Medicine Shoppe-Jonesborough; Revocation of Registration, 364-388 [E7-25342]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 73, Number 1 (Wednesday, January 2, 2008)]
[Notices]
[Pages 364-388]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-25342]



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Part V





Department of Justice





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Drug Enforcement Administration



Medicine Shoppe--Jonesborough; Revocation of Registration; Notice

Federal Register / Vol. 73, No. 1 / Wednesday, January 2, 2008 / 
Notices

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 03-21]


Medicine Shoppe--Jonesborough; Revocation of Registration

    On March 14, 2003, the Deputy Assistant Administrator, Office of 
Diversion Control, issued an Order to Show Cause to the Medicine 
Shoppe--Jonesborough (Respondent) of Jonesborough, Tennessee. The Show 
Cause Order proposed the revocation of Respondent's DEA Certificate of 
Registration, BM3913781, as a retail pharmacy, and the denial of any 
pending application for renewal of its registration, on the ground that 
its continued registration would be ``inconsistent with the public 
interest.'' Show Cause Order at 1 (citing 21 U.S.C. 823(f)).
    The Show Cause Order specifically alleged that a DEA investigation 
had determined that between 1990 and 1995, Royce E. Blackmon, Jr., a 
physician located in Butler, Tennessee, had ``issued numerous 
controlled substance prescriptions for no legitimate medical reason.'' 
Id. The Show Cause Order alleged that in December 1995, DEA 
investigators visited Respondent and determined that it had filled 947 
of the controlled-substance prescriptions issued by Dr. Blackmon. Id. 
at 1-2. The Show Cause Order further alleged that on October 29, 1997, 
DEA investigators returned to Respondent and subsequently determined 
that Respondent had filled an additional 3,100 controlled-substance 
prescriptions issued by Dr. Blackmon. Id. at 2. Relatedly, the Show 
Cause Order alleged that on October 6, 1997, Blackmon entered into an 
Agreed Order with the Tennessee Board of Medical Examiners which 
revoked his state medical license. Id. at 2.
    The Show Cause Order next alleged that between May 1996 and 
December 1997, Respondent filled 124 prescriptions issued by Edmond 
Watts, a veterinarian practicing in Johnson City, Tennessee, 
notwithstanding that Watts' DEA registration and state veterinary 
license had expired on May 31, 1996, and February 29, 1996, 
respectively. Id. at 2. The Show Cause Order further alleged that 
``[m]any of these prescriptions were issued to persons using several 
aliases and false addresses,'' and that Watts was ultimately indicted 
and pled guilty to two state-law counts of obtaining prescription drugs 
by fraud. Id. at 2-3.
    The Show Cause Order next alleged that on March 9, 1998, DEA 
investigators returned to Respondent to review its controlled-substance 
records and to conduct an accountability audit. Id. at 3. The Show 
Cause Order alleged that Mr. Jeff Street, Respondent's owner and 
pharmacist, told DEA investigators that ``the pharmacy's computer could 
not process prescription information at that time,'' and that the 
investigators ``would have to wait until the following morning'' to 
obtain the information. Id. The Show Cause Order further alleged 
``[t]hat the following morning, Mr. Street informed investigators that 
the pharmacy's computer [had] `crashed' and its data had been lost.'' 
Id. at 3. The Show Cause Order thus alleged that Respondent violated 21 
U.S.C. 827(a)(3), as well as 21 CFR 1304.04 and 1304.21. Id.
    Next, the Show Cause Order alleged that on December 14, 1999, DEA 
audited Respondent's handling of twenty-nine controlled substances 
during the period of January 11, 1999, to December 14, 1999. Id. The 
Show Cause Order alleged that the audit found that Respondent had an 
overage of 29,656 dosage units of diazepam, a schedule IV controlled 
substance, and a shortage of 3,453 dosage units of combination 
hydrocodone drugs, which are schedule III controlled substances. Id.
    Relatedly, the Show Cause Order alleged that on April 10, 2001, and 
April 2, 2002, DEA had performed additional audits of Respondent's 
handling of various controlled substances and that each audit had found 
both overages and shortages. Id. at 3-4. More specifically, the Show 
Cause Order alleged that the April 2002 audit found that Respondent was 
short 4,505 tablets of some higher-strength combination hydrocodone/
acetaminophen products and had overages of 2,273 lower-strength 
hydrocodone/acetaminophen products. Id. at 4. The Show Cause Order 
further alleged that the April 2002 audit found both ``shortages and 
overages of between 500 and 1,000 tablets.'' Id.
    Finally, the Show Cause Order alleged that in analyzing 
Respondent's records for the period 2001 through 2002, DEA had 
determined that ``many patients received in excess of 2,000 dosage 
units of hydrocodone, often from several physicians.'' Id. The Show 
Cause Order thus alleged that ``[u]nder regulation, a pharmacy has a 
corresponding liability to ensure that every prescription [it] 
dispense[s] is for a legitimate medical purpose,'' and that ``[t]here 
is no indication that [Respondent] took steps to corroborate the 
necessity of these large amounts of controlled substances.'' Id. at 4-
5.
    Respondent, through its counsel, timely requested a hearing on the 
allegations. The matter was assigned to Administrative Law Judge (ALJ) 
Gail Randall, who conducted a hearing in Knoxville, Tennessee, on July 
27-29, 2004, and in Greenville, Tennessee, on May 24, 2005. At the 
hearing, both the Government and Respondent called witnesses to testify 
and introduced both testimonial and documentary evidence into the 
record. Following the hearing, both parties filed briefs containing 
their proposed findings of fact and conclusions of law.
    On June 9, 2006, the ALJ filed her recommended decision. In her 
decision, the ALJ found that while there was a factual ``dispute 
regarding the exact numbers involved in the three DEA audits, the 
record clearly shows that [the] audits and inventories of * * * 
Respondent revealed substantial shortages and overages of the 
controlled substances investigated.'' ALJ at 69. The ALJ rejected, 
however, the Government's contention that Respondent had failed ``on 
multiple occasions'' to comply with ``its corresponding responsibility 
to ensure that dispensed prescriptions for controlled substances were 
issued by the physician for a legitimate medical purpose and in the 
usual course of professional practice.'' Gov. Proposed Findings at 10; 
see also ALJ at 72.
    While noting that ``the patient profiles did not contain any 
documents demonstrating that Respondent's pharmacists made any 
telephone calls to verify suspect prescriptions,'' the ALJ credited the 
testimony of Respondent's owner that he had called the doctors whose 
prescriptions were suspicious ``on many occasions'' to ``verify the 
prescriptions prior to filling them.'' ALJ at 72; see also id. at 75 
(noting that ``Mr. Street's credible testimony concerning his personal 
knowledge of his customers [and] the actions he took to coordinate his 
dispensing with the patients' health care providers * * * dispelled 
many of [the] concerns'' expressed by the Government's expert 
witnesses). While the ALJ also found Respondent's filling of 
prescriptions issued by a veterinarian during 1996 and 1997 
``bothersome,'' she further reasoned that the datedness of the conduct 
and ``the lack of any more recent evidence of similar carelessness'' 
did not support the revocation of Respondent's registration. Id. at 78. 
The ALJ thus recommended that Respondent be allowed to maintain its 
registration subject to the condition that it undergo an annual audit 
by an independent auditor at its own expense for a period of three 
years from the date of the issuance of this Final Order. Id. at 78.

