Prescription Fraud: Abusing the System

Along one massive front of the war on drugs, where fortunes are amassed and lives destroyed, barely a skirmish has been waged.

Every year, hundreds of millions of prescription pills flow into the nation’s illicit drug market, creating a giant cornucopia of painkillers, stimulants and tranquilizers. They are believed to be among the most abused substances in the country, even rivaling the estimated use of cocaine and crack.

But in California and elsewhere, only a few agents, often equipped with the most lenient narcotics laws, investigate the illegal trafficking of powerful pharmaceuticals by doctors and others. In this backwater of enforcement, recognition comes hard and frustrations abound.

“There is just no glory in it--no guns, no piles of coke, and no bundles of cash to stack up for the TV cameras,” said Special Agent Walter Allen III of the state Bureau of Narcotic Enforcement, who supervises prescription fraud cases.

It seems the only time prescription drug abuse gets serious attention is when a celebrity tumbles--be it Betty Ford, Elizabeth Taylor or superstar producer Don Simpson, who died of an overdose in January from a lethal mix of cocaine and 20 prescription drugs.

In an extraordinary effort, authorities from local, state and federal law enforcement agencies are investigating more than a dozen doctors suspected of unlawfully supplying prescription drugs to the producer of such hits as “48 Hours,” “Top Gun” and “Beverly Hills Cop.”

On Friday, the offices of two of those doctors, both psychiatrists, were raided by investigators. The home of one also was searched.

“Abuse of prescription drugs is a serious problem in our society, but nobody pays attention until somebody big and powerful like Don Simpson drops dead,” said Steve Simmons, the California Medical Board’s senior investigator on the case. “But this kind of thing happens all the time to lots of regular folks.”

Even when law enforcement resources are marshaled, the returns often are small. No more than two dozen doctors, dentists and pharmacists are prosecuted annually for prescription drug offenses, case records show. Most get probation and stay in practice, largely because it is harder to prosecute a professional in a white coat than a street-corner pusher.

In California, about three of four physicians convicted of a prescription drug crime keep their licenses. Users often do more time in jail.

“There are two kinds of justice in this system,” said former state narcotics agent Paul K. King, who worked on prescription fraud in Los Angeles County for 10 years. “One for doctors, and one for everybody else.”

Take the case of Dr. Eric C. Tucker, whom state narcotics authorities suspected of illegal trafficking after scrutinizing prescription records.

Before his arrest in 1991, court records show, Tucker issued more than 7,000 questionable prescriptions for the stimulant Preludin and another 7,600 for Dilaudid, so-called drugstore heroin, an addictive pain reliever that fetches up to $100 a pill on the street.

More Dilaudid was coming out of Tucker’s Montebello office every year than at County-USC Medical Center, the West Coast’s largest public hospital.

Tucker, then 59, pleaded guilty to two felony counts of prescription fraud and lost his medical license. Although responsible for flooding the illegal market with hundreds of thousands, if not millions, of dangerous pills, he was sentenced to eight days in jail.

In contrast, Daniel G. Siemianowski, 38, of Los Angeles, a low-level street dealer and first-time offender, was prosecuted about the same time as Tucker. Police arrested him with about four ounces of crack and powder cocaine on the front seat of his car--a speck compared to the doctor’s goods. Siemianowski’s sentence: a year behind bars.

An Activist Is Born

About 2.6 million people in the United States use prescription painkillers, stimulants, tranquilizers and sedatives for “nonmedical reasons”--more than the estimated use of heroin, crack and cocaine, according to surveys by the National Institute of Drug Abuse. Only marijuana is more popular.

Users run the gamut from street addicts to senior citizens who mix afternoon cocktails of tranquilizers, and even teenagers who sell their doses of Ritalin to classmates.

Some combine prescription drugs with illicit narcotics to enhance the high. Others use tranquilizers to soften the crash from cocaine and heroin, helping them sustain their habits. For many others, pharmaceuticals simply are their drugs of choice.

