Hearing of the Senate Committee on the Judiciary - Electronic Prescribing of Controlled Substances

Hearing of the Senate Committee on the Judiciary - Electronic Prescribing of Controlled Substances: Addressing Health Care and Law Enforcement Priorities

SEN. WHITEHOUSE: The committee today will consider the question of electronic prescription of controlled substances. Viewed up close, this issue involves technical questions about competing information technology systems, the evidentiary needs of law enforcement officials, and the prevention of drug addiction in America, but it also puts at issue our struggle to rein in exploding health care costs. Solving this e-prescribing dilemma will help us fulfill our obligation in Congress to provide high-quality health care to all Americans at reasonable cost.

While electronic prescription is by no means the end all, be all of health care reform, it is an important piece of the puzzle. For starters, electronic prescription could save $20 billion per year that's Washington, so this is a B, billion dollars per year -- through reduced adverse drug events, increased patient adherence to prescription regimens, and improved administrative efficiency.

It is also a logical gateway for many providers to the more comprehensive health care information technology system we need, one that could save, by some reports, as much as $346 billion per year and certainly would save multiple tens of billions of dollars per year. But until doctors can prescribe electronically, they're unlikely to adopt a fully integrated electronic health records system which could decrease medical errors, better coordinate care particularly for high-cost, chronically ill patients -- and enhance efficiency throughout the system. So it is an important gateway.

Indeed, to quote Department of Health and Human Services Secretary Leavitt: "The benefits of electronic prescribing are unchallengeable. E-prescribing is not only more efficient and convenient for consumers, but widespread use would eliminate thousands of medication errors every year. E-prescribing needs faster implementation."

Unfortunately, there is one roadblock in our way: Current law does not permit the electronic prescription of scheduled drugs. A doctor can electronically prescribe medication that is not regulated by the Drug Enforcement Administration totaling roughly 90 percent of prescriptions but must rely on paper and pen for the remaining 10 percent. The inevitable result is that many doctors simply refuse to prescribe any medications electronically because it is too burdensome to operate two separate systems -- an electronic one for regular prescriptions and a paper and pen one for controlled drugs. Imagine if you are the doctor, prescribing both controlled and non-controlled medication to the same patient in the same visit and having to use two systems for that, and you will understand the confusion that this creates.

Everyone seems to support the notion that it is time for DEA to issue regulations permitting e-prescription of controlled substances. Indeed, I understand that the Drug Enforcement Administration itself agrees with this notion. Therefore, the only two questions we have to explore this morning are when and how.

First, the when: DEA issued e-prescription regulations four years ago, but they were roundly criticized for being too restrictive and were never implemented. I understand the DEA has been at work on a new set of regulations since at least 2006 but has been unwilling yet to commit to any sort of timeline for completion and has not as yet circulated these draft regulations outside of DEA. At this point, we could conclude the Bush administration without progress at this rate, and so I'm hoping we can accelerate things.

The how question is a little bit more complex. Roughly 6 million people per month, 2.5 percent of the population -- use prescription medication for non-medical purpose, and this number has more than doubled in the last 15 years. I've been the attorney general of my state; I've been a United States attorney; I fully appreciate that any e-prescription must preserve the government's ability to investigate and prosecute cases where prescriptions are unlawfully used to acquire controlled substances known as diversion cases in the law enforcement world.

But protecting the law enforcement capabilities need not be incompatible with giving doctors, pharmacies and patients the tools necessary for e-prescription. We target military weapons. We engage in billion-dollar financial transactions. We transmit national security information and we engage in countless important private communications electronically every day. I can't believe we can't figure out a way to prescribe Vicodin electronically. Indeed, as we will hear from witnesses on the second panel, those necessary tools do exist.

So as President Bush said of our health care system just a few weeks ago -- not a man I frequently quote, but here we are -- "When it comes to information technology, they're light years behind a lot of America. Perhaps the best way to describe it is that we still get doctors handwriting files." He went on to say, "Congress ought to focus on spreading information technology throughout health care."

Well, here we are today. I look forward to hearing testimony both from DEA and the Department of Health and Human Services on how they're working to help the president fulfill this mandate. Later this morning I look forward to hearing the perspective of doctors, pharmacists and experts in the field of e-prescription as well.

Our ranking member, Senator Specter.

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SEN. WHITEHOUSE: Thank you, Mr. Trenkle.

To start at a very basic level, I assume that you two know each other?

MR. RANNAZZISI: Actually, we just met today, but I think we've been on the phone together, and I know our staffs meet.

MR. TRENKLE: Yeah, our staffs have met and we've been on the phone with DEA a number of times, as I've mentioned.

SEN. WHITEHOUSE: And it sounds as if the entry of Mr. Kolodner into this as a broker to force change is a welcome development from both of your points of view?

MR. RANNAZZISI: Any new perspective as far as electronic prescribing is welcome, and, yes, we welcome his perspective as well.

Also, Mr. Trenkle testified in that hearing in July 2006, and it was a very informative hearing to us.

SEN. WHITEHOUSE: I've run administrative agencies and so I have the experience of the triage of priorities that is necessary at an administrative agency. There are those things that sort of urgently must be accomplished, there are those priorities that are things that would be nice to get done but don't have that same urgency, and then there are things that you sort of float around and they're not really urgent, and if you can get to them some day you will, and maybe somebody will push you a little bit to get something done, but it simply isn't in the top first or second tier of administrative priorities.

Where does DEA put getting this done in its hierarchy of administrative priorities?

MR. RANNAZZISI: It's right at the top of our administrative hierarchies. If you look historically back, we started an e-commerce initiative in 1999. In 2005, we initiated a Controlled Substance Ordering System through the use of PKI. The second phase of that would be the electronic prescription initiative. Unfortunately, where CSOS has worked fairly well, there have been some hang-ups with electronic prescriptions, and we're trying to work through them now. But make no mistake about it: It's right at the top of our list of priorities. Again, we started this back in 1999.

SEN. WHITEHOUSE: Have you heard from the White House on this issue?

