[Senate Hearing 110-922]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-922
 
ELECTRONIC PRESCRIBING OF CONTROLLED SUBSTANCES: ADDRESSING HEALTH CARE 
                     AND LAW ENFORCEMENT PRIORITIES

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 4, 2007

                               __________

                          Serial No. J-110-64

                               __________

         Printed for the use of the Committee on the Judiciary




                  U.S. GOVERNMENT PRINTING OFFICE
53-359                    WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001


                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
      Michael O'Neill, Republican Chief Counsel and Staff Director



                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts..................................................     4
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................     3
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................     1

                               WITNESSES

Adams, Laura, President and CEO, Rhode Island Quality Institute, 
  Providence, Rhode Island.......................................    21
Hutchinson, Kevin, CEO, Sure Scripts, Alexandria, Virginia.......    23
Miller, David, Chief Security Officer, Covisint, Detroit, 
  Michigan.......................................................    26
Podgurski, Mike A., R.Ph., Vice President, Pharmacy Services, 
  Rite Aid Corporation, Camp Hill, Pennsylvania..................    28
Rannazzisi, Joseph T., Deputy Assistant Administrator, Drug 
  Enforcement Administration, Office of Diversion Control, 
  Alexandria, Virginia...........................................     5
Trenkle, Tony, Director, Office of E-Health Standards and 
  Services Centers for Medicare and Medicaid Services, Baltimore, 
  Maryland.......................................................     7

                         QUESTIONS AND ANSWERS

Responses of Joseph Rannazzisi to questions submitted by Senator 
  Whitehouse.....................................................    40

                       SUBMISSIONS FOR THE RECORD

AARP, Washington, D.C., statement................................    44
Adams, Laura, President and CEO, Rhode Island Quality Institute, 
  Providence, Rhode Island, statement............................    48
American Pharmacists Association, Washington, D.C., statement....    51
CHCC Corporate Health Care Coalitia, statement...................    55
e-Prescribing Controlled Substances Coalition, letter............    57
Hutchinson, Kevin, CEO, Sure Scripts, Alexandria, Virginia, 
  statement......................................................    75
Miller, David, Chief Security Officer, Covisint, Detroit, 
  Michigan, statement............................................    84
National Association of Chain Drug Stores, Alexandria, Virginia, 
  statement......................................................    92
Podgurski, Mike A., R.Ph., Vice President, Pharmacy Services, 
  Rite Aid Corporation, Camp Hill, Pennsylvania, statement.......    99
Rannazzisi, Joseph T., Deputy Assistant Administrator, Drug 
  Enforcement Administration, Office of Diversion Control, 
  Alexandria, Virginia, statement................................   106
Trenkle, Tony, Director, Office of E-Health Standards and 
  Services Centers for Medicare and Medicaid Services, Baltimore, 
  Maryland, statement............................................   115
Walgreens, Washington, D.C., statement...........................   122


ELECTRONIC PRESCRIBING OF CONTROLLED SUBSTANCES: ADDRESSING HEALTH CARE 
                     AND LAW ENFORCEMENT PRIORITIES

                              ----------                              


                       TUESDAY, DECEMBER 4, 2007

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                     Washington, DC
    The Committee met, pursuant to notice, at 10 a.m., in room 
226, Dirksen Senate Office Building, Hon. Sheldon Whitehouse, 
presiding.
    Present: Senators Kennedy, Specter, and Coburn.

 OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, A U.S. SENATOR 
                 FROM THE STATE OF RHODE ISLAND

    Senator Whitehouse. Welcome, everyone. I will call this 
hearing of the Judiciary Committee to order.
    We are here today to discuss an issue that is, as many 
issues are, at the conjunction of different departments and 
different responsibilities here in the government, and that is 
the electronic prescription of controlled substances.
    I am Sheldon Whitehouse, a member of this committee, and I 
have the honor to chair this particular hearing. I am joined by 
my very distinguished colleague from Massachusetts, Senator 
Kennedy, and I am very thrilled that he is here today. I 
appreciate it.
    Senator, with your permission I'll make a brief opening 
statement and then turn to you for opening remarks, then we can 
go on to the witnesses.
    And the Ranking Member has arrived, Senator Specter of 
Pennsylvania.
    Senator Specter. I arrived promptly at 10, may the record 
show.
    [Laughter.]
    Senator 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--this is 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 that 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 are 
unlikely to adopt a fully integrated electronic health record 
system which could decrease medical errors, better coordinate 
care, particularly for high-cost, chronically ill patients, and 
enhance efficiency throughout the system, though 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 road block in our way: current 
law does not permit the electronic prescription of schedule 
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 that we have to explore 
this morning are when, and how? First, the ``when''. DEA issued 
e-prescription regulations 4 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 am hoping that 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 have been 
the Attorney General of my State, I've been a U.S. 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 law enforcement.
    But protecting these 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 are 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 are 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.

        STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR 
                 FROM THE STATE OF PENNSYLVANIA

    Senator Specter. Thank you, Mr. Chairman. I note your 
comment that you don't often quote the President. He is widely 
quoted, occasionally favorably, by Democrats, but frequently 
quoted unfavorably by the Democrats. But I don't think he's a 
central party to this particular issue, and it is one of 
importance.
    Although I cannot stay too long, and Senator Coburn will 
represent the Republican side during the course of the hearing, 
I did want to come to lend my voice in support of using e-
prescriptions. We have a very distinguished array of witnesses. 
We have DEA here to express their point of view, and CMS to 
discuss their administration of the e-prescription program at 
HHS.
    I am pleased to note the presence of Mike Podgurski, who is 
Vice President for Pharmacy Services for Rite-Aid, a major 
Pennsylvania corporation with pharmacies all over the United 
States, specifically, 5,000 in stores in 31 States. We thank 
them for their participation in this hearing.
    I do believe that it is time that this issue came into the 
21st century. Electronic systems are in use. Having had some 
experience in prosecution, I can understand DEA's interest in 
having a paper trail. But these electronic transmissions are 
trailable. Some of the most significant evidence these days is 
dug up on e-mails, so electronic transmission would be a great 
help. Since you can prescribe certain controlled substances 
orally, it seems to me that using an electronic prescription 
system is an equallly sound way to approach it.
    Senator Whitehouse has already outlined the kinds of 
savings which are involved, and I think it would be very, very 
useful. So it is my hope that this hearing will shed some 
significant light and give the program a push, and perhaps 
motivate DEA to move forward on a timeline to set forth their 
position.
    Thank you, Mr. Chairman.
    Senator Whitehouse. Well, I thank the distinguished Ranking 
Member for honoring us with his presence today. I do appreciate 
it very, very much.
    I would recognize the senior Senator from Massachusetts, 
Senator Kennedy.

 STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR FROM THE 
                     STATE OF MASSACHUSETTS

    Senator Kennedy. Thank you very much, Senator Whitehouse, 
Senator Specter. On having this hearing, I first of all want to 
commend Senator Whitehouse for his interest and his knowledge 
and awareness about this issue. As an Attorney General, he has 
really led the country in terms of his commitment, in terms of 
quality health care in the State of Rhode Island and had a 
particular interest in the role of information technology. We 
know we've had the various GAO studies that estimated about $30 
billion a year could be saved in terms of adverse drug reaction 
with the use of information technology. Thirty billion dollars 
could be saved.
    So, there are broad policy issues, whether the DEA is 
playing the constructive role in terms of making available 
needed narcotics for people that have the kinds of health 
conditions where those are necessary, and also how you're going 
to be able to police the fraudulent use, which is an issue and 
a problem in terms of the country. It's a balance. That's what 
this hearing is about. But it has broad implications as well.
    In many respects, the way that the DEA goes will have an 
implication in terms of where the Nation goes on issues of 
information technology and the use of e-prescribing. So they 
have incredible, broad health kinds of implications, these 
decisions, and that's why this hearing is so important and why 
I commend Senator Whitehouse for his interest. We've lagged 
behind other nations in the world in terms of the use of 
information technology.
    Just a final point. We in Massachusetts have both 
physicians and pharmacies that have already begun adopting e-
prescribing, and our patients are benefiting. Massachusetts was 
recognized as the State with the highest volume of electronic 
prescriptions per capita in the country. We have an 
infrastructure to move forward with incorporating controlled 
substances into the electronic prescribing. It's my 
understanding that Massachusetts applied for a waiver from DEA 
to allow them to move ahead after they had spent a great deal 
of time in working through this issue. I'm disappointed to hear 
that the waiver was rejected.
    So, I hope that the DEA's concerns could be addressed in a 
manner that would allow the health care providers, the 
patients, to benefit from the advantages of electronic 
prescribing. This is a very important health care issue. There 
are a lot of concerns that American families have about health 
care, such as access, cost, availability, dependability, 
reliability, a lot of different kinds of issues. Prevention, 
case management. A thousand different kinds of issues. But this 
one here is of incredible importance and consequence.
    I just commend the Chair for having it, and I hope the DEA 
and CMS will work very closely with the Chair and others 
interested in this issue so we can make progress. It's really 
key in terms of quality and in terms of cost, and it seems to 
me in terms of law enforcement, as has been the case by Senator 
Whitehouse with his work as Attorney General, and someone who 
understands this and its importance in terms of law 
enforcement. That's why the Judiciary Committee is having this 
hearing. I want to commend you and thank you for having it, and 
look forward to working with you and our witnesses to see if we 
can't make progress.
    Senator Whitehouse. Well, thank you, Senator Kennedy. It's 
a great honor for all of us to have you here. There is no 
person in this institution who has shown more leadership on 
health care than you, so we're honored that you could stop by 
today. I appreciate it very much.
    We have as our first panel of witnesses Joseph Rannazzisi 
from the Drug Enforcement Administration; and Tony Trenkle, who 
is the Director of the Office of E-Health Standards and 
Services. If I might ask you gentlemen to please stand to be 
sworn.
    [Whereupon, the witnesses were duly sworn.]
    Senator Whitehouse. Thank you very much. Please be seated.
    I believe, at least in my order of proceeding, that Mr. 
Rannazzisi goes first. So if you'd care to give your opening 
statement now, I would appreciate it. I thank you for being 
here. I understand that you oversee DEA's effort to prevent, 
detect, and investigate the diversion of pharmaceutical 
controlled substances and listed chemicals, so I appreciate you 
taking time out of your busy work to come here. Thank you, sir.

