Drug Topics®: Hello and welcome to Freely availablea podcast from Drug Topics®. I’m your host Lauren Biscaldi, editor-in-chief. In this episode, I talk to George Euson, Director of Compliance at Associated Pharmacies Incorporated, a subsidiary of American Associated Pharmacies. George has had a long career in the industry focused on regulatory compliance and security. Today, we’ll discuss the recent surge in pharmacy fraud and provide some tips and best practices independent pharmacies can use to protect themselves and their customers. Hi George, thank you so much for joining us today. I just wanted to start this interview with a short introduction. So I’m going to hand it over to you.
George Euson: My name is George Euson, Director of Compliance for Associated Pharmacies Incorporated of API, a subsidiary of AAP. Basically, my job responsibilities are all compliance related to AAP, mostly related to controlled substances, monitoring suspicious orders, due diligence with our pharmacy customers. I have been in the industry for over 20 years with compliance-like duties following a career in law enforcement.
Drug Topics®: We are very happy that you were able to take the time to be with us today. When we talk about the recent surge in fraudulent activity in the pharmacy industry, what kind of activity are we talking about? What kind of fraud is really on the rise?
Euson: We’ve seen some things and I don’t know if it’s because of the COVID pandemic we’ve been involved in, but there seems to have been an increase in fraudulent activity across the board, including in the pharmacy and pharmaceutical industry . The reasons can be many, various staff shortages, staff training, additional burden on pharmacists and pharmacies due to the rollout of vaccines. As with anything when there is a shortage of time or perhaps a lack of attention to details, fraudulent activity can really take hold. We’ve seen some things from prescription fraud, phishing, there’s always been a problem with the staff. Theft issues if the pharmacist or owner can’t pay close attention to the details regarding inventory checks, checking in the product as it comes in from the wholesaler, leaving there the potential for theft and other criminal or diversionary activity.
Drug Topics®: I just wanted to talk a little bit about avoiding being victimized by one of these phishing schemes. What should pharmacies and pharmacists do? Are there certain questions they should ask themselves or protocols they should implement?
Euson: The pharmacies mainly deal with their wholesalers and manufacturers, but they mainly deal with their wholesalers. Most pharmacies have primary wholesalers and maybe secondary or tertiary wholesalers. There is usually a standard protocol that they use for dealing with their wholesale, purchasing products, the way they can receive notifications due to recalls, payment type issues. If anything changes in that kind of protocol or if they get emails or phone calls from people they don’t know they really should check because that’s one way the scammers will work phishing emails have to deal with with products, have to do with recall products, have to do with their bank account or bank details. In short, it’s just being vigilant, being alert. If something seems out of the ordinary, if they’re rushed to make decisions, rushed to give information, something just doesn’t feel right, it’s some sort of gut check. Then they have to call, send emails, find out if this person, this information they are getting, is legit and check it before they become a victim.
Drug Topics®:Excellent. I think that is very important advice. It’s better to ask a question and have the answer than to get caught up in one of these schemes. Do you think the COVID-19 pandemic could be implicated as the reason for the rise of this industry-wide fraudulent activity? And if so, how did that happen?
Euson: I don’t know if that’s the reason. I think it could cause an increase. There has always been fraudulent activity in the pharmacy world. I just think the odds due to the pandemic have exacerbated that. Again, there’s so much pressure on the pharmacies, especially with the vaccine rollout. There were a number of pharmacies that were closed. Staffing in any industry is difficult these days. So if you have a lack of qualified pharmacy workers it puts additional burden on the pharmacies and the pharmacy owners and the pharmacists who work in the pharmacies especially independent pharmacies when they are already at the staff minimum and now there is extra pressure on them . And I believe that the people who commit the fraud are taking advantage of that.
Drug Topics®: It seems that there have been many cases of price gouging and counterfeiting since the start of the pandemic. I definitely remember seeing that on the news. So how can pharmacists and pharmacy owners stay on top of these issues and really protect themselves?