MR. RANNAZZISI: We've discussed this issue with OMB, yes, with ONDCP, with the Department of Justice -- OMB probably -- (aside) within the last month? -- within the last week. But I mean --

SEN. WHITEHOUSE: Well, good.

In your testimony just a moment ago you noted that nearly 7 million Americans have used prescription medications for non-medical purposes.

MR. RANNAZZISI: Yes, sir.

SEN. WHITEHOUSE: And you have said that nationally the misuse of prescription drugs was second only to the use of marijuana in calendar year 2005. That far exceeds other illicit drugs -- cocaine, heroin, PCP, amphetamines.

Do you think that the current paper and pen regime is a really good model, given that record, in allowing you to prevent the diversion of prescribed controlled substances and, more specifically, in evaluating what the goals are that you seek to achieve for e- prescribing? Are you demanding a higher level of effectiveness in that dimension -- effectiveness against diversion -- for the new e- prescribing system than you are able to achieve right now through the pen and paper system?

MR. RANNAZZISI: Let's take the second part of the question first.

I don't believe -- do I believe that the electronic prescribing will prevent diversion? It will prevent some diversion, absolutely, if it's done properly. We're proponents of a two-factor authentication system, and the reasons we're proponents of two-factor authentication is because that will help us identify who is actually writing the prescription.

SEN. WHITEHOUSE: But to give your example a moment ago, you spoke about a small number of pharmacies to which an enormous amount of information -- an enormous amount of potentially illicit prescriptions were flowing -- of hydrocodone, oxycodone -- I forget which one you mentioned.

For every document that you no longer have on paper so your document examiners can't go in and prove the case their way and you actually have to prove the case a different way using electronic signatures -- and there are ways to do it; you could do both --

MR. RANNAZZISI: Right.

SEN. WHITEHOUSE: -- but you'd have to change from one to the other -- for the inconvenience of that, isn't there a corresponding gain in having all that information at your fingertips and being able to say, you know, there's been a real bulge in prescriptions at this pharmacy that we're noting because it's coming through electronically, we're tracking that in new ways, we can be much more proactive?

It seems to me that the gains of e-prescribing aren't just the gains that HHS is here to advocate for -- the gains of patient safety, the gains of greater efficiency, the gains of the sort of gateway gains of moving more rapidly to an e-health system for America so we can get away from the health care nightmare we have right now. Those are all enormous gains, but if you set those aside it seems to me that -- are there not also purely law enforcement gains from going to an electronic prescription system for controlled substances?

MR. RANNAZZISI: Well, I'll be speculating now, but until we get a system in place and a pilot in place to actually see how the system operates, I can say probably there will be some law enforcement gains.

However, we're not just dealing now with a doctor and a pharmacy. We're dealing with other non-regulated entities that'll be involved in the process. I don't know how that's going to pan out. I don't know how much regulatory control I'll have over them. I don't know how they're going to respond to subpoenas. I don't know how the system will address breaches in the system where orders are actually changed. This is all new to us, and we're trying to work through it.

Again, I don't want to speculate. Do I believe that it's going to be better for law enforcement somewhere down the line once we get the proper system in place? Yes, I do. But currently right now, I'm just not sure because I don't know what system is in place.

Now, Senator Kennedy talked about that Massachusetts pilot program.

SEN. WHITEHOUSE: Why was that shot down?

MR. RANNAZZISI: That was shot down because -- not because of the merits of the program, not because of the protocols -- because in their direction, what they said was they were going to create a system that would be adopted nationwide for security and controls.

Now, on its face that doesn't seem like a bad idea, except that's what the rule-making process is, and for us to agree to that, we'd be hijacking the rule-making process. We didn't disagree with the merits of that pilot, and in fact, we're working with Massachusetts right now for them to resubmit so we could approve it. So it's not been shut down. We're just in the process of trying to work with them to get their protocols back in so we could approve it.

SEN. WHITEHOUSE: My distinguished colleague Senator Coburn has joined us.

And I have been taking the floor for a while now and asking a number of questions, so if you'd like to step in, Senator, I'll yield the floor to you.

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SEN. WHITEHOUSE: Nothing that you have told Senator Coburn about the administrative process and the accountability for the administrative process is consistent with your earlier testimony that this is a top priority for the Drug Enforcement Administration.

I simply can't believe that if this is something that is viewed by the Drug Enforcement Administration as a top priority there isn't the kind of internal scheduling for purpose of internal administrative accountability that you've set up.

When I've run organizations and I want to get something done, I lay out what I expect to get done, and I tell people it's got to be done by this date and I can hold my staff accountable. And you -- accountability makes action take place in government.

So I think for both of us to hear you say, "Well, we don't know what date, we don't have a date, we're not sure, we want generally to do it as soon as possible, but nobody's actually pin down any accountability points for this," none of that registers with us as resembling top priority.

MR. RANNAZZISI: I don't think you can compare prioritization of tasks with a staff and with an agency that has to deal with several other agencies in addition to several administration components.

The fact is is when we're drafting rules, we don't do it in a vacuum. We're in constant contact with the agencies that we work with. We're bouncing things off of them.

SEN. WHITEHOUSE: But everybody is pushing to get this done. DHS would like to have this done yesterday. OMB wants this to move. Somebody just assigned Dr. Kolodner to try to solve this. I mean, it's not as if other people are holding you back. At least, that's not the way it --

MR. RANNAZZISI: And there's -- obviously CMS and several different agencies have reasons why they're pushing it, and their reasons could be different than DEA's.

The fact is is we have to protect the public health and safety from diversion of controlled substances, and to do that we have to --

SEN. WHITEHOUSE: Let me stop you right there because --

MR. RANNAZZISI: Okay.

SEN. WHITEHOUSE: -- every agency has its purposes. From a public policy point of view, we need to see that decisions are made in the best interests overall. And we can't have an agency stopping a process because it has particular concerns, however well founded those may be, if the externalities, the benefits of this going forward in other areas, are so enormous that on a cost-benefit calculation for society, for America, for people who are out there stuck in our health care system right now, this is a big loser. You've got to be prepared to kind of move on and work with other people for the greater good.

