Farmacia Yani; Decision and Order, 29053-29067 [2015-12130]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices the experience of the applicant in dispensing controlled substances is of such character and quality that registration is not in the public interest. This requires evidence of both the qualitative manner and quantitative volume of the applicant’s experience. Where evidence of the applicant’s experience, as expressed through its employees and officers, establishes that the business plan provides for the active daily involvement of no one having experience applying DEA controlled substance diversion regulations in a retail pharmacy setting, and provides only for the involvement of an employee familiar with the regulations applicable to Registered Nurses whose duties include dispensing medication, in such an application there is sufficient evidence proving, by at least a preponderance, that granting such an application would be inconsistent with the public interest. 4. When proposing to deny a retailpharmacy application under Factor Two based on the prior association and dispensing history of a third party, the Government must demonstrate that the third party’s past negative experience in dispensing controlled substances warrants a finding that his or her association with the applicant would be inconsistent with the public interest. Where, as here, the third party is the husband of the applicant’s majority shareholder but has no clearly demonstrated role in either the corporation (as a shareholder or an officer), or in the retail pharmacy (as an employee or manager), and where there is insufficient evidence demonstrating the third party’s past negative experience will have any impact on the operation of the retail pharmacy, the Government has not met its burden of proving a basis to deny the application under Factor Two. 5. In order to establish a basis for denying a new application for a retail-pharmacy Certificate of Registration based on the provisions of 21 U.S.C. 823 (f)(5) (Factor Five), the Government must present evidence establishing, by at least a preponderance, other conduct (i.e., conduct not covered within the scope of Factors One through Four) which may threaten the public health and safety. Where, as here, the evidence establishes that when called upon by DEA investigators to identify the person or persons who would be familiar with DEA diversion control regulations and would be present at the retail pharmacy to ensure compliance with those regulations, the applicant’s sole officer and both of its two shareholders made material misrepresentations about having such person or persons present, there is substantial evidence of conduct that may threaten the public health and safety. In such an application there is sufficient evidence proving, by at least a preponderance, that granting such an application would be inconsistent with the public interest. 6. Upon such evidence, the Government has met its burden and has made a prima facie case in support of the proposed order denying the Respondent’s application for a retail-pharmacy Certificate of Registration. 7. Upon a review of the record as a whole, including all claims made in the Respondent’s post-hearing brief, there is VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 insufficient evidence of remediation. Accordingly, the Government has established cause to deny this application. Recommendation As the Government has established its prima facie case by at least a preponderance of the evidence, the Respondent’s application for a retail-pharmacy DEA Certificate of Registration should be DENIED. Dated: April 23, 2013. Christopher B. McNeil, Administrative Law Judge. [FR Doc. 2015–12131 Filed 5–19–15; 8:45 am] BILLING CODE 4410–09–P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 13–31] Farmacia Yani; Decision and Order On April 10, 2013, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Farmacia Yani (Respondent), of San Sebastian, Puerto Rico. ALJ Ex. 1. The Show Cause Order proposed the denial of Respondent’s application for a DEA Certificate of Registration as a retail pharmacy, on the ground that its registration ‘‘would be inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).’’ Id. at 1. The Show Cause Order specifically alleged that on March 27, 2012, Respondent submitted an application for a registration as a retail pharmacy, seeking authority to dispense controlled substances in schedules II through V, at a location in San Sebastian, Puerto Rico. Id. The Order further alleged that Respondent held a registration at the same location, which it ‘‘had surrendered for cause on December 2, 2011,’’ and that a DEA investigation found ‘‘that from February 2009 through November 2011, [it] filled approximately 218 prescriptions for controlled substances issued by a medical doctor who did not possess a valid DEA registration, in violation of Federal law and regulations.’’ Id. (citing 21 U.S.C. 843(a)(2); 21 CFR 1306.04). The Government then alleged that Respondent’s ‘‘violations of Federal law and regulations render granting its application for a [registration] inconsistent with the public interest.’’ Id. (citing 21 U.S.C. 823(f) and 824(a)). On May 10, 2013, Respondent, through its counsel, requested a hearing on the allegations and the matter was placed on the docket of the Office of Administrative Law Judges. ALJ Ex. 2. PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 29053 Thereafter, an Administrative Law Judge (ALJ) proceeded to conduct pre-hearing procedures. ALJ Ex. 3. In its Supplemental Prehearing Statement, the Government provided notice to Respondent that it intended to elicit testimony from an Agency Diversion Investigator (DI) that Respondent had ‘‘filled twenty-nine (29) prescriptions for Suboxone that were written by two doctors who did not possess authority to issue these controlled substances,’’ that the ‘‘prescriptions were written by Dr. Aguilar-Amieva and Dr. Cesar I. VargasQuinones,’’ and that a review of ‘‘the DEA registration database . . . found that these two physicians were never registered with DEA as data-waived practitioners, in violation of 21 CFR 1301.28.’’ ALJ Ex. 7, at 3. The Government also provided notice that it intended to question Respondent’s owner ‘‘about the circumstances of the pharmacy’s prior surrender of its . . . registration, and about her failure to note the previous surrender on Respondent’s new application for registration.’’ Id. On July 16, 2013, the ALJ conducted an evidentiary hearing in Guaynabo, Puerto Rico.1 Tr. 27. At the hearing, the 1 On June 18, 2013, the ALJ had conducted the first day of the hearing, during which he reviewed the parties’ proposed stipulations and admitted several documents into the record, while holding the admission of two Government exhibits in abeyance. See Tr. 4–14 (June 18, 2013). After Respondent’s counsel objected to the admission of some of the Government’s exhibits because they contained prescriptions issued by a doctor whose prescriptions were not the basis of what it had previously alleged, the Government announced that it would be filing a supplemental prehearing statement during which it would ‘‘outline that the Government discovered some prescriptions by Dr. Cesar Vargas-Quinones.’’ Id. at 14. After the ALJ ruled that these exhibits would ‘‘be held in abeyance until after we’ve had the opportunity to see what the Government sets forth in its supplemental prehearing statement,’’ the ALJ explained that the deadline for both parties to file their supplemental prehearing statements would ‘‘be simultaneous’’; the ALJ also told Respondent’s counsel that ‘‘you really won’t have a chance to reply in your—in your response in the prehearing statement,’’ but that she would be able ‘‘to object to these exhibits during the hearing itself.’’ Id. at 15–16. Notably, during the June 18 hearing, the Government made no mention of its intent to raise the material falsification issue. Moreover, the ALJ subsequently ordered that the parties file any supplemental prehearing statements with the Office of Administrative Law Judges ‘‘not later than 2:00 p.m. on the 9th of July 2013.’’ Id. at 18–19. The same day, the ALJ also issued an Order memorializing these instructions. See Order (June 18, 2013). Therein, the ALJ further instructed that ‘‘[a]fter this deadline, Prehearing Statements may only be supplemented upon the filing of a motion for extension of time and after a favorable ruling by me. Any new documents identified in a supplemental prehearing statement also need to be exchanged by the parties no later than July 9, 2013.’’ Id. at 4. E:\FR\FM\20MYN1.SGM 20MYN1 mstockstill on DSK4VPTVN1PROD with NOTICES 29054 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices Government elicited the testimony of a DI and Ms. Yanira Santiago-Soto, Respondent’s owner and pharmacist in charge; Respondent also elicited the testimony of Ms. Santiago-Soto. Both parties also introduced documentary evidence into the record. Following the hearing, both parties submitted briefs containing their proposed findings of fact, conclusions of law, and argument. On September 26, 2013, the ALJ issued his Recommended Decision (hereinafter, cited as R.D.) Therein, the ALJ found that the Government had established a prima facie case that granting Respondent’s application ‘‘would be inconsistent with the public interest.’’ R.D. 36. The ALJ further found that Respondent had ‘‘failed to rebut’’ the Government’s case. Id. The ALJ thus recommended that Respondent’s application be denied. Respondent filed Exceptions to the Recommended Decision. Having reviewed Respondent’s Exceptions along with the entire record, I find that several of them are well taken and that the ALJ committed multiple prejudicial errors. These include: (1) Barring Respondent from using a document, which, according to Respondent’s offer, was from DEA’s Web site, to impeach a Government witness, because it was not submitted in advance of the hearing; (2) barring Respondent from introducing evidence of an email its principal sent to an Agency Investigator the day after she submitted the application, which according to Respondent’s offer, memorialized a phone conversation in which she asked if she had correctly answered an application question, also on the ground that it was not submitted in advance of the hearing, notwithstanding that the Government did not even disclose that it was pursuing the material falsification allegation until one week before the hearing; and (3) finding that Respondent’s principal materially falsified its application based on the answer she gave to Question Four when the Government never provided notice that the answer to this question was at issue in the Show Cause Order, its prehearing statements, or its opening statement, nor even questioned her about her answer to this question, even though it called her to testify in its casein-chief. Because I reject the ALJ’s legal conclusions that Respondent’s principal materially falsified its application and that Respondent violated its corresponding responsibility under 21 CFR 1306.04(a) when it dispensed prescriptions issued by a physician VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 whose registration had expired, and these errors solely affect these two allegations, I conclude that a remand is not warranted. While I agree with the ALJ’s legal conclusion that Respondent violated federal law when it dispensed Suboxone prescriptions, which were issued to provide maintenance or detoxification treatment and the prescribers lacked the requisite authority to prescribe the drug for this purpose, I do not find that the record as a whole supports the proposed outright denial of the Application. Accordingly, I will order that Respondent be granted a registration subject to conditions set forth in this decision. I make the following findings of fact. Findings Respondent’s License and Registration Status Respondent is a corporation which owns a retail pharmacy located at Carretera 109, Kilometer 26.7, Barrio Culebrina, San Sebastian, Puerto Rico. Tr. 9; GX 1. Ms. Yanira Santiago-Soto is the owner of Respondent and its pharmacist-in-charge. Tr. 106. Respondent is licensed as a pharmacy by the Commonwealth of Puerto Rico Department of Health; this license does not expire until June 26, 2015. RX D1, at 3. Respondent also holds a controlled substance registration, which was also issued by the Commonwealth’s Department of Health.2 RX E4. Respondent previously held DEA Certificate of Registration FF1070894, pursuant to which it was authorized to dispense controlled substances in schedules II through V. GX 5, at 1. While this registration was not due to expire until September 30, 2014, on November 30, 2011, Ms. Santiago-Soto surrendered Respondent’s registration.3 Id.; see also RX I. On March 26, 2012, Ms. Santiago-Soto applied on Respondent’s behalf for a new registration. GX 1, at 1–2. It is this 2 According to the certificate, the registration was due to expire on September 30, 2013. RX E, at 4. 3 The day before, Ms. Santiago-Soto had been indicted along with thirty-two other defendants, on two felony counts of violating the Controlled Substances Act. The charges were: (1) Conspiring to possess and dispense, with intent to distribute, various controlled substances, in violation of 21 U.S.C. 841(a)(1), 846, and 860; and (2) aiding and abetting each other and ‘‘knowingly and intentionally possess[ing] and dispens[ing] with intent to distribute various’’ schedule II through IV controlled substances, ‘‘outside the scope of professional practice and not for a legitimate medical purpose,’’ in violation of 21 U.S.C. 841(a)(1) and 18 U.S.C. 2. RX B, at 1–13. Several months later, the Government moved to dismiss the charges with prejudice, and on March 23, 2012, the District Court entered a Judgment of Dismissal. RX C. PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 application which is at issue in this proceeding. On the application, Respondent was required to answer four questions. Id. at 1. The second of these asked: ‘‘Has the applicant ever surrendered (for cause) or had a federal controlled substance registration revoked, suspended, restricted or denied, or is any such action pending?’’ GX 1, at 1. Ms. Santiago-Soto answered the question by checking the ‘‘no’’ box. Id. The fourth question asked, in relevant part: If the applicant is a corporation (other than a corporation whose stock is owned and traded by the public), association, partnership, or pharmacy, has any officer, partner, stockholder or proprietor been convicted of a crime in connection with controlled substance(s) under state or federal law, or ever surrendered or had a federal controlled substance registration revoked, suspended, restricted or denied, or ever had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation, or is any such action pending? Id. Respondent also answered this question, by checking the ‘‘no’’ box. Id. The Investigation of Respondent Following Ms. Santiago-Soto’s submission of Respondent’s application, a Diversion Investigator with the Ponce, Puerto Rico DEA Office was assigned to investigate the application. Tr. 40–41. Upon doing so, the DI determined that on November 30, 2011, a search warrant had been executed at Respondent during which various items of evidence, including prescriptions, were seized. Id. at 43. Some of the evidence was sent to the DEA digital evidence laboratory for further analysis; according to the DI, the lab extracted various data and sent a CD containing the data to his office. Id. at 44. In addition, prescriptions were seized from Respondent and scanned by the Ponce DEA office. Id. Upon reviewing the data provide by the digital evidence lab, the DI determined that ‘‘there were two main violations.’’ Id. at 46. According to the DI, the first set of violations involved Respondent’s having ‘‘illegally filled’’ some ‘‘241 prescriptions’’ which were issued by a Doctor Hector J. AguilarAmieva after the latter’s registration was retired by DEA on January 31, 2009 and ‘‘he was no longer authorized to prescribe any controlled substances. Id. at 46–47; see also GX 6 (affidavit of Chief, Registration and Program Support Section, Drug Enforcement Administration, stating that Dr. AguilarAmieva’s registration expired on June 30, 2008 and was retired from the DEA computer system on January 31, 2009). As for the second set of violations, the DI stated that they involved E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Respondent’s having filled twenty-nine prescriptions issued by both Dr. Aguilar-Amieva and Dr. Cesar VargasQuinones for Suboxone (buprenorphine). Tr. 47, 49. According to the DI, the prescriptions were unlawful because the doctors ‘‘were not authorized to’’ prescribe Suboxone (buprenorphine) ‘‘because they were not DATA-waived 4 practitioners.’’ Id. at 48. The DI further explained that a DATAwaived practitioner is a physician who is approved by ‘‘the Center of Substance Abuse’’ (actually, the Center for Substance Abuse Treatment, a component of the Substance Abuse and Mental Health Services Administration) to prescribe Suboxone (buprenorphine) to treat narcotic addiction and that these physicians are issued ‘‘a specific registration that is distinguished with an X number,’’ which ‘‘should be on the prescription[s]’’ they issued for these drugs. Id. at 49. However, none of these prescriptions bore an X number (even though seventeen of the twenty-nine prescriptions listed a diagnosis of opiate addiction or dependence). Id. at 49–50; see also GX 3, at 410–56. The DI further testified that Respondent’s application contained a falsification because in answering ‘‘[q]uestion [n]umber 3,’’ Ms. SantiagoSoto failed to disclose that the pharmacy had previously surrendered its registration. Tr. 45. While the DI was not present when Ms. Santiago-Soto surrendered Respondent’s registration, he testified that he had read a report that stated that she ‘‘voluntarily surrendered the pharmacy’s license’’ and that he had also seen the document that she signed, and that the document said that she ‘‘voluntarily surrendered’’ the registration. Id. at 60–61. The DI further explained that based on the inconsistencies between what he read in the report and the answers to the application’s questions, he concluded that Ms. Santiago-Soto had falsified the application. Id. at 62–63. Later, on cross-examination, the DI conceded that the criminal charges which were filed against Ms. SantiagoSoto were voluntarily dismissed with prejudice. Id. at 72. Moreover, when asked whether Ms. Santiago-Soto had violated any federal law or regulation, the DI answered: The conclusion, once again, is based on our records, what I see in the records, and it’s based on the evidence. Whenever an application is submitted to the DEA, and we are required to analyze this application, and based on the pharmacy’s, for example, that 4 See Drug Addiction Treatment Act of 2000, Pub. L. 106–310, Div. B, Title XXXV, § 3502(a), 114 Stat. 1222 (2000) (codified at 21 U.S.C. 823(g)(2)). VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 the applicant is dispensing controlled substances. Id. at 72–73. Respondent’s counsel then asked if anyone had found that Ms. Santiago-Soto ‘‘has violated any federal law in dispensing those prescriptions that are part of the evidence here today?’’ Id. at 73. The Government objected on the ground that the question ‘‘ha[d] been asked and answered’’ and the ALJ sustained the objection, noting that he knew that the charges were dismissed and that there was no evidence that Ms. Santiago-Soto had been convicted of any federal offense.5 Id. Respondent’s counsel then asked the DI if there was any official Web site or registry where a pharmacist can verify if a DEA number is active. Id. at 74. The DI testified that there is such a registry, that he ‘‘believe[d]’’ that the registry was available in 2009 through 2011 and was located at the DEA Diversion Web site, and that he believed that if a person was registered, they could access the Web site. Id. Subsequently, the DI testified that he could confirm that the registry has been available since 2009, but ‘‘[t]o [his] knowledge . . . physicians have been informed at least from 2010, [and] that she should have been able to do that.’’ Id. at 75–76. However, later in his testimony, Government counsel raised the possibility that this service had been discontinued, when he asked the DI: ‘‘But you’re not aware of when it started, and when it stopped?’’ and the DI answered: ‘‘That is correct.’’ Id. at 92. Respondent’s counsel then asked the DI ‘‘why the DEA site, as of today, states that you cannot verify a DEA number online?’’ Id. at 76. The DI replied: 5 Contrary to the ALJ’s understanding, this was an undue restriction on Respondent’s right of crossexamination, especially given that the answer was not responsive. Later in the proceedings, the Government called Respondent’s owner in its case-in-chief. Id. at 106. During cross-examination, the Government objected to Ms. Santiago-Soto’s testimony (well after the question was asked and well into her answer) regarding a conversation she had in April 2012 with the group supervisor on the ground that it was ‘‘[o]utside the scope of the pre-hearing statement’’ and ‘‘[t]here [was] no proffer that they were going to be introducing testimony from DEA agents.’’ Tr. 134. The ALJ sustained the objection on the ground that ‘‘it goes beyond the scope of what you informed in the amended pre-hearing statement.’’ Id. Here again, the ALJ erred in sustaining the objection. Even if Respondent’s pre-hearing statements did not disclose that Ms. Santiago-Soto would testify regarding this issue, its pre-hearing statement only limited the scope of what she could testify to on direct examination in Respondent’s case-in-chief and had no bearing on the appropriate scope of cross-examination given that Ms. SantiagoSoto was still testifying as a Government witness. Moreover, the Government did not argue that the testimony was beyond the scope of its direct examination. PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 29055 ‘‘[t]hat is new to me.’’ Id. Respondent’s counsel then asked if he could show a document to the DI which, according to the proffer, was from the Agency’s Web site and was contrary to the DI’s testimony. Id. at 76–78. The ALJ barred Respondent’s counsel from doing so even for the purpose of impeachment, explaining that his prehearing orders were clear that if documents ‘‘were not presented to the Government, in advance of the hearing,’’ he would not ‘‘allow it.’’ Id. at 77. Respondent’s counsel then asked the DI if, in order to verify a DEA number, one had to pay for a program. Id. at 78– 79. The DI answered that this was correct but that that ‘‘if there are [sic] any reason to verify, you can call our office at any time, and you can ask for a verification.’’ Id.; see also id. at 92. Next, when asked if ‘‘the law requires that any dispensing pharmacist calls the DEA to verify if a physician’s license is active,’’ the DI answered ‘‘yes.’’ Id. at 79. When then asked what statute or agency regulation requires this, the DI could not identify one. Id. at 79–80. Moreover, the DI then testified that there is no law or regulation that requires a pharmacy to subscribe to the database provided by the National Technical Information Service. Id. at 80. Still later, when asked if ‘‘it is the responsibility of the doctor [to have] a valid DEA license when prescribing a controlled substance,’’ the DI answered: ‘‘It is the responsibility of both the doctor and the pharmacist. The pharmacy has the responsibility.’’ Id. at 86–87. The DI then acknowledged that the prescriptions in Government Exhibit 3 contained the required information and that he could not identify a prescription that was ‘‘suspicious or irregular without knowing that the physician’s license has been revoked or expired.’’ Id. at 87–88. However, on redirect examination, the DI explained that the Suboxone prescriptions were suspicious because they did not include an X number for the physician. Id. at 90–91. Respondent’s counsel then asked whether he had ‘‘any evidence’’ that Ms. Santiago-Soto ‘‘ha[d] acted with the intention or knowledge’’ in dispensing either Dr. Aguilar’s or Dr. Vargas’ prescriptions. Id. at 88. The DI answered that he did not ‘‘base [his] evaluations on intentions’’ but ‘‘on the documents’’ that he had ‘‘seen.’’ Id. Also on redirect, the DI was asked whether part of the process of granting the applications of pharmacies involves ‘‘explaining to the pharmacies that they have the burden to verify all prescriptions.’’ Id. at 91. The DI answered ‘‘that is correct,’’ and agreed E:\FR\FM\20MYN1.SGM 20MYN1 29056 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices that this is a requirement for maintaining a DEA registration ‘‘under the code of regulations.’’ Id. Still later in his testimony, when no question was pending, the DI proceeded to state that even aside from the Suboxone prescriptions, the 241 prescriptions at issue were suspicious because they were for oxycodone and alprazolam, which are highly abused drugs. Id. at 95–96. The DI then explained that ‘‘if physicians regularly prescribe those drugs only, those should be of concern to any pharmacist who is . . . trying to ensure the public health and safety.’’ Id. at 96. The Government did not produce any evidence, however, to show that these were the only drugs which were being prescribed by Dr. Aguilar-Amieva and being filled by Respondent. The Government also called Ms. Santiago-Soto as a witness. Tr. 105. Ms. Santiago-Soto acknowledged that she has been Respondent’s owner and pharmacist-in-charge since she opened the pharmacy.6 Id. at 106. Asked by the Government whether the pharmacy had filled ‘‘241 prescriptions for Dr. AguilarAmieva from February 2009 to October 2009,’’ Ms. Santiago-Soto answered ‘‘yes.’’ Id. However, when asked whether she knew ‘‘that his registration had been revoked in January of 2009,’’ Ms. Santiago-Soto answered that she ‘‘didn’t know’’ at the time.7 Id. at 106– 07. Next, the Government asked Ms. Santiago-Soto whether she ‘‘believe[d] that it’s your duty to verify all prescriptions’’; she replied: ‘‘That’s what I do all the time.’’ Id. at 107. The Government then asked Ms. SantiagoSoto why she had filled Dr. AguilarAmieva’s prescriptions ‘‘if that’s what you do all the time?’’ Id. Ms. SantiagoSoto replied: Well to start with, I’m a pharmacist. And I revise [sic] prescriptions, and I make sure mstockstill on DSK4VPTVN1PROD with NOTICES 6 Ms. Santiago-Soto testified that she had worked at four other pharmacies prior to opening Respondent. Tr. 139–40. She also testified that Respondent had been inspected by the Commonwealth’s Health Department and the AMSCA, which is the Commonwealth agency that regulates controlled substances, and that she held the licenses required by the Commonwealth. Tr. 141–42. She further testified that Respondent had been inspected twice by DEA and had provided the DIs with both prescriptions and a list of various controlled medications that it had dispensed; according to Ms. Santiago-Soto, she was never notified that her pharmacy had engaged in any wrongdoing. Id. at 143. 7 The Government’s evidence does not establish that Dr. Aguilar-Amieva’s registration had been revoked, in which case a Decision and Order would have been published in the Federal Register. See GX 6. Rather, the Government’s evidence shows that Dr. Aguilar-Amieva’s registration expired on June 30, 2008 and was retired from the DEA computer system on January 31, 2009. See id. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 that the indications are correct, are the adequate ones, that they meet all standards and legal requirement [sic], whether they be federal or state laws. Once all those standards are met, and there is no question surrounding the prescription that might prompt me to call the physician for whatever reasons, then we proceed to dispense it. Id. at 107–8. Ms. Santiago-Soto then acknowledged that Respondent filled the twenty-nine Suboxone prescriptions issued by Drs. Aguilar-Amieva and Vargas-Quinones and that she was not aware that neither doctor was a DATA-waiver physician. Id. at 108. When asked whether Respondent had ever contacted the two doctors to verify the purpose of these prescriptions, Ms. Santiago-Soto answered: I verified the exhibit that you . . . gave me. . . And if you take a look at the Suboxone prescriptions, in their majority, they have a diagnosis that is related to the abuse of opioids, or opiates. Therefore, it was my understanding that these physicians had their license current, including some prescriptions that were invoiced to health insurance plans, and they were paid by these, even after they were reviewed. So, supposedly, that if the health insurance plan hires a physician, all the credentials should be up to date. And if they didn’t come to notice this, and with them being the health insurance plan, when they are usually up to date on everything, then it was my understanding that the prescriptions were okay. Id. at 109. When then asked what her understanding was of who could prescribe Suboxone to treat substanceabuse patients, Ms. Santiago-Soto answered that she ‘‘was aware of the use given to the medication’’ and that ‘‘[i]f you go prescription by prescription . . . the amounts are not such that would raise my suspicions that something is running amok.’’ Id. at 109–10. She then reiterated that, at the time, she ‘‘was not aware of the X DEA number’’ that is required to prescribe Suboxone and buprenorphine to treat narcoticdependent patients. Id. at 110. Upon questioning by the Government, Ms. Santiago-Soto acknowledged that a DATA-waiver physician must meet certain requirements and that ‘‘not all physicians may prescribe’’ Suboxone, and that a physician who prescribes Suboxone for this purpose must have an X-number. Id. The Government then asked Ms. Santiago-Soto why she did not know this when she ‘‘became accredited as a pharmacist?’’ Id. Ms. Santiago-Soto explained that she graduated in 1995, that the DATA was enacted in 2000, and that Suboxone and buprenorphine were not approved for PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 this purpose until 2002. Id. She then contended that ‘‘the DEA in Puerto Rico never has provided any guidance to her whether through an orientation or conference, online guidance, or by letters.’’ Id. She further asserted that in none of the continuing education classes that she was required to take to maintain her pharmacist license was there any training offered by DEA on the DATA’s requirements. Id. at 111. Ms. Santiago-Soto testified that she did not become aware of the DATA’s requirements until Respondent was audited by a health insurance plan and the buprenorphine prescriptions were discussed with her.8 Id. at 112. However, she acknowledged that she should have learned of these requirements earlier. Id. at 114. After describing what she was taught at pharmacy school about spotting diversion, id. at 114–16, the Government asked Ms. Santiago-Soto whether she found ‘‘anything suspicious with Dr. Aguilar-Amieva’s prescriptions?’’ Id. at 116. She replied: The prescriptions met all legal parameters. The patients would come over to the drug store, and the ones that I did dispense, their reputation wasn’t in doubt, in my judgment, because many of them would also bring me prescriptions of their medications that they took for continuous use. Id. The Government then asked Ms. Santiago-Soto whether she analyzed the prescribing practices of a physician for signs of diversion when filling a prescription. Id. at 117. Ms. SantiagoSoto replied: I don’t speak with the doctors. There is a confidentiality law between doctor and patient. I review that the prescription meets the law and that it shouldn’t raise the least suspicion possible in me, that this medication is not intended, particularly intended for this patient, for medical use. Id. at 117. When then asked whether she ‘‘went through [Respondent’s] computer system looking for patterns,’’ Ms. Santiago-Soto answered that she ‘‘kept a manual inventory and . . . from it I couldn’t necessarily discern that something was out of place.’’ Id. at 119. She then explained that in 2009, she dispensed a total of 30,000 prescriptions (including 27,000 for non-controlled drugs), of which 66 had been written by 8 Ms. Santiago-Soto denied that she had not learned about the DATA’s requirements until after being served with the Show Cause Order. Tr. 112. Ms. Santiago-Soto testified that the insurance plan audit occurred several months before the search warrant was executed at her pharmacy. Id. at 113. It is noted that the Government’s evidence shows that Respondent did not dispense any Suboxone prescriptions after July 3, 2011. GX 4, at 23–24. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices Dr. Aguilar-Amieva.9 Id. She further stated that Dr. Aguilar-Amieva’s prescriptions did not raise any suspicion. Id. at 122. Turning to the application, Ms. Santiago-Soto acknowledged that she understood both questions two and three.10 Id. at 123–24. When then asked whether she had surrendered her DEA registration for cause in November 2011, Ms. Santiago-Soto replied: ‘‘In my judgment, I surrendered the license, but not with cause.’’ Id. at 124. She then explained that: . . . . In my judgment, this is simple. When I surrendered my license, it was in a situation where I was under arrest, and I had no other choice but to sign the document that was placed in front of me. Moreover, at the moment of having to sign the document, an agent came out speaking or yelling, ‘‘was her rights read to Yanira Santiago, was her Miranda rights’’—and just before I signed that paper that said ‘‘surrender,’’ I had my Miranda rights read. And I was practically signing simultaneously. Agent [P.N.], from the Ponce DEA, explained to me that I had to sign that surrender because of the criminal charges against me. And not because of what I’m being told of here. * * * * * I’m handcuffed, and I had to sign a document that they demand from me to sign because I had no other option. Because, according to what they were saying, I was part of a scheme. When I proceed to answer this questions [sic] that is posed in the new application and quote/unquote, it puts the words ‘‘with cause.’’ It’s my understanding, as of this day, that I surrendered the license without cause, because it was taken away from me because of my criminal case [an]d not because of what I’m being told here. mstockstill on DSK4VPTVN1PROD with NOTICES Id. at 124–26. See also id. at 132 (‘‘I signed the document, because he told me that I had to surrender the license because of a criminal charge against me.’’). Ms. Santiago-Soto then explained that when she filled out the application ‘‘that question raised doubts in my mind.’’ Id. at 126. Accordingly, the next day, she called ‘‘the regional director for 9 In Respondent’s case in chief, Ms. Santiago-Soto testified that Respondent dispensed 104 prescriptions in 2010 and 63 prescriptions in 2011 which were issued by Dr. Aguilar-Amieva. Tr. 151. 10 Question three asks whether ‘‘the applicant [has] ever surrendered (for cause) or had a state professional license or controlled substances registration revoked, suspended, denied, restricted, or placed on probation, or is any such action pending?’’ GX 1, at 1. There is no evidence, however, that the Commonwealth took any of these actions against Respondent’s (or Ms. SantiagoSoto’s) professional license or controlled substance registration. Thus, it is unclear why Ms. SantiagoSoto was asked about this question rather than question four. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 the DEA in Ponce 11 . . . and . . . told her . . . that I was unsure if I had answered the question correctly’’ and that she had ‘‘answered ‘no,’ because, quote/unquote, it said ‘with cause.’ ’’ Id. Ms. Santiago-Soto further testified that the official said ‘‘that she would look into it and verify if that was answered correctly, because she didn’t know. And she also told me that, since I had informed her about it, eventually, if any situation came up, she could appear as a witness and say that I had that doubt, and I had asked her about it, and that she had answered me.’’ Id. at 126–27. Ms. Santiago-Soto testified that she memorialized the conversation in an email. Id. at 127. However, as of the date of the hearing, the official had not replied to the email. Id. at 136. The Government then asked Ms. Santiago-Soto ‘‘if you had to fill this application out again today, what would you put for the Question No. 3?’’ Id. at 128. Ms. Santiago-Soto replied: I would answer it the same way. I would answer the same thing. Because of the statement ‘‘with cause,’’ if that statement wouldn’t have been there, I would have no reason to answer ‘‘no.’’ I would’ve answered ‘‘yes.’’ Because I surrendered. But since it stated, in parentheses, ‘‘with cause,’’ that’s not my issue. Because I surrendered my DEA license because of the criminal case against me. Not because of this intervention right now, that we’re having today. Id. Throughout her testimony, Ms. Santiago-Soto maintained that she did not voluntarily surrender Respondent’s registration, but rather was coerced into surrendering it. Id. at 132. She also testified that the various prescriptions which form the basis of the allegations regarding the dispensing violations were taken from Respondent on the date she was arrested. Id. at 135–36. Upon the conclusion of Respondent’s cross-examination of Ms. Santiago-Soto, Respondent’s counsel attempted to move into evidence a copy of the email which she had sent to the group supervisor and explained that he had shown a copy of the email to the Government. Id. at 137. The ALJ denied the motion, explaining: ‘‘That may be true, Counsel, but I don’t have it. It’s not evidence before me. I don’t have any reason to understand why it wasn’t presented ahead of time, so I could evaluate it.’’ Id. at 137–38. As found above, the email appears to have been relevant to the issue of whether Ms. Santiago-Soto falsified Respondent’s application. And contrary 11 I have taken official notice that the official is actually a group supervisor. PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 29057 to the ALJ’s on the record explanation for denying the motion, there was ample reason for why the document was not ‘‘presented ahead of time.’’ Specifically, the ALJ ignored that the Government did not provide any notice that it intended to litigate the issue of material falsification until its supplemental prehearing statement, which it filed one week before the hearing, and on which date Respondent was also required to file its supplemental pre-hearing statement. Moreover, the ALJ’s June 18 order did not address what procedure Respondent was required to follow in the event the Government raised an entirely new allegation at this stage of the proceeding. See ALJ Ex. 7. Finally, the document was not included with the transmitted record as a rejected exhibit as it should have been. See 21 CFR 1316.60. Ms. Santiago-Soto also testified in Respondent’s case-in-chief. Ms. Santiago-Soto testified that prior to her arrest on November 30, 2011, she had been inspected twice by DEA. Tr. 142– 43. The first of these inspections occurred on September 2, 2010; the second on September 7, 2011. RXs G & H. While Agency Investigators apparently reviewed the controlledsubstance prescriptions and her dispensing records, they never notified her of ‘‘any findings or wrongdoings on’’ the part of Respondent. Tr. 143. Nor did they advise that Dr. Aguilar-Amieva or any other doctor was under investigation. Id. at 144. Ms. Santiago-Soto further testified that there is a ‘‘question and answer section’’ on the DEA diversion Web site which includes a question regarding whether the Agency can verify a DEA registration. Id. at 145–46. According to Ms. Santiago-Soto, ‘‘the answer that the DEA gives . . . is ‘no’ ’’ and that she has to buy a program from the National Technical Information Service ‘‘to be able to have access on several occasions to that registry.’’ Id. at 146. Ms. Santiago-Soto further testified that it ‘‘costs over $2,000 on an annual basis . . . for one user.’’ Id. However, she then explained that she would buy the program if she is issued a registration. Id. at 146–47. Still later, she testified that the NTIS is ‘‘costly for a drugstore that’s just starting out’’ and that she did not ‘‘know of any small community pharmacy that has purchased’’ a subscription to the NTIS database, ‘‘because the law does not require that it be purchased.’’ Id. at 149. However, she reiterated that she would purchase the database. Id.; see also id. at 154–55. Moreover, Ms. Santiago-Soto testified that if she was granted a registration, she would be willing to consider any E:\FR\FM\20MYN1.SGM 20MYN1 29058 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES recommendations made by the Agency. Id. at 155. Regarding the allegation that she dispensed prescriptions written by Dr. Aguilar-Amieva, whose registration had expired, Ms. Santiago-Soto explained that she had reviewed the DEA Pharmacist’s Manual, and that while the Manual contains extensive information as to what must be provided on a prescription, ‘‘[n]owhere in the law am I told that I have to be checking each one of the licenses at every moment.’’ Id. at 148. She also testified that during the period at issue, she ‘‘would check the list of those physicians that had been criminally charged because of their prescriptions,’’ id., and that if the name of a doctor was not on the list, she ‘‘proceeded to dispense the prescription.’’ Id. at 161. However, neither Dr. Aguilar-Amieva nor Dr. Vargas-Quinones appeared on the various lists for the years 2008 through 2013.12 Id. at 148–49. Finally, Ms. Santiago-Soto denied that she had ever knowingly dispensed a prescription which had not been lawfully issued. Id. at 154. Following the conclusion of Ms. Santiago-Soto’s testimony, Respondent’s counsel requested that the ALJ take official notice of various documents, including the Web page containing various questions and answers which Respondent’s counsel had previously sought to use to impeach the testimony of the DI to the effect that Ms. SantiagoSoto could have verified whether the physicians were registered by calling DEA. Tr. 162–67. After the ALJ asserted that the document’s ‘‘relationship to the narrative . . . attributed to’’ Respondent should have been clear to its counsel when she filed its amended pre-hearing statements, Respondent’s counsel again argued that it had no ‘‘knowledge that the witness for the DEA would provide testimony . . . under oath, that contradicts the information the DEA provided on that Web page.’’ Id. at 167. 12 On cross-examination by the Government, Ms. Santiago-Soto acknowledged that these lists may actually have been of those physicians who were subjected to administrative proceedings. Tr. 158. When the Government suggested that her review of these lists was inadequate because they were lists of final agency actions and would not ‘‘contain the names of doctors that voluntarily surrendered’’ their registrations, Ms. Santiago-Soto replied that ‘‘I can’t make any supposition, as you’ve been telling me. You’re asking me to suppose something, and I’m not here to suppose anything. I’m here with facts. I’m being shown facts. So I have to answer with facts.’’ Id. However, upon questioning by the ALJ, Ms. Santiago-Soto admitted that if a doctor who voluntarily surrendered his registration was not identified on the Web site, she ‘‘wouldn’t know’’ that the doctor did not have the requisite authority. Id. at 161–62. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 However, the ALJ again rejected Respondent’s request. Id. Discussion Section 303(f) of the Controlled Substances Act (CSA) provides that an application for a practitioner’s registration may be denied upon a determination ‘‘that the issuance of such registration would be inconsistent with the public interest.’’ 21 U.S.C. 823(f). In making the public interest determination, the CSA requires the consideration of the following factors: (1) The recommendation of the appropriate State licensing board or professional disciplinary authority. (2) The applicant’s experience in dispensing . . . controlled substances. (3) The applicant’s conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances. (4) Compliance with applicable State, Federal, or local laws relating to controlled substances. (5) Such other conduct which may threaten the public health and safety. Id. ‘‘These factors are . . . considered in the disjunctive.’’ Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ‘‘may rely on any one or a combination of factors, and may give each factor the weight [I] deem[] appropriate in determining whether . . . an application for registration [should be] denied.’’ Id. Moreover, I am not required to make findings as to all of the factors.13 Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005). Under Section 304(a)(1), a registration may be revoked or suspended ‘‘upon a 13 I have considered Respondent’s evidence that it is currently licensed by the Commonwealth of Puerto Rico as a pharmacy and holds a registration from the Commonwealth which authorizes it to dispense controlled substances. I have also considered Respondent’s evidence that the Pharmaceutical Board took no action against Ms. Santiago-Soto’s pharmacist’s license. However, none of these documents constitute a recommendation from the state licensing board as to whether DEA should grant the application, see 21 U.S.C. 823(f)(1), and while Respondent clearly possesses authority to dispense controlled substances under the laws of the Commonwealth and thus meets a prerequisite for obtaining a registration, this finding is not dispositive of the public interest inquiry. So too, I acknowledge that neither Respondent, nor Ms. Santiago-Soto, has been convicted of an offense under either federal or Puerto Rico law ‘‘relating to the manufacture, distribution or dispensing of controlled substances.’’ 21 U.S.C. 823(f)(3). However, while the charges against Ms. Santiago-Soto were dismissed, this finding is not dispositive of the allegations that Respondent filled unlawful prescriptions because this proceeding involves different allegations than those brought in the criminal proceeding and is subject to a lower standard of proof (the preponderance standard) than that applied in a criminal proceeding. PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 finding that the registrant . . . has materially falsified any application filed pursuant to or required by this subchapter.’’ 21 U.S.C. 824(a)(1). Under agency precedent, the various grounds for revocation or suspension of an existing registration that Congress enumerated in section 304(a), 21 U.S.C. 824(a), are also properly considered in deciding whether to grant or deny an application under section 303. See The Lawsons, Inc., 72 FR 74334, 74337 (2007); Anthony D. Funches, 64 FR 14267, 14268 (1999); Alan R. Schankman, 63 FR 45260 (1998); Kuen H. Chen, 58 FR 65401, 65402 (1993). Thus, the allegation that Respondent materially falsified its application is properly considered in this proceeding. See The Lawsons, 72 FR at 74337; Samuel S. Jackson, 72 FR 23848, 23852 (2007). Moreover, just as materially falsifying an application provides a basis for revoking an existing registration without proof of any other misconduct, see 21 U.S.C. 824(a)(1), it also provides an independent and adequate ground for denying an application. The Lawsons, 72 FR at 74338; cf. Bobby Watts, M.D., 58 FR 46995 (1993). In this matter, the Government alleged that Ms. Santiago-Soto materially falsified Respondent’s application for registration by failing to disclose that it had previously surrendered its prior registration for cause. Gov. Post-Hearing Br., at 6–9. It also alleged that Respondent’s registration is inconsistent with the public interest because it violated 21 U.S.C. 843(a)(2), as well as 21 CFR 1306.04 and 1306.06, when: (1) Between February 2009 and October 2009, it filled 241 prescriptions which were issued by Dr. Aguilar-Amieva, whose registration had been retired by the Agency; and (2) it filled Suboxone prescriptions issued by Dr. AguilarAmieva and Dr. Vargas-Quinones to treat narcotic addiction, when neither doctor was authorized under Federal law to do so. See Gov. Post-Hearing Br., at 11–12. The Material Falsification Allegation The Government argues that Ms. Santiago-Soto materially falsified Respondent’s application for registration because she failed to disclose the November 30, 2011 surrender of its registration. More specifically, the Government contends that Ms. Santiago-Soto materially falsified the application, when she provided a ‘‘no’’ answer to question two, which asked: ‘‘Has the applicant ever surrendered (for cause) or had a federal controlled substances registration revoked, suspended, E:\FR\FM\20MYN1.SGM 20MYN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices restricted or denied, or is any such action pending?’’ Gov. Br. at 7 (citing GX 1, at 1). Moreover, in its post-hearing brief, the Government contends—for the first time in the proceeding—that Ms. Santiago-Soto also materially falsified the application when she provided a ‘‘no’’ answer to question four, which asked: ‘‘If the applicant is a corporation . . . or pharmacy . . . has any officer, partner, stockholder or proprietor . . . ever surrendered or had a federal controlled substances registration revoked, suspended, restricted, or denied . . . .?’’ Id. at 8. I reject the allegations. One of the fundamental tenets of Due Process is that an Agency must provide a Respondent with notice of those acts which the Agency intends to rely on in seeking the revocation of its registration so as to provide a full and fair opportunity to challenge the factual and legal basis for the Agency’s action. See NLRB v. I.W.G., Inc. 144 F.3d 685, 688– 89 (10th Cir. 1998); Pergament United Sales, Inc. v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990). Because the Government did not allege in the Order to Show Cause that Respondent had materially falsified its application, before proceeding to address whether the evidence supports the Government’s contention, it is necessary determine whether the Government otherwise provided adequate notice of its intent to litigate the issue. See 5 U.S.C. 554(b) (‘‘Persons entitled to notice of an agency hearing shall be timely informed of . . . the matters of fact and law asserted.’’). ‘‘ ‘Pleadings in administrative proceedings are not judged by the standards applied to an indictment at common law.’ ’’ Aloha Airlines v. Civil Aeronautics Bd., 598 F.2d 250, 262 (D.C. Cir. 1979) (quoted in CBS Wholesale Distributors, 74 FR 36746, 36749 (2009)); accord Citizens State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984). Accordingly, ‘‘the failure of the Government to disclose an allegation in the Order to Show Cause is not dispositive and an issue can be litigated if the Government otherwise timely notifies a [r]espondent of its intent to litigate the issue.’’ CBS Wholesale, 74 FR at 36570. Thus, while the Agency has held that ‘‘the parameters of the hearing are determined by the prehearing statements,’’ consistent with numerous court decisions, it has also recognized that even where an allegation was not raised in either the Show Cause Order or the pre-hearing statements, the parties may nonetheless litigate an issue by consent. Pergament United Sales, 920 F.2d at 135–37; see also Duane v. Department of Defense, 275 F.3d 988, VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 995 (10th Cir. 2002) (discussing Facet Enterprises, Inc. v. NLRB, 907 F.2d 963, 974 (10th Cir. 1990); ‘‘we held that defendant had constructive notice of an alternate theory of liability not described in the formal charge when the agency detailed that theory during its opening argument and at other points during the hearing and when the defendant’s conduct revealed that it understood and attempted to defend against that theory’’).14 ‘‘The primary function of notice is to afford [a] respondent an opportunity to prepare a defense by investigating the basis of the complaint and fashioning an explanation that refutes the charge of unlawful behavior.’’ Pergament United Sales, 920 F.2d at 135 (citation omitted). While the issue of whether an allegation ‘‘has been fully and fairly litigated [by consent] is so peculiarly fact-bound as to make every case unique,’’ id. at 136, ‘‘the simple presentation of evidence important to an alternative [allegation] does not satisfy the requirement’’ that a respondent be afforded with a full and fair opportunity to litigate the alternative allegation. I.W.G., 144 F.3d at 688 (quoting NLRB v. Quality C.A.T.V., Inc., 824 F.2d 542, 547 (7th Cir. 1987) (other citation omitted)). ‘‘An agency may not base its decision upon an issue the parties tried inadvertently. Implied consent is not established merely because one party introduced evidence relevant to an unpleaded issue and the opposing party failed to object to its introduction. It must appear that the parties understood the evidence to be aimed at the unpleaded issue.’’ Yellow Freight System, Inc. v. Martin, 954 F.2d 353, 358 (6th Cir. 1992) (citation omitted). Accordingly, where the Government’s case ‘‘focus[es] on another issue and [the] evidence of [an] uncharged violation [is] ‘at most incidental,’ ’’ the Government has not satisfied its constitutional obligation to provide a full and fair opportunity to litigate the issue and it cannot rely on the incidental issue as the basis for imposing a sanction. Pergament, 920 F.2d at 136 (quoting NLRB v. Majestic Weaving Co., 355 F.2d 854, 861–62 (2d Cir. 1966)). 14 See also Grider Drug #1 & Grider Drug #2, 77 FR 44070, 44077 n.23 (2012) (holding that while the Government did not provide adequate notice of its intent to litigate an allegation in either the Show Cause Order or its pre-hearing statements, where respondents ‘‘did not object that the allegation was beyond the scope of the proceeding and that they were denied adequate notice of it’’ and ‘‘fully litigated the issue,’’ the allegation was litigated by consent) (citing Citizens State Bank, 751 F.2d at 213; Kuhn v. Civil Aeronautics Bd., 183 F.2d 839, 841–42 (D.C. Cir. 1950); and Yellow Freight System, Inc. v. Martin, 954 F.2d 353, 358 (6th Cir. 1992)). PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 29059 In its initial Pre-Hearing Statement, the Government again failed to allege that the application was materially false. Nor, in summarizing the testimony of its proposed witnesses therein, did the Government provide notice that it intended to put forward any evidence which would lead Respondent to conclude that the material falsification of its application was an issue in the case. Instead, the Government did not provide notice that it intended to litigate the issue of whether the application contained a material falsification until its Supplemental Pre-Hearing Statement, which was not filed until one week before the evidence-taking phase of the proceeding convened. Even then, the Supplemental Pre-Hearing Statement did not identify which specific statements on the applications were allegedly false. Rather, the Supplemental Pre-Hearing Statement merely stated that ‘‘Ms. Soto will be asked about the circumstances of the pharmacy’s prior surrender of its DEA certificate of registration, and about her failure to note the previous surrender on Respondent’s new application for registration.’’ ALJ Ex. 7, at 3. Because the Government’s Supplemental PreHearing Statement did not specifically identify which of the various application statements it was alleging to be materially false, only those issues which the record shows were litigated by consent can support a finding (if proved by substantial evidence) that Ms. Santiago-Soto materially falsified the application and the imposition of a sanction. Notably, while at the evidentiary phase of the hearing the Government made an opening statement, here again, it did not identify the specific statements which were allegedly false. Rather, it confined its opening statement to the following: ‘‘Your Honor, the Government seeks a recommendation of a denial of application based on Sections 823 and 824 of the Controlled Substances Act, on the basis of a material falsification on the application, and the fact that Respondent’s registration would be inconsistent with the public interest.’’ Tr. 39. Moreover, in questioning both the DI and Ms. Santiago-Soto, the Government did not elicit any testimony regarding Question Four. Rather, it focused entirely on the answers Ms. SantiagoSoto had given to Question Two, and, notwithstanding that there was no evidence that the Commonwealth of Puerto Rico had taken any action against either Respondent or Ms. Santiago-Soto, Question Three. See Tr. 45 (testimony of DI that Respondent’s application E:\FR\FM\20MYN1.SGM 20MYN1 29060 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES contained a falsification at ‘‘Question Number 3’’); id. at 123–24 (Government’s questioning of Ms. Santiago-Soto regarding Questions Two and Three). Indeed, it was not until its post-hearing brief that the Government finally argued that Ms. Santiago-Soto had provided a materially false answer to Question Four. This, however, is simply too late in the day to provide a meaningful opportunity to refute the allegation. See Pergament United Sales, 920 F.2d at 135.15 Thus, I hold that the Government provided adequate notice to support a finding that the parties litigated by consent the issue of whether Ms. Santiago-Soto’s answer to Question Two was materially false. However, I further hold that the record does not support a finding that the parties litigated by consent whether her answer to Question Four was also materially false. Turning to the merits of the allegation pertaining to Question Two, the evidence showed that on November 29, 2011, Ms. Santiago-Soto was indicted (along with thirty-two other persons) on two felony counts of violating the Controlled Substance Act, including: (1) By conspiring to possess and dispense, with intent to distribute, various controlled substances, in violation of 21 U.S.C. 841(a)(1), 846, and 860; and (2) by aiding and abetting each other and ‘‘knowingly and intentionally possess[ing] and dispens[ing] with intent to distribute various’’ schedule II through IV controlled substances, ‘‘outside the scope of professional practice and not for a legitimate medical purpose,’’ in violation of 21 U.S.C. 841(a)(1) and 18 U.S.C. 2. RX B, at 1– 13. On November 30, 2011, Ms. SantiagoSoto was arrested early in the morning and taken to her pharmacy where, after receiving the Miranda warnings, she was told by P.N., a DI,16 that she had to surrender her registration ‘‘because of the criminal charges against’’ her and that she ‘‘had no other options’’ because she was ‘‘part of a scheme.’’ Tr. 125–26. The evidence further showed that Ms. Santiago-Soto executed a Voluntary Surrender form, which was witnessed by P.N. (as well as another DI). RX I. This form stated that she had been ‘‘fully advised of my rights, and 15 Indeed, even if an allegation could be refuted without further factual development because it involves a matter of law, because DEA proceedings customarily require the parties to file their posthearing briefs simultaneously (as was done here), there is no meaningful opportunity to respond prior to the issuance of an ALJ’s recommended decision. 16 In her testimony, Ms. Santiago-Soto referred to this person as an Agent; however, on the Voluntary Surrender form, this person signed as a witness and listed his title as ‘‘Diversion Investigator.’’ RX I. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 underst[ood] that I am not required to surrender my controlled substance privileges,’’ and that ‘‘[i]n view of my alleged failure to comply with the Federal requirements pertaining to controlled substances, and as an indication of my good faith in desiring to remedy any incorrect or unlawful practices on my part’’ she was ‘‘voluntarily surrender[ing] my . . . Certificate of Registration.’’ Id. As found above, the DI who testified for the Government did not personally participate in the arrest of Ms. SantiagoSoto and did not witness the events surrounding her execution of the Voluntary Surrender form. Tr. 60–61. Nor did the Government call as a witness any other person who witnessed the execution of the surrender form. Thus, there is no evidence that, at the time she surrendered Respondent’s registration, Ms. Santiago-Soto was confronted with any allegations of misconduct aside from those which comprised the criminal case. Subsequently, the U.S. Attorney moved to dismiss with prejudice both of the charges against Ms. Santiago-Soto. RX C. On March 23, 2012, the District Court granted the Government’s motion and entered a Judgment of Dismissal and discharged her. Id. The consequence of this was that the charges could not be refiled against her. The Government nonetheless argues that Ms. Santiago-Soto ‘‘could not under any reasonable circumstances have answered the relevant liability questions . . . in the negative’’ and that she ‘‘placed undue emphasis on the words ‘for cause’ in liability question #2.’’ Gov. Post-Hrng. Br., at 7. The Government further notes Ms. Santiago-Soto’s claim that she signed the surrender form ‘‘under duress.’’ Id. I need not decide whether surrendering a registration under duress constitutes a valid defense to a charge of material falsification of Question Two or whether the facts here would support such a defense.17 This is so because I find unpersuasive the Government’s contentions that Ms. Santiago-Soto could not have reasonably answered Question Two in the negative and that 17 Of consequence, Question Two did not ask whether Respondent had ‘‘ever voluntarily surrendered (for cause)’’ but only if it had ‘‘ever surrendered (for cause)’’ its registration. GX 1, at 1. Moreover, notwithstanding that Ms. Santiago-Soto was under arrest at the time she surrendered Respondent’s registration, in signing the Voluntary Form, she acknowledged that she had been ‘‘fully advised of [her] rights’’ and understood that she was ‘‘not required to surrender my controlled substances privileges’’; she then acknowledged that she was ‘‘freely execut[ing]’’ the form and ‘‘choos[ing] to’’ voluntarily surrender her registration. RX I. PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 she ‘‘placed undue emphasis on the words ‘for cause.’ ’’ As for the latter contention, Ms. Santiago-Soto was only required to answer Question Two as it was written on the application and not as it otherwise could have been written (such as without those words). Indeed, the Government does not explain how Ms. Santiago-Soto could have ‘‘placed undue emphasis on the words ‘for cause,’ ’’ when those words were part of the question and the application contains no explanation of what the term ‘‘surrender for cause’’ means. There is no Agency regulation which defines the term ‘‘for cause’’ as it is applied in the context of an application for registration. However, two regulations do define the term in the context of imposing requirements on practitioners in the employment of persons who handle or have access to controlled substances, see 21 CFR 1301.76(a), as well as on manufacturers and distributors (among others) in the employment of persons who will have access to listed chemicals. See 21 CFR 1309.72(a). Under these provisions, ‘‘the term ‘for cause’ means a surrender in lieu of, or as a consequence of, any Federal or State administrative, civil or criminal actions resulting from an investigation of the handling of controlled substances or listed chemicals.’’ 21 CFR 1301.76(a); id. at 1309.72(a). However, even if this definition was applied to Respondent’s application, it would offer no support to the Government. Here, there is no evidence that Ms. Santiago-Soto was advised that if she did not surrender the registration, Respondent would face an Order to Show Cause. Thus, she did not surrender the registration ‘‘in lieu of’’ a hearing. Moreover, while she had been indicted prior to the surrender, there is no evidence that she surrendered the registration in lieu of facing the criminal charges, which were not dismissed until several months later.18 Notably, Ms. Santiago-Soto’s testimony that she was told that she had to surrender her registration because of her involvement in a criminal scheme stands unrefuted, and there is no evidence that, at the time of the surrender, she was told by Agency personnel that the Agency was alleging additional violations of the CSA or DEA 18 Nor does the evidence support a finding that she surrendered the registration as a consequence of the criminal action. Ms. Santiago-Soto did not surrender the registration as part of a pre-trial diversion agreement, a plea agreement, or as part of a sentence imposed by a court. Rather, the criminal case against Ms. Santiago-Soto was dismissed with prejudice. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES regulations beyond the offenses for which she was indicted.19 Moreover, the consequence of the district court’s dismissal of the charges ‘‘with prejudice,’’ on motion of the Government (and apparently before trial), was that she could be not recharged for the same offenses. Under these circumstances, a layperson could, in good faith, conclude that there was no basis for both the charges and the DI’s demand that she surrender her registration, and given the absence of any definition of the limiting term, a layperson could also, in good faith, conclude that she had not surrendered her registration ‘‘for cause.’’ 20 Even had I concluded otherwise, I would hold that there are mitigating circumstances that substantially diminish the egregiousness of the alleged misconduct. Ms. Santiago-Soto testified that the day after she submitted the application, she contacted the Diversion Group Supervisor and explained to her that she answered the question ‘‘no’’ and ‘‘was unsure if [she] had answered the question correctly’’ because the question used the words ‘‘with cause.’’ Tr. 126. Ms. SantiagoSoto also testified that the Group Supervisor told her that she did not know, but that she would look into it and get back to her. Id. at 126–27. Ms. Santiago-Soto further testified that she had memorialized the conversation in an email to the Group Supervisor. Id. at 127. However, the Group Supervisor did not respond to her. Id. Notably, all of this testimony was unrefuted by the Government. While the ALJ acknowledged this testimony in his summary of the testimony, see R.D. at 5–6, in his discussion of whether Ms. Santiago-Soto had materially falsified the application, he entirely ignored it and offered no explanation for why he apparently rejected it even as a mitigating circumstance. Id. at 27–28. However, in concluding that Ms. Santiago-Soto had materially falsified the application, the 19 It is acknowledged that on the Voluntary Surrender form the box was checked which indicates that Ms. Santiago-Soto surrendered Respondent’s registration ‘‘[i]n view of my alleged failure to comply with the Federal requirements pertaining to controlled substances.’’ RX I. However, the Voluntary Surrender form did not list (nor is there a space to list) what those alleged failures were. See id. Given the absence of any evidence that at the time the surrender occurred, Ms. Santiago-Soto was told of additional allegations against her, the Voluntary Surrender form does not refute her testimony that because the criminal case was dismissed, she did not believe that she had surrendered for cause. 20 The Government does not argue that the mere fact that she was indicted was sufficient to place her on notice that she had surrendered her registration for cause. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 ALJ repeatedly noted that Santiago-Soto had also provided a ‘‘no’’ answer to Question Four, which does not use the words ‘‘for cause’’ to modify the scope of surrenders which must be disclosed. Id. at 27–29. Moreover, in his earlier summary of the testimony, the ALJ noted that ‘‘[t]here is no evidence indicating that Ms. Santiago-Soto also inquired about Question Four during her conversation with’’ the Group Supervisor, id. at 5, and that in her testimony, she did not address her answer to Question Four. He also explained that the Group Supervisor ‘‘did not testify at the hearing, and [that] neither party sought such testimony.’’ Id. The ALJ further observed that ‘‘the record before me does not include a copy of’’ the email which Ms. SantiagoSoto testified she had sent to the Group Supervisor. Id. at 6. Thus, it appears that the ALJ rejected Santiago-Soto’s testimony regarding the phone call and email to the Group Supervisor because she did not claim to have asked about Question Four. However, to the extent this is an accurate discernment of the ALJ’s unexplained reasoning, it not surprising that there is no evidence as to why Ms. Santiago-Soto answered Question Four as she did. This is so because the Government never asked her why she did, nor otherwise adequately put her on notice that her answer to this question was at issue in the proceeding.21 This, however, is not the only problematic aspect of the ALJ’s failure to adequately explain why he gave no weight to Ms. Santiago-Soto’s testimony regarding the phone call she made to the Group Supervisor. As explained above, the ALJ’s decision also suggests that he gave no weight to her testimony because the Group Supervisor was not called to testify and the email was not part of the record. As for the failure to obtain the Group Supervisor’s testimony, Respondent was not required to call the Group Supervisor in order to establish that her testimony was credible. As for the ALJ’s 21 For this reason, in testifying regarding the phone call, Ms. Santiago-Soto had no obligation to address whether she had also discussed her answer to Question Four with the Group Supervisor. In its Post-Hearing Brief, the Government asserts that Ms. Santiago-Soto’s ‘‘failure to testify on this question supports an adverse inference that she knew the statement was false.’’ Gov. Post-Hrng. Br., at 8. The Government ignores that it called Ms. Santiago-Soto to testify in its case in chief and could have—but failed to—ask her about her answer to Question Four. Nor did the Government, at any time prior to filing its Post-Hearing Brief, provide notice to Santiago-Soto that her answer to Question Four was at issue. I therefore hold that the Government is not entitled to an adverse inference regarding her answer to Question Four. PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 29061 observation that the email is not part of the record, it should have been (indeed, notwithstanding the Agency’s regulation, which requires that an ALJ forward a rejected exhibit to the Administrator’s Office, it was not). As found above, the ALJ allowed the Government to delay filing its supplemental prehearing statement until one week before the hearing and imposed the same deadline on Respondent. Moreover, the ALJ failed to provide any direction to Respondent as to what steps it must take in the event the Government raised an entirely new allegation at this state of the proceeding and wished to present evidence to refute the allegation. As for the ALJ’s on-the-record explanation that the email had to be presented ‘‘ahead of time, so [he] could evaluate it,’’ Tr. 138, this begs the question: Evaluate it for what? Even in jury trials (where there is a manifest to need to protect the factfinder from being misled or confused), judges routinely rule from the bench on the admissibility of evidence. And here, where there is no jury, the ALJ could have evaluated this evidence at the same time he evaluated the testimony. Finally, the Government offered no objection to the email; nor could it reasonably claim prejudice given that it waited until one week before the hearing to finally make the allegation. Under these circumstances, I conclude that the ALJ’s refusal to admit the email was arbitrary and capricious. I further reject the ALJ’s findings that Ms. Santiago-Soto materially falsified Respondent’s application when she provided a ‘‘no’’ answer to Question Two and Four. R.D. at 29, 30–31. I further reject the ALJ’s Conclusions of Law with respect to this issue. See id. at 35. Factors Two and Four—The Applicant’s Experience in Dispensing Controlled Substances and Compliance With Applicable Laws Related to Controlled Substances With respect to Factors Two and Four, the Government made two allegations. First, it alleged that ‘‘from February 2009 to October 2009,’’ Respondent ‘‘filled approximately 241 prescriptions’’ which were issued by Dr. Aguilar-Amieva, after his registration had been retired by the Agency. Gov. Post-Hrng. Br., at 11. The Government alleged that this ‘‘conduct violated 21 U.S.C. 843(a)(2), 21 CFR 1306.04 and 1306.06.’’ Id. Second, it alleged that Respondent filled twenty-nine Suboxone prescriptions, which were issued by both Dr. Aguilar-Amieva and Dr. Vargas-Quinones, neither of whom were authorized to prescribe this drug to E:\FR\FM\20MYN1.SGM 20MYN1 29062 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices treat narcotic addiction. See id. at 11– 12. The Government alleged that this conduct also violated 21 U.S.C. 843(a)(2), 21 CFR 1306.04 and 1306.06. mstockstill on DSK4VPTVN1PROD with NOTICES Allegation One—Respondent’s Filling of Prescriptions Issued By A Physician Who Was No Longer Registered As found above, the evidence showed that Dr. Hector J. Aguilar-Amieva’s registration expired on June 30, 2008 and was retired from the DEA computer system on January 31, 2009. GX 6. The evidence, which was not objected to, further showed that Respondent filled more than two hundred controlledsubstance prescriptions which were issued by Dr. Aguilar-Amieva from February 2, 2009 through August 8, 2011.22 GX 4. Except for in limited circumstances which are not implicated here, the Controlled Substances Act requires that ‘‘[e]very person who dispenses . . . any controlled substance [ ] shall obtain from the Attorney General a registration issued in accordance with the rules and regulations promulgated by him.’’ 21 U.S.C. 822(a)(2).23 Moreover, under a DEA regulation, ‘‘[a] prescription for a controlled substance may be issued only by an individual practitioner who is: (1) [a]uthorized to prescribe controlled substances by the jurisdiction in which he is licensed to practice his profession and (2) [e]ither registered or exempted from registration pursuant to 1301.22(c) and 1301.23 of this chapter.’’ 21 CFR 1306.03(a). Also, it is ‘‘unlawful for any person knowingly or intentionally . . . to use in the course of the . . . dispensing of a controlled substance . . . a registration number which is fictitious, revoked, suspended, expired, or issued to another person.’’ 21 U.S.C. 843(a)(2). Thus, it is clear (and undisputed) that Dr. Aguilar-Amieva repeatedly violated the CSA by issuing controlled-substance prescriptions using his expired registration number. The issue in this matter, however, is whether liability can be imposed on Respondent because its principal filled Dr. Aguilar-Amieva’s prescriptions. As explained above, the Government 22 At the hearing, Respondent did not challenge the admission of this evidence on the ground of lack of foundation. Nor did it raise such a challenge in its Exceptions. Notably, the only Government witness to testify did not participate in the execution of the search warrant and did not specifically identify the prescriptions submitted by the Government as those which were seized when the warrant was issued. Moreover, the prescription labels (which were apparently affixed to the back of the prescriptions), do not identify Respondent as the dispensing pharmacy. Nor did the Government submit any documentary evidence tending to establish that the prescriptions were those which were seized from Respondent. 23 See 21 U.S.C. 822(c); 21 CFR 1301.22. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 contends that Respondent’s conduct violated section 843(a)(2); the Agency’s corresponding responsibility rule, see 21 CFR 1306.04(a); as well as a further regulation, 21 CFR 1304.06. Contrary to the Government’s understanding, its evidence does not support a finding that Respondent violated any of the three provisions in dispensing these prescriptions. As explained above, section 843(a)(2) imposes criminal liability on any person who uses, in the course of dispensing a controlled substance, an expired registration number. While no case has been cited by the Government where a pharmacist has been convicted of violating this provision because it filled prescriptions issued by a physician whose registration had expired, given that a prescription provides the lawful authority for a pharmacist to dispense a controlled substance, see 21 U.S.C. 829(a) & (b), it is clear that a pharmacist can held liable for dispensing a controlled substance prescription issued by a physician who no longer holds a registration. However, the statute imposes liability only where a pharmacist does so knowingly or intentionally. See 21 U.S.C. 843(a)(2). As for 21 CFR 1306.04(a), it requires that a controlled substance prescription ‘‘be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of professional practice’’ and imposes ‘‘a corresponding responsibility’’ on the pharmacist who fills a prescription which was not issued ‘‘in the usual course of professional treatment.’’ However, here again, the regulation imposes liability only on a ‘‘person knowingly filling such a purported prescription.’’ Id. (emphasis added). While the plain language of both of these provisions requires proof that a pharmacist dispensed a prescription knowing that the issuer lacked the requisite authority, the Government produced no evidence that Ms. Santiago-Soto knew (or was even willfully blind) to the fact that Dr. Aguilar-Amieva did not hold a DEA registration. Indeed, while in its brief the Government argues that Ms. Santiago-Soto admitted that Respondent had filled the prescriptions, Ms. Santiago-Soto expressly denied that she knew that Aguilar-Amieva’s registration ‘‘had been revoked in January 2009.’’ Tr. 106–07.24 Thus, although it is true that 24 The quotation is from the Government’s question. The Government’s evidence did not establish that the Agency had revoked Dr. AguilarAmieva’s registration, but only that Aguilar-Amieva let his registration expire after which his number was retired from the DEA registrant database. Had Aguilar-Amieva’s registration been revoked, an PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 Ms. Santiago-Soto admitted that Respondent had filled the prescriptions, her admission satisfies the Government’s evidentiary burden only with respect to showing that the dispensings occurred. Moreover, when asked whether he had any evidence that Ms. Santiago-Soto had ‘‘acted with the intention or knowledge [of] illegal activity when dispensing Dr. Aguilar’s . . . prescriptions,’’ the DI gave an unresponsive answer, stating that he did not ‘‘base [his] evaluations on intentions,’’ and when asked a followup question, the ALJ interjected (without the DI even answering the question): ‘‘I’ll take it as a no.’’ Thus, I hold that the Government did not prove that Ms. Santiago-Soto acted with the requisite knowledge to sustain a violation of either 21 U.S.C. 843(a)(2) or 21 CFR 1306.04(a), with respect to this allegation. The Government also alleged that Respondent’s filling of the 241prescriptions violated 21 CFR 1306.06. In relevant part, this regulation provides that ‘‘[a] prescription for a controlled substance may only be filled by a pharmacist, acting in the usual course of his professional practice.’’ 21 CFR 1306.06. Thus, on its face, this regulation does not require proof of knowledge to sustain a violation. However, the regulation does require that the Government establish what the standards of pharmacy practice require, through either expert testimony or by reference to federal or state laws, pharmacy board or Agency regulations, or decisional law (whether of administrative bodies or the courts). Here, while the Government’s evidence establishes that Respondent dispensed some 241 controlled substance prescriptions over a period of approximately thirty months, which were written by a physician who was not registered, the Government did not put on any expert testimony establishing that pharmacists have a duty to verify the registration status of the prescribers whose prescriptions they fill. Nor did the Government cite to any other rule or decision imposing such a duty. Notwithstanding that the Government neither produced any evidence establishing that the usual course of professional practice requires that a pharmacist verify the registration status of prescribers, nor cited any law, regulation, or other authority, which imposes such a requirement, the ALJ found that when ‘‘she filled these prescriptions[,] Ms. Santiago-Soto failed order doing so would have been published in the Federal Register and on the Agency’s Web site. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES to conform to regulations relating to the distribution of controlled substances and failed to act in the usual course of professional pharmacy practice.’’ R.D. at 34. Apparently, this was based on the ALJ’s earlier conclusion that ‘‘[o]ne way or another, pharmacists must ensure that they are filling only those controlled substance prescriptions that have been written by persons registered with the DEA. A pharmacy applicant who fails to appreciate the need to verify DEA credentials of prescribing doctors (either by contacting the DEA 25 or subscribing to a private verification service) demonstrates a lack of experience material to the application.’’ Id. at 23 (emphasis added). Thus, the ALJ applied a standard of strict liability in concluding that Ms. Santiago-Soto had ‘‘failed to act in the usual course of professional pharmacy practice.’’ Id. at 34. Contrary to the ALJ’s understanding, no Agency regulation requires that a pharmacist ascertain that each prescription presented to him/her has been issued by a practitioner who possesses a valid DEA registration and the Agency expressly disclaimed the existence of such a duty in 2010, when it promulgated its Interim Final Rule on Electronic Prescriptions for Controlled Substances. See 75 FR 16236, 16266 (2010). Therein, the Agency noted that it had proposed requiring pharmacies ‘‘to confirm that the [prescriber’s] DEA registration . . . was valid at the time’’ the prescription was signed. Id. 25 Based on the testimony of the DI, the ALJ found that ‘‘[i]n order to determine whether a medical provider is authorized by the DEA to prescribe controlled substances, a pharmacist may contact the DEA by telephone and inquire.’’ R.D. 31 (FoF #13); see also id. at 23 (‘‘Although it might be a cumbersome and time-consuming verification process, the DEA does permit a pharmacist to call into a field office to confirm the status of a given prescribing source.’’). However, as found above, the ALJ barred Respondent from using a Question and Answer printout from the DEA Web page to impeach the DI’s testimony to this effect, reasoning that the Respondent was required to disclose this document in advance of the hearing. Tr. 164. It is true that under the Agency’s rule, a party is generally required to provide a copy of any proposed exhibit which is being offered as substantive evidence in the matter. However, contrary to the ALJ’s understanding, a party is not required to disclose, in advance of the hearing, a document which is being used to impeach a witness. I therefore reject this finding. As for the NTIS database, the ALJ acknowledged that subscribing to this service is expensive. However, he then opined that ‘‘[i]t is no answer to complain that the NTIS program costs a lot of money; nor is it a sufficient legal response to argue that DEA regulations do not require pharmacists to purchase the program.’’ R.D. at 23. To the extent this comment might be understood as creating an obligation on all pharmacies to subscribe to this service, it is rejected. While it was not fully developed on the record of this proceeding, DEA provides a web tool which allows a registrant to verify the registration of another person or entity. VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 However, several commenters objected ‘‘that pharmacies are not required to check DEA registrations for paper prescriptions unless they suspect something is wrong with a prescription.’’ Id. In its response (which appears to be missing pertinent text), the Agency stated that it ‘‘agrees with those commenters that expressed the view that, when filling a paper prescription, it is not necessary for a pharmacist who receives an electronic prescription for a controlled substance to check the CSA database in every instance to confirm that the prescribing practitioner is properly registered with DEA.’’ Id. The Agency thus removed the requirement from the Interim Final Rule, but ‘‘made clear that a pharmacist continues to have a corresponding responsibility to fill only those prescriptions that conform in all respects with the requirements of the [CSA] and DEA regulations, including the requirement that the prescribing practitioner be properly registered.’’ Id. However, as explained above, the corresponding responsibility does not impose strict liability on pharmacists but rather requires proof that a pharmacist filled a controlled-substance prescription either knowing that it was unlawful or with willful blindness or deliberate ignorance of the fact that the prescription was unlawful.26 26 Notwithstanding the Agency’s pronouncement in the Interim Rule, the Agency’s corresponding responsibility rule is not the only potential basis for finding a violation where a pharmacist dispenses a controlled substance prescription issued by a practitioner who does not hold the requisite authority. Upon a showing that such conduct is outside of ‘‘the usual course of professional practice,’’ 21 CFR 1306.06, a pharmacist may be held to have violated DEA regulations and to have committed acts which render her pharmacy’s registration inconsistent with the public interest. Moreover, in Medicine Shoppe—Jonesborough, 73 FR 364, 381 (2008), the ALJ found that a pharmacist had filled a large number of controlledsubstance prescriptions which were issued by a veterinarian who did not hold either a state license or DEA registration. The ALJ further found that this conduct constituted such other conduct which may threaten public health and safety, reasoning, in part, that a pharmacy has a duty to periodically verify whether a prescriber retains authority to practice medicine and dispense controlled substances. I found a violation of 21 CFR 1306.04(a), based on the evidence that the prescriptions were being presented on a daily basis by the veterinarian’s brother and were for drugs that were toxic for certain animals. However, in dictum, I noted that ‘‘[a] pharmacy has a duty to periodically check to see that a practitioner retains the authority to practice medicine and dispense a controlled substance.’’ Id. at n.45. I also noted my agreement with the ALJ’s reasoning that failing ‘‘to do so could threaten public health and safety because there is usually a good reason for why a practitioner has lost his or her state license and DEA registration.’’ Id. The Government does not rely on this theory and no case (until recently) has presented the question of how frequently a pharmacy must re-verify the PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 29063 Accordingly, I reject the ALJ’s reasoning as contrary to the published guidance of the Agency. And because the Government failed to put forward either: (1) any evidence to show that Ms. Santiago-Soto either knew or was willfully blind to the fact that Dr. Aguilar-Amieva was no longer registered, or (2) any evidence or legal authority establishing that Ms. SantiagoSoto acted outside of the usual course of professional practice, I reject the Government’s contention that Respondent violated federal law and DEA regulations in filling these prescriptions. Allegation Two—Respondent’s Filling of Suboxone Prescriptions Regarding this allegation, the evidence shows that Respondent filled twenty-nine Suboxone prescriptions, which were issued by Dr. AguilarAmieva and Dr. Vargas-Quinones, see GX 4, at 23–24; and Ms. Santiago-Soto admitted that a majority of the prescriptions (17 of the 29) listed ‘‘a diagnosis that is related to the abuse of opioids[] or opiates.’’ Tr. 108. It was undisputed that neither Dr. AguilarAmieva nor Dr. Vargas-Quinones was qualified to prescribe Suboxone to treat narcotic addiction. See GX 6, at 1 & 5. A physician who seeks to prescribe Suboxone (or other schedule III through V drugs approved by FDA) for maintenance or detoxification treatment must meet certain conditions (including that the physician either holds various certifications or has training or experience in the management of opiatedependent patients) and must provide a notification (which includes various certifications) to the Secretary of the Department of Health and Human Services, who must then determine (within 45 days from the date of receipt of the notification) whether the physician meets the requirements for a waiver under 21 U.S.C. 823(g)(2)(B). 21 CFR 1301.28(a)–(d). If the practitioner holds ‘‘the appropriate registration’’ and the Secretary either makes ‘‘a positive determination’’ or fails to act within the 45 day period, DEA issues an identification number, which is otherwise known as an X-number to the practitioner. Id. § 1301.28(d)(1); see also Tr. 48–49. Moreover, under DEA’s regulation: A prescription may not be issued for ‘‘detoxification treatment’’ or ‘‘maintenance treatment,’’ unless the prescription is for a credentials of prescribers. Nor has the Agency published any guidance to the regulated community setting forth the parameters of this duty. What is clear, however, is that a pharmacy is not required to verify the credentials of the prescriber for every prescription it fills. E:\FR\FM\20MYN1.SGM 20MYN1 29064 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices Schedule III, IV, or V narcotic drug approved by the Food and Drug Administration specifically for use in maintenance or detoxification treatment and the practitioner is in compliance with requirements in § 1301.28 of this chapter. mstockstill on DSK4VPTVN1PROD with NOTICES 21 CFR 1306.04(c) (emphasis added). So too, pursuant to 21 CFR 1306.05(b), ‘‘[a] prescription for a Schedule III, IV, or V narcotic drug approved by FDA specifically for ‘detoxification treatment’ or ‘maintenance treatment’ must include the identification number issued by the Administrator under 1301.28(d) of this chapter or a written notice stating that the practitioner is acting under the good faith exception of [21 CFR] 1301.28(e).’’ 27 (emphasis added). This information is in addition to the prescriber’s DEA registration number. See 21 CFR 1306.05(a). Also, under 21 CFR 1306.05(f), ‘‘[a] corresponding liability rests upon the pharmacist . . . who fills a prescription not prepared in the form prescribed by DEA regulations.’’ However, none of the Suboxone prescriptions issued by either Dr. Aguilar-Amieva or Dr. VargasQuinones bore either an X number or a statement that the physician was ‘‘acting under the good faith exception.’’ See GX 3, at 410–456. The Government contends that Respondent violated, inter alia, 21 CFR 1306.04 and 1306.06, because it ‘‘does not contest that [it] acted outside the usual course of professional practice’’ when it dispensed the Suboxone prescriptions. Gov. Post-Hrng. Br., at 12. Contrary to the Government’s understanding, Ms. Santiago-Soto made no such admission and the Government put forward no evidence as to what the usual course of professional practice requires of a pharmacist who is presented with prescriptions that are clearly marked as being issued for the purpose of providing maintenance or detoxification treatment for narcoticdependent patients and yet are missing the requisite X number or good faith statement. However, the evidence does establish that Ms. Santiago-Soto violated 21 CFR 1306.05(f) when she filled at least seventeen of these prescriptions.28 With 27 The good faith exception applies only during the period before the practitioner receives his Xnumber from the Agency and only if ‘‘[t]he Secretary has not notified the registrant that he/she is not qualified’’ to provide such treatment. 