Hills Pharmacy, LLC; Decision and Order, 49815-49847 [2016-17721]

Download as PDF Vol. 81 Thursday, No. 145 July 28, 2016 Part III Department of Justice mstockstill on DSK3G9T082PROD with NOTICES2 Drug Enforcement Administration Hills Pharmacy, LLC; Decision and Order; Notices VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\28JYN2.SGM 28JYN2 49816 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 15–4] mstockstill on DSK3G9T082PROD with NOTICES2 Hills Pharmacy, LLC; Decision and Order On October 8, 2014, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Hills Pharmacy, LLC (hereinafter, Hills or Respondent), which proposed the revocation of its DEA Certificate of Registration FH0772257, pursuant to which it is authorized to dispense controlled substances in schedules II through V as a retail pharmacy, at the registered location of 7730 W. Hillsborough Ave., Tampa, Florida. ALJ Ex. 1, at 1. As grounds for the proposed action (which also includes the denial of any pending applications), the Show Cause Order alleged that Respondent’s ‘‘continued registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).’’ Id.; see also 21 U.S.C. 824(a)(4). More specifically, the Show Cause Order alleged that Respondent’s ‘‘pharmacists repeatedly failed to exercise their corresponding responsibility to ensure that controlled substances they dispensed were dispensed pursuant to prescriptions issued for legitimate medical purposes by practitioners acting within the usual course of their professional practice’’ and that its ‘‘pharmacists ignored readily identifiable red flags that [the] controlled substances prescribed were being diverted and dispensed despite unresolved red flags.’’ Id. (citing 21 CFR 1306.04(a); Holiday CVS, L.L.C., d/b/a CVS Pharmacy Nos. 219 and 5195, 77 FR 62315, 62319 (2012)). The Show Cause Order further alleged that Respondent’s ‘‘pharmacists dispensed controlled substances when they knew or should have known that the prescriptions were not issued in the usual course of professional practice or for a legitimate medical purpose, including circumstances where the pharmacist knew or should have known that the controlled substances were abused and/or diverted by the customer.’’ Id. at 2. The Show Cause Order listed various red flags which Respondent’s pharmacists allegedly failed to resolve before dispensing prescriptions, including: (1) ‘‘multiple individuals presenting prescriptions for the same drugs in the same quantities from the same doctor’’; (2) ‘‘individuals presenting prescriptions for controlled VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 substances known to be highly abused, such as oxycodone and hydromorphone’’; (3) ‘‘individuals paying high prices . . . for controlled substances with cash’’; and (4) ‘‘individuals residing long distances from the pharmacy.’’ Id. The Show Cause Order then alleged that between July 28 and August 4, 2011, Respondent’s ‘‘pharmacists dispensed large and substantially similar quantities of’’ oxycodone 30 mg tablets ‘‘to at least nine customers, all of whom received their prescriptions from physicians working at the same clinic,’’ and that seven of the customers ‘‘resided at least [50] miles from’’ Respondent and five of the customers ‘‘resided more than [100] miles from’’ it. Id. The Government specifically alleged that ‘‘on July 28, 2011, a Hills . . . pharmacist dispensed 210’’ tablets of oxycodone 30 mg ‘‘to T.V., who resided in Pensacola, . . . more than [450] miles from’’ Respondent. The Order also alleged that ‘‘on August 4, 2011, one or more Hills . . . pharmacists dispensed large quantities of oxycodone pursuant to prescriptions written by the same physician on the same day to two customers with the same last name’’ (J.P. and T.P.), both of whom ‘‘resided in St., Augustine, Florida, more than [180] miles from’’ it. Id. Next, the Show Cause Order alleged that ‘‘[o]n April 21, 2011, one or more Hills[’] . . . pharmacists dispensed large and substantially similar quantities of . . . oxycodone 30 to at least [12] customers, three of whom resided more than [50] miles from [it], and two of whom resided more than [100] miles away.’’ Id. The Show Cause Order then alleged that ‘‘[a]ll of these prescriptions were written by physicians working at the same clinic and were for amounts ranging from 168 to 240 tablets.’’ Id. To similar effect, the Show Cause Order alleged that on January 16, 2012, Hills’ pharmacists dispensed three prescriptions for oxycodone 30 mg tablets in quantities which ranged from 168 to 224 tablets to three persons who ‘‘resided more than [50] miles from Hills,’’ which were all ‘‘issued by physicians working at the same clinic.’’ Id. at 3. The Show Cause Order then alleged that on January 19, 2012, a Hills’ pharmacist dispensed 120 oxycodone 30 tablets to a person who resided in Panama City, Florida, which is ‘‘located more than [350] miles from’’ it. Id. The Show Cause Order also alleged that on December 10, 2012, Hills’ pharmacists engaged in a further instance of dispensing prescriptions (for 180 oxycodone 30) to two persons with the same last name on the same date ‘‘at or about the same time.’’ Id. at 3. With PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 respect to these prescriptions, the Government also alleged that ‘‘both customers were willing to pay as much as [$7.50] per tablet despite evidence that Hills . . . was now charging double for oxycodone than it charged the previous year.’’ Id. And the Show Cause Order further alleged that on December 10, 2011, a Hills’ pharmacist dispensed 224 tablets of oxycodone 30 to a resident of Bradenton, Florida, ‘‘who willingly paid . . . $1232 for the same prescription he purchased just four months earlier for . . . $896,’’ and that ‘‘[b]oth of these prescriptions were also facially invalid inasmuch as they contained no patient address.’’ Id. Finally, the Show Cause Order alleged that in October 2011, Hills’ pharmacists dispensed prescriptions for 196 and 240 tablets of hydromorphone 8 mg to two persons. Id. The Show Cause Order alleged that the prescriptions, ‘‘if taken as directed, far exceeded the recommended [daily] dosage of’’ the drug. Id. The Order also alleged that both ‘‘prescriptions were issued by the same physician and one of them was facially invalid . . . as it contained no patient address.’’ Id. Next, the Show Cause Order alleged that Respondent ‘‘failed to create and maintain accurate records in violation of 21 U.S.C. 842(a)(5).’’ Id. at 4. More specifically, the Order alleged that: (1) Respondent ‘‘failed to complete a biennial inventory as required by 21 CFR 1304.11(c)’’; (2) its DEA schedule II order forms did not contain the ‘‘receipt date or quantity received in violation of 21 U.S.C. 827(b) and 21 CFR 1305.13(e)’’; (3) it ‘‘failed to retain Copy 3 of’’ its schedule II order forms ‘‘as required by 21 U.S.C. 827(b) and 21 CFR 1305.13(a) and 1305.17(a)’’; and (4) its schedule II records were not ‘‘readily retrievable . . . at its registered location in violation of 21 CFR 1304.04(a) and (h)(2).’’ Id. Finally, the Show Cause Order alleged that a DEA audit of various schedule II drugs found both shortages and overages. The Order alleged that an audit for the period of July 24, 2012 through February 4, 2013 found ‘‘a shortage of 4,135’’ tablets of hydromorphone 4 mg and ‘‘an overage of 8,758’’ tablets of hydromorphone 8 mg. Id. The Order also alleged that an audit for the period of June 27, 2012 through February 4, 2013 found an overage of 1,306 tablets of oxycodone 30 mg, and an audit for the period of June 9, 2012 through February 4, 2013 found overages of 113 tablets of morphine 60 mg and 88 tablets of morphine 30 mg. Id. On October 17, 2014, the Order to Show Cause was served on Respondent E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 by delivery to an attorney who was representing it in the investigation, and who had emailed a Diversion Investigator the day before that he would ‘‘accept any service of process in that regard for Hills Pharmacy.’’ ALJ Ex. 4. On November 14, 2014, Respondent, through its counsel, filed a request for a hearing with the Office of Administrative Law Judges. ALJ Ex. 2. The matter was then assigned to ALJ Gail Randall, who proceeded to conduct pre-hearing proceedings.1 On December 2, 2014, the Government filed its Prehearing Statement. ALJ EX. 7. Of note, the Government’s Prehearing Statement contained no additional information beyond that provided by the Show Cause Order as to the identities of the patients whose prescriptions were at issue. Compare ALJ Ex. 1, at 2–3, with ALJ Ex. 7, at 4–5. Thereafter, Respondent moved for an extension, which the Government did not oppose, and on December 16, 2014, the ALJ granted its motion. On January 9, 2015, Respondent filed its Prehearing Statement. ALJ Ex. 14. Respondent proposed to call as witnesses, ‘‘[a]ny and all patients whose prescriptions were seized by . . . DEA pursuant to the Administrative Inspection Warrant [AIW] executed February 4, 2013 or whose prescriptions for controlled substances were dispensed between January 1, 2011 and February 4, 2013.’’ Id. at 3. Respondent further attached to its Prehearing Statement a list of 1,461 persons. Id. at Exhibit A. Respondent also proposed to call as witnesses all of the physicians who had issued the prescriptions that were seized pursuant to the AIW and the controlled substance prescriptions that it dispensed between January 1, 2011 and February 4, 2013. Id. at 3. Respondent attached to its Prehearing Statement a list of more than 130 doctors. Id. at Exhibit B. Respondent further estimated that it would require 45 to 60 days to present its case, exclusive of cross-examination and rebuttal.2 Id. at 9. 1 Respondent raised no objection to the adequacy of service. 2 Respondent also sought to call the physicians who issued controlled substance prescriptions to the patients listed in Exhibit A after February 4, 2013, as well as the pharmacists who dispensed those prescriptions. ALJ Ex. 14, at 3. It also proposed to call as a witness,‘‘[e]ach and every . . . Diversion Investigator, Special Agent, and/or Task Force Officer who participated in the preparation of the application for the’’ AIW or the ‘‘the execution of the’’ AIW, and ‘‘[a]ny and all witnesses identified in the Government’s Prehearing Statement.’’ Id. at 4. Respondent also proposed to call a consultant, who was a former Supervisory Diversion Investigator, who would testify regarding ‘‘his VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 On January 14, 2015, the ALJ conducted an on-the-record prehearing conference. Noting that the Government had referred to the patients by their initials, the ALJ ascertained that Government intended to request a protective order. Tr. 6 (Jan. 14, 2015). Continuing, the ALJ noted ‘‘the scope of the Respondent’s [counsel’s] prehearing statement and his inability up to this point to identify the witnesses’’ and asked the Government if it was ‘‘willing to exchange the prescriptions which it intend[ed] to utilize . . . so Respondent can ID the actual patients involved?’’ Id. at 6–7. Government counsel represented that the prescriptions would be sent by Fed Ex that day. Id. at 7. Subsequently, the ALJ noted that Respondent’s counsel had ‘‘proposed in excess of 1,500 named witnesses and approximately 13,500 pages of documents’’ and asked if this was ‘‘still [his] current plan?’’ Id. at 10. Respondent’s counsel replied that if ‘‘the Court limits the scope of the Government’s case to just those prescriptions that are provided to us, I may be able to wean that down slightly.’’ Id. The ALJ then asked Respondent’s counsel to explain the purpose of the patients’ testimony. Id. Respondent’s counsel stated that ‘‘the Government ha[d] not listed in their list of witnesses any of the patients . . . to whom prescriptions were dispensed and ha[d] not identified any of the physicians who issued [the] prescriptions.’’ Id. at 11. Respondent’s counsel then explained that it was his position that the Government’s Expert’s ‘‘testimony should be excluded because he hasn’t had any contact with any of the patients or prescribers to determine whether or not the red flags that he’s identified can be resolved.’’ Id. at 11–12. Respondent’s counsel then maintained that if the Government’s Expert was allowed to testify on these issues, ‘‘it would be incumbent upon Respondent to demonstrate by the testimony of the patients regarding the inquiry and discussion between the patients and the pharmacists to resolve any of those red flags as identified by [the Expert], and for those prescribers to testify about their basis for issuing the prescriptions for those particular patients.’’ Id. at 12. knowledge and experience in the investigation, preparation and execution of’’ AIWs, purported errors in the audits, and Respondent’s ‘‘procedure for resolving potential ‘red flag’ issues and compliance with recordkeeping requirements.’’ Id. at 3, 5–6. Finally, Respondent proposed to call its own expert who would testify as to ‘‘the legal and ethical responsibilities of the pharmacists dispensing prescriptions at’’ it, the procedures used by it to resolve red flags, and his review of ‘‘the prescriptions at issue.’’ Id. at 6. PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 49817 On January 15, the ALJ issued a Preliminary Order Regarding Scope Of Proceedings. ALJ Ex. 19. Therein, the ALJ explained that ‘‘any of those proposed patient and physician witnesses who are not linked to a prescription transaction which the Government asserts created a ‘red flag’ present[s] the potential for providing no relevant evidence.’’ Id. at 3. However, the ALJ also held that ‘‘to the extent warranted by the Government’s disclosure (and potentially its case-inchief at the hearing), the Respondent may seek leave to present evidence from prescribing practitioners and/or patientcustomers on the narrow issue of rebutting Government evidence that controlled substances were dispensed in the face of ‘red flags’ of diversion with no attempts made to contact those witnesses to attempt to resolve the ‘red flag(s).’ ’’ Id. The ALJ thus concluded that ‘‘[a]s the proffer stands now . . . an insufficient basis has been presented for presenting the testimony of all of these 1598 proposed witnesses.’’ Id. (citing Respondent’s Prehearing Statement, at 3 and Exhibits A & B). Addressing Respondents’ proffers of 13,510 pages of documents, the ALJ found ‘‘that many of these documents are not relevant to this proceeding.’’ Id. at 4. The ALJ thus excluded Respondent from admitting any documents ‘‘not linked to inventory practices, the controlled substance audit, or prescription transactions specified in the Order to Show Cause.’’ Id. Finally, the ALJ precluded Respondent’s Pharmacy Expert from testifying ‘‘regarding applicable legal standards and any aspect of the Respondent’s legal obligations as a DEA registrant.’’ Id. at 5. However, the ALJ held that Respondent’s Pharmacy Expert would be permitted to testify as to other areas in accordance with Respondent’s proffer. Id. at 4. The same day, the ALJ also issued her Prehearing Ruling. In addition to setting the date of the evidentiary hearing, the Ruling also advised each party that if it chose to amend its witness list to include a new witness, it must file a supplement to its Prehearing Statement and include a summary of the witness’s proposed testimony. ALJ Ex. 20, at 3. The Ruling further explained ‘‘that witnesses not properly identified and testimony not summarized in prehearing statements or supplements thereto will be excluded at the hearing,’’ and that if either party ‘‘wished to raise any issues of inadequacies or ambiguities regarding the proposed witness’ testimony . . . [it] may do so by motion.’’ Id. Finally, the Ruling specified the date by which all E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49818 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices documentary evidence as well as any affidavits were to be provided to both the tribunal and the opposing party.3 Id. Thereafter, both of Respondent’s counsels moved to withdraw; the ALJ granted the motions. ALJ Exs. 24, 25, 29, 31. Subsequently, new counsel entered an appearance and simultaneously moved for a continuance. ALJ Ex. 27, 30. The ALJ granted the motion and continued the hearing for three weeks, scheduling it for March 10 through March 13, 2015. ALJ Ex. 40. In the meantime, both parties filed supplemental prehearing statements, ALJ Ex. 34 & 37, requests for subpoenas, and additional motions. On March 10 through 12, 2015, the ALJ conducted an evidentiary hearing in Tampa, Florida. See Recommended Decision (hereinafter, cited as R.D.), at 5. At the hearing, both parties elicited testimony from multiple witnesses and submitted various exhibits. Following the hearing, the ALJ left the record open so that the Government could submit an affidavit from a Special Agent who was then out of the country. Tr. 613. On April 16, 2015, the Government submitted the affidavit, and on April 21, 2015, the ALJ admitted the affidavit and closed the record. ALJ 52. Thereafter, both parties filed briefs containing their proposed findings of fact, conclusions of law, and argument. On April 29, 2015, the ALJ issued her Recommended Decision. Therein, the ALJ found that the Government had ‘‘proved its prima facie case for revocation through the failing of Respondent’s accountability practice and its violation of its corresponding responsibility by dispensing controlled substances without first resolving red flags raised by the prescriptions.’’ R.D. 50 (citing 21 CFR 1306.04(a)). The ALJ further held that the testimony of Respondent’s pharmacist-in-charge (PIC) on the issue of acceptance of responsibility ‘‘lack[ed] credibility.’’ Id. at 52. Noting that while its PIC had stated that he had done due diligence in accordance with its protocols prior to dispensing the prescriptions at issue, the ALJ drew an adverse inference based on Respondent’s failure to produce evidence to corroborate the PIC’s assertion. Id. The ALJ thus ‘‘conclude[d] that the Respondent’s representatives have not accepted responsibility for the full extent of their actions proven by the Government,’’ thus rendering its evidence of remedial measures irrelevant. Id. The ALJ then 3 There were numerous motions filed during the course of the pre-hearing procedures. My discussion of the motions and rulings is confined to those which limited the scope of the proceeding and the evidence that was admissible. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 recommended that Respondent’s registration be revoked and that any pending applications be denied. Id. at 53. Respondent filed Exceptions to the Recommended Decision and the Government filed a Response to Respondent’s Exceptions. Thereafter, the record was forwarded to me for Final Agency Action. Having considered the record in its entirety, including Respondent’s Exceptions (which I discuss throughout this decision), I adopt the ALJ’s legal conclusions that Respondent violated the corresponding responsibility rule of 21 CFR 1306.04(a) with respect to many of the prescriptions. I also agree with her legal conclusion that Respondent failed to maintain accurate records as required by 21 U.S.C. 827. And I further agree with her legal conclusion that Respondent has failed to accept responsibility for the misconduct which has been proven on the record of the proceeding. Accordingly, I agree with the ALJ’s ultimate conclusion that Respondent has committed acts which render its continued registration inconsistent with the public interest and will adopt her recommendation that I revoke Respondent’s registration and deny any pending applications. I make the following Findings of Fact Respondent is the holder of DEA Certificate of Registration FH0772257, pursuant to which it is authorized to dispense controlled substances in schedules II through V, as a retail pharmacy, at the registered location of 7730 W. Hillsborough Ave., Tampa, Florida 33615. GX 1. This registration does not expire until October 31, 2016. Id. According to Respondent’s registration, it is owned by Hills Pharmacy, L.L.C.4 Id. No evidence was put forward as to Respondent’s current licensure status with the Florida Department of Health. The Investigation of Respondent On February 4, 2013, DEA Investigators executed an Administrative Inspection Warrant (AIW) at Respondent. Tr. 233. The lead 4 Notwithstanding its representation in its opening statement that it would ‘‘show that Hills Pharmacy is owned by Hope’’ Aladiume and ‘‘her brother is Victor Obi Aladiume,’’ Tr. 9, the Government put forward no evidence establishing Hope Aladiume’s relationship to Respondent, or whether Victor Obi is her brother. Of note, Victor Obi was the owner of two Tampa pharmacies whose registrations I recently revoked. Superior Pharmacy I and Superior Pharmacy II, 81 FR 31310, 31341 (2016). Moreover, Victor Obi served as ‘‘the designated representative of the Respondent’’ during this proceeding. Tr. 4. PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 Investigator presented the AIW to Respondent’s PIC (Mr. George), and obtained various records from Respondent including inventory records, receipt records, and prescriptions. Id. According to the Investigator, he asked for two years’ worth of records.5 Id. The DI further testified that while Respondent provided him with a perpetual inventory of various schedule II drugs, the document ‘‘did have physical inventory dates in there.’’ 