How did $14 million in drugs vanish from a UM pharmacy?

Olga Hutnik, a pharmacy buyer at the University of Miami, noticed something odd in May 2011 when she looked at the results of a new program to track drugs in the UM medical system: Hundreds of syringes of an expensive cancer drug were apparently missing.

The new software was not the most trustworthy, Hutnik later told investigators, so she decided to hand-count the syringes of Neulasta, a medication used to boost white blood cells to reduce the risk of infection at a cost of about $2,600 per dose.

That decision, court records say, led eventually to the arrest of a UM employee and a stunning discovery that $14 million in prescription drugs had gone missing over a three-year period from UMs Sylvester Comprehensive Cancer Center. Pharmacy technician Manuel Gerardo Pacheco who seemed to be living beyond his means, investigators said later was charged with four counts of grand theft, two counts of trafficking in contraband prescription drugs and one count of dealing in stolen property. He has pleaded not guilty.

Obviously, somebody let the ball slip, said Randy Kroner, a Miami forensic accountant. He said most large organizations have internal auditors that make sure the proper controls are followed counting supplies that come in, tracking units that go out and then reconciling the two. Looks like this case just fell through the cracks.

In fact, both UMs chief financial officer, Joe Natoli, and board member Norman Braman have said there were no inventory controls at the cancer pharmacy to keep track of supplies.

Thats ludicrous, said Michael Kessler, a certified forensic accountant who heads Kessler International, a financial services company with an office in Miami. A hospital should track its supplies down to the last sponge and scalpel in the operating room. Somebody was asleep at the switch.

In a statement last week, the UM Miller School of Medicine said rampant theft of pharmaceuticals is a national problem and UM had tight controls at several of its pharmacies, but controls at the cancer pharmacy failed to quickly detect the employee theft of expensive non-controlled substances, actually life-saving chemotherapy drugs for cancer patients. As soon as the theft was detected, physical security and inventory controls of pharmaceuticals at Sylvester were reviewed and strengthened.

A follow-up internal audit found the cancer pharmacys controls are now sufficient. The university is seeking reimbursement for losses from the employee and its insurance carrier, the statement said. In an April memo to employees about UMs moves to control fraud, Natoli noted three major incidents at UM, including a pharmacy technician with access to expensive drugs that were not under inventory control.

Last fall, in a letter to fellow UM board members, Miami auto magnate Braman decried the pharmacy theft as an example of managerial ineptitude involving a host of wrong doings that took months of forensic accounting to discover because of nonexistent inventory controls.

Natoli told The Herald in May that UM was a highly decentralized organization with old systems that had grown very, very rapidly, and UM was working hard to put the necessary controls in place.

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How did $14 million in drugs vanish from a UM pharmacy?