And if I could just for a moment ask Mr. Trenkle to summarize -- he touched on safety issues, he touched on efficiency issues, he touched on improvement of care, and he touched on this as a sort of -- I'm calling it the gateway factor -- that this can be a progress step towards an electronic health system for America that can reap enormous rewards. And we're holding back all of that progress here.

And while the internal calculation with respect to DEA of whether you will do drug diversion more effectively or not -- and I suggest, given the results we're seeing right now, it's hard to imagine it's going to turn out a whole lot worse; it's sort of the number one drug abuse problem in America right now, I would hazard. So the idea that it's going to end up a whole lot worse with this technology is a little bit hard to believe, but when you compare it with the public benefits that HHS is arguing for, it seems to me that it's worth taking that shot. Let's just get it out there and cope. You do your best to make it happen, but you don't stop all this other progress because your particular interest isn't met.

Would you react to that?

MR. RANNAZZISI: Yeah. Controlled substances are a different type of drug than non-controlled substance or legend drugs. The fact is is that's why Congress created the CSA, because they recognized the abuse potential of these drugs. That's why they took it out of the FDCA, put it in a separate category. Okay?

In my 20-plus years of law enforcement, I've never seen anybody selling Amoxicillin or Inderal or any of those other drugs out on the street.

SEN. WHITEHOUSE: I understand but --

MR. RANNAZZISI: But I do see them selling Vicodin, and there's a reason for it, because the profit potential and the abuse potential of those drugs are quite a bit higher.

So while on the legend drug side you might not need the security because you're not going to see the diversion, you will see it on the controlled substances side, and that's why we're moving so cautiously.

SEN. WHITEHOUSE: My problem, Mr. Rannazzisi, is that you are answering the question in exactly the mode that I'm trying to push back against, which is that in this case it is all about our diversion responsibilities, when in this case I think it's all about a lot of other issues as well. It's all about also patient safety, which will be dramatically improved if we can get to a serious e-prescription regime.

It is all about far greater efficiency and cost when families are out there right now getting creamed with prescription drug costs if they have a seriously ill member of the family. It's all about allowing our health care system to develop into a system that is truly supported by information technology and has comprehensive electronic health records. All of these things are being affected by this decision.

And I'd like to hear from you that from an administrative point of view you recognize all of those benefits, and it's not just about the internal balance between is this better or worse from a diversion point of view, but that this is a larger issue and maybe needs a little bit more attention for that reason.

MR. RANNAZZISI: As I said before, I think the benefits of electronic prescribing are numerous. I understand that electronic patient records are very important. I understand that it's a very good cost-saving measure. I understand that it could prevent a lot of the medication errors and interactions -- not all of them, but I'm pretty sure most of them. Okay? However, again, that aside, I have to look at other things.

Now, there's no question that --

SEN. WHITEHOUSE: Do you look at everything?

MR. RANNAZZISI: Yes, absolutely. Absolutely. I just said I did.

But that's -- unfortunately, there are other factors involved that we have to look at. We're protecting the integrity of the closed system of controlled substance distribution, and to do that, there are other factors that we look at.

I'm not saying that the electronic prescribing of drugs in general is not beneficial universally. It is. But we have to do it properly. We have to do it appropriately. We have to do it so it's not going to create another avenue of diversion.

SEN. COBURN: Mr. Chairman, can I?

SEN. WHITEHOUSE: Please.

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SEN. WHITEHOUSE: Let me ask you a different question. DEA agents out in the field -- I was a U.S. attorney in Rhode Island; we had a wonderful DEA office in that district. The agents communicate with each other how? Do they communicate with each other electronically?

MR. RANNAZZISI: The whole agency communicates electronically through an e-mail system, yes, a secure e-mail system, and by phones.

SEN. WHITEHOUSE: The system is kept secure?

MR. RANNAZZISI: There are security safeguards built within the system. Depending on the system you're using, yes.

SEN. WHITEHOUSE: And they're adequate for the DEA to have taken that step and gone to electronic internal communication, correct?

MR. RANNAZZISI: Yes.

SEN. WHITEHOUSE: And highly confidential investigative and other material is transmitted through that system between offices and from agents back in headquarters?

MR. RANNAZZISI: Depending on the level of security information, no, not necessarily. We have several different systems to pass information, depending on the level of security necessary for that information.

SEN. WHITEHOUSE: But you're comfortable that you can transmit electronically within DEA highly confidential investigative information at the appropriate level of security, correct?

MR. RANNAZZISI: Yes, absolutely.

SEN. WHITEHOUSE: And you do that day in and day out; it's happening right now over at the DEA?

MR. RANNAZZISI: Yes.

SEN. WHITEHOUSE: And you have a database -- don't you? -- that keeps track of evidence of suspected drug dealers, of suspected drug networks, of suspected drug organizations and how they connect as who's involved and where they're financed and all of that. You have a very extensive intelligence aspect to try to investigate drug dealing organizations inside and outside the country, don't you?

MR. RANNAZZISI: Yes, we have intelligence databases.

SEN. WHITEHOUSE: And you keep those databases electronically, don't you?

MR. RANNAZZISI: Yes.

SEN. WHITEHOUSE: And you're comfortable that they can be kept securely?

MR. RANNAZZISI: Yes.

SEN. WHITEHOUSE: All right. It would be nice to try the same thing for a guy who wants to prescribe a bottle of Vicodin.

MR. RANNAZZISI: I understand your concern, sir.

SEN. WHITEHOUSE: Let me give you the -- what is the view from HHS as to where we are procedurally on this? What are the next steps? What does Secretary Leavitt anticipate as a deadline for this process? When, from the HHS's point of view, should we expect to have e- prescribing in place in the United States of America for controlled substances?

MR. TRENKLE: We would --

SEN. WHITEHOUSE: I think you have to push a button to get your microphone back on.

MR. TRENKLE: Okay. From the HHS perspective, obviously we're in support of e-prescribing as much as possible as soon as possible. As you know, over the last two years we've not only promulgated two sets of standards, we've also run five pilot projects, did a report to Congress. So we're moving as quickly as possible to move ahead in e- prescribing and we stand here ready to work with DEA as much as possible on a pilot project to assist them in providing background, feedback, anything to support their regulations.