21 CFR 1301.28(e). 28 While the Government alleged that Respondent violated 21 CFR 1306.04 in filling the Suboxone prescriptions, it did not identify the specific subsection which it alleges was violated. See Gov. Post-Hrng. Br. at 12. Notably, in contrast to subsection a of this regulation, which imposes a corresponding responsibility on a pharmacist to not VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 respect to the seventeen Suboxone prescriptions which contained a notation by the doctor that he had diagnosed the patient as being opioid dependent, Ms. Santiago-Soto knew that the prescriptions were issued to provide either maintenance or detoxification treatment.29 Moreover, notwithstanding the clear requirement that the prescriptions include (in addition to the prescriber’s DEA number), either his DATA-waiver identification number or the practitioner’s statement that he was ‘‘acting under the good faith exception of § 1301.28(e),’’ none of the prescriptions contained either an Xnumber or the good faith statement. In her testimony, Ms. Santiago-Soto maintained that she ‘‘was not aware’’ that the X number had to be on the prescription ‘‘for that medication in particular,’’ Tr. 110, and that she ‘‘was not aware that buprenorphine [the generic name for Suboxone] fell among the medications that required the X DEA number.’’ Id. at 112. However, Ms. Santiago-Soto did know that the purpose of most of the Suboxone prescriptions was to treat narcotic addiction. And as explained above, under the Agency’s regulation, a prescription could not be issued for a Schedule III through V controlled substance such as Suboxone for this purpose unless the drug was approved by FDA for this purpose and the practitioner met the requirements for prescribing for this purpose. Accordingly, her testimony does not establish that she made a mistake of fact but rather that she was ignorant of the regulations. This, of course is not a defense. See United States v. International Minerals & Chem. Corp., 402 U.S. 558, 563 (1971) (‘‘The principle knowingly fill a prescription that is issued outside of the usual course of professional practice and which lacks a legitimate medical purpose, subsection c impose duties only on the issuer of the prescription which has been issued to provide maintenance or detoxification treatment. See 21 U.S.C. 1306.04(c). However, as explained above, 21 CFR 1306.05(f), imposes ‘‘[a] corresponding liability . . . upon the pharmacist . . . who fills a prescription not prepared in the form prescribed by DEA regulations.’’ 29 I do not find any violations with respect to those prescriptions which did not contain a diagnosis of narcotic dependence. Under federal law, a doctor may prescribe a drug for a legitimate off-label use and absent evidence that the prescriptions, which lacked a diagnosis of narcotic dependence, were actually being issued for this purpose, I do not find a violation proved. The Government offers no argument to the effect that a doctor cannot prescribe Suboxone for any legitimate medical purpose unless they have X-number. Nor did it offer evidence that when a pharmacist is presented with a Suboxone prescription that does not list a diagnosis and lacks an X number, the standards of professional practice require the pharmacist to call the physician and determine the purpose of the prescription. PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 that ignorance of the law is no defense applies whether the law be a statute or a duly promulgated and published regulation.’’). Indeed, Ms. Santiago-Soto’s testimony regarding the allegation was most unpersuasive. More specifically, Ms. Santiago-Soto testified that she had graduated from pharmacy school in 1995, and that the DATA law was passed in 2000, but after 2002, when Suboxone was approved by FDA for the purpose of treating narcotic addiction, ‘‘the DEA in Puerto Rico never has provided any orientation or guidance online, or by way of a conference, or through continuing education, or by letters, letting me know, or providing me these kinds of guidelines.’’ Tr. 110.30 However, in 2003, the Agency published in the Federal Register a notice of proposed rulemaking, and in 2005, the Agency published its final rule, which promulgated the various provisions set forth above, including 21 CFR 1301.28 (requirements for obtaining an X-number and the good faith exception), 21 CFR 1306.04(c) (prohibiting a prescription for maintenance or detoxification treatment unless the drug has been approved by FDA for this purpose and the practitioner is in compliance with 1301.28), 21 CFR 1306.05(a) (requiring that such prescription include either the prescriber’s X number or a good faith statement), and 21 CFR 1306.07 (allowing a practitioner to administer, dispense or prescribe a Schedule III through V drug specifically approved by FDA for use in maintenance or detoxification treatment if the practitioner complies with 1301.28). See DEA, Authority for Practitioners to Dispense or Prescribe Approved Narcotic Controlled Substances for Maintenance or Detoxification Treatment, 70 FR 36338 (2005); see also DEA, Authority for Practitioners to Dispense or Prescribe Approved Narcotic Controlled Substances for Maintenance or Detoxification Treatment, 68 FR 37429 (2003) (Notice of Proposed Rulemaking). Indeed, prior to the 2005 issuance of the final rule, no narcotic controlled substance could be prescribed by a physician (including those authorized to conduct a narcotic treatment program under 21 U.S.C. 823(g)(1)) to treat narcotic addiction and no pharmacy could have lawfully 30 The Government offered no evidence regarding the contents of the package insert for Suboxone and whether it contained any special instructions regarding the prescribing and dispensing of Suboxone following the FDA’s approval of the drug for use in providing maintenance or detoxification treatment. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices dispensed such a prescription. See id. at 37429. As the 2003 Notice of Proposed Rulemaking explained: mstockstill on DSK4VPTVN1PROD with NOTICES [t]he Controlled Substances Act (CSA) and current regulations requires that practitioners who want to conduct maintenance or detoxification treatment using narcotic (opioid) controlled drugs be registered with DEA as narcotic treatment programs (NTPs) in addition to the practitioners’ personal registrations. The separate NTP registrations authorize the practitioners to dispense or administer, but not prescribe narcotic (opioid) controlled drugs. Id. The Notice also observed that ‘‘[o]n October 8, 2002, FDA approved two products containing buprenorphine, [S]ubutex and [S]uboxone, Schedule III controlled drugs, for use in maintenance and detoxification treatment,’’ and that the proposed rule would ‘‘[p]ermit pharmacies to fill prescriptions for Schedule III, IV, and V narcotic (opioid) controlled drugs approved by FDA specifically for use in maintenance or detoxification treatment.’’ Id. at 37430. The dispensing of controlled substances is a highly regulated industry, and as a participant in this industry, Ms. Santiago-Soto is properly charged with knowledge of the applicable regulations, including: (1) The requirement that a Suboxone prescription, which has been issued to provide treatment for opiate addiction, can only be issued by a person who meets the requirements of 21 CFR 1301.28; as well as (2) that the prescription must bear either the prescriber’s X-number or the good faith statement. See International Minerals, 402 U.S. at 565 (where ‘‘dangerous or deleterious . . . products . . . are involved, the probability of regulation is so great that anyone who is aware that he is in possession of them or dealing with them must be presumed to be aware of the regulation’’); United States v. Southern Union Co., 630 F.3d 17, 31 (1st Cir. 2010) (‘‘[T]hose who manage companies in highly regulated industries are not unsophisticated. It is part of [their] business to keep abreast of government regulation.’’) (citing United States v. Lachman, 387 F.3d 42, 56–57 (1st Cir. 2004)), rev’d on other grounds, 132 S.Ct. 2344 (2012). I therefore find that Ms. Santiago-Soto knowingly dispensed the seventeen Suboxone prescriptions which were issued for maintenance or detoxification purposes in violation of federal law by the respective physicians and thus also violated federal law in doing so. 21 CFR 1306.04(c); see also 21 U.S.C. 841(a)(1). While it is true, as Ms. Santiago-Soto testified, that the amounts of most of the prescriptions were limited (most being VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 for ten tablets or less), there were also two prescriptions for sixty tablets issued to the same patient, which contained a diagnosis of opiate dependence. Thus, I am not persuaded by her testimony ‘‘that the amounts are not such that would raise my suspicions that something is running amok.’’ Tr. 109– 10. However, Ms. Santiago-Soto testified that she had become aware of the DATA of 2000 during an audit by a health insurance plan, which occurred months before she was arrested and surrendered her registration, and that she then went online and familiarized herself with the statute’s requirements. Tr. 112. Most significantly, the Government’s own evidence shows that Respondent dispensed the last Suboxone prescription on July 3, 2011, nearly five months before Ms. Santiago-Soto was arrested and surrendered its registration.31 See GX 4, at 23–24. Finally, in her testimony, Ms. SantiagoSoto demonstrated some degree of knowledge of the requirements pertaining to the prescribing of Suboxone to identify those prescriptions which do not comply with the DATA requirements and should not be dispensed. Tr. 110. Thus, while I conclude that the Government has proved that Respondent committed acts which are ‘‘inconsistent with the public interest,’’ 21 US.C. § 823(f), I also find that there are several factors which mitigate the violations. Sanction Under Agency precedent, where, as here, ‘‘the Government has proved that a registrant has committed acts inconsistent with the public interest, a registrant must ‘‘ ‘present sufficient mitigating evidence to assure the Administrator that it can be entrusted with the responsibility carried by such a registration.’ ’’ ’’ Medicine ShoppeJonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 (1988))). ‘‘Moreover, because ‘past performance is the best predictor of future performance,’ ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir.1995), [DEA] has repeatedly held that where a registrant has committed acts 31 It is also noted that Respondent had stopped dispensing these prescriptions two months before a DEA inspection which occurred on September 7, 2011. See RX H. While DEA had also inspected Respondent on September 2, 2010, see RX G, as of that date, Respondent had dispensed but a single prescription (only three days earlier) for fourteen tablets. GX 4, at 23–24. No evidence was put forward by the Government as to whether this prescription was discussed with Ms. Santiago-Soto. PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 29065 inconsistent with the public interest, the registrant must accept responsibility for its actions and demonstrate that it will not engage in future misconduct.’’ Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Prince George Daniels, 60 FR 62884, 62887 (1995). See also Hoxie v. DEA, 419 F.3d at 483 (‘‘admitting fault’’ is ‘‘properly consider[ed]’’ by DEA to be an ‘‘important factor[]’’ in the public interest determination). While a registrant must accept responsibility and demonstrate that it will not engage in future misconduct in order to establish that its registration is consistent with the public interest, DEA has repeatedly held these are not the only factors that are relevant in determining the appropriate sanction. See, e.g., Joseph Gaudio, 74 FR 10083, 10094 (2009); Southwood Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007). Obviously, the egregiousness and extent of a registrant’s misconduct are significant factors in determining the appropriate sanction. See Jacobo Dreszer, 76 FR 19386, 19387–88 (2011) (explaining that a respondent can ‘‘argue that even though the Government has made out a prima facie case, his conduct was not so egregious as to warrant revocation’’); Paul H. Volkman, 73 FR 30630, 30644 (2008); see also Paul Weir Battershell, 76 FR 44359, 44369 (2010) (imposing six-month suspension, noting that the evidence was not limited to security and recordkeeping violations found at first inspection and ‘‘manifested a disturbing pattern of indifference on the part of [r]espondent to his obligations as a registrant’’); Gregory D. Owens, 74 FR 36751, 36757 n.22 (2009). So too, the Agency can consider the need to deter similar acts, both with respect to the respondent in a particular case and the community of registrants. See Gaudio, 74 FR at 10095 (quoting Southwood, 71 FR at 36503). Cf. McCarthy v. SEC, 406 F.3d 179, 188–89 (2d Cir. 2005) (upholding SEC’s express adoptions of ‘‘deterrence, both specific and general, as a component in analyzing the remedial efficacy of sanctions’’). As found above, the only allegation sustainable on the record is that Respondent filled seventeen Suboxone prescriptions that were issued to provide maintenance or detoxification treatment by two physicians who were not DATA-waived physicians. As explained above, I find that Ms. Santiago knowingly violated federal law by dispensing these prescriptions because the purpose of the prescriptions was clearly identified on them and none of the prescriptions had the physician’s E:\FR\FM\20MYN1.SGM 20MYN1 29066 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES identification number or the requisite good faith statement. Moreover, the Government’s interest in deterring pharmacists from dispensing Suboxone prescriptions, which have been issued to treat narcotic-dependent patients by physicians, who lack the requisite qualifications to treat such patients, is manifest. Regarding these violations, Respondent’s evidence of its acceptance of responsibility was less than unequivocal. While Ms. Santiago-Soto admitted that she was aware that the prescriptions were issued to treat substance abuse patients and that she should have learned about the requirements applicable to the prescribing of Suboxone for this purpose earlier than she did, she also attempted to minimize her misconduct by attributing it to the failure of the DEA office in Puerto Rico to provide any guidance to her regarding the requirements. DEA did, however, publish, in the Federal Register, both a Notice of Proposed Rulemaking and a Final Rule, which provided legally sufficient notice that Suboxone could only be prescribed for maintenance or detoxification purposes by a qualified physician, and that such a physician was required to either list his identification number or provide a good faith statement on the prescriptions. Yet, while Ms. Santiago-Soto is presumed to have knowledge of the applicable regulations and thus violated federal law in dispensing those Suboxone prescriptions which bore a diagnosis indicating that they were issued to treat narcotic addiction, the egregiousness of her misconduct is diminished by two factors. First, the violations were limited in scope, as the total amount of the unlawful dispensings was 224 tablets. Second, Ms. Santiago-Soto had determined, prior to the Agency’s bringing it to her attention, that the Suboxone prescriptions were illegal, and at the time she surrendered Respondent’s registration, had long since ceased the offending practice.32 32 In rejecting Respondent’s evidence of remediation, the ALJ faulted Ms. Santiago-Soto for testifying that DEA ‘‘maintained information on its Web site that is contradictory to what the Diversion Investigator said during the hearing.’’ R.D. at 29. Given that the ALJ improperly precluded Respondent from using a printout from the Agency’s Web site to impeach the DI, there is no basis for this finding. The ALJ further found that there is ‘‘scant evidence that Ms. Santiago-Soto has engaged in a course of conduct that would ensure that she remains properly informed about changes in DEA controlled substance regulations.’’ Id. at 30. Continuing, he explained that ‘‘[t]here was no suggestion that she would accept responsibility for keeping up with changes in the DATA-waived list VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 In its Exceptions, Respondent argues that the ALJ’s recommended sanction of denial ‘‘is drastic and overly broad.’’ Exceptions at 15. It argues, inter alia, that the Agency ‘‘could grant a license with a monetary sanction or provide in its determination that it can be issued after a determined period of additional time’’; it also argues that it ‘‘is willing to undertake and place into action any diverse measures the DEA requires as a condition for approving the’’ application. Id. at 16. ‘‘Proceedings under sections 303 and 304 of the CSA are . . . non-punitive.’’ Samuel S. Jackson, 72 FR 23848, 23853 (2007) (citing Leo R. Miller, 53 FR 21931, 21932 (1988)). As the Agency previously recognized, ‘‘this proceeding ‘is a remedial measure, based upon the public interest and the [need] to protect the public from those individuals who have misused their’’ registrations and ‘‘who have not presented sufficient mitigating evidence to assure the Administrator that they can be entrusted with the responsibility’’ attendant with holding a registration. Id. (quoting Miller, 53 FR at 21932). I agree with Respondent that the outright denial of its application is not supported by the record and that its application can be granted ‘‘after a determined period of additional time,’’ subject to Respondent meeting various conditions. First, while I acknowledge Ms. Santiago-Soto’s testimony as to the steps she took to familiarize herself with the requirements pertaining to the prescribing of Suboxone, she also testified that while she reviews a prescription to ensure that it meets legal requirements and is not suspicious, she does not ‘‘speak with the doctors’’ because ‘‘[t]here is a confidentiality law in the future, for example.’’ Id. There is, however, no evidence in the record that a DATA-waived list exists, whether maintained by DEA or any other agency. It may be that the ALJ actually meant to say that he does not believe that Ms. Santiago-Soto will properly verify that the issuers of Suboxone prescriptions for addiction treatment will have the requisite qualifications. If this was the ALJ’s intent, it is refuted by his acknowledgment—one page earlier in his decision—of Ms. Santiago-Soto’s testimony that she would subscribe to the NTIS service and that ‘‘[t]his would appear to be an effective remedial step [which] possibly could lessen the risk of filling prescriptions for Suboxone if the prescribing provider was not a DATAwaived’’ physician. Id. at 29. (Indeed, I have taken official notice that the DEA registration validation web-tool provides this information. See 21 CFR 1316.59(e)). Moreover, the ALJ entirely ignored Ms. Santiago-Soto’s testimony (which is corroborated by the Government’s evidence), that following the audit by a health plan, she reviewed the requirements applicable to prescribing Suboxone to treat narcotic addiction, and the evidence that she had ceased dispensing the Suboxone prescriptions long before DEA raised this as an issue with her. See R.D. at 29–30. PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 between doctor and patient.’’ Tr. 117. While the Government did not address the validity of this statement in its posthearing brief, it is flatly inconsistent with long-standing authority setting forth the scope of a pharmacist’s corresponding responsibility under the Controlled Substances Act. See, e.g., United States v. Hayes, 595 F.2d 258, 260 (5th Cir. 1979); see also Medicine Shoppe—Jonesborough v. DEA, 300 Fed. App’x 409, 412 (6th Cir. 2008) (quoting Ralph J. Bertolino, 55 FR 4729, 4730 (1990) (‘‘ ‘When [pharmacists’] suspicions are aroused as reasonable professionals,’ they must at least verify the prescription’s propriety, and if not satisfied by the answer they must ‘refuse to dispense.’ ’’)). Accordingly, I will order that Ms. Santiago-Soto take a course on controlled substance dispensing and the corresponding responsibility of a pharmacist under federal law. Said course must be completed and a certificate of such completion must be presented to the Agency prior to the granting of Respondent’s application. I will further order that Respondent’s application be held in abeyance for six months from the date of this order (not the date of publication) at which time, its application shall be granted provided Respondent has provided evidence to DEA that Ms. Santiago-Soto has completed the above-described course and commits no violation of federal or commonwealth controlled substance laws. If, however, Ms. Santiago-Soto fails to provide evidence that she has completed such course within the sixmonth period, Respondent’s application shall be denied. Upon the granting of the registration, Respondent shall be placed on probation for a period of three years. During the period of the probation, Respondent and its principal shall agree to consent to unannounced inspections by DEA personnel and shall waive its right to require DEA personnel to obtain an Administrative Inspection Warrant prior to conducting an inspection. Ms. Santiago-Soto shall provide a letter to DEA manifesting Respondent’s consent to unannounced inspections by DEA and waiving its right to require DEA personnel to obtain an Administrative Inspection Warrant prior to the issuance of its registration. Respondent shall provide a copy of its controlled substance dispensing log on a quarterly basis to the DEA Ponce Office. Said quarters shall end on March 31st, June 30th, September 30th, and December 31st of each year, and the log shall be provided to the DEA Ponce Office no later than ten (10) calendar E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices days following the last day of each quarter. Respondent and Ms. Santiago-Soto shall notify the DEA Ponce Office of any disciplinary action undertaken against its pharmacy license and Puerto Rico controlled substance registration, as well as any action taken against Ms. Santiago-Soto’s pharmacist license, including the initiation of any proceeding by the Commonwealth’s authorities to suspend or revoke any of the licenses or registration. Such notification shall occur no later than three business days following service on Respondent or Ms. Santiago-Soto of any document initiating such a proceeding, any interim or emergency order of suspension, and any final order. The above conditions shall terminate upon Respondent’s completion of the period of probation, provided Respondent fully complies with each term of its probation. Any violation of these conditions shall constitute an act inconsistent with the public interest and grounds for the suspension or revocation of Respondent’s registration. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well as 28 CFR 0.100(b), I order that the Application of Farmacia Yani be, and it hereby is, held in abeyance for a period of six months to begin on the date of this ORDER. I further order that upon the conclusion of the six-month period, the Application of Farmacia Yani shall be granted or denied as set forth above. I also order that in the event that Ms. Santiago-Soto complies with the condition that she complete a course in controlled substance dispensing and the corresponding responsibility, Farmacia Yani’s Application shall be granted subject to the probationary conditions set forth above. This ORDER is effective immediately. Dated: May 12, 2015. Michele M. Leonhart, Administrator. [FR Doc. 2015–12130 Filed 5–19–15; 8:45 am] BILLING CODE 4410–09–P DEPARTMENT OF JUSTICE mstockstill on DSK4VPTVN1PROD with NOTICES Drug Enforcement Administration [Docket No. 12–62] Jana Marjenhoff, D.O.; Decision and Order On June 24, 2014, Chief Administrative Law Judge (ALJ) John J. Mulrooney, Jr., issued the attached VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 Recommended Decision.1 Respondent filed Exceptions to the Decision. Having reviewed the entire record, including Respondent’s Exceptions, I have decided to adopt the ALJ’s findings of fact,2 conclusions of law, and 1 All citations to the Recommended Decision (hereinafter, cited as R.D.) are to the slip opinion as issued by the ALJ. 2 I do not adopt the ALJ’s findings that hydrocodone combined with acetaminophen is a schedule III controlled substance. See, e.g., R.D. at 5 n.12; id. at 20 n.42. While that was correct at the time of the underlying events, as well as on the date of the issuance of the Recommended Decision, this drug has since been placed in schedule II of the Controlled Substances Act. See Rescheduling of Hydrocodone Combination Products from Schedule III to Schedule II, 79 FR 49661 (2014). I also do not adopt the ALJ’s finding that the dispensing event which occurred on March 15, 2011 was based on a hard copy prescription which was dated March 11, 2011, or that the March 11 prescription was presented to different pharmacies on three occasions. See R.D. at 22–25. Rather, I find that the March 15 prescription was based on a telephone prescription which was dated March 15, 2014. See GX 6, at 3; GX 8, at 5. As for the hard copy prescription which the ALJ cited as the evidence to support this finding, I find the date to be illegible. However, this finding does not alter the disposition of this matter because I adopt the ALJ’s finding that PA Francis, whose prescribing authority was used to obtain the prescriptions, credibly denied having issued Respondent any controlled substance prescriptions after the initial controlled substance prescription she issued on February 14, 2011. See R.D. at 55. While I adopt the ALJ’s finding that the testimony of Malana Diminovich, who testified that the PA had issued the controlled substance prescriptions, was not credible, as explained in my discussion of Respondent’s fourth exception, I do not rely on his reasoning to the extent it is based on the suggested inconsistency between Diminovich’s testimony that ‘‘Respondent was never observed to be under the influence of controlled substances during the time the two worked together’’ and ‘‘that she was aware that . . . Respondent was receiving controlled substance prescriptions from PA Francis.’’ Id. at 30– 31. In his decision, the ALJ found that ‘‘the only evidence received on the issue supports the Respondent’s claim that she had an objective medical basis that could arguably have supported the prescribing of controlled substances,’’ Id. at 62. Given the ALJ’s findings, it is notable that the record is devoid of evidence as to whether patients who are taking narcotics for legitimate pain would necessarily manifest symptoms consistent with abuse or intoxication. In any event, the Government’s case primarily focused on Respondent’s obtaining of controlled substances through fraud or misrepresentation such as by presenting forged prescriptions. Thus, resolution of the allegations does not require proof that Respondent was abusing the controlled substances. Also, I do not adopt the ALJ’s findings related to the dates of the phone call in which Dr. Edmonds confronted Respondent as to whether she was forging prescriptions which were purportedly authorized by PA Francis. In the decision, the ALJ referred to this phone call as occurring in July 2011, following Respondent’s positive urinalysis for opiates. See R.D. at 39. The evidence is clear, however, that this conversation did not occur in response to the July 2011 drug test, but in September 2011, after a pharmacist had notified PA Francis about the prescriptions and the latter had presented a printout from the State Prescription Monitoring Program to the clinic’s Human PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 29067 recommended order, except as discussed below. A discussion of Respondent’s Exceptions follows. Exception One—Whether Respondent Was Denied Adequate Notice Because the ALJ Relied on Matters That Were Not Raised in the Order To Show Cause Respondent argues that her rights under the Due Process Clause and the Administrative Procedure Act were violated because in the Show Cause Order, the Government alleged only that Respondent forged eight prescriptions and the ALJ proceeded to rely on ‘‘other matters of fact to support’’ his recommendation. Exceptions, at 2. Respondent does not, however, identify the specific facts of which she believes she was denied adequate notice, but rather, simply asserts that ‘‘the matters determined by the ALJ to support findings against Respondent as to factors four and five were not previously raised in the Order to Show Cause.’’ Id. at 3. To the extent Respondent takes issue with the ALJ’s decision because the Show Cause Order alleged only eight instances of forgery rather than the ten instances that the ALJ found proved (as well as the instance in which Respondent filled the first prescription a second time at a second pharmacy), her argument is not well taken. However, to the extent Respondent takes issue with the ALJ’s finding that Respondent engaged in conduct actionable under factor five because she attempted to obstruct the pharmacist who questioned her prescription from contacting PA Francis, her argument is well taken. One of the fundamental tenets of Due Process is that an Agency must provide a Respondent with notice of those acts which the Agency intends to rely on in seeking the revocation of its registration so as to provide a full and fair opportunity to challenge the factual and legal basis for the Agency’s action. See NLRB v. I.W.G., Inc., 144 F.3d 685, 688– 89 (10th Cir. 1998); Pergament United Sales, Inc. v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990); see also 5 U.S.C. 554(b) (‘‘Persons entitled to notice of an agency hearing shall be timely informed of . . . the matters of fact and law asserted.’’) (emphasis added). However, ‘‘ ‘[p]leadings in administrative proceedings are not judged by the standards applied to an indictment at common law.’ ’’ Aloha Airlines v. Civil Aeronautics Bd., 598 F.2d 250, 262 (D.C. Cir. 1979) (quoted in CBS Wholesale Distributors, 74 FR Resources Manager, who raised it with Dr. Edmonds. See Tr. 195–202; 368; 831–32. E:\FR\FM\20MYN1.SGM 20MYN1

