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Prescription Drug Compliance: A New Priority

July 22, 2013

Prescription drug compliance is now a priority for government enforcement. The current epidemic of prescription drug abuse, combined with increasing annual government expenditures for prescription drugs, has thrust this issue into the government spotlight. Key recent government activities include the following:

  • Last month, the Office of Inspector General (OIG) published an investigation revealing that in 2009, Medicare paid millions of dollars for drugs ordered by individuals or entities who clearly had no authority to do so. Among the ten most problematic states studied (which included Michigan), the figure exceeded $26 million.
  • Another OIG report found that 2,367 retail pharmacies had “questionable” Medicare Part D billings during 2009.
  • Medicare accrediting entities have recently been citing hospitals for permitting unauthorized individuals to prescribe drugs, especially controlled substances in the operating suite.
  • The DEA has focused on controlled substance abuse and diversion, taking serious action against Walgreens, CVS and several pain clinics for improper storage, handling, prescribing and recordkeeping of controlled substances.
  • The federal Health Resources Services Administration is actively auditing 340B Covered Entities for compliance with 340B Program Guidelines.
  • Effective August 1, 2013, the Sunshine Law requires drug and device manufacturers to start collecting data regarding physician ownership interests and payments made to physicians and research hospitals.

Given this flurry of government enforcement activity, providers are well-advised to make prescription drug compliance efforts a priority. Here are some general suggestions:

  • Review your prescription drug (especially controlled substance) acquisition, handling, resale and prescription activities for compliance with federal and state law.
  • Confirm that individuals in your organization who write prescriptions, especially for controlled substances, have authority to do so under state law, and that their prescriptive practices satisfy federal and state drug control and controlled substance laws and Medicare/Medicaid requirements.
  • If you are a 340B Covered Entity or Contract Pharmacy, prepare for audit by HRSA or a drug manufacturer.
  • If you or your organization receive funds from a drug manufacturer, prepare for compliance with the Sunshine Law.

Prescription drug compliance involves a complex intersection of several state and federal laws and regulations. For more information about and assistance with making prescription drug compliance a priority for your organization, please contact Dykema Senior Attorney Kathleen A. Reed, R.N. at kreed@dykema.com or 231-348-8134.


As part of our service to you, we regularly compile short reports on new and interesting developments in our business services program. Please recognize that these reports do not constitute legal advice and that we do not attempt t cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments on this newsletter, or any Dykema publication, are always welcome. © 2013 Dykema Gossett PLLC.

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2017 Dykema Gossett PLLC.