[[Page 365]]

    The Government filed exceptions to the ALJ's recommended decision. 
While asserting that it was not arguing ``the minutiae of the specific 
findings, or the issue of the credibility * * * of seriatim statements 
of Respondent's pharmacist owner,'' the Government's principal 
exception was that ``Respondent's entire defense consistently produced 
explanations for every fact that the Government proved,'' and that 
``for every patient that the Government showed * * * was receiving 
excessive amounts of controlled substances, Respondent had a recitation 
as to the medical condition . . . which would . . . justify [the] 
dispensing'' and the avoidance of liability under 21 CFR 1306.04. Gov. 
Exceptions at 1-2. The Government further argued that Respondent's 
owner ``had months . . . to prepare a self-serving testimonial defense 
by acquiring and reviewing medical records after [the] presentation of 
the Government's case,'' and that Respondent did not have access to 
these records ``at the time the prescriptions were presented.'' Id. at 
2. The Government thus contended that ``by accepting'' the testimony of 
Respondent's owner, ``the ALJ effectively negated the expert testimony 
of the two health care professionals who testified on behalf of the 
Government.'' Id. The Government also argued that Respondent's lack of 
accountability in its handling of controlled substances warranted the 
revocation of its registration.\1\ Id.
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    \1\ I also note Respondent's response to the Government's 
exceptions and have considered the arguments raised therein.
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    Thereafter, the record was forwarded to me for final agency action. 
In her decision, the ALJ decision found that Respondent had ``last 
renewed [its] registration on January 3, 2000, and [that] the 
registration was due to expire on January 31, 2003.'' ALJ at 3. Under 
DEA precedent, ``[i]f a registrant has not submitted a timely renewal 
application prior to the expiration date, then the registration number 
expires and there is nothing to revoke.'' Ronald J. Riegel, 63 FR 
67132, 67133 (1998). Because ``it appear[ed] that Respondent's 
registration had expired before the . . . proceeding was even 
initiated,'' the case was remanded to the ALJ to determine whether 
Respondent had submitted a timely renewal application in accordance 
with DEA's regulations and the Administrative Procedure Act (APA). See 
Order Remanding for Further Proceedings at 1-2; see also 5 U.S.C. 
558(c) (``[w]hen [a] licensee has made timely and sufficient 
application for a renewal or a new license in accordance with agency 
rules, a license with reference to an activity of a continuing nature 
does not expire until the application has been finally determined by 
the agency'').
    Thereafter, the ALJ conducted further proceedings in accordance 
with my remand order. Those proceedings determined that Respondent had 
submitted a renewal application prior to the January 31, 2003 
expiration of its registration and had paid the appropriate fee. 
However, Respondent's owner was told that its registration had not been 
renewed pending ``administrative review.'' Affidavit of Jeffrey Street 
at 1. According to the Government, Respondent's registration was 
renewed, but ``for unknown reasons,'' the Agency's Registrant 
Information Consolidated System ``did not record the renewal timely 
submitted for the 2003-2006 period,'' Gov. Resp. to the Registration 
Issue on Remand at 2, and ``did not advance the expiration date from 
January 31, 2003 to January 31, 2006.'' Affidavit of Richard Boyd, 
Chief of Registration and Program Support Section, at 1. Apparently, 
the new registration which was issued to Respondent in January 2003, 
simply used the same January 31, 2003 expiration date of the previous 
registration. See id.
    I therefore find that in January 2003, Respondent made a timely and 
sufficient application for a new registration. I further hold that 
because the registration which the Agency issued in January 2003 did 
not extend the expiration date of the registration, but rather, only 
re-instituted the January 31, 2003 expiration date of the existing 
registration, the Agency did not make a final determination on the 
application and Respondent therefore has maintained a valid 
registration throughout these proceedings.\2\ See 5 U.S.C. 558(c). 
Accordingly, there is jurisdiction to determine whether Respondent's 
registration should be revoked and its pending application should be 
denied.
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    \2\ The Government contends that Respondent's ``registration 
actually expired on January 31, 2006,'' and that ``Respondent was 
obligated to continue to file renewal applications during the 
duration of the show cause process.'' Gov. Resp. to the Registration 
Issue (ALJ Ex. 14) at 2. While I reject the Government's contention, 
even if Respondent's registration had, in fact, been renewed with a 
new expiration date of January 31, 2006, there is no evidence that 
the Agency ever notified it of this fact. Respondent cannot be 
faulted for failing to file an application to renew a registration 
when the Government never informed it of the new expiration date.
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    Having considered the record as a whole including the ALJ's 
recommended decision, I hereby issue this Decision and Final Order. As 
explained below, I adopt in part and reject in part the ALJ's findings 
of fact and conclusions of law. More specifically, while the ALJ 
rejected the entirety of the Government's allegations that Respondent 
dispensed controlled substances to numerous patients in violation of 
its corresponding responsibility under federal law, as ultimate 
factfinder, I conclude that the Government has proved by a 
preponderance of the evidence that Respondent unlawfully dispensed 
controlled substances to numerous persons. I also conclude that 
Respondent violated federal law and DEA regulations by failing to 
maintain complete and accurate records. Based on my findings and 
Respondent's (and its owner's) failure to acknowledge their misconduct, 
I concluded that revocation of its registration is necessary to protect 
the public interest. I make the following findings.

Findings of Fact

    Respondent is a pharmacy which is located in Jonesborough, 
Tennessee. Respondent has been registered as a retail pharmacy since 
February 1994, and as found above, currently holds DEA Certificate of 
Registration, BM3913781, which remains valid pending the issuance of 
this Final Order. See Gov. Ex. 1. Respondent is owned by Mr. Jeffrey 
Street, who has been a licensed pharmacist since 1984. Tr. May 24, 2005 
at 75.\3\
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    \3\ All citations to the transcript which do not include a date 
refer to the testimony taken on July 27-29, 2004.
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The Investigation of Respondent

    Sometime in 1995, DEA investigators received information from the 
Tennessee Bureau of Investigation and the First Judicial District Drug 
Task Force that Dr. Royce Blackmon, a Butler, Tennessee based 
physician, was writing prescriptions for drugs containing hydrocodone, 
a schedule III controlled substance, see 21 CFR 1308.13(e), and for 
Dilaudid (hydromorphone), a schedule II controlled substance, id. 
1308.12(b), without a legitimate medical purpose. Tr. 22. As part of 
the investigation, DEA investigators interviewed some of Dr. Blackmon's 
``patients'' and determined that Blackmon would frequently write 
prescriptions ``without even seeing the patient.'' Id. at 24.\4\ Dr. 
Blackmon's staff would then tell the ``patients'' to bring the 
prescriptions to Respondent for filling. Id. Moreover, the 
investigation determined that both Dr. Blackmon's

