Follow-Up Review of the Drug Enforcement Administration’s Efforts
to Control the Diversion of Controlled Pharmaceuticals
Evaluations and Inspections Report I-2006-004
July 2006
Office of the Inspector General
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On June 9, 2006, the Office of the Inspector General (OIG) sent a copy of the draft report to the Drug Enforcement Administration (DEA) with a request for written comments. The DEA responded to us in a memorandum dated June 28, 2006. DEA Response In its response, the DEA disagreed with several of the OIG’s conclusions concerning the amount of assistance special agents and intelligence analysts provide to DEA diversion investigations. Specifically, the DEA expressed concern with the OIG’s exclusion of certain G-DEP substance identifiers from the analysis of pharmaceutical diversion investigation work hours.58 According to the DEA, this exclusion led to OIG conclusions that were “not fully representative of the pharmaceutical drug threat and DEA’s activities.” Also, the DEA disagreed with the OIG conclusion that intelligence analyst assistance to diversion investigations has remained limited. According to the DEA, intelligence analysts’ work hours spent on diversion investigations increased 58 percent from 2003 to 2005. The DEA also stated that 67 percent of the 60 respondents to an OIG survey reported that intelligence analysts “always or usually provided” a sufficient amount of intelligence support for diversion investigations. The DEA also stated that the OIG overlooked “ongoing budget shortfalls” that limit the manpower support the DEA is able to provide for the diversion control program. Although the DEA disagreed with several of the report’s conclusions, it concurred with five of the six OIG recommendations. However, the DEA did not state concurrence or nonconcurrence with the recommendation to “Provide diversion investigators with adequate special agent support until the conversion of the DEA diversion investigator position to one with law enforcement authority is fully implemented,” because, in the DEA’s opinion, the recommendation was “unnecessary.” Nonetheless, the DEA presented an action plan for addressing that recommendation as well as for the five with which it concurred. The DEA also offered several minor technical corrections to the report that we incorporated in the final version of the report, as appropriate. OIG Analysis of the DEA Response While we believe that the actions undertaken and planned by the DEA to improve its ability to address the growing problem of the diversion of controlled pharmaceuticals are responsive to our recommendations, we address the DEA’s specific comments on our conclusions below. The OIG’s exclusion of 14 G-DEP identifiers from the analysis of pharmaceutical diversion work hours The DEA stated that the OIG’s work hour data analysis based on the G‑DEP substance identifiers “is overly restrictive and excludes key data.” Specifically, the DEA stated that excluding the work hours charged to investigations denoted by 14 additional G-DEP substance identifiers “renders conclusions that are not fully representative of the pharmaceutical drug threat and DEA’s activities.” According to the DEA, “for consistency, this review should reflect work hours expended under all relevant G-DEP identifiers just as in the 2002 review.” The substances denoted by the 14 additional G-DEP identifiers are methaqualone, GHB/GBL/BD, unspecified analogues, amphetamine/stimulant related chemical, pseudoephedrine, ephedrine, hallucinogen related chemical, iodine/red phosphorous, depressant related chemical, chemical equipment (non-drug specific), depressant (clandestine), other stimulant (clandestine), steroid (clandestine), and “No Specific Drug.” OIG Analysis. The DEA’s assessment of our G-DEP work hour analysis is incorrect. In its calculations, the DEA inappropriately included work hours for investigations that did not involve pharmaceuticals. In addition, the DEA incorrectly characterized the work hour analysis contained in our 2002 report. In Appendix II of this report, we list the 29 G‑DEP substance identifiers that the DEA stated were related to the diversion of pharmaceuticals and our rationale for excluding 14 of these identifiers that we deemed not to be within the scope of this review. The 14 excluded G‑DEP substance identifiers fall into the following five categories. First, we excluded 7 of the 14 G-DEP substance identifiers because they are chemicals, not controlled pharmaceuticals. As noted in the scope statement of this report (page 12), “Our review examined the DEA’s enforcement efforts to control pharmaceutical diversion since our October 2002 report through FY 2005. . . . We did not assess the diversion control program’s regulatory function and did not examine its enforcement efforts against the diversion of regulated chemicals.” In addition, because this review is a follow-up review to one conducted in 2002, the scope of this review was guided by the scope of the previous review, which also excluded chemicals and was entitled Review of the Drug Enforcement Administration’s