DEA Pharmacy Inspections: Are You Prepared to Avoid Federal Charges?
All pharmacies in the United States are subject to the oversight of the U.S. Drug Enforcement Administration (DEA). The DEA is tasked with ensuring pharmacies’ compliance with the Controlled Substances Act (CSA); and, in order to execute this mandate, it has a variety of tools at its disposal. One of these tools is the pharmacy inspection. When conducting an inspection, the DEA is not subject to many of the legal restrictions that apply during audits and investigations. However, if an inspection reveals evidence of opioid diversion or any other form of prescription drug fraud, the inspection can trigger further legal action, and pharmacists, pharmacy owners, and other individuals can still face civil or criminal penalties.
Inspections, Audits, and Investigations: What is the Difference?
In order to ensure pharmacies’ compliance with the Controlled Substances Act, the DEA can collect information through three primary means: inspections, audits, and investigations. This article focuses on inspections. In order to conduct an audit – typically pursuant to DEA Form 82 (Notice of Inspection of Controlled Premises) – the DEA must obtain the pharmacy’s informed consent. In order to conduct a criminal investigation, the DEA must obtain a search warrant prior to entering a pharmacy. Inspections are more akin to audits; and, although they are often viewed as being “routine” in nature, the reality is that they can still present substantial risks for pharmacies and their personnel.
10 Key Facts about DEA Pharmacy Inspections
1. The DEA is Required to Obtain Informed Consent in Order to Conduct an Inspection Without a Warrant.
Similar to an audit, in order to conduct an inspection without a warrant, the DEA is required to obtain informed consent. This consent can be granted by any individual with authority to act on behalf of the pharmacy, though it must be in writing. The informed consent document will stipulate that consent has been granted voluntarily with full knowledge of the right to refuse, and that any evidence obtained during the inspection can be used as evidence in subsequent legal proceedings.
When presented with a request for consent for a DEA inspection, pharmacists and pharmacy owners must weigh their options very carefully. While it may be tempting to grant consent in order to appear helpful and to (hopefully) resolve the matter as quickly as possible, if there is incriminating evidence to be found, pharmacists and pharmacy owners must try to preserve as many defenses as possible. Voluntarily consenting to a search and seizure eliminates a key defense strategy in federal criminal cases. As a result, pharmacists and pharmacy owners should consult with legal counsel before granting their consent.
2. When it Comes to DEA Pharmacy Inspections, Informed Consent is an All-or-Nothing Proposition.
If you decide to grant the DEA consent to conduct an investigation, it is important to understand that this consent is an all-or-nothing proposition. Once you grant the DEA access to your pharmacy, it will have access to all of your pharmacy’s records, files, and personnel. At this point, interfering with the inspection could get you into trouble, and there is no going back if you realize that you have made a mistake in voluntarily consenting to the inspection.
3. If You Refuse to Consent to an Inspection, the DEA Can Still Inspect Your Pharmacy by Obtaining an Administrative Inspection Warrant.
However, refusing to grand your informed consent does not mean that the DEA will simply go away. Even if the DEA does not have the evidence required to establish probable cause for a criminal search warrant, it can still conduct an inspection through the use of an administrative inspection subpoena. These subpoenas do not require probable cause, and yet they are still sufficiently broad to allow DEA agents to examine all aspects of your pharmacy’s prescription drug dispensing and management practices.
4. Being Overly “Cooperative” May Do More Harm than Good.
Many people assume that cooperating with DEA agents during a pharmacy inspection will help them avoid penalties. They assume that they have nothing to worry about; and, on the off chance that an inadvertent mistake comes to light, they will get “credit” for helping the agency with its inspection.
Unfortunately, cooperating with the DEA’s inspection of your pharmacy will often do more harm than good. To be clear, it is not a good idea to interfere with the inspection; however, you do not have to volunteer information either. Let the agents do their job, and let your attorney make sure that nothing about the inspection exposes you or your practice to undue risk of civil or criminal penalties.