[[Page 366]]

wife and his daughter were drug addicts, that Dr. Blackmon prescribed 
both Dilaudid and hydrocodone drugs for his daughter, and that Mr. 
Street filled some of the daughter's prescriptions. Id. at 53 & 86.
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    \4\ DEA investigators were, however, unable to obtain Blackmon's 
medical records. Tr. 56.
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    As part of the investigation, DEA conducted a prescription review 
of approximately 15 to 20 pharmacies including Respondent, which were 
located in the areas of Johnson City, Bristol, Kingsport and 
Jonesborough. Id. at 26. In either November or December 1995, DEA 
investigators visited Respondent and found that it had dispensed 
approximately 950 prescriptions which had been issued by Dr. Blackmon. 
Id. at 27; see also id. at 181. Most of the other area pharmacies had 
stopped filling Blackmon's prescriptions, id. at 26, but some continued 
to do so. May 24, 2005 Tr. at 9-10.
    In October 1997, DEA investigators returned to Respondent to 
determine whether Respondent had continued to fill Blackmon's 
prescriptions since the previous visit. Tr. at 182. The investigators 
found that Respondent had filled more than 3,000 of Blackmon's 
prescriptions, all of which were for controlled substances. Id. at 183.
    Mr. Richards, a private investigator retained by Respondent, 
testified, however, that he had interviewed Mr. James Backers, a 
pharmacist who had worked as a relief pharmacist for Respondent during 
the last three months of 1996, as well as in 1997 and 1998. May 24, 
2005 Tr. at 69. According to Mr. Richards, Mr. Backers told him that 
``because he had heard rumors that some . . . drugstores weren't 
filling Dr. Blackmon's prescriptions anymore'' he visited Blackmon at 
his office. Id. at 11. Mr. Richards testified that Mr. Backers stated 
that Blackmon ``was very nice to him, showed him his records, showed 
him that he was making referrals to specialists, [and] doing tests.'' 
Id. Moreover, Dr. Blackmon ``was writing not only pain medication, but 
other maintenance drugs, as well.'' Id. Mr. Backers told Mr. Street 
about his visit. Id. He also continued to fill Blackmon's prescriptions 
although he would call his office if one did not ``look right.'' Id.\5\
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    \5\ It is questionable whether Mr. Backers' hearsay statements 
are reliable because Mr. Richards obtained them in anticipation of 
this litigation. I assume without deciding that the statements meet 
the APA's standard that evidence must be ``reliable'' and 
``substantial,'' 5 U.S.C. 556(d), because I conclude that the 
appropriate analysis of whether Respondent dispensed controlled 
substances in violation of federal law should focus on the actual 
prescriptions it filled.
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The Audits

    In March 1998, a DI returned to Respondent with the intention of 
auditing its handling of controlled substances and presented an 
Administrative Inspection Warrant to Mr. Street. Tr. at 185-87. The DI 
asked Mr. Street to provide the pharmacy's purchase, dispensing and 
distribution records,\6\ id. at 187-88; these are records which a 
pharmacy is required under regulation to maintain for two years. Id. at 
189. Mr. Street assisted in conducting a closing inventory and provided 
the pharmacy's invoices for the drugs being audited. Because preparing 
the drug usage reports required accessing data in Respondent's computer 
and Mr. Street was to teach a class that night, Mr. Street printed out 
only two drug usage reports (one for Dilaudid and one for Lortab 5) and 
requested that he be allowed to print out the remaining reports in the 
morning. Tr. 192; May 5, 2005 Tr. at 117.\7\ When the DI arrived at the 
pharmacy the next morning, Mr. Street reported that ``his computer had 
crashed and he'd lost all [of] his prescription data.'' Tr. 192. Mr. 
Street further told the DI that his computer's hard drive had failed. 
May 24, 2005 Tr. at 121.
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    \6\ Under DEA regulations, a pharmacy is required to maintain 
records for a minimum of two years and the records must document the 
purchase and receipt, dispensing, and distribution through 
destruction, loss, theft or a transfer between registrants of 
controlled substances. Tr. 190-91; see also 21 CFR 1304.22(c). 
Moreover, records pertaining to schedule II controlled substances 
must be ``maintained separately from all other records of the 
pharmacy,'' with the prescriptions ``maintained in a separate 
prescription file.'' 21 CFR 1304.04(h)(1). With respect to schedule 
III through V controlled substances, a pharmacy's records must be 
``maintained separately from all other records of the pharmacy or in 
such form that the information required is readily retrievable from 
[the] ordinary business records of the pharmacy'' with prescription 
records ``maintained either in a separate prescription file for 
controlled substances in Schedules III, IV, and V only or in such 
form that they are readily retrievable from the other records of the 
pharmacy.'' See also 21 CFR 1304; Tr. 193.
    \7\ There is conflicting evidence as to when the DI obtained 
Respondent's backup tape. The DI testified that Mr. Street gave him 
the backup tape (which was stored in his files and not the 
pharmacy's computer) before leaving on the day that he showed up to 
conduct the audit. Tr. 192. Mr. Street testified that upon the DI's 
arrival the next morning, he assured the DI that ``everything's 
going to be okay because I've got a good backup tape,'' to which the 
DI responded ``Show it to me.'' May 24, 2005 Tr. at 121. According 
to Mr. Street, he then pulled the tape out of the computer's 
``external drive'' and the DI took possession of it. Id. at 121.
    I also note that Mr. Street testified that he ran a backup tape 
``every night.'' May 24, 2005 Tr. at 120. Mr. Street did not testify 
that the backup tapes were re-used, and given the absence of such 
testimony, it is perplexing that Mr. Street did not have a more 
current backup tape available. The ALJ did not, however, reconcile 
her findings with this testimony.
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    According to Mr. Street, several days later the DI returned to the 
pharmacy with the backup tape. Upon loading the tape into the computer, 
there were no records on it. Respondent then loaded another backup 
tape, which he had last used in either October or November and the tape 
loaded up right away. Id. at 122. Because several months of records 
were missing, the DI determined that an audit could not be conducted. 
Tr. 193. The ALJ specifically credited the DI's testimony that while he 
had inspected fifty to seventy-five pharmacies, this was the only time 
a pharmacy had been unable to produce the required records. ALJ at 10 
(citing Tr. 194).
    In December 1999, the DI obtained another administrative warrant 
and returned to Respondent to conduct an audit.\8\ GX 6, Tr. 195. Mr. 
Street provided the DI with a copy of Respondent's biennial inventory 
which had been taken on January 11, 1999. GX 5. According to Mr. 
Street, under the rules of the Tennessee Board of Pharmacy, a 
pharmacist is allowed to estimate the number of pills in an open bottle 
in conducting an inventory of schedule III through V controlled 
substances. May 24, 2005 Tr. 149.
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    \8\ The DI was accompanied by another DI and an investigator 
from the Tennessee Board. Tr. 198.
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    Another DI and a state investigator conducted a closing inventory 
of Respondent's controlled substances. Tr. 198. Mr. Street signed the 
closing inventory thereby attesting to its accuracy. Id. at 199. 
According to the DI, the audit ``look[ed] . . . at all the records of 
purchase, all records of distribution'' including the prescription 
records, as well as various DEA forms for reporting theft, loss and 
destruction of controlled substances, and other forms that document the 
movement of controlled substances between the beginning and end dates 
of the audit. Id. at 201. For each audited drug, the DI added up the 
amount of Respondent's purchases during the audit period and added them 
to the opening inventory; the DI then added the total amount of each 
drug dispensed (and or distributed) to the ending inventory and 
compared the two figures. Id.
    While the two numbers should equal each other, the DEA audit found 
that there were both numerous shortages and overages. GX 8. Some of the 
discrepancies involved substantial quantities in absolute terms. The 
ALJ found credible Mr. Street's testimony that the Government's audit 
contained eleven errors because four drug usages reports had been left 
out,\9\ that one of