      STATEMENT OF JOSEPH T. RANNAZZISI, DEPUTY ASSISTANT 
   ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION, OFFICE OF 
               DIVERSION CONTROL, ALEXANDRIA, VA

    Mr. Rannazzisi. Thank you, Chairman Whitehouse. Good 
morning. On behalf of Acting Administrator Michele Leonhart and 
the men and women of the Drug Enforcement Administration, I 
want to thank you for this opportunity to appear today to 
discuss DEA's ongoing efforts to establish standards that will 
permit electronic prescribing for controlled substances.
    Before I elaborate on our progress toward this end, I want 
to explain the need for ensuring the distribution system for 
controlled substances, even when it includes electronic 
prescription, remains a closed system as envisioned by the 
Controlled Substances Act, also known as the CSA. In recent 
years we've seen a remarkable reduction in the number of 
individuals who abuse illicit drugs. However, we are now 
fighting an alarming increase in the abuse and trafficking of 
prescription medication. In just 5 years, the number of 
Americans abusing prescription drugs rose more than two-thirds, 
from 3.8 million abusers to nearly 7 million.
    DEA is charged with the responsibility to prevent diversion 
while ensuring there is an adequate, non-interrupted supply of 
pharmaceutical drugs to meet legitimate medical needs. Since 
passage of the CSA, there have been significant technological 
advancements that affect the way DEA carries out its mission.
    The information and technological revolution promotes 
business models that improve efficiency, shrink costs, and 
reduce paperwork. Unfortunately, DEA's investigative and 
regulatory obligations must factor in an element that is not 
part of such innovative business models: the criminal element. 
To be effective, DEA must be able to identify, collect, and 
preserve evidence for subsequent criminal, civil, and 
administrative proceedings.
    An area not contemplated by Congress during the creation of 
the CSA was the Internet, which has drastically altered the 
medical community's traditional business models. As the number 
of Americans with Internet access has increased, so, too, have 
the opportunities for individuals to acquire pharmaceutical 
controlled substances over the Internet, both legally and 
illegally.
    Technology, when used appropriately, can increase 
efficiency and reduce costs. However, DEA knows all too well 
that individuals are more than willing to exploit weaknesses in 
technology for financial gain. A small number of individuals 
can wreak havoc in a very short period of time.
    Let me give you an example of how technology can be 
exploited, and the subsequent damage. In 2006 alone, just 34 
pharmacies used the Internet to illegally divert more than 98 
million dosage units of hydrocodone. Now, DEA recognizes that 
there are strong societal benefits realized by enabling 
individuals to fill their prescriptions over the Internet, as 
long as all of the parties involved do so in accordance with 
the law. However, the anonymity of the Internet and the 
proliferation of Web sites that facilitate illicit transactions 
for pharmaceutical controlled substances have given drug 
traffickers and drug abusers the means to circumvent the law, 
as well as sound medical practice.
    The overwhelming majority of prescribing in America is 
conducted responsibly, but a small number of unscrupulous 
practitioners prescribe controlled substances improperly; 
carelessly at best, knowingly at worst. Their actions help 
supply America's second most widespread drug addiction problem.
    In the case of electronic transmissions involving 
prescriptions for controlled substances, DEA's responsibility 
to identify, collect, and preserve evidence is a challenging 
task. According to a recent report by the Kaiser Family 
Foundation, there were more than 3.5 billion prescriptions 
written in the U.S. in 2005. The report noted that this was a 
71 percent increase from the number of prescriptions written in 
1994, compared to a U.S. population growth of only 9 percent 
during that same period. Based upon these figures, the number 
of prescriptions written for controlled substances in 2005 were 
between 360 and 400 million.
    To meet statutory obligations, DEA must ensure that any 
electronic system used for transmitting a prescription for a 
controlled substance include three factors: authentication, 
non-repudiation, and integrity in the recordkeeping process and 
system. It is critical that we acknowledge and account for the 
clear and distinct differences between the system for non-
controlled substances and one for a powerful and addictive 
controlled substance.
    The technology and standards which are ultimately 
promulgated for the electronic prescribing of controlled 
substances cannot simply be plug-and-play; a system that does 
not have adequate safeguards and accountability simply provides 
a plausible defense for those who would exploit such a system 
to divert even more controlled substances to those willing to 
abuse them.
    I'd like to close by saying that DEA is committed to 
establishing a system of electronic prescribing, but only a 
system that's in the best interests of the American public. A 
system without adequate safeguards is nothing more than an 
electronic superhighway for prescriptions, with an express lane 
for diversion. DEA is committed to protecting the public, first 
and foremost.
    On behalf of the Drug Enforcement Administration, I want to 
thank you for this opportunity to appear today and I look 
forward to answering any questions you may have.
    [The prepared statement of Mr. Rannazzisi appears in the 
appendix.]
    Senator Whitehouse. Thank you.
    I think what I'll do right now is actually go to the 
opening statement of Mr. Trenkle, and then we can have a 
discussion back and forth with both of you.
    Mr. Trenkle.

  STATEMENT OF TONY TRENKLE, OFFICE OF E-HEALTH STANDARDS AND 
     SERVICES, CENTERS FOR MEDICARE AND MEDICAID SERVICES, 
                         BALTIMORE, MD

