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DEA Audit Pharmacy Lawyer

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DEA Compliance Attorney for Pharmacies

Compliance with state and federal laws and regulations is important for any industry, but it is especially complex and necessary for pharmacies. Pharmacies must follow regulations put in place for businesses, the healthcare industry, and the prescription drug supply chain. It can be complex to comply with these laws, but it is essential to protect public safety and keep a pharmacy safe from civil, administrative, and criminal penalties.

The Drug Enforcement Administration (DEA) is a federal agency tasked with regulating and managing controlled substances, which includes prescription drugs. It is one of the only regulatory agencies with oversight authority of your business that lacks a health care mission.  The DEA focuses on preventing diversion and their regulations often present barriers to the health and safety of your patients.  That creates a unique challenge for you as a health care provider.  The DEA requires any licensed pharmacy, that stores or dispenses controlled substances, to have policies and procedures for the security and storage of these drugs, corresponding responsibility, and delivery of controlled substances to your patients. These laws are outlined in the Controlled Substances Act (CSA), which the DEA enforces through audits, inspections, investigations, and prosecutions.

Why You Need a DEA Audit Pharmacy Attorney

DEA audits are a regular part of a pharmacy’s operations, but even a routine audit can become a civil, criminal, or administrative nightmare if any non-compliance with the CSA is discovered. It’s important to prevent these issues before they happen and defend your pharmacy against investigations conducted by the DEA. An attorney is an important partner during this process.

The attorneys with Boesen & Snow have more than 75 years of combined experience in health care and pharmacy law. We focus on this complex area of law to provide pharmacies with exceptional legal services. Our team has backgrounds in pharmacy management, business audits, and other areas of the health care field. We are qualified to help you comply with and defend your rights during a DEA audit or investigation of your pharmacy.

How Boesen & Snow Can Help

Our attorneys can also review your current policies to uncovered any potential liabilities that may lead an audit or  investigation. DEA audits can occur randomly, from a tip received by the DEA, or from other causes. If you are in the midst of an investigation or an audit, it is essential that you get in contact with a qualified DEA audit pharmacy lawyer. Boesen & Snow is based in Arizona but serves clients nationwide. Our attorneys can represent you in the face of auditors, investigators, other DEA agents, and federal prosecutors.

A DEA investigation is very serious, and even a routine audit could become a serious investigation without the proper legal representation. Let Boesen & Snow help your pharmacy comply with DEA laws and keep your business regulated and profitable. It’s important to understand your rights during a DEA audit. That way, you can avoid penalties or actions against pharmacy or  medical provider registrations. We want to help your business succeed while maintaining the necessary protections for the public and for your business.

What Is a DEA Audit?

When the DEA conducts an audit or inspection, they are checking for compliance with the CSA. A DEA audit includes reviewing the licensure and credentials of pharmacists, pharmacy technicians, and other staff. It also includes reviewing the pharmacy’s policies and their implementation to see if they are effective and comply with the law. Policies need to cover areas such as:

  • Controlled substances are well-secured during receiving and while they are in the pharmacy
  • Prescription drugs are stored and inventoried safely
  • Records are well-kept and accurate
  • Prescription drugs are ordered and dispensed safely and legally
  • There are protections against fraud
  • Corresponding Responsibility

The audit may be of the pharmacy and the pharmacists employed there. If the audit determines that there are unlawful actions or that there is a failure of policy, there may be an investigation. The investigation may result in civil penalties like fines, or it may be a more serious matter resulting in criminal prosecution.

What Will Usually Trigger a DEA Audit?

The DEA audits any business or practitioner who is registered with the agency to process, distribute, prescribe, and dispense controlled substances. The DEA conducts regular audits of  pharmacies and its pharmacists about once every 3 to 5 years. This varies based on several factors, such as the prescriptions that pharmacies handle or any treatment programs they offer and the pharmacy’s geographic location. Although audits may  be less frequent in your area, it’s to a pharmacy’s benefit to be prepared for regular as well as unexpected audits. Outside of these regular audits, an audit may be triggered by:

  • A tip the DEA received about a practitioner or pharmacy
  • Discrepancies between a pharmacy’s prescriptions compared to other pharmacies
  • A random inspection
  • Unusual activity reported to ARCOS by manufacturers or wholesalers
  • Unusual activity reported to the states’ Prescription Drug Monitoring Programs (PMP or PDMP) programs.

Any type of audit can lead to problems for pharmacies if non-compliance or illegal actions are discovered. Any violation of the CSA can result in action against a license and registration. It may even lead to criminal prosecution if the violation is severe.

How Does the DEA Notify a Pharmacy of an Audit?