[[Page 367]]

the five diazepam drug usage reports provided to DEA overlapped with 
another report resulting in an overage of 30,000 tablets of 
diazepam,\10\ that the DI had used ``some inaccurate beginning counts . 
. . off of our inventory,'' and that the DI had failed to include drugs 
Respondent had reported stolen. May 24, 2005 Tr. 125.\11\
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    \9\ In his testimony, Mr. Street did not specifically identify 
which drug usage reports had been left out. Respondent also did not 
submit the DEA-106s into evidence.
    To make clear for future cases, to successfully challenge an 
audit, a registrant must specifically identify the error which it 
claims was made. For example, if it claims that the Government left 
out a drug usage report, it must specifically identify the report 
and show how its exclusion affected the results. The generalized 
testimony which Mr. Street typically gave is wholly insufficient to 
demonstrate that the audit results were erroneous. I conclude, 
however, that there is no need for a remand on this issue because 
even Mr. Street's audits found numerous discrepancies.
    \10\ As discussed below, it is a registrant's responsibility to 
maintain accurate records. The fact that the audit may have showed 
an overage of diazepam because the dispensings were recorded on 
multiple drug usage reports is therefore further evidence of 
Respondent's poor recordkeeping practices.
    \11\ At the hearing, the DI acknowledged that he erred when he 
recorded the beginning inventory figure for hydrocodone/
acetaminophen 10/650 from Respondent's January 11, 1999 inventory 
onto his spreadsheet. More specifically, the DI wrote that the 
pharmacy had on hand 330 tablets rather than 33. Tr. 219.
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    There is, however, no dispute that Respondent was short 800 tablets 
of hydrocodone/acetaminophen \12\ (5/500) and more than 380 tablets of 
Lortab (7.5/500), a brand name drug which also contains hydrocodone and 
acetaminophen. Compare ALJ Attachments A and B. Respondent was also 
short 200 tablets of Dilaudid (hydromorphone) 4 mg. and 193 tablets of 
generic hydromorphone 4 mg. Id. Respondent was also short 485 tablets 
of acetaminophen/codeine (300/60). Id.
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    \12\ Through out this decision, the term ``apap'' is used as an 
abbreviation for acetaminophen.
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    Furthermore, according to Respondent's audit, the pharmacy was 
short 589 tablets of hydrocodone/apap (7.5/500) and 704 tablets of 
Diazepam 10 mg. Id. at Attachment B. Moreover, Respondent's audit found 
substantial overages in multiple drugs include hydrocodone/apap 7.5/750 
(740 tablets), hydrocodone/apap 10/650 (438 tablets), Lortab 5/500 (189 
tablets), and apap/codeine 300/30 (369 tablets). Id. While it is not 
uncommon that a pharmacy will have small shortages or overages (of less 
than fifty dosage units), Tr. 72-73, the shortages and overages found 
during the 1999 audit are not trifling amounts.
    On April 10, 2001, DEA investigators returned to Respondent to 
conduct another audit. For the closing counts, the DIs took an 
inventory of the drugs being audited which Mr. Street verified. GX 10. 
For most of the drugs being audited, the DIs used the inventory taken 
during the December 14, 1999 audit for the beginning counts.\13\ Here 
again, the Government found several substantial shortages of 
hydrocodone/apap drugs and numerous overages. See GX 11.
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    \13\ For several schedule II drugs (Oxycontin and Methadone) 
which had not been previously audited, the DIs used for the 
beginning count the inventory which Respondent took on May 10, 2000. 
GX 11.
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    Mr. Street also disputed the accuracy of this audit and testified 
that he found that it had eight errors. May 24, 2005 Tr 128. More 
specifically, Mr. Street testified that the several drug usage reports 
and purchase invoices were left out. Id. He also asserted that the 
diazepam was again over-accounted for. Id.
    Mr. Street again conducted his own audit and found that Respondent 
had substantial shortages in numerous drugs. See ALJ 15, Resp. Ex. 3. 
With respect to generic hydrocodone/apap drugs, Respondent was short 
171 tablets of 5/500 strength, 656 tablets of 7.5/500, and 657 tablets 
of 10/500; Respondent was also short 196 tablets of Lortab 10. Resp. 
Ex. 3. As for diazepam, Respondent was short 312 tablets of 5 mg. 
strength and 554 tablets of 10 mg. strength. See id. Respondent was 
also short 152 tablets of methadone 40 mg. (a schedule II drug, 21 CFR 
1308.12(c)), and 166 tablets of acetaminophen and codeine 4. 
See Resp. Ex. 3 at 2.
    On April 30, 2002, the DIs returned to Respondent and conducted an 
audit which covered the period between the April 10, 2001 and the date 
of their visit. GX 13. The DIs used the closing inventory counts from 
the 2001 audit for the beginning count and took an inventory of the 
drugs on hand for the closing count, which Mr. Street verified. See id.
    Even though the DIs audited only twelve drugs, they again found 
several substantial shortages and overages, see GX 14, and Mr. Street 
disputed the accuracy of the audit. May 24, 2005 Tr. at 129 & 137. More 
specifically, Mr. Street testified that the DEA audit did not include 
three drug usage reports and that apparently, the amounts from some 
invoices were not properly counted. Id. at 129.
    Once again, Mr. Street's audit found substantial shortages and 
overages. See Resp. Ex. 4. Specifically, Respondent was short 498 
tablets of diazepam 10mg., 754 tablets of hydrocodone/apap 7.5/500, and 
910 tablets of hydrocodone/apap 10/500. Resp. Ex. 4. Respondent also 
had overages of 442 units of hydrocodone/apap 7.5/650 and 364 units of 
hydrocodone/apap 10/650.
    With respect to the 2001 audit, the ALJ found that Mr. Street 
``credibly stated that he attributed such discrepancies to human 
error.'' ALJ 15. More specifically, Mr. Street testified that ``it 
could have been simply [that] the person was supposed to have gotten 
the generic and we accidentally pulled the name brand off the shelf.'' 
May 24, 2005 Tr. at 142-43. Mr. Street further testified that there 
were ``four different'' strengths of combination hydrocodone drugs 
``all on the shelf together[,] and it could have been just simply the 
fact that we just pulled the wrong one off the shelf.'' Id. at 143. The 
ALJ also credited Mr. Street's testimony that ``there was no deliberate 
diversion of drugs.'' ALJ at 15 (May 24, 2005 Tr. at 143).
    As for Mr. Street's contention that his pharmacy may have confused 
branded and generic drugs when it filled prescriptions, it would have 
been easy enough to prove this by showing the existence of 
corresponding overages and shortages in the respective drugs. Mr. 
Street did not, however, offer any evidence from his own audits to this 
effect.\14\
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    \14\ For example, even if DEA did not audit a branded drug of 
the same strength as a generic drug that it audited, Mr. Street 
could have done so.
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    Mr. Street's contention that he and other pharmacy personnel may 
have mistakenly filled a prescription with a drug of a different 
strength than that prescribed by his customers' physicians is alarming. 
Under federal regulations, drug manufacturers and distributors are 
required to label the containers that they use to distribute their 
drugs. 21 CFR Pt. 201. Manufacturers are also required to imprint each 
dosage unit ``with a code imprint that, in conjunction with the 
product's size, shape and color, permits the unique identification of 
the drug product and the manufacturer * * * of the product.'' 21 CFR 
206.10(a). Moreover, ``[i]dentification of the drug product requires 
identification of its active ingredients and its dosage strength.'' Id. 
In short, a pharmacist should know the strength of a drug he is 
dispensing based on both the container's labeling and the imprint on 
the dosage unit and make sure that he has dispensed the correct 
strength of a drug. Indeed, dispensing controlled substances of the 
wrong strength can have serious consequences for the health of 
patients.
    As for Mr. Street's testimony that ``there was no deliberate 
diversion'' of the drugs his pharmacy was short of, this is pure 
speculation. Respondent offered no evidence that it had