Agencies

[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)]
[Notices]
[Pages 29053-29067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12130]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 13-31]


Farmacia Yani; Decision and Order

    On April 10, 2013, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Farmacia Yani (Respondent), of San Sebastian, Puerto 
Rico. ALJ Ex. 1. The Show Cause Order proposed the denial of 
Respondent's application for a DEA Certificate of Registration as a 
retail pharmacy, on the ground that its registration ``would be 
inconsistent with the public interest, as that term is defined in 21 
U.S.C. 823(f).'' Id. at 1.
    The Show Cause Order specifically alleged that on March 27, 2012, 
Respondent submitted an application for a registration as a retail 
pharmacy, seeking authority to dispense controlled substances in 
schedules II through V, at a location in San Sebastian, Puerto Rico. 
Id. The Order further alleged that Respondent held a registration at 
the same location, which it ``had surrendered for cause on December 2, 
2011,'' and that a DEA investigation found ``that from February 2009 
through November 2011, [it] filled approximately 218 prescriptions for 
controlled substances issued by a medical doctor who did not possess a 
valid DEA registration, in violation of Federal law and regulations.'' 
Id. (citing 21 U.S.C. 843(a)(2); 21 CFR 1306.04). The Government then 
alleged that Respondent's ``violations of Federal law and regulations 
render granting its application for a [registration] inconsistent with 
the public interest.'' Id. (citing 21 U.S.C. 823(f) and 824(a)).
    On May 10, 2013, Respondent, through its counsel, requested a 
hearing on the allegations and the matter was placed on the docket of 
the Office of Administrative Law Judges. ALJ Ex. 2. Thereafter, an 
Administrative Law Judge (ALJ) proceeded to conduct pre-hearing 
procedures. ALJ Ex. 3.
    In its Supplemental Prehearing Statement, the Government provided 
notice to Respondent that it intended to elicit testimony from an 
Agency Diversion Investigator (DI) that Respondent had ``filled twenty-
nine (29) prescriptions for Suboxone that were written by two doctors 
who did not possess authority to issue these controlled substances,'' 
that the ``prescriptions were written by Dr. Aguilar-Amieva and Dr. 
Cesar I. Vargas-Quinones,'' and that a review of ``the DEA registration 
database . . . found that these two physicians were never registered 
with DEA as data-waived practitioners, in violation of 21 CFR 
1301.28.'' ALJ Ex. 7, at 3. The Government also provided notice that it 
intended to question Respondent's owner ``about the circumstances of 
the pharmacy's prior surrender of its . . . registration, and about her 
failure to note the previous surrender on Respondent's new application 
for registration.'' Id.
    On July 16, 2013, the ALJ conducted an evidentiary hearing in 
Guaynabo, Puerto Rico.\1\ Tr. 27. At the hearing, the

[[Page 29054]]

Government elicited the testimony of a DI and Ms. Yanira Santiago-Soto, 
Respondent's owner and pharmacist in charge; Respondent also elicited 
the testimony of Ms. Santiago-Soto. Both parties also introduced 
documentary evidence into the record. Following the hearing, both 
parties submitted briefs containing their proposed findings of fact, 
conclusions of law, and argument.
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    \1\ On June 18, 2013, the ALJ had conducted the first day of the 
hearing, during which he reviewed the parties' proposed stipulations 
and admitted several documents into the record, while holding the 
admission of two Government exhibits in abeyance. See Tr. 4-14 (June 
18, 2013). After Respondent's counsel objected to the admission of 
some of the Government's exhibits because they contained 
prescriptions issued by a doctor whose prescriptions were not the 
basis of what it had previously alleged, the Government announced 
that it would be filing a supplemental prehearing statement during 
which it would ``outline that the Government discovered some 
prescriptions by Dr. Cesar Vargas-Quinones.'' Id. at 14. After the 
ALJ ruled that these exhibits would ``be held in abeyance until 
after we've had the opportunity to see what the Government sets 
forth in its supplemental prehearing statement,'' the ALJ explained 
that the deadline for both parties to file their supplemental 
prehearing statements would ``be simultaneous''; the ALJ also told 
Respondent's counsel that ``you really won't have a chance to reply 
in your--in your response in the prehearing statement,'' but that 
she would be able ``to object to these exhibits during the hearing 
itself.'' Id. at 15-16. Notably, during the June 18 hearing, the 
Government made no mention of its intent to raise the material 
falsification issue. Moreover, the ALJ subsequently ordered that the 
parties file any supplemental prehearing statements with the Office 
of Administrative Law Judges ``not later than 2:00 p.m. on the 9th 
of July 2013.'' Id. at 18-19.
     The same day, the ALJ also issued an Order memorializing these 
instructions. See Order (June 18, 2013). Therein, the ALJ further 
instructed that ``[a]fter this deadline, Prehearing Statements may 
only be supplemented upon the filing of a motion for extension of 
time and after a favorable ruling by me. Any new documents 
identified in a supplemental prehearing statement also need to be 
exchanged by the parties no later than July 9, 2013.'' Id. at 4.
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    On September 26, 2013, the ALJ issued his Recommended Decision 
(hereinafter, cited as R.D.) Therein, the ALJ found that the Government 
had established a prima facie case that granting Respondent's 
application ``would be inconsistent with the public interest.'' R.D. 
36. The ALJ further found that Respondent had ``failed to rebut'' the 
Government's case. Id. The ALJ thus recommended that Respondent's 
application be denied.
    Respondent filed Exceptions to the Recommended Decision. Having 
reviewed Respondent's Exceptions along with the entire record, I find 
that several of them are well taken and that the ALJ committed multiple 
prejudicial errors. These include:
    (1) Barring Respondent from using a document, which, according to 
Respondent's offer, was from DEA's Web site, to impeach a Government 
witness, because it was not submitted in advance of the hearing;
    (2) barring Respondent from introducing evidence of an email its 
principal sent to an Agency Investigator the day after she submitted 
the application, which according to Respondent's offer, memorialized a 
phone conversation in which she asked if she had correctly answered an 
application question, also on the ground that it was not submitted in 
advance of the hearing, notwithstanding that the Government did not 
even disclose that it was pursuing the material falsification 
allegation until one week before the hearing; and
    (3) finding that Respondent's principal materially falsified its 
application based on the answer she gave to Question Four when the 
Government never provided notice that the answer to this question was 
at issue in the Show Cause Order, its pre-hearing statements, or its 
opening statement, nor even questioned her about her answer to this 
question, even though it called her to testify in its case-in-chief.
    Because I reject the ALJ's legal conclusions that Respondent's 
principal materially falsified its application and that Respondent 
violated its corresponding responsibility under 21 CFR 1306.04(a) when 
it dispensed prescriptions issued by a physician whose registration had 
expired, and these errors solely affect these two allegations, I 
conclude that a remand is not warranted. While I agree with the ALJ's 
legal conclusion that Respondent violated federal law when it dispensed 
Suboxone prescriptions, which were issued to provide maintenance or 
detoxification treatment and the prescribers lacked the requisite 
authority to prescribe the drug for this purpose, I do not find that 
the record as a whole supports the proposed outright denial of the 
Application. Accordingly, I will order that Respondent be granted a 
registration subject to conditions set forth in this decision. I make 
the following findings of fact.

Findings

Respondent's License and Registration Status

    Respondent is a corporation which owns a retail pharmacy located at 
Carretera 109, Kilometer 26.7, Barrio Culebrina, San Sebastian, Puerto 
Rico. Tr. 9; GX 1. Ms. Yanira Santiago-Soto is the owner of Respondent 
and its pharmacist-in-charge. Tr. 106.
    Respondent is licensed as a pharmacy by the Commonwealth of Puerto 
Rico Department of Health; this license does not expire until June 26, 
2015. RX D1, at 3. Respondent also holds a controlled substance 
registration, which was also issued by the Commonwealth's Department of 
Health.\2\ RX E4.
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    \2\ According to the certificate, the registration was due to 
expire on September 30, 2013. RX E, at 4.
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    Respondent previously held DEA Certificate of Registration 
FF1070894, pursuant to which it was authorized to dispense controlled 
substances in schedules II through V. GX 5, at 1. While this 
registration was not due to expire until September 30, 2014, on 
November 30, 2011, Ms. Santiago-Soto surrendered Respondent's 
registration.\3\ Id.; see also RX I. On March 26, 2012, Ms. Santiago-
Soto applied on Respondent's behalf for a new registration. GX 1, at 1-
2. It is this application which is at issue in this proceeding.
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    \3\ The day before, Ms. Santiago-Soto had been indicted along 
with thirty-two other defendants, on two felony counts of violating 
the Controlled Substances Act. The charges were: (1) Conspiring to 
possess and dispense, with intent to distribute, various controlled 
substances, in violation of 21 U.S.C. 841(a)(1), 846, and 860; and 
(2) aiding and abetting each other and ``knowingly and intentionally 
possess[ing] and dispens[ing] with intent to distribute various'' 
schedule II through IV controlled substances, ``outside the scope of 
professional practice and not for a legitimate medical purpose,'' in 
violation of 21 U.S.C. 841(a)(1) and 18 U.S.C. 2. RX B, at 1-13. 
Several months later, the Government moved to dismiss the charges 
with prejudice, and on March 23, 2012, the District Court entered a 
Judgment of Dismissal. RX C.
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    On the application, Respondent was required to answer four 
questions. Id. at 1. The second of these asked: ``Has the applicant 
ever surrendered (for cause) or had a federal controlled substance 
registration revoked, suspended, restricted or denied, or is any such 
action pending?'' GX 1, at 1. Ms. Santiago-Soto answered the question 
by checking the ``no'' box. Id. The fourth question asked, in relevant 
part:

    If the applicant is a corporation (other than a corporation 
whose stock is owned and traded by the public), association, 
partnership, or pharmacy, has any officer, partner, stockholder or 
proprietor been convicted of a crime in connection with controlled 
substance(s) under state or federal law, or ever surrendered or had 
a federal controlled substance registration revoked, suspended, 
restricted or denied, or ever had a state professional license or 
controlled substance registration revoked, suspended, denied, 
restricted, or placed on probation, or is any such action pending?

Id. Respondent also answered this question, by checking the ``no'' box. 
Id.

The Investigation of Respondent

    Following Ms. Santiago-Soto's submission of Respondent's 
application, a Diversion Investigator with the Ponce, Puerto Rico DEA 
Office was assigned to investigate the application. Tr. 40-41. Upon 
doing so, the DI determined that on November 30, 2011, a search warrant 
had been executed at Respondent during which various items of evidence, 
including prescriptions, were seized. Id. at 43. Some of the evidence 
was sent to the DEA digital evidence laboratory for further analysis; 
according to the DI, the lab extracted various data and sent a CD 
containing the data to his office. Id. at 44. In addition, 
prescriptions were seized from Respondent and scanned by the Ponce DEA 
office. Id.
    Upon reviewing the data provide by the digital evidence lab, the DI 
determined that ``there were two main violations.'' Id. at 46. 
According to the DI, the first set of violations involved Respondent's 
having ``illegally filled'' some ``241 prescriptions'' which were 
issued by a Doctor Hector J. Aguilar-Amieva after the latter's 
registration was retired by DEA on January 31, 2009 and ``he was no 
longer authorized to prescribe any controlled substances. Id. at 46-47; 
see also GX 6 (affidavit of Chief, Registration and Program Support 
Section, Drug Enforcement Administration, stating that Dr. Aguilar-
Amieva's registration expired on June 30, 2008 and was retired from the 
DEA computer system on January 31, 2009).
    As for the second set of violations, the DI stated that they 
involved

[[Page 29055]]

Respondent's having filled twenty-nine prescriptions issued by both Dr. 
Aguilar-Amieva and Dr. Cesar Vargas-Quinones for Suboxone 
(buprenorphine). Tr. 47, 49. According to the DI, the prescriptions 
were unlawful because the doctors ``were not authorized to'' prescribe 
Suboxone (buprenorphine) ``because they were not DATA-waived \4\ 
practitioners.'' Id. at 48. The DI further explained that a DATA-waived 
practitioner is a physician who is approved by ``the Center of 
Substance Abuse'' (actually, the Center for Substance Abuse Treatment, 
a component of the Substance Abuse and Mental Health Services 
Administration) to prescribe Suboxone (buprenorphine) to treat narcotic 
addiction and that these physicians are issued ``a specific 
registration that is distinguished with an X number,'' which ``should 
be on the prescription[s]'' they issued for these drugs. Id. at 49. 
However, none of these prescriptions bore an X number (even though 
seventeen of the twenty-nine prescriptions listed a diagnosis of opiate 
addiction or dependence). Id. at 49-50; see also GX 3, at 410-56.
---------------------------------------------------------------------------

    \4\ See Drug Addiction Treatment Act of 2000, Pub. L. 106-310, 
Div. B, Title XXXV, Sec.  3502(a), 114 Stat. 1222 (2000) (codified 
at 21 U.S.C. 823(g)(2)).
---------------------------------------------------------------------------

    The DI further testified that Respondent's application contained a 
falsification because in answering ``[q]uestion [n]umber 3,'' Ms. 
Santiago-Soto failed to disclose that the pharmacy had previously 
surrendered its registration. Tr. 45. While the DI was not present when 
Ms. Santiago-Soto surrendered Respondent's registration, he testified 
that he had read a report that stated that she ``voluntarily 
surrendered the pharmacy's license'' and that he had also seen the 
document that she signed, and that the document said that she 
``voluntarily surrendered'' the registration. Id. at 60-61. The DI 
further explained that based on the inconsistencies between what he 
read in the report and the answers to the application's questions, he 
concluded that Ms. Santiago-Soto had falsified the application. Id. at 
62-63.
    Later, on cross-examination, the DI conceded that the criminal 
charges which were filed against Ms. Santiago-Soto were voluntarily 
dismissed with prejudice. Id. at 72. Moreover, when asked whether Ms. 
Santiago-Soto had violated any federal law or regulation, the DI 
answered:

    The conclusion, once again, is based on our records, what I see 
in the records, and it's based on the evidence. Whenever an 
application is submitted to the DEA, and we are required to analyze 
this application, and based on the pharmacy's, for example, that the 
applicant is dispensing controlled substances.

Id. at 72-73. Respondent's counsel then asked if anyone had found that 
Ms. Santiago-Soto ``has violated any federal law in dispensing those 
prescriptions that are part of the evidence here today?'' Id. at 73. 
The Government objected on the ground that the question ``ha[d] been 
asked and answered'' and the ALJ sustained the objection, noting that 
he knew that the charges were dismissed and that there was no evidence 
that Ms. Santiago-Soto had been convicted of any federal offense.\5\ 
Id.
---------------------------------------------------------------------------

    \5\ Contrary to the ALJ's understanding, this was an undue 
restriction on Respondent's right of cross-examination, especially 
given that the answer was not responsive.
    Later in the proceedings, the Government called Respondent's 
owner in its case-in-chief. Id. at 106. During cross-examination, 
the Government objected to Ms. Santiago-Soto's testimony (well after 
the question was asked and well into her answer) regarding a 
conversation she had in April 2012 with the group supervisor on the 
ground that it was ``[o]utside the scope of the pre-hearing 
statement'' and ``[t]here [was] no proffer that they were going to 
be introducing testimony from DEA agents.'' Tr. 134. The ALJ 
sustained the objection on the ground that ``it goes beyond the 
scope of what you informed in the amended pre-hearing statement.'' 
Id.
    Here again, the ALJ erred in sustaining the objection. Even if 
Respondent's pre-hearing statements did not disclose that Ms. 
Santiago-Soto would testify regarding this issue, its pre-hearing 
statement only limited the scope of what she could testify to on 
direct examination in Respondent's case-in-chief and had no bearing 
on the appropriate scope of cross-examination given that Ms. 
Santiago-Soto was still testifying as a Government witness. 
Moreover, the Government did not argue that the testimony was beyond 
the scope of its direct examination.
---------------------------------------------------------------------------

    Respondent's counsel then asked the DI if there was any official 
Web site or registry where a pharmacist can verify if a DEA number is 
active. Id. at 74. The DI testified that there is such a registry, that 
he ``believe[d]'' that the registry was available in 2009 through 2011 
and was located at the DEA Diversion Web site, and that he believed 
that if a person was registered, they could access the Web site. Id. 
Subsequently, the DI testified that he could confirm that the registry 
has been available since 2009, but ``[t]o [his] knowledge . . . 
physicians have been informed at least from 2010, [and] that she should 
have been able to do that.'' Id. at 75-76. However, later in his 
testimony, Government counsel raised the possibility that this service 
had been discontinued, when he asked the DI: ``But you're not aware of 
when it started, and when it stopped?'' and the DI answered: ``That is 
correct.'' Id. at 92.
    Respondent's counsel then asked the DI ``why the DEA site, as of 
today, states that you cannot verify a DEA number online?'' Id. at 76. 
The DI replied: ``[t]hat is new to me.'' Id. Respondent's counsel then 
asked if he could show a document to the DI which, according to the 
proffer, was from the Agency's Web site and was contrary to the DI's 
testimony. Id. at 76-78. The ALJ barred Respondent's counsel from doing 
so even for the purpose of impeachment, explaining that his prehearing 
orders were clear that if documents ``were not presented to the 
Government, in advance of the hearing,'' he would not ``allow it.'' Id. 
at 77.
    Respondent's counsel then asked the DI if, in order to verify a DEA 
number, one had to pay for a program. Id. at 78-79. The DI answered 
that this was correct but that that ``if there are [sic] any reason to 
verify, you can call our office at any time, and you can ask for a 
verification.'' Id.; see also id. at 92. Next, when asked if ``the law 
requires that any dispensing pharmacist calls the DEA to verify if a 
physician's license is active,'' the DI answered ``yes.'' Id. at 79. 
When then asked what statute or agency regulation requires this, the DI 
could not identify one. Id. at 79-80. Moreover, the DI then testified 
that there is no law or regulation that requires a pharmacy to 
subscribe to the database provided by the National Technical 
Information Service. Id. at 80.
    Still later, when asked if ``it is the responsibility of the doctor 
[to have] a valid DEA license when prescribing a controlled 
substance,'' the DI answered: ``It is the responsibility of both the 
doctor and the pharmacist. The pharmacy has the responsibility.'' Id. 
at 86-87. The DI then acknowledged that the prescriptions in Government 
Exhibit 3 contained the required information and that he could not 
identify a prescription that was ``suspicious or irregular without 
knowing that the physician's license has been revoked or expired.'' Id. 
at 87-88. However, on re-direct examination, the DI explained that the 
Suboxone prescriptions were suspicious because they did not include an 
X number for the physician. Id. at 90-91.
    Respondent's counsel then asked whether he had ``any evidence'' 
that Ms. Santiago-Soto ``ha[d] acted with the intention or knowledge'' 
in dispensing either Dr. Aguilar's or Dr. Vargas' prescriptions. Id. at 
88. The DI answered that he did not ``base [his] evaluations on 
intentions'' but ``on the documents'' that he had ``seen.'' Id.
    Also on redirect, the DI was asked whether part of the process of 
granting the applications of pharmacies involves ``explaining to the 
pharmacies that they have the burden to verify all prescriptions.'' Id. 
at 91. The DI answered ``that is correct,'' and agreed

[[Page 29056]]

that this is a requirement for maintaining a DEA registration ``under 
the code of regulations.'' Id.
    Still later in his testimony, when no question was pending, the DI 
proceeded to state that even aside from the Suboxone prescriptions, the 
241 prescriptions at issue were suspicious because they were for 
oxycodone and alprazolam, which are highly abused drugs. Id. at 95-96. 
The DI then explained that ``if physicians regularly prescribe those 
drugs only, those should be of concern to any pharmacist who is . . . 
trying to ensure the public health and safety.'' Id. at 96. The 
Government did not produce any evidence, however, to show that these 
were the only drugs which were being prescribed by Dr. Aguilar-Amieva 
and being filled by Respondent.
    The Government also called Ms. Santiago-Soto as a witness. Tr. 105. 
Ms. Santiago-Soto acknowledged that she has been Respondent's owner and 
pharmacist-in-charge since she opened the pharmacy.\6\ Id. at 106. 
Asked by the Government whether the pharmacy had filled ``241 
prescriptions for Dr. Aguilar-Amieva from February 2009 to October 
2009,'' Ms. Santiago-Soto answered ``yes.'' Id. However, when asked 
whether she knew ``that his registration had been revoked in January of 
2009,'' Ms. Santiago-Soto answered that she ``didn't know'' at the 
time.\7\ Id. at 106-07.
---------------------------------------------------------------------------

    \6\ Ms. Santiago-Soto testified that she had worked at four 
other pharmacies prior to opening Respondent. Tr. 139-40. She also 
testified that Respondent had been inspected by the Commonwealth's 
Health Department and the AMSCA, which is the Commonwealth agency 
that regulates controlled substances, and that she held the licenses 
required by the Commonwealth. Tr. 141-42. She further testified that 
Respondent had been inspected twice by DEA and had provided the DIs 
with both prescriptions and a list of various controlled medications 
that it had dispensed; according to Ms. Santiago-Soto, she was never 
notified that her pharmacy had engaged in any wrongdoing. Id. at 
143.
    \7\ The Government's evidence does not establish that Dr. 
Aguilar-Amieva's registration had been revoked, in which case a 
Decision and Order would have been published in the Federal 
Register. See GX 6. Rather, the Government's evidence shows that Dr. 
Aguilar-Amieva's registration expired on June 30, 2008 and was 
retired from the DEA computer system on January 31, 2009. See id.
---------------------------------------------------------------------------

    Next, the Government asked Ms. Santiago-Soto whether she 
``believe[d] that it's your duty to verify all prescriptions''; she 
replied: ``That's what I do all the time.'' Id. at 107. The Government 
then asked Ms. Santiago-Soto why she had filled Dr. Aguilar-Amieva's 
prescriptions ``if that's what you do all the time?'' Id. Ms. Santiago-
Soto replied:

    Well to start with, I'm a pharmacist. And I revise [sic] 
prescriptions, and I make sure that the indications are correct, are 
the adequate ones, that they meet all standards and legal 
requirement [sic], whether they be federal or state laws.
    Once all those standards are met, and there is no question 
surrounding the prescription that might prompt me to call the 
physician for whatever reasons, then we proceed to dispense it.

Id. at 107-8.
    Ms. Santiago-Soto then acknowledged that Respondent filled the 
twenty-nine Suboxone prescriptions issued by Drs. Aguilar-Amieva and 
Vargas-Quinones and that she was not aware that neither doctor was a 
DATA-waiver physician. Id. at 108. When asked whether Respondent had 
ever contacted the two doctors to verify the purpose of these 
prescriptions, Ms. Santiago-Soto answered:

    I verified the exhibit that you . . . gave me. . . And if you 
take a look at the Suboxone prescriptions, in their majority, they 
have a diagnosis that is related to the abuse of opioids, or 
opiates.
    Therefore, it was my understanding that these physicians had 
their license current, including some prescriptions that were 
invoiced to health insurance plans, and they were paid by these, 
even after they were reviewed.
    So, supposedly, that if the health insurance plan hires a 
physician, all the credentials should be up to date. And if they 
didn't come to notice this, and with them being the health insurance 
plan, when they are usually up to date on everything, then it was my 
understanding that the prescriptions were okay.

Id. at 109. When then asked what her understanding was of who could 
prescribe Suboxone to treat substance-abuse patients, Ms. Santiago-Soto 
answered that she ``was aware of the use given to the medication'' and 
that ``[i]f you go prescription by prescription . . . the amounts are 
not such that would raise my suspicions that something is running 
amok.'' Id. at 109-10. She then reiterated that, at the time, she ``was 
not aware of the X DEA number'' that is required to prescribe Suboxone 
and buprenorphine to treat narcotic-dependent patients. Id. at 110.
    Upon questioning by the Government, Ms. Santiago-Soto acknowledged 
that a DATA-waiver physician must meet certain requirements and that 
``not all physicians may prescribe'' Suboxone, and that a physician who 
prescribes Suboxone for this purpose must have an X-number. Id. The 
Government then asked Ms. Santiago-Soto why she did not know this when 
she ``became accredited as a pharmacist?'' Id. Ms. Santiago-Soto 
explained that she graduated in 1995, that the DATA was enacted in 
2000, and that Suboxone and buprenorphine were not approved for this 
purpose until 2002. Id. She then contended that ``the DEA in Puerto 
Rico never has provided any guidance to her whether through an 
orientation or conference, online guidance, or by letters.'' Id. She 
further asserted that in none of the continuing education classes that 
she was required to take to maintain her pharmacist license was there 
any training offered by DEA on the DATA's requirements. Id. at 111.
    Ms. Santiago-Soto testified that she did not become aware of the 
DATA's requirements until Respondent was audited by a health insurance 
plan and the buprenorphine prescriptions were discussed with her.\8\ 
Id. at 112. However, she acknowledged that she should have learned of 
these requirements earlier. Id. at 114. After describing what she was 
taught at pharmacy school about spotting diversion, id. at 114-16, the 
Government asked Ms. Santiago-Soto whether she found ``anything 
suspicious with Dr. Aguilar-Amieva's prescriptions?'' Id. at 116. She 
replied:
---------------------------------------------------------------------------

    \8\ Ms. Santiago-Soto denied that she had not learned about the 
DATA's requirements until after being served with the Show Cause 
Order. Tr. 112. Ms. Santiago-Soto testified that the insurance plan 
audit occurred several months before the search warrant was executed 
at her pharmacy. Id. at 113. It is noted that the Government's 
evidence shows that Respondent did not dispense any Suboxone 
prescriptions after July 3, 2011. GX 4, at 23-24.

