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3/7/2003

Hospitals Take Action After Theft of Expensive Drugs

Donna Young

Health systems have long been taking measures to protect inventories of controlled substances against diversion and theft.

But recent investigations into pharmaceutical diversions at two Houston, Texas, hospitals did not involve narcotics. The drugs stolen from University of Texas M. D. Anderson Cancer Center and Methodist Hospital were products—including epoetin alfa, filgrastim, leuprolide acetate, and ondansetron hydrochloride—used in patients with cancer or HIV infection.

Stolen Drugs May Reenter Distribution Chain

Ana R. Vann, Methodist Hospital’s interim pharmacy director, said she is concerned about what happens to drugs that are diverted from pharmacy shelves—especially when those products need to be kept at certain temperature.

The thieves are keeping those drugs in their car trunks and not refrigerating them, she said. My worry is that eventually pharmacies end up with those drugs, and who knows how long those drugs have not been refrigerated. It's very frightening to think that patients are getting those drugs.

Vann said FDA needs to "crack down" on the purchasing practices of wholesalers and monitor their activities more closely.

It's been a free-for-all for wholesalers, and consumers need to beware,she said.

But in January, FDA, for the fourth time, delayed implementation of a regulation that requires wholesalers other than primary wholesalers to maintain and forward to buyers a pedigree—a complete history that identifies each prior sale, purchase, and trade of a prescription drug product.

Since the passage of the Prescription Drug Marketing Act (PDMA) of 1987—legislation designed to help stop counterfeit, adulterated, misbranded, and expired drugs from entering the wholesale drug marketplace—the vast majority of wholesale distributors have operated under a gray area in the law.

The pedigree regulation was originally scheduled to take effect in December 2000, but has now been delayed until April 2004 to give Congress time to consider if further legislative action is appropriate.

Until Congress or FDA takes further action, Florida is moving ahead with its own solution, said Jerry Hill, bureau chief of pharmacy services for the state's health department. Florida, he said, adopted PDMA under a state statute in 1992.

Under PDMA, primary wholesalers have been exempt from the pedigree requirement, and many secondary wholesalers have interpreted a 1988 FDA guidance letter to mean that sales records need to record only the most recent primary wholesaler that handled the drug product.

Florida's health department proposed a new administrative rule on February 12 that would require all wholesalers, even primary wholesalers, to provide a pedigree for 30 drug products that the state has identified as having a high risk for diversion, including epoetin alfa, filgrastim, and leuprolide acetate, Hill said.

The proposed rule is open for public comment, and the state is scheduled to hold its first public hearing on the rule on March 15, he noted. The rule will be implemented 60 days after it is approved.

Because of their “street” value, said Houston Police Department Robbery Division Detective Jared Davis, those expensive products have caught the attention of thieves and, in this case, wholesalers who were willing to buy and sell the stolen products to other wholesalers. 

A pharmacist and four pharmacy technicians who had been stealing drug products directly from hospital pharmacy shelves were arrested as a result of the investigation, Davis said, as were two men with wholesaling licenses issued by the state, and two accomplices.

Harris County Assistant District Attorney Casey O’Brien said that, even though the wholesalers had licenses, he “would not characterize them as legitimate” businessmen.

Paula Storts, assistant district attorney for Harris County, Texas, said some drug products stolen from the two hospitals were recovered and are being held as evidence. But, she added, it is difficult to know for certain what happened to the hospitals’ other stolen drugs, and there is a large possibility that the drugs have reentered the distribution chain.

“There is no way to guarantee the legitimacy of those drugs and that they have not been exposed to some kind of environmental degradation,” Storts said.

Epoetin alfa and filgrastim must be stored at 2–8 degrees C.

Hijacked. During the course of a robbery investigation involving pharmaceutical products in a delivery truck that had been hijacked in March 2002, law enforcement officials “stumbled upon a drug diversion scheme” that resembled a pyramid scheme, Storts said.

Officials from the Houston Police Department, Harris County District Attorney’s Office, the United States Attorney’s Office, and FDA’s Criminal Investigation Division were involved in the investigation, she noted.

Arrested for the truck hijacking case were wholesalers Fred Solmor and Paul Ward and robbery accomplices Manville Hopes and Harold Morrison, who used a high-voltage stun gun to subdue the driver.

The men, expecting to find sealed boxes of pharmaceuticals worth $500,000 in the truck, found cartons containing orders of specific products, including loose vials, packaged for delivery to local pharmacies—items that would be more difficult to sell on the black market.

"They got the wrong truck," Brien said.

So the thieves dumped the containers of drug products on a “lonely road” outside of Houston, he said.

The drugs were recovered by law enforcement authorities but were destroyed because the integrity of the products could not be ensured, Brien said.

The truck hijackers were quickly identified and caught within a few days, he said. Two of the men arrested in connection with the kidnapping cooperated with police, leading investigators to the scheme involving the pharmacist and pharmacy technicians, Brien said.