[[Page 368]]

investigated its employees to determine whether any of them could be 
diverting the missing drugs. In short, Mr. Street does not know whether 
or not his pharmacy's employees could have been diverting drugs.
    Respondent also introduced into evidence the affidavit of Mr. 
Timothy Mitchell Pierce, a lawyer and registered pharmacist. Resp. Ex. 
6. Mr. Pierce reviewed various documents in the case, medical records, 
and interviewed Mr. Street. Mr. Pierce, who was presumably testifying 
as an expert, opined that ``the alleged overages and shortages of 
controlled substances as described in the Order to Show Cause are not 
due to deliberate diversion,'' and ``are more likely due to DEA audit 
errors, acceptable human error by [Respondent's] personnel and theft by 
person(s) not associated with'' Respondent. Id. at 4.
    I reject the conclusions of Mr. Pierce for several reasons. First, 
while Mr. Pierce has been a registered pharmacist and stated that he 
has practiced in retail pharmacy settings, his affidavit does not 
establish how many years of actual pharmacy practice he has, that he 
has remained active in pharmacy practice,\15\ and that he has any 
experience in conducting audits.
---------------------------------------------------------------------------

    \15\ Indeed, it appears that Mr. Pierce has not practiced as a 
pharmacist in a substantial time because he graduated from a 
Tennessee law school in 1992, is licensed as a lawyer in Tennessee, 
but holds a Louisiana pharmacy license.
---------------------------------------------------------------------------

    Second, Mr. Pierce's affidavit typically did not address the 
shortages which Mr. Street's own audits found. For example, in 
discussing the December 1999 audit, Mr. Pierce discussed only the 
shortage of one drug (hydrocodone/apap 7.5/500). RX 6, at 4-5. Mr. 
Pierce's affidavit ignores that Respondent was short 800 tablets of 
hydrocodone/apap 5/500, 380 tablets of Lortab (7.5/500), 200 tablets of 
Dilaudid 4 mg., 193 tablets of generic hydromorphone 4 mg., 485 tablets 
of acetaminophen/codeine (300/60), and 704 tablets of diazepam 10 mg. 
See id. Similarly, with respect to the April 2001 audits, Mr. Pierce's 
affidavit ignores the shortages of 312 tablets of diazepam 5 mg. and 
554 tablets of diazepam 10 mg. See id. at 5-6. The affidavit also 
offers nothing but speculation regarding the shortages of hydrocodone/
apap.\16\
---------------------------------------------------------------------------

    \16\ With respect to the April 2002 audits and the diazepam 
shortages, Mr. Pierce's affidavit responds to the allegations of the 
Show Cause Order. The Show Cause Order, however, only sets the 
parameters of the proceeding and does not constitute evidence.
---------------------------------------------------------------------------

    Finally, with respect to the April 2002 audits, Mr. Pierce's 
affidavit does not even acknowledge the figures for the hydrocodone 
shortages per Mr. Street's own audit (754 tablets of hydrocodone/apap 
7.5/500 and 910 tablets of hydrocodone/apap 10/500). See id. at 8. Mr. 
Pierce then opined that the shortages and overages ``were probably 
due'' to ``inadvertently'' dispensing the wrong strength of drug. Id. 
Mr. Pierce also opined that a name brand drug could have been 
``dispensed for a generic brand drug or vice versa,'' and noted that 
``[t]he name brand drugs were not audited and thus cannot be 
compared.'' Id. Again, Mr. Pierce's opinion amounts to pure 
speculation. His testimony is therefore rejected.

The Evidence Regarding Respondent's Dispensings

    The ALJ found that during 1997, Respondent ``filled over 124 
controlled substance prescriptions written by Edmond Watts,'' a 
veterinarian who had allowed both his DEA registration and state 
veterinary license to expire without renewing them, ALJ at 17 (citing 
Tr. 37-38, 41-42), and was therefore without authority to prescribe 
controlled substances. According to the credited testimony of a DEA 
supervisory diversion investigator, a pharmacist is required to 
periodically check with the appropriate state licensing authority to 
ensure that a practitioner holds a current license. Id. (citing Tr. 
61).
    Normally, veterinarians purchase the controlled substances they 
dispense directly from wholesale distributors and dispense the drugs 
directly to the owner of the animal. Tr. 88. Indeed, under DEA 
regulations, ``[a] prescription may not be issued in order for an 
individual practitioner to obtain controlled substances for supplying 
the individual practitioner for the purpose of general dispensing to 
patients.'' 21 CFR 1306.04(b).
    Watts wrote the prescriptions, which were for drugs containing 
hydrocodone, in the names of fictitious patients,\17\ Tr. 40, and had 
his brother present them to Respondent for filling. Id. at 62-63. 
Moreover, Watts' brother was presenting the prescriptions ``almost 
every day [or] every other day.'' Id. at 62. The drugs were then 
personally used by Veterinarian Watts. Id. at 40. Eventually, Watts was 
convicted of a controlled-substances related felony. Id. at 42.
---------------------------------------------------------------------------

    \17\ Watts also wrote prescriptions ``in the name of his sister-
in-law.'' Tr. 41. Watt's sister-in-law ``was interviewed and 
indicated [that] she never received that medication.'' Id.
---------------------------------------------------------------------------

    With respect to the prescriptions issued by Watts, Respondent put 
on the testimony of Mr. Richards, a private investigator it had 
retained. Mr. Richards testified that Watts told him that he had 
``deceived'' Street, and ``didn't tell him [Street]'' about his 
licensure status. May 24, 2005 Tr. at 14. There is, however, no 
evidence that Mr. Street had asked Watts whether he had a valid DEA 
registration and state license prior to the incident in summer of 1997 
when state investigators showed up at Respondent and inquired about 
Watts' prescriptions. Id.
    Moreover, Mr. Richards testified that ``all of the prescriptions 
that Dr. Watts wrote that Jeff filled for any kind of pain drugs 
contained acetaminophen. And that would alert a pharmacist to the fact 
that it was probably for an animal, because acetaminophen is toxic to 
certain animals.'' Id. at 16. Contrary to Mr. Richard's testimony, the 
fact that ``acetaminophen is toxic to certain animals'' points to the 
exact opposite conclusion--that the drugs were not being prescribed to 
treat animals for a ``legitimate medical purpose'' and that Watts was 
not acting in the ``usual course of his professional practice.'' 21 CFR 
1306.04(a).
    DEA investigators also found that Respondent was filling large 
amounts of prescriptions for schedule III drugs containing hydrocodone 
that were written by a dentist, J. Michael Haws. ALJ at 19 (citing Tr. 
34-35, GX 15I). According to a DEA diversion group supervisor, Dr. Haws 
``was prescribing to almost all of his patients, and even though the 
amounts weren't that large, the frequency was. [The patients] were 
going to him almost every other day and requiring additional 
prescriptions.'' Tr. 35. Ultimately, the state dental board placed Dr. 
Haws on probation for three years, and following the issuance of an 
Order to Show Cause, Haws voluntarily agreed to restrictions on his DEA 
registration. Id. at 37.
    On cross-examination, the DEA investigator acknowledged that Haws 
did a lot of extractions and that it would not be unusual for a dentist 
to prescribe pain medication after doing this procedure. Id. at 59. 
However, on re-direct examination, the investigator testified that in 
his experience, dentists who performed extractions treat acute pain 
which ``lasts for a short period of time'' and that dentists do not 
``normally'' treat chronic pain. Id. at 87-88. The investigator further 
explained that the frequency of the prescriptions issued by Haws and 
filled by Respondent was not consistent with the treatment of acute 
pain, but rather, with the treatment of chronic pain. Id. at 87-88.
    DEA investigators also determined that Respondent was filling a 
large number of prescriptions issued by Dr. Frank Varney for 
benzodiazepines (such as Valium or diazepam), which are