    Mr. Trenkle. Good morning, Senator Whitehouse. I am pleased 
to be here today to discuss CMS's leadership role in the 
ongoing development of uniform standards for electronic 
prescribing for the Medicare Part D program.
    More than 43 million people are covered by Medicare alone 
this year. Since the enactment of the Medicare Prescription 
Drug Improvement and Modernization Act of 2003, CMS has been 
working with its government partners and industry stakeholders 
to develop and implement standards that would create an 
infrastructure that will allow us to realize the significant 
potential public health and safety benefits e-prescribing 
offers for the Medicare population.
    The MMA directed CMS to promulgate standards for a 
voluntary e-prescribing program in the Medicare Part D 
prescription drug benefit. For several years now, CMS has 
pursued an incremental approach to adopting final uniform 
standards for Part D e-prescribing that are consistent with the 
MMA's objectives of patient safety, quality, and efficiency.
    And as you mentioned, beyond Part D, facilitating the 
widespread adoption of e-prescribing is one of the key action 
items in the administration's effort to build a nationwide 
interoperable electronic health information infrastructure.
    The current handwritten medication prescription process, as 
we know, is prone to errors. In addition to ineligible 
prescriptions, it is estimated that some 530,000 adverse drug 
events take place annually among Medicare beneficiaries alone. 
The Institute of Medicine last year reported that more than 1.5 
million Americans are injured each year by drug errors in 
hospitals, nursing homes, and doctors' offices.
    E-prescribing has the potential to empower both prescribers 
and pharmacists to deliver higher quality care and improve work 
flow efficiencies. For providers who choose to invest in e-
prescribing technology, quality and efficiency can improve, 
resulting in better beneficiary outcomes and, more importantly, 
saving lives.
    We continue to make progress on the e-prescribing front. To 
encourage e-prescribing in the initial year of the Part D 
program, we published a final rule establishing a set of 
foundation standards. The rule reflected industry consensus and 
recommendations from the National Committee on Vital and Health 
Statistics, which is a Federal advisory committee representing 
significant experience in health information technology, 
including e-prescribing. These foundation standards took effect 
January 1, 2006 and they were related to transaction and 
eligibility information exchanges among providers, dispensers, 
and Part B plan sponsors.
    In 2006, following implementation of the foundation 
standards, CMS, along with another HHS agency, the Agency for 
Healthcare, Research, and Quality, ARQ, conducted a series of 
pilot tests to test six additional standards for potential 
adoption. Results of the pilot testing were issued by the 
Secretary in a report to Congress April of 2007.
    Based on the pilot results, several weeks ago, November 15, 
2007, we published a Notice of Proposed Rulemaking to adopt two 
additional standards for e-prescribing in Part D: the first 
proposed standard for formulary and benefits governs 
information for prescribers about a patient's drug coverage 
provided at the point of care; the second proposed standard for 
medication history is intended to provide a uniform means for 
prescribers, dispensers, and payors to communicate about drugs 
that have been dispensed to a patient. The four remaining 
standards tested during the pilot are not proposed for adoption 
at this time, but may be proposed in the future.
    CMS is committed to continue testing and partnerships with 
all stakeholders to advance the development of secure, 
scaleable, and administratively feasible e-prescribing 
standards for use throughout the health care system. The 
challenge moving forward is that the law does not treat all 
prescriptions equally. As the e-prescribing environment 
continues to evolve, we support a consistent e-prescribing 
framework because we feel the alternative could slow adoption 
and generate undue administrative burden, along with attendant 
incremental costs.
    For this reason, CMS believes that existing standards and 
industry practices must be given careful consideration in 
future efforts to establish e-prescribing standards, such as 
those related to controlled substances.
    CMS has heard from various stakeholders in both public 
testimony and in written comments to proposed e-prescribing 
standards regulation that the inability to prescribe controlled 
substances electronically is a major inhibitor of overall 
growth of e-prescribing.
    In response, CMS and other parts of HHS have reached out to 
the DEA to work jointly, along with appropriate stakeholders, 
to identify and adopt solutions for the secure e-prescribing of 
controlled substances. These solutions must be consistent and 
scaleable with current mainstream practices and work flows.
    In July 2006, HHS and DEA co-sponsored a public meeting on 
e-prescribing of controlled substances and solicited input from 
stakeholders. The stakeholders spoke from various perspectives, 
but agreed that a consistent approach to e-prescribing was 
critical.
    Following the hearing, CMS and DEA have had further 
discussions on how best to move ahead, including potential 
pilot testing. Recently, because of its critical importance to 
the administration's HIT agenda, we asked Dr. Robert Kolodner, 
the national coordinator for health information technology, to 
help broker an acceptable solution. Dr. Kolodner had agreed, 
and has begun meeting with CMS and DEA.
    Thank you for the opportunity to talk about CMS role in 
promoting e-prescribing. We are committed to ensuring patient 
safety, not only for the Medicare population, but for all 
Americans. E-prescribing saves lives, and it is critical to 
take all necessary steps to achieve widespread adoption of e-
prescribing. Thank you.
    [The prepared statement of Mr. Trenkle appears in the 
appendix.]
    Senator 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. Yes. Our staffs have met and we've been on the 
phone with DEA a number of times, I've mentioned.
    Senator Whitehouse. And it sounds as if the entry of Dr. 
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 welcomed. Yes, we welcome his perspective as 
well. Also, Mr. Trenkle testified in that hearing in July, 2006 
and it was a very informative hearing.
    Senator Whitehouse. I've run administrative agencies and so 
I have the experience of the triage of priorities that is 
necessary in 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 
just 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 CSAS has worked very 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.
    Senator 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.
    Senator Whitehouse. When was this?
    Mr. Rannazzisi. OMB, probably within the last month. Within 
the last week.
    Senator Whitehouse. Oh, 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.
    Senator Whitehouse. And you have said that, nationally, the 
misuse of prescription drugs was second only to the use of 
marijuana in calendar year 2005, and far exceeds other illicit 
drugs--cocaine, heroin, PCP, amphetamines.
    Mr. Rannazzisi. Yes, sir.
    Senator Whitehouse. 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 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. Do I believe that electronic prescribing will prevent 
diversion? It will prevent some diversion, absolutely, if it's 
done properly. Yes. We're proponents of the two-factor 
authentication system. The reason we're proponents of two-
factor authentication is because that will help us identify who 
is actually writing the prescription.
    Senator Whitehouse. But to your example a moment ago, you 
spoke about a small number of pharmacies in which an enormous 
amount of potentially illicit prescriptions were flowing of 
hydrocodone, oxycodone. I forget which one you mentioned.
    Mr. Rannazzisi. Right.
    Senator Whitehouse. 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.
    Senator Whitehouse. But you would 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 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, are there not also purely law 
enforcement gains from going to an electronic prescription 
system for controlled substances?
    Mr. Rannazzisi. Well, I would 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 will 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.
    Senator Whitehouse. Why was that shot down?
    Mr. Rannazzisi. That was shot down, not because of the 
merits of the program, not because of the protocols, but 
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 rulemaking process is. For us to agree to that, 
we'd be hijacking the rulemaking process. We didn't disagree 
with the merits of that pilot. In fact, we're working with 
Massachusetts right now for them to resubmit so we can approve 
it. So it's not been shot down, we're just in the process of 
trying to work with them to get their protocols back in so we 
could approve it.
    Senator Whitehouse. My distinguished colleague, Senator 
Coburn, has joined us. I have been taking the floor for a while 
now in asking a number of questions, so if you would like to 
step in, Senator, I would yield the floor to you.
    Senator Coburn. It's curious to me, with all the benefits 
that we're going to get from e-prescriptions, why you all would 
not say, here are the things we have to have as you do this. In 
other words, rather than worry about the ``what ifs'', why 
don't you tell us what the ``what ifs'' are and have us write 
legislation that covers it? There is no question, consumers are 
going to be better off in this country with the pharmacist not 
reading my handwriting. There's no question about that. There 
is no question that control of controlled substances is going 
to be far improved with e-prescriptions. Will there be new 
potentials for abuse? Yes. Will there be new loopholes?
    But I think, reading the history on this last night, it 
seems to me that the problem is, the DEA needs to tell us, here 
are the things we're concerned about, fix that as you write 
this, and you change this, rather than saying we can't get 
there. We have to get there. We have a lot of problems in terms 
of IT interoperability now in health care, and that's something 
the administration is doing a great job on. They don't need a 
piece of legislation for it. They're actually accomplishing it 
under Secretary Leavitt now.
    But assuming that the interoperable standards are going to 
be there and that the medical community and the health care 
community is going to eventually go online with medical 
records, et cetera, to say that we can't come up and lead on 
what is necessary--I'd just like your comment. Why wouldn't you 
just give back to this committee, here's the things that we 
think have to be included in anything that has to happen in 
terms of e-prescriptions for controlled substances, and then 
let us work with you as we formulate legislation to create that 
so that we have the safeguards against abuse of controlled 
substances?
    Mr. Rannazzisi. Well, Senator, I believe we've gone on 
record numerous times as saying the three things that we need 
are authentication, non-repudiation, and a system that protects 
the integrity of the recordkeeping process. The devil is in the 
details. I would love to sit here and give you a laundry list 
of things that we need. Technically, I'm not the person to do 
that. That's what I have a technical staff for.
    However, they are just as cautious of developing these 
protocols as I am because they know that we have pretty much 
one shot to do it right. If we don't do it right, there could 
be a massive problem in the system which causes a lot of 
diversion, a huge avenue of diversion. That's what a pilot 
program is for. That's why this pilot is important to us. In 
fact, Massachusetts' pilot was just resubmitted last Thursday 
and we're in the process of reviewing it now. If we can get 
that pilot up and running, we'll have a better idea of how the 
system works.
    Senator Coburn. There is a massive amount of diversion now.
    Mr. Rannazzisi. Yes, there is. And we don't want to 
contribute to that.
    Senator Coburn. But not looking at the opportunity for 
eliminating what's there now by going to an e-prescription 
would seem to me--you have a shop. You can offer suggested 
legislative language that would raise your concerns on that, 
that would address every concern that the DEA would have.
    Mr. Rannazzisi. Being in the rulemaking process right now 
and drafting proposed regulations, I think we're requesting 
more time to get this right. I would love to give you language 
for legislation, but we're so far along in the rulemaking 
process right now, the regulation process right now, I think if 
you just give us a little more time we'll have something that 
we'll all benefit from.
    Senator Coburn. What is ``a little more time''?
    Mr. Rannazzisi. That's the question of the decade. If the 
Drug Enforcement Administration was the approving authority, 
the sole approving authority for all rules and regulations, as 
the head of the Office of Diversion Control I would give you a 
time. But it's not. We have to go through a process of vetting 
with several agencies and several different components of the 
administration. If I sat here and gave you a time limit, I'd be 
lying to you and I don't want to do that.
    Senator Coburn. Good. Give us the time at which you will 
offer that vetting to the other agencies.
    Mr. Rannazzisi. At this point in time I don't believe I'm 
able to do that.
    Senator Coburn. Is there a time at which you will be able 
to give us that?
    Mr. Rannazzisi. Yes. I'd like to see, once Massachusetts is 
up and running, how their program is working.
    Senator Coburn. That's a little bit frustrating, just to be 
quite honest with you. The fact is, you're responsible for 
control of--
    Mr. Rannazzisi.--Yes, I am.
    Senator Coburn [continuing.] Controlled substances in this 
country, and there is no question, it's an indisputable fact 
that we're going to have a better handle on it if we do it in a 
more advanced technological way. E-prescriptions is that way. 
The idea is, you don't want to go on record to be held to 
account; because somebody might hold you to account is why 
we're not going to get there as soon as we should get there. 
