory energy directed at them than non-controlled prescription products. It is worth noting that both types of products require a prescription in order for them to be legitimately dispensed by a pharmacist licensed in a given state.

Controlled substances have an abuse and addictive potential as well as a therapeutic benefit associated with them. Under the care of a prescriber and the watchful eye of a pharmacist, the benefits of this category of drug should outweigh the potential risk.

While we have all heard about the “war on drugs,” prescription products are rarely mentioned. Abusers recognize prescription substances as “pure” and of known strength, unlike the illicit drug market. An addict knows that a Valium 10mg always looks the same and has the same effect on his body and mind. While he may not know that it contains 10mg of diazepam hydrochloride per tablet, he does know what to look for, as it always has the same appearance from a shape and color standpoint.

On the other hand, that white powder that a different kind of addict buys is of varying degrees of purity, and dosing the substance is often a problem for them as well. There is a belief that controlled prescription drugs are not as dangerous or addictive as illicit drug substances. Nothing could be further from the truth. These pharmaceuticals have an abuse potential and an addictive nature as well.

Second only to marijuana, drug diversion and prescription drug abuse is a topic of interest from a variety of aspects. Concern for the public health, undue regulatory scrutiny, and protection of assets are all valid reasons for a retailer to be concerned about this topic. Retailers with pharmacies have not always been aware of this issue and did not dedicate the proper amount of resources to this potential problem.

A Reuters report cited the National Center on Addiction and Substance Abuse at Columbia University survey that showed that more Americans were abusing controlled substances than cocaine, hallucinogens, inhalants, and heroin combined. According to that same Reuters article, the number of prescription drug abusers doubled from 1992 to 2003 to nearly 15 million.

When there is a market that large, someone will attempt to meet the demands. Unfortunately, the method by which they serve that market involves the unlawful removal of prescription products from a pharmacy.

Why Pharmacy Personnel Steal

While an efficient model for distribution, the legitimate prescription system serves as the conduit for pharmacy theft and often at the retail level. A pharmacy technician or pharmacist may have less than the best intentions for your company’s reputation, assets, and pharmacy license.

Personal Use or Personal Gain

The motivation for drug diversion can be for personal use—a person likes the euphoric feelings they get from abusing the substance—or personal gain from the resale of controlled substances at street level.

Generally, a pharmacist making over $100,000 per year is not stealing for the money. They are well compensated for their knowledge and expertise. Even though the pharmacist is typically not stealing for the personal profit aspect, the risks posed to your company remain great. No one would doubt that a pharmacist under the influence of a mind-altering substance is more likely to make a medication error or have a lapse of judgment than a pharmacist not under such an influence.

With the efficacy and potency of modern pharmaceuticals, such conditions can be a prescription for harm or even death.

Primarily, we as pharmacists have a responsibility to the health and well-being of our patients. Of secondary importance—though for the parent company, it may be of great concern—is the fact that there exists a potential for adverse publicity in the event that something along the lines of a therapeutic misadventure occurs in a company’s pharmacy. No one from pharmacy operations to loss prevention wants to see their company’s name in the headlines or on the news when the story references a rogue pharmacist misfilling a prescription under the influence of a controlled substance.

This risk is different than the one presented by pharmacy technicians diverting controlled substances. While headline risk is an issue, it takes a different form with the pharmacy technician than with a pharmacist. Generally, a pharmacy technician makes substantially less than the pharmacist and is more likely motivated from a financial aspect.

High Street Prices

The street values of some controlled prescription substances are astronomical even when compared to their retail prices. Unlike stolen merchandise, where the street value is characteristically less than the retail price, prescription products uniformly have street values in excess of their retail value.

We know that stolen general merchandise often sells for 60 to 80 percent of its retail price. In the prescription drug world, just the opposite is true. A 100-count bottle of OxyContin 80mg, the brand name of a powerful prescription pain medication, has an average street value of about $8,000, or $80 per tablet. A 500-count bottle of hydrocodone/acetaminophen 5/500, the generic name of another prescription pain medication with multiple brand names, the most common being Vicodin, has a value of about $2,500, or $5 per tablet.