[[Page 369]]

schedule IV controlled substances. Tr. 28, 31-33, see 21 CFR 
1308.14(c)). According to the supervisory investigator, in 1994, the 
state board put Dr. Varney on probation and required that he attend a 
course on prescribing controlled substances. Tr. 33. Before the state 
board action, Dr. Varney was writing prescriptions for schedule II 
narcotic prescriptions; after the board action, he turned to writing 
the benzodiazepine prescriptions. Id. at 33-34. Respondent filled 
``over 7000'' prescriptions written by Dr. Varney, most of which were 
for benzodiazepines. Id.\18\
---------------------------------------------------------------------------

    \18\ Mr. Richards testified that between 1997 to 1999, a 
competitor pharmacy ``filled 1,886 controlled substance 
prescriptions for Dr. Varney'' and ``Jonesborough Drug filled 25,861 
hard copies during the same period.'' May 24, 2005 Tr. 32. Even if 
Mr. Richard's testimony regarding the prescriptions filled by 
Jonesborough Drug was meant to refer to controlled-substance 
prescriptions, the testimony is not relevant to the issue of whether 
Respondent filled unlawful prescriptions.
---------------------------------------------------------------------------

The Prescription Traces

    The Government introduced into evidence prescriptions traces for 
twenty-five customers of Respondent. See Gov. Ex. 15 (A-Y). For each 
customer, the traces indicated the name and strength of the controlled 
substance, the quantity dispensed, the prescription number, the date of 
the original prescription, and the name of the prescribing 
practitioners. The Government also put on two expert witnesses, Dr. 
John Mulder, a physician with a specialty in family practice who is 
board certified in hospice and palliative medicine, GX 16, and Dr. 
James Ferrell, a pharmacist with forty-one years of experience and the 
former director of the Tennessee State Board of Pharmacy. Tr. 271, GX 
17.
    With respect to several of the traces, either one or both of the 
Government's experts testified that Respondent's dispensings were not 
improper. With respect to Customer M.B. (GX 15-A), Dr. Mulder opined 
that his review found ``no significant deviation from what could be 
expected to be a standard of care for prescribing these medications. In 
other words, the quantities over a period of time could be consistent 
with an acceptable medical reason.'' Tr. 499.
    With respect to patient D.C. 2 (GX 15-C), Dr. Mulder ``found 
nothing that would be outside of a legitimate medical reason for the 
dispensing of these particular amounts and types of medications.'' Id. 
at 507. As for Government Exhibit 15-E, a trace which listed a male 
(D.E.) and female (J.E.) who used the same address, Dr. Mulder stated 
that ``[t]he amounts of medicine prescribed began to skirt the upper 
limit of acceptable, but [they] never actually surpassed it in terms of 
the number of pills dispensed within a given month.'' Id. at 509. Dr. 
Mulder further explained that ``it is conceivable that someone with a 
particular pain problem could be dispensed this amount of medication 
longitudinally, so I did not have a particular problem with this 
particular chart.'' Id. at 509-10.
    Dr. Mulder also found that the prescriptions for patient B.R. (GX 
15-O) ``could have been . . . for legitimate medical purposes,'' Tr. 
528, that Respondent had properly dispensed to patient W.B. (GX 15-P), 
Tr. 530, and that Respondent ``probably met'' the standard in 
dispensing to patient R.S. (GX 15-S). Tr. 533. Finally, with respect to 
patient W.T. (GX 15-W), Dr. Ferrell noted that while ``[t]he dosages 
are really high . . . [w]hen your patients have cancer and they're 
dying, we do see . . . dosages of controlled substances [that] are 
really high.'' Tr. 359. Dr. Ferrell thus concluded that the 
prescriptions ``could be legitimate.'' Id. at 359-60.
    The remaining traces did, however, raise substantial questions 
regarding the legitimacy of the prescriptions Respondent filled. Set 
forth below is a discussion of the evidence regarding Respondent's 
dispensings to those patients which the Government's experts concluded 
(at least initially) did not satisfy the ``corresponding 
responsibility'' under Federal law.

Patient D.C. 1.

    This trace showed that Respondent dispensed to D.C. numerous 
prescriptions for Lorcet, a branded drug combining hydrocodone and 
acetaminophen, which were issued by J. Michael Haws, a dentist. See GX 
15-B, at 1-2. Between June 24, 1997, and September 29, 1997, Respondent 
filled twenty-nine controlled substance prescriptions for narcotics; 
twenty-eight of the prescriptions were for hydrocodone and 
acetaminophen, and one of the prescriptions was for Percodan, a 
schedule II controlled substance which contains oxycodone and aspirin. 
See 21 CFR 1308.12(b). The prescriptions were typically issued every 
three to four days. See GX 15-B, at 1-2. Furthermore, during both July 
and August, the controlled substances dispensed by Respondent contained 
140,400 mg. of acetaminophen or approximately 4529 mg. per day. 
Moreover, on July 8, 1997, one day after Respondent filled a 
prescription for twenty-four Vicodin ES tablets, which was issued by 
Dentist Haws, it filled a prescription for sixty Lorcet 10/650 tablets 
issued by another practitioner, Dr. Caudle. Id. at 2.
    With respect to the prescriptions Dentist Haws issued to D.C., Dr. 
Ferrrell observed: ``that's a lot of times, a lot of dental problems 
right there. At some point in time, you've got to wonder * * * why he's 
seeing the dentist so often and why he's having so much dental 
problems.'' Tr. 289. Dr. Ferrell further explained that dentists 
usually treat acute pain and that ``after maybe a month or two and I 
continued to see those things * * * I would ask the dentist to supply 
me some type of reason for why the prescriptions kept going on for such 
a long period of time.'' Id. at 290.
    Relatedly, Dr. Mulder opined ``that the prescriptions over a 
longitudinal basis for this narcotic in this dose were being prescribed 
by a dentist who is not a physician which heightens the level of 
concern about this particular prescription.'' Id. at 504. Dr. Mulder 
also testified that the drugs Respondent dispensed contained 
acetaminophen, and that there is a ``safe limit'' as to the amount of 
acetaminophen an individual can take during a day without ``developing 
a toxic state,'' which is ``four grams a day.'' Id. at 500. Dr. Mulder 
further testified that ``[t]he number of pills dispensed to this 
individual were above the acceptable limit'' and could lead to serious 
illness if the patient was actually taking the drugs. Id. at 500-01.
    In his testimony, Mr. Street acknowledged that the prescriptions 
``slightly exceed[ed]'' the safe limit for acetaminophen ``on two 
separate months.'' May 25, 2005 Tr. at 79. Mr. Street testified that 
D.C. ``required a lot of dental work,'' and that because he was a 
patient ``that Dr. Haws [was] treating over a long period of time, we 
kept in touch with the dentist office. And it was easy to do, because 
the dentist office is right there in town. And kept in touch with 
either Dr. Haws or his receptionist * * * Ms. Williams, to verify that 
they were, you know, requiring ongoing treatment.'' Id. The ALJ 
credited this testimony, see ALJ at 35, and many of the prescriptions 
issued by Dentist Haws appear to have been called in to Respondent.\19\ 
See GX 15-B.