A pyramid scheme. Pharmacist Reginald W. McCoy, a former employee at M. D. Anderson, was arrested for allegedly stealing drugs and recruiting pharmacy technicians to join in his scheme.

McCoy allegedly sold drugs stolen from M. D. Anderson and Methodist Hospital to his friend, Solmor, who allegedly sold the products to other wholesalers.

McCoy recruited M. D. Anderson pharmacy technicians Debra Griggs and Christopher Felan to be part of the scheme. Felan, a pharmacy student at Texas Southern University (TSU) at Houston, recruited another colleague, pharmacy technician Jefrey Huddleston, a student at South Texas College of Law in Houston.

Felan also recruited fellow TSU pharmacy student Jeremy Gutierrez, who was working as a pharmacy technician at Methodist Hospital.

The technicians sold the stolen drugs to Felan or directly to McCoy, Storts said.

After his arrest, Felan helped investigators stage a “sting” operation to catch Gutierrez and Huddleston.

Both men were caught with stolen drugs in their cars and were arrested in the parking lots at Houston fast food restaurants—regular meeting locations used by Felan.

Defendants in Houston Case

Reginald W. McCoy, age 42
Pharmacist
Pleaded guilty to theft
Sentenced to 22 years in prison
Must pay a fine of $10,000
[Note: Sentencing occurred after AJHP went to press]

Christopher Felan, age 31
Pharmacy technician
Pleaded guilty to theft
Sentenced to 7 years in prison

Debra Griggs, age 44
Pharmacy technician
Pleaded guilty to theft
Sentenced to 10 years deferred adjudication and 30 days in jail
Must pay $48,625.36 restitution to M. D. Anderson Cancer Center

Jeremy K. Gutierrez, age 24
Pharmacy technician
Pleaded not guilty to theft
Sentenced to 3 1/2 years in prison

Jefrey Huddleston, age 32
Pharmacy technician
Pleaded not guilty to theft
Sentenced to 180 days in jail and 10 years of probation

Fred Solmor, age 73
Wholesaler
Charged with aggravated kidnapping
Trial pending

Paul Ward, age 40
Wholesaler
Charged with aggravated kidnapping
Trial scheduled for March 3

Manville Hopes, age 30
Robbery accomplice
Charged with aggravated kidnapping
Trial pending

Harold Morrison, age unknown
Robbery accomplice
Charged with aggravated kidnapping
Trial pending 

G utierrez and Huddleston pleaded innocent to the charges but were found guilty. Investigators seized $40,000 in cash from Huddleston’s home—money gained from selling stolen drugs products, Storts said. The money was turned over to M. D. Anderson, she added. 

McCoy, Felan, and Griggs pleaded guilty.

At press time, trials were pending for Solmor, Ward, Hopes, and Morrison.

Theft prevention. Joel D. Lajeunesse, deputy division pharmacy head at M. D. Anderson, said his facility lost approximately $2 million worth of epoetin alfa, filgrastim, and other drugs.

Filgrastim, sold under Amgen’s brand name Neupogen, is packaged in 10-vial boxes with an average wholesale price of $3151 per box. Epoetin alfa, sold under Ortho Biotech’s brand name Procrit, is sold in 4-vial boxes with an average wholesale price of $2136 per box.

Hospital pharmacies, Lajeunesse suggested, should immediately open boxes of expensive drugs upon delivery to the facility or mark the box with something identifying it as belonging to the hospital to deter would-be thieves from stealing the products.

“An unsealed box is not worth as much as a sealed box,” he said. “And a wholesaler is less likely to buy an unsealed box of drugs.”

As soon as the hospital discovered that drugs were being stolen, Lajeunesse said, “we took action and invited an internal audit.”

“We determined that we needed to look beyond traditional drugs that had street value and consider tighter controls for very expensive drugs that could also be resold by thieves,” he said. “We will periodically go back now and take a look at our formulary and determine which drugs are most at risk.”

M. D. Anderson’s pharmacy has recently upgraded and expanded its Pyxis automated pharmaceutical dispensing system to include refrigerated cabinets in the pharmacy. A new biometrics security component requires employees to scan their index finger to access the system.

The pharmacy’s information system, Lajeunesse said, interfaces with the Pyxis dispensing system.

“It gives us real-time knowledge of who is taking what out and when and gives us real-time auditing to verify our current balance,” he said.

However, the pharmacy still partially relies on paper to reconcile audits because batch-fill requests from the pharmacy’s main system must be printed and matched with the Pyxis system’s information, Lajeunesse said.

The pharmacy also installed additional digital video security cameras to have complete surveillance of the pharmacy, he added.

Vulnerabilities. “But given time and effort, there is a way around any security system,” Lajeunesse said. “And if someone is determined enough, they will find a pharmacy’s vulnerabilities.”