We feel, as you know, Senator, that this is a very major area for patient safety; it's a key element of the interoperable network that we're pushing both with e-prescribing and HIT as a whole. So we're --

SEN. WHITEHOUSE: Is that, by the way, why the 2004 proposed regulations were requested by the Department of Justice to be withdrawn because of non-concurrence with HHS? Is it because of the interoperability issue and to have this be something that can link in with the prescribing network?

MR. TRENKLE: Yes, we were concerned -- as I mentioned in my testimony, we would like to build an e-prescribing system that incorporates what's in the current system, in addition takes into account DEA's requirements, but not to build something that would potentially require two systems.

SEN. WHITEHOUSE: A parallel and independent system, yeah.

MR. TRENKLE: Correct.

SEN. WHITEHOUSE: Good. I think that's a sensible goal.

Is that a goal that DEA shares, that a doctor who's prescribing amoxicillin and Vicodin should be able to go to the same machine and enter the prescription when they send it down to CVS or to Rite Aid?

MR. RANNAZZISI: Yes, sir. We don't want parallel systems; we don't think that serves any purpose other than probably push doctors away from prescribing through electronic means. So yes, we share that goal.

SEN. WHITEHOUSE: Good. Well, what I would like to do is ask a question for the record of the administrator, the acting administrator, that she provide to this committee the very best and most concrete information that she can give us that will answer Senator Coburn's question and my question about what the time frame is for the administrative process of concluding the e-prescribing rule making. And that would include not only an end date by which somebody's willing to be held accountable for saying, "I will get this done by then," but also any steps along the way, the announcement of a proposed rule making, for instance, with the various administrative procedures act steps. If any of them are at this point timed or if you can get back to us with a time that you're willing to commit to, because we really do need to know what is going on and when this is going to happen. You've seen intense bipartisan concern about this. This is not an issue where we're going to go away. We'll be back at you regularly on this subject.

And I think when you consider some of the costs that are involved here, which I submit that you have not adequately recognized as an agency -- the costs in safety patient safety, the 530,000 episodes of adverse drug interactions. Every one of them is an individual or a family that is frightened, that is harmed, that is put at risk -- times 530,000; that's a lot of pain.

We have a miserable health care system in this country with terrible information technology support right now, and we need to move rapidly towards developing information technology support for our health care system. I think that it's probably Secretary Leavitt's primary single goal, and it's something that the president has spoken about, he's appointed people to be in charge of. It's a very high priority that will affect businesses across the country, which are now non-competitive with foreign manufacturers who don't have to put that much health care into their products and they're at a big price disadvantage. And it's really difficult for the American families who have to live through the tragedy of the health care system that doesn't help them when they need it and some of those are insured families who find that they are in a nightmare despite the fact that they thought they had adequate insurance.

So there's a lot at stake here. And I think it's important that the different elements of the administration be willing to look beyond their own brief and consider more broadly the cost benefit to the country of getting past this and move with according dispatch.

I carry a little book around and I write things in it that interest me, that I think are useful thoughts to keep. And I have one that I will close this part of the hearing with, which is a -- it's a quotation from a decision of the United States Supreme Court in an opinion authorized (sic) by the great Justice Holmes, Oliver Wendell Holmes.

He said that: "All rights tend to declare themselves absolute to their logical extreme. Yet all in fact are limited by the neighborhood of principles of policy which are other than those on which the particular right is founded and which becomes strong enough to hold their own when a certain point is reached."

And I think we are at the point in which the neighborhood of principles around drug diversion authority needs to assert itself and it's no longer appropriate for the Drug Enforcement Administration to treat the diversion question alone as being the absolute here in this public policy question.

And I appreciate that you've come here; I appreciate you've taken a lot of bullets today. I know that you are the single human representative of a large organization and that there are some things that are beyond your control. But we have a job here as well, and sometimes that job is to be a thorn in the side of the executive branch to spur activity. And I'm sorry that you had to be at the point in the body where the thorn was applied today. But I'm sure that you understand that we are here in good faith to try to solve an important problem for our country.

MR. RANNAZZISI: I understand and respect your role, Senator, and I appreciate those words and I will take this back to the acting administrator.

SEN. WHITEHOUSE: And the question for the record is one that if you can commit to at least a time in which that question will be answered -- 30 days, 60 days. (Laughter.

) We'd like to leave here with at least one firm date. When can you get back to us with the answer? Sixty days, 30 days, two weeks, you name it.

MR. RANNAZZISI: To get back with the answer?

SEN. WHITEHOUSE: Yes. We're getting concurrence here. Good.

MR. RANNAZZISI: I would say within 60 days.

SEN. WHITEHOUSE: Sixty days it is.

MR. RANNAZZISI: Yes.

SEN. WHITEHOUSE: I appreciate it, and if you could make sure that it's returned not only to me but also to Senator Coburn, who's shown such a distinct interest in this.

I thank you both for your testimony and I look forward to working with you in the months ahead to work our way through this quandary and get this resolved. I thank you both kindly.

And I would ask the next panel -- we'll take a few-minute break while the next panel gathers. We'll break for five minutes.

MR. RANNAZZISI: Thank you, Senator.

(Recess.)

SEN. WHITEHOUSE: Let me call the hearing back to order and welcome the second panel.

I am grateful that you all are here. I appreciate it very much. You have all been interested in and helpful with this question, and we look forward very much to your guidance and advice on this important matter.

Some of you I know already.

I'm delighted to welcome Laura Adams here from Rhode Island. She's not actually from Rhode Island, but she works in Rhode Island and is the executive director of an organization called the Rhode Island Quality Institute, which has been a leadership organization in bringing together the various stakeholders in the Rhode Island health care system to improve information technology and explore energetically that very special area in which improving the cost -- sorry, improving the quality of health care lowers the cost. And it's an area well worth mining, and she has done a wonderful job and I'm delighted that she is here.