    The prescriptions met all legal parameters. The patients would 
come over to the drug store, and the ones that I did dispense, their 
reputation wasn't in doubt, in my judgment, because many of them 
would also bring me prescriptions of their medications that they 
---------------------------------------------------------------------------
took for continuous use.

Id.
    The Government then asked Ms. Santiago-Soto whether she analyzed 
the prescribing practices of a physician for signs of diversion when 
filling a prescription. Id. at 117. Ms. Santiago-Soto replied:

    I don't speak with the doctors. There is a confidentiality law 
between doctor and patient. I review that the prescription meets the 
law and that it shouldn't raise the least suspicion possible in me, 
that this medication is not intended, particularly intended for this 
patient, for medical use.

Id. at 117. When then asked whether she ``went through [Respondent's] 
computer system looking for patterns,'' Ms. Santiago-Soto answered that 
she ``kept a manual inventory and . . . from it I couldn't necessarily 
discern that something was out of place.'' Id. at 119. She then 
explained that in 2009, she dispensed a total of 30,000 prescriptions 
(including 27,000 for non-controlled drugs), of which 66 had been 
written by

[[Page 29057]]

Dr. Aguilar-Amieva.\9\ Id. She further stated that Dr. Aguilar-Amieva's 
prescriptions did not raise any suspicion. Id. at 122.
---------------------------------------------------------------------------

    \9\ In Respondent's case in chief, Ms. Santiago-Soto testified 
that Respondent dispensed 104 prescriptions in 2010 and 63 
prescriptions in 2011 which were issued by Dr. Aguilar-Amieva. Tr. 
151.
---------------------------------------------------------------------------

    Turning to the application, Ms. Santiago-Soto acknowledged that she 
understood both questions two and three.\10\ Id. at 123-24. When then 
asked whether she had surrendered her DEA registration for cause in 
November 2011, Ms. Santiago-Soto replied: ``In my judgment, I 
surrendered the license, but not with cause.'' Id. at 124. She then 
explained that:
---------------------------------------------------------------------------

    \10\ Question three asks whether ``the applicant [has] ever 
surrendered (for cause) or had a state professional license or 
controlled substances registration revoked, suspended, denied, 
restricted, or placed on probation, or is any such action pending?'' 
GX 1, at 1. There is no evidence, however, that the Commonwealth 
took any of these actions against Respondent's (or Ms. Santiago-
Soto's) professional license or controlled substance registration. 
Thus, it is unclear why Ms. Santiago-Soto was asked about this 
question rather than question four.

    . . . . In my judgment, this is simple. When I surrendered my 
license, it was in a situation where I was under arrest, and I had 
no other choice but to sign the document that was placed in front of 
me.
    Moreover, at the moment of having to sign the document, an agent 
came out speaking or yelling, ``was her rights read to Yanira 
Santiago, was her Miranda rights''--and just before I signed that 
paper that said ``surrender,'' I had my Miranda rights read. And I 
was practically signing simultaneously.
    Agent [P.N.], from the Ponce DEA, explained to me that I had to 
sign that surrender because of the criminal charges against me. And 
not because of what I'm being told of here.
* * * * *
    I'm handcuffed, and I had to sign a document that they demand 
from me to sign because I had no other option. Because, according to 
what they were saying, I was part of a scheme.
    When I proceed to answer this questions [sic] that is posed in 
the new application and quote/unquote, it puts the words ``with 
cause.''
    It's my understanding, as of this day, that I surrendered the 
license without cause, because it was taken away from me because of 
my criminal case [an]d not because of what I'm being told here.

Id. at 124-26. See also id. at 132 (``I signed the document, because he 
told me that I had to surrender the license because of a criminal 
charge against me.'').
    Ms. Santiago-Soto then explained that when she filled out the 
application ``that question raised doubts in my mind.'' Id. at 126. 
Accordingly, the next day, she called ``the regional director for the 
DEA in Ponce \11\ . . . and . . . told her . . . that I was unsure if I 
had answered the question correctly'' and that she had ``answered `no,' 
because, quote/unquote, it said `with cause.' '' Id. Ms. Santiago-Soto 
further testified that the official said ``that she would look into it 
and verify if that was answered correctly, because she didn't know. And 
she also told me that, since I had informed her about it, eventually, 
if any situation came up, she could appear as a witness and say that I 
had that doubt, and I had asked her about it, and that she had answered 
me.'' Id. at 126-27. Ms. Santiago-Soto testified that she memorialized 
the conversation in an email. Id. at 127. However, as of the date of 
the hearing, the official had not replied to the email. Id. at 136.
---------------------------------------------------------------------------

    \11\ I have taken official notice that the official is actually 
a group supervisor.
---------------------------------------------------------------------------

    The Government then asked Ms. Santiago-Soto ``if you had to fill 
this application out again today, what would you put for the Question 
No. 3?'' Id. at 128. Ms. Santiago-Soto replied:

    I would answer it the same way. I would answer the same thing. 
Because of the statement ``with cause,'' if that statement wouldn't 
have been there, I would have no reason to answer ``no.'' I would've 
answered ``yes.'' Because I surrendered.
    But since it stated, in parentheses, ``with cause,'' that's not 
my issue. Because I surrendered my DEA license because of the 
criminal case against me. Not because of this intervention right 
now, that we're having today.

Id.
    Throughout her testimony, Ms. Santiago-Soto maintained that she did 
not voluntarily surrender Respondent's registration, but rather was 
coerced into surrendering it. Id. at 132. She also testified that the 
various prescriptions which form the basis of the allegations regarding 
the dispensing violations were taken from Respondent on the date she 
was arrested. Id. at 135-36.
    Upon the conclusion of Respondent's cross-examination of Ms. 
Santiago-Soto, Respondent's counsel attempted to move into evidence a 
copy of the email which she had sent to the group supervisor and 
explained that he had shown a copy of the email to the Government. Id. 
at 137. The ALJ denied the motion, explaining: ``That may be true, 
Counsel, but I don't have it. It's not evidence before me. I don't have 
any reason to understand why it wasn't presented ahead of time, so I 
could evaluate it.'' Id. at 137-38.
    As found above, the email appears to have been relevant to the 
issue of whether Ms. Santiago-Soto falsified Respondent's application. 
And contrary to the ALJ's on the record explanation for denying the 
motion, there was ample reason for why the document was not ``presented 
ahead of time.'' Specifically, the ALJ ignored that the Government did 
not provide any notice that it intended to litigate the issue of 
material falsification until its supplemental pre-hearing statement, 
which it filed one week before the hearing, and on which date 
Respondent was also required to file its supplemental pre-hearing 
statement. Moreover, the ALJ's June 18 order did not address what 
procedure Respondent was required to follow in the event the Government 
raised an entirely new allegation at this stage of the proceeding. See 
ALJ Ex. 7. Finally, the document was not included with the transmitted 
record as a rejected exhibit as it should have been. See 21 CFR 
1316.60.
    Ms. Santiago-Soto also testified in Respondent's case-in-chief. Ms. 
Santiago-Soto testified that prior to her arrest on November 30, 2011, 
she had been inspected twice by DEA. Tr. 142-43. The first of these 
inspections occurred on September 2, 2010; the second on September 7, 
2011. RXs G & H. While Agency Investigators apparently reviewed the 
controlled-substance prescriptions and her dispensing records, they 
never notified her of ``any findings or wrongdoings on'' the part of 
Respondent. Tr. 143. Nor did they advise that Dr. Aguilar-Amieva or any 
other doctor was under investigation. Id. at 144.
    Ms. Santiago-Soto further testified that there is a ``question and 
answer section'' on the DEA diversion Web site which includes a 
question regarding whether the Agency can verify a DEA registration. 
Id. at 145-46. According to Ms. Santiago-Soto, ``the answer that the 
DEA gives . . . is `no' '' and that she has to buy a program from the 
National Technical Information Service ``to be able to have access on 
several occasions to that registry.'' Id. at 146. Ms. Santiago-Soto 
further testified that it ``costs over $2,000 on an annual basis . . . 
for one user.'' Id. However, she then explained that she would buy the 
program if she is issued a registration. Id. at 146-47. Still later, 
she testified that the NTIS is ``costly for a drugstore that's just 
starting out'' and that she did not ``know of any small community 
pharmacy that has purchased'' a subscription to the NTIS database, 
``because the law does not require that it be purchased.'' Id. at 149. 
However, she reiterated that she would purchase the database. Id.; see 
also id. at 154-55. Moreover, Ms. Santiago-Soto testified that if she 
was granted a registration, she would be willing to consider any

[[Page 29058]]

recommendations made by the Agency. Id. at 155.
    Regarding the allegation that she dispensed prescriptions written 
by Dr. Aguilar-Amieva, whose registration had expired, Ms. Santiago-
Soto explained that she had reviewed the DEA Pharmacist's Manual, and 
that while the Manual contains extensive information as to what must be 
provided on a prescription, ``[n]owhere in the law am I told that I 
have to be checking each one of the licenses at every moment.'' Id. at 
148. She also testified that during the period at issue, she ``would 
check the list of those physicians that had been criminally charged 
because of their prescriptions,'' id., and that if the name of a doctor 
was not on the list, she ``proceeded to dispense the prescription.'' 
Id. at 161.
    However, neither Dr. Aguilar-Amieva nor Dr. Vargas-Quinones 
appeared on the various lists for the years 2008 through 2013.\12\ Id. 
at 148-49. Finally, Ms. Santiago-Soto denied that she had ever 
knowingly dispensed a prescription which had not been lawfully issued. 
Id. at 154.
---------------------------------------------------------------------------

    \12\ On cross-examination by the Government, Ms. Santiago-Soto 
acknowledged that these lists may actually have been of those 
physicians who were subjected to administrative proceedings. Tr. 
158. When the Government suggested that her review of these lists 
was inadequate because they were lists of final agency actions and 
would not ``contain the names of doctors that voluntarily 
surrendered'' their registrations, Ms. Santiago-Soto replied that 
``I can't make any supposition, as you've been telling me. You're 
asking me to suppose something, and I'm not here to suppose 
anything. I'm here with facts. I'm being shown facts. So I have to 
answer with facts.'' Id.
     However, upon questioning by the ALJ, Ms. Santiago-Soto 
admitted that if a doctor who voluntarily surrendered his 
registration was not identified on the Web site, she ``wouldn't 
know'' that the doctor did not have the requisite authority. Id. at 
161-62.
---------------------------------------------------------------------------

    Following the conclusion of Ms. Santiago-Soto's testimony, 
Respondent's counsel requested that the ALJ take official notice of 
various documents, including the Web page containing various questions 
and answers which Respondent's counsel had previously sought to use to 
impeach the testimony of the DI to the effect that Ms. Santiago-Soto 
could have verified whether the physicians were registered by calling 
DEA. Tr. 162-67. After the ALJ asserted that the document's 
``relationship to the narrative . . . attributed to'' Respondent should 
have been clear to its counsel when she filed its amended pre-hearing 
statements, Respondent's counsel again argued that it had no 
``knowledge that the witness for the DEA would provide testimony . . . 
under oath, that contradicts the information the DEA provided on that 
Web page.'' Id. at 167. However, the ALJ again rejected Respondent's 
request. Id.

Discussion

    Section 303(f) of the Controlled Substances Act (CSA) provides that 
an application for a practitioner's registration may be denied upon a 
determination ``that the issuance of such registration would be 
inconsistent with the public interest.'' 21 U.S.C. 823(f). In making 
the public interest determination, the CSA requires the consideration 
of the following factors:

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing . . . controlled 
substances.
    (3) The applicant's conviction record under Federal or State 
laws relating to the manufacture, distribution, or dispensing of 
controlled substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.

Id.

    ``These factors are . . . considered in the disjunctive.'' Robert 
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or 
a combination of factors, and may give each factor the weight [I] 
deem[] appropriate in determining whether . . . an application for 
registration [should be] denied.'' Id. Moreover, I am not required to 
make findings as to all of the factors.\13\ Volkman v. DEA, 567 F.3d 
215, 222 (6th Cir. 2009); Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 
2005).
---------------------------------------------------------------------------

    \13\ I have considered Respondent's evidence that it is 
currently licensed by the Commonwealth of Puerto Rico as a pharmacy 
and holds a registration from the Commonwealth which authorizes it 
to dispense controlled substances. I have also considered 
Respondent's evidence that the Pharmaceutical Board took no action 
against Ms. Santiago-Soto's pharmacist's license. However, none of 
these documents constitute a recommendation from the state licensing 
board as to whether DEA should grant the application, see 21 U.S.C. 
823(f)(1), and while Respondent clearly possesses authority to 
dispense controlled substances under the laws of the Commonwealth 
and thus meets a prerequisite for obtaining a registration, this 
finding is not dispositive of the public interest inquiry.
     So too, I acknowledge that neither Respondent, nor Ms. 
Santiago-Soto, has been convicted of an offense under either federal 
or Puerto Rico law ``relating to the manufacture, distribution or 
dispensing of controlled substances.'' 21 U.S.C. 823(f)(3). However, 
while the charges against Ms. Santiago-Soto were dismissed, this 
finding is not dispositive of the allegations that Respondent filled 
unlawful prescriptions because this proceeding involves different 
allegations than those brought in the criminal proceeding and is 
subject to a lower standard of proof (the preponderance standard) 
than that applied in a criminal proceeding.
---------------------------------------------------------------------------

    Under Section 304(a)(1), a registration may be revoked or suspended 
``upon a finding that the registrant . . . has materially falsified any 
application filed pursuant to or required by this subchapter.'' 21 
U.S.C. 824(a)(1). Under agency precedent, the various grounds for 
revocation or suspension of an existing registration that Congress 
enumerated in section 304(a), 21 U.S.C. 824(a), are also properly 
considered in deciding whether to grant or deny an application under 
section 303. See The Lawsons, Inc., 72 FR 74334, 74337 (2007); Anthony 
D. Funches, 64 FR 14267, 14268 (1999); Alan R. Schankman, 63 FR 45260 
(1998); Kuen H. Chen, 58 FR 65401, 65402 (1993). Thus, the allegation 
that Respondent materially falsified its application is properly 
considered in this proceeding. See The Lawsons, 72 FR at 74337; Samuel 
S. Jackson, 72 FR 23848, 23852 (2007). Moreover, just as materially 
falsifying an application provides a basis for revoking an existing 
registration without proof of any other misconduct, see 21 U.S.C. 
824(a)(1), it also provides an independent and adequate ground for 
denying an application. The Lawsons, 72 FR at 74338; cf. Bobby Watts, 
M.D., 58 FR 46995 (1993).
    In this matter, the Government alleged that Ms. Santiago-Soto 
materially falsified Respondent's application for registration by 
failing to disclose that it had previously surrendered its prior 
registration for cause. Gov. Post-Hearing Br., at 6-9. It also alleged 
that Respondent's registration is inconsistent with the public interest 
because it violated 21 U.S.C. 843(a)(2), as well as 21 CFR 1306.04 and 
1306.06, when: (1) Between February 2009 and October 2009, it filled 
241 prescriptions which were issued by Dr. Aguilar-Amieva, whose 
registration had been retired by the Agency; and (2) it filled Suboxone 
prescriptions issued by Dr. Aguilar-Amieva and Dr. Vargas-Quinones to 
treat narcotic addiction, when neither doctor was authorized under 
Federal law to do so. See Gov. Post-Hearing Br., at 11-12.

The Material Falsification Allegation

    The Government argues that Ms. Santiago-Soto materially falsified 
Respondent's application for registration because she failed to 
disclose the November 30, 2011 surrender of its registration. More 
specifically, the Government contends that Ms. Santiago-Soto materially 
falsified the application, when she provided a ``no'' answer to 
question two, which asked: ``Has the applicant ever surrendered (for 
cause) or had a federal controlled substances registration revoked, 
suspended,

[[Page 29059]]

restricted or denied, or is any such action pending?'' Gov. Br. at 7 
(citing GX 1, at 1). Moreover, in its post-hearing brief, the 
Government contends--for the first time in the proceeding--that Ms. 
Santiago-Soto also materially falsified the application when she 
provided a ``no'' answer to question four, which asked: ``If the 
applicant is a corporation . . . or pharmacy . . . has any officer, 
partner, stockholder or proprietor . . . ever surrendered or had a 
federal controlled substances registration revoked, suspended, 
restricted, or denied . . . .?'' Id. at 8. I reject the allegations.
    One of the fundamental tenets of Due Process is that an Agency must 
provide a Respondent with notice of those acts which the Agency intends 
to rely on in seeking the revocation of its registration so as to 
provide a full and fair opportunity to challenge the factual and legal 
basis for the Agency's action. See NLRB v. I.W.G., Inc. 144 F.3d 685, 
688-89 (10th Cir. 1998); Pergament United Sales, Inc. v. NLRB, 920 F.2d 
130, 134 (2d Cir. 1990). Because the Government did not allege in the 
Order to Show Cause that Respondent had materially falsified its 
application, before proceeding to address whether the evidence supports 
the Government's contention, it is necessary determine whether the 
Government otherwise provided adequate notice of its intent to litigate 
the issue. See 5 U.S.C. 554(b) (``Persons entitled to notice of an 
agency hearing shall be timely informed of . . . the matters of fact 
and law asserted.'').
    `` `Pleadings in administrative proceedings are not judged by the 
standards applied to an indictment at common law.' '' Aloha Airlines v. 
Civil Aeronautics Bd., 598 F.2d 250, 262 (D.C. Cir. 1979) (quoted in 
CBS Wholesale Distributors, 74 FR 36746, 36749 (2009)); accord Citizens 
State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984). 
Accordingly, ``the failure of the Government to disclose an allegation 
in the Order to Show Cause is not dispositive and an issue can be 
litigated if the Government otherwise timely notifies a [r]espondent of 
its intent to litigate the issue.'' CBS Wholesale, 74 FR at 36570. 
Thus, while the Agency has held that ``the parameters of the hearing 
are determined by the prehearing statements,'' consistent with numerous 
court decisions, it has also recognized that even where an allegation 
was not raised in either the Show Cause Order or the pre-hearing 
statements, the parties may nonetheless litigate an issue by consent. 
Pergament United Sales, 920 F.2d at 135-37; see also Duane v. 
Department of Defense, 275 F.3d 988, 995 (10th Cir. 2002) (discussing 
Facet Enterprises, Inc. v. NLRB, 907 F.2d 963, 974 (10th Cir. 1990); 
``we held that defendant had constructive notice of an alternate theory 
of liability not described in the formal charge when the agency 
detailed that theory during its opening argument and at other points 
during the hearing and when the defendant's conduct revealed that it 
understood and attempted to defend against that theory'').\14\
---------------------------------------------------------------------------

    \14\ See also Grider Drug #1 & Grider Drug #2, 77 FR 44070, 
44077 n.23 (2012) (holding that while the Government did not provide 
adequate notice of its intent to litigate an allegation in either 
the Show Cause Order or its pre-hearing statements, where 
respondents ``did not object that the allegation was beyond the 
scope of the proceeding and that they were denied adequate notice of 
it'' and ``fully litigated the issue,'' the allegation was litigated 
by consent) (citing Citizens State Bank, 751 F.2d at 213; Kuhn v. 
Civil Aeronautics Bd., 183 F.2d 839, 841-42 (D.C. Cir. 1950); and 
Yellow Freight System, Inc. v. Martin, 954 F.2d 353, 358 (6th Cir. 
1992)).
---------------------------------------------------------------------------

    ``The primary function of notice is to afford [a] respondent an 
opportunity to prepare a defense by investigating the basis of the 
complaint and fashioning an explanation that refutes the charge of 
unlawful behavior.'' Pergament United Sales, 920 F.2d at 135 (citation 
omitted). While the issue of whether an allegation ``has been fully and 
fairly litigated [by consent] is so peculiarly fact-bound as to make 
every case unique,'' id. at 136, ``the simple presentation of evidence 
important to an alternative [allegation] does not satisfy the 
requirement'' that a respondent be afforded with a full and fair 
opportunity to litigate the alternative allegation. I.W.G., 144 F.3d at 
688 (quoting NLRB v. Quality C.A.T.V., Inc., 824 F.2d 542, 547 (7th 
Cir. 1987) (other citation omitted)).
    ``An agency may not base its decision upon an issue the parties 
tried inadvertently. Implied consent is not established merely because 
one party introduced evidence relevant to an unpleaded issue and the 
opposing party failed to object to its introduction. It must appear 
that the parties understood the evidence to be aimed at the unpleaded 
issue.'' Yellow Freight System, Inc. v. Martin, 954 F.2d 353, 358 (6th 
Cir. 1992) (citation omitted). Accordingly, where the Government's case 
``focus[es] on another issue and [the] evidence of [an] uncharged 
violation [is] `at most incidental,' '' the Government has not 
satisfied its constitutional obligation to provide a full and fair 
opportunity to litigate the issue and it cannot rely on the incidental 
issue as the basis for imposing a sanction. Pergament, 920 F.2d at 136 
(quoting NLRB v. Majestic Weaving Co., 355 F.2d 854, 861-62 (2d Cir. 
1966)).
    In its initial Pre-Hearing Statement, the Government again failed 
to allege that the application was materially false. Nor, in 
summarizing the testimony of its proposed witnesses therein, did the 
Government provide notice that it intended to put forward any evidence 
which would lead Respondent to conclude that the material falsification 
of its application was an issue in the case.
    Instead, the Government did not provide notice that it intended to 
litigate the issue of whether the application contained a material 
falsification until its Supplemental Pre-Hearing Statement, which was 
not filed until one week before the evidence-taking phase of the 
proceeding convened. Even then, the Supplemental Pre-Hearing Statement 
did not identify which specific statements on the applications were 
allegedly false. Rather, the Supplemental Pre-Hearing Statement merely 
stated that ``Ms. Soto will be asked about the circumstances of the 
pharmacy's prior surrender of its DEA certificate of registration, and 
about her failure to note the previous surrender on Respondent's new 
application for registration.'' ALJ Ex. 7, at 3. Because the 
Government's Supplemental Pre-Hearing Statement did not specifically 
identify which of the various application statements it was alleging to 
be materially false, only those issues which the record shows were 
litigated by consent can support a finding (if proved by substantial 
evidence) that Ms. Santiago-Soto materially falsified the application 
and the imposition of a sanction.
    Notably, while at the evidentiary phase of the hearing the 
Government made an opening statement, here again, it did not identify 
the specific statements which were allegedly false. Rather, it confined 
its opening statement to the following: ``Your Honor, the Government 
seeks a recommendation of a denial of application based on Sections 823 
and 824 of the Controlled Substances Act, on the basis of a material 
falsification on the application, and the fact that Respondent's 
registration would be inconsistent with the public interest.'' Tr. 39.
    Moreover, in questioning both the DI and Ms. Santiago-Soto, the 
Government did not elicit any testimony regarding Question Four. 
Rather, it focused entirely on the answers Ms. Santiago-Soto had given 
to Question Two, and, notwithstanding that there was no evidence that 
the Commonwealth of Puerto Rico had taken any action against either 
Respondent or Ms. Santiago-Soto, Question Three. See Tr. 45 (testimony 
of DI that Respondent's application

[[Page 29060]]

contained a falsification at ``Question Number 3''); id. at 123-24 
(Government's questioning of Ms. Santiago-Soto regarding Questions Two 
and Three). Indeed, it was not until its post-hearing brief that the 
Government finally argued that Ms. Santiago-Soto had provided a 
materially false answer to Question Four. This, however, is simply too 
late in the day to provide a meaningful opportunity to refute the 
allegation. See Pergament United Sales, 920 F.2d at 135.\15\
---------------------------------------------------------------------------

    \15\ Indeed, even if an allegation could be refuted without 
further factual development because it involves a matter of law, 
because DEA proceedings customarily require the parties to file 
their post-hearing briefs simultaneously (as was done here), there 
is no meaningful opportunity to respond prior to the issuance of an 
ALJ's recommended decision.
---------------------------------------------------------------------------

    Thus, I hold that the Government provided adequate notice to 
support a finding that the parties litigated by consent the issue of 
whether Ms. Santiago-Soto's answer to Question Two was materially 
false. However, I further hold that the record does not support a 
finding that the parties litigated by consent whether her answer to 
Question Four was also materially false.
    Turning to the merits of the allegation pertaining to Question Two, 
the evidence showed that on November 29, 2011, Ms. Santiago-Soto was 
indicted (along with thirty-two other persons) on two felony counts of 
violating the Controlled Substance Act, including: (1) By conspiring to 
possess and dispense, with intent to distribute, various controlled 
substances, in violation of 21 U.S.C. 841(a)(1), 846, and 860; and (2) 
by aiding and abetting each other and ``knowingly and intentionally 
possess[ing] and dispens[ing] with intent to distribute various'' 
schedule II through IV controlled substances, ``outside the scope of 
professional practice and not for a legitimate medical purpose,'' in 
violation of 21 U.S.C. 841(a)(1) and 18 U.S.C. 2. RX B, at 1-13.
    On November 30, 2011, Ms. Santiago-Soto was arrested early in the 
morning and taken to her pharmacy where, after receiving the Miranda 
warnings, she was told by P.N., a DI,\16\ that she had to surrender her 
registration ``because of the criminal charges against'' her and that 
she ``had no other options'' because she was ``part of a scheme.'' Tr. 
125-26. The evidence further showed that Ms. Santiago-Soto executed a 
Voluntary Surrender form, which was witnessed by P.N. (as well as 
another DI). RX I. This form stated that she had been ``fully advised 
of my rights, and underst[ood] that I am not required to surrender my 
controlled substance privileges,'' and that ``[i]n view of my alleged 
failure to comply with the Federal requirements pertaining to 
controlled substances, and as an indication of my good faith in 
desiring to remedy any incorrect or unlawful practices on my part'' she 
was ``voluntarily surrender[ing] my . . . Certificate of 
Registration.'' Id.
---------------------------------------------------------------------------

