The Problem of Prescription Fraud

his guide describes the problem of prescription fraud, and reviews the factors that increase the risks of it. It then identifies a series of questions to help you analyze your local problem. Finally, it reviews responses to the problem, and what is known about them from evaluative research and police practice.

For the purposes of this guide, prescription fraud, which falls under the broader heading of “pharmaceutical diversion,” is defined as the illegal acquisition of prescription drugs for personal use or profit. This definition excludes theft, burglary, backdoor pharmacies,† and illegal importation or distribution of prescription drugs.

† “Backdoor pharmacies” are businesses not licensed/authorized to distribute pharmaceutical drugs.

Prescription fraud is a significant and growing problem. Almost half the law enforcement agencies responding to a 2000 National Drug Threat Survey listed pharmaceutical abuse as a problem in their jurisdiction, and a similar share reported observing dramatic increases in prescription fraud and pharmaceutical drug abuse.1

While prescription fraud is common throughout the country, its intensity varies from place to place. This is often due to trends in specific types of drugs popular in different regions. It is a serious form of illegal drug activity, rivaling that involving more traditional street drugs, such as heroin and cocaine. Nationwide in 1993, people spent an estimated $25 billion on prescription drugs in the illegal market, compared with $31 billion on cocaine, including crack.2 Put another way, a recent study concluded that the number of people who abuse prescription drugs each year roughly equals the number who abuse cocaine­­—about 2 to 4 percent of the population.3 The local scope of the problem is similar. For example, the state of Kentucky estimates that over half the drug cases investigated through a federal law enforcement initiative involved prescription drugs.4 And the Cincinnati Police Department’s Pharmaceutical Diversion Squad reported that, in nine years, over 2 million doses of prescription drugs had been diverted illegally in the city.5

People commit prescription fraud in numerous ways, including forging prescriptions, going to several doctors to get multiple prescriptions (termed “doctor shopping”), and altering prescriptions to increase the quantity. However, the true scope of prescription fraud is largely unknown, due to a number of factors. Successful offenders get caught less often, and police never detect most of their offenses—as with any crime. Unlike other crimes, however, much prescription fraud goes undetected because it is not a high police priority; very few local agencies systematically track it. Limited awareness and lack of oversight among doctors and pharmacists may also contribute to the problem. In addition, because those who commit prescription fraud usually pay for the prescriptions (either personally or through insurance), pharmacies are less likely to perceive themselves as victims, to view prescription fraud as a crime, and to report fraud. Despite these difficulties in determining the scope of the problem, it stands to reason that, as the legitimate prescription drug market increases,† prescription fraud will, as well.

† The National Association of Chain Drug Stores projected that, in 2002, the industry would yield $188.5 billion in sales: 40 percent from traditional chain drug stores, 20 percent from independent stores, 17.9 percent from mail orders, 12.5 percent from grocery store pharmacies, and 9.7 percent from mass merchants (National Association of Chain Drug Stores 2002).[Full Text]

Related Problems

Offenders obtain prescription drugs in various ways, often to make a profit. Related problems that require their own analyses and responses include the following:

• Medicaid fraud.Pharmacy workers sometimes commit Medicaid fraud, usually by substituting generic drugs for name brands, short counting pills, and filling prescriptions without a refill, then over-billing Medicaid. They may also bill Medicaid for drugs they never dispensed.6
• Online ordering.Many people try to obtain prescription drugs illegally through the Internet. While most websites require proof of prescriptions, people can easily fabricate them, and vendors do not routinely verify them.
• Theft.Pharmacy workers and healthcare providers, both of whom have easy access to prescription drugs, sometimes steal them.
• Burglary† and robbery. Offenders obtain prescription drugs by either burglarizing or robbing pharmacies.

  † See the POP Guide on Burglary of Retail Establishments.

Factors Contributing to Prescription Fraud

Understanding the factors that contribute to prescription fraud will help you frame your own local analysis questions, determine good effectiveness measures, recognize key intervention points, and select appropriate responses.

