A New Standard For Suspicious Order Monitoring

Law360, August 21, 2017

In the Law360 article “A New Standard For Suspicious Order Monitoring,” Managing Principals Crystal Pike and Kenneth Weinstein and Vice President Nicholas Van Niel examine the potential implications of the recent court ruling upholding the U.S. Drug Enforcement Agency's (DEA's) revocation of Masters Pharmaceutical's controlled substance license as it relates to the analysis of data in complying with the “Suspicious Order Monitoring (SOM) requirement.” The DEA's recent enforcement decisions demonstrate that they expect a heightened level of compliance throughout the entire prescription opioid distribution chain, despite the lack of concrete underlying guidance for the rule-making. This raises questions about what actions distributors should take to manage risk.

Under the SOM requirement, any DEA-registered entity distributing opioids or other controlled substances must develop and use a system to identify and disclose suspicious orders of controlled substances. Distributors often use an algorithm to evaluate the order data they receive, so that they can permit legitimate orders that meet patient needs while also blocking suspicious orders (defined in the Controlled Substances Act as “orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency”). However, no algorithm or review process can be guaranteed to distinguish legitimate from illegitimate activity with perfect accuracy, and the cost of imprecision is high. While increased consistency and prediction accuracy are critical to this process, both require constant improvement and the latter requires important tradeoffs. Based on their experience building SOM models and anti-diversion analytics across the industry, the authors discuss principles to help manage risk in contexts that rely on a sound combination of statistics and judgment. 

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Pike C, Weinstein KVan Niel N