Kevin Hutchinson is the president and CEO of Sure Scripts. He has worked with us in Rhode Island also. He has led the effort to establish a neutral, nationwide network for electronic prescribing by connecting the nation's numerous physicians, technology applications and pharmacy software systems, enabling physicians and pharmacies to communicate electronically. Notably, Secretary Leavitt has selected Mr. Hutchinson to serve as one of the 16 commissioners of the American Health Information Community, so he is a national leader on this issue as well.

David Miller is the chief security officer for Covisint, where he directs and implements internal and external system architecture security solutions for the multi-industry exchange. In addition, Mr. Miller directs the federation and identity management offering at Covisint, which currently secures access for over 300,000 users across the health care and automotive industries as well as various public sector initiatives.

And Michael Podgurski has been at the Rite Aid Corporation since 1987, where he currently serves as Rite Aid's vice president of pharmacy services. He's the past chairman of the Pennsylvania State Board of Pharmacy, hence the appearance today and the recognition today from your wonderful senator, Arlen Specter.

I'm so glad that he was able to come and to welcome you.

He served on both the Committee on Law Enforcement Legislation and the Task Force on Pharmacy Automation at the National Association of the Boards of Pharmacies, so he is perfectly positioned for this discussion today.

I welcome all of the witnesses, and I would ask that you stand as a group so that I can administer the oath.

(Witnesses are sworn in.)

Thank you very much. Please be seated.

Why don't I ask each of you to make a summary of your opening -- of the filed testimony rather briefly and just go right down the table, and then we can have a bit more of a dialogue. It should be a little bit more of an open forum than if we just go one back and forth.

So if you don't mind, I'll ask Ms. Adams to proceed.

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SEN. WHITEHOUSE: Well, thank you all for your testimony and for your expertise and interest in this area.

The first question I'd like to ask is for Mr. Hutchinson and Mr. Miller, and you can go back and forth in any way that you're comfortable with. But you have handled this as a technical question in this and in and other fields. If DEA were to come to you and to say, "Here's our problem: We want to make sure people can't cut into the system and divert prescription drugs for unauthorized purposes," what do we need to do to accomplish that in the most sensible, thoughtful, efficient and effective way? What would you tell them?

And particularly with respect to you, Mr. Hutchinson, would you tell them use our system, or would you need, if they said we're going to hand over to you this question of controlled substances, would you feel that you needed to add additional safeguards for that into the Sure Scripts system as it now operates?

MR. HUTCHINSON: It's a very good question, sir. I think the response I would give is that we'd feel that the systems and the networks that are in place today in this country to process prescriptions electronically are sufficient to process controlled substances.

In fact, if the concern is prosecution traceability, "trackability," we've even offered up that we could allow prescriptions to go electronically to the pharmacies but yet also allow the DEA to have a copy of all controlled substances in a real-time mode where they could track themselves the prescriptions that would go in an electronic format.

I think there are some -- from audibility and a traceability standpoint it actually increases in a very real-time mode their ability to track controlled substances and the use thereof.

We have over 140 different software systems that are on the network, so the physicians and pharmacies are able to choose their choice of software. They're the ones that register these users on the network and do the authentication directly of their own user base onto the network, which these are licensed pharmacies.

There aren't -- as I mentioned in my testimony, these are not Internet pharmacies. These are not rogue pharmacies. So those systems are not and those pharmacies are not on the network and will not be on the network.

SEN. WHITEHOUSE: In our research my wonderful staff found testimony from Mr. Ratliffe (sp) of your organization at a previous hearing, in which he said, "We have maintained the confidentiality and the integrity of these transmissions" -- the e-prescribing transmissions -- "for the prescriptions that can be transmitted electronically and have had no instances of tampering."

He went on to say, "We believe that the electronic prescribing process greatly improves security for the prescribing of all prescriptions in comparison to today's written and oral processes for prescription information."

Now, this is from some time ago. Is it still valid that you can assert that the Sure Scripts system has not been hacked and tampered with and that you are confident in its integrity?

MR. HUTCHINSON: It's absolutely valid. It was valid then; it's valid today. And we've been working on this very issue for several years and it will maintain to be valid in the future.

SEN. WHITEHOUSE: So your answer to the question of what do you tell DEA is get off the dime and use us.

MR. HUTCHINSON: Absolutely.

SEN. WHITEHOUSE: Mr. Miller?

MR. MILLER: I think our answer to DEA would be very similar to Mr. Hutchinson's answer. There is no single solution; you need to do something. Any electronic e-prescribing methodology is going to be more secure than the paper-based system that we see today.

SEN. WHITEHOUSE: Any. Repeat that.

MR. MILLER: Any. Any based will be more secured than what we have today. As I said before --

SEN. WHITEHOUSE: Can I ask you to repeat that just one more time for effect? (Laughter.)

MR. MILLER: Sure. Any e-prescribe-based system will be more secure than the paper-based system that is currently used today.

SEN. WHITEHOUSE: Okay. Thank you.

MR. MILLER: It is more trackable; it is more secure. It is definitely used in other industries. Again, if this was the leading edge thing and no one had ever even thought of doing electronic transactions over the Internet, then perhaps it would be we need to do a pilot and kind of try, you know, spend the three years figuring it out.

But we all trade on the Internet; we all do banking on the Internet. I guarantee you your health records are going back and forth on the Internet now anyway, even if you're not e-prescribing.

So the first answer is really move forward with something.

The second thing, though, that is really important is in reality many of the doctors that you're talking about are not sophisticated computer users. And if you pick a system that is difficult for them to implement, they won't. The doctors that I know are much more interested in patient care than they are about the latest version of Windows.

And so you need to find methodologies and systems that are more simple. And does that mean that it may be a little less secure? Possibly. But again, it is definitely more secure than the current paper-based system that we have today.

SEN. WHITEHOUSE: Now, you say this from the position of also being a Department of Justice vendor, are you not?

MR. MILLER: Yeah. So Covisint also provides electronic identity transaction for a law enforcement sharing program that basically allows the information related to terrorist activity to be shared both with federal and local law enforcement. That today is --

SEN. WHITEHOUSE: That's fairly highly classified stuff that you don't want people floating in and out of.