Control of the Diversion of Controlled Pharmaceuticals (I‑2002-010). Second, we excluded 3 of the remaining 7 G-DEP substance identifiers because they are clandestinely produced substances and therefore cannot be “diverted” in the way we define that term in this report since they were never in the legal distribution chain. Third, we excluded 2 of the remaining 4 G-DEP substance identifiers because they are ingredients used to make pharmaceuticals and not controlled pharmaceuticals themselves. Ingredients do not represent “diverted pharmaceuticals” because they must be combined with other ingredients in order to become controlled pharmaceuticals. Fourth, we excluded 1 of the remaining 2 G-DEP substance identifiers because it refers to a Schedule I drug. Schedule I drugs have no legal medical use and therefore are rarely diverted pharmaceuticals.59 Therefore, the vast majority of work hours spent on this Schedule 1 drug reflects illicit production. Finally, we excluded hours charged to investigations in which the G‑DEP identifier was listed as “No Specific Drug” because we found that most of the hours in this category did not relate to pharmaceuticals. Although we explored the possibility with the DEA of extracting the “No Specific Drug” investigations that pertained specifically to controlled pharmaceuticals and including data about those cases in our analysis, the DEA informed us that this would not be possible without an extensive manual case file review. Further, when DEA personnel conducted a manual review of a small subjective sample of “No Specific Drug” investigations, they found that most of the investigations reviewed did not pertain to controlled pharmaceuticals. The decision about whether to include hours in the “No Specific Drug” category was critical to reaching the most accurate analysis possible because, of the 29 G-DEP substance identifiers that the DEA said were related to the diversion of pharmaceuticals, the “No Specific Drug” category contained the most hours. In fact, this category accounted for 30 percent of the combined work hours for the 29 G-DEP substance identifiers and 72 percent of the work hours for the 14 G-DEP substance identifiers that we excluded from this review. To further test the reasonableness of our decision to exclude “No Specific Drug” investigations, we checked the number of work hours diversion investigators charged to this category. We posited that if many “No Specific Drug” investigations were related to diversion, then diversion investigators would have charged a substantial number of hours to this category. We therefore examined the percentage of time that diversion investigators charged to the “No Specific Drug” category out of the total time they charged to the 29 G‑DEP substance identifiers that the DEA said were related to the diversion of controlled pharmaceuticals. We found that diversion investigators charged only 0.26 percent of their work hours to the “No Specific Drug” category, while special agents charged 49 percent, task force officers 43 percent, and intelligence analysts 37 percent. We also examined whether diversion investigator work hours made up a significant share of total hours spent on “No Specific Drug” investigations. We found that in FY 2005, a total of 289,197.5 hours were charged to “No Specific Drug” investigations. Of those hours, only 922 (0.32 percent) were diversion investigator hours, while 203,898 (70.5 percent) were special agent hours, 66,791.5 (23.1 percent) were task force officer hours, and 17,586 (6.1 percent) were intelligence analyst hours. These analyses confirmed that diversion investigators had limited involvement in investigations denoted by the “No Specific Drug” G‑DEP substance identifier. Therefore, we concluded from our analysis that including the hours spent on “No Specific Drug” investigations, as the DEA suggested, would improperly inflate the amount of time that the DEA spent investigating the diversion of controlled pharmaceuticals. In its response, the DEA also stated that “this review should reflect work hours expended under all relevant G-DEP identifiers, just as in the 2002 review.” In fact, the OIG’s 2002 review did not examine work hours by G-DEP identifier because the DEA told the OIG at the time that it was not possible to provide data on the number of work hours that special agents spent on diversion investigations. Therefore, we used DEA officials’ estimate that special agents spent 1 to 3 percent of their time on diversion investigations. In the 2002 report, we also gave the DEA the maximum credit for special agent assistance by using the highest estimate and calculated the total number of work years spent by special agents on controlled pharmaceutical cases by computing 3 percent of all special agent time spent on criminal investigations. That methodology was required because the DEA could not specifically isolate the work hours spent by special agents on investigations involving controlled pharmaceuticals. Since 2002, the DEA has improved its work hour reporting system and can now better differentiate and report the work hours spent by