The DEA is not required to provide a search warrant for its actions to ensure that a pharmacy is compliant with the CSA. This includes audits, inspections, or investigations. In most cases, the DEA provides either a Notice of Inspection or an administrative warrant to inform a pharmacy of an impending audit.  Most of the time the Notice of Inspection is served at the time of an unannounced inspection.

DEA Notice of Inspection

The DEA provides a Notice of Inspection before an audit, also called a DEA Form 82. The form is given to the DEA registrant before the audit or inspection occurs. The notice does not mean that the DEA will immediately begin the audit. The registrant must give informed consent in response to the Notice of Inspection. This is a written statement by the registrant that says:

  1. They have been informed of their right to refuse the administrative inspection.
  2. They know that anything incriminating discovered during the inspection can be used against them in a criminal case.
  3. They voluntarily consent to this.

The audit or inspection can happen once informed consent has been provided. An attorney can help you determine whether it is in your interest to provide informed consent to the DEA for an audit.

However, there are situations where informed consent is not needed for the DEA to perform an audit or inspection of a pharmacy. This includes:

  • Pharmacies, clinics, or practices that are applying for their initial registration with the DEA
  • Record and document inspection through an administrative subpoena that is under the DEA’s power to subpoena
  • When the DEA believes that there is an imminent and present danger to public health or safety and is unable to apply for a warrant

If these do not apply, and the DEA registrant doesn’t provide informed consent, the DEA may instead get an administrative warrant.

DEA Administrative Inspection Warrants

To obtain an administrative search warrant, the DEA has to apply for one with the federal court. An administrative warrant does not require probable cause like a criminal search warrant. The DEA has to explain why it wishes to inspect and the extent of the inspection. These administrative warrants are often granted by a judge. Because it’s common for the DEA to receive an inspection warrant, it may seem unnecessary for a registrant to refuse to provide informed consent. Usually, it provides the registrant time to contact an attorney, or an attorney has advised them to refuse to provide informed consent.

If a pharmacy is presented with an administrative inspection warrant, they are required to comply. If the DEA registrant refuses to comply, they may be arrested and prosecuted. If your pharmacy receives a Notice of Inspection, it’s important to begin working with a pharmacy attorney quickly. Although you may have experienced a DEA audit previously, our attorneys have dealt with them frequently and are well-equipped to protect your rights, your license, and your registration. We can help you understand whether you should provide informed consent or not. Our firm can also ensure that any DEA inspections under an administrative warrant do not go beyond their parameters.

The Scope of DEA Administrative Search Warrants

When the DEA obtains an administrative warrant from the court, they are not allowed to look over every aspect of the pharmacy. It has to provide the court with a list of the documents and information that it wants to inspect and what it wants to seize. Under an administrative warrant, the DEA can interview pharmacy employees and pharmacy owners. It can also look over patient files and records. Your attorney can be sure that these limitations are respected during the inspection.

What Does a DEA Audit or Inspection Look At?

When the DEA conducts an audit, they will be looking for potential violations that fall under DEA authority. They will address certain aspects of the pharmacy, such as:

·   Managing Prescription Drug Inventory

Under the CSA, pharmacies must have a complete inventory of their prescription medications and inventory records for at least the past two years. A pharmacy must readily provide that information to the DEA during an audit or inspection. A pharmacy may face violation penalties if records are not accurate, available, and complete.

·   Packaging, Transfer, and Disposal of Prescription Drugs

There are regulations under the CSA for any transfer of controlled substances. Pharmacies are required to have records that document packaging, transferal, and disposal actions with prescription drugs. It is a violation to fail to follow the CSA guidelines for these actions or fail to document them. A pharmacy that has a third-party disposal of prescription drugs may still be held responsible by the DEA for improper disposal or non-compliance.

·   Preventing Loss and Theft

The DEA requires pharmacies to have security implemented that prevents the loss or theft of controlled substances. Security measures should exist in the pharmacy and when prescription drugs are being transported. Additionally, the pharmacy must have effective methods of reporting and properly informing the DEA of loss or theft. During an audit, the DEA may review both the methods of security and reporting to determine if a pharmacy is complying.

·   Recordkeeping Systems

A pharmacy’s records are incredibly important for a DEA audit. The DEA will need several forms of documentation and records, including those on drug inventories, drug transfer, and drug disposal. In addition, the DEA will review a pharmacy’s internal policy and enforcement of record-keeping. This includes the creation, storing, and maintenance of these records.

·   Monitoring for Prescription Fraud – Corresponding Responsibility

Pharmacies are responsible for preventing prescription drug fraud, just as prescribing physicians are. The DEA will review a pharmacy’s policies to determine that an electronic or physical prescription request is valid. It will also review how the pharmacy addresses potential fraud in either patients or physicians for unnecessary prescriptions. Inadequate policy may result in violations.