Every day we don't get there, somebody dies from an overdose. 
Somebody puts somebody else onto a drug. We see more drugs on 
the street. The fact is, we're talking about ways to actually 
improve the DEA, the capability to enforce and do its job. I 
will submit some letters, some questions in writing. But I 
don't think that's an acceptable answer of not getting this 
point.
    Senator Whitehouse. I agree.
    Senator Coburn. There ought to be a time at which you can, 
with your staff, say we will have a position of DEA on e-
prescribing that raises the areas that we think are a problem, 
at which time we will submit for vetting for the rest of the 
administration. We'll do the oversight. I think Senator 
Whitehouse has proven that he's capable of doing the oversight.
    If you've submitted it and we know it, then we'll be 
bringing everybody up here and saying, ``What's wrong with 
it?'' The fact is, we need to get there. We're behind the rest 
of the world in terms of IT and health care. This is a large 
component that's going to make a big difference in terms of 
offering health to people and safety to people. So, I just 
think that we need to have a date from you. You all know the 
process.
    I'm very supportive of DEA. I know that a lot of the 
problems with controlled substances is physician-based because 
we don't do our job, or we don't do it the way we should. But 
this is an area of expertise and of a technical nature that you 
all have, and can have, and can offer. We ought to have a time 
frame. My fear is, we're going to be sitting here 2 years from 
now doing the same thing because the pilot didn't go as you 
wanted. So what if the pilot doesn't go? If you know what you 
want and you know what you need, we can solve the problem. But 
we can't if we don't start. The starting point has to be with 
you all saying here's what you'd like to have.
    Mr. Rannazzisi. Sir, we look forward to working with this 
committee, working with your staff and Senator Whitehouse's 
staff. We'd be more than happy to provide briefings for you on 
where we are and how we're going about the process. I regret 
that I can't give you a date, a hard date. I would love to give 
you a hard date. I'm a health professional. I'm a pharmacist, a 
registered pharmacist by trade, so I understand the problems. 
But I just think it would be foolish for me to give you even an 
estimate because I'd just be speculating.
    Senator Coburn. So there's nothing inside your organization 
today that says ``we have a goal to get there X''?
    Mr. Rannazzisi. Yes, there is.
    Senator Coburn. And when is that? When is that X?
    Mr. Rannazzisi. We have a goal to get to a particular 
place, but we don't have a time period yet. I can tell you, we 
are drafting regulations. We've been in contact with HHS. We've 
discussed our regulations with the department. We've discussed 
our regulations with ONDCP. It's in the process. However, I 
just can't give you a hard date. Again, that would be reckless 
for me to give you a hard date. When? Trust me, as soon as 
possible, as far as I'm concerned.
    Senator Coburn. Thank you. I don't have any other 
questions.
    Senator 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 
would 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. 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 
pinned down any accountability points for this, none of that 
registers with us as resembling ``top priority''.
    Mr. Rannazzisi. I don't think you compare prioritization of 
tasks with a staff than with an agency that has to deal with 
several other agencies, in addition to several administration 
components. The fact is, when we're drafting the rules we don't 
do it in a vacuum. We're in constant contact with the agencies 
that we work with, bouncing things off of them.
    Senator Whitehouse. But everybody else 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 seems.
    Mr. Rannazzisi. And 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, we have to protect 
the public health and safety from diversion of controlled 
substances, and to do that we have to--
    Senator Whitehouse. Let me stop you right there.
    Mr. Rannazzisi. OK.
    Senator 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. 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.
    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 sort of, I'm calling it the ``gateway'' 
factor, that this can be a progress step toward an electronic 
health system for America that can reap enormous rewards, and 
we're holding back on that progress here. While, on the 
internal calculation with respect to DEA, 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. Yes. Controlled substances are a different 
type of drug than non-controlled substances, or legend drugs. 
The fact 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. In my 
20-plus years of law enforcement, I've never seen anybody 
selling amoxicillin, Indural, or any of those other drugs out 
on the street, 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 incredibly 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. That's why we're 
moving so cautiously.
    Senator Whitehouse. My problem, Mr. Rannazzisi, is 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. 
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 our 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. OK. However, 
again, that aside, I have to look at other things.
    Now, there's no question that there are benefits.
    Senator Whitehouse. Do you look at that thing?
    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.
    Senator Coburn. Mr. Chairman, can I?
    Senator Whitehouse. Please.
    Senator Coburn. Two years from now, will we have a system?
    Mr. Rannazzisi. I would hope so.
    Senator Coburn. But you can't say ``yes, we will''? We're 
getting to that Coburn's Theory of Bureaucracy: never do what's 
best when you can do what's safe. Now, I understand you're a 
safety agency. But the goal is hiding behind a message that 
allows you not to step up to the line. That's what I'm hearing, 
and that's what I don't like. It has nothing to do with you 
personally, Mr. Administrator. It has to do with the fact that 
everybody else that's sitting here watching this hearing is 
saying, why couldn't they do it in 2 years? Why couldn't it get 
done in 2 years?
    The question is, obviously it could if people committed to 
it and did it. But what we have is no commitment, which is 
worrisome because we may be here 2 years from now with the 
exact same problem on controlled substances. My dealings with 
the DEA in the past have been very, very similar in terms of 
responsiveness. So, you need at least to give the committee 
some type of assurance we're going to get this problem solved 
in some timeframe. If you say ``three years'', great, 3 years. 
But to not say anything means that you're not going to step up 
to the line and say, here's something we need to do for this 
country.
    Mr. Rannazzisi. Sir, I would hope that within 3 years we 
have a system in place. My personal goal is quite a bit shorter 
than that, but in 3 years I would hope to have some system in 
place, yes. You know, obviously it's a personal goal to have it 
a lot quicker. But, you know, if you're asking me, for 3 years, 
I believe that in 3 years some system will be in place, yes.
    Senator Coburn. Have you communicated with your staff that 
this is something we're going to get done and we're going to 
get it done in a certain timeframe?
    Mr. Rannazzisi. My staff is right behind me here and--
    Senator Coburn. No, no. I said, have you communicated to 
your staff that, this is our goal, this is what we're going to 
get done, and we're going to get it done in a certain 
timeframe?
    Mr. Rannazzisi. I've communicated to my staff that we have 
a goal and we want to get to it as quickly as possible, 
however, with the appropriate safeguards to protect the 
integrity of the closed system. Yes.
    Senator Coburn. But every agency head in this Federal 
Government can answer a question that way. What I'm saying is, 
have you set a goal, a time goal, within your staff to get 
something done?
    Mr. Rannazzisi. No, I can't set a time goal, sir.
    Senator Whitehouse. Let me ask you a different question. 
DEA agents out in the field. I was 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.
    Senator Whitehouse. And that system is kept secure?
    Mr. Rannazzisi. There are security safeguards built within 
the system, depending on the system you're using, yes.
    Senator Whitehouse. And they're adequate for the DEA to 
have taken that step and gone to electronic internal 
communication. Correct?
    Mr. Rannazzisi. Yes.
    Senator Whitehouse. And highly confidential investigative 
and other material is transmitted through that system between 
offices and from agents back to headquarters?
    Mr. Rannazzisi. Depending on the level of security of the 
information, no, not necessarily. We have several different 
systems to pass information depending on the level of security 
necessary for that information.
    Senator 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.
    Senator Whitehouse. And you do that day in and day out. 
It's happening right now over at the DEA.
    Mr. Rannazzisi. Yes.
    Senator 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, and who is involved, and how 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. Yes.
    Senator Whitehouse. And you keep those databases 
electronically, don't you?
    Mr. Rannazzisi. Yes.
    Senator Whitehouse. And you're comfortable that they can be 
kept securely?
    Mr. Rannazzisi. Yes.
    Senator 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 concerns, sir.
    Senator Whitehouse. 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 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. 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 2 years we've not only 
promulgated two sets of standards, we've also run five pilot 
projects that 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 
within e-prescribing and HIT as a whole.
    Senator 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, and in addition 
takes into account DEA's requirements, but not to build 
something that would potentially require two systems.
    Senator Whitehouse. A parallel and independent system. Yes.
    Mr. Trenkle. Correct.
    Senator 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 to probably 
push doctors away from prescribing through electronic means. 
So, yes, we share that goal.
    Senator 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 
timeframe is for the administrative process of concluding the 
e-prescribing rulemaking.
    That would include not only an end date by which somebody 
is 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 rulemaking, 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. 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 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. We need to move rapidly toward 
developing information technology support for our health care 
system.
    I think it is probably Secretary Leavitt's primary, single 
goal. 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.
    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. Some of those are insured families 
who find that they're in a nightmare, despite the fact that 
they thought they had adequate insurance. So, there's a lot at 
stake here. 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. I have 
one that I will close this part of the hearing with, which is a 
quotation from a decision of the U.S. Supreme Court in an 
opinion authorized by the great Justice Holmes, Oliver Wendell 
Holmes.
    He said, ``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 become 
strong enough to hold their own when a certain point is 
reached.'' I think we are at the point in which the 
neighborhood of principles around drug diversion authority 
needs to assert itself.
    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. 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. Sometimes that job is to be a thorn in the side of the 
executive branch to spur activity. I'm sorry that you had to be 
at the point in the body where the thorn was applied today, but 
I'm sure 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. I appreciate those words. I will take this back to the 
Acting Administrator.
    Senator Whitehouse. And the question for the record is one 
that, if you could 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? Thirty 
days? Two weeks? You name it.
    Mr. Rannazzisi. To get back with the answer?
    Senator Whitehouse. Yes. We're getting concurrence here. 
Good.
    Mr. Rannazzisi. I would say within 60 days.
    Senator Whitehouse. Sixty days it is.
    Mr. Rannazzisi. Yes.
    Senator Whitehouse. I appreciate it. If you could make sure 
that it's returned not only to me, but also to Senator Coburn, 
who has shown such a distinct interest in this.
    Mr. Rannazzisi. OK.
    Senator Whitehouse. 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.
    We'll take a few minute break while the next panel gathers. 
We'll break for 5 minutes.
    Mr. Rannazzisi. Thank you, sir.
    [Whereupon, at 11:05 a.m. the hearing was recessed.]
    AFTER RECESS [11:09 a.m.]
    Senator 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. 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 
quality of health care lowers the cost. It's an area well worth 
mining, and she's done a wonderful job. 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 
architectural 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 other 300,000 users across the health care 
and automotive industries, as well as various public sector 
initiatives.
    Michael Podgurski has been at the Rite Aid Corporation 
since 1987, where he current 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 welcome 
you.
    He has served on both the Committee on Law Enforcement 
Legislation and the Task Force on Pharmacy Automation at the 
National Association of the Boards of Pharmacy, so he is 
perfectly positioned for this discussion today.
    I welcome all of the witnesses. I would ask that you stand 
as a group so that I can administer the oath.
    [Whereupon, the witnesses were duly sworn.]
    Senator Whitehouse. Thank you very much. Please be seated.
    Why don't I ask each of you to make a summary of the file 
testimony rather briefly, and just go right down the table. 
Then we can have a bit more of a dialog. 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.