special agents investigating controlled pharmaceuticals, using more specific G-DEP substance identifiers. This improvement allowed the OIG to produce a more accurate analysis of the percentage of special agent time spent on pharmaceutical investigations. Given the fact that the DEA has refined its work hour reporting system so that it can identify work hours for specific substances by job series, we used this information in calculating the work hour data. In sum, we concluded that using all of the 29 G-DEP substance identifiers, as suggested by the DEA, would not accurately assess special agent time spent on pharmaceutical investigations. Thus, we made no changes to the work hour analysis in the report. The OIG’s exclusion of task force officer work hours from the analysis of pharmaceutical diversion work hours The DEA response noted that the OIG’s analysis excluded the work hours of state and local officers working on pharmaceutical investigations as a part of DEA task forces. The DEA stated:
OIG Analysis. The OIG recognizes the importance of task force officers to the success of the DEA’s mission. During interviews and in responses to our survey, diversion personnel often noted the excellent partnerships they had with officers from state, local, and federal agencies. Although task force officers often play an important role in the DEA’s diversion control investigations, the fact that local jurisdictions responded to the increasing diversion of pharmaceuticals by increasing their support of DEA task forces is not a satisfactory substitute for the DEA providing adequate support through its own special agents. The OIG’s review focused on DEA resources allocated to control the diversion of pharmaceuticals. In addition, because this was a follow-up review, we focused on the current status of the issues we identified in our 2002 review. In that review, the work hour data analysis focused exclusively on DEA special agents and the assistance of task force officers was mentioned only in the context of diversion investigators relying on state, local, and federal agents because of the lack of DEA special agent assistance. The OIG’s statement that intelligence analyst assistance to diversion investigations has remained limited The DEA response stated that while the OIG report states that intelligence analyst support has remained limited, its own analysis “shows that intelligence analyst work hours on diversion investigations increased 58 percent from 25,603 hours in 2003 to 40,517 hours in 2005.” The DEA also presented its own analysis of the OIG’s diversion group supervisor survey. Finally, the DEA noted that it is “continuing to expand its intelligence support to diversion investigations and is in the process of allocating 41 new intelligence analysts to support the Diversion Control Program.”60 OIG Analysis. The DEA made two arguments to support its contention that our conclusion concerning limited intelligence analyst support to diversion investigations was not accurate. First, the DEA’s statement that intelligence analyst work hours on diversion investigations increased 58 percent is based on the work hours expended on all 29 G‑DEP substance identifiers that the DEA stated are related to pharmaceutical investigations, including the “No Specific Drug” category. As we discussed previously, it is inaccurate to include these substances, particularly the “No Specific Drug” category. The “No Specific Drug” category contains 37 percent of all the intelligence analyst work hours that the DEA stated were related to pharmaceutical investigations. Once these hours are excluded, the increase in work hours is shown to be much more modest, as we describe in the report on page 36. Further, that modest increase appears to be mostly attributable to a few specific operations rather than an across-the-board increase. We found that in FY 2005, 44 percent of intelligence analyst time was charged to four specific operations (page 38). While this indicates that some pharmaceutical investigations are receiving significant amounts of intelligence support, it does not establish that intelligence analyst assistance is generally and consistently available to diversion investigators. Moreover, our data analysis, interviews, and survey responses showed that overall intelligence analyst support in the field is limited. Second, the DEA presented its own analysis of the results of our diversion group supervisor survey that obscures important information, and we do not agree with the DEA’s characterization of the survey data. For example, the DEA stated that 67 percent of the respondents reported that intelligence analysts always or usually provide a sufficient amount of intelligence support for diversion investigations. However, the survey results showed that more than double the number of respondents reported that DEA intelligence analysts never provide sufficient support than said DEA intelligence analysts always provide sufficient support. In fact, one-third of respondents stated that they never receive sufficient intelligence support. The actual survey question and results are shown below.