·   Ordering Prescription Drugs

A pharmacy has to use the correct form for ordering controlled substances from drug manufacturers, 3rd Party Logistics Providers (3PLs), or wholesalers. This is DEA Form 222, which must be completed correctly along with a pharmacy’s internal record-keeping of ordering and receiving the drug.

In addition to laws enforced by the DEA, a pharmacy must also comply with the Drug Supply Chain Security Act (DSCSA) enforced by the Food and Drug Administration (FDA) and state Boards of Pharmacy. This means that the pharmacy must ensure that the manufacturers and other trading partners (3PLs, wholesalers) that they receive controlled substances from are registered with the appropriate agencies and there is a transaction history that is auditable.

·   Ensuring Proper Dispensing

Under state and federal regulations, a pharmacy has to ensure proper labeling of dispensed medications. There must also be complete and accurate records of drug dispensing. This includes the number of units, the person a unit was dispensed to, and the pharmacist or staff member who dispensed the prescription. A DEA audit may determine that essential information is missing or inaccurate.

·   Preventing Drug Diversion

Pharmacies are responsible for preventing drug diversion when dispensing controlled substances, especially those with a high likelihood of abuse or addiction. The DEA will check for policies and procedures meant to prevent drug diversion.

·   Screening Employees

Pharmacies should run background checks on employees who have access to controlled substances. This includes state and federal checks for criminal convictions, along with determining a history of substance misuse in recent years. The DEA considers this to be a vital aspect of pharmacy security. Pharmacy staff with certain controlled substance criminal convictions are generally prohibited from working in your pharmacy.

What Is One of the Most-Cited Violations During a DEA Audit?

Many of the aspects of a pharmacy that the DEA audit will be reviewing require accurate, complete, and available documentation and recordkeeping. Because of this, violations are frequently found in recordkeeping mistakes and omissions. These errors may be accidents but will likely result in fines for a pharmacy. This is why it’s essential that pharmacies have policies and staff training that ensures that record-keeping regulation is met.

Non-Compliance Reports By the DEA

Following an audit or an inspection, the DEA will determine if there are violations or non-compliance with the CSA. If it finds violations and non-compliance in a pharmacy, it will issue an audit report that explains what issues were found. The DEA may take administrative actions, including revoking the DEA registration of the business or the DEA license of a specific pharmacist or practitioner. The DEA may also refer the case to the Department of Justice (DOJ) for criminal prosecution. If convicted, a DOJ sentence could include a Letter of Admonishment, thousands in fines, or imprisonment.

How Does a DEA Audit Pharmacy Lawyer Help My Pharmacy?

A pharmacy has to comply with several federal and state laws, including the DEA regulations. It can be incredibly complex to follow the legal requirements and statutes of every agency. Additionally, these laws change constantly, making it even more difficult for pharmacies and their owners to effectively run the company.

To comply with and avoid violations during a DEA audit, a pharmacy needs specific and thought-out policies in place. A DEA audit attorney can help you with that. Working with an attorney who has a unique understanding of healthcare and pharmacy law can provide you with the legal guidance you need for all legal and regulatory compliance. This includes DEA and FDA regulations, along with Environmental Protection Agency (EPA) requirements, State Pharmacy Board laws, and other regulatory bodies that apply to pharmacy businesses. This legal guidance and review of your policies limits your business’s risk during DEA audits, PBM audits, and other inspections for compliance. Importantly, it also limits the liability of harm to patients as well as the monetary and reputational damage that it can do to your company.

An attorney can review your pharmacy for liability and weak areas of compliance prior to dealing with a DEA audit. If you have received notice of or a warrant for an audit, an attorney can defend your rights during this process. Your attorney can ensure that you comply with the audit requirements while protecting your rights throughout the entire process of a DEA audit, inspection, or investigation. They can also advocate for your rights during civil or criminal prosecution.

If your pharmacy or a pharmacist employed at your pharmacy is under investigation or prosecution, it can have devastating effects on the reputation and professional life of the employees and the business. The sooner you begin working with a pharmacy lawyer to protect your interests, the more likely it is that they can fight for a positive outcome.

Potential Penalties for Violations of the CSA

If the DEA finds non-compliance during an audit or inspection, or has reason to believe that your pharmacy is non-complying, it could take several actions. These may be against your business, the clinic, or pharmacists. These actions include:

  • Assessing civil or administrative monetary fines
  • DEA raids
  • Criminal charges, prosecution, or imprisonment, sometimes alongside other agencies
  • Probation or limiting the scope of a practice
  • Asking for the voluntary surrender of a DEA registration or permit
  • Suspending a DEA registration until a certain event or for a set amount of time
  • Permanently revoking a DEA registration
  • Suspending a medical license through the state board

Even if a DEA investigation does not result in criminal charges, a provider could still lose their state license. Even fines, one of the less-serious results of a violation, can result in tens of thousands of dollars in fines. If the violations are numerous, this amount can be much worse. This can be a serious hit to your business.

