What the ARCOS Data Won’t Tell You

July 24, 2019

Any discussion about ARCOS data must take into account the overall evolution of the prescription opioid epidemic and the complexity of the pharmaceutical supply chain.

Distributors report every sale of opioid medications to the DEA for inclusion in its ARCOS database.

Distributors report sales of Schedule I, II and some III opioid-based medications to the Drug Enforcement Administration (DEA) for its database, known as the Automation of Reports and Consolidated Orders System (ARCOS). ARCOS collects data around the flow of opioid controlled substances from the point of manufacturing through commercial distribution to delivery to DEA- and state-registered pharmacies, hospitals and other healthcare providers.

ARCOS data is available to be analyzed and could have been used by the DEA to proactively identify pharmacies that the regulators believed had suspicious ordering patterns and thus required investigation. However, a recent House Energy & Commerce report found that the DEA “did not proactively use ARCOS data to investigate diversion trends.”

Distributors report thousands of suspicious orders to the DEA for its ARCOS database.

In addition to reporting every sale of Schedule I, II and some III medications to the DEA through ARCOS, distributors also report thousands of suspicious orders to the DEA and some state regulators. However, the House Energy & Commerce report found that although distributors were reporting suspicious orders, the “local DEA offices held varying regulatory interpretations, resulting in inconsistent handling of the reports.”

Distributors have repeatedly asked the DEA for ARCOS data to aid anti-diversion efforts.

For years, the Healthcare Distribution Alliance (HDA) and its members have consistently asked for greater insight and transparency related to ARCOS data as a necessary step toward improving monitoring and coordination with the DEA. Only recently has DEA, in step with the Department of Justice (DOJ), outlined new guidelines to make ARCOS data more accessible and transparent to distributors and other entities in the supply chain. Additionally, Congress enacted legislation in 2018 with the goal of expanding distributors’ access to critical information including DEA’s ARCOS database, helping individual companies have a better understanding of the full scope of the distributions received by pharmacies and oher healthcare facilities across the country.

Distributors support policies that would improve coordination and monitoring across the supply chain. 

HDA and its pharmaceutical distributor members supported federal legislation to help strengthen and improve communication between the industry and the DEA, as well as other state and federal regulators and law enforcement. This legislation, enacted into law in 2018, is designed to enhance data sharing and increase coordination between distributors and the DEA. The goal of Congress was to expand distributors’ access to critical information including the DEA’s ARCOS database, helping individual companies have a better understanding of the full scope of the distributions received by licensed pharmacies and other healthcare facilities across the country.

This law also called for the establishment of a centralized suspicious orders database, which will provide a more streamlined and uniform reporting mechanism for submitting suspicious order reports to the DEA. A comprehensive database that is operated by the DEA, along with the data DEA is required to share with state and local partners, will help federal and state entities identify trends that indicate that a pharmacy or other dispenser should no longer be permitted to handle controlled substances.

Our industry is eager to act on these new opportunities to collaborate with the DEA and state regulators, so that we can be even more effective in supporting law enforcement efforts. Additionally, we have put forward a number of policy solutions that will meaningfully address this public health crisis.

In addition to the above ARCOS information, here are several other important facts: 

Every opioid prescription that a distributor delivers started with a doctor’s clinical recommendation and prescription pad. 

All pharmacy orders start with a prescription from state and federally registered physicians. Distributors do not prescribe opioids or have any influence on a physician’s clinical decision-making. Distributors provide the logistics support to help make sure medicines prescribed by state and federally registered physicians get to the licensed hospital, pharmacy or other healthcare facility safely, securely and reliably.

U.S. doctors prescribe opioids to tens of millions of Americans each year.

More Americans suffer from chronic pain than those living with diabetes, heart disease and cancer combined. Opioid prescribing in the U.S. peaked in 2010, with providers writing 81.2 prescriptions per 100 persons, according to the Centers for Disease Control and Prevention (CDC). While the number of prescriptions has dropped since then, recent government data estimate that close to 92 million people (38 percent of the U.S. population) used prescription opioids in 2014–2015.

DEA determines the amount of prescription opioids that can be manufactured each year.

Following a shift in medical practice to treat pain more aggressively, billions of opioid prescriptions were written between 2006 and 2014. In response, the DEA reacted to the demand in opioid prescriptions by increasing production quotas to account for what the agency judged to be the legitimate medical needs of the U.S. population.

During the height of the opioid epidemic, the DEA approved year-over-year increases in opioid production. In fact, between 1993 and 2015, the DEA approved a 39-fold increase of oxycodone and a 12-fold increase of hydrocodone to meet what it believed were legitimate medical needs based on the year-over-year increases in the numbers of prescriptions doctors were writing for opioids.

Distributors support the DOJ’s calls to evaluate potential changes to the annual production quotas for opioids. 

DEA has exclusive insight into nearly every entities in the pharmaceutical supply chain.

The DEA as well as state regulatory entities (e.g., state pharmacy agency or board) oversee and regulate the pharmaceutical supply chain. Each entity in the supply chain that handles these medicines, including prescribers, dispensers, manufacturers and distributors, is a registrant of the DEA and states agencies.

Distributors are not law enforcement entities.

Distributors have no law enforcement power. Unlike the DEA, distributors have no authority to stop physicians from writing prescriptions for medication, nor can they take unilateral action to halt pharmacies’ ability to dispense medication. In some instances, distributors have terminated shipments of controlled substances to pharmacies only to face judicial orders forcing the distributor to continue shipping. The ultimate responsibility and enforcement power in controlling the supply and demand of opioids in the market rests with the DEA.

Distributors manage logistics; they do not manufacture, prescribe or promote medicines.

Distributors’ primary role is logistics, providing safe and timely delivery of prescription medicines. Distributors do not manufacture, prescribe or promote opioids to doctors or patients, nor are distributors in the position to police the practice of medicine. The ultimate responsibility and enforcement power in controlling the supply and demand of opioids in the market rests with the DEA.

Distributors sustain a complex pharmaceutical supply chain, delivering medicines safely, reliably and efficiently to hospitals, pharmacies or other healthcare providers.

Distributors continuously monitor, protect and enhance the security of the pharmaceutical supply chain to ensure medicines are properly and securely handled, stored and delivered.

As healthcare logistics experts, distributors deliver medications ordered by pharmacies based on prescriptions written by registered physicians or healthcare providers. Distributors review its customers and their orders and only fulfill requests that come from registered and approved pharmacists and providers. Distributors also deploy state-of-the-art security procedures that ensure that every order is safely and securely delivered to hospitals, pharmacies or other healthcare providers.

Distributors are committed to working with the healthcare community and policymakers on solutions to address the prescription opioid abuse epidemic.

HDA and its members are committed to stopping opioid abuse and misuse before it occurs through investments in information technology and state-of-the-art monitoring tools to prevent diversion, initiatives to provide education and awareness to consumers and practical policy solutions to address prescription opioid abuse and misuse.