MR. MILLER: It is definitely highly secure stuff that you don't want people to be able to access. That information is being transmitted today in a secure manner.

SEN. WHITEHOUSE: Without PKI technology?

MR. MILLER: Without PKI technology. As a matter of fact, the authentication mechanism used by the FBI in their system is also currently without PKI technology, although moving to it.

So there are cases where the utilization of other security technologies certainly work -- again, in banking, law enforcement.

Is it possible that somebody can use this to perhaps find a way to get around the system? Yes, anything is possible. But again, if you look at the system we have today, which is little pieces of paper that are transmitted back and forth, it certainly is more secure to be able to do it an encrypted and tracked technology. And I think that's really the big deal. In electronic communication, I can watch all that happens. And people who are watched have a tendency to not want to break -- you know, break the law. It's a lot easier if you're not watched.

SEN. WHITEHOUSE: And you can also -- because the electronic information can be easily, cheaply, quickly and effectively aggregated, you can very quickly detect patterns that are inconsistent with customer use and might indicate something is wrong so that you can make a proactive inquiry, correct? I mean, you can set up --

MR. MILLER: Right.

SEN. WHITEHOUSE: -- flags that go up at various times.

MR. MILLER: Right. And that's absolutely true. Not only can you track very large patterns that you couldn't do -- so you can take a look at a doctor who consistently is over-prescribing a medication over years of time. You also have the ability to set up real-time flags. So for example, if some sort of bad guy is going to steal OxyContin, he's not going to steal 11 tablets. He's going to steal a million of them.

Well, no doctor prescribes a million tablets. I mean, you would see that immediately. It would be very easy for you to be able to identify the event that occurred and actually, you know, in many cases, stop the even before the transaction's completed. I mean, that's how fast the electronic capability is.

MR. HUTCHINSON: And imagine just the value of taking the prescription out of the patient's hands and being between the two providers, between the physician and the pharmacist to avoid that kind of opportunity for fraud.

SEN. WHITEHOUSE: So the Drug Enforcement Administration, as we all know, is a division of the Department of Justice.

And so if I were to bring this question up with the new attorney general, Attorney General Mukasey, I could safely report to him that this important question that is being wrestled with by his own Drug Enforcement Administration has already been conclusively and satisfactorily answered by other divisions of his very organization?

MR. HUTCHINSON: Absolutely.

SEN. WHITEHOUSE: I think I might make that point. (Laughter.)

The other thing that I wanted to get it -- I don't know, we're a little bit into the technical piece of this, Mr. Podgurski, and I'm not sure if that's where you're comfortable. But if you wanted to add something to this, I'd be delighted to hear from you as well.

MR. PODGURSKI: No, I was just going to say on the security angle and the way Sure Scripts has the validation and verification process in place that I wasn't aware of any breaches and I think it's the most secure system that we have for e-prescriptions out there.

SEN. WHITEHOUSE: Okay. The other place I'd like to go with my questioning is to try to put a little bit more of a kind of practical and human face on some of the opportunity costs that were missing by not being here and by not being up to speed with e-prescribing on controlled substances.

And you can probably think of others, and if you do, please remind me. But my notes from your testimony today fall basically into four categories. One is patient safety, with sort of the subcategories of accuracy of the prescription and drug interaction alerts that can be prompted electronically.

The second would be compliance with prescription regimes, the ability to track a little bit better what's going on.

The third would be administrative efficiency within the systems so that costs are reduced and people don't have to pay much, as much for a prescription because the pharmacy industry is able to deliver it more efficiently.

And the third (sic) would be data gathering, not just from a fraud and abuse-prevention point of view but also from a public health point of view.

And there are four of you and there are four of those points and so what I would like to do is basically to target each of you with one of them.

And Ms. Adams, if I could start with you.

On the issue of compliance with prescription regimes, what is the state of knowledge about how compliant people are with prescription regimes, how serious an issue is the non-compliance? What are its effects and how does e-prescribing help on the compliance issue?

MS. ADAMS: It's a serious issue in that we know that upwards of 30 percent of all prescriptions are never filled. Then if that patient returns that -- I mean, even for non-controlled substances it's a problem. If a patient returns back and their blood pressure remains high they may get an increased dosage. Maybe this time they start taking that prescription when they never were taking the original prescription but the prescriber thought they were.

So the percentage is very high, surprisingly high. When that --

SEN. WHITEHOUSE: (Why ?) when we're asked by our doctors if we actually picked up the prescription?

MS. ADAMS: Oftentimes we are not. That assumption has been made; in fact, I think it's just now becoming new knowledge to providers that their patients aren't talking their prescriptions. We're finding that out through what? Electronic prescribing, because we now have records of whether or not patients pick up those prescriptions.

The pharmacy never knows if a doctor writes something on a piece of paper and the patient never brings it to them. So we have that now capability of discovering something new.

The point that I was making earlier about the advancement of innovation -- this is exactly what we're talking about here. When that prescriber can know that that patient never picked it up -- there are other issues around compliance; it's not just that somebody decided not to do it. It could be that they don't have the money to pay for that prescription, but they'll suffer the consequences and so will society down the line. We'll still pay for that patient's condition, but only after they've had their heart attack because they're not taking their beta blocker or something of that nature.

So it once again contributes to hospitalization, contributes to visits to the doctor's office. It contributes to the overall cost structure and the harm structure that goes on because the physician's not able to have that discussion with the patient. "Gee, I see that you didn't pick up the prescription."

"Well, you know what? I didn't have transportation this week."

"Oh, okay. Well we're going to solve that problem with your case manager."

We won't have that information otherwise. That's afforded to us through electronic prescribing.

SEN. WHITEHOUSE: So it's not just not picking up the prescription the first time when you go have a single prescription; it also applies to people who are chronic -- have chronic illnesses and require consistent prescription drug support and the doctor can get a flag when a regularly collected medicine is not picked up --

MS. ADAMS: Right.

SEN. WHITEHOUSE: -- and intervene at that point. And that person is totally missed right now by the hospital.