Similarly, the DEA stated that 72 percent of survey respondents were very satisfied or somewhat satisfied with the intelligence support received, as shown in the table below. The survey results showed that 27 percent of respondents were not at all satisfied with the intelligence that their group received from intelligence analysts. Further, in our opinion, having an additional 45 percent of diversion group supervisors report that they are only somewhat satisfied leaves considerable room for the DEA to improve intelligence analyst support to diversion investigations. The survey question and its results are shown below.
Moreover, although omitted from the DEA’s response to our report, 17.7 percent of respondents to our survey reported that the availability of intelligence support often causes delays in investigations, and 37.1 percent reported that the availability of intelligence support sometimes causes delays in investigations. This further reinforces our conclusion that the DEA’s limited support of pharmaceutical investigations is negatively affecting these investigations. The survey question and its results are shown below.
The DEA also stated that “75 percent of respondents reported receiving intelligence for specific investigations when requested.” This misrepresents the data in our survey. The question that the DEA refers to was intended to capture the type of intelligence support provided, not the frequency. The question asks what type of intelligence assistance the respondent received – not whether they received assistance when they needed it. The responses to this question indicate that it is far more common for diversion investigators to receive intelligence support when they specifically request it than for them to receive proactive intelligence support on specific potential targets of investigation or trends in diversion. We found that only 22.6 percent of respondents received intelligence on specific investigative targets, and 32.3 percent received intelligence on trends in diversion, as shown in the table below. The survey question and its results are shown below.
Moreover, while the DEA and the OIG interpreted the survey results differently, we also used other evidence from site visit interviews, DEA threat assessments, and work hour data to conclude that intelligence analyst assistance remains limited, as it was at the time of our 2002 review. Finally, the DEA stated that it is continuing to expand its intelligence support to diversion investigators and is in the process of allocating 40 new intelligence analysts to support the diversion control program. While we agree that such a measure will be helpful, the OIG could not assess the full impact of these positions on intelligence support because, as of the end of our field work, the DEA had not yet begun to fill the positions. The OIG overlooked DEA budget shortfalls that limit support for the diversion control program The DEA’s response also stated that the OIG overlooked “ongoing budget shortfalls” that limit the manpower support the DEA is able to provide for the diversion control program. The OIG recognizes that the DEA, like other Department components, is faced with budget constraints that require prioritization of limited resources. In conducting our evaluations, the OIG attempts to assess whether the agency’s response is in proportion to the scope of the problem and identifies areas where the response could be improved. Yet, we believe the dramatic growth in pharmaceutical diversion requires the DEA to consider rebalancing its priorities. As we state in our report on page 2, the abuse of controlled pharmaceuticals can be as dangerous as the abuse of illicit drugs. Both can result in addiction, overdoses, and deaths. Two recent reports show the continuing increase in the diversion of controlled pharmaceuticals. According to a report released by the National Center on Addiction and Substance Abuse at Columbia University (CASA) in June 2006, “The extensive availability of controlled prescription drugs online poses a silent menace to our nation’s health and a challenge for law enforcement.” The CASA report also documents the increase in web sites selling controlled pharmaceuticals without requiring prescriptions between 2004 and 2005 and again between 2005 and 2006. In addition, a May 2006 study by the Partnership for a Drug Free America reported that nearly one in five (19 percent or 4.5 million) teens has used prescription pain relievers or stimulants non-medically and that the widespread availability and easy access of these substances has driven their popularity among teens. Additionally, the CASA report states, “Today more adults and teens report abusing these drugs [controlled pharmaceuticals] than the number abusing all illicit drugs combined except marijuana.” The DEA’s efforts are critical to controlling the diversion of pharmaceuticals, and undertaking criminal investigations of diverters is critical to the effectiveness of these efforts. The recommendations in our report are intended to help the DEA improve its ability to address the growing problem of controlled pharmaceutical diversion, given the limited resources available to it. The following section addresses the DEA’s responses to the specific recommendations in the report. RECOMMENDATIONS Recommendation 1: Provide diversion investigators with adequate special agent support until the conversion of the DEA diversion investigator position to one with law enforcement authority is fully