    \16\ In her testimony, Ms. Santiago-Soto referred to this person 
as an Agent; however, on the Voluntary Surrender form, this person 
signed as a witness and listed his title as ``Diversion 
Investigator.'' RX I.
---------------------------------------------------------------------------

    As found above, the DI who testified for the Government did not 
personally participate in the arrest of Ms. Santiago-Soto and did not 
witness the events surrounding her execution of the Voluntary Surrender 
form. Tr. 60-61. Nor did the Government call as a witness any other 
person who witnessed the execution of the surrender form. Thus, there 
is no evidence that, at the time she surrendered Respondent's 
registration, Ms. Santiago-Soto was confronted with any allegations of 
misconduct aside from those which comprised the criminal case.
    Subsequently, the U.S. Attorney moved to dismiss with prejudice 
both of the charges against Ms. Santiago-Soto. RX C. On March 23, 2012, 
the District Court granted the Government's motion and entered a 
Judgment of Dismissal and discharged her. Id. The consequence of this 
was that the charges could not be refiled against her.
    The Government nonetheless argues that Ms. Santiago-Soto ``could 
not under any reasonable circumstances have answered the relevant 
liability questions . . . in the negative'' and that she ``placed undue 
emphasis on the words `for cause' in liability question #2.'' Gov. 
Post-Hrng. Br., at 7. The Government further notes Ms. Santiago-Soto's 
claim that she signed the surrender form ``under duress.'' Id.
    I need not decide whether surrendering a registration under duress 
constitutes a valid defense to a charge of material falsification of 
Question Two or whether the facts here would support such a 
defense.\17\ This is so because I find unpersuasive the Government's 
contentions that Ms. Santiago-Soto could not have reasonably answered 
Question Two in the negative and that she ``placed undue emphasis on 
the words `for cause.' ''
---------------------------------------------------------------------------

    \17\ Of consequence, Question Two did not ask whether Respondent 
had ``ever voluntarily surrendered (for cause)'' but only if it had 
``ever surrendered (for cause)'' its registration. GX 1, at 1. 
Moreover, notwithstanding that Ms. Santiago-Soto was under arrest at 
the time she surrendered Respondent's registration, in signing the 
Voluntary Form, she acknowledged that she had been ``fully advised 
of [her] rights'' and understood that she was ``not required to 
surrender my controlled substances privileges''; she then 
acknowledged that she was ``freely execut[ing]'' the form and 
``choos[ing] to'' voluntarily surrender her registration. RX I.
---------------------------------------------------------------------------

    As for the latter contention, Ms. Santiago-Soto was only required 
to answer Question Two as it was written on the application and not as 
it otherwise could have been written (such as without those words). 
Indeed, the Government does not explain how Ms. Santiago-Soto could 
have ``placed undue emphasis on the words `for cause,' '' when those 
words were part of the question and the application contains no 
explanation of what the term ``surrender for cause'' means.
    There is no Agency regulation which defines the term ``for cause'' 
as it is applied in the context of an application for registration. 
However, two regulations do define the term in the context of imposing 
requirements on practitioners in the employment of persons who handle 
or have access to controlled substances, see 21 CFR 1301.76(a), as well 
as on manufacturers and distributors (among others) in the employment 
of persons who will have access to listed chemicals. See 21 CFR 
1309.72(a). Under these provisions, ``the term `for cause' means a 
surrender in lieu of, or as a consequence of, any Federal or State 
administrative, civil or criminal actions resulting from an 
investigation of the handling of controlled substances or listed 
chemicals.'' 21 CFR 1301.76(a); id. at 1309.72(a).
    However, even if this definition was applied to Respondent's 
application, it would offer no support to the Government. Here, there 
is no evidence that Ms. Santiago-Soto was advised that if she did not 
surrender the registration, Respondent would face an Order to Show 
Cause. Thus, she did not surrender the registration ``in lieu of'' a 
hearing. Moreover, while she had been indicted prior to the surrender, 
there is no evidence that she surrendered the registration in lieu of 
facing the criminal charges, which were not dismissed until several 
months later.\18\
---------------------------------------------------------------------------

    \18\ Nor does the evidence support a finding that she 
surrendered the registration as a consequence of the criminal 
action. Ms. Santiago-Soto did not surrender the registration as part 
of a pre-trial diversion agreement, a plea agreement, or as part of 
a sentence imposed by a court. Rather, the criminal case against Ms. 
Santiago-Soto was dismissed with prejudice.
---------------------------------------------------------------------------

    Notably, Ms. Santiago-Soto's testimony that she was told that she 
had to surrender her registration because of her involvement in a 
criminal scheme stands unrefuted, and there is no evidence that, at the 
time of the surrender, she was told by Agency personnel that the Agency 
was alleging additional violations of the CSA or DEA

[[Page 29061]]

regulations beyond the offenses for which she was indicted.\19\ 
Moreover, the consequence of the district court's dismissal of the 
charges ``with prejudice,'' on motion of the Government (and apparently 
before trial), was that she could be not re-charged for the same 
offenses. Under these circumstances, a layperson could, in good faith, 
conclude that there was no basis for both the charges and the DI's 
demand that she surrender her registration, and given the absence of 
any definition of the limiting term, a layperson could also, in good 
faith, conclude that she had not surrendered her registration ``for 
cause.'' \20\
---------------------------------------------------------------------------

    \19\ It is acknowledged that on the Voluntary Surrender form the 
box was checked which indicates that Ms. Santiago-Soto surrendered 
Respondent's registration ``[i]n view of my alleged failure to 
comply with the Federal requirements pertaining to controlled 
substances.'' RX I. However, the Voluntary Surrender form did not 
list (nor is there a space to list) what those alleged failures 
were. See id. Given the absence of any evidence that at the time the 
surrender occurred, Ms. Santiago-Soto was told of additional 
allegations against her, the Voluntary Surrender form does not 
refute her testimony that because the criminal case was dismissed, 
she did not believe that she had surrendered for cause.
    \20\ The Government does not argue that the mere fact that she 
was indicted was sufficient to place her on notice that she had 
surrendered her registration for cause.
---------------------------------------------------------------------------

    Even had I concluded otherwise, I would hold that there are 
mitigating circumstances that substantially diminish the egregiousness 
of the alleged misconduct. Ms. Santiago-Soto testified that the day 
after she submitted the application, she contacted the Diversion Group 
Supervisor and explained to her that she answered the question ``no'' 
and ``was unsure if [she] had answered the question correctly'' because 
the question used the words ``with cause.'' Tr. 126. Ms. Santiago-Soto 
also testified that the Group Supervisor told her that she did not 
know, but that she would look into it and get back to her. Id. at 126-
27. Ms. Santiago-Soto further testified that she had memorialized the 
conversation in an email to the Group Supervisor. Id. at 127. However, 
the Group Supervisor did not respond to her. Id. Notably, all of this 
testimony was unrefuted by the Government.
    While the ALJ acknowledged this testimony in his summary of the 
testimony, see R.D. at 5-6, in his discussion of whether Ms. Santiago-
Soto had materially falsified the application, he entirely ignored it 
and offered no explanation for why he apparently rejected it even as a 
mitigating circumstance. Id. at 27-28. However, in concluding that Ms. 
Santiago-Soto had materially falsified the application, the ALJ 
repeatedly noted that Santiago-Soto had also provided a ``no'' answer 
to Question Four, which does not use the words ``for cause'' to modify 
the scope of surrenders which must be disclosed. Id. at 27-29. 
Moreover, in his earlier summary of the testimony, the ALJ noted that 
``[t]here is no evidence indicating that Ms. Santiago-Soto also 
inquired about Question Four during her conversation with'' the Group 
Supervisor, id. at 5, and that in her testimony, she did not address 
her answer to Question Four. He also explained that the Group 
Supervisor ``did not testify at the hearing, and [that] neither party 
sought such testimony.'' Id. The ALJ further observed that ``the record 
before me does not include a copy of'' the email which Ms. Santiago-
Soto testified she had sent to the Group Supervisor. Id. at 6.
    Thus, it appears that the ALJ rejected Santiago-Soto's testimony 
regarding the phone call and email to the Group Supervisor because she 
did not claim to have asked about Question Four. However, to the extent 
this is an accurate discernment of the ALJ's unexplained reasoning, it 
not surprising that there is no evidence as to why Ms. Santiago-Soto 
answered Question Four as she did. This is so because the Government 
never asked her why she did, nor otherwise adequately put her on notice 
that her answer to this question was at issue in the proceeding.\21\
---------------------------------------------------------------------------

    \21\ For this reason, in testifying regarding the phone call, 
Ms. Santiago-Soto had no obligation to address whether she had also 
discussed her answer to Question Four with the Group Supervisor.
     In its Post-Hearing Brief, the Government asserts that Ms. 
Santiago-Soto's ``failure to testify on this question supports an 
adverse inference that she knew the statement was false.'' Gov. 
Post-Hrng. Br., at 8. The Government ignores that it called Ms. 
Santiago-Soto to testify in its case in chief and could have--but 
failed to--ask her about her answer to Question Four. Nor did the 
Government, at any time prior to filing its Post-Hearing Brief, 
provide notice to Santiago-Soto that her answer to Question Four was 
at issue. I therefore hold that the Government is not entitled to an 
adverse inference regarding her answer to Question Four.
---------------------------------------------------------------------------

    This, however, is not the only problematic aspect of the ALJ's 
failure to adequately explain why he gave no weight to Ms. Santiago-
Soto's testimony regarding the phone call she made to the Group 
Supervisor. As explained above, the ALJ's decision also suggests that 
he gave no weight to her testimony because the Group Supervisor was not 
called to testify and the email was not part of the record.
    As for the failure to obtain the Group Supervisor's testimony, 
Respondent was not required to call the Group Supervisor in order to 
establish that her testimony was credible. As for the ALJ's observation 
that the email is not part of the record, it should have been (indeed, 
notwithstanding the Agency's regulation, which requires that an ALJ 
forward a rejected exhibit to the Administrator's Office, it was not). 
As found above, the ALJ allowed the Government to delay filing its 
supplemental prehearing statement until one week before the hearing and 
imposed the same deadline on Respondent. Moreover, the ALJ failed to 
provide any direction to Respondent as to what steps it must take in 
the event the Government raised an entirely new allegation at this 
state of the proceeding and wished to present evidence to refute the 
allegation.
    As for the ALJ's on-the-record explanation that the email had to be 
presented ``ahead of time, so [he] could evaluate it,'' Tr. 138, this 
begs the question: Evaluate it for what? Even in jury trials (where 
there is a manifest to need to protect the factfinder from being misled 
or confused), judges routinely rule from the bench on the admissibility 
of evidence. And here, where there is no jury, the ALJ could have 
evaluated this evidence at the same time he evaluated the testimony. 
Finally, the Government offered no objection to the email; nor could it 
reasonably claim prejudice given that it waited until one week before 
the hearing to finally make the allegation. Under these circumstances, 
I conclude that the ALJ's refusal to admit the email was arbitrary and 
capricious.
    I further reject the ALJ's findings that Ms. Santiago-Soto 
materially falsified Respondent's application when she provided a 
``no'' answer to Question Two and Four. R.D. at 29, 30-31. I further 
reject the ALJ's Conclusions of Law with respect to this issue. See id. 
at 35.
Factors Two and Four--The Applicant's Experience in Dispensing 
Controlled Substances and Compliance With Applicable Laws Related to 
Controlled Substances
    With respect to Factors Two and Four, the Government made two 
allegations. First, it alleged that ``from February 2009 to October 
2009,'' Respondent ``filled approximately 241 prescriptions'' which 
were issued by Dr. Aguilar-Amieva, after his registration had been 
retired by the Agency. Gov. Post-Hrng. Br., at 11. The Government 
alleged that this ``conduct violated 21 U.S.C. 843(a)(2), 21 CFR 
1306.04 and 1306.06.'' Id. Second, it alleged that Respondent filled 
twenty-nine Suboxone prescriptions, which were issued by both Dr. 
Aguilar-Amieva and Dr. Vargas-Quinones, neither of whom were authorized 
to prescribe this drug to

[[Page 29062]]

treat narcotic addiction. See id. at 11-12. The Government alleged that 
this conduct also violated 21 U.S.C. 843(a)(2), 21 CFR 1306.04 and 
1306.06.
Allegation One--Respondent's Filling of Prescriptions Issued By A 
Physician Who Was No Longer Registered
    As found above, the evidence showed that Dr. Hector J. Aguilar-
Amieva's registration expired on June 30, 2008 and was retired from the 
DEA computer system on January 31, 2009. GX 6. The evidence, which was 
not objected to, further showed that Respondent filled more than two 
hundred controlled-substance prescriptions which were issued by Dr. 
Aguilar-Amieva from February 2, 2009 through August 8, 2011.\22\ GX 4.
---------------------------------------------------------------------------

    \22\ At the hearing, Respondent did not challenge the admission 
of this evidence on the ground of lack of foundation. Nor did it 
raise such a challenge in its Exceptions. Notably, the only 
Government witness to testify did not participate in the execution 
of the search warrant and did not specifically identify the 
prescriptions submitted by the Government as those which were seized 
when the warrant was issued. Moreover, the prescription labels 
(which were apparently affixed to the back of the prescriptions), do 
not identify Respondent as the dispensing pharmacy. Nor did the 
Government submit any documentary evidence tending to establish that 
the prescriptions were those which were seized from Respondent.
---------------------------------------------------------------------------

    Except for in limited circumstances which are not implicated here, 
the Controlled Substances Act requires that ``[e]very person who 
dispenses . . . any controlled substance [ ] shall obtain from the 
Attorney General a registration issued in accordance with the rules and 
regulations promulgated by him.'' 21 U.S.C. 822(a)(2).\23\ Moreover, 
under a DEA regulation, ``[a] prescription for a controlled substance 
may be issued only by an individual practitioner who is: (1) 
[a]uthorized to prescribe controlled substances by the jurisdiction in 
which he is licensed to practice his profession and (2) [e]ither 
registered or exempted from registration pursuant to 1301.22(c) and 
1301.23 of this chapter.'' 21 CFR 1306.03(a). Also, it is ``unlawful 
for any person knowingly or intentionally . . . to use in the course of 
the . . . dispensing of a controlled substance . . . a registration 
number which is fictitious, revoked, suspended, expired, or issued to 
another person.'' 21 U.S.C. 843(a)(2). Thus, it is clear (and 
undisputed) that Dr. Aguilar-Amieva repeatedly violated the CSA by 
issuing controlled-substance prescriptions using his expired 
registration number.
---------------------------------------------------------------------------

    \23\ See 21 U.S.C. 822(c); 21 CFR 1301.22.
---------------------------------------------------------------------------

    The issue in this matter, however, is whether liability can be 
imposed on Respondent because its principal filled Dr. Aguilar-Amieva's 
prescriptions. As explained above, the Government contends that 
Respondent's conduct violated section 843(a)(2); the Agency's 
corresponding responsibility rule, see 21 CFR 1306.04(a); as well as a 
further regulation, 21 CFR 1304.06. Contrary to the Government's 
understanding, its evidence does not support a finding that Respondent 
violated any of the three provisions in dispensing these prescriptions.
    As explained above, section 843(a)(2) imposes criminal liability on 
any person who uses, in the course of dispensing a controlled 
substance, an expired registration number. While no case has been cited 
by the Government where a pharmacist has been convicted of violating 
this provision because it filled prescriptions issued by a physician 
whose registration had expired, given that a prescription provides the 
lawful authority for a pharmacist to dispense a controlled substance, 
see 21 U.S.C. 829(a) & (b), it is clear that a pharmacist can held 
liable for dispensing a controlled substance prescription issued by a 
physician who no longer holds a registration. However, the statute 
imposes liability only where a pharmacist does so knowingly or 
intentionally. See 21 U.S.C. 843(a)(2).
    As for 21 CFR 1306.04(a), it requires that a controlled substance 
prescription ``be issued for a legitimate medical purpose by an 
individual practitioner acting in the usual course of professional 
practice'' and imposes ``a corresponding responsibility'' on the 
pharmacist who fills a prescription which was not issued ``in the usual 
course of professional treatment.'' However, here again, the regulation 
imposes liability only on a ``person knowingly filling such a purported 
prescription.'' Id. (emphasis added).
    While the plain language of both of these provisions requires proof 
that a pharmacist dispensed a prescription knowing that the issuer 
lacked the requisite authority, the Government produced no evidence 
that Ms. Santiago-Soto knew (or was even willfully blind) to the fact 
that Dr. Aguilar-Amieva did not hold a DEA registration. Indeed, while 
in its brief the Government argues that Ms. Santiago-Soto admitted that 
Respondent had filled the prescriptions, Ms. Santiago-Soto expressly 
denied that she knew that Aguilar-Amieva's registration ``had been 
revoked in January 2009.'' Tr. 106-07.\24\ Thus, although it is true 
that Ms. Santiago-Soto admitted that Respondent had filled the 
prescriptions, her admission satisfies the Government's evidentiary 
burden only with respect to showing that the dispensings occurred. 
Moreover, when asked whether he had any evidence that Ms. Santiago-Soto 
had ``acted with the intention or knowledge [of] illegal activity when 
dispensing Dr. Aguilar's . . . prescriptions,'' the DI gave an 
unresponsive answer, stating that he did not ``base [his] evaluations 
on intentions,'' and when asked a follow-up question, the ALJ 
interjected (without the DI even answering the question): ``I'll take 
it as a no.'' Thus, I hold that the Government did not prove that Ms. 
Santiago-Soto acted with the requisite knowledge to sustain a violation 
of either 21 U.S.C. 843(a)(2) or 21 CFR 1306.04(a), with respect to 
this allegation.
---------------------------------------------------------------------------

    \24\ The quotation is from the Government's question. The 
Government's evidence did not establish that the Agency had revoked 
Dr. Aguilar-Amieva's registration, but only that Aguilar-Amieva let 
his registration expire after which his number was retired from the 
DEA registrant database. Had Aguilar-Amieva's registration been 
revoked, an order doing so would have been published in the Federal 
Register and on the Agency's Web site.
---------------------------------------------------------------------------

    The Government also alleged that Respondent's filling of the 
241prescriptions violated 21 CFR 1306.06. In relevant part, this 
regulation provides that ``[a] prescription for a controlled substance 
may only be filled by a pharmacist, acting in the usual course of his 
professional practice.'' 21 CFR 1306.06. Thus, on its face, this 
regulation does not require proof of knowledge to sustain a violation.
    However, the regulation does require that the Government establish 
what the standards of pharmacy practice require, through either expert 
testimony or by reference to federal or state laws, pharmacy board or 
Agency regulations, or decisional law (whether of administrative bodies 
or the courts). Here, while the Government's evidence establishes that 
Respondent dispensed some 241 controlled substance prescriptions over a 
period of approximately thirty months, which were written by a 
physician who was not registered, the Government did not put on any 
expert testimony establishing that pharmacists have a duty to verify 
the registration status of the prescribers whose prescriptions they 
fill. Nor did the Government cite to any other rule or decision 
imposing such a duty.
    Notwithstanding that the Government neither produced any evidence 
establishing that the usual course of professional practice requires 
that a pharmacist verify the registration status of prescribers, nor 
cited any law, regulation, or other authority, which imposes such a 
requirement, the ALJ found that when ``she filled these 
prescriptions[,] Ms. Santiago-Soto failed

[[Page 29063]]

to conform to regulations relating to the distribution of controlled 
substances and failed to act in the usual course of professional 
pharmacy practice.'' R.D. at 34. Apparently, this was based on the 
ALJ's earlier conclusion that ``[o]ne way or another, pharmacists must 
ensure that they are filling only those controlled substance 
prescriptions that have been written by persons registered with the 
DEA. A pharmacy applicant who fails to appreciate the need to verify 
DEA credentials of prescribing doctors (either by contacting the DEA 
\25\ or subscribing to a private verification service) demonstrates a 
lack of experience material to the application.'' Id. at 23 (emphasis 
added). Thus, the ALJ applied a standard of strict liability in 
concluding that Ms. Santiago-Soto had ``failed to act in the usual 
course of professional pharmacy practice.'' Id. at 34.
---------------------------------------------------------------------------

    \25\ Based on the testimony of the DI, the ALJ found that ``[i]n 
order to determine whether a medical provider is authorized by the 
DEA to prescribe controlled substances, a pharmacist may contact the 
DEA by telephone and inquire.'' R.D. 31 (FoF #13); see also id. at 
23 (``Although it might be a cumbersome and time-consuming 
verification process, the DEA does permit a pharmacist to call into 
a field office to confirm the status of a given prescribing 
source.''). However, as found above, the ALJ barred Respondent from 
using a Question and Answer printout from the DEA Web page to 
impeach the DI's testimony to this effect, reasoning that the 
Respondent was required to disclose this document in advance of the 
hearing. Tr. 164.
    It is true that under the Agency's rule, a party is generally 
required to provide a copy of any proposed exhibit which is being 
offered as substantive evidence in the matter. However, contrary to 
the ALJ's understanding, a party is not required to disclose, in 
advance of the hearing, a document which is being used to impeach a 
witness. I therefore reject this finding.
    As for the NTIS database, the ALJ acknowledged that subscribing 
to this service is expensive. However, he then opined that ``[i]t is 
no answer to complain that the NTIS program costs a lot of money; 
nor is it a sufficient legal response to argue that DEA regulations 
do not require pharmacists to purchase the program.'' R.D. at 23. To 
the extent this comment might be understood as creating an 
obligation on all pharmacies to subscribe to this service, it is 
rejected. While it was not fully developed on the record of this 
proceeding, DEA provides a web tool which allows a registrant to 
verify the registration of another person or entity.
---------------------------------------------------------------------------

    Contrary to the ALJ's understanding, no Agency regulation requires 
that a pharmacist ascertain that each prescription presented to him/her 
has been issued by a practitioner who possesses a valid DEA 
registration and the Agency expressly disclaimed the existence of such 
a duty in 2010, when it promulgated its Interim Final Rule on 
Electronic Prescriptions for Controlled Substances. See 75 FR 16236, 
16266 (2010). Therein, the Agency noted that it had proposed requiring 
pharmacies ``to confirm that the [prescriber's] DEA registration . . . 
was valid at the time'' the prescription was signed. Id. However, 
several commenters objected ``that pharmacies are not required to check 
DEA registrations for paper prescriptions unless they suspect something 
is wrong with a prescription.'' Id.
    In its response (which appears to be missing pertinent text), the 
Agency stated that it ``agrees with those commenters that expressed the 
view that, when filling a paper prescription, it is not necessary for a 
pharmacist who receives an electronic prescription for a controlled 
substance to check the CSA database in every instance to confirm that 
the prescribing practitioner is properly registered with DEA.'' Id. The 
Agency thus removed the requirement from the Interim Final Rule, but 
``made clear that a pharmacist continues to have a corresponding 
responsibility to fill only those prescriptions that conform in all 
respects with the requirements of the [CSA] and DEA regulations, 
including the requirement that the prescribing practitioner be properly 
registered.'' Id. However, as explained above, the corresponding 
responsibility does not impose strict liability on pharmacists but 
rather requires proof that a pharmacist filled a controlled-substance 
prescription either knowing that it was unlawful or with willful 
blindness or deliberate ignorance of the fact that the prescription was 
unlawful.\26\
---------------------------------------------------------------------------

    \26\ Notwithstanding the Agency's pronouncement in the Interim 
Rule, the Agency's corresponding responsibility rule is not the only 
potential basis for finding a violation where a pharmacist dispenses 
a controlled substance prescription issued by a practitioner who 
does not hold the requisite authority. Upon a showing that such 
conduct is outside of ``the usual course of professional practice,'' 
21 CFR 1306.06, a pharmacist may be held to have violated DEA 
regulations and to have committed acts which render her pharmacy's 
registration inconsistent with the public interest.
    Moreover, in Medicine Shoppe--Jonesborough, 73 FR 364, 381 
(2008), the ALJ found that a pharmacist had filled a large number of 
controlled-substance prescriptions which were issued by a 
veterinarian who did not hold either a state license or DEA 
registration. The ALJ further found that this conduct constituted 
such other conduct which may threaten public health and safety, 
reasoning, in part, that a pharmacy has a duty to periodically 
verify whether a prescriber retains authority to practice medicine 
and dispense controlled substances. I found a violation of 21 CFR 
1306.04(a), based on the evidence that the prescriptions were being 
presented on a daily basis by the veterinarian's brother and were 
for drugs that were toxic for certain animals. However, in dictum, I 
noted that ``[a] pharmacy has a duty to periodically check to see 
that a practitioner retains the authority to practice medicine and 
dispense a controlled substance.'' Id. at n.45. I also noted my 
agreement with the ALJ's reasoning that failing ``to do so could 
threaten public health and safety because there is usually a good 
reason for why a practitioner has lost his or her state license and 
DEA registration.'' Id.
    The Government does not rely on this theory and no case (until 
recently) has presented the question of how frequently a pharmacy 
must re-verify the credentials of prescribers. Nor has the Agency 
published any guidance to the regulated community setting forth the 
parameters of this duty. What is clear, however, is that a pharmacy 
is not required to verify the credentials of the prescriber for 
every prescription it fills.
---------------------------------------------------------------------------

    Accordingly, I reject the ALJ's reasoning as contrary to the 
published guidance of the Agency. And because the Government failed to 
put forward either: (1) any evidence to show that Ms. Santiago-Soto 
either knew or was willfully blind to the fact that Dr. Aguilar-Amieva 
was no longer registered, or (2) any evidence or legal authority 
establishing that Ms. Santiago-Soto acted outside of the usual course 
of professional practice, I reject the Government's contention that 
Respondent violated federal law and DEA regulations in filling these 
prescriptions.
Allegation Two--Respondent's Filling of Suboxone Prescriptions
    Regarding this allegation, the evidence shows that Respondent 
filled twenty-nine Suboxone prescriptions, which were issued by Dr. 
Aguilar-Amieva and Dr. Vargas-Quinones, see GX 4, at 23-24; and Ms. 
Santiago-Soto admitted that a majority of the prescriptions (17 of the 
29) listed ``a diagnosis that is related to the abuse of opioids[] or 
opiates.'' Tr. 108. It was undisputed that neither Dr. Aguilar-Amieva 
nor Dr. Vargas-Quinones was qualified to prescribe Suboxone to treat 
narcotic addiction. See GX 6, at 1 & 5.
    A physician who seeks to prescribe Suboxone (or other schedule III 
through V drugs approved by FDA) for maintenance or detoxification 
treatment must meet certain conditions (including that the physician 
either holds various certifications or has training or experience in 
the management of opiate-dependent patients) and must provide a 
notification (which includes various certifications) to the Secretary 
of the Department of Health and Human Services, who must then determine 
(within 45 days from the date of receipt of the notification) whether 
the physician meets the requirements for a waiver under 21 U.S.C. 
823(g)(2)(B). 21 CFR 1301.28(a)-(d). If the practitioner holds ``the 
appropriate registration'' and the Secretary either makes ``a positive 
determination'' or fails to act within the 45 day period, DEA issues an 
identification number, which is otherwise known as an X-number to the 
practitioner. Id. Sec.  1301.28(d)(1); see also Tr. 48-49.
    Moreover, under DEA's regulation:

    A prescription may not be issued for ``detoxification 
treatment'' or ``maintenance treatment,'' unless the prescription is 
for a

[[Page 29064]]

Schedule III, IV, or V narcotic drug approved by the Food and Drug 
Administration specifically for use in maintenance or detoxification 
treatment and the practitioner is in compliance with requirements in 
Sec.  1301.28 of this chapter.