MS. ADAMS: So we'll know that if that patient that needs that for correct management of their chronic illness isn't taking enough of that drug, because by now, had they been taking the prescription as prescribed, it should be renewed. We wouldn't' know that otherwise. Through the electronic system we have information that now it's time for that patient to be renewing. If they're not, we need to be connecting with them to find out why they're not getting their next scheduled renewal of that drug.

SEN. WHITEHOUSE: Valuable public health information?

MS. ADAMS: Absolutely.

SEN. WHITEHOUSE: Mr. Hutchinson, with respect -- let me ask you about the safety questions of the accuracy of the transmission between Dr. Coburn deciding that this is the prescription he intends for the patient to take with what the pharmacist ends up reading and dispensing, and also with respect to the drug interaction. How significant are those from a public health point of view? What are the costs? Put kind of a human and practical face on those, if you would.

MR. HUTCHINSON: I'll give you a bonus, because I'll add a little bit more color to the issue around adherence as well.

SEN. WHITEHOUSE: Please.

MR. HUTCHINSON: Something that should be pointed out is that Walgreen's and IMS just concluded a study that looked at physicians prior to adopting e-prescribing and physicians post e-prescribing. One of the major concerns the pharmacy industry had is restocking charges: "Am I going to get all these prescriptions electronically patients aren't going to come in and pick up and now I'm having to restock these prescriptions on the shelves?" And in fact, they found the exact opposite.

Once they go to electronic prescribing patients, they dispense 11 percent more prescriptions on a per position basis, once it goes to e- prescribing, which means that patients are more compliant with physicians' orders once they know that the drugs have been sent electronically. That goes directly to patient safety as well, because if the patients are not taking their medications as prescribed by their physicians, then in fact what happens is they end up back in the physician's office or in an emergency room or in a hospitalization.

One of the -- there's a wonderful, wonderful study that's out there now -- we have plenty of studies on this topic, by the way. We don't need any more pilots or any more studies.

The Henry Ford Medical Center just published some recent results that showed that they were able to cut their hospitalizations and their emergency room visits in half, and one-third of those cuts in those visits were directly attributable to electronic prescribing and the avoidance of drug interactions associated with that, because they are able to track the original order that a physician was going to prescribe and then post-drug interaction, the change of that medication to a safer medication according to that drug interaction alert that was given.

SEN. WHITEHOUSE: And the result was -- repeat that for me -- a third --

MR. HUTCHINSON: They cut their hospitalizations due to adverse drug events --

SEN. WHITEHOUSE: Yes.

MR. HUTCHINSON: -- and their ER visits due to adverse drug events in half. And they attributed 33 percent of those cuts directly due to the fact that they were electronically prescribed medications.

SEN. WHITEHOUSE: And so you -- (inaudible) -- 533,000 adverse drug events that Mr. Trenkle referred to earlier in his testimony, you would cut --

MR. HUTCHINSON: A percentage of those --

SEN. WHITEHOUSE: A (sixth ?) of that would be eliminated just by e-prescribing alone without further --

MR. HUTCHINSON: That's exactly right. A percentage of those will be direct to hospitalization or admission to hospitals as -- and a percentage of those would also be attributed to potentially an emergency room visit due to that drug interaction. And they were able to cut, due to the implementation of electronic prescribing, those hospitalizations due to ADEs and emergency room visits due to ADEs in half.

SEN. WHITEHOUSE: And what can you tell us that's kind of from a practical point of view about the accuracy issue, about the extent to which errors occur because famously physicians handwriting is illegible, decimals are misplaced and so forth? Is there any information on how big a role that simple issue of inaccuracy and ineligibility impacts on Americans' health?

MR. HUTCHINSON: Yeah. There is a lot of studies that relate to this very matter. The practical examples that I'll give you is so long as it is actually truly electronically prescribed as defined by the standards by HHS has established in the Medicare Modernization Act, then you will see a significant improvement in that legibility, because we need to eliminate the fax as well.

Any duplication of entry into the computer -- this is a -- whatever is entered into the physician's computer is exactly what shows up in the pharmacy's computer. And why that is important is if even in a faxed prescription environment, sometimes a milligrams of 1.0 may be misread or misinterpreted as 10, and when it goes from application to application, the computer does not misinterpret the decimal symbol so that we actually have proper and accurate prescriptions. Whatever the physician orders is exactly what the pharmacy dispenses.

SEN. WHITEHOUSE: And how often does an inaccuracy result in a missed prescription or a health care problem for people in America? Is that a rare and unusual problem? Is it is a significant problem? Is the --

MR. HUTCHINSON: It's a significant problem. I don't have a number at my fingertips to be able to give you today as to we can --

SEN. WHITEHOUSE: If you find one, could I make that a question for the record, so you could get back to us before the hearing record concludes? Thank you.

Mr. Miller, my question for you has to do with the data-gathering and the sort of public health aspect of it. I guess beyond what we talked about earlier, do you see public health value from being able to sort of track ultimately even around the country where a prescription for a particular type of drug is, for instance, suddenly ballooning or where associations can be developed between a particular drug and then a condition that may emerge weeks later after the use -- is there public health value here to this and how would you --

MR. MILLER: Absolutely. So if you take a look at a parallel effort, which is really the ability to do electronic health records -- right? -- those electronic health records, along with a robust e- prescribing program, would allow you to see certain drug interactions, not only with other drugs but drug interactions in general with patients that you may not have seen before.

So not only do you see that OxyContin is being prescribed, but what you do see is your see the number of hospital visits, for example, that occur. Right? You can only do that if you can marry those two electronic transactions together as opposed to paper-based.

The other thing --

SEN. WHITEHOUSE: If you have to do it with paper, you'd --

MR. MILLER: Well, you'd employ a lot of people, I suppose.

SEN. WHITEHOUSE: Good point.

MR. MILLER: The other thing that is interesting and it's an interesting parallel is that what we're seeing in health care in general is the old days of me going to the same physician all the time, or, to be honest, the reason why there weren't drug interactions and he knew what I was taking is he's the only person who ever prescribed me anything. And by the way, probably going to the same pharmacist down the road, those days are gone. They're either gone because you travel so much that you go lots of places or more tragically that you don't have health insurance and so what you do is you go to free clinics and you go to the ER, where to be honest, that doctor basically has absolutely no idea what you have been doing or haven't been doing.