Sandra K. Bauer, a member of the California Board of Pharmacy, knows how easy it is to fall to prescription drugs--and how complacent regulatory and law enforcement agencies sometimes can be in searching out the truth.

In 1990, before Bauer joined the board, her 34-year-old sister collapsed after injecting three times the lethal amount of Demerol--synthetic morphine. Although the coroner found needle marks on her arms and thighs, police had accepted her husband’s explanation that she had suffered from terminal cancer.

“I told him that was ridiculous,” Bauer recalled of her conversation with the detective. “There was no cancer.”

Bauer insisted that authorities take another look because her sister was a drug addict. During a search of her sister’s home, police discovered shelves full of syringes, tranquilizers and potent painkillers.

“It was classic middle-class drug abuse,” Bauer said. “You go to a doctor and get a bogus prescription. Then you get the pharmacy to fill it, and have your insurance company pay for it all. No one suspects anything.”

To ensure a thorough investigation of her sister’s death, Bauer lobbied state legislators, high-ranking law enforcement officials, journalists and officials on the state pharmacy and medical boards. As a result, two doctors and two pharmacists lost their licenses.

“Had I not intervened, my sister simply would have been buried--end of story,” she said.

Even then, Bauer did not back off. Through a friend who was the appointments secretary for then-Assembly Speaker Willie Brown, she maneuvered her way onto the state pharmacy board in 1992. Bauer has been working ever since to improve professional discipline and the state’s obsolete system of monitoring prescription drugs.

Enormous Profits

The U.S. Drug Enforcement Administration has estimated that about $25 billion in prescription drugs were sold on the illicit street market in 1993, compared to a government estimate of $31 billion spent that year on cocaine, including crack.

What makes pills so attractive to abusers and purveyors are their purity, predictable effect and low cost compared to illicit drugs. For about $10, less than the price of a few rocks of crack, a user can combine two or three times the therapeutic dose of codeine with the sedative glutethimide to achieve a high similar to heroin.

Although some of the drugs are smuggled into the country or stolen from distributors, a large portion comes from medical offices and pharmacies.

State and federal law prohibits the dispensing of controlled substances unless good-faith medical exams are performed, accepted prescribing practices are followed, and there is adequate medical justification. It also is illegal for someone to fraudulently obtain prescription drugs, a practice known as doctor-shopping.

By American Medical Assn. estimates, 1% to 1.5% of physicians dishonestly prescribe drugs, and another 5% are grossly negligent in their prescribing. In California, that represents 4,500 to 4,875 doctors.

For the unscrupulous professional, the profits can be enormous. Doctors, dentists and pharmacists have made millions by turning their practices into lucrative pill mills, where fraudulent prescriptions--written in minutes--have sold for $200 to $600 apiece, depending on the substance.

Working at the other end of the spectrum are doctor-shoppers, who trick physicians and pharmacists with self-inflicted injuries, forged prescriptions and stories about back pain or old war wounds.

During an eight-month period in 1990, Vicki J. Renaldo of Oceanside duped 42 San Diego area doctors and 26 pharmacies into giving her thousands of codeine tablets--all paid for by Medi-Cal. She was convicted and sentenced to two years in state prison.

Another doctor-shopper in the Midwest managed to scam 134 physicians.

“It’s so easy to do. The doctors don’t really question you,” said Barbara Curtis, 42, a member of Benzodiazepines Anonymous, a Los Angeles-based support group for prescription drug addicts. For almost 20 years, Curtis went to three or four doctors to secure supplies of two painkillers--Vicoden and Fiorinal with codeine.

“Migraine headaches was all I had to say.”

“There seems to be a constant supply of these drugs on the black market,” said Dr. Greg N. Haynor of the Haight Ashbury Free Clinic in San Francisco, one of the nation’s leading drug treatment centers. “The fact is, a lot of pills are floating around out there that can pack quite a wallop.”