   STATEMENT OF LAURA ADAMS, PRESIDENT AND CEO, RHODE ISLAND 
          QUALITY INSTITUTE, PROVIDENCE, RHODE ISLAND

    Ms. Adams. Thank you, Mr. Chairman. For the record, my name 
is Laura Adams and I'm the president and CEO of the Rhode 
Island Quality Institute. This is a not-for-profit organization 
founded 6 years ago by then-Attorney General of Rhode Island, 
now U.S. Senator, Sheldon Whitehouse.
    This multi-stakeholder organization, comprised of 
hospitals, physicians, nurses, consumers, insurers, and 
employers has the singular mission of significantly improving 
the quality, safety, and value of health care in Rhode Island. 
We have no other agenda and we are beholden to nobody but the 
people of the State of Rhode Island.
    I believe, Senator Whitehouse, I remember vividly you 
putting a fine point on this about 4 years ago for the members 
of the Institute when we were exploring the value of electronic 
technology in health care when you pointed out to all of us 
that anybody just has to go through a fast-food restaurant and 
watch your order come up on the screen to realize there's more 
technology in getting your hamburger from your fast-food 
restaurant than there is in getting your medications to 
patients. That point never left us.
    I am here today to respectfully request that the committee 
take action to strongly urge the Drug Enforcement 
Administration and the Department of Justice to promulgate 
regulations immediately for electronic prescribing of 
controlled substances that are technology neutral, that build 
on today's safe and secure electronic prescribing 
infrastructure, allow for future changes in growth of 
technology, privacy, and security safeguards in industry 
expansion.
    I'm going to speak about the need for those new regulations 
from the perspective of our broad-based coalition that's 
working together to transform the health care system in the 
State of Rhode Island. The Quality Institute serves as Rhode 
Island's regional health information organization, or RHIO. We 
strongly believe in the value of health information technology 
as an essential element of any viable proposal for addressing 
the problems that plague our health care system right, left, or 
center.
    It's our goal to bring about the delivery of health care 
system in our State, and bring it out of the paper-based 
system, which we recognize as a root cause of significant waste 
and harm and is a horrendous barrier to innovation.
    In order for the people of our State and our Nation to 
realize the promise of health information technology globally, 
their providers have to adopt it and use it. Our job in Rhode 
Island is to work diligently to lower these barriers to 
adoption. Our Clinical IT Leadership Committee, a group of some 
of the most competent and respected thought leader physicians 
in Rhode Island, has identified the inability to electronically 
prescribe controlled substances as a significant barrier to 
adoption.
    Some physicians on our committee, who devoted their scarce 
and valuable time to this work for more than 3 years, have 
cited this barrier as one of the primary reasons that they, 
themselves, have not yet adopted electronic prescribing, even 
though they're absolutely, unequivocally sure of the benefits 
to patients, providers, and payors.
    While approximately 12.5 percent of all prescribed drugs 
are controlled substances, perhaps a more significant number is 
the far higher percentage of patients that require the 
prescription of controlled substances in addition to 
medications that are permitted to be electronically prescribed.
    For example, in the very common situation where an elderly 
patient needs multiple medications to manage their chronic 
illnesses and some of the drugs are controlled, it makes it far 
more likely that a very busy practitioner who has adopted 
electronic prescribing will default to the paper-based system 
for all of the prescriptions for that particular patient than 
attempt other than operating parallel systems and their very 
complex office settings.
    Therefore, the inability to electronically prescribe 
controlled substances not only thwarts adoption in the first 
place, it suppresses the total number of electronic 
prescriptions written by those who have adopted and want to 
electronically prescribe.
    As I'm sure every member of the committee knows, research 
has shown that medication errors are occurring at an alarming 
rate in this country. With a staggering number of new drugs on 
the market and more and more coming out all the time, it's 
become all but impossible for providers to rely on their memory 
for proper dosing, avoidance of drug-drug interactions, and 
allergic reactions. I think David Eddie said it best when he 
said that ``the complexity of modern medicine has exceeded the 
capacity of the unaided human mind.''
    Controlled substances include some of the most potent and 
potentially harmful drugs, if given in the wrong dose or with 
other drugs that result in untoward reactions. When a misplaced 
decimal point or a drug interaction can be catastrophic--death 
by decimal point, if you will--these patients are effectively 
being denied a system that could save their lives. Patients who 
require controlled substances deserve the same opportunity for 
safer prescribing as all other patients.
    Another problem of great concern to emergency room 
physicians in Rhode Island is the electronic prescription of 
controlled substances prevention. It doesn't help them prevent 
``doctor shopping'', when patients with addictions or drug 
dependency problems go from physician to physician to obtain 
controlled substances. I was urged by the emergency room 
director of our largest institution in Rhode Island to bring 
this issue up today.
    Electronic prescribing by emergency room physicians can 
help to identify patients who doctor shop much more quickly and 
efficiently than is now possible. This creates an immediate 
electronic footprint or an audit trail that is documented and 
time stamped through each point in the process, from the 
prescriber's location to the pharmacy.
    This is not simply an e-mail over the Internet, not by a 
long shot. So that is not to say that electronic prescribing of 
controlled substances, in every instance, could prevent drug 
diversion. But it is saying that it can go a long way toward 
reducing incidents of doctor shopping, reducing the rate of 
those who successfully forge prescriptions, or alter the 
originals.
    We are asking today. The industry is ready. The need has 
never been greater. We are asking for your help to bring about 
the electronic prescribing of controlled substances and all the 
benefits it affords consumers, providers, and payors.
    Thank you for the opportunity to come before you today with 
this request.
    Senator Whitehouse. Thank you, Ms. Adams.
    [The prepared statement of Ms. Adams appears in the 
appendix.]
    Senator Whitehouse. Mr. Hutchinson.