Euson: One of the most important things I think is making sure they are dealing with a reputable wholesaler. Most pharmacies have a primary wholesaler or secondary wholesaler and I know they are bombarded with special offers and purchasing opportunities from various wholesalers and distributors, but they are really dealing with a reputable wholesaler. One that is VOD accredited, one that has a good reputation in the industry. They are also bombarded by other wholesalers who want to buy products from them, meaning they could be a participant in a fraud without knowing it. Much of the price going on was a commodity that was in short supply, especially hospital product and much of this was sourced by notorious wholesalers through pharmacies. Giving them a great deal on a product that they can buy or sell at a great price. It’s the old saying. “If it’s too good to be true, it’s too good to be true.” The most important thing is to buy from a reputable wholesaler and also require their product to be properly sourced directly from the manufacturer. They get this information through their DSCSA information that they get from their wholesaler. They should check that. Demand that they get a product that only comes directly from the manufacturer or an exclusive distributor for that manufacturer or someone who is an authorized distributor for that manufacturer because there are many major manufacturers that only deal through authorized distributors and exclusive distributors. So if you get a product offered at a great price, there may be a problem. Again, “if it’s too good to be true, it’s too good to be true.”
Drug Topics®: The funny thing is that that saying also applies to pharmacy. I say that often in my life, like “that sale just seems too good to be true”. It’s good to keep in mind for sure. Excellent. So I’m going to switch a bit. There is an increase in other types of health care fraud, especially around personal health information. It’s actually one of the most lucrative pieces of data on the dark web and it can sell for as much as $1,000 per medical record, which to me is just wild, if you compare that to a credit card, it’s five dollars per credit card number. How can independent pharmacies protect themselves and their patient data from these types of breaches and disseminate that patient information on the dark web?
Euson: You know that pharmacies have access to a lot of personal health information and it is their responsibility to ensure that through HIPAA laws and regulations. A lot of it is protecting that information through every kind of phishing attempt we just discussed, where someone might be looking for personal information. What’s in their dispensing records and the kind of information they provide to many of the wholesalers, and as a result of some recent lawsuits, there will be a lot more prevalence where the wholesalers are going to look at prescription data. They must ensure that anyone who has access to that prescription data has an agreement with a business partner, which is essential to protect the pharmacy. If that data were to be violated, it would not be on the pharmacy. It belongs to the third party that may have access to that data. But make sure they have a business partner agreement. They may want to have one of their own. They may want to have an attorney draft one for them or at least one given to them to sign to make sure all the provisions are in HIPAA to protect them. Train their employees, that’s huge. There are a lot of techies and they may not have that kind of training and may not know the importance of protecting a patient’s personal health information. Just be informed about the HIPAA regulations, they change. Make sure they are up to date and make sure their staff is trained on that information.
Drug Topics®: Excellent. I think that’s a really important point, especially because there’s so much attrition because of the pandemic and the big layoffs and all that, so that’s a really good point to keep in mind. You touched on this a bit in your last answer, but if we gave our listeners some sort of top 3 to 5 kind of best practice tips they could take from this conversation on how to protect themselves from fraud. What would those tips be?
Euson: Just to stay vigilant, train their staff. Know that we live in a world where we only know our own 4 walls, but just know that there are bad people who do bad things, and be aware of that. It is as if you are aware of your surroundings. Be aware of your business. Be aware of the people who are trying to attack your business. Conduct regular audits and inventories, that’s how you catch someone, an employee or anyone else, who might be stealing from you. Especially in controlled substances and expensive products, conducting audits, conducting inventories. By law they have to take inventories, but they are staggered. Do them more often. Do them randomly. Ensure separation of duties. Don’t let one tech do everything for you. Too many times I’ve seen one person have too much responsibility and the owner doesn’t even know what’s going on. They can steal from you, money or product, while the product is going out the back door. Ensure separation of duties. Check those tasks, check those people. When new technicians come in, do background checks. They are not that expensive. Find out who these people are to make sure they have all the certifications they say they have. Don’t be trusted. It’s the old saying ‘trust but verify’ again.
Drug Topics®: Awesome. Well, this was a super informative talk. I know I learned a lot, so I’m sure our listeners will take a lot of this and implement it in their own pharmacies. I wanted to thank you again, George, for joining us today. I appreciate you taking the time. Thank you.