Anti-Diversion and Regulatory Compliance Programs
Our specialized team includes nearly 100 individuals, including trained investigators, data analysts, former law enforcement officers, pharmacists, and compliance officers — deployed on site at our pharmaceutical distribution facilities, in the field, and at our corporate headquarters.
Anti-Diversion and Controlled Substances Monitoring and Regulatory Reporting. Our anti- diversion program includes a state-of-the-art, constantly adaptive, rigorous system supported by program specialists who monitor and investigate suspicious orders using advanced analytics and other tools. We operate a strict and uncompromising system to spot, stop, and report to regulators suspicious orders of prescription controlled substances, including opioids. As threats evolve, we are constantly adapting our system to prevent the diversion and misuse of medications. We operate in good faith and our goal is to get it right. Through our program to date, Cardinal Health representatives have conducted hundreds of thousands of site inspections of our pharmacy customers nationwide and thousands of pharmacies have been identified that do not meet our anti- diversion standards, and we refuse to do business with them.
The anti-diversion program involves three main components — “Know Your Customer,” electronic monitoring, and site visits. We use a multi-factor process to evaluate pharmacies before they become customers, including taking steps to understand their business and historical prescription drug ordering patterns. Controlled substance orders pass through our order monitoring system, which tracks orders against statistical benchmarks for signs of potential diversion. If an order is deemed suspicious by our anti-diversion analysts, it is canceled and reported to the U.S. Drug Enforcement Administration (“DEA”) and applicable state regulators. We also have a team of experienced investigators who regularly conduct customer site visits.
The SVP, Supply Chain Integrity oversees these operations, which are organized in reporting groups for investigations, analytics, and customer management (including due diligence and licensing). In addition, the EVP, Quality and Regulatory oversees regular reporting of transaction data to the DEA via the Automation of Reports and Consolidated Orders System (“ARCOS”) and the Controlled Substance Ordering System (“CSOS”) as well as to state regulatory bodies. Both the SVP, Supply Chain Integrity and the EVP, Quality and Regulatory report to the Chief Legal and Compliance Officer.
Policies and Procedures at Pharmaceutical Distribution Centers. We deploy compliance officers at every pharmaceutical distribution center. These individuals provide independent oversight of our distribution operations to ensure adherence to regulations and guidance issued by the DEA, the FDA, the U.S. Department of Transportation, and State Boards of Pharmacy and Departments of Health.
We maintain rigorous policies pertaining to accessing restricted and secured areas; protecting secured data and assets; and overseeing visitor access to our facilities. Among other things, we have thorough policies and procedures designed to cover the storage and handling of controlled substances, including the discovery, investigation, and reporting requirements for controlled substance theft and loss. The compliance officers in our pharmaceutical distribution centers conduct investigations of controlled substance theft and loss, cooperate with law enforcement, and timely report losses to the DEA, as required. The EVP, Quality and Regulatory oversees these operations.