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Major Drug Distribution Company Criminally Charged – What Does This Mean?

News broke late April about Rochester Drug Co-Operative, and its former chief executive and another top executive being criminally charged with conspiracy to violate narcotics laws, conspiracy to defraud the U.S., and willfully failing to file suspicious order reports. The major drug company criminally charged is being investigated further in New York.

What we know:

  • Both former executives face life in prison for failing to file suspicious order with the Drug Enforcement Administration.
  • This prosecution is the first of its kind – that is, “executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking (and) trafficking the same drugs that are fueling the opioid epidemic.”*
  • Between 2012 and 2016 the drug company was accused of distributing tens of millions of doses of oxycodone, fentanyl and other opioids that their own compliance department flagged for the pharmacies having no legitimate need for them.
  • Prosecutors said what lead to this was practitioners working for the company acted outside of the scope of their medical practices, which they are now under investigation for.
  • The drug company purposely hid the red flags from the DEA to prevent pharmacy investigations and from potentially losing clients.
  • The company identified more than 8,000 potential orders of interest, either by size, frequency or pattern, however only one was reported.
  • During this 4-year period, RDC’s oxycodone sales grew from 4.7 million to 42.2 million, and fentanyl sales grew from 63,000 to 1.3 million.
  • Due to the growth, the former chief executive’s compensation rose to $1.5 million a year.
  • A spokesperson for RDC said the major downfall leading to these charges was not having adequate systems in place nor were their compliance team and practices rigorous enough to provide controls and oversight over the increased demand for narcotic drugs.

So now what?

Many times we see others thinking they’ll be the next drug company criminally charged because they don’t understand the regulations put in place by the DEA. And often, we see many smaller manufacturer, distributor and other pharmaceutical companies who don’t have the resources for a robust compliance team. So, what can keep companies on track is a robust software that monitors and tracks order data, and immediately reports anything marked suspicious. Not allowing any orders to slip by, or only having one person manage the system. If an order was flagged in an SOM software, it would have immediately been suspended from fulfillment and someone would have to go in, approve, adjust or completely reject the order, leaving an explanation as to why. They also would have been able to utilize previous order data from the permanent repository to gauge past, present and future orders to help make safe operating decisions.

Lately, so many investigations and compliance issues are due to human-error or lack of clear step-by-step protocols to follow when issues like this arise. This can be reduced when multiple users have access to the “order of interest” software workflow.

“Software that can help pharmaceutical companies identify, locate, suspend and investigate orders of interest in an easy-to-use environment is a key component to staying off of the DEA’s radar,” says e-SupplyLink CEO, Todd LaBonte. “DEA regulations can be an intimidating field to maneuver alone and, even more, a costly industry if operating without safety precautions.”

We have been helping companies operate safely within the scope of DEA regulations for more than 10 years. Our solution gives our clients the ability to select which administrators have access to the dashboard so profit doesn’t get ahead of ethics and safety. Having a robust software with customization capabilities would have protected this manufacturer. SOM software is all about supporting the compliance team or individual and giving them the control. We’ve worked with several users to understand their needs and worries, and apply order testing based on those discussions. We make order processing a team effort and ensure everyone using SOMLink is fully trained to maximize the investment. SOMLink has proven to be universally applicable, yet locally adaptable and continues to be a reliable source for identify orders of interest.

 

Keep reading: Pharmaceutical Ethics – Where Modern Day Practices Stand.

 

*Read the full NBC investigation article here.

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e-SupplyLink and Boomi Form Strategic Integration Partnership

Supply chain technology company forms strategic partnership with leading integration software company.

TRAVERSE CITY, Mich., – Supply chain technology provider, e-SupplyLink, announces their strategic partnership with Dell Boomi (Boomi) to bring a complete third-party integration service to clients.

e-SupplyLink is celebrating its 20-year anniversary in the supply chain industry and has made third-party software integration a top priority. Our integration services allow us to produce translations faster, reduce data entry expenses and automate data/order entries. We connect our clients’ existing EDI translators and ERP systems to our software to ensure a smooth and successful installation.

