Inventory Nightmare: Hydrocodone/APAP as a CII

Friday the Drug Enforcement Administration (DEA) announced that effective October 6, 2014, all hydrocodone combination products (HCPs) will move from Schedule III to Schedule II.  hydrocodone-WATSON4It may not seem like a big deal for those outside of pharmacy, but anyone who is currently involved in pharmacy operations knows that this change will have a major impact on the daily activities for most pharmacies.  I do not dispute that HCPs are addictive and the potential for diversion is high.  The move from CIII to CII may help reduce the number of tablets being sold illegally.  I understand the DEA’s perspective, but I would like to discuss a few things retail pharmacists on the front lines will have to deal with.  Today’s post I’m going to focus solely on the inventory perspective regarding this rescheduling.

Volume

According to the IMS Institute, the combination of hydrocodone and acetaminophen is the most popular prescription drug in the United States for all disease states.  Not just the top pain reliever, the top drug…period.  The second pharmacy I managed in Louisville, Kentucky dispensed over 20,000 tablets each month of hydrocodone/APAP 10/500 alone.  When you think about it, that is more than a 500-count bottle of tablets each day.  One of the biggest challenges with HCPs becoming a CII for pharmacies will be the sheer number of prescriptions this will impact.

Exact Count

The Code of Federal Regulations has specific inventory requirements for controlled substances.  A major inventory difference between a Schedule II and a Schedule III-V in the eyes of the DEA is that pharmacies must maintain an “exact count” on all CII’s while they are allowed to estimate the counts on CIII-V products.  In practice, pharmacies keep a perpetual inventory log for CII’s, documenting all ins and outs for each product.  After a pharmacy dispenses a CII product, a pharmacist or technician will “back count” the remaining pills in the stock bottle as a double-check that the perpetual log is accurate.  This process makes stocking 500ct bottles more trouble than they are worth in per-unit savings.

Ordering

DEA Form 222 Sample

DEA Form 222 Sample

Pharmacies wishing to stock Schedule I or II products must jump through additional hoops using an electronic Controlled Substance Ordering System (CSOS) or manually fill out a DEA Form 222.  These ordering requirements are explained in detail in Section 1305 of the Code of Federal Regulations.  As a former pharmacy manager, this was one of the most tedious processes around controlled substances.  I do not envy anyone using DEA Form 222’s once HCPs go to CII.

If you are on the front lines…

Try to measure how this impacts your business and operational efficiency.  The “Cost to Dispense” in a typical retail pharmacy can be anywhere from $6-12 per prescription depending on several variables.  This cost does not include the cost of the drug itself.  The additional labor and inventory issues with HCPs may have an impact on the per unit cost of every prescription in the pharmacy.  While the more stringent regulations on HCPs may be good for law enforcement, will it have an impact on the overall costs of healthcare for everyone else?

To the physicians…

Please understand that we are in this together.  The pharmacists in the field that will soon flood your office with refill requests for HCPs on behalf of the patients standing at the counter are not happy about this either.  I may write an article that addresses the additional burdens on the prescriber because I think the administrative time required to handle HCPs alone will change how many prescribers practice.

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Joey
Joey Mattingly, PharmD, MBA is an assistant professor at the University of Maryland School of Pharmacy located in Baltimore, Maryland. Joey has managed retail and long-term care pharmacy operations in Kentucky, Illinois and Indiana. Leading Over The Counter is a blog of Joey's views and opinions on the topics of pharmacy leadership and management and do not represent the University of Maryland, Baltimore. Joey can be followed on Twitter @joeymattingly.

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