Often when we talk about the opioid epidemic, the focus is rightly on the suffering that the situation has caused. However, it’s important not to miss the surrounding context of this crisis, and what various health systems have started to uncover.
Currently, health systems face a huge challenge in tracking and managing their controlled substances. One of the technology-based solutions to the problem is drug diversion monitoring systems, which KLAS reported on in a recent report. While these employee-monitoring systems offer a way to mitigate the risk of controlled substances wandering out the door, it’s certainly not a comfortable topic.
The unfortunate truth is that—even in an industry full of mission-motivated people, some take the opportunity and access provided by working in a health system to siphon controlled substances for personal use or gain. More than 3.7 billion retail prescriptions were filled in 2019 in the US, which leaves a lot of room for diversion and misuse.
Often when diversion cases are uncovered, the Drug Enforcement Agency (DEA) gets involved, leading to a black eye for the organization, and a regulatory nightmare. Many health systems have landed in hot water when they didn’t take drug diversion seriously, and the DEA placed blame on their shoulders. Exacerbated by the opioid epidemic, these incidents have become top of mind.
As health systems and clinics look for a solution to this problem, many find the answer in technology. Pharmacies, in particular, have prioritized drug diversion monitoring technology, as they’re often the first place the DEA looks when digging for evidence of illicit activity. And while the pharmacy is heading up efforts, this really is a multi-department effort between pharmacy, nursing, anesthesia, and compliance usually. Pharmacy has the lead on stewardship over meds, so that’s why they are often driving evaluation and adoption of these tools.
Drug diversion monitoring systems look at how controlled substances are dispensed from various electronic systems like automated dispensing cabinets, or the narcotics vault from the central pharmacy. The system analyzes the electronic footprint of the staff interacting with the drugs and finding those with the most irregularities. For example, the system pinpoints those who are pulling drugs more frequently or at odd times or those whose records don’t match up with how much they waste.
Medacist and Pandora were the two main vendors in this space for a long time. Medacist’s product, RxAuditor, got a lot of the market share through a partnership with BD, the vendor of the Pyxis cabinets. If health systems bought the cabinets, they could get the RxAuditor products at a relatively lower cost. Pandora had a decent footprint, though not massive like RxAuditor. Pandora was eventually acquired and is now owned by Omnicell. While both products were updated, customers we spoke with want more aggressive enhancements to the overall success of their drug diversion monitoring programs.
New Entrants in the Marketplace
A lot of new solutions suddenly came to the market in 2019, including BD, Kit Check, Protenus, Invistics, and HelioMetrics. While it’s not entirely clear why all of these entrants jumped in around the same time, it does happen to coincide with the expiration of a Medacist patent on pieces of RxAuditor’s technology.
That said, Pandora has been around for a long time and they weren’t considered to be infringing on the patent. Who can really say? Regardless, six or seven new vendors all came on the scene and created a lot of buzz. Medacist also announced a new product called RxAuditor Investigate.
There is a lot of interest in these new, next-generation solutions. The market is asking for a product that intuitively and proactively tells them where to focus diversion investigations. In answer to this demand, the new play for each of these products is based on some mix of analytics, visualizations, and artificial intelligence (AI). Each of these three elements plays a part in vendor selection.
A big driver behind the companies landing contracts is the ability to aggregate more and more data. To get a clearer picture of possible diversion, health organizations need to be able to investigate the staff’s electronic footprint across many different systems.
For example, an investigation could look at who dispenses the most drugs in their peer group. That answer is connected to the automated dispensing cabinet system. From there, the organization wants to know how much of the drugs are being wasted. That information is housed in the electronic medical record (EMR). Then, they may want to know who dispenses drugs when they are not clocked in or not on shift. This is done by looking at the time and attendance system. Further down the line, maybe the investigation expands to look at what is happening in the anesthesia. So, the system needs to get data from the anesthesia cabinets. And so on.
There are some products that do not have as many integration points. Their customers are often smaller and do not need an advanced system or the vendor has made promises that additional integrations are coming. But for larger organizations, current buying favors vendors who have those data integrations built out.
Aside from the technical requirements, health systems are also looking at how well the data is aggregated to meet workflow requirements. It is highly important that organizations can clearly interpret the data and identify the lowest hanging fruit. The idea is that the system proactively identifies possible diversion and then visually represents the data in an easy-to-interpret way. The health system can then use the reports to determine if someone is really diverting substances, or if they are non-compliant.
We used to think that there would be an arms race to see who implemented artificial intelligence (AI) first. But our research in this last year indicates that artificial intelligence is important to a very small subset of customers. A customer who prioritizes AI is generally going to be much more willing to adopt and put a lot of trust in the technology. They trust the idea that once you give the machine learning enough data, the technology will learn how to be the best version of itself.
Other customers do not yet trust that machine learning is going to be a real outcome driver within the next few years. In the meantime, they go with vendors who have more tangible products. AI is one of those things where the ideas make a lot of sense, but the actual execution is still somewhat of a nebulous concept for customers.
Drug diversion monitoring is a rapidly growing space. When we kicked off research for this report in 2020, several vendors we looked at did not have enough customers to be rated by KLAS. A handful had fewer than 10 customers—we could not even rate them even with limited data. By the time we published the report, most vendors’ live customer bases had almost doubled. Most vendors in the space are reporting massive growth and rapid adoption. There is a lot of money that is going into this market right now.
Of course, this is a space that is still new and emerging. But people are starting to get their feet under them and to know what to expect from technology in this space. Provider organizations are continually looking for ways to increase their efficiency and accuracy in regard to diversion detection. The companies that innovate to meet provider needs are the ones most likely to win as drug diversion monitoring sees increased interest and investment.
Jackson Tate is the Research Director of Pharmacy Solutions, at KLAS Research. He can be reached at email@example.com.