SEN. WHITEHOUSE: Or you're chronically ill and have five or six specialists all working on you --

MR. MILLER: Or you're chronically ill and you have five or six specialists. And those things are the things, really, that electronic prescribing allows you to be able -- allows the doctor to be able to understand all the prescriptions that you are currently taking. So I actually have a personal experience where my mother went into the hospital last summer and she couldn't remember whether or not she had filled her prescription for her heart medication.

And the ER doc said I need to know because if you have filled it and taken it, I can't give you this drug. And if you haven't, then I need to give you this drug. Well, she couldn't remember, and without electronic prescriptions, there really was no way to tell. It was kind of more of a crap shoot. And so those are, I think, some of the things that are just really important with that.

SEN. WHITEHOUSE: The last point was the internal efficiency, and nobody could be more knowledgeable about that than you, Mr. Podgurski. Could you kind of quantify from an industry point of view what benefits you see if we move from a paper system and are able to eliminate it and go fully to an e-prescribing system in terms of your ability to make this transaction more efficient and reduce costs for American consumers?

MR. PODGURSKI: Well, the thing is with the efficiencies, these prescriptions come directly into the computer, so you don't have to do a data entry; they still go through adverse drug reactions at the pharmacy, but they're automatically -- come into the system and print a hard copy, which is still required and are identified as e-Rx's. They also have an electronic signature on them that makes them valid for the secure purposes.

There's a pharmacist shortage across this nation, and many pharmacists work in different pharmacies today. No longer will you see many of the same people continually only working in one store.

Those individuals used to be able to identify a doctor's signature, a doctor's nurses calling in. Those days have gone by the wayside. E-prescriptions would bring in authenticity to that. Pharmacists still have a duty to make sure that the prescription is valid and the state boards of pharmacy have given them the authority to use their professional judgment in dispensing medications.

So, you know, looking at -- if it's an out-of-the-area prescriber, new patient that's out of the area, those things won't go by the wayside when looking at the authenticity even if it's an electronic prescription. They still have a duty to verify those.

SEN. WHITEHOUSE: Good. Well, this hearing was scheduled to end at noon and we've come to the noon hour. If anybody has a closing point of any kind they would like to make, I'm not in any particular rush and I'll welcome any final point if anybody has something they'd like to make and --

MS. ADAMS: Senator Whitehouse, I'd just like to add one statistic to that --

SEN. WHITEHOUSE: Please.

MS. ADAMS: -- that Mr. Miller was referencing, that notion of in this day and age multiple providers. Studies have shown that Medicare beneficiaries see anywhere from 1.5 to 13.8 unique providers each year -- 13.8 unique providers, none of whom are able to talk to each other if everybody's using a paper-based system. The issue is serious.

SEN. WHITEHOUSE: So the electronic e-prescribing system really becomes the safety net --

MS. ADAMS: That's right. It goes back to the issue of --

SEN. WHITEHOUSE: -- with regard to their prescriptions.

MS. ADAMS: Of being unable to -- you're not the doctor that -- the only doctor they're seeing, the only pharmacy that's filling your prescriptions. Thirteen point doctors are making prescriptions here and the drug interaction potential is horrendous.

SEN. WHITEHOUSE: Well, thank you very much.

I will call this hearing very shortly to its end. We will leave the record of the hearing open for seven days so the questions that have been asked for the record we'd like to have within seven days, with the exception in DEA's case of the 60 days that we granted you. But the record of this particular hearing will close then, and I want to thank all of you for your travel here, for your very helpful and thoughtful testimony. I know you've come a considerable distance and you all have very busy lives. It has been very helpful to me and I hope to my colleagues to have you here. I think it will make a difference if we can push through this problem.

I would like to, I guess, close with one observation to put this into some context as to why I called this hearing and why I think it's so important. I also serve on the Budget Committee with Senator Conrad, who is a brilliant chairman of the Budget Committee and a very able and sensible person, certainly not anyone who is any kind of a hysteric. And the information that we have received in the Budget Committee and the conclusions that he and I and others have drawn about them show that we are headed for a real potential disaster in our health care system.

There is what he has described as a tsunami of cost coming at us in the American health care system. The people who will receive that medical care have already been born; they are here. We can't do anything about their presence. Time makes them older second by second; we can't do anything about the passage of time. Aging human beings require more health care services than younger ones; that is a fact of life. I don't know that we can do much about that.

And unless we can do something about the efficiency with which we deliver that health care to those people, the combination of those factors will make our already wasteful health care system unaffordable. And if our health care system becomes unaffordable, then the only place we have to go is to cut people off of it -- seniors, working families, children. That is not acceptable.

The alternative, the only alternative is to get in ahead now while we have the time to make it work and build the infrastructure that came make our health care system sufficiently efficient to continue to serve Americans the way they expect, to actually improve the health care service that America gets, but to do it at a cost America can afford. And it is the electronic health infrastructure that is our best avenue to accomplishing that goal.

Now, this is kind of a macro point; it's probably going to take 10, 15, 20 years for all this to play out, but as time goes by and we lose the opportunity to get in ahead and built this into place, the potential costs on the back end to people who will pay the price in lower health care services is a very, very real one and a very human one and a very tragic one.

So three years is more than we have to wait on this; we have got to get going now because e-prescribing is a gateway to this; many of you have said it. I think it's really important not just from a diversion point of view, not just from a "wow, isn't this a wonderful gizmo; it's going to make people get their prescriptions more efficiently" point of view, but from a point of view of where our American health care system goes. I think this has been a really important point for us to tackle, so your effort in coming here is much, much appreciated.

I want to -- this is my first hearing; I'm a new senator -- the first one that I've called and held so I want to also on the record express my appreciation to the brilliant staffers, Jordana Levinson, my health care staffer, and Sam Goodstein, my Judiciary staffer, who have prepared me for this and worked with all of you to get here today.

So with my thanks to them, and a reminder that seven days is when the hearing record will close, we are adjourned. (Sounds gavel.)

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