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Workers' Compensation

Prescription Drug Abuse in America (Part Two) – The “P” Stakeholders

 By Stuart Colburn, Esq.

This is the second part of a three-part series on prescription drug abuse in America. Part One explained “the problem”. Part Two below identifies the “P” stakeholders involved with this epidemic:

  • Pharmaceutical Companies
  • Physicians
  • Pharmacies
  • Payers
  • Patients


A. Pharmaceutical Companies (Manufacturers)

Unlike illegal drug manufacturers, the pharmaceutical industry includes Fortune 500 companies which are well-respected in their communities. Drug makers spend billions in research, development, and testing, and they truly make miracle drugs that save lives. Numerous pain management medications have also improved the quality of life for millions of Americans.

Pharmaceutical companies must make a profit and create value for their shareholders. Like any good capitalist, they must create products people want. To reach their target audience and “hit their number”, they market drugs to their potential customers first using attractive drug reps visiting doctors’ offices and later directly to consumers. Profit motive leads to better drugs, but can also lead to some perversions.

B. Physicians

The entrepreneurial healer & dispenser

Physicians are held in high regard and command significant salaries. Yet, doctors are people and often are influenced by relationships and business opportunities. One study indicated 94% of physicians had a relationship with the pharmaceutical companies. 83% of physicians receive food or drinks in the workplace, and 78% receive drug samples. A lucky 35% receive reimbursement to attend meetings, including continuing medical education, usually at plush resorts. 28% receive payment for consulting, speaking, or enrolling patients in clinical trials.

Physicians are both healers and entrepreneurs. Many in the profession view themselves as more than a provider of medical services to their patients, but rather as business professionals. Prescription drugs are one profit center.

And like any good capitalists, many doctors continually look to expand their profit centers. One company marketed on LinkedIn how doctors’ offices could expand their profit margin by dispensing drugs. Physician dispensing is a hot topic across the nation. Studies show that physician dispensing increases the number of prescriptions and the cost of those prescriptions in the states that allow it. For example, payers reimburse doctors 148% more for ibuprofen in Florida and 464% more for Soma. Louisiana doctors were reimbursed 81% more than a retail pharmacy for ibuprofen and “only” 268% for Soma.

















Closely associated with physician dispensing is repackaging. Repackagers deliver bulk medications to physician offices. The packages are then divided into smaller amounts for dispensing to patients. Drugs are reimbursed at higher amounts per pill. A California study noted 80% of the drugs and costs are prescribed by 20% of the doctors. A new study focused on a breakdown of the top 10%. For example, the top 10% of physicians prescribed 79% of all Schedule 2 opioid prescriptions and 87% of opioid morphine equivalents. Worse, the top 1% of California physicians is responsible for a whopping 33% of all Schedule 2 opioid prescriptions and 41% of all Schedule 2 opioid morphine equivalents.

Pill Mills

The business of some medical providers is supplying pain medications. Some of these providers and businesses have come to be known as “pill mills”. A pill mill is typically a clinic that dispenses a great deal of prescription medications without extensive scrutiny of the patient. They are often listed as pain management clients, weight loss clinics or arthritis clinics.

Pill Mills – What Do They Look Like?

If it looks like a duck….

As a Florida drug czar said, “it may be a pill mill if the medical clinic is located between a tattoo parlor and a pawn shop.”

The Regional Hubs:

  • South Florida

  • Southern California

  • Houston

Signs of Pill Mills

  • No physical exam performed
  • No medical records required
  • No (or very little) medical equipment in office
  • On site pharmacy
  • Patient can select their own medications
  • Large volumes of meds dispensed at clinics
  • Large crowds around clinics
  • Cash only practice

What Kinds of Drugs Do They Prescribe?

  • Houston cocktail – Hydrocodone, Valium and Xanax taken together to result in a heroin-like high
  • Hydrocodone – Synthetic opioid
  • Oxycontin – Synthetic opioid narcotic, developed to be a time-release capsule.  Some crush and snort or smoke for instant high.
  • Soma/Valium – Muscle relaxant/relieves anxiety
  • Xanax – Like Soma/Valium, a benzodiazapene used to treat anxiety and panic disorders

How Often Do They Prescribe Them?

  • From January 2009 to March 2010, one Houston doctor wrote more than 43,000 prescriptions for the Houston Trio
  • 2009: 70% of the 144,000 prescriptions of the Trio were in Houston

C. Pharmacies

Pharmacies make money dispensing pharmaceuticals. But pharmacies have also become victims. More pharmacies report robberies. In fact, there has been an 81% increase in robberies since 2006, resulting in 1.3 million pills stolen. Some robberies have turned lethal. In Long Island, NY, a robber shot the pharmacist, teenage store clerk, and two customers in her pursuit of hydrocodone. An Idaho man dressed in a suit and tie threatened “to light this place up” if not provided oxycontin. Robbers are taking some extreme measures, including squeezing into air-conditioning shafts, using an electric saw to cut off a door know, and in one instance, attempting to break in a Walgreens drive thru window with a crowbar. Some pharmacies are posting signs saying they do not carry oxycontin or oxycodone.

D. Payers

Insurers pay 80% of the nation’s $230 billion drug bill and are therefore the main financiers and enablers of drug diversion.

The Coalition Against Insurance Fraud Speaks…

  • PDA costs insurers $72.5 billion per year
  • Insurance Fraud is the main financier and enabler of drug diversion
  • Affects both health and workers’ comp insurers
  • Insurers pay 80% of nation’s $230 billion drug bills
  • In 2006, almost 1/2 of Aetna’s member fraud investigations involved prescription benefits

E. Patients

Patients are being prescribed and taking more pain medications. More frequent prescriptions and more pills inevitably lead to more addicts. Addicts rob, steal, and lie. Their addiction affects those they love, destroying families. One judge recently explained the cycle: “The addict soon breaks the law and either steals or diverts the drugs to fund the drug habit. Eventually, the addict is arrested for violation of a state or federal law leaving his family to pick up the pieces. Patients do not choose the addiction but the statistics of the lives affected do not lie.” Some patients trust the physician. Others may have ulterior motives. Detoxication programs are not a failsafe cure and are often administered after so many lives are destroyed. They are costly when compared to strategies to stop the addiction from ever taking hold of the patient.

Drug Diversion

Street Value/Abuse Potential of Narcotics

  • MScontin - $75 per pill
  • Dilaudid - $50 per pill
  • Fentanyl Patch - $50
  • Oxycontin - $40 per pill
  • Vicodin - $1 to $4 per pill
  • Soma - $1 to $5 per pill
  • Tylenol #3 - .05 to $1 per pill
  • Xanax - $5 to $7 per pill
  • Valium - $4 to $6 per pill

© Copyright 2011 Stuart Colburn, Esq. All rights reserved. Reprinted with permission.