Take a moment and think about the stores and merchandise in your company. Note that there are few items in a retail setting with the size of a small apple and a street value of $8,000. This approximates the size of a bottle of OxyContin. Make no mistake, these street prices are significantly higher than their corresponding retail prices when sold at a pharmacy for cash when a prescription is presented and filled by a pharmacist. Insurance co-payments also make a patient’s out-of-pocket expense even lower.

Drug Diversion off Our Radar

The ease with which these highly desirable products can be removed is great. The methodologies are neither new nor innovative. Often, someone will place a bottle in a smock pocket after initially staging it away from its normal home. Sometimes a trash receptacle may be used to remove product, or an outdoor jacket serves as a method of concealment. None of these techniques should surprise us as trained investigators.

What is different about prescription drug diversion is our past ignorance to the matter. A historical lack of understanding and involvement in the retail operation of our pharmacies by loss prevention makes drug diversion even more pressing in the present-day environment of an always-on news cycle and instant communication.

Auburn University’s Harrison School of Pharmacy conducted a study that reported approximately 10 percent of pharmacists become chemically impaired at some point in their professional career. The University of Georgia reported that 40 percent of the pharmacists they surveyed voluntarily admitted to taking a regulated prescription substance without a prescription, and 20 percent admitted to repeated use.

Taking a regulated prescription substance without a prescription is not only a violation of the state pharmacy acts and federal law, but it causes a loss of assets for our company. None of us would knowingly allow a person to remove a television, clothing, or lawn mower from our store without a purchase occurring.

In the same light, we cannot ignore the issue of internal theft of prescription drugs any longer. The opportunity to divert prescription product will go unchecked unless retailers and loss prevention begin to address this problem.

Questions We Should Ask

Here are some questions that you may want to reflect upon regarding your company and the pharmacies in your area of supervision. While each company has a different approach and methodology of generating solutions, these basic questions should spur additional thought processes within your organization.

  • On your normal store visit, do you visit the prescription filling area? The simple act of including this area in the store visit and speaking with these folks can make your presence more visible and ensure that they come to you at the first signs of something not seeming quite right.
  • Can you remember the last time that you had a conversation with the pharmacist in charge or a pharmacy technician? By regularly visiting with pharmacy personnel, you can look for any changes in behavior or physical appearance. The abuse of prescription drugs can be associated with extreme weight gains or losses as well as mood swings or irritability.
  • Does your company take proactive measures, such as comparing shipments of prescription products to a store with their analogous prescription sales over the same period? This is an effective way to ensure that what was shipped is being sold or remains on the shelf via an audit.
  • Do your operations and field LP teams have the ability to spot exceptions via the reporting mechanisms already in place? In many companies, we may have more visibility to a package of wood screws than a highly regulated, desirable, and dangerous substance like a controlled pharmaceutical product. If the answer is no, then this is an effective way to spot trends and prevent a small case from becoming a liability.
  • Does loss prevention have a useful method of communicating the issue to the pharmacy district manager and upper management? If not, ensure that your team is involved with broadcasts and memos as well as conference calls. If you are not inserting and advancing the loss prevention agenda, who will?
  • What educational programs are in place to help a pharmacist learn to spot drug diversion occurring from a pharmacy technician? Understand that in our professional education, now a six-year degree program in the United States, drug diversion is not a topic that has been historically discussed. Pharmacists are experts in therapeutics, drug delivery, patient counseling, and managing patient outcomes, but drug diversion and substance abuse are not given the emphasis that they rightfully deserve.
  • Here is a great opportunity for your loss prevention team to get a place at the table and proactively educate and prevent drug diversion. Ensure that in their orientation and training these topics are addressed and that the teams understand that loss prevention is an important player in the functioning of a proper pharmacy in your company.
  • Does your company conduct pre-employment assessment tests, background checks, and drug testing? Is the drug test the same for a cashier as it is for a pharmacy team member? If so, does it include testing and detection for the most commonly diverted prescription substances? While this may seem like common sense, it is not always the case.
  • During the pre-employment process, do the pharmacy supervisors look for warning signs? Hiring managers should look for gaps in the resume, ask questions about people working below their educational level, and check with the state board of pharmacy to ensure that a pharmacist or pharmacy technician has a license or permit in good standing with them.