[[Page 370]]

None of the prescriptions, however, include a notation that the 
dispensing pharmacist had questioned Dentist Haws about D.C.'s 
continuing need for the drugs. See Id.
---------------------------------------------------------------------------

    \19\ The ALJ also found that ``Mr. Street had counseled [D.C. 1] 
not to take additional over-the-counter acetaminophen during this 
time.'' ALJ at 35 (citing Resp. Ex. 1, at 1). Mr. Street did not, 
however, testify to this under oath and the document which contains 
this statement was not sworn. It is also notable that Mr. Street and 
his counsel had approximately ten months from the time the 
Government rested until the hearing reconvened and thus they had 
ample time to prepare for his testimony. ALJ at 2. Because Mr. 
Street could have testified to this but chose not to, I give no 
weight to this statement.
---------------------------------------------------------------------------

Patient E.C.

    Government Exhibit 15-D shows that on several occasions, Respondent 
dispensed to E.C. prescriptions for combination hydrocodone and 
acetaminophen products issued by different doctors within a short 
period of other similar prescriptions. For example, on October 24, 
1997, Respondent dispensed a prescription for 20 Lortab 7.5/500 issued 
by Dr. Hussain; the next day, it dispensed a prescription for 25 
hydrocodone/apap 5/500 issued by Dr. Wiles. See GX 15-D at 1. Three 
days later (on October 28), Respondent dispensed another 30 tablets of 
Lortab 5/500 issued by Dr. Wiles. Id. Dr. Ferrell specifically noted 
that upon receiving such prescriptions, a pharmacist should call the 
prescriber and ask if he was ``aware that the patient had gotten Lortab 
the day before.'' Tr. 296.
    The trace also showed that Respondent had filled multiple 
prescriptions for sixty tablets of alprazolam 5 mg. issued by Dr. 
Hussain, as well as multiple prescriptions for diazepam 5 mg. issued by 
Dr. Slonaker. GX 15-D. In several instances, Respondent filled the 
prescriptions only days apart. See Id. at 1 (10/26/99 Rx for 60 
alprazolam and 10/27/99 Rx for 60 diazepam; 11/20/99 Rx for 60 
alprazolam and 11/23/99 Rx for 60 diazepam). Id. at 1. Both drugs are 
schedule IV depressants, see 21 CFR 1308.14(c), and according to Dr. 
Ferrell ``have a synergistic effect'' when taken together. Tr. 297. Dr. 
Ferrell further noted that the trace showed that the patient was 
simultaneously receiving multiple controlled substances for pain (from 
Dr. Slonaker) such as hydrocodone/apap 7.5/500 and hydrocodone/apap 10/
500, Id. at 298, and that the pharmacy should have questioned this. Id. 
at 300; GX 15-D at 2. Relatedly, Dr. Mulder testified that ``[it] is 
generally considered not appropriate to be mixing different short-
acting analgesic medications at the same time'' such as E.C. was 
receiving, and that the pharmacist should have contacted the physician. 
Tr. 508. None of the prescriptions indicated that Respondent had 
contacted the prescriber. See GX 15-D.
    Mr. Street testified that ``I'd talk to Dr. Slonaker about this 
before, because he does this for many of his patients'' and that ``he 
likes to prescribe a stronger pain med for severe pain, and a weaker 
pain med * * * for mild to moderate pain.'' May 24, 2005 Tr. 81-82. Mr. 
Street also testified that E.C. had been a patient since Respondent 
opened, that he had ``chronic back problems'' and ``has seizures'' 
related to a fall he had in November 1997. Id. at 81. Mr. Street, 
however, offered no testimony regarding Respondent's frequent (and 
sometimes nearly simultaneous) dispensings of the alprazolam and 
diazepam prescriptions which were written by different doctors.
    Respondent also introduced into evidence the affidavit of Joseph 
Montgomery, a physician with thirty years of experience. See RX 5. Dr. 
Montgomery reviewed the medical records of most of the patients 
identified in the traces. Dr. Montgomery opined that it was ``probably 
* * * medically justified'' for E.C. ``to receive the degree of pain 
medications prescribed.'' RX 5, Ex. A. at 2. Dr. Montgomery offered no 
opinion, however, as to whether the prescriptions Respondent repeatedly 
filled for alprazolam and diazepam were issued for a legitimate medical 
purpose. See Id.

Patient S.F.

    The prescription trace for S.F. shows that beginning in January 
1996 and ending in April 1997, Respondent filled approximately 126 
prescriptions issued by Dr. Blackmon which were primarily for Dilaudid 
(schedule II) and Lorcet 10/650 (schedule III). GX 15-F. Dr. Ferrell 
noted that in 1996, Respondent filled approximately 47 hydrocodone/apap 
prescriptions for a total of 3,915 dosage units and 35 Dilaudid 
prescriptions for 3,090 dosage units. Tr. 306. Dr. Ferrell further 
explained that this amounted to ten tablets a day of hydrocodone and 
eight tablets a day of Dilaudid, ``which is real heavy usage of * * * 
the two opioids.'' Id. Moreover, in the first three-and-a-half months 
of 1997, Respondent filled 23 prescriptions totaling 2,070 dosage units 
of hydrocodone and 16 prescriptions totaling 1,454 dosage units of 
Dilaudid. Id. This amounted to approximately 17 tablets a day of 
hydrocodone and 12 tablets a day of Dilaudid. Id. Dr. Ferrell also 
noted that Respondent had filled a prescription for Buprenex, a 
narcotic agonist-antagonist which can cause acute withdrawal symptoms 
in patients taking Dilaudid, an opioid agonist. Id. at 307.
    Dr. Ferrell further noted that the Buprenex prescriptions contained 
no notation that Respondent had contacted the prescriber. Id. at 308. 
Dr. Ferrell added that based upon the dosages being prescribed, S.F. 
was ``at least physically dependent'' on the opioids and that he would 
have ``probably refuse[d] to fill his prescriptions.'' Id.
    Dr. Mulder added that the quantities of dosage units of 
hydrocodone/acetaminophen drugs ``were twice the acceptable limits'' 
and ``would be potentially toxic.'' Id. at 511. He further testified 
that a pharmacist has an obligation ``not to dispense medication 
knowingly harmful to the patient'' and ``to contact the physician to 
let him know that the prescriptions were exceeding acceptable norms.'' 
Id. Dr. Mulder also noted that Respondent was dispensing ``two 
different narcotics simultaneously in relatively large quantities.'' 
Id.
    The ALJ found credible Mr. Street's testimony that S.F. had ``three 
major back surgeries'' and had difficulty walking. ALJ 40. The ALJ also 
found credible Mr. Street's testimony that he ``had to make frequent 
phone calls about him, because he was always wanting his medications 
early, or he would * * * bring a prescription in that was * * * too 
frequent, too close to the other one he brought in.'' May 24, 2005 Tr. 
85. Mr. Street maintained, however, that Dr. Blackmon ``was monitoring 
him closely,'' and that while Dr. Blackmon acknowledged that ``he was 
giving [S.F.] a high amount of narcotics, he felt [S.F.] needed these 
just so * * * he could function in every day life.'' Id.
    The ALJ also found credible Mr. Street's testimony that while he 
provided early refills of S.F.'s prescription, he never did so without 
verifying it with Dr. Blackmon and then ``document[ed] the transaction 
in the computer.'' ALJ at 40 (citing May 24, 2005 Tr. at 85-86). 
Respondent did not, however, produce any printouts of this 
documentation (or for any other instance in which he claimed to have 
contacted a prescriber) and testified on cross-examination that he did 
not know if the ``specific notes for each specific patient'' could even 
be printed out. May 24, 2005 Tr. at 154.
    As for the filling of the Buprenex, the ALJ credited Mr. Street's 
testimony that the drug's package insert ``gives no interactions or 
contraindications to ingestion with hydrocodone.'' ALJ at 40. The ALJ 
also credited Mr. Street's testimony that ``[t]he only precaution 
regarding Buprenex and hydrocodone is that the combination may 
`increase * * * drowsiness.''' Id. at 40-41 (citing May 24, 2005 Tr. 
87).
    Respondent, however, offered no testimony in response to Dr. 
Mulder's testimony that Respondent was filling prescriptions for 
combination hydrocodone/acetaminophen at quantities that exceeded 
acceptable safe