 STATEMENT OF KEVIN HUTCHINSON, CEO, SURE SCRIPTS, ALEXANDRIA, 
                            VIRGINIA

    Mr. Hutchinson. Chairman Whitehouse, I thank you for the 
opportunity to testify on this very important topic. We at Sure 
Scripts have been interested in the implementation of 
electronic prescribing for controlled substances for several 
years and we're pleased to share our experiences and views on 
this very important matter.
    We were created by the National Community Pharmacists 
Association and the National Association of Chain Drugstores in 
2001. Our mission is to improve the overall prescribing process 
and to ensure, among other things, neutrality, patient safety, 
privacy and security, and enforce a patient's ability to choose 
their pharmacy, and a physician's ability to choose the 
appropriate therapy without encountering any commercial 
messages along the way.
    Under the leadership and with the backing of the pharmacy 
industry, Sure Scripts has created a neutral and secure network 
that is compatible with all major physician and pharmacy 
software systems.
    What is electronic prescribing? Put simply, it is not an e-
mail. It is the private and secure electronic delivery of 
prescription and other health care information from a 
prescriber's computer to the computer of the pharmacy, and back 
again.
    Allow me to point out what the term ``e-prescribing'' does 
not include. It is not using a computer-generated fax. It is 
not sending a prescription in an unsecure manner over the 
Internet. It does not entail unlicensed or rogue Internet 
pharmacies. The pharmacies that are connected to the network 
are duly licensed and legitimate retail and mail-order 
pharmacies.
    The company's services were first put into production 
sending and receiving electronic prescription transactions in 
January of 2004. Today, more than 95 percent of the Nation's 
pharmacies have computer systems that have been certified for 
connection to the Pharmacy Health Information Technology 
Exchange. Seventy percent of the Nation's pharmacies are live 
on the network today.
    In addition, physician software vendors, including 
electronic medical record vendors and stand-alone e-prescribing 
applications, whose combined customer base represents well over 
150,000 prescribing physicians, have contracted and certified 
their applications in the Nation's Pharmacy Health Information 
Technology Exchange.
    Electronic prescribing with respect to non-controlled 
substances is a reality today. In 2007, 35 million prescription 
transactions will have been routed electronically in the U.S. 
Over 35,000 prescribers will have been utilizing e-prescribing 
in the U.S., and over 40,000 pharmacies will have been e-
prescribing in the U.S. This represents 70 percent of the 
pharmacies in the United States.
    In fact, more prescribers electronically prescribed in the 
first 10 months of 2007 than in all of 2004, 2005, and 2006 
combined. There were more electronic prescriptions transmitted 
in the first 8 months of 2007 than in all of 2004, 2005, and 
2006 combined as well.
    For 2008, Sure Scripts estimates the number of prescription 
transactions routed electronically will grow to over 100 
million. We estimate that in 2008, the number of electronic 
prescribers will grow to approximately 85,000. Finally, for 
2008, Sure Scripts estimates the number of e-prescribing 
pharmacies will grow to 45,000.
    Today, Sure Scripts is issuing the ``National Progress 
Report on E-Prescribing'', an at-a-glance summary of key 
statistics detailing the status of e-prescribing adoption and 
utilization in the U.S. The deployment and use of electronic 
medical records is a bipartisan priority of Congress, as well 
as a priority of President Bush's administration. The 
automation of the prescribing process is considered by many to 
be the first step in the deployment of robust electronic 
medical records. Many would argue that if we cannot get 
providers to take the first step of e-prescribing, then how 
will we expect them to adopt a full-fledged electronic medical 
records system?
    Federal policymakers and a growing number of congressional 
and State legislators are calling for e-prescribing of 
controlled substances to enable public and private payors, 
consumers, and others to take full advantage of the safety 
benefits, quality of care improvements, and increased cost 
savings accruing from e-prescribing.
    Adoption and utilization of e-prescribing is on the rise, 
but there are still barriers to adoption. One of those 
significant barriers is the fact that prescribers cannot 
process controlled substances electronically. This prohibition 
directly affects more than 11 to 13 percent of prescribed 
medications in the U.S. today.
    Prescribers want, and need, to use just one tool and one 
process to prescribe their patients' medications. Using one 
process for one drug and another process for a second drug is 
inefficient, dangerous, and unnecessary. Consider a physician 
that's about to prescribe both controlled and non-controlled 
medications to his or her patient but cannot use electronic 
prescribing for all of the prescriptions.
    As a result, prescriptions are written electronically in 
which an automatic drug interaction check is performed, and the 
remaining drugs, which are controlled substances, are written 
by hand and no drug interaction check is performed against 
those medications, leaving the patient vulnerable to an adverse 
drug event. The more likely case, is the prescriber chooses to 
just use the paper and pen to issue all of the patient's 
prescriptions and the advantages of automatic drug interaction 
checks and use of available clinical decision support tools is 
lost.
    Time and time again, we hear from prescribers that they 
will not e-prescribe, at all because they cannot controlled 
substances electronically. Accordingly, the DEA prohibition 
affects not just the 11 to 13 percent of controlled substances, 
but a far greater number of prescriptions. This is truly a 
barrier to adoption.
    We agree that the criminal element is interested in 
leveraging today's paper-based process using fraudulent means 
to obtain Schedule II through V drugs, and we absolutely agree 
that the DEA and other law enforcement officials need the 
necessary tools to find and prosecute those who abuse drugs and 
break the law.
    We believe, however, the current system used for e-
prescribing supports the highly secure transmission of 
prescriptions, regardless of Schedule. We believe that today's 
system of e-prescribing would enhance, not deter, law 
enforcement. E-prescribing is far safer and more secure than 
today's paper world in which prescription pads are stolen, home 
computers can easily print out counterfeit prescriptions, 
signatures can be scanned and forged easily, and drug 
quantities can be altered manually by patients before 
prescriptions are delivered to the pharmacy.
    In fact, Congress has always concluded that e-prescribing 
is a substitute for paper and pen with respect to the 
prevention of fraud. In Section 7002(b) of the U.S. Troop 
Readiness, Veterans Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act of 2007, Congress mandated 
the use of tamper-proof pads for all Medicaid prescriptions. It 
significantly allowed for e-prescribing as an alternative to 
even tamper-proof paper.
    Among other things, the law aimed to prevent patients from 
illegally obtaining controlled drugs. Accordingly, Congress has 
also recognized that e-prescribing prevents fraud as much, if 
not more than, the vulnerable paper- based system that exists 
today.
    The current e-prescribing system also allows for the 
tracking of prescriptions on a real-time basis, which is not 
possible, at least in a timely and scaleable way, with paper 
processes in place today. E-prescribing could help law 
enforcement to quickly identify in real time patients who 
doctor shop and garner multiple prescriptions for controlled 
substances.
    E-prescribing, additionally, creates an immediate 
electronic audit trail that is documented and time stamped 
through each point in the process, from the prescribing 
clinician's office to the pharmacy. These electronic audit 
trails show who touched the prescription, and when.
    If the prescription is created and sent electronically, 
these built-in audit trails also could be used to identify drug 
shopping if the patient pays cash. These electronic records, 
available from the proactive process that is now live in all 50 
States, including the District of Columbia, when subpoenaed, 
could assist law enforcement in prosecuting diversion cases in 
a much more timely and efficient manner than today's e-
prescribing process.
    Accordingly, we call upon Congress to encourage the 
adoption of regulations that would allow for electronic 
prescribing of controlled substances. Such regulations should 
set forth policy that achieves the goals and mandate of law 
enforcement authorities and not mandate particular 
technologies. E-prescribing, as currently conducted, not only 
will enhance law enforcement, but will advance a legislative 
agenda promoting electronic health records, which will save the 
Federal Government millions of dollars, and will save lives.
    We are Sure Scripts thank the committee for the opportunity 
to share our experiences with respect to electronic health 
care, and it would be my pleasure to answer any questions you 
might have.
    Senator Whitehouse. Thank you, Mr. Hutchinson. I appreciate 
it.
    [The prepared statement of Mr. Hutchinson appears in the 
appendix.]
    Senator Whitehouse. Mr. Miller.

 STATEMENT OF DAVID MILLER, CHIEF SECURITY OFFICER, COVISINT, 
                       DETROIT, MICHIGAN

    Mr. Miller. Senator Whitehouse, I appreciate the 
opportunity for myself and Covisint to be able to talk about 
the issues associated with e-prescribing. Although in the last 
few years Covisint has supported many doctors and pharmacies 
related to things like RHIOs, and also supports the current law 
enforcement information sharing program, that was not our 
birth. The birth of Covisint was in 2000, really based upon the 
automotive industry.
    I am really here to tell you that this problem of secure 
transaction sharing among large organizations that may not 
trust each other, where there is the capability for fraud, has 
been solved in other industries. This is not a brand-new thing. 
This is not something that has never come up before.
    Covisint, having to bear this problem in automotive, has 
found some techniques in order to do this. The automotives, 
very early on, realized that there was going to be a need to go 
to electronic transactions. A large automotive manufacturer 
does billions of transactions every month, and it's gotten to 
the point, with global awareness, with global suppliers, that 
you just can't do that with paper. You can't put pieces of 
paper in an envelope and send it. So, certainly in the 1990's, 
they decided to go to an electronic means.
    In 2000, Covisint was started to leverage this new thing 
called the Internet, to be able to make it more effective and 
cheaper, really, to be able to do these type of electronic 
transactions. These transactions moved to electronics. I can 
tell you for a fact, having been in the automotive industry 
then, that there were a lot of issues associated with security 
of that type of thing.
    Here's what was found out. What was found out, is that 
electronic transactions have a few things that paper-based 
transactions just don't have. They have easy auditability, so 
they are truly auditable because you can send them through some 
sort of centralized system, you can count them in the hundreds 
of millions.
    They are trackable in real time. So is it really effective 
to be able to find out that somebody is prescribing drugs that 
they weren't supposed to be prescribing 6 months after that 
event occurs? Real- time action is very important.
    They're transparent. And by ``transparent'' I don't mean 
insecure, and I don't mean that HIPPA-based information is 
exposed. By transparent, what I mean is, it is very difficult 
for two parties to collude and get around the system, as it is 
much easier in paper-based transactions.
    You can take a look at historical information. I would 
assume that there are hundreds and hundreds of millions of 
transactions on controlled substances. Can you see the types of 
things--doctors and pharmacists who are probably getting around 
the system oftentimes use things that maybe aren't quite so 
obvious. But perhaps by looking at months and months' worth of 
records, or years' worth of records, you can see trends that 
you wouldn't have been able to see. Automotive has been doing 
this for a long time to track quality issues associated with 
global suppliers.
    The other thing I've found, being a security expert, is the 
fact that organizations oftentimes insist on picking the most 
complex, difficult, and most secure technology that is offered 
at that time. Really, that problems becomes extremely difficult 
then to implement those technologies. Half implementation is 
almost worse than no implementation at all. As has been said 
here, if people go half one way and half the other, you're 
really not going to kind of get the adoption that you want.
    So it's really important that you find a simple and secure 
method for implementation of e-prescribing. Those types of 
methods are certainly found in other areas. Again, they're 
found in manufacturing and automotive, but they're certainly 
found in other areas, also. For example, Web banking that we do 
right now. The New York Stock Exchange does all of its 
transactions electronically and they don't seem to be worried 
about the fact that people could steal trillions of dollars of 
information.
    So what are kind of the security methodologies, at least, 
that we have seen work in an industry with large constituents 
that don't necessarily trust each other? The first thing is, a 
secure authentication is extremely important, so something that 
authenticates the user. But you don't have to go to thinks like 
PKI, you don't have to go to things like issued Smart Cards. 
There are other authentication mechanisms. Again, I do Web 
banking with an ID and a password, some additional questions. 
The world does that. It seems to be good enough for the guy 
from the FDIC, so I would assume it might be good enough for 
this.
    Also, the idea that there are identity providers that are 
already out there. Large hospital systems, large pharmacy 
organizations that manage IDs today that can vouch for the 
identity of an individual.
    In addition, the implementation of some sort of trusted 
broker is definitely something that we have seen. If you have 
organizations that are working with each other--for example, a 
doctor who's working with the pharmacy--they could collude, and 
even in an electronic system they could find a way that nobody 
might see that. If you put someone in the middle of the 
transaction, some type of independent party who kind of 
monitors it, it's much more difficult to collude between 
organizations.
    Then, last off, you really need both policy and oversight 
that can be implemented in a consistent manner. Simplicity is 
the most important thing here. If it's not simple, it won't be 
adopted.
    So in conclusion, I really think that the success of any 
system that we have is really about adoption. Adoption is the 
most important thing that we've seen in the automotive 
industry, that we've seen in health care industries in general. 
It has to be cost effective and secure. We certainly believe 
that any move toward an electronic system is much superior to 
the paper-based system that we have.
    So, I thank you for the opportunity to testify.
    Senator Whitehouse. I thank you, Mr. Miller.
    [The prepared statement of Mr. Miller appears in the 
appendix.]
    Senator Whitehouse. Mr. Podgurski.