5. DEA Inspections Can Target a Variety of Different Controlled Substances Act Violations.
Among the reasons why being overly cooperative can be dangerous is that, in most cases, you will not know what the DEA is looking for. The Controlled Substances Act contains numerous prohibitions, including prohibitions that are both specific and non-specific to pharmaceutical practice. If you voluntarily share information related to an issue that is not currently on the DEA’s radar, this could trigger additional scrutiny and potentially lead to severe penalties.
Common issues targeted in DEA pharmacy inspections include:
- Diversion of opioids and other prescription medications
- Sale of prescription medications
- Overfilling and underfilling of prescriptions
- Refilling prescriptions that have expired
- Medicare, Medicaid, and Tricare billing violations
6. DEA Inspections Can Lead to a Variety of Administrative, Civil, and Criminal Penalties.
Despite the fact that the DEA often (though not always) conducts pharmacy inspections as a matter of routine, as noted above, these inspections still have the potential to lead to lead to severe penalties. First, if the DEA finds evidence that your pharmacy is in violation of the CSA’s registration provisions, the inspection could lead to suspension or revocation of your DEA registration. This would mean the inability to legally carry and dispense prescription medications.
Second, a DEA inspection has the potential to lead to civil charges under the CSA. Certain violations of the CSA can be prosecuted civilly, and a finding of civil liability can result in substantial monetary fines. If other agencies (such as the U.S. Department of Justice (DOJ) or the U.S. Department of Health and Human Services’ Office of Inspector General (OIG)) are involved in the investigation as well, then a DEA inspection could lead to a much broader civil investigation targeting allegations of Medicare fraud and other offenses.
Third, DEA inspections also have the potential to lead to criminal prosecution. Criminal violations of the CSA (such as opioid diversion) carry substantial fines and long-term federal imprisonment.
7. DEA Pharmacy Inspections Can Also Lead to Disciplinary Action by a Pharmacist’s State Licensing Board.
In addition to federal action, DEA pharmacy inspections can also trigger disciplinary action by a pharmacist’s state licensing board. If a pharmacy is found to have engaged in CSA violations, all pharmacists working for the pharmacy will potentially be at risk for having their licenses suspended or revoked. Furthermore, since the standards for federal liability and state ethics compliance vary, even if an inspection does not lead to administrative, civil, or criminal penalties, it could still create issues at the state licensing board level.
8. An Effective CSA Compliance Program Can Provide a Strong Defense to Liability.
Although pharmacists and pharmacy owners must be careful to avoid being overly cooperative during DEA inspections – particularly when they are unaware of the specific issues being targeted – affirmatively demonstrating adherence to an effective CSA compliance program can provide a strong defense to liability in some cases. If your pharmacy has a compliance program, you will want to speak with your defense attorney about how (and if) to use it during the DEA’s inspection.
9. Known Issues Should Be Addressed Proactively in Order to Mitigate the Risk of Federal Prosecution.
If you are aware of potential CSA violations at your pharmacy (or if you are aware of Medicare, Medicaid, or Tricare billing violations that could also come to light), this is something you will need to discuss with your defense attorney as well. This is a matter that needs to be approached cautiously; and, depending on the nature and severity of the issue, there are a variety of defense tactics you may need to deploy during your pharmacy’s DEA inspection.
10. Hiring Experienced Defense Counsel Can Greatly Reduce Your Risk During a DEA Pharmacy Inspection.
Regardless of the circumstances at hand, when facing a DEA pharmacy inspection, hiring experienced defense counsel can greatly reduce your risk of federal and state penalties. At Oberheiden, P.C., our attorneys have centuries of combined experience in DEA matters, and we have successfully represented pharmacists, pharmacy owners, and other healthcare clients at all stages of federal inquiry. If you have been contacted by the DEA, we can help you, and we encourage you to contact us promptly for a free and confidential case assessment.
Speak with a Federal Defense Lawyer about Your DEA Pharmacy Inspection
To speak with a member of our federal defense team about your DEA pharmacy inspection, please call 888-680-1745 or contact us online. We will arrange for you to speak with one of our senior federal defense lawyers as soon as possible.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.