Depending on the year, a quarter to a half of emergency room admissions related to drug abuse involve a prescription drug either taken by itself or in combination with alcohol or other controlled substances, according to the national Drug Abuse Warning Network.

The network surveys emergency rooms in 43 metropolitan areas to measure the consequences of drug use. It does not determine whether the prescription drugs were obtained illegally.

Of the top 20 drugs mentioned in the emergency room episodes, about 75% were prescription painkillers, sedatives, stimulants and tranquilizers.

Despite the enormity of the problem, prescription drug abuse remains a low priority for law enforcement, which has had its hands full fighting illicit drugs at home and abroad.

Building a prescription prosecution can take months, sometimes years, of tedious work. Pharmacy records must be scrutinized, and undercover buys must show conclusively that drugs were prescribed without good-faith exams or medical justification.

Because of the lengthy investigations and a shortage of agents, no more than 20 doctors, dentists and pharmacists a year are prosecuted criminally in California for prescription drug offenses. Federal authorities, on average, convict 240 people a year for federal drug-diversion offenses, or about five per state.

Even when charges are filed, however, juries balk at returning convictions. When they do, the sentences often are short.

Lenient Laws

Part of the reason, according to law enforcement officials, is that medical practitioners usually are charged under laws that can be filed either as a misdemeanor punishable by no more than a year in jail, or as a low-grade felony, which carries a penalty of 16 months to three years in prison.

The way the laws are written, prosecutors say, health care professionals can escape more serious drug-trafficking charges if they have written a prescription, no matter how fraudulent.

Assistant U.S. Atty. Alka Sagar said she has handled about 10 prescription fraud cases in federal court in Los Angeles since 1990. Of those, she said, one doctor received a short prison sentence; the rest pleaded guilty and were placed on probation.

Although felony convictions for prescription fraud are considered easier to obtain in federal court than in state court, the penalties can be just as light because sentencing guidelines are geared almost exclusively toward street drugs.

“You could make a series of undercover buys for 60 pills each and the sentencing range would be zero to six months. Even if each buy was 100 times that amount, it would still be zero to six months,” Sagar said. “You’d have to raid a drug factory to get a tough sentence.”

In California, few police departments, even in major cities such as Los Angeles, have specialized officers or anyone with training in prescription drug abuse. The same holds true elsewhere in the nation.

Responsibility for investigating pharmaceutical abuse in California usually rests with the state’s Bureau of Narcotic Enforcement. But, of the agency’s 300 officers, about seven are assigned the task, and they sometimes are burdened with other assignments. Prescription drugs also represent a fraction of investigations by state Medi-Cal fraud units and professional boards.

Nationally, the federal government spends $13 billion to $14 billion annually on the war on drugs. But only $70 million goes to the DEA to investigate prescription drug offenses--a small fraction of the agency’s billion-dollar budget--and part of that is earmarked to halt the illegal flow of chemicals to clandestine labs.

Making enforcement even harder is that the state’s computerized tracking system for the sale of controlled substances is obsolete. Because data has to be entered by hand, the unit can analyze only 10% to 15% of the 1.5 million controlled substance prescriptions forwarded annually.

Former state narcotics officer Paul King, who recently retired, recalled a frustrating incident that he says reflects a prevailing attitude toward pill fraud.

King said he learned in 1988 that federal officers in Ohio had arrested a drug runner as he got off a plane from Los Angeles International Airport with at least $600,000 worth of Dilaudid in a shoe box--12,000 pills.

At the time, the heroin-like drug was pouring into the illicit market in Los Angeles and then to destinations nationwide. To King’s dismay, federal agents wanted to use the courier as an informant for a standard cocaine case, torpedoing any investigation of the Dilaudid shipment, which was as valuable as 40 to 50 kilograms of wholesale cocaine.

“You couldn’t put $600,000 of any other drug that I’m aware of in a shoe box, and this guy was carrying it in plain sight,” King said. “I later found out that the courier wasn’t even prosecuted.”