Abuse of and Addiction to Prescription Drugs

The biggest factor driving prescription fraud is the increasing abuse of and addiction to prescription drugs. Prescription drug abuse is significant and rising rapidly. In 2000, an estimated 2 million Americans over the age of 12 used prescription pain relievers for the first time, up from 400,000 in the mid-1980s.7 In 2001, an estimated 11.1 million people used prescription drugs non-medically, and more than 6 million abused pain relievers. 8

This increase is reflected in overdose cases. Visits to emergency rooms increased significantly from 1994 to 2001 for overdoses on narcotic prescription pain relievers.9 “Other substances of abuse,” which are usually those marketed legally as prescription or over-the-counter drugs, represented 43 percent of emergency room drug mentions in 2001.10 Law enforcement officials have witnessed similar trends, estimating that, of the 20 most commonly abused drugs, over half are obtainable by prescription.11

Types of Prescription Drugs Abused

The prescription drugs that law enforcement agencies most frequently listed as commonly abused include Valium (diazepam) and Vicodin (hydrocodone), as well as Xanax (alprazolam), OxyContin (oxycodone), Lorcet, Dilaudid, Percocet, Soma, Darvocet, and morphine.12 Many of these top the lists of prescription drugs used nonmedically by youths and young adults, who tend to favor pain relievers such as codeine, methadone, Demerol (meperidine), Percocet, Vicodin, and OxyContin.13

Many experts attribute the growth in prescription drug abuse in part to the recent availability of OxyContin, an oral, controlled-release form of oxycodone that acts for 12 hours.14 As prescribed by a doctor, OxyContin is a very effective pain reliever. However, when crushed and snorted or mixed with water and injected, the drug delivers all of its power in one punch, producing a high similar to that experienced with heroin.15 Thus, heroin addicts favor OxyContin, but it has also taken hold among the general population.

Illegal use of OxyContin has spread throughout many regions of the United States, and has significantly impacted the volume of prescription fraud and related problems nationwide. For example, nearly 85 percent of 1999 arrests for writing false prescriptions in Maryland involved oxycodone products, including OxyContin.16 In Florida, lab submissions indicated that police are increasingly seizing oxycodone: between 1995 and 2000, oxycodone lab submissions increased by 161 percent. OxyContin has taken hold both because it can be addictive and because it commands high dollars on the black market, with a street value of as much as $80 per 80-milligram dose.17

Hydrocodone, the third most prescribed drug in 2000, is among the most abused of prescription drugs, according to the National Clearinghouse for Alcohol and Drug Information.18 It is similar to oxycodone but is less potent, with less potential for abuse.19 In certain regions, Vicodin, a form of hydrocodone, is becoming a popular target for prescription fraud, usually among women who become addicted after originally being prescribed the drug for pain relief.20

Types of Offenders

Unlike perpetrators of other drug-related crimes, prescription fraud offenders span a wide range of ethnic, social, educational, and economic backgrounds. Often, they become addicted to drugs legally prescribed to them, then try to get additional drugs illegally. Other offenders, already addicted to street drugs, discover how to convert prescription drugs into more potent substances. Among youth, abuse of prescription drugs is often a gateway to use and abuse of illegal drugs, such as marijuana. The elderly and healthcare workers are also susceptible to prescription drug addiction and fraud.

Youth. The most dramatic increases in illegal prescription drug use in recent years have been among youth. Of the estimated 11.1 million people using prescription drugs non-medically in 1999, nearly half (5.4 million) were aged 12 to 25.21 Non-medical prescription drug use is often accompanied by other illicit drug use: one study found that 63 percent of 12- to 25-year-olds who had used prescription drugs non-medically in the past year had also used marijuana in the past year.22 Non-medical use of a prescription drug found in the home can quickly lead to burglary, theft, and drug sales. For example, in 2001, a 14-year-old Florida boy died of an OxyContin overdose the day after he and a friend stole about 50 pills during a residential burglary.23 Likewise, a number of police agencies have reported incidents of schoolchildren’s selling prescription drugs, particularly Ritalin, to classmates.24 Research shows that non-medical use of prescription drugs (mostly pain relievers such as Percodan and Vicodin) among youth is rising.25