implemented. Summary of DEA Response. The DEA did not state concurrence or nonconcurrence with this recommendation. The DEA asserted that “this recommendation is unnecessary and its objective – ‘to provide adequate special agent support’ is ambiguous.” Further, the DEA stated that it has “provided ‘adequate’ special agent support to diversion investigations.” The DEA also wrote, “Another concern is the OIG reports’ [sic] misrepresentation of the August 2001 directive by DEA’s Chief of Operations. DEA’s Chief of Operations issued this memorandum instructing Special Agents in Charge to place two special agents in each diversion group in each Division office.” According to the DEA, this instruction “was overtaken by a 2003 decision to instead convert diversion investigators to a series with law enforcement authority.” Although the DEA neither concurred nor nonconcurred with this recommendation, the DEA reported that it is planning to allocate 23 additional special agents to support diversion groups and the diversion control program. In addition, the DEA response said that within 30 days after the issuance of this report, the DEA Administrator will issue a memorandum and worldwide teletype restating that diversion and trafficking of controlled pharmaceuticals, including Internet trafficking, remain a top DEA priority and that Special Agents in Charge are to enhance special agent assistance to criminal diversion investigations. OIG Analysis. Recommendation 1 is resolved – open. The actions planned by the DEA are responsive to the recommendation. Please provide a copy of the teletype, a description of how the 23 additional special agents will be deployed to support diversion groups, and a description of how Special Agents in Charge have enhanced assistance to criminal diversion investigations in each field division by October 31, 2006. However, although we accept the DEA’s planned actions to address this recommendation, we disagree with several of the statements included in the DEA’s response. We address each of these statements below. The DEA stated that it has “provided adequate special agent support to diversion investigations.” However, as this report shows, we believe the DEA should do more to ensure that diversion investigators have adequate special agent support. Diversion investigators still do not have law enforcement authority and continue to rely on special agent support to conduct critical tasks in criminal diversion investigations. In 2002, DEA personnel estimated that special agents spent at most 3 percent of their time assisting with diversion investigations. Although diversion of pharmaceuticals has increased dramatically since that time, in our current review the percentage of special agent time dedicated to pharmaceutical diversion investigations was at most 2.2 percent. Further, we were told during field interviews that diversion investigators’ lack of law enforcement authority, coupled with inconsistent levels of special agent support, impeded diversion investigators’ criminal pharmaceutical investigations. Moreover, our review of the DEA’s 2004 Pharmaceutical Threat Assessments and our survey results supported the field interviews. And although the DEA has proposed converting the diversion investigator position to one with law enforcement authority, this proposed conversion has not yet occurred. We also disagree with the DEA’s statement that the OIG misrepresented an August 2001 directive by DEA’s Chief of Operations. In the memorandum in question, the DEA’s Chief of Operations instructed Special Agents in Charge to place two special agents in each diversion group in each Division office to better support diversion investigations. According to the DEA, this instruction was overtaken by a 2003 decision to instead convert diversion investigators to a job series with law enforcement authority. However, the DEA presented no documentation showing that the directive had been overtaken or rescinded. In fact, the DEA reaffirmed the 2001 Chief of Operations’ directive by using it as evidence in a DEA 2003 memorandum to the Department requesting conversion of the diversion investigator position.61 In addition, this explanation that the memorandum was overtaken by the 2003 decision to convert diversion investigators contradicts the DEA’s previous written statements to us, in February 2006, in which it said that the terrorist attacks of September 11, 2001, had prevented the DEA from implementing the 2001 Chief of Operations’ directive. In conclusion, although the DEA states that it believes this recommendation to be “unnecessary,” several sources of evidence (such as site visit interviews, analysis of survey responses, review of the DEA 2004 Pharmaceutical Threat Assessments, and special agent work hour data) showed that for many diversion investigators, inadequate special agent support, coupled with their own lack of law enforcement authority, remains a serious concern. In our report (beginning on page 16), we note many positive steps that the DEA has taken to improve its pharmaceutical diversion control program. However, contrary to the DEA’s claim that this recommendation is unnecessary, it is needed to ensure that the DEA consistently, sufficiently, and timely supports diversion investigations. Recommendation 2: Ensure that DEA special agents who frequently assist with diversion investigations attend the week-long diversion training school. Summary of DEA Response. The DEA concurred with the recommendation and will continue to identify