Boomi, an extension of Dell, is known for connecting all aspects of business together with their Integration Platform as a Service, allowing companies to focus on growth.  They help people, processes, applications, data and devices all work together to gain a complete understanding of customers and engage them across any channel, device, or platform.

“At Boomi, it is our mission to quickly and easily unite everything in a clients’ digital ecosystem and speed the flow of information, interactions and innovations so better business outcomes can be achieved faster,” said Dave Tavolaro, VP of Global Business Development, Boomi. “Our platform provides data and application integration, and workflow solutions with built-in intelligence and expert support that helps organizations of all sizes. This partnership with e-SupplyLink will enable businesses to focus on evolution and ultimately increase their revenue.”

Together, e-SupplyLink and Boomi raise integration to the next level. Boomi connects our customers to their trading partners, and acts as the central hub for all application integration. e-SupplyLink connects their shipping solution software with Boomi to bring clients a complete package offering.

“We are proud to be an authorized OEM provider and system integrator with Boomi,” says e-SupplyLink CEO Todd LaBonte. “Our software easily integrates into Boomi’s platform and allows us to connect businesses’ order applications to ensure smoother communication between systems.”

Boomi expedites the way we connect our software with our customers’ applications. Our close partnership with them allows us to work with their product and engineering teams to bring value-added solutions to our clients..

hospitals changing practices

Hospitals Changing Practices To Curb Opioid Epidemic

We read an article from the American College of Physicians website talking about hospitals changing practices for their day-to-day routines. It was an interesting read for sure and we were left with a few thoughts we wanted to share.

 

The gist: Due to the ongoing opioid crisis and rise in the diversion of prescription narcotics, many hospitals are changing practices and protocols to reduce the amount of opioids they distribute to patients. A survey from Vizient in October 2018 shows the most common changes made are prescriber education, implementing new technologies to monitor prescribing and alternative therapies for acute pain management. Also, for any opioids that are prescribed, they are being cut significantly in length, hoping shorter timeframes for these prescriptions reduces the risk of them falling into the wrong hands.

 

Our five key takeaways/thoughts:

  1. We think these steps, while not ideal, are a logical step for ending the diversion of illegal narcotics. Too many times opioids fall into the hands of pill mills and other black markets to continue allowing “free-range” prescribing.
  2. Our big question is how will limiting prescriptions be enforced among doctors? As far as DEA regulatory statutes, there is nothing in there about doctors and their involvement with opioids, and there are multiple sides to this making it difficult to monitor doctors. How can this be generalized across the board? Hospitalists have many different specialties, and the number of prescriptions a cancer specialist writes will be vastly different from a hospitalists who specializes in family practice.
  3. We don’t think taking these narcotics off the line is a reasonable solution. They were created out of need and people rely on them in order to be a functioning member of society. We don’t want doctors and hospitalists to think they need to stop prescribing opioids all together. It’s their job to help their patients, and it’s our jobs to provide tools to make that happen. So when it comes to employing technology to monitor prescriptions, it does all the tracking and allows medical professionals to focus on caring for patients.
  4. Alternative therapies for pain management can be beneficial, however most patients don’t explore those avenues due to insurance. Alternatives can include physical therapy, yoga, or acupuncture, but aren’t covered under a basic healthcare plan, leading to opioids being the “affordable” option. This is an insurance issue, and until it gets resolved and adapted, the number of opioid prescriptions won’t be decreasing any time soon.
  5. And Finally, technology can be the difference for getting off the DEA’s radar. When you implement a software solution that tracks orders, compares them to a historical archive, approves or denies them and then fulfills them, you are demonstrating due diligence for scouting out potential orders of interest.

 

Do you agree with our thoughts? Let us know in the comments below.