STATEMENT OF MIKE A. PODGURSKI, R.Ph., VICE PRESIDENT PHARMACY 
     SERVICES, RITE AID CORPORATION CAMP HILL, PENNSYLVANIA

    Mr. Podgurski. Good morning, Senator Whitehouse. I am Mike 
Podgurski. I'm vice president of Pharmacy Services for the Rite 
Aid Corporation. I'm a graduate of West Virginia University's 
School of Pharmacy, and I've been involved with many aspects of 
the practice of pharmacy for 35 years. We thank you for this 
opportunity to provide testimony today for this important 
hearing regarding the electronic prescribing of controlled 
substances.
    Rite Aid, which is based in Camp Hill, Pennsylvania, is one 
of the Nation's largest retail pharmacy chains. We operate 
approximately 5,100 pharmacies in 31 States and the District of 
Columbia.
    Rite Aid has been involved for many years in the 
development of the current electronic prescribing 
infrastructure. For example, I was involved in the development 
of Rite Aid's own e-prescribing system in 1998. Our company has 
also been very actively involved in the development of the 
Pharmacy Health Information Exchange operated by Sure Scripts. 
This system currently serves as a secure platform for the 
transmission of all the e-prescriptions which Rite Aid receives 
today.
    Rite Aid strongly supports the ability of prescribers to 
send, and retail pharmacies to receive, e-prescriptions for 
controlled substances in Schedules II through V. We especially 
appreciate your support for this initiative, Senator 
Whitehouse, as you recently expressed in a colloquy with other 
Senators.
    The health care system needs to increase the number of 
prescriptions that are transmitted electronically. About 3.2 
billion prescriptions are filled in the United States each 
year. The majority of these prescriptions are still written by 
prescribers on small, 3 x 5-inch pieces of paper, handed to the 
patient, and brought by the patient or caregiver to the 
pharmacist for dispensing.
    In this day and age, the health care system can, and must, 
do better in using technology in transmitting all prescriptions 
to pharmacies, including controlled substances. Each of our 
5,100 pharmacies across the United States is currently able to 
receive e-prescriptions. These include new prescription orders, 
as well as approvals to refill existing prescriptions.
    These electronic transmissions have greatly enhanced the 
efficiency of our pharmacists. This allows pharmacists 
additional time to interact with patients and lessens the time 
the pharmacist spends on the phone trying to obtain a refill 
authorization or clarifying prescription orders with the 
prescribers' offices.
    The frequency with which prescribers are sending 
prescriptions electronically is increasing, but we need to 
encourage more prescribers to transmit new prescriptions and we 
need to permit and encourage those who do e-prescribe today to 
send all prescriptions electronically.
    There are multiple health care and efficiency benefits to 
e-prescribing, including those prescriptions for controlled 
substances. First, e-prescriptions are easier for the 
pharmacist to read, which may reduce the chances that errors 
might be made in the filling of these prescriptions. It also 
reduces the likelihood that a pharmacist may make a 
transcription error when taking a prescriber's oral 
prescription order over the telephone.
    Second, before the prescriber sends an e-prescription to 
the pharmacy of the patient's choosing, the prescriber is able 
to perform an initial drug interaction or adverse reaction 
review to make sure that the new drug being prescribed does not 
conflict with a prescription drug that the patient is already 
taking.
    Third, e-prescribing provides significant convenience for 
patients. Using this system, prescribers can transmit 
prescriptions so that they are ready for pick-up when the 
patient arrives at the pharmacy. However, because controlled 
substance prescriptions cannot be transmitted this way, the 
patient convenience and benefits of e-prescribing are 
significantly reduced.
    We understand and recognize the concerns of law enforcement 
agencies, including the Drug Enforcement Administration, about 
the need to assure that e-prescribing does not result in 
additional diversion of controlled substances.
    Rite Aid takes seriously our responsibilities to 
appropriately dispense and account for controlled substances we 
purchase and provide to our patients. However, we believe that 
e-prescribing of controlled substances will reduce diversion 
and abuse of controlled substances because of the significant 
security features incorporated into the system.
    An increase in the electronic transmission of prescriptions 
may also help reduce the need for paper prescription pads. 
These paper prescription pads are more subject to theft and 
forgery. In addition, pharmacists make every effort to verify 
the authenticity of the person communicating oral prescriptions 
for controlled substances. However, the secure electronic 
transmission of controlled substance prescriptions may reduce 
the incidence of phony prescriptions being called into the 
pharmacy.
    In conclusion, we look forward to working with the Congress 
and the DEA to ensure that workable regulations are developed 
that would allow for the e-prescribing of controlled 
substances. We believe this would enhance medical benefits to 
patients, increase efficiencies in the prescribing and 
dispensing of controlled substances, and reduce--not increase--
the potential for diversion and abuse of these substances.
    I look forward to answering any questions you may have. 
Thank you.
    [The prepared statement of Mr. Podgurski appears in the 
appendix.]
    Senator 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 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? 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 
Script system as it now operates?
    Mr. Hutchinson. It's a very good question, sir. I think the 
response I would give, is that we 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 a 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, from an auditability and 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 are the ones that register these users on the 
network and do the authentication directly of their own user 
base onto the network. These are licensed pharmacies. These 
are, as I mentioned in my testimony, not Internet pharmacies. 
These are not rogue pharmacies. So, those systems and those 
pharmacies are not on the network, and will not be on the 
network.
    Senator Whitehouse. In our research, my wonderful staff 
found testimony from Mr. Ratliff of your organization at a 
previous hearing in which he said, ``We have maintained the 
confidentiality and 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're confident in its integrity?
    Mr. Hutchinson. It's absolutely valid. It was valid then, 
it's valid today. We've been working on this very issue for 
several years and it will maintain to be valid in the future.
    Senator Whitehouse. So your answer to the question of, what 
do you tell DEA, is get off the dime and use us?
    Mr. Hutchinson. Absolutely.
    Senator 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 a paper-based system that we 
see today.
    Senator Whitehouse. Any? Repeat that.
    Mr. Miller. Any. Any based will be more secure than what we 
have today. As I said before--
    Senator Whitehouse. Can I ask you to repeat that just one 
more time for effect?
    [Laughter.]
    Mr. Miller. Sure. Any e-prescribed based system will be 
more secure than the paper-based system that is currently used 
today.
    Senator Whitehouse. OK. 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 though of doing 
electronic transactions over the Internet, then perhaps it 
would be, we need to do a pilot and kind of try, maybe spend 3 
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. 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, so you need to find 
methodologies and systems that are more simple. 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.
    Senator Whitehouse. Now, you say this from the position of 
also being a Department of Justice vendor, are you not?
    Mr. Miller. Yes. Covisint also provides electronic identity 
transaction for a law enforcement sharing program that 
basically allows information related to terrorist activity to 
be shared both with Federal and local law enforcement. That, 
today, is done--
    Senator Whitehouse. That's fairly highly classified stuff 
that you don't want people floating in and out of.
    Mr. Miller. It is. 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.
    Senator 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 in encrypted 
and tracked technology. I think that's really the big deal. In 
electronic communication, I can watch all that happens. People 
who are watched have a tendency to not want to break the law. 
It's a lot easier if you're not watched.
    Senator 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 flags that go up and various 
times.
    Mr. Miller. Right. Right. 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 event before the transaction is 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.
    Senator Whitehouse. So the Drug Enforcement Administration, 
as we all know, is a division of the Department of Justice. 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. Miller. Absolutely.
    Senator Whitehouse. I think I might make that point.
    [Laughter.]
    The other thing I wanted to get into--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. I think it's the most secure system that we have for 
e-prescriptions out there.
    Senator Whitehouse. OK.
    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 we're missing by not 
being here and by not being up to speed with e-prescribing on 
controlled substances.
    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 
system so that costs are reduced and people don't have to pay 
as much for a prescription because the pharmacy industry is 
able to deliver it more efficiently. The fourth would be data 
gathering, not just from a fraud and abuse prevention point of 
view, but also from a public health point of view. There are 
four witnesses and there are four of those points, so what I 
would like to do is basically target each of you with one of 
them.
    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, 
than if that patient returns back--I mean, even for non-
controlled substances, it's a problem. If the 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.
    Senator Whitehouse. 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 taking 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 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 hospitalizations, 
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 is 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, OK. Well, we're going to 
solve that problem with your case manager.'' We won't have that 
information otherwise. That is afforded to us through 
electronic prescribing.
    Senator 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 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 and can intervene at that point.
    Ms. Adams. Correct.
    Senator Whitehouse. And that person is totally missed right 
now by the health care system.
    Ms. Adams. So we'll know 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.
    Senator Whitehouse. Valuable public health information.
    Ms. Adams. Absolutely.
    Senator Whitehouse. Mr. Hutchinson, 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.
    Senator 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 that patients aren't going to come 
in and pick up, and now I'm having to restock these 
prescriptions on the shelves?
    In fact, they found the exact opposite. Once they go to 
electronic prescribing to patients, they dispensed 11 percent 
more prescriptions on a per-physician 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.
    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're 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.
    Senator Whitehouse. And their result was--repeat that for 
me. A third of--
    Mr. Hutchinson. They cut their hospitalizations due to 
adverse drug events, and their ER visits due to adverse drug 
events, in half. They attributed 33 percent of those cuts 
directly to the fact that they were electronically prescribed 
medications.
    Senator Whitehouse. So of the 530,000 adverse drug events 
that Mr. Trenkle referred to earlier in his testimony, a sixth 
of that would be eliminated just by e-prescribing alone without 
further--
    Mr. Hutchinson. That's exactly right. A percentage of 
those--
    Senator Whitehouse. Three thousand folks.
    Mr. Hutchinson [continuing]. Would be direct to 
hospitalization or admission to hospitals, 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.
    Senator Whitehouse. And what can you tell us, 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 illegibility impacts on Americans' health?
    Mr. Hutchinson. Yes. There are a lot of studies that relate 
to this very matter. The practical example that I will give you 
is, so long as it is actually truly electronically prescribed 
as defined by the standards that 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. You need duplication of entry into the 
computer. Whatever is entered into the physician's computer is 
exactly what shows up in the pharmacy's computer.
    Why that is important, is even in a faxed prescription 
environment, sometimes a milligrams of 1.0 may be misread or 
misentered as 10. When it comes from application to 
application, the computer does not misintepret the decimal 
symbol, so we actually have proper and accurate prescriptions. 
Whatever the physician orders is exactly what the pharmacy 
dispenses.
    Senator 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 a 
significant problem?
    Mr. Hutchinson. It's a significant problem. I don't have a 
number at my fingertips to be able to give you today.
    Senator 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?
    Mr. Hutchinson. I will, yes.
    Senator Whitehouse. Thank you.
    [The information appears in the appendix.]
    Senator Whitehouse. 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 a condition that may emerge weeks later after the use? 
Is there public health value here to this?
    Mr. Miller. Absolutely. So if you take a look at a parallel 
effort, which is really the ability to do electronic health 
records, 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 you see the number of hospital visits, for 
example, that occur. You can only do that if you can marry 
those two electronic transactions together as opposed to paper-
based.
    Senator Whitehouse. If you have to do it with paper, you'd 
go--
    Mr. Miller. Well, you'd employ a lot of people, I suppose.
    Senator Whitehouse. At vast expense.
    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, where, 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 prescribes 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, 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.
    Senator Whitehouse. Or you're chronically ill and have five 
or six specialists all working on you at once.
    Mr. Miller. Or you're chronically ill and you have fix or 
six specialists. Those things are the things, really, that 
electronic prescribing 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.
    The ER doctor 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. Without electronic prescriptions, there really was no 
way to tell. It was kind of more of a crap shoot. So, those 
are, I think, some of the things that are just really important 
with that.
    Senator Whitehouse. The last point was the internal 
efficiency. Nobody could be more knowledgeable about that than 
you, Mr. Podgurski. Could you kind of quantify, from an 
industry point of view, what benefits do 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 automatically come 
into the system and print a hard copy, which is still required, 
and are identified as e-Rxs. They also have an electronic 
signature on them that makes them valid for the secure 
purposes.
    There's a pharmacist shortage across this Nation. 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 nurse calling in. Those days have gone by 
the wayside.
    E-prescriptions would bring an 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 looking at, if it's an out-of-the-
area prescriber, a 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.
    Senator 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'd welcome any final point, if anybody 
has something they'd like to make.
    Ms. Adams. Senator Whitehouse, I'd just like to add one 
statistic to that--
    Senator Whitehouse. Please.
    Ms. Adams [continuing]. 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 is using a paper-based system. The issue is serious.
    Senator Whitehouse. So the electronic e-prescribing system 
really becomes the safety net under that circumstance with 
respect to their prescriptions.
    Ms. Adams. That's right. You're not the only doctor they're 
seeing, the only pharmacy that's filling your prescriptions; 
13.8 doctors are making prescriptions here, and the drug 
interaction potential is horrendous.
    Senator 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 7 days, so the questions that have been 
asked for the record, we'd like to have within 7 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.
    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 an hysteric.
    The information that we have received in the Budget 
Committee, and the conclusions that he, 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. 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. 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 ahead now 
while we have the time to make it work and build the 
infrastructure that can 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 that America can afford. 
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 build 
this into place, the potential costs on the back end to people 
who will pay the price in lowered health care services is a 
very, very real one, and a very human one, and a very tragic 
one. So, 3 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. This has been a really 
important point for us to tackle, so your effort in coming here 
is much, much appreciated.
    This was 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 7 days is when the hearing record will close, we 
are adjourned.
    [Whereupon, at 12:09 p.m. the hearing was adjourned.]
    [Questions and answers and submissions for the record 
follow.]
[GRAPHIC] [TIFF OMITTED] 53359.001