Understanding a DEA Registration Suspension

A DEA registration is a federal license that allows a practitioner to prescribe controlled substances. The registration for a pharmacist is different from the registration required of a pharmacy business. Individual DEA registrations also require the practitioner to be licensed in the state where they are practicing. DEA registrations for both individuals and businesses require timely renewals.

If a DEA audit leads to the suspension or revocation of a business or individual practitioner’s license, it is very serious. This can alter a practitioner’s career and prevent a pharmacy from remaining in business. Unfortunately, not all DEA revocations or suspensions are the result of intentional harm. Often, a pharmacy or a practitioner has made a mistake or failed to fully train their staff. Although it is the responsibility of a pharmacy or practitioner to uphold their duty of care to the public and to follow regulations, a revocation or suspension can impact the entire livelihood of a person or business.

This is why it’s essential to take audits and inspections very seriously and to take the essential steps to protect your business from liability. An attorney can assist with this and protect your rights. The DEA may send a request to voluntarily surrender a DEA registration. This is rarely recommended. An attorney can help you determine if it’s right for your situation, but it’s usually beneficial to have the DEA present a cause for suspending or revoking a registration. An attorney can then fight against these charges in a hearing.

What Are Grounds for a DEA Suspension?

The DEA is allowed to suspend or revoke a pharmacy’s or a practitioner’s registration only if they can show cause to do so. Grounds for suspending a DEA registration include:

  • False information was provided on the DEA registration application.
  • There was a felony conviction that involved controlled substances.
  • They were excluded from Medicare or Medicaid participation.
  • State medical license is suspended or revoked in a minimum of one state.
  • An application for a state medical license was denied.
  • Behavior is against the public interest.
  • They voluntarily surrendered the registration.
  • They pose an imminent threat or danger to public health or safety.

An attorney can ensure that you know your rights, help you protect your registration, and work to keep it in good standing with the DEA.

How Must the DEA Show Cause for a Registration Suspension?

For the DEA to show that it has cause to suspend or revoke a pharmacy’s registration, it must create an Order to Show Cause. This document outlines:

  • The reasons why the DEA is going to suspend or revoke the pharmacy or pharmacist’s registration
  • An order for the DEA registrant to explain why no action should be taken against the registration
  • The registrant’s right to request a hearing to respond to the Order to Show Cause

A response or a request for a hearing must be provided within 30 days of revising the Order. Failing to respond or request within that time will waive the registrant’s right to a hearing.

If you receive an Order to Show Cause, you should contact an attorney immediately. They can help you determine if a hearing is within your interests.

A DEA Registration Show Cause Hearing

A show cause hearing is held in front of a federal administrative law judge. Both the DEA and you will present evidence, interview witnesses, and argue their side of things. Entering this hearing without an attorney is not recommended. You will be facing attorneys who have the resources of the DEA, and it is essential that you are prepared.

The DEA holds the burden of proof in a show cause hearing, but this burden of proof is not as high as that in a criminal case. The standard for the burden of proof in this hearing is a preponderance of the evidence. This means that the DEA has to prove that their version of the story is more likely than it is not.

After the judge hears both arguments, they will make a recommendation. This recommendation is not a final order but instead is presented to the DEA administrator. The administrator makes a decision based on the judge’s recommendation and other factors, including if the registrant has:

  • Complied with local, state, and federal laws and regulations
  • Had prior experience distributing and securing controlled substances
  • Taken necessary precautions to prevent loss or diversion of prescription drugs
  • Been convicted of controlled substance crimes
  • Posed a significant threat to public health

Based on the specifics of your situation, the DEA administrator will determine what action should be taken against your DEA registration. An attorney can help argue your case throughout a hearing and gather essential evidence for the case.

Boesen & Snow: Protecting Your Pharmacy and Your Registration

DEA audits and investigations can have significant consequences. The most effective way to prevent these consequences is to ensure your pharmacy’s compliance prior to a DEA audit. The attorneys with Boesen & Snow can review your policies and help you comply with DEA regulations and other state and federal laws. We have the necessary experience to help you limit liabilities.

We can help your pharmacy adapt to any changing laws so that you can provide your patients with protection and keep your business safe. Let us help you keep your pharmacy safe and you in good standing with the DEA throughout an inspection. Contact Boesen & Snow today.

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