and offer training to all special agents and task force officers who are assigned to Tactical Diversion Squads or who assist with diversion investigations. The DEA stated that, dependent upon funding, special agents and task force officers will be identified and will attend the 1-week diversion course during FY 2007. OIG Analysis. Recommendation 2 is resolved – open. The actions planned by the DEA are responsive to the recommendation. Please provide your target number and timeline for the special agents and task force officers who are assigned to Tactical Diversion Squads or who assist with diversion investigations to attend the 1-week course. Please explain how special agents and task force officers will be identified and prioritized for this training, and submit the number of special agents by field office that are expected to attend the course during FY 2007. In addition, please indicate whether any of the agents currently assigned full time to diversion groups, Tactical Diversion Squads, or other diversion task forces are not expected to attend the 1-week course during FY 2007. Please provide an alternative plan to address this recommendation by October 31, 2006, if the DEA anticipates funding or other constraints will prevent special agents and task force officers assigned to Tactical Diversion Squads or assisting with diversion investigations from attending the 1-week course during FY 2007. Recommendation 3: Provide training to intelligence analysts on topics that would effectively support diversion investigations. Summary of DEA Response. The DEA concurred with the recommendation and said it will conduct an assessment to determine the precise analytic needs of diversion investigators and investigations, which will then be used as a baseline to design a course and curriculum for intelligence analyst training. OIG Analysis. Recommendation 3 is resolved – open. The actions planned by the DEA are responsive to the recommendation. However, the DEA noted that development of the curriculum and commencement of the training are dependent on funding. If the curriculum is developed and the training commences, please provide us with a report on the findings of the assessment, a copy of the new curriculum, and the schedule of intelligence analyst diversion courses planned for FY 2007 by October 31, 2006. If funding or other constraints prevent the DEA from developing the curriculum and conducting courses in FY 2007, please provide an alternative plan to address this recommendation by October 31, 2006. Recommendation 4: Update the diversion control training video used in the special agent and intelligence analyst training academies to include current issues such as diversion using the Internet. Summary of DEA Response. The DEA concurred with the recommendation and said it is currently in the process of developing a new training video specifically for pharmaceutical diversion, which it expects to complete by September 30, 2006. OIG Analysis. Recommendation 4 is resolved – open. The action planned by the DEA is responsive to the recommendation. Please provide a copy of the new video by October 31, 2006. Recommendation 5: Ensure that diversion investigators receive training in skills necessary for conducting Internet investigations, such as financial investigations. Summary of DEA Response. The DEA concurred with the recommendation and said it will conduct a needs assessment to determine the knowledge, skills, and abilities necessary for diversion investigators to effectively conduct Internet investigations by November 2006; increase the number of diversion investigators who attend the DEA Special Operations Division’s Internet Telecommunications Exploitation Training (ITEP) school in FY 2007; increase the number of diversion investigators who attend the DEA’s financial investigations, asset forfeiture, complex conspiracy, and FinCEN/Gateway courses; and modify existing courses or develop new ones to meet the needs of diversion investigators. OIG Analysis. Recommendation 5 is resolved – open. The actions planned by the DEA are responsive to our recommendation. However, the DEA noted that increasing the number of diversion investigators attending the ITEP course is dependent on funding. Please provide us with the status of the needs assessment, an FY 2007 schedule showing the planned number of sessions of each course listed in your response as relevant to Internet diversion investigations, and the number of diversion investigators expected to attend each course during FY 2007 by October 31, 2006. If funding or other constraints prevent the DEA from taking these actions, please provide an alternative plan to address this recommendation by October 31, 2006. Recommendation 6: Fully implement the program to provide undercover credit cards to diversion investigators. Summary of DEA Response. The DEA concurred with the recommendation and said it has approved the program, tested it, and issued guidelines. The DEA reported that 7 of its 21 field divisions have received the undercover credit cards and that the remaining divisions are in various stages of processing and having banks issue the undercover cards. The DEA anticipates that the program will be completely implemented by December 2006. OIG Analysis. Recommendation 6 is resolved – open. The actions planned by the DEA are responsive to the recommendation. Please provide a status report on the implementation by October 31, 2006. Footnotes
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