Successes Rare

Although there have been some successful crackdowns, critics say those have been few and far between.

During the mid- to late-1980s, state and federal authorities prosecuted more than 34 doctors, pharmacists and runners during Operation Rx, one of the largest raids on pill mills in Los Angeles. Also during the ‘80s, the powerful sedative Quaalude was virtually eliminated as a problem by regulatory and law enforcement action.

Still, for the most part, prosecutors are reluctant to file charges in prescription fraud cases because they believe that their limited resources are better spent fighting street drugs.

It is against this backdrop that comedian Chevy Chase managed to stay out of serious trouble in 1994. For some time, the former star of “Saturday Night Live” has had a problem with painkillers, which he says he first took for back injuries caused by pratfalls.

State narcotics officials spent almost a year compiling prescription records on Chase, whom they suspected of illegally obtaining the potent painkillers Percocet and Percodan from numerous doctors. His Pacific Palisades home was searched, as were several physicians’ offices.

Agents believed the evidence showed that Chase had engaged in unlawful doctor-shopping and recommended that charges be filed by the Los Angeles County district attorney’s office. But that’s as far as it went; prosecutors considered the case unwinnable.

Explaining his decision not to file charges against Chase, Deputy Dist. Atty. John Lynch said not only was the doctor-shopping law vague, but it was unclear whether Chase had committed any fraud as defined by the statute.

Los Angeles attorney Zia F. Modabber, a spokesman for Chase, declined to comment because of pending litigation brought against the comedian by a former chauffeur. The driver contends that he has been unable to get work since he was caught by police in 1994 while allegedly ferrying painkillers into Canada for Chase. The judge has restricted public discussion of that case, which is nearing trial.

“I think it would be inappropriate to discuss the issues,” Modabber said, “not because we have anything to hide, but out of respect for the justice system.”

A Slap on the Wrist

Disciplinary records from state pharmacy and medical boards also raise questions about the resolve of regulatory agencies to get tough with those who violate criminal and professional codes.

From 1990 to 1995, the state medical board disciplined about 120 physicians for drug-related matters, 44 of whom were convicted of drug crimes. The pharmacy board disciplined about 160 people. The dental board disciplined 20.

One in four pharmacists or pharmacy owners, one in four dentists, and one in nine physicians lost their licenses after charges were sustained. Some of the cases included minor offenses for which license revocations would seem inappropriate.

But even when physicians were found guilty of criminal offenses, including felonies, three out of four kept their licenses. One of them was Dr. Jovencio L. Raneses, formerly of Anaheim Hills.

In 1990, Raneses agreed to plead guilty to one felony count of illegally prescribing controlled substances. He was sentenced to one day in jail and three years probation. Four felony counts were dismissed.

Case records show that Raneses issued thousands of fraudulent prescriptions for Dilaudid through a bogus treatment program for back pain. Authorities estimated that the scheme netted a minimum of $400,000 from January 1988 to April 1989.

Despite the scale of the operation, the state medical board decided in December 1993 to suspend Raneses’ license for two months and place him on eight years professional probation.

Back in 1984, the board first warned Raneses about his prescribing practices and ordered him to take medical courses. Court records show that he never took the classes, and the state never checked to see if he did.

Such examples have prompted allegations over the years that the medical board, as well as other regulatory agencies, have done little to rid their professions of the worst offenders.

Medical and pharmacy board officials acknowledge that there have been some problems with professional discipline, but say that reforms have been made since the early 1990s when the criticisms were at their height.

Records show that more complaints are being investigated and more people disciplined because of streamlined procedures.

Laws now require the automatic suspensions of medical, dental and pharmacy licenses for someone convicted of a felony. In addition, investigators say, they are seeking more court orders to suspend medical licenses after a person is arrested.

“There have been some improvements,” said John Lancara, chief of enforcement for the state medical board, who was hired in the early 1990s to help overhaul the disciplinary system. “Our goal is to vigorously enforce the Medical Practices Act.”