[GRAPHIC] [TIFF OMITTED] 53359.002

[GRAPHIC] [TIFF OMITTED] 53359.003

[GRAPHIC] [TIFF OMITTED] 53359.004

[GRAPHIC] [TIFF OMITTED] 53359.005

[GRAPHIC] [TIFF OMITTED] 53359.006

[GRAPHIC] [TIFF OMITTED] 53359.007

[GRAPHIC] [TIFF OMITTED] 53359.008

[GRAPHIC] [TIFF OMITTED] 53359.009

[GRAPHIC] [TIFF OMITTED] 53359.010

[GRAPHIC] [TIFF OMITTED] 53359.011

[GRAPHIC] [TIFF OMITTED] 53359.012

[GRAPHIC] [TIFF OMITTED] 53359.013

[GRAPHIC] [TIFF OMITTED] 53359.014

[GRAPHIC] [TIFF OMITTED] 53359.015

[GRAPHIC] [TIFF OMITTED] 53359.016

[GRAPHIC] [TIFF OMITTED] 53359.017

[GRAPHIC] [TIFF OMITTED] 53359.018

[GRAPHIC] [TIFF OMITTED] 53359.019

[GRAPHIC] [TIFF OMITTED] 53359.020

[GRAPHIC] [TIFF OMITTED] 53359.021

[GRAPHIC] [TIFF OMITTED] 53359.022

[GRAPHIC] [TIFF OMITTED] 53359.023

[GRAPHIC] [TIFF OMITTED] 53359.024

[GRAPHIC] [TIFF OMITTED] 53359.025

[GRAPHIC] [TIFF OMITTED] 53359.026

[GRAPHIC] [TIFF OMITTED] 53359.027

[GRAPHIC] [TIFF OMITTED] 53359.028

[GRAPHIC] [TIFF OMITTED] 53359.029

[GRAPHIC] [TIFF OMITTED] 53359.030

[GRAPHIC] [TIFF OMITTED] 53359.031

[GRAPHIC] [TIFF OMITTED] 53359.032

[GRAPHIC] [TIFF OMITTED] 53359.033

[GRAPHIC] [TIFF OMITTED] 53359.034

[GRAPHIC] [TIFF OMITTED] 53359.035

[GRAPHIC] [TIFF OMITTED] 53359.036

[GRAPHIC] [TIFF OMITTED] 53359.037

[GRAPHIC] [TIFF OMITTED] 53359.038

[GRAPHIC] [TIFF OMITTED] 53359.039

[GRAPHIC] [TIFF OMITTED] 53359.040

[GRAPHIC] [TIFF OMITTED] 53359.041

[GRAPHIC] [TIFF OMITTED] 53359.042

[GRAPHIC] [TIFF OMITTED] 53359.043

[GRAPHIC] [TIFF OMITTED] 53359.044

[GRAPHIC] [TIFF OMITTED] 53359.045

[GRAPHIC] [TIFF OMITTED] 53359.046

[GRAPHIC] [TIFF OMITTED] 53359.047

[GRAPHIC] [TIFF OMITTED] 53359.048

[GRAPHIC] [TIFF OMITTED] 53359.049

[GRAPHIC] [TIFF OMITTED] 53359.050

[GRAPHIC] [TIFF OMITTED] 53359.051

[GRAPHIC] [TIFF OMITTED] 53359.052

[GRAPHIC] [TIFF OMITTED] 53359.053

[GRAPHIC] [TIFF OMITTED] 53359.054

[GRAPHIC] [TIFF OMITTED] 53359.055

[GRAPHIC] [TIFF OMITTED] 53359.056

[GRAPHIC] [TIFF OMITTED] 53359.057

[GRAPHIC] [TIFF OMITTED] 53359.058

[GRAPHIC] [TIFF OMITTED] 53359.059

[GRAPHIC] [TIFF OMITTED] 53359.060

[GRAPHIC] [TIFF OMITTED] 53359.061

[GRAPHIC] [TIFF OMITTED] 53359.062

[GRAPHIC] [TIFF OMITTED] 53359.063

[GRAPHIC] [TIFF OMITTED] 53359.064

[GRAPHIC] [TIFF OMITTED] 53359.065

[GRAPHIC] [TIFF OMITTED] 53359.066

[GRAPHIC] [TIFF OMITTED] 53359.067

[GRAPHIC] [TIFF OMITTED] 53359.068

[GRAPHIC] [TIFF OMITTED] 53359.069

[GRAPHIC] [TIFF OMITTED] 53359.070

[GRAPHIC] [TIFF OMITTED] 53359.071

[GRAPHIC] [TIFF OMITTED] 53359.072

[GRAPHIC] [TIFF OMITTED] 53359.073

[GRAPHIC] [TIFF OMITTED] 53359.074

[GRAPHIC] [TIFF OMITTED] 53359.075

[GRAPHIC] [TIFF OMITTED] 53359.076

[GRAPHIC] [TIFF OMITTED] 53359.077

[GRAPHIC] [TIFF OMITTED] 53359.078

[GRAPHIC] [TIFF OMITTED] 53359.079

[GRAPHIC] [TIFF OMITTED] 53359.080

[GRAPHIC] [TIFF OMITTED] 53359.081

[GRAPHIC] [TIFF OMITTED] 53359.082

[GRAPHIC] [TIFF OMITTED] 53359.083

[GRAPHIC] [TIFF OMITTED] 53359.084

[GRAPHIC] [TIFF OMITTED] 53359.085

[GRAPHIC] [TIFF OMITTED] 53359.086

                                 