Ana R. Vann, Methodist Hospital’s interim pharmacy director, said the thieves found her hospital’s vulnerabilities after Tropical Storm Allison flooded much of Houston, including her hospital, in 2001.

Technicians' Status in Texas

In Texas, all pharmacy technicians, unless exempted, are required to be certified, achieved by passing the certification exam given by the Pharmacy Technician Certification Board (PTCB).

Texas has 25,007 PTCB-certified pharmacy technicians—the most of any state in the nation.

Certification may be revoked by PTCB for conviction of a felony or crime involving moral turpitude, including the illegal sale, distribution, or use of controlled substances or other prescription drugs, according to the exam application.

Texas passed legislation in 1999 requiring the state board of pharmacy to register pharmacy technicians in the state. However, the mandate has gone unfunded, so registration has been postponed, making it difficult for the state to reprimand pharmacy technicians, said Gay Dodson, executive director for the Texas State Board of Pharmacy.

Pharmacists convicted of felony crimes do not automatically lose their license to practice in Texas, Dodson said.

"We look at each individual case and punish accordingly," she said. "Diversion of drugs is something we take very seriously."

"It knocked out all of our systems and our controls," she said. "It left us wide open for potential theft. And one of our technicians just happened to figure out what those vulnerabilities were and took advantage of the situation."

Vann said her hospital is still recovering from the flood and is in the process of installing new automated dispensing equipment, which is expected to be completed by the end of the year.

Keep it locked. In the meantime, Vann added, the hospital has installed locks on all pharmacy refrigerators.

The pharmacy’s storeroom can now be accessed only by managers using a security-access swipe card, she said. This access system is linked to the hospital’s security and pages Vann each time the storeroom is entered, she said.

Any employee who is not authorized to be in the storeroom, Vann noted, will be terminated immediately.

The pharmacy also conducts daily audits of its inventory, she added.

University of Colorado Hospital in Denver tightened its pharmacy security after a former pharmacy storeroom employee, Steuart William Smith, admitted to stealing gemcitabine, carboplatin, cisplatin, and paclitaxel from the hospital and selling the drugs.

Smith was arrested as part of a Kansas City, Missouri, investigation that led to the arrest of Robert R. Courtney, a pharmacist who pleaded guilty in February 2002 to 20 felony criminal charges related to the incorrect preparation and dispensing of cancer chemotherapy.

Courtney was sentenced in December 2002 to 30 years in federal prison without parole. He has appealed his sentence.

The court also ordered Courtney to pay restitution of $10,452,109 to his victims and a fine of $25,000.

Smith was sentenced on August 13, 2002, to five years of probation, including six months of home detention, 1000 hours of community service, and a $25,000 fine. He was also ordered to pay $50,000 of restitution to University of Colorado Hospital.

Nancy Stolpman, University of Colorado Hospital pharmacy director, said her hospital has installed Pyxis automated dispensing machines in its pharmacy storeroom. Refrigerators are key-locked, and the key is stored in the Pyxis system.

High-cost items in the pharmacy’s inventory are now controlled like narcotics, with a mandatory count on each access, she said.

"You have to treat your pharmacy like a bank vault," Stolpman said. "Pharmacies need to be wary of the potential risks and take a good look at the drugs they have. Clearly there is a market out there for these stolen drugs."

The pharmacy’s new system automatically generates a blind count, making it difficult for someone to enter fraudulent data, she said.

“We know exactly what is in our storeroom at all times,” Stolpman said. “We have a good audit trail that makes it difficult for anyone to steal anything.”

The sharing of system access codes is grounds for termination, she added.

The hospital has also installed surveillance cameras and implemented new security policies and procedures.

Easy access. But the implementation of policies and procedures is effective only if employees follow them, said Jeff Ramirez, chief of management and clinical information systems for the Department of Veteran Affairs (VA).

Too often, Ramirez said, employees write down access codes and place them in view of other employees, making it easy for someone to pilfer products.

The VA recently had a rash of drug thefts from pharmacies and nursing units by its employees. The stolen products were not high-cost drugs, but narcotics, including oxycodone, hydrocodone, and hydromorphone hydrochloride, according to John C. Lowe, manager of pharmacy benefits management for the Veteran Integrated Network Service in Pittsburgh.

One pharmacy supervisor, Lowe said, was caught last year after stealing over 205,000 doses of Schedule II controlled substances having a street value of $7.1 million.

The VA has taken several measures to control its drug inventory, including installation of a variety of automated dispensing systems, such as those made by Omnicell, Pyxis, and McKesson, Ramirez said.

Pharmacies should identify the potential for diversion of certain drugs and have separate policies for storing and dispensing high-cost drugs, he noted.

"Every time an inventive product comes on the market, it is at risk for being diverted," Ramirez said. "Pharmacies need to treat drugs the same way a jewelry store treats jewelry. You are not going to put the Hope Diamond in a cheap, glass case out front where anyone can get to it. You're going to keep it locked away in a vault."