21 CFR 1306.04(c) (emphasis added).

    So too, pursuant to 21 CFR 1306.05(b), ``[a] prescription for a 
Schedule III, IV, or V narcotic drug approved by FDA specifically for 
`detoxification treatment' or `maintenance treatment' must include the 
identification number issued by the Administrator under 1301.28(d) of 
this chapter or a written notice stating that the practitioner is 
acting under the good faith exception of [21 CFR] 1301.28(e).'' \27\ 
(emphasis added). This information is in addition to the prescriber's 
DEA registration number. See 21 CFR 1306.05(a). Also, under 21 CFR 
1306.05(f), ``[a] corresponding liability rests upon the pharmacist . . 
. who fills a prescription not prepared in the form prescribed by DEA 
regulations.'' However, none of the Suboxone prescriptions issued by 
either Dr. Aguilar-Amieva or Dr. Vargas-Quinones bore either an X 
number or a statement that the physician was ``acting under the good 
faith exception.'' See GX 3, at 410-456.
---------------------------------------------------------------------------

    \27\ The good faith exception applies only during the period 
before the practitioner receives his X-number from the Agency and 
only if ``[t]he Secretary has not notified the registrant that he/
she is not qualified'' to provide such treatment. 21 CFR 1301.28(e).
---------------------------------------------------------------------------

    The Government contends that Respondent violated, inter alia, 21 
CFR 1306.04 and 1306.06, because it ``does not contest that [it] acted 
outside the usual course of professional practice'' when it dispensed 
the Suboxone prescriptions. Gov. Post-Hrng. Br., at 12. Contrary to the 
Government's understanding, Ms. Santiago-Soto made no such admission 
and the Government put forward no evidence as to what the usual course 
of professional practice requires of a pharmacist who is presented with 
prescriptions that are clearly marked as being issued for the purpose 
of providing maintenance or detoxification treatment for narcotic- 
dependent patients and yet are missing the requisite X number or good 
faith statement.
    However, the evidence does establish that Ms. Santiago-Soto 
violated 21 CFR 1306.05(f) when she filled at least seventeen of these 
prescriptions.\28\ With respect to the seventeen Suboxone prescriptions 
which contained a notation by the doctor that he had diagnosed the 
patient as being opioid dependent, Ms. Santiago-Soto knew that the 
prescriptions were issued to provide either maintenance or 
detoxification treatment.\29\ Moreover, notwithstanding the clear 
requirement that the prescriptions include (in addition to the 
prescriber's DEA number), either his DATA-waiver identification number 
or the practitioner's statement that he was ``acting under the good 
faith exception of Sec.  1301.28(e),'' none of the prescriptions 
contained either an X-number or the good faith statement.
---------------------------------------------------------------------------

    \28\ While the Government alleged that Respondent violated 21 
CFR 1306.04 in filling the Suboxone prescriptions, it did not 
identify the specific subsection which it alleges was violated. See 
Gov. Post-Hrng. Br. at 12. Notably, in contrast to subsection a of 
this regulation, which imposes a corresponding responsibility on a 
pharmacist to not knowingly fill a prescription that is issued 
outside of the usual course of professional practice and which lacks 
a legitimate medical purpose, subsection c impose duties only on the 
issuer of the prescription which has been issued to provide 
maintenance or detoxification treatment. See 21 U.S.C. 1306.04(c). 
However, as explained above, 21 CFR 1306.05(f), imposes ``[a] 
corresponding liability . . . upon the pharmacist . . . who fills a 
prescription not prepared in the form prescribed by DEA 
regulations.''
    \29\ I do not find any violations with respect to those 
prescriptions which did not contain a diagnosis of narcotic 
dependence. Under federal law, a doctor may prescribe a drug for a 
legitimate off-label use and absent evidence that the prescriptions, 
which lacked a diagnosis of narcotic dependence, were actually being 
issued for this purpose, I do not find a violation proved. The 
Government offers no argument to the effect that a doctor cannot 
prescribe Suboxone for any legitimate medical purpose unless they 
have X-number. Nor did it offer evidence that when a pharmacist is 
presented with a Suboxone prescription that does not list a 
diagnosis and lacks an X number, the standards of professional 
practice require the pharmacist to call the physician and determine 
the purpose of the prescription.
---------------------------------------------------------------------------

    In her testimony, Ms. Santiago-Soto maintained that she ``was not 
aware'' that the X number had to be on the prescription ``for that 
medication in particular,'' Tr. 110, and that she ``was not aware that 
buprenorphine [the generic name for Suboxone] fell among the 
medications that required the X DEA number.'' Id. at 112. However, Ms. 
Santiago-Soto did know that the purpose of most of the Suboxone 
prescriptions was to treat narcotic addiction. And as explained above, 
under the Agency's regulation, a prescription could not be issued for a 
Schedule III through V controlled substance such as Suboxone for this 
purpose unless the drug was approved by FDA for this purpose and the 
practitioner met the requirements for prescribing for this purpose.
    Accordingly, her testimony does not establish that she made a 
mistake of fact but rather that she was ignorant of the regulations. 
This, of course is not a defense. See United States v. International 
Minerals & Chem. Corp., 402 U.S. 558, 563 (1971) (``The principle that 
ignorance of the law is no defense applies whether the law be a statute 
or a duly promulgated and published regulation.'').
    Indeed, Ms. Santiago-Soto's testimony regarding the allegation was 
most unpersuasive. More specifically, Ms. Santiago-Soto testified that 
she had graduated from pharmacy school in 1995, and that the DATA law 
was passed in 2000, but after 2002, when Suboxone was approved by FDA 
for the purpose of treating narcotic addiction, ``the DEA in Puerto 
Rico never has provided any orientation or guidance online, or by way 
of a conference, or through continuing education, or by letters, 
letting me know, or providing me these kinds of guidelines.'' Tr. 
110.\30\
---------------------------------------------------------------------------

    \30\ The Government offered no evidence regarding the contents 
of the package insert for Suboxone and whether it contained any 
special instructions regarding the prescribing and dispensing of 
Suboxone following the FDA's approval of the drug for use in 
providing maintenance or detoxification treatment.
---------------------------------------------------------------------------

    However, in 2003, the Agency published in the Federal Register a 
notice of proposed rulemaking, and in 2005, the Agency published its 
final rule, which promulgated the various provisions set forth above, 
including 21 CFR 1301.28 (requirements for obtaining an X-number and 
the good faith exception), 21 CFR 1306.04(c) (prohibiting a 
prescription for maintenance or detoxification treatment unless the 
drug has been approved by FDA for this purpose and the practitioner is 
in compliance with 1301.28), 21 CFR 1306.05(a) (requiring that such 
prescription include either the prescriber's X number or a good faith 
statement), and 21 CFR 1306.07 (allowing a practitioner to administer, 
dispense or prescribe a Schedule III through V drug specifically 
approved by FDA for use in maintenance or detoxification treatment if 
the practitioner complies with 1301.28). See DEA, Authority for 
Practitioners to Dispense or Prescribe Approved Narcotic Controlled 
Substances for Maintenance or Detoxification Treatment, 70 FR 36338 
(2005); see also DEA, Authority for Practitioners to Dispense or 
Prescribe Approved Narcotic Controlled Substances for Maintenance or 
Detoxification Treatment, 68 FR 37429 (2003) (Notice of Proposed 
Rulemaking). Indeed, prior to the 2005 issuance of the final rule, no 
narcotic controlled substance could be prescribed by a physician 
(including those authorized to conduct a narcotic treatment program 
under 21 U.S.C. 823(g)(1)) to treat narcotic addiction and no pharmacy 
could have lawfully

[[Page 29065]]

dispensed such a prescription. See id. at 37429.
    As the 2003 Notice of Proposed Rulemaking explained:

    [t]he Controlled Substances Act (CSA) and current regulations 
requires that practitioners who want to conduct maintenance or 
detoxification treatment using narcotic (opioid) controlled drugs be 
registered with DEA as narcotic treatment programs (NTPs) in 
addition to the practitioners' personal registrations. The separate 
NTP registrations authorize the practitioners to dispense or 
administer, but not prescribe narcotic (opioid) controlled drugs.

Id. The Notice also observed that ``[o]n October 8, 2002, FDA approved 
two products containing buprenorphine, [S]ubutex and [S]uboxone, 
Schedule III controlled drugs, for use in maintenance and 
detoxification treatment,'' and that the proposed rule would ``[p]ermit 
pharmacies to fill prescriptions for Schedule III, IV, and V narcotic 
(opioid) controlled drugs approved by FDA specifically for use in 
maintenance or detoxification treatment.'' Id. at 37430.
    The dispensing of controlled substances is a highly regulated 
industry, and as a participant in this industry, Ms. Santiago-Soto is 
properly charged with knowledge of the applicable regulations, 
including: (1) The requirement that a Suboxone prescription, which has 
been issued to provide treatment for opiate addiction, can only be 
issued by a person who meets the requirements of 21 CFR 1301.28; as 
well as (2) that the prescription must bear either the prescriber's X-
number or the good faith statement. See International Minerals, 402 
U.S. at 565 (where ``dangerous or deleterious . . . products . . . are 
involved, the probability of regulation is so great that anyone who is 
aware that he is in possession of them or dealing with them must be 
presumed to be aware of the regulation''); United States v. Southern 
Union Co., 630 F.3d 17, 31 (1st Cir. 2010) (``[T]hose who manage 
companies in highly regulated industries are not unsophisticated. It is 
part of [their] business to keep abreast of government regulation.'') 
(citing United States v. Lachman, 387 F.3d 42, 56-57 (1st Cir. 2004)), 
rev'd on other grounds, 132 S.Ct. 2344 (2012).
    I therefore find that Ms. Santiago-Soto knowingly dispensed the 
seventeen Suboxone prescriptions which were issued for maintenance or 
detoxification purposes in violation of federal law by the respective 
physicians and thus also violated federal law in doing so. 21 CFR 
1306.04(c); see also 21 U.S.C. 841(a)(1). While it is true, as Ms. 
Santiago-Soto testified, that the amounts of most of the prescriptions 
were limited (most being for ten tablets or less), there were also two 
prescriptions for sixty tablets issued to the same patient, which 
contained a diagnosis of opiate dependence. Thus, I am not persuaded by 
her testimony ``that the amounts are not such that would raise my 
suspicions that something is running amok.'' Tr. 109-10.
    However, Ms. Santiago-Soto testified that she had become aware of 
the DATA of 2000 during an audit by a health insurance plan, which 
occurred months before she was arrested and surrendered her 
registration, and that she then went online and familiarized herself 
with the statute's requirements. Tr. 112. Most significantly, the 
Government's own evidence shows that Respondent dispensed the last 
Suboxone prescription on July 3, 2011, nearly five months before Ms. 
Santiago-Soto was arrested and surrendered its registration.\31\ See GX 
4, at 23-24. Finally, in her testimony, Ms. Santiago-Soto demonstrated 
some degree of knowledge of the requirements pertaining to the 
prescribing of Suboxone to identify those prescriptions which do not 
comply with the DATA requirements and should not be dispensed. Tr. 110.
---------------------------------------------------------------------------

    \31\ It is also noted that Respondent had stopped dispensing 
these prescriptions two months before a DEA inspection which 
occurred on September 7, 2011. See RX H. While DEA had also 
inspected Respondent on September 2, 2010, see RX G, as of that 
date, Respondent had dispensed but a single prescription (only three 
days earlier) for fourteen tablets. GX 4, at 23-24. No evidence was 
put forward by the Government as to whether this prescription was 
discussed with Ms. Santiago-Soto.
---------------------------------------------------------------------------

    Thus, while I conclude that the Government has proved that 
Respondent committed acts which are ``inconsistent with the public 
interest,'' 21 US.C. Sec.  823(f), I also find that there are several 
factors which mitigate the violations.

Sanction

    Under Agency precedent, where, as here, ``the Government has proved 
that a registrant has committed acts inconsistent with the public 
interest, a registrant must `` `present sufficient mitigating evidence 
to assure the Administrator that it can be entrusted with the 
responsibility carried by such a registration.' '' '' Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 
23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 
(1988))). ``Moreover, because `past performance is the best predictor 
of future performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th 
Cir.1995), [DEA] has repeatedly held that where a registrant has 
committed acts inconsistent with the public interest, the registrant 
must accept responsibility for its actions and demonstrate that it will 
not engage in future misconduct.'' Medicine Shoppe, 73 FR at 387; see 
also Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 
(2006); Prince George Daniels, 60 FR 62884, 62887 (1995). See also 
Hoxie v. DEA, 419 F.3d at 483 (``admitting fault'' is ``properly 
consider[ed]'' by DEA to be an ``important factor[]'' in the public 
interest determination).
    While a registrant must accept responsibility and demonstrate that 
it will not engage in future misconduct in order to establish that its 
registration is consistent with the public interest, DEA has repeatedly 
held these are not the only factors that are relevant in determining 
the appropriate sanction. See, e.g., Joseph Gaudio, 74 FR 10083, 10094 
(2009); Southwood Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007). 
Obviously, the egregiousness and extent of a registrant's misconduct 
are significant factors in determining the appropriate sanction. See 
Jacobo Dreszer, 76 FR 19386, 19387-88 (2011) (explaining that a 
respondent can ``argue that even though the Government has made out a 
prima facie case, his conduct was not so egregious as to warrant 
revocation''); Paul H. Volkman, 73 FR 30630, 30644 (2008); see also 
Paul Weir Battershell, 76 FR 44359, 44369 (2010) (imposing six-month 
suspension, noting that the evidence was not limited to security and 
recordkeeping violations found at first inspection and ``manifested a 
disturbing pattern of indifference on the part of [r]espondent to his 
obligations as a registrant''); Gregory D. Owens, 74 FR 36751, 36757 
n.22 (2009). So too, the Agency can consider the need to deter similar 
acts, both with respect to the respondent in a particular case and the 
community of registrants. See Gaudio, 74 FR at 10095 (quoting 
Southwood, 71 FR at 36503). Cf. McCarthy v. SEC, 406 F.3d 179, 188-89 
(2d Cir. 2005) (upholding SEC's express adoptions of ``deterrence, both 
specific and general, as a component in analyzing the remedial efficacy 
of sanctions'').
    As found above, the only allegation sustainable on the record is 
that Respondent filled seventeen Suboxone prescriptions that were 
issued to provide maintenance or detoxification treatment by two 
physicians who were not DATA-waived physicians. As explained above, I 
find that Ms. Santiago knowingly violated federal law by dispensing 
these prescriptions because the purpose of the prescriptions was 
clearly identified on them and none of the prescriptions had the 
physician's

[[Page 29066]]

identification number or the requisite good faith statement. Moreover, 
the Government's interest in deterring pharmacists from dispensing 
Suboxone prescriptions, which have been issued to treat narcotic-
dependent patients by physicians, who lack the requisite qualifications 
to treat such patients, is manifest.
    Regarding these violations, Respondent's evidence of its acceptance 
of responsibility was less than unequivocal. While Ms. Santiago-Soto 
admitted that she was aware that the prescriptions were issued to treat 
substance abuse patients and that she should have learned about the 
requirements applicable to the prescribing of Suboxone for this purpose 
earlier than she did, she also attempted to minimize her misconduct by 
attributing it to the failure of the DEA office in Puerto Rico to 
provide any guidance to her regarding the requirements. DEA did, 
however, publish, in the Federal Register, both a Notice of Proposed 
Rulemaking and a Final Rule, which provided legally sufficient notice 
that Suboxone could only be prescribed for maintenance or 
detoxification purposes by a qualified physician, and that such a 
physician was required to either list his identification number or 
provide a good faith statement on the prescriptions.
    Yet, while Ms. Santiago-Soto is presumed to have knowledge of the 
applicable regulations and thus violated federal law in dispensing 
those Suboxone prescriptions which bore a diagnosis indicating that 
they were issued to treat narcotic addiction, the egregiousness of her 
misconduct is diminished by two factors. First, the violations were 
limited in scope, as the total amount of the unlawful dispensings was 
224 tablets. Second, Ms. Santiago-Soto had determined, prior to the 
Agency's bringing it to her attention, that the Suboxone prescriptions 
were illegal, and at the time she surrendered Respondent's 
registration, had long since ceased the offending practice.\32\
---------------------------------------------------------------------------

    \32\ In rejecting Respondent's evidence of remediation, the ALJ 
faulted Ms. Santiago-Soto for testifying that DEA ``maintained 
information on its Web site that is contradictory to what the 
Diversion Investigator said during the hearing.'' R.D. at 29. Given 
that the ALJ improperly precluded Respondent from using a printout 
from the Agency's Web site to impeach the DI, there is no basis for 
this finding.
    The ALJ further found that there is ``scant evidence that Ms. 
Santiago-Soto has engaged in a course of conduct that would ensure 
that she remains properly informed about changes in DEA controlled 
substance regulations.'' Id. at 30. Continuing, he explained that 
``[t]here was no suggestion that she would accept responsibility for 
keeping up with changes in the DATA-waived list in the future, for 
example.'' Id. There is, however, no evidence in the record that a 
DATA-waived list exists, whether maintained by DEA or any other 
agency.
    It may be that the ALJ actually meant to say that he does not 
believe that Ms. Santiago-Soto will properly verify that the issuers 
of Suboxone prescriptions for addiction treatment will have the 
requisite qualifications. If this was the ALJ's intent, it is 
refuted by his acknowledgment--one page earlier in his decision--of 
Ms. Santiago-Soto's testimony that she would subscribe to the NTIS 
service and that ``[t]his would appear to be an effective remedial 
step [which] possibly could lessen the risk of filling prescriptions 
for Suboxone if the prescribing provider was not a DATA-waived'' 
physician. Id. at 29. (Indeed, I have taken official notice that the 
DEA registration validation web-tool provides this information. See 
21 CFR 1316.59(e)). Moreover, the ALJ entirely ignored Ms. Santiago-
Soto's testimony (which is corroborated by the Government's 
evidence), that following the audit by a health plan, she reviewed 
the requirements applicable to prescribing Suboxone to treat 
narcotic addiction, and the evidence that she had ceased dispensing 
the Suboxone prescriptions long before DEA raised this as an issue 
with her. See R.D. at 29-30.
---------------------------------------------------------------------------

    In its Exceptions, Respondent argues that the ALJ's recommended 
sanction of denial ``is drastic and overly broad.'' Exceptions at 15. 
It argues, inter alia, that the Agency ``could grant a license with a 
monetary sanction or provide in its determination that it can be issued 
after a determined period of additional time''; it also argues that it 
``is willing to undertake and place into action any diverse measures 
the DEA requires as a condition for approving the'' application. Id. at 
16.
    ``Proceedings under sections 303 and 304 of the CSA are . . . non-
punitive.'' Samuel S. Jackson, 72 FR 23848, 23853 (2007) (citing Leo R. 
Miller, 53 FR 21931, 21932 (1988)). As the Agency previously 
recognized, ``this proceeding `is a remedial measure, based upon the 
public interest and the [need] to protect the public from those 
individuals who have misused their'' registrations and ``who have not 
presented sufficient mitigating evidence to assure the Administrator 
that they can be entrusted with the responsibility'' attendant with 
holding a registration. Id. (quoting Miller, 53 FR at 21932).
    I agree with Respondent that the outright denial of its application 
is not supported by the record and that its application can be granted 
``after a determined period of additional time,'' subject to Respondent 
meeting various conditions. First, while I acknowledge Ms. Santiago-
Soto's testimony as to the steps she took to familiarize herself with 
the requirements pertaining to the prescribing of Suboxone, she also 
testified that while she reviews a prescription to ensure that it meets 
legal requirements and is not suspicious, she does not ``speak with the 
doctors'' because ``[t]here is a confidentiality law between doctor and 
patient.'' Tr. 117. While the Government did not address the validity 
of this statement in its post-hearing brief, it is flatly inconsistent 
with long-standing authority setting forth the scope of a pharmacist's 
corresponding responsibility under the Controlled Substances Act. See, 
e.g., United States v. Hayes, 595 F.2d 258, 260 (5th Cir. 1979); see 
also Medicine Shoppe--Jonesborough v. DEA, 300 Fed. App'x 409, 412 (6th 
Cir. 2008) (quoting Ralph J. Bertolino, 55 FR 4729, 4730 (1990) (`` 
`When [pharmacists'] suspicions are aroused as reasonable 
professionals,' they must at least verify the prescription's propriety, 
and if not satisfied by the answer they must `refuse to dispense.' 
'')). Accordingly, I will order that Ms. Santiago-Soto take a course on 
controlled substance dispensing and the corresponding responsibility of 
a pharmacist under federal law. Said course must be completed and a 
certificate of such completion must be presented to the Agency prior to 
the granting of Respondent's application.
    I will further order that Respondent's application be held in 
abeyance for six months from the date of this order (not the date of 
publication) at which time, its application shall be granted provided 
Respondent has provided evidence to DEA that Ms. Santiago-Soto has 
completed the above-described course and commits no violation of 
federal or commonwealth controlled substance laws. If, however, Ms. 
Santiago-Soto fails to provide evidence that she has completed such 
course within the six-month period, Respondent's application shall be 
denied.
    Upon the granting of the registration, Respondent shall be placed 
on probation for a period of three years. During the period of the 
probation, Respondent and its principal shall agree to consent to 
unannounced inspections by DEA personnel and shall waive its right to 
require DEA personnel to obtain an Administrative Inspection Warrant 
prior to conducting an inspection. Ms. Santiago-Soto shall provide a 
letter to DEA manifesting Respondent's consent to unannounced 
inspections by DEA and waiving its right to require DEA personnel to 
obtain an Administrative Inspection Warrant prior to the issuance of 
its registration.
    Respondent shall provide a copy of its controlled substance 
dispensing log on a quarterly basis to the DEA Ponce Office. Said 
quarters shall end on March 31st, June 30th, September 30th, and 
December 31st of each year, and the log shall be provided to the DEA 
Ponce Office no later than ten (10) calendar

[[Page 29067]]

days following the last day of each quarter.
    Respondent and Ms. Santiago-Soto shall notify the DEA Ponce Office 
of any disciplinary action undertaken against its pharmacy license and 
Puerto Rico controlled substance registration, as well as any action 
taken against Ms. Santiago-Soto's pharmacist license, including the 
initiation of any proceeding by the Commonwealth's authorities to 
suspend or revoke any of the licenses or registration. Such 
notification shall occur no later than three business days following 
service on Respondent or Ms. Santiago-Soto of any document initiating 
such a proceeding, any interim or emergency order of suspension, and 
any final order.
    The above conditions shall terminate upon Respondent's completion 
of the period of probation, provided Respondent fully complies with 
each term of its probation. Any violation of these conditions shall 
constitute an act inconsistent with the public interest and grounds for 
the suspension or revocation of Respondent's registration.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well 
as 28 CFR 0.100(b), I order that the Application of Farmacia Yani be, 
and it hereby is, held in abeyance for a period of six months to begin 
on the date of this ORDER. I further order that upon the conclusion of 
the six-month period, the Application of Farmacia Yani shall be granted 
or denied as set forth above. I also order that in the event that Ms. 
Santiago-Soto complies with the condition that she complete a course in 
controlled substance dispensing and the corresponding responsibility, 
Farmacia Yani's Application shall be granted subject to the 
probationary conditions set forth above. This ORDER is effective 
immediately.

    Dated: May 12, 2015.
Michele M. Leonhart,
Administrator.
[FR Doc. 2015-12130 Filed 5-19-15; 8:45 am]
BILLING CODE 4410-09-P

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