Women. Women may be more likely than men to commit prescription fraud, as they are 48 percent more likely to be prescribed an abusable (i.e., narcotic or antianxiety) drug.26 While overall, men and women have roughly similar rates of non-medical prescription drug use, research has shown that among women and men who use a sedative, antianxiety drug, or hypnotic, women are almost twice as likely to become addicted.27 In San Diego, the typical prescription fraud offender is a middle-class woman, who often becomes addicted after being prescribed a pain reliever for a legitimate health problem.28

Older adults. Older adults are more susceptible to prescription drug abuse because they use such drugs at a rate three times that of the general population, and also often have trouble following their doctor’s dosage instructions.29 Given the high rate of prescription drug misuse among the elderly, it is possible that addiction is common as well, which could ultimately lead to prescription fraud.

Existing addicts. Several police agencies have observed increases in prescription drug abuse among heroin addicts and users of other illegal drugs. Users often take prescription drugs to ease the effects of those other drugs.30 Conversely, some experts have observed that those who become addicted to OxyContin and lose their health insurance often turn to heroin for a similar, and cheaper, high.31

Healthcare workers. Healthcare workers are in a unique position to acquire and abuse prescription drugs. While many offenders steal drugs while working, others steal prescription pads or write illegal prescriptions for friends. Of the 250 felony arrests made by the Cincinnati Police Department’s Drug Diversion Unit in 1999, almost a third involved healthcare workers, including doctors, nurses, and hospital workers.32

Types of Fraud

Prescription fraud can take many forms. The most common tactics are to forge or alter a prescription, to “doctor shop,” and to phone in fraudulent prescriptions posing as an employee of a doctor’s office. Theft of prescription pads is also common.

Forging prescriptions. Forging prescription slips has become easier as the cost of high-quality copying equipment has dropped. Some offenders even go so far as to paint glue on the top edge of the slip to give the appearance that it was ripped from a pad.

 Altering prescriptions. The first resort of many users of legally prescribed drugs who become addicted is to alter a legitimate prescription to change the type of drug, increase the number of refills, increase the quantity, or add drugs (see examples below). Another tactic is to copy legitimate prescriptions for multiple uses.33

Doctor shopping. Those who doctor shop often go to multiple doctors, emergency rooms, and pharmacies and feign symptoms or gain sympathy to obtain prescriptions. Common feigned ailments include migraine headaches, toothaches, cancer, psychiatric disorders, and attention deficit disorder.34 In addition, offenders may deliberately injure themselves to get a prescription from an emergency room. Another approach is to claim to be from out of town and to have forgotten to pack prescription drugs,35 or to claim to have lost the drugs from a legitimate prescription.36 Given recent statistics on the number of prescriptions doctors write, doctor shopping may be the prescription fraud tactic with the highest success rate: the Centers for Disease Control and Prevention reports that the number of written prescriptions per office visit increased by 34 percent between 1985 and 2000.37

Calling in prescriptions. Prescription fraud in the form of impersonating medical staff and calling in false prescriptions poses the greatest challenge with regard to identifying suspects. Typically, offenders call in a prescription when the doctor’s office is closed, in case the pharmacist calls the office to confirm that the prescription is legitimate; some offenders leave their own phone numbers for verification. Offenders are often patients or employees of the doctor they are impersonating, and tend to act overly friendly on the phone to give the impression that they regularly call in prescriptions.

Stealing blank prescription forms. Some offenders steal prescription pads from doctor’s† offices and write prescriptions for either themselves or fictitious patients. They may change the phone number so that they or an accomplice can answer verification calls.38

† Doctor’s offices include physician’s, veterinarian’s, and dentist’s offices.