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Carlos Aquino, founder and president of PharmaDiversion LLC, talks about what happens to a pharmacy if it is found to be out of compliance with DEA regulations or federal statutes.

Healthcare IT security: you have a bad reputation. When it gets down to healthcare there’s always a little chuckle about how bad they are…This year was among the worst in cybersecurity across the healthcare sector…On average, companies that got breached did not know it for 270 days and some had even been breached for seven years without knowing it…that two-thirds of those entities did not even discover the breach internally; it was pointed out to them, either by someone outside the organization or by the federal government...As bad as breaches are, however, there are other worse threats emerging that hospital CIOs, CISOs and IT departments should understand and prepare for.

1. Ransomware
2. DDoS (Distributed Denial of Services)
3. Wiper attacks
4. Intellectual property theft
5. Straight theft of money
6. Data manipulation
7. Data destruction

Bradley Bender, Southampton Town Councilman, pleaded guilty today to conspiring to illegally distribute oxycodone…Bender received phony prescriptions for oxycodone from a Riverhead physician assistant, Michael Troyan, filled those prescriptions, and illegally exchanged the oxycodone pills for cash and steroids with another co-conspirator. The oxycodone pills were then re-sold to drug abusers…“Councilman Bender’s actions in this oxycodone distribution conspiracy victimized the very community he was entrusted to represent…guilty plea should serve as a reminder that no one is above the law, including those entrusted with passing our laws.”

A group of San Diego, California, pharmacies and their owners have paid $750,000 to the federal government to resolve drug diversion claims…pharmacies had been accused of mishandling prescription narcotics and ephedrine/pseudoephedrine products…The settlement was with Park Medical Pharmacy Inc…and owners Joseph Grasela and John Grasela…Drug Enforcement Administration alleged that the pharmacies had violated the Controlled Substances Act by diverting a “significant” amount of controlled substances, not taking adequate inventory of controlled substances, and not maintaining records of the pharmacies’ distribution of products.

Here’s a chance to lock up some savings…The high cost of hepatitis C drugs may be straining budgets nationwide, but the country can save money if prison inmates are screened and treated for the disease… researchers determined that treatment could lower infection among both prisoners and society…If more inmates are treated, the disease would be less likely to spread within prisons, where an estimated 17 percent of the population is already infected. Beyond that, hepatitis C would be less likely to spread in the wider population once inmates are released. About 1 percent of the general US population is believed to have hepatitis C…screening and treatment would require an added 12.4 percent increase in the health care budgets of state and federal prisons during the first year such an effort is undertaken. But that would eventually decline to an annual budget increase of less than 0.7 percent after 15 years…prices have prompted many public and private payers to restrict access to treatment…a...class action lawsuit was filed earlier this year by two inmates in Massachusetts state prisons for failing to provide hepatitis C treatment to most infected prisoners…

Lahey Hospital and Medical Center has agreed to pay $850,000 in a settlement with HHS' Office for Civil Rights to resolve alleged privacy and security violations stemming from the theft of a laptop computer with unencrypted patient records…health system also entered into a corrective action plan to address other privacy and security issues raised during the breach investigation. Lahey “impermissibly disclosed” electronic medical records of 599 individuals “for a purpose not permitted by the privacy rule” under the Health Insurance Portability and Accountability Act…Lahey had failed to meet a number of other HIPAA requirements, including not conducting “an accurate and thorough” security risk analysis, failing to assign “a unique username for identifying and tracking user identity” on the stolen computer and failing to “implement a mechanism to record and examine activity” on the computer.

Last month, Novartis disclosed that it received a warning letter from the Food and Drug Administration about manufacturing issues at two facilities in India that are operated by its Sandoz generic drug unit…At the time, the company noted it was working closely with the FDA to resolve the problems. But Novartis never actually specified what bothered the agency. Now, the warning letter has been posted on the FDA website, and the infractions are concerning, especially given that the plants are run by one of the world’s largest suppliers of generic medicines…The disclosure comes amid ongoing FDA scrutiny of overseas manufacturing plants, particularly in India, where a string of drug makers has failed inspections and had products banned from the US. The Indian pharmaceutical industry is furious that the agency appears to be singling out its ranks for infractions; however the Sandoz letter indicates the FDA is not confining its reviews to India’s domestic drug makers…A key issue that alarmed the agency during its August 2014 inspections was the integrity of the data Sandoz was collecting…“Backdating … records is unacceptable,” the FDA wrote in its Oct. 22 warning letter. The agency also expressed concern that Sandoz failed to demonstrate the extent to which such practices may be widespread and — this is significant — whether previous data is even reliable.

The antitrust division of the U.S. Department of Justice has subpoenaed Mylan N.V. for information relating to the marketing, pricing and sale of its generic doxycycline antibiotic products…Department of Justice has sought information on any communication with competitors about the anti-bacterial products, the company said in a regulatory filing, adding it would cooperate with the federal agency…drugmakers have been under increased pressure this year from the government, insurers and corporations over steep increases in the prices of generic drugs, which have dragged on shares in the sector… There are many forms of doxycyline made by more than a dozen companies, including Valeant Pharmaceuticals International, Allergan, and Hikma Pharmaceuticals, according to the U.S. Food & Drug Administration's database.

…ex-CFO (James Canedo ) of the now-defunct Pacific Hospital in Long Beach, Calif., was among those who recently reached a plea agreement with prosecutors for his involvement in a fraud scheme that generated $580 million in false billings…The 15-year-long fraud scheme involved…submitting bills to workers' compensation insurers and the U.S. Department of Labor for spinal surgeries. The surgeries were performed on patients who had been referred by dozens of physicians, chiropractors and others who were paid illegal kickbacks…More than $580 million in bills were fraudulently submitted by Pacific Hospital during the last eight years of the scheme alone. [California Pharmacy Management and its successor, Industrial Pharmacy Management, were also important players in the scheme. Both companies set up and managed what were essentially mini-pharmacies within doctors’ offices.]

..FBI…announced a $390 million settlement against NOVARTIS...in a civil fraud lawsuit based on claims that NOVARTIS gave kickbacks to specialty pharmacies in return for recommending two of its drugs, Exjade (deferasirox) and Myfortic (mycophenolic acid)…two specialty pharmacies, Bioscrip, Inc. and Accredo Health Group, agreed to pay a total of $75 million to resolve federal and state claims against them based on the same allegations...today’s settlement, the federal and state governments will recover $465 million in total based on the kickback allegations in this lawsuit…a whistleblower, and asserted that NOVARTIS violated the False Claims Act and the Anti-Kickback Statute…by giving kickbacks to specialty pharmacies in return for recommending Exjade…and Myfortic…With respect to Exjade, the Government alleged that NOVARTIS gave kickbacks in the form of patient referrals and rebates to Bioscrip and Accredo to induce those pharmacies to recommend Exjade refills…the Government alleged that, to increase Exjade sales, Novartis incentivized and pressured the pharmacies to emphasize Exjade’s benefits to patients while understating the drug’s serious, potentially life-threatening, side effects. With respect to Myfortic, the Government alleged that NOVARTIS gave rebate contracts to specialty pharmacies to induce the pharmacies to recommend to doctors that they switch patients to Myfortic from competitor drugs.