[[Page 371]]

limits.\20\ Furthermore, I take official notice of the package insert 
for Buprenex.\21\ Under the section captioned ``Use in Narcotic-
Dependent Patients,'' the insert states: ``Because of the narcotic 
antagonist activity of Buprenex, use in the physically dependent 
individual may result in withdrawal effects.'' Buprenex Injectable 
Package Insert, at 1. I therefore reject the ALJ's finding crediting 
Mr. Street's testimony on the issue. I further find that at the time 
Respondent filled the Buprenex prescription, it had filled more than 
sixty prescriptions issued to S.F. for both Dilaudid (hydromorphone) 
and combination hydrocodone drugs, both of which are narcotics. See GX 
15-F, at 1 & 3; see also 21 CFR 1300.01(b)(30); Id. 1308.12(b)(1); Id. 
1308.13(e).
---------------------------------------------------------------------------

    \20\ Neither Mr. Street nor his expert witness, Dr. Montgomery, 
offered any evidence to refute this testimony. See RX 5, at 3-4. 
Moreover, while Dr. Montgomery stated that ``the records showed that 
Jeff Street called Dr. Blackmon's office regarding the quantity of 
pain medicine and Soma that [S.F.] received,'' RX 5, at 5, Dr. 
Montgomery offered no opinion as to why it was appropriate to 
dispense either quantities of drugs that are potentially toxic or 
multiple opiates. See id. at 4-5.
    \21\ In accordance with the Administrative Procedure Act (APA), 
an agency ``may take official notice of facts at any stage in a 
proceeding--even in the final decision.'' U.S. Dept. of Justice, 
Attorney General's Manual on the Administrative Procedure Act 80 
(1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with 
the APA and DEA's regulations, Respondent is ``entitled on timely 
request to an opportunity to show to the contrary.'' 5 U.S.C. Sec.  
556(e); see also 21 CFR 1316.59(e). To allow Respondent the 
opportunity to refute the facts of which I take official notice, 
Respondent may file a motion for reconsideration within fifteen days 
of service of this order which shall commence with the mailing of 
the order.
---------------------------------------------------------------------------

Patient B.J.

    This trace showed that twenty-one different physicians had 
prescribed controlled substances to B.J. The prescriptions were for 
multiple schedule IV benzodiazepines including alprazolam, lorazepam, 
clonazepam, temazepam, and triazolam; multiple schedule III narcotics 
including combination hydrocodone/apap, Fiorinal with Codeine,\22\ and 
propoxyphene/apap, some schedule II endocet (oxycodone with 
acetaminophen), and four prescriptions for Stadol (butorphanol), a 
schedule IV drug (21 CFR 1308.14(f)), which is a mixed agonist/
antagonist but which has opioid antagonist properties. Tr. 548.
---------------------------------------------------------------------------

    \22\ A branded drug containing butalbital, aspirin, caffeine and 
codeine phosphate.
---------------------------------------------------------------------------

    The trace showed that Respondent repeatedly filled alprazolam and 
lorazepam prescriptions which were issued by different physicians for 
B.J. and that in multiple instances the prescriptions were filled 
within several days of each other. See GX 15-G at 1 (Compare Dr. 
Greenwood Rx for 60 alprazolam on 5/24/99 with Dr. Varney Rx for 90 
lorazepam on 5/25/99; Greenwood Rx for 45 alprazolam on 6/23/99 with 
Varney Rx for 90 lorazepam on 6/21/99; Greenwood Rx for 60 alprazolam 
on 10/26/99 with Varney Rx for 90 lorazepam on 11/1/99; Greenwood Rx 
for 60 alprazolam on 11/30/99 with Varney Rx for 90 lorazepam on 11/29/
99).\23\ The trace also showed multiple instances in which Respondent 
filled prescriptions for schedule III narcotics such as generic 
Fiorinal with Codeine and propoxyphene--which again were issued by 
different doctors--within a short time of each dispensing. Moreover, 
the trace showed numerous instances in which Respondent filled 
prescriptions for hydrocodone/apap issued by six practitioners. Id. at 
8.
---------------------------------------------------------------------------

    \23\ There were also similar instances on February 9 and 15, 
1999; March 6 and 11, 1999; April 27, 29, 30 and May 1, 1999, in 
which Respondent filled prescriptions for these drugs which were 
issued by these two doctors for B.J. See GX 15-G, at 2. There were 
also many instances in which the prescriptions were presented within 
a week to two weeks of each other but were for large quantities.
---------------------------------------------------------------------------

    Finally, the trace showed that Respondent filled prescriptions for 
Stadol on April 19 and 24, 1999, September 30, 1999, and November 6, 
1999. Id. at 1-2. Respondent, however, was also filling prescriptions 
for narcotics contemporaneously with its Stadol dispensings. See Id.
    In his testimony, Dr. Ferrell explained that ``[a] pharmacist is 
basically the gatekeeper of the medical delivery system.'' Tr. 310. 
After noting the numerous instances in which Respondent filled 
prescriptions for different benzodiazepines which were issued by 
different doctors and the large quantities of these drugs it dispensed, 
Id. at 312, Dr. Ferrell explained that a pharmacist must contact the 
prescriber, ask him if he is ``familiar with the fact [that] the 
patient'' is on another drug of the same class, and ask if he really 
wants the patient to receive the drug. Id. at 313. Dr. Ferrell also 
found problematic Respondent's filling of the prescriptions for 
hydrocodone/apap which were written by six different practitioners. Id. 
at 315.
    Dr. Mulder found problematic Respondent's filling of ``simultaneous 
prescription[s] of narcotic analgesics'' and noted that ``there were 
six different narcotics being * * * dispensed simultaneously by a 
number of different physicians.'' Id. at 512-13. Dr. Mulder further 
found that ``[t]he number of pills dispensed * * * exceeded the 
acceptable safe limits and would have been toxic to the patient.'' Id. 
at 513.
    Dr. Mulder also explained that prescribing an agonist/antagonist 
such as Stadol ``at the same time that you're giving an agonist * * * 
precipitate[s] a withdrawal reaction [in] the patients.'' Id. Dr. 
Mulder further explained that Stadol and narcotic agonist drugs 
``cannot be given simultaneously and they were given simultaneously in 
this particular patient.'' Id. at 513-514. According to Dr. Mulder, 
Respondent ``should not have filled'' the Stadol prescriptions. Id. at 
514. Respondent also should have notified the physician that ``he 
cannot fill'' the prescription because of the ``potential medical 
problems'' that can occur ``by dispensing these two medications 
together'' and also that the ``numbers of pills are too much.'' Id.
    Finally, with respect to Respondent's dispe