6 Id. at 235. According to the Investigator, ‘‘there was not one date [when] every controlled substance was inventoried.’’ Id. Thus, the beginning dates for the drugs that were audited varied. Id. at 236. The DI further testified that as part of executing the AIW, a closing inventory was taken in which various schedule II drugs were physically counted. Id. at 237. According to the DI, the closing counts were taken by Mr. George (Respondent’s PIC) and were recorded on a document.7 Id.; GX 7. However, the closing inventory was signed by another Diversion Investigator and witnessed by a DEA Special Agent rather than Mr. George. GXs 7 & 16; Tr. 312. Using the inventories and the records of Respondent’s receipts and prescriptions, the DI conducted an audit of Hills’ handling of seven schedule II 5 According to the DI, ‘‘not all of the required records were onsite.’’ Tr. 252. The DI specifically identified the offsite records as including prescriptions from February 4, 2011 through April 2011, inventories from February 4, 2011 through the end of 2011, and receiving records from February 4, 2011 through the end of 2011. Id. at 253. The DI further testified that Respondent’s attorney had stated that the records were offsite and that the office manager had the key and was not available that day. Id. Respondent, however, disputed that the records were offsite. Its PIC testified that the records were onsite in a locked storage room, but that he had left the storeroom key at home that day, and that when Respondent’s owner arrived with the duplicate key ‘‘two hours later,’’ ‘‘the officers [had] left’’ so he provided the records to its lawyer. Id. at 536. 6 According to the transcript, the Government asked the DI: ‘‘Did you inquire whether Hills had a bi-annual inventory?’’ Tr. 234. After he explained that he was provided with the above-mentioned perpetual inventory, the Government asked the DI: ‘‘So that’s how you conclude there was no biannual inventory?’’ Id. at 235. The DI answered ‘‘correct.’’ Id. Federal law requires, however, that a registrant take biennial and not biannual inventories. 21 U.S.C. 827(a). Moreover, the transcript was not corrected. Thus, I take the transcript as it is. 7 However, other testimony was to the effect that the closing inventory counts were done by the PIC, another DI, and the Special Agent who signed the inventory as a witness. Tr. 287, 312. Moreover, Mr. George testified that he did not participate in the counting of the drugs on hand. Tr. 535. And he further testified that the Investigators did not tell him that they were ‘‘doing the actual count.’’ Id. Be that as it may, I find no reason to reject the closing count. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices controlled substances. According to the DI, he conducted the audit by adding Respondent’s purchases to the initial inventory figures to calculate the quantity of each drug that Respondent was accountable for. Tr. 237. The DI then explained that the ‘‘total accounted for’’ was calculated by using the closing inventory (i.e., the inventory taken on the date of the inspection) and adding the amounts distributed or transferred of each drug. Id. According to the DI, the latter was ‘‘basically . . . what they filled at the pharmacy’’ as the Investigators did not ‘‘come across’’ any ‘‘sales . . . to other pharmacies.’’ Id. He further testified that in calculating Respondent’s purchases, ‘‘the only numbers that [he] used was stuff that we actually had a physical 222 [form] or [a] CSOS representation’’ and that he did not count product which was recorded in the perpetual inventory if there was no 222 form for it. Id. at 273. Comparing the ‘‘total accountable for’’ with the ‘‘total accounted for’’ for the seven drugs, the DI found that Respondent had overages in six of the drugs, the most significant being 1,306 dosage units (du) of oxycodone 30 mg and 8,758 du of hydromorphone 8 mg.8 GX 4. Moreover, Respondent had a shortage of 4,135 du of hydromorphone 4 mg. Id. Respondent disputed the accuracy of the audits. Specifically, its PIC testified that there were controlled substances in the will-call bins. Tr. 536–37. Respondent’s PIC then explained that these drugs would be prescriptions that were finished in ‘‘vials with the label’’ and ‘‘waiting for the patient to come and collect it.’’ Id. at 537. Moreover, a DI testified that the audit team did not count the prescriptions in the will-call bins. Id. at 290. He also did not recall if drugs that were quarantined for disposal were counted. Id. Respondent, however, put forward no evidence that there were any drugs quarantined for disposal on the date that the AIW was executed, let alone that any of those drugs were those being audited. Subsequently, the DI testified that ‘‘[w]e asked where the controlled substances were,’’ and counted the drugs in the safe because ‘‘that’s where we were shown.’’ Id. at 291. Respondent’s PIC also testified that there were some medications that were returned to the pharmacy’s stock when they were not picked up by the customer. Tr. 525. He further identified a document (RX 6, at 3) which lists six 8 According to the Government, Respondent had overages of 5 du in methadone 10 mg, 82 or 88 du in morphine sulfate 30 mg, 113 du in morphine sulfate 60 mg, and 2 du in morphine sulfate 100 mg. GX 4, at 1. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 instances (by date, RX number, patient name, and quantity) in which a patient apparently did not pick up a prescription for hydromorphone 8 and the drugs were returned to stock. Tr. 525. The PIC testified that he did not know if DEA counted the pills that were returned to stock if they were still on hand. Id. Respondent did, however, introduce into evidence various documents for each of the audited drugs, including a list of the prescriptions that were dispensed, its perpetual inventory for the drug, the invoices and scheduled II order forms for its receipts, and, as explained above, in some instances, a document listing ‘‘returns to stock’’ from patients. As discussed later in this decision, with respect to the overages alleged by the Government as to oxycodone 30 mg and hydromorphone 8 mg, the records show that Respondent placed additional orders that were not counted by the Government and establish that the overages in these two drugs were substantially less than the quantities alleged by the Government. Respondent’s records do not, however, call into question the conclusion that it had a large shortage in hydromorphone 4 mg and actually support the conclusion that the shortage was even larger than that alleged by the Government. The same DI also testified as to other alleged violations. More specifically, the DI testified that several DEA Order Forms for Schedule II drugs (Form 222) were not properly completed, because ‘‘[w]hen they don’t receive a drug, they need to write a zero if they didn’t receive anything.’’ Tr. 255. While the DI did identify an instance in which Respondent had notated the receipt of six packages of methadone 10 mg, he noted that Respondent had failed to include the date that the packages were received. Id.; see also GX 10, at 9. He then testified regarding a further order form, on which three of the four line items had been filled in with both the quantity received and the date received, explaining with respect to an entry that was not completed, that the forms ‘‘are missing [the] number of packages received, [the] date received.’’ Tr. 255. However, when asked by the ALJ whether the pharmacist would ‘‘put the date that he entered the zero’’ for a similar entry which was left blank (GX 10, at 1, line 2), the DI testified; ‘‘I’m not sure about that, but we need the number zero at least.’’ Tr. 256. The DI also testified that there were some instances in which Respondent provided him with a photocopy of the purchaser’s copy of the 222 form, rather than the original which it is required to PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 49819 maintain for a period of two years. Id. at 257 (discussing GX 11, at 2). The DI also testified that Respondent did not have any inventory document other than the perpetual inventory documents that its PIC provided. Id. at 270. Reemphasizing the point, the DI subsequently testified that ‘‘that’s all we had, so we had to use it.’’ Id. at 278. The Allegations of Dispensing Violations Following the execution of the warrant, another DI provided a CD which contained copies of the schedule II prescriptions 9 that were seized to Robert Parrado, R.Ph., who reviewed them and testified as an Expert for the Government. The DI testified that the Investigators did not obtain the patient profiles (which apparently could have been extracted from the computer which was imaged by the inspection team) and thus did not provide them to Mr. Parrado. Tr. 300. Mr. Parrado testified that he obtained his B.S. in Pharmacy in 1970 from the University of Florida College of Pharmacy and that he has held a Florida pharmacist’s license since 1971. Tr. 14; GX 2, at 1. Mr. Parrado testified that he has practiced as a pharmacist at both community pharmacies as well as hospital pharmacies; he also testified that he had been the pharmacy department manager at multiple pharmacies, including two pharmacies that he owned for approximately 19 years. Tr. 15–16; GX 2, at 1–2. Mr. Parrado was a member of the Florida Board of Pharmacy from January 2001 through February 2009, and served as both Vice Chairman and Chairman of the Board. Tr. 17; GX 2, at 3. He is a member of the Florida Pharmacy Association, having served as both its President and then Chairman of the Board. GX 2, at 3. He is also a member of the Hillsborough County Alcohol & Drug Abuse Task Force, the National Community Pharmacists Association, and the American Society for Pharmacy Law. Id. Finally, he has made numerous presentations on the dispensing of controlled substances by pharmacists, id. at 3–7, and has testified as an expert witness for both the prosecution and defense in criminal and administrative matters. Tr. 18. On voir dire, Mr. Parrado explained that he reviewed only the front and back of the prescriptions in forming his opinions, and that while he had also recently been provided with and looked at ‘‘some Respondent exhibits [that] 9 According to the DI, the Investigator did not seize ‘‘any noncontrolled prescriptions’’ and ‘‘just took [the] [s]chedule [II] scrips.’’ Tr. 299. E:\FR\FM\28JYN2.SGM 28JYN2 49820 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 looked like partial . . . medical records . . . for about 25 patients,’’ he had already formed his opinion before he reviewed those documents. Tr. 29–30, 32. Mr. Parrado also testified that he did not interview any patients, doctors or pharmacists, and that he was not provided with any information regarding interviews conducted by DEA personnel of the patients, doctors, or pharmacists. Id. at 39. Mr. Parrado testified that he did a limited amount of research on his own, which included doing Google map searches to determine how far the patients lived from Tampa, looking to see whether the doctors had a valid license, looking up the pharmacy on the Board of Pharmacy’s Web site to determine its ownership and prescription department manager, and looking to see whether the pharmacists had valid licenses and a disciplinary history. Id. at 40–42. After an extensive voir dire by Respondent’s counsel, Respondent objected to Mr. Parrado’s being recognized as an expert in community pharmacy practice. Id. at 50. The ALJ properly overruled the objection, finding that Mr. Parrado was qualified to testify as an expert in retail pharmacy practice based on ‘‘his knowledge, skill, experience, training, and education.’’ Id. at 52. On resumption of direct examination, the Government asked Mr. Parrado if there is ‘‘a specific protocol’’ that a pharmacist must follow ‘‘before dispensing a controlled substance?’’ Id. at 53–54. Mr. Parrado explained that a pharmacist ‘‘has to ensure that the prescription is valid,’’ and that under both the Florida Statutes and federal regulations, ‘‘a pharmacist has to ensure the prescription is valid by making sure that it was written by a doctor in the course of his professional practice and that it was for a legitimate medical purpose.’’ Id. at 54. Asked what a pharmacist is ‘‘required to look for on the actual prescription,’’ Mr. Parrado testified: prescription as far as the patient name and address, the physician’s name and address, the DEA number, the name of the medication, the strength, the directions, all those things, the quantity, have to be on that prescription. Well, there are certain requirements that have to be on a prescription. What creates a red flag is anything that causes a pharmacist concern about that prescription. . . . [T]here is a thing a pharmacist has to do before he fills a prescription that is called prospective drug review. He has to go over that prescription. He has to evaluate the prescription for appropriateness of therapy, for seeing if there is any therapeutic duplications of medications. Are there any drug/drug interactions? Are there any drug/ disease interactions? Is the prescription for— does it show signs of clinical abuse or misuse? You know, that’s just a basic thing a pharmacist does before he fills a prescription. And then, knowing all the requirement of a prescription, what must be on that One of the things that a pharmacist knows or should know is that oxycodone . . . that 80 milligrams a day has been listed in the ¨ literature as a lethal dose for an opioid naıve patient. So, when being presented with a prescription for a dose that would exceed 80 milligrams in one day, that pharmacist would need to stop and take a look and verify that ¨ the patient is not opioid naıve and has been on a regiment [sic] that has led him to develop a tolerance to that dose. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Id. at 54–55. Asked by the Government to explain what a ‘‘red flag’’ is and to give examples, Mr. Parrado testified that ‘‘a red flag . . . is anything that would cause a pharmacist concern,’’ and that ‘‘[t]here are lots of things that lead to red flags’’ when a pharmacist is ‘‘trying to determine’’ if a prescription was issued ‘‘for a legitimate medical purpose.’’ Id. at 55–56. Mr. Parrado then identified multiple red flags, including, what he termed the ‘‘first red flag,’’ that being ‘‘the drug itself,’’ as there are ‘‘known drugs of abuse’’ that are being ‘‘commonly’’ abused. Id. at 56. Mr. Parrado then identified additional red flags to include: the ‘‘the dosing’’; ‘‘[a] person travelling a long distance to acquire that drug’’; ‘‘a person willing to pay a lot, a lot of money in cash to obtain that drug’’; and ‘‘a person getting . . . certain cocktails of drugs.’’ Id. As to the latter, Mr. Parrado explained that: A cocktail is multiple drugs . . . that are known to be abused on the street, and the most common . . . has a name, it’s called the Holy Trinity, which would be oxycodone, which is an opioid, a benzodiazepine, which would be a tranquilizer such as Xanax, and a muscle relaxer like Soma. Those three together are well known combinations or cocktails that are abused on the street. Id. Next, the Government asked whether ‘‘a pharmacist look[s] at the actual amounts that are prescribed when determining whether there’s a red flag on that prescription?’’ Id. Mr. Parrado answered that a pharmacist is ‘‘required by law . . . to make sure that the dosing is not excessive or inappropriate’’ and ‘‘[t]hat’s one of our things that we are trained in.’’ Id. at 57. Continuing, Mr. Parrado explained that: Id. Mr. Parrado further identified as a red flag the simultaneous prescribing of two immediate release opioids, which he stated ‘‘would be inappropriate therapy.’’ Id. at 58. He also identified as a red flag ‘‘pattern prescribing,’’ which PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 he defined as ‘‘when I see the same medications, the same groups of medications, same combinations of medications in very similar quantities and very similar doses coming out of one . . . clinic.’’ Id. Continuing, Mr. Parrado testified: When I see multiple people presenting with a very similar group or combination of prescriptions coming from one particular clinic, that is very much a red flag. That’s not what happens in the average course of a day in a pharmacy. You don’t see groups of people coming in from the same clinic, all getting the same drugs in large quantities and all willing to pay cash. Id. at 59. Mr. Parrado identified a further red flag as ‘‘multiple people living in one household all receiving the same medications.’’ Id. Mr. Parrado then testified: ‘‘[i]s it possible? It could be, but it’s just not—it doesn’t happen on an everyday basis’’ and that he ‘‘would have to resolve [this red flag] before [he] could fill’’ the prescriptions. Id. Mr. Parrado testified that ‘‘the basic way of resolving a red flag is . . . to verify [the prescription] with the prescriber,’’ and that ‘‘you consult with the prescriber’’ and not his staff or nurse, ‘‘over your concerns.’’ Id. at 60. According to Mr. Parrado, the pharmacist must then ‘‘use [his/her] professional judgment’’ and ask ‘‘[d]id I believe what I just heard? . . . [Are] there any red flags in the conversation I just had?’’ Id. Mr. Parrado added that ‘‘I’ve had many, many instances where after a conversation with the physician I said absolutely I’m not going to fill that prescription.’’ Id. Mr. Parrado further testified that some red flags are unresolvable. Id. As an example of unresolvable red flags that would lead him to refuse to fill a prescription, he identified ‘‘a group of multiple people travelling a long distance, all getting the exact same or very similar prescriptions from one physician and all coming in with very, very large quantities of cash.’’ Id. at 60– 61. Mr. Parrado then testified that ‘‘if you do see a red flag and you can resolve it, you document it on the prescription and then you fill it.’’ Id. at 61. Mr. Parrado reiterated that the resolution is written ‘‘[o]n the prescription itself.’’ Id. To counter Mr. Parrado’s testimony as to the procedures a pharmacist must follow in dispensing controlled substances, Respondent called Dr. Sam Badawi. Dr. Badawi obtained his Doctor of Pharmacy degree from Samford University in 2002, and he is licensed to practice pharmacy in both Alabama and Florida, becoming licensed in the latter State in 2010. Tr. 346. He also E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices holds Juris Doctor degrees from both the Birmingham School of Law (2008) and Stetson University (2014), as well as an L.L.M. (2011) from Stetson in international intellectual property. Id. Mr. Badawi testified that he had worked as a full-time retail pharmacist in Alabama until sometime in 2004 or 2005, when he ‘‘transitioned into clinical pharmacy and IV infusion,’’ which involved working ‘‘with hospice patients who required intravenous pain prescriptions’’ and ‘‘morphine pumps.’’ Tr. 348. While Mr. Badawi asserted that he continued to work on a part-time basis in retail pharmacy, he subsequently went to work for Amgen, a biotechnology company where his duties involved clinical trial design. Id. at 366. On voir dire, Mr. Badawi testified that while he had worked in retail pharmacy for about ten years, four of those years were as an intern. And while he then asserted that he had worked in retail pharmacy ‘‘from 02 all the way up to 08, when [he] moved to Florida,’’ id. 372, his testimony was that for much of this time he worked only on a ‘‘floating’’ or ‘‘part-time basis.’’ Id. at 374. Mr. Badawi also acknowledged that when he worked at Amgen, as well as when he worked as a clinical pharmacy director, he did not interact directly with patients. Id. at 374–76. He further acknowledged that he had never taught pharmacy or published any articles; he also testified that his experience managing a pharmacy was limited to doing so on an interim basis ‘‘for a couple of months.’’ Id. at 376. Mr. Badawi further acknowledged that he is not currently practicing pharmacy. Id. at 377. As for his experience testifying as an expert witness, Mr. Badawi testified that it is limited to a single criminal case in which he was listed as a witness but did not testify. Id. at 381. While the Government objected to Mr. Badawi’s being qualified as an expert witness on the standard of pharmacy practice as it affects the dispensing of controlled substances, the ALJ overruled the objection and deemed him qualified ‘‘as an expert in the standard of [pharmacy] practice as to the effective dispensing of controlled substances.’’ Id. at 390. On direct examination, Mr. Badawi testified that when a controlled substance prescription presents a red flag, ‘‘[a] reasonable, prudent pharmacist will follow the DEA [Pharmacist’s] Manual,’’ which was published in 2010 and which at ‘‘page 67’’ lists criteria that ‘‘may be an indication . . . that [the] prescription was not issued for a legitimate medical purpose.’’ Id. at 391. Continuing, Mr. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Badawi testified that ‘‘[a]nd you have six options. And then it tells you what to do.’’ Id. at 391–92. Mr. Badawi then referenced a Florida Board of Pharmacy Rule (Fla. Admin. Code r.64B16– 27.831), which states that ‘‘a prescription that is not issued for a legitimate medical purpose is not a valid prescription,’’ and ‘‘gives you five different scenarios’’ before adding that ‘‘in a retail setting, I would follow first the DEA Manual.’’ Id. at 392. Mr. Badawi then testified as to the prevention techniques listed in the Manual, which include ‘‘[k]now[ing] your patient . . . what’s the story behind that patient,’’ ‘‘know[ing] your drug, and know[ing] the prescriber and the DEA.’’ Id. at 393. Mr. Badawi asserted that this is what a reasonably prudent pharmacist would do, ignoring that the Manual then states that ‘‘[w]hen there is a question about any aspect of the prescription order, the pharmacist should contact the prescriber for verification or clarification.’’ Pharmacist’s Manual, at 67. Mr. Badawi then testified that ‘‘[a] red flag is a caution sign for the pharmacist,’’ but ‘‘on its face alone does not mean the prescription is invalid.’’ Id. at 394. Continuing, Mr. Badawi testified that the Manual says that: if any of these criterias [sic] are found . . . the prescription may not be issued for [a] legitimate medical purpose. So actually it’s a caution sign. You stop and you look, meaning that you default back on your training, your knowledge, state laws, federal laws, common sense as a professional, and you exercise that professional judgment, meaning a discretion. So after you stop with that red flag, and then you proceed with caution, and you exercise your discretion. So, if a pharmacist chooses to exercise that discretion favorably by resolving the red flag, then you dispense it. If not, then you don’t dispense it. Id. at 395. Respondent’s counsel then questioned Mr. Badawi about the specific red flags identified by the Government’s Expert and how a pharmacist should resolve the red flag. Id. at 395–96. As to how a pharmacist should resolve the circumstance where prescriptions are presented ‘‘from multiple individuals for the same or similar types of drugs [narcotics] in similar quantities,’’ Mr. Badawi acknowledged that this is a red flag. Id. Mr. Badawi then testified that a pharmacist should ‘‘fall back to the DEA Manual rules’’ and ‘‘[k]now the patient. So I have two patients with the same address from the same prescriber, so I would actually inquire into the circumstance of these two patients.’’ Id. at 396. Continuing, Mr. Badawi added that ‘‘then you want to know the PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 49821 doctor’’ and whether he is ‘‘a pain management’’ or ‘‘an ortho surgeon’’ and ‘‘[w]hat’s the origination of that prescription?’’ Id. According to Mr. Badawi, if the pharmacist still had doubts despite knowing this: you pick up the phone and ask to speak to the prescriber to find out more of the story because sometimes your patients are not going to tell you everything. So I don’t want to miss the whole picture. So I would call the prescriber and verify. And if I still have doubts, I would not dispense that prescription. So that goes all under professional judgment, not just looking at the piece of paper and making a decision. Id. at 396–97. Mr. Badawi maintained, however, that this red flag could be resolved and the prescription could be dispensed. Id. at 397. Respondent’s counsel then asked Mr. Badawi whether the fact the drug alone was for oxycodone 30 mg was a red flag of the prescription’s potential illegitimacy. Id. at 397–98. While Mr. Badawi initially answered that ‘‘[t]he drug by itself, no,’’ he then testified that a Board of Pharmacy Regulation ‘‘says that if the patient, all he or she is getting [is a] controlled substance, the oxycodone by itself could be under Florida law a red flag because it meets that criteria.’’ Id. at 399. Then asked what a pharmacist should do to meet the standard of practice where a patient presents only a prescription for oxycodone 30 mg, Mr. Badawi answered: ‘‘Know your patient. So I would actually look into the patient profile history of that patient’’ to see ‘‘if there are any notes being documented in the computer from prior pharmacists that actually dispense [sic] for this individual.’’ Id. Mr. Badawi then explained that one of the reasons for reviewing the patient profile is that ‘‘there are certain drugs’’ that you ‘‘want ¨ to steer away from opioid-naıve patients’’ and that a pharmacist ‘‘want[s to] make sure that the patient is able to tolerate the drug because it’s a CNSdepressant.’’ Id. at 400. Mr. Badawi also explained that the pharmacist must review the patient profile to determine whether there are any ‘‘drug-drug interactions.’’ Id. at 401. Mr. Badawi acknowledged his agreement with Mr. Parrado’s testimony that a prescription that calls for the dispensing of a ‘‘very large or larger than normal amounts of a narcotic’’ raises a red flag which requires that the pharmacist make an inquiry. Id. at 402– 03. He also acknowledged that a narcotic prescription which provides for dosing that is ‘‘larger-than-normal,’’ or ‘‘larger-than the manufacturer’s recommended dosage’’ also creates a red flag which requires the pharmacist to E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49822 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices look at the patient profile and determine if the patient has developed tolerance. Id. at 403–04. Mr. Badawi then explained that the doses of patients being treated with narcotics ‘‘typically increase[ ] over time to achieve the pharmacological effect and also with respect to tolerance,’’ and it ‘‘very common’’ for a patient to be prescribed both an extended release drug and immediate release drug ‘‘for breakthrough pain.’’ Id. at 404. As for the circumstance of a patient presenting prescriptions for two short acting narcotics, Mr. Badawi testified that he ‘‘would consider it as a red flag, and I would investigate further, and I would exercise my professional judgment.’’ Id. at 418–19. When later asked on cross-examination, what possible explanation there could be for a patient to be prescribed two shortacting opiates together, Mr. Badawi suggested that a patient with kidney failure who is undergoing dialysis three times a week may require a combination because ‘‘the drug is being excreted by the kidneys.’’ Id. at 435–36. Mr. Badawi further testified that it is ‘‘common for physicians to issue prescriptions for [schedule II] drugs without the address being on the face of the prescription.’’ Id. at 406. However, he testified that DEA had issued guidance that a pharmacist is to look at his/her State’s rule’’ to determine whether the patient’s address could be added to the prescription. Id. at 406–07. As for how a pharmacist would address the circumstance in which a patient lives ‘‘a significant distance . . . from the pharmacy,’’ Mr. Badawi testified that ‘‘you want to know the patient, the reason why they’re 100 miles way.’’ Id. at 407–08. Mr. Badawi then suggested that the patient could be ‘‘on a special assignment to MacDill Air Force Base,’’ which is located in South Tampa; that the patient could be a snowbird and that Florida has ‘‘a lot of snowbirds’’; the patient could be on a three-month job assignment in Tampa or ´ ‘‘moving in with his fiancée.’’ Id. at 408. Mr. Badawi then testified that he was ‘‘not discounting that’’ this ‘‘is a red flag,’’ and that a pharmacist should ‘‘investigate more.’’ Id. He then maintained that ‘‘there is a professional judgment for the pharmacist to exercise, and based on the fact, you act accordingly.’’ Id. And he further asserted that the proximity of the prescribing doctor to the pharmacy could explain why the patient who had travelled a long distance was filling the prescription at the pharmacy. Id. at 409. Later, in response to a question by the ALJ, Mr. Badawi maintained that even if the patient was travelling a long VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 distance, if the patient was a regular patron, ‘‘that would actually resolve the distance.’’ Id. at 437–38. However, after again testifying that the pharmacist should know his patient, the prescriber and the medical condition, Mr. Badawi explained that the pharmacist ‘‘may want to inquire more about the patient [sic] reasons for being in hypothetically Tampa.’’ Id. at 438. Asked what types of prescriptions a reasonable pharmacist would ‘‘expect to see’’ when ‘‘there is a pain management facility that is seeing a large number of patients for chronic pain,’’ Mr. Badawi testified that a pharmacist would expect the prescriptions to be for ‘‘primarily opioids.’’ Id. at 416. Then asked what a pharmacist should do ‘‘to adhere to the standard of practice . . . and address that issue,’’ Mr. Badawi testified that ‘‘when I was there, most of the patients . . . were regulars, and they were getting it actually on set intervals.’’ Id. at 416. As for ‘‘a new patient, you would go through ID verification [and] [y]ou would actually have them fill out more of a history, diagnosis.’’ Id. at 417. Mr. Badawi then agreed with Respondent’s counsel’s suggestion that knowing that the clinic administered random drugs screens would ‘‘assist a reasonable pharmacist.’’ Id. Asked what other information a pharmacist would want to know about the practices of a pain management clinic, Mr. Badawi testified that a pharmacist would want know that the practitioners ‘‘hold a valid DEA license’’ and that the clinic has ‘‘an active state license to conduct business.’’ Id. at 418. Continuing, Mr. Badawi explained that ‘‘you utilize the [Prescription Drug Monitoring Program] and the patient profile. So it’s the totality of the circumstances, not just one angle, like a tunnel vision, when you actually want to verify these red flags.’’ Id. Mr. Badawi then testified that standing alone, none of the red flags identified by the Government’s Expert render a prescription invalid. Id. at 419. He then explained that ‘‘[r]ed flags are meant for the pharmacist to stop and inquire. So, now, if you have a combination thereof, not just one flag, maybe the weight of the inquiry is probably more than just one red flag.’’ Id. at 419–20. He then testified that none of the red flags or combinations thereof identified by the Government’s Expert required that the pharmacist reject the prescription. Id. Mr. Badawi then testified that with the exception of a Board rule which requires a pharmacist to make a photocopy of a patient’s identification, or if a copier is not available, to document descriptive information on PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 the back of a prescription, there is no requirement that a pharmacist document his resolution of a red flag on the prescription. Id. at 421. Asked whether it is the standard practice for a pharmacist to document how he/she resolved every red flag, Mr. Badawi answered: . . . I don’t know if you could document every single thing. I mean, you pick your battles. You want to document the major issues, and documentation nowadays, especially with these computer systems that would make you approve a prescription via a thumbprint scan, you don’t even have to put a code on the computer anymore. These electronic records are kept. I would rather, as a reasonable, prudent pharmacist, and to benefit my other colleagues who are working after my shift, to have access to this documentation is to have it on the computer under the patient notes so they can see what I’ve done versus the paper trail. Id. at 422. However, when asked on cross-examination if it is ‘‘within the standard of practice . . . to not document how a red flag is resolved,’’ Mr. Badawi answered: ‘‘No, it is not in the standard of practice to make a blanket statement and not to document any red flags that are being resolved.’’ Id. at 436–37. Mr. Badawi also testified that he had attended a presentation by Mr. Parrado two years earlier on dispensing controlled substances, during which Mr. Parrado ‘‘said there is a lot of gray area, it’s not black or white, and to always use your professional judgment.’’ Id. at 425. According to Mr. Badawi, during the presentation Mr. Parrado did not mention that the distance a patient travels is a red flag and that Mr. Parrado also told the attendees that ‘‘there is no ceiling on’’ the quantity of narcotics that a patient can be prescribed. Id. at 426. Mr. Badawi also testified that Mr. Parrado did not identify as a red flag the circumstance of a prescription missing a patient’s address. Id. at 426–27. He also asserted that Mr. Parrado did not identify as a red flag the circumstance of patients residing at the same address. Id. at 427. While the Government objected to Mr. Badawi’s testimony regarding the presentation on the ground that it had not been disclosed in advance of the hearing, to which Respondent’s counsel asserted that this testimony was offered to impeach Mr. Parrado, id. at 424–25, 427; the ALJ overruled the objection. Id. at 427. On cross-examination, Mr. Badawi acknowledged that he had not looked at any of the prescriptions. Id. at 430. Nor did he look at any of the patient profiles. Id. Asked if ‘‘traveling hundreds of miles to see a physician is E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices a potential red flag,’’ Mr. Badawi testified: ‘‘It’s not a potential red flag. It is a red flag.’’ Id. When then asked if travelling hundreds of miles to see a physician whose clinic was affiliated with the pharmacy was a red flag, id., Mr. Badawi testified that the affiliation raised a separate issue regarding possible ‘‘kickbacks and Stark laws,’’ but that ‘‘has nothing to do with the controlled substance dispensing.’’ Id. at 431. However, after again agreeing that distance ‘‘is a red flag,’’ Mr. Badawi stated that ‘‘[i]f they’re sending patients in the back door and the pharmacists suspect that’s a red flag, that’s a separate issue on its own.’’ Id. On questioning by the ALJ, Mr. Badawi acknowledged that there are some red flags that are not resolvable such as a prescription for some astronomical number of a drug such as morphine. Id. at 439. As an example, he testified: ‘‘a 12-year old with [a] high doses of opioids, maybe in the hundred, for a broken bone. That seems excessive. So I would actually consult with the physician.’’ Id. Mr. Badawi did not, however, explain what action he would take if the physician asserted that the prescription was legitimate. As another example of an unresolvable prescription, Mr. Badawi offered where ‘‘there is any drug-drug interactions that would deem that the prescription is not in the best interests of the patient.’’ Id. However, in Mr. Badawi’s view, this involved a ‘‘medical issue’’ and ‘‘therapeutic appropriateness’’ and ‘‘not necessarily the validity of the prescription.’’ Id. As an example, he then identified a patient being prescribed opioids when she was pregnant because even though the prescriptions may have been valid ‘‘medically speaking,’’ the fetus could be born addicted. Id. at 440. Mr. Badawi did not, however, address whether the simultaneous prescribing of drugs such as oxycodone 30, alprazolam, and carisoprodol also raises an issue of drugdrug interactions. As between Mr. Parrado’s and Mr. Badawi’s testimony, there was substantial agreement on a number of issues. Where, however, there are areas of disagreement, I generally find that Mr. Parrado’s testimony was more credible based on his years of service on the Florida Board of Pharmacy and because his experience in retail pharmacy is far lengthier and more current than that of Mr. Badawi. The Prescription Evidence At the hearing, the Government introduced into evidence copies of the front and back of 83 prescriptions for schedule II controlled substances which VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 it alleged were dispensed by Respondent’s pharmacists in violation of 21 CFR 1306.04(a) because they presented red flags which were not resolved. See GXs 3, 13, 14, and 15. Nearly all of the prescriptions were issued by physicians at the 24th Century Medical Center,10 which was located at 7747 W. Hillsborough Ave. in Tampa, id., a short walk from Respondent. According to a DEA Intelligence Research Specialist (IRS) who reviewed data that came from Respondent’s dispensing software, 1,460 patients filled a total of 4,287 schedule II prescriptions at Respondent between January 3, 2011 and February 2, 2013. GX 12, at 2; Tr. 219. The IRS further determined that 3,867 of these prescriptions—more than 90 percent— were written by six doctors who worked for Victor Obi. Tr. 219, 223; GX 12, at 2. These doctors include S. A.-H., P.C., R.R., H.D., V.S., and J.E., who worked at the 24th Century clinic. According to the online records of the Florida Department of Health, 24th Century is a pain management clinic which has been owned by Mr. Obi since January 4, 2010.11 For example, the Government introduced a prescription issued by Dr. P.C. of the 24th Century Medical Center on July 28, 2011 to T.V. for 210 oxycodone 30 mg, which Respondent filled the same day. GX 3, at 1. While T.V.’s address was not written on the prescription, the prescription bears an address label listing T.V.’s address as being in Pensacola, Florida, a distance of 472 miles from Respondent. R.D. at 6. Mr. Parrado testified that the prescription presented several red flags, including the lack of the patient’s address; that it was for oxycodone 30 mg, a known drug of abuse; and that it was for a minimum of 180 milligrams a day, which is ‘‘well above the 80 milligrams threshold’’ and ‘‘a very high dose’’ and large quantity. Tr. 63. Mr. 10 Throughout this decision, the 24th Century Medical Center is also referred to as the 24th Century clinic and 24th Century. 11 I take official notice of the online records of the Florida Department of Health which establish that Victor Obi-Anadiume is the owner of 24th Century Medical Center and has been since January 4, 2010. Under the Administrative Procedure Act (APA), an agency ‘‘may take official notice of facts at any stage in a proceeding-even in the final decision.’’ U.S. Dept. of Justice, Attorney General’s Manual on the Administrative Procedure Act 80 (1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with the APA and DEA’s regulation, Respondent is ‘‘entitled on timely request to an opportunity to show to the contrary.’’ 5 U.S.C. 556(e); see also 21 CFR 1316.59(e). Respondent may dispute my finding by filing a properly supported motion within fifteen calendar days of this Order which shall commence on the date this Order is mailed. PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 49823 Parrado then noted that the patient’s address was in Pensacola, 472 miles from Respondent. Id. at 64; R.D. at 6. Mr. Parrado testified there was no indication on the prescription that ‘‘anything was done . . . except that it was filled.’’ Id. Asked whether it was possible to resolve the various red flags, Mr. Parrado replied that it was possible, ‘‘but it would have taken a lot of investigation’’ and that he ‘‘would have had to have a good reason why that patient had to travel all the way to this clinic to get a prescription filled.’’ Id. at 64–65. Continuing, Mr. Parrado stated that he could ‘‘see if a patient is driving that far because they’re . . . see[ing] a specific physician that has a specialty that’s not available anywhere else.’’ Id. at 65. Mr. Parrado subsequently testified that he was not aware that the physician has any specific specialty. Id. at 68. After the ALJ properly overruled Respondent’s counsel’s objection that Mr. Parrado was testifying beyond the scope of his expertise, the ALJ asked ‘‘what would indicate on a prescription to you as a pharmacist of what you’re looking for in this physician?’’ Id. at 69. Mr. Parrado answered: . . . When I look at a prescription, I look and see where it came from. . . . You know a pharmacist has to exert his professional judgment on all prescriptions before he fills them. So I would be looking to see . . . I’m looking at a high dose of a very strong opioid narcotic. Where is that coming from . . . ? Is that coming from a cancer center, from an orthopedic office, somebody just had a big surgery? . . . I look for things like that, and I didn’t see anything like that on here or I didn’t see anything on this prescription that would indicate that a pharmacist had called to verify any of those things. Id. at 69–70. Next, on August 4, 2011, Dr. S.A.-H., also of the 24th Century Medical Center, issued a prescription to J.P. for 196 oxycodone 30 mg; Respondent filled the prescription the same day. GX 3, at 2. Here too, J.P.’s address was not written on the prescription; rather a label was attached which listed J.P.’s address as being in St. Augustine, Florida, a distance of 196 miles from Respondent. Id.; R.D. at 6. Asked if the prescription presented any red flags, Mr. Parrado identified the lack of the patient’s address; that is was written for oxycodone 30, ‘‘a known drug of abuse’’; that ‘‘it’s a very high quantity’’; that the patient lived ‘‘a rather good distance’’ from Tampa; that it came from the 24th Century clinic; and that ‘‘[t]he patient paid $784 in cash.’’ Id. at 70–71. As to the cost of the prescription, Mr. Parrado testified that: You don’t see people paying $784 in cash. You tell a person they have a $50 co-pay and E:\FR\FM\28JYN2.SGM 28JYN2 49824 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 they go ballistic on you. And for a person to willingly pay $784 and not have any documentation as to why they did that and to see that over and over every day is a concern to me. . . . That’s a red flag that I couldn’t resolve. Id. at 71. Mr. Parrado then explained that ‘‘there were multiple red flags on here’’ and that ‘‘[a]ny attempt to have . . . done anything with them to resolve them would have been documented on the prescription.’’ Id. at 71–72. However, Mr. Parrado ‘‘did not see any documentation on this prescription that led me to believe anything was done.’’ Id. Also on August 4, 2011, Dr. P.C. of the 24th Century Medical Center issued a prescription to T.P.—who has the same last name as J.P.—for 224 oxycodone 30 mg; Respondent filled the prescription the same day. GX 3, at 3. Here too, T.P.’s address was not written on the prescription; rather a label was attached which listed her address as also being in St. Augustine, Florida. Id.; R.D. at 6. Moreover, Respondent‘s dispensing software assigned the number 2037897 to J.P.’s prescription and the number 2037898 to T.P.’s prescription. GX 3, at 2–3. Asked if T.P.’s prescription presented any red flags, Mr. Parrado testified that ‘‘[h]ere we have two people with the same last name traveling from St. Augustine . . . to get very similar prescriptions.’’ Tr. 72. After noting the quantity of each prescription, Mr. Parrado testified that there were ‘‘the same red flags as before. No address, the known drug of abuse, the high quantity, traveling the long distances’’ and that T.P. ‘‘paid $896 in cash.’’ Id. According to Mr. Parrado, T.P.’s prescription ‘‘was the very next prescription entered’’ in the dispensing software after J.P.’s. Id. at 74. Also on August 4, 2011, Dr. P.C. issued a prescription for 240 oxycodone 30 to W.J.; Respondent filled the prescription the same day. GX 3, at 4– 5. Here too, W.J.’s address was not written on the prescription and had been added by a label which listed his address as being in San Antonio, Florida, a distance of 36 miles from Respondent. Id.; R.D. 6. Mr. Parrado testified that the prescription presented red flags which included the lack of the patient’s address; that the drug was for oxycodone 30, a known drug abuse; that the quantity was very high; that the patient was travelling from a town which is ‘‘40 miles from Tampa’’; that the patient paid $960; that the prescription was written by a doctor from the same clinic; and that the prescription number (2037895) VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 preceded the numbers on the prescriptions presented to J.P. and T.P. Tr. 75. Mr. Parrado explained that ‘‘[t]hese were all filled on the same day, so you have multiple prescriptions coming in from people travelling a long way, from the same clinic, for very similar drugs, and paying in cash, very large quantities of cash.’’ Id. at 75–76. Mr. Parrado then testified that there was no evidence on the prescription that the red flags were resolved. Id. at 76. On July 29, 2011, Dr. S.A.-H. issued a prescription for 140 oxycodone 30 to W.D.; Respondent filled the prescription the same day. GX 3, at 6–7. Here again, the prescriber had not written W.D.’s address on the prescription and his address was added by label which listed it as being in St. Cloud, Florida, a distance of 92 miles from Respondent. Id.; see also R.D. at 6. Mr. Parrado testified that the prescription presented ‘‘the exact same red flags as . . . the previous prescriptions,’’ and that there was no documentation that the red flags were resolved. Tr. 76–77. Mr. Parrado provided testimony to the effect that other prescriptions in GX 3 presented the same red flags as he had previously identified. These included two prescriptions written on July 29, 2011 by Dr. P.C. for 168 oxycodone 30 to C.D. and 224 oxycodone 30 to D.M., as well as two prescriptions written by Dr. S.A.-H. the same day for 168 oxycodone 30 to B.P. and 224 oxycodone 30 to C.C. GX 3, at 8–15. Respondent dispensed the prescriptions the same day. GX 3, at 8–15. As written, none of the prescriptions contained the patient’s address. See id. at 8, 10, 12, and 14. However, the prescriptions bear labels which show that C.D. and B.P. lived in Gainesville, 134 miles from Respondent; D.M. lived in Hudson, 36 miles from Respondent; and C.C. lived in Spring Hill, 42 miles from Respondent. See id.; see also R.D. at 6. Mr. Parrado testified that these prescriptions raised an additional red flag, in that he was ‘‘starting to see a pattern . . . coming from this one clinic of the same prescriptions’’ and that ‘‘[t]here is no individualization of therapy, which is important.’’ Tr. 80. He also testified that he did not see any evidence that the red flags were resolved. Id. at 82. On April 21, 2011, Dr. P.C. issued a prescription for 196 oxycodone 30 to C.B., which Respondent filled the same day. GX 3, at 16. Again, Dr. P.C. did not write C.B.’s address on the prescription. Id. According to the address label, C.B. lived in Big Pine Key, which is near Key West and a distance of 400 miles from Respondent. Id.; R.D. at 6. Mr. Parrado testified that he did not see any PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 evidence that the red flags were resolved. Id. at 82. Also on April 21, 2011, Dr. R.R. issued a prescription for 224 oxycodone 30 to S.S., which Respondent filled the same day. GX 3, at 17. Dr. R.R. did not write S.S.’s address on the prescription. See id. According to the address label, S.S. lived in Lakeland, a distance of 44 miles from Respondent. Id.; see also R.D. at 7. After testifying that the prescription raised the same red flags as the previous prescriptions, Mr. Parrado explained that there was documentation on the prescription that the pharmacist had dispensed two different brands. Tr. 82– 83; see also GX 3, at 17. However, Mr. Parrado did not see any evidence that the red flags were resolved. Id. at 83. Pages 18 through 25 of Government Exhibit 3 contain copies of eight prescriptions which were also written on April 21, 2011 by physicians from the 24th Century clinic for oxycodone 30 (in quantities that range from 140 to 240 tablets) and filled the same day. As with the previous prescriptions, none of the prescribers wrote the patient’s address on the prescription; instead, the prescriptions bear a label with the address. See GX 3, at 18–25. Asked whether these prescriptions presented any additional red flags, Mr. Parrado testified that: It’s just another day of doing the same thing. Yeah, could something like this happen once occasionally a person travels a long way and pays cash? Of course. Does it happen consistently day after day after day? No. That’s what would be a nonresolvable red flag. Tr. 84. The Government then asked Mr. Parrado if he knew where Hudson is in relation to Tampa.12 Tr. 85. Mr. Parrado answered that it is 30 to 40 miles on the way to New Port Richie (which was the town or residence of one of these patients). Id. The Government then asked why it would ‘‘be a red flag if it’s just 30 miles?’’ Id. Mr. Parrado explained: It’s not so much just the red flag, it’s the rapidity of people coming from other cities. You know, there’s a lot of physicians’ office, a lot of pharmacies between Hudson and Tampa. Why did they choose this pharmacy? That would have been the red flag I would have wanted resolved. Id. Mr. Parrado then testified that he did not see any documentation that the red 12 None of the patients whose prescriptions are reproduced at pages 18 through 25 resided in Hudson. See GX 3, at 18–25. Rather, the patients were from Tampa, Wildwood (79 miles), Dunedin (14 miles), Palm Harbor (14 miles), New Port Richey (25 miles), Port Richey (26 miles), Gainesville (134 miles) and Lutz (18 miles). R.D., at 6–7. E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices flags presented by the April 21, 2011 prescriptions had been resolved. Id. Next, the Government asked Mr. Parrado about the price of a prescription written by Dr. H.V.D. (also of 24th Century) on January 16, 2012 for 224 tablets of oxycodone 30, which Respondent filled the same day.13 Tr. 86. The price of the prescription was $1,232. Id.; see also GX 3, at 28. The Government then asked Mr. Parrado if he had ‘‘any independent knowledge of what oxycodone normally sold for at that time?’’ Tr. 86. Respondent objected to the question on the basis that there was no foundation as to Mr. Parrado’s knowledge. Id. While the ALJ sustained the objection she allowed the Government to establish a foundation. Id. at 87. The Government then asked Mr. Parrado if, in his ‘‘view as an experienced pharmacist,’’ the price was ‘‘a red flag.’’ Id. Mr. Parrado answered ‘‘yes,’’ and explained: It’s a very high price. I do know that about this time, in this timeframe, 2012, average wholesale price of oxycodone ran anywhere between $33 100 to maybe, depending on what wholesaler you went to, it could run as high as $150, $200 100. But that would still— this price would still be far exceeding anything that I would have ever, ever considered charging. mstockstill on DSK3G9T082PROD with NOTICES2 Id. at 87–88. Mr. Parrado subsequently testified that ‘‘I cannot say in my 40 plus years as a pharmacist I have ever sold a prescription for $1,232 cash. That’s just not something I’ve ever seen in my practice.’’ Id. at 89. Mr. Parrado then testified that he was practicing pharmacy ‘‘[i]n 2012.’’ Id. Asked to look at the prescriptions reproduced at pages 29 and 30, both of which were written by doctors with 24th Century, Mr. Parrado testified that they presented the same red flags.14 Id. Next, the Government asked Mr. Parrado about two Dilaudid (hydromorphone 15) prescriptions which were written by Dr. R.R. of 24th Century on October 10 and 13, 2011, which Respondent filled. GX 3, at 31–32. The 13 Here too, the patient’s address was added by a label and had not been written by the physician; the label shows that the patient lived in Floral City, Florida, 63 miles from Respondent. GX 3, at 28. 14 The first of these prescriptions was written by Dr. R.R. on January 18, 2012 for 224 oxycodone 30. GX 3, at 29. The patient’s address was added by a label and showed that he lived in Dunnellon, Florida, 88 miles from Respondent. Id.; see also R.D. at 7. The patient paid $1232 for the prescription. GX 3, at 29. The second prescription was written by Dr. P.C. on January 19, 2012 for 168 oxycodone 30. GX 3, at 30. The patient’s address was added by a label and showed he lived in Inglis, Florida, 80 miles from Respondent. Id.; see also R.D. at 7. The patient paid $966 for the prescription. GX 3, at 30. 15 Mr. Parrado testified that ‘‘[h]ydromorphone is the generic name of Dilaudid.’’ Tr. 92. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 first prescription authorized the dispensing of 240 tablets of Dilaudid 8 mg to D.K.; the second authorized the dispensing of 196 tablets of Dilaudid 8 mg. to G.C.16 See id. The labels for both prescriptions included the initials ‘‘KG,’’ thus indicating that they were dispensed by Kasey George, Respondent’s PIC. Asked whether these prescriptions presented any other red flags, Mr. Parrado testified: Yeah. For starters, the drug. Dilaudid 8 milligram, extremely, extremely potent opioid. From my education, experience, and training, the average daily dose of Dilaudid would be probably between 12 and 24 milligrams a day. It would be a dose that would be a high dose because mostly people don’t take Dilaudid 8 milligrams unless they’re in a terminal stage of cancer. . . . [T]hat’s just a drug that’s very rarely dispensed anymore because of the potency, especially in that quantity. And to see a patient come in and get 200 plus of these tablets would be a . . . concern. To see multiple prescriptions for 200 tablets would be almost a nonresolvable red flag to me. Tr. 90. Mr. Parrado further clarified that his opinion regarding the quantity applied to both prescriptions. Id. at 91. He then testified that he saw no evidence that the red flags had been resolved and added that the dose ‘‘is almost double the recommended upper daily dose.’’ Id. On January 19, 2012, Dr. R.R. of 24th Century issued a prescription for 120 oxycodone 30 to S.D. GX 3, at 33. According to the address label (Dr. R.R. again not having written the patient’s address on the prescription), S.D. lived in Panama City, Florida. GX 3, at 33. Mr. Parrado testified that Panama City is in the western panhandle of Florida, and the parties stipulated that it is 331 miles from Respondent. Tr. 92; R.D. at 7. Mr. Parrado again found no evidence that the red flags had been resolved. Tr. 93. Continuing, the Government questioned Mr. Parrado about prescription labels found at pages 34 and 35 of its Exhibit 3 which showed the prices Respondent was charging for oxycodone 30 in late April 2011 and in early December 2011. Specifically, the evidence showed that in late April 2011, Respondent was charging $3.75 for a tablet of oxycodone 30, but that in early December 2012, it was charging $7.50 a tablet. GX 3, at 34–35. Mr. Parrado explained that he determined the price per tablet because he knew ‘‘in that time frame that the wholesale costs had not 16 As before, Dr. R.R. did not write either patient’s address on the prescription. GX 3, at 31–32. Labels attached to the prescriptions show that D.K. lived in Clearwater, a distance of 19 miles from Respondent, and that G.C. lived in Largo, a distance of 21 miles from Respondent. See id.; R.D. 7. PO 00000 Frm 00011 Fmt 4701 Sfmt 4703 49825 doubled.’’ Tr. 96. Mr. Parrado then testified that the price Respondent charged raised a red flag. Id. at 96–97. However, after recognizing that ‘‘we don’t have the prescription,’’ the Government did not ask whether there was any evidence that the red flags had been resolved. Id. The last page of Government Exhibit 3 contains the front and back of a prescription (dated April 25, 2011) which was written by a doctor from Tampa who was not affiliated with 24th Century. GX 3, at 36. The prescription authorized the dispensing of 120 tablets of methadone 10 mg for pain to B.V. but did not list B.V.’s address. Id. Of note, the front of the prescription contains the notation: ‘‘verified by Dave’’ with the date and time. Id. The back of the prescription contains a photo copy of a state-issued identification card and the prescription label which list B.V.’s address as Riverside, Florida. Id. According to the stipulation, Riverside is 200 miles from Respondent. R.D. at 7. After noting that the prescription ‘‘had some documentation that somebody verified something,’’ Mr. Parrado testified to the effect that it was unclear what the pharmacist verified. Tr. 97; see also id. (‘‘What does this mean? What did they verify? Who is this somebody? Was that the prescriber? You know, what were they verifying?’’). Then asked what red flags were presented by the prescription, Mr. Parrado testified: Methadone . . . it is a drug that . . . it’s being abused on the street. There’s a lot of concern. I have a lot of concern about the use of . . . methadone because of the pharmacokinetics of the drug and the way it acts on patients. And . . . taking two tablets every 12 hours would probably be okay. I would want to verify with the doctor if the patient had developed a tolerance to this. I’ve seen people that have overdosed and died on methadone on the third dose of methadone because of the kinetics of that drug. Id. at 97–98. Subsequently, Mr. Parrado reiterated his testimony that he did not know what the pharmacist had verified with respect to the prescription and that he did not see any evidence that ‘‘red flag of distance’’ had been resolved. Id. at 102. Thereafter, the Government showed its Exhibit Number 13 to Mr. Parrado. This exhibit includes 20 prescriptions for schedule II narcotics including oxycodone 30, MS Contin 30 (morphine sulfate continuous release), and Dilaudid in both eight and four milligrams per dosage unit. See generally GX 13. Each of the prescriptions was issued by a physician with 24th Century between April 14 and 20, 2011, and on each of the E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49826 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices prescriptions, the patient’s address had not been written on the prescription but had been added by a label. Id. Also, each prescription presented the issue of the distance travelled by the patient, with the closest any patient resided being in Tarpon Springs, a distance of 18 miles to Respondent. See GX 13, at 23; R.D., at 7. The other patients lived in Brooksville (46 miles), Gainesville (134 miles), Newberry (145 miles), Ocala (100 miles), High Springs (158 miles), Spring Hill (42 miles), Sarasota (58 miles), Weeki Wachee (48 miles), Silver Springs (107 miles), Dunnellon (88 miles), and Lecanto (70 miles). See generally GX 13; R.D. at 6– 7. Asked by the Government whether the GX 13 prescriptions raised the same or additional red flags, Mr. Parrado answered: ‘‘[i]t’s all the same.’’ Tr. 105. After noting that one of the prescriptions was for a patient from Dunnellon, Mr. Parrado then testified that he did not see any indication that the red flags had been resolved. Id. at 105–06. Next, the Government asked Mr. Parrado about two prescriptions issued on January 8, 2013, by Dr. P.C. to B.W. and filled by Respondent the same day. Tr. 107–8; GX 14, at 1–5. The prescriptions were for 100 Dilaudid 8 mg and 60 methadone 10 mg. GX 14, at 1–4. While Dr. P.C. was not affiliated with 24th Century, he also failed to include B.W.’s address on the prescriptions; however, both prescriptions bear an address label which lists B.W.’s address as Tallevast, Florida, which is 54 miles from Respondent. Id., at 2, 4; R.D. 7. The evidence also showed that B.W. presented a Florida Identification Card. GX 14, at 5. Asked if these prescriptions presented any red flags, Mr. Parrado testified that the dosing instruction on the Dilaudid prescription called for taking one tablet every four hours, which would result in a daily dosage of 48 milligrams, ‘‘double the upper recommended dose.’’ Tr. 107. Mr. Parrado then noted that the prescriptions raised an additional and serious concern because both Dilaudid and methadone were being prescribed and both drugs ‘‘are immediate release opioids . . . which could contribute to respiratory depression.’’ Id. Mr. Parrado subsequently testified that B.W.’s address and presentation of an identification card raised additional issues that ‘‘a reasonable pharmacist [would] want to investigate.’’ Id. at 110