Sears Holdings Fighting Bankruptcy

Sears Holdings Trying To Restructure To Avoid Bankruptcy

It’s no surprise to hear Sears Holdings is doing everything in their power to avoid going under. Recently they’ve closed low-performing stores, and invested more time and money into higher-achieving establishments as a reactive measure. However the CEO Eddie Lampert is making the biggest push yet to restructure the company to avoid going bankrupt. Lampert has been trimming costs to keep debt at bay and the company afloat. If Sears Holdings fails to cut costs, they will be starring at a $134 million payment on Oct. 15.  Lampert has been working close with ESL Investments – their hedge fund – to work restructure liabilities. If this works, the board could sell off $1.75 billion in assets and remain only $1.24 billion in debt. This would reduce their debt by almost 80 percent. That and on top of selling $1.5 billion worth of property for former retail locations, to generate liquidity to pay off more debt.

A significant restructuring tactic is Sears selling the Kenmore appliance brand and Craftsman. But will this be enough to lower debt, keep customers happy and allow Sears to climb out of their debt? This may be a way just to delay the inevitable, however per our last posting – E-commerce Comes Back To Help Brick And Mortar – there are lessons to learn from the e-commerce leaders. If Sears Holdings adopts the instant gratification model and creates hassle-free experiences online shopping involves, they could potentially see an increase in traffic.

It is unclear whether Sears’s debtholders will continue to support these efforts, or if they will recommend the company close its doors.

Read the full CNBC article here.

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Here We Go Again – Sears Holdings Closing More Stores

The trend continues – Sears Holdings announced that they will close 46 more stores by November. Of those stores, 33 are Sears and 13 are Kmart. This announcement follows the news in June that the company was already planning on liquidating almost 100 other stores. Liquidation sales for these stores will begin the week of Aug. 27.

The company stated they will continue to evaluate their network of stores and make further adjustments as needed. Sears has been continually trimming its real estate footprint as sales dwindle and shoppers turn more to online shopping opportunities. Their stock has dropped 85 percent the last year and they are in the midst of evaluating a bid from Lampert’s to buy the Kenmore appliance brand for $400 million. That’s more than triple the price of Sears current market cap.

Read more on Sears Holdings and get a full list of the stores closing here.

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Sears Closing 72 Stores in the Near Future

Sears Holdings announced this week that they have identified one hundred additional stores that continue to be unprofitable. Representatives of the company say they are not liquidating just for the sake of liquidating, instead their plan is to get capital in order to fulfill pensions for their employees. The department store chain has found themselves in a constant cycle of closing low performing stores to reduce costs. But even as expenses were cut, sales continued to fall further.

At the end of the first quarter, Sears and Kmart had 894 stores operating. That’s 381 fewer than it had a year ago. In January 2018 the company announced the closing of 64 Kmart stores and 39 Sears stores. Some locations are even being auctioned off online.

CEO of Sears Holdings said they’re not erring on the side of “this store might work,” however instead of investing the time and money, they’re staying on the cautious side.

To read the full CNBC story, click here.

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DEA and States Share Prescription Drug Information to Combat Opioid Abuse

The Drug Enforcement Administration and attorneys general from 46 states, the District of Columbia and Puerto Rico will now share prescription drug information with one another to help with criminal investigations tied to opioids. The DEA will provide data from its Automation of Reports and Consolidated Order Systems, which collects 80 million transaction reports annually, and the attorneys general will provide the DEA information from their state-run prescription drug monitoring programs. Better information means better decisions . That means the 48 attorneys general and DEA can prosecute the criminals who are contributing to our national drug emergency… Keep Reading.

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Bon-Ton Announces the Closing of all Department Stores

The Bon-Ton Stores, a chain of department stores that trace its origins to 1854, applied for Chapter 11 bankruptcy protection in February, but failed to find a buyer. With a significant geographic operating footprint and operating presence, the store is dependent on traffic. “Foot traffic” for stores has decreased as customers shift increasingly toward online retailers,” said the company. The company says big retailers like JCPenny, Kohl’s and Macy’s are squeezing them out.  Bon-Ton is the parent company of Younkers, Carson’s and more. The stores will hold liquidation sales until late July.  Keep Reading…