Ethics & Compliance

Overview of Suspicious Order Monitoring

The Controlled Substances Act (CSA), as noted below, requires manufacturers and distributors of controlled substances (sometimes referred to as Registrants) to maintain effective controls against diversion of controlled substances outside of legitimate medical, scientific, and industrial channels. Purdue takes seriously its commitments under these regulations and believes that a robust program of controlled substance ordering analysis, knowing your customer, and knowing your customer’s customer, due diligence, data analysis, and downstream customer reviews will assist in preventing diversion. 

21 CFR 1301.74(b)
The registrant shall design and operate a system to disclose to the registrant suspicious orders of controlled substances. The registrant shall inform the Field Division Office of the Administration in his area of suspicious orders when discovered by the registrant. Suspicious orders include orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.

Purdue Pharma L.P. Suspicious Order Monitoring Program

Analyzing Orders

Purdue Pharma L.P. and its subsidiaries, (including but not limited to Rhodes Pharmaceuticals L.P.) (the Company) have implemented a Suspicious Order Monitoring (SOM) program that is designed to follow the Controlled Substance Act (CSA) and Drug Enforcement Administration (DEA) regulations and guidance. Relying in part on tools provided by an industry-leading third-party vendor, the Company’s Suspicious Order Monitoring Team (SOMT) analyzes Direct Customer orders (i.e., orders that come from wholesalers/distributors) for controlled substances manufactured by the Company. Vendor tools provide insight into Direct Customer orders, based on a refined and targeted algorithm that is adjusted annually. Deployment of this algorithm, against all available data in the SOMT’s possession about Direct Customer orders for controlled substances, allows for a determination of orders that may be of unusual size, frequency, and pattern. When identified, such orders are pended (held) for further investigation. Pended orders are analyzed by the SOMT to determine if an order should be cleared or rejected. In addition, the Company sets thresholds for each Direct Customer. Pended orders above the established threshold are analyzed by the SOMT.  

Based on recommendations made by the Company’s court appointed monitor, all orders that pend – whether based on the algorithm or threshold – are considered “suspicious orders” and thus are reported to the DEA using the DEA’s Suspicious Order Reporting System (SORS). If, after analysis, there is sufficient cause to allow release of an order, it may be cleared by the SOMT. Alternatively, if the order is rejected by the SOMT, it is reported to SORS.  

Know Your Customer

The DEA expects drug manufacturers and wholesalers to “know your customer.” For a pharmaceutical manufacturer, a customer is typically a wholesaler/distributor (a Direct Customer). The SOMT is in regular communication with all the Company’s Direct Customers. As part of this interaction, all Direct Customers must complete annual due diligence questionnaires. In addition, Direct Customers must annually provide copies of their licenses and as well as an overview of their SOM system or controlled substance due diligence program. The SOMT conducts in-person site visits with all Direct Customers on a 3-year rotational basis. Site visits are also conducted outside of the 3-year rotation if circumstances warrant. 

Know Your Customer’s Customer

The DEA’s guidance and regulations state that pharmaceutical manufacturers need to go beyond their Know Your Customer program requirements and use available data to follow DEA’s Know Your Customer’s Customer program in preventing drug diversion. The SOMT implements these requirements by working with our Direct Customers to learn about their customers (e.g., retail pharmacies, hospitals, and other healthcare facilities). 

Customers who purchase from our Direct Customers are known as Downstream Customers. The SOMT works with our Direct Customers to gain a better understanding of a Downstream Customer’s purchasing history by analyzing several data sets provided by our Direct Customers. The SOMT utilizes a proprietary third-party, vendor-based system to assist with the analysis of this data, to offer further insight into Downstream Customer’s activity. If an outlier is found, a due diligence review process is completed on the Downstream Customer. This may include DEA registration verification, review of disciplinary history, and many other factors. The analysis of data sets (e.g., EDI 844 (i.e., chargeback data) & EDI 867 (i.e., bottle count data)) and due diligence reviews provide insight into the Downstream Customer environment and further the Company’s compliance with DEA’s Know Your Customer’s Customer program guidance. The SOMT also uses DEA’s Automated Reports and Consolidated Ordering System (ARCOS) to compare pharmacy ordering patterns to 867 and 844 data.  

After the Downstream Customer analysis is concluded, outliers are reported to both the respective Direct Customers as well as to the DEA. Direct Customers are requested to conduct a due diligence review of the reported Downstream Customers. 

Reporting to DEA

As required by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the SUPPORT Act), reports are made weekly to DEA’s Suspicious Orders Report System (SORS). Reports include all orders that system-pended for further analysis in the prior full calendar week. Orders that have pended, and for which potential concerns cannot be resolved within a seven-day timeline, are rejected and reported to the DEA. In addition, all Downstream Customer outliers are reported to the wholesaler/distributor and to the DEA via SORS.