Meanwhile, at the pharmacy board, backlogs of cases--some of which had lingered for 10 years--have been eliminated. More records are being computerized, and fines that went unpaid for years are being collected.

Board member Bauer argues, however, that there is plenty of room for improvement. She compares the public attitude toward prescription drug abuse to that surrounding drunk driving before a grass-roots movement resulted in stronger laws.

“No one really sees this as a crime,” she said. “To me, what is this if not a crime? We need to change people’s attitudes. There is a need to say, ‘This is a problem.’ ”

NEXT: The piece of paper at the center of the drug regulation controversy.

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Price on the Street

Price markups are enormous for prescription drugs sold on the illicit market--several thousand percent in some cases. The most expensive pill is Dilaudid, a powerful narcotic known as “drugstore heroin.” Pharmacies pay about $2 per pill, but each can be sold on the illegal market for $50 to $100. Price based on a 1993 study by U.S. Government Accounting Office:

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Drug Pharmacy Street Price % Profit Price Dilaudid (painkiller) $2.00 $50-$100 2,400% to 4,900% Percodan (painkiller) $1.09 $7.00 542% Biphetamine (stimulant) $2.67 $7.00 162% Valium (tranquilizer) $1.04 $6.00 477% Seconal (tranquilizer) $0.33 $6.00 1,718% Percocet (painkiller) $0.85 $5.00 488% Ativan (tranquilizer) $1.03 $5.00 385% Dexedrine (stimulant) $0.13 $5.00 3,746% Emprine w/codeine (painkiller) $0.70 $4.00 471% Fiorinal w/codeine (painkiller) $0.90 $4.00 344% Xanax (tranquilizer) $0.79 $2.00 153% Dalmane (tranquilizer) $0.61 $2.00 228%

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Prescription Drug Abuse: How Bad?

A federal survey of the United States population for 1994 estimates that the nonmedical use of prescription drugs is greater than cocaine, crack cocaine, and heroin use. Only marijuana is used more than prescription drugs. Nonmedical drug use means: Using more than prescribed, more often than prescribed, for reasons other than prescribed, and without a prescription.

Estimated illicit drug use, in millions.

1. Ever Used, 71,935,000.

2. Used in Past Year, 22,663,000.

3. Used in Past Month, 12,553,000.

Marijuana

1. Ever Used, 65,229,000.

2. Used in Past Year, 17,813,000.

3. Used in Past Month, 10,112,000.

Prescription Drugs.

1. Ever Used, 20,926,000.

2. Used in the Past Year, 6,056,000.

3. Used in Past Month, 2,566,000.

Cocaine.

1. Ever Used, 21,821,000.

2. Used in Past Year, 3,664,000.

3. Used in Past Month, 1,382,000.

Crack Cocaine.

1. Ever Used 4,042,000.

2. Used Past Year, 1,258,000.

3. Used in Past Month, 520,000.

Heroin*.

1. Ever Used, 2,083,000.

2. Used Past Year, 281,000.

3. Used Past Month, Not Available.

Hallucinogens.

1. Ever Used, 18,217,000.

2. Used in Past Year, 2,725,000.

3. Used in Past Month, 960,000.

SURVEY METHODOLOGY: The survey by the National Institute of Drug Abuse estimated population-wide drug use based on a scientifically selected sample of 29,000 people, who were personally interviewed in a telephone survey. Numbers appearing in this chart are extrapolated from the sample, based on the 1994 United States population. Because the sample does not include the homeless or the incarcerated, some experts believe the totals underestimate use.

NOTES: The survey by institute includes one-time, occasional and regular users of controlled substances. The categories are cumulative, meaning one respondent’s answers may be included in more than one category, due to use of multiple drugs. Nonmedical use is calculated for four classes of psychotherapeutic drugs: analgesics or painkillers, stimulants, sedatives and tranquilizers.

* Number who used heroin in the past month was unavailable.