For the second time in less than 10 years, McKesson Corporation (NSE:MCK) is paying a multimillion dollar fine for not properly monitoring and reporting the sales of controlled substances. Not just any controlled substances, but opioid painkillers that are thought to be linked to heroin addiction. This month, they announced they will be paying the U.S. Government a record $150 million and suspending distribution from facilities in Colorado, Ohio, Michigan, and Florida.
The Department of Justice (DOJ) reported, “McKesson failed to design and implement an effective system” and “did not fully implement and adhere to its own system.” As the statement continues, all the project management standards are there – stalled roll-out, lack of full adoption, and deprioritization of proactive reporting.
As a mother and citizen, I’m shocked and disappointed at this report. As a professional who has spent her career focused on quality systems design and implementation, I read the reports differently. In fact, it reads like so many project steering committee presentations of corporate change initiatives and implementations.
Regulations around controlled substances are really not that much different than the compliance guidelines throughout the pharmaceutical supply chain. The overall sentiment is that a corporation, manufacturing and/or distribution facility, and all the employees within must plan for, demonstrate, and report that they are in a state of control and in compliance with regulations. Whether it’s signing for a package in a warehouse or safely disposing of kilograms of an amphetamine.
That said, working with the Drug Enforcement Agency (DEA) specifically does feel different than other regulatory bodies. And if you’ve ever worked under its regulations, you know what I’m talking about. Unfortunately, the same drugs that are needed to safely control pain, treat attention disorders, or even ease cold symptoms are illegally sold and abused and lead to crime and death in our country and throughout the world. So…the stakes of control are high.
But, the fact remains that these are just regulations. And these are just procedures and systems to keep a company or facility in compliance with them. Easy, right? And if a company cared enough, it would stay in control, right? Unfortunately, no – at least not in my experience.
McKesson definitely cares. Beyond the obvious concern for both the fine and the suspension of handling controlled substances in selected distribution facilities, McKesson actively supports public policy that addresses the real root cause of the problem – addiction.
Where McKesson fell down, seems to be on the most common pitfalls – system design, implementation, and follow-through. This is both aggravating and understandable. It’s also something we can all learn from – and luckily at a safe distance that costs much less than $150 million.
Organizational Design & Efficiency
Controlled substance processes and controls are like other quality systems. They must be thoughtfully designed. Experts in these regulations, as well as diversion prevention, should audit or redesign key processes. This step is obvious and most organizations are investing here. However, are they coupling this investment with an organizational efficiency perspective? In many cases, they are not and it’s to the detriment of process and systems adoption, which is really the only measure of success. If the first set of smart people suggest something too hard to execute, it simply won’t matter because it won’t get done.
Controlled substance processes and controls require effective implementation. Anything half installed, or installed improperly won’t work – at least not well. Working with an implementation and program management team that understands delivery focused on business results is key. It’s not enough to check the “it’s done” box. Implementations are only complete when they are fully adopted. But, project funding isn’t ever limitless, so partnering with a team that knows how to get results through adoption within budget is critical.
Reporting and Monitoring
Controlled substance processes and controls require continuous follow through, improvement, and monitoring. According to the DOJ, McKesson wasn’t able to detect “orders that are unusual in their frequency, size, or other patterns”. This could have been largely avoided as part of the design itself (see Organizational Design & Efficiency above) or as part of a full implementation. However, people interested in drug diversion continue to evolve their techniques. New patterns may need to be identified and flagged. And if your corporation doesn’t find them, the DEA and DOJ have proven they will and they’ll charge you for their work.
As a mother and citizen, I applaud the work of the DEA and DOJ. I also applaud the good intentions and hard work of the entire pharmaceutical supply chain. But, I also believe more can be done. The Center for Disease Control (CDC) estimates that the amount of prescription opioids sold has nearly quadrupled since 1999 along with a quadrupling of the number of deaths involving opioid use. Let’s do more than have good intentions. Let’s build business processes and systems that succeed through thoughtful design, results-focused program delivery, and continuous improvement.
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