The DEA issued a short press release yesterday that, at first glance, appeared to deliver on something that wholesale drug distributors have been seeking for years—access to ARCOS data so that wholesalers can see the total number of controlled substances a customer is ordering.* Despite the sensational headline, the new DEA tool is underwhelming and misses the mark because it will only tell a wholesaler how many other wholesalers a prospective customer has purchased a controlled substance from in the past six months. Unfortunately, this tool will provide little to no usefulness to distributors in identifying suspicious orders.
DEA noted that manufacturers and distributors have repeatedly requested ARCOS information to help them make informed decisions about whether new customers are purchasing excessive amounts of controlled substances.
This is true. The Healthcare Distribution Alliance (“HDA”) mentioned the desire for ARCOS data in a November 28, 2017 letter to Senator Claire McCaskill, and John Gray, HDA’s president and CEO, discussed how ARCOS data would be helpful in a written communication to the Senate Judiciary Committee last month.
But what the industry has been seeking from DEA is access to ARCOS data that would show the total amount of controlled substances that individual pharmacies, hospitals, and practitioners have received from each of their suppliers. This would give distributors a fuller picture of a customer and aid the distributor in determining whether a particular order is suspicious.
DEA’s new tool does not do that. Rather, it will allow registrants to “view the number of competitors who have sold a particular controlled substance to a prospective customer in the last six months.” DEA noted that it might be a red flag to a new distributor if a query showed that a large number of suppliers had recently sold opioid analgesics to a prospective purchaser.
DEA has long-stated that pharmacies buying from multiple distributors is a red flag of diversion. That may have been what DEA’s investigations of rogue Internet pharmacies revealed over ten years ago. The reality, however, is that legitimate pharmacies, especially independent retail pharmacies, will purchase from multiple suppliers for a number of legitimate business reasons, with price at the very top of the list. Knowing that a pharmacy purchases from multiple sources is clearly not as helpful as knowing how many total dosage units a customer has purchased in the past six months. And limiting the feature to prospective customers and a limited six-month period hampers the tool’s usefulness even further.
Wholesalers should go into the ARCOS Online Reporting System soon to determine the answers to these important questions: (i) Whether queries can be made on current customers, or if the feature is truly limited to prospective customers. (ii) How detailed the queries will be, i.e., will a wholesaler be able to search by NDC, just drug code family, or something else? Knowing things such as product strength or volume are key to determining whether ordering from multiple distributors is a problem.
While DEA’s efforts are a step in the right direction, they do not fully answer industry’s call for harnessing ARCOS data.
* At the beginning of the third paragraph of the press release, DEA indicates that its regulations require distributors to “know your customer.” We could find no such requirement in DEA’s regulations or the Controlled Substances Act.