This is by no means an exhaustive list of questions. This is merely a foundation from which your company can build a meaningful program to prevent and detect prescription drug diversion. As the holder of the pharmacy permit, retailers have a responsibility to ensure the safety of the general public while ensuring that the very life-giving medications we dispense are secured properly.

Frequent and meaningful meetings with your states’ boards of pharmacy, as well as the Drug Enforcement Administration, help your teams understand their expectations as well as forming relationships that are beneficial to all parties. These government agencies often help to drive investigations in the event drug diversion is uncovered. A partnership with these regulatory agencies provides valuable insight and resources.

The knowledge base that these governmental agencies possess is industry-wide. There can be distinct differences in drugs of abuse across geographic regions. For example, in the Houston, TX area, promethazine with codeine, the generic name of a cough syrup with a brand name of Phenergan with codeine, is popular. On the other hand, the OxyContin abuse phenomenon was first widely noticed in the northeastern United States

It is of great importance that a data-mining tool be robust enough to drill down to the item level, known as national drug code or NDC, by store in order to detect such trends. Pharmacy diversion investigators have to be able to distinguish between an anomaly and a legitimate trend.

Drug Diversion Trends

It does not appear that the trend of an increase in prescription drug abuse is going away anytime soon. One possible consequence of increased vigilance on the controlled substance prescription products is that we may see an increase in non-controlled prescription drug diversion.

A Growing Demand

Pharmaceutical manufacturers have been hard at work developing new miracle drugs for the market. Some of these substances have high retail prices associated with them.

There are also drugs that are viewed as recreational in nature. Ads for Cialis, Levitra, and Viagra have certainly helped raise the curiosity of the public. Pharmaceutical manufacturers would not be advertising their products if this were not working for them from a financial point of view.

It would not take any of us too long to think about the times we have watched, heard, or read the news recently and heard a health-related story in which a reference to a prescription product occurred. The criminal element also sees and hears these ads and news stories and knows that there is another market for these substances. Companies should remain aware of trends in advertising and health-related stories and mine the data surrounding these products.

There are also maintenance drugs that lower cholesterol, improve asthma symptoms, or help a person boost their quality of life when they have HIV/AIDS. Many of these drugs required the manufacturers to devote millions of dollars in research and development. As a result, they often have a  sizable retail price associated with them. The potential for drug diversion exists with these items as well.

Educating Pharmacists on Drug Diversion

Schools of pharmacy are getting better about educating their students about this industry problem. We have delivered lectures to various schools of pharmacy throughout the United States on this topic. Our hope is to educate future pharmacists about this subject so that when they are on the front lines, they can help mitigate the risk.

An additional benefit is that pharmacy students get to hear that retailers take this problem seriously and have dedicated resources to detecting and preventing drug diversion. A student who was thinking that retail would be an easy way to divert prescription product may think twice about their career choice. By letting students know about our programs on the front-side, we also attract a future pharmacist who knows that we are dedicated to their profession from a wide variety of aspects.

Graduating pharmacy students have many job choices awaiting them. Most have jobs lined up with a high salary and signing bonus well in advance of their graduation. In fact, according to the Pharmacy Times, a 2015 survey of 17 pharmacy schools found that 95 percent of job-seeking graduates were employed.

Students know that their skills are in high demand and employers are responding to the market forces that drive salaries and workplace environments. A company would be wise to view these lectures as an opportunity to educate and attract students to help fill their workforce requirements.

A Call to Action

It is clear that drug diversion is a legitimate concern of the pharmaceutical profession as well as to loss prevention professionals within companies that have pharmacies. In the past, few resources were dedicated to this issue. Many companies are realizing that they can no longer do business in this fashion.

Potential risks exist not only for the health and well-being of the patients who use the pharmacy, but the public in the communities we serve. The other risk is that of negative headline exposure.

If we ensure that our companies take action on the aforementioned steps, we can help reduce a problem hitherto neglected. Our responsibilities are to ensure that the leadership of our various companies is educated on this issue and dedicates the proper amount of resources to this issue.

We can no longer sit idly by and wait to be called upon to clean up after the fact. Loss prevention needs to be a part of the vanguard on this issue that affects not only retail but also society as a whole.

This article was published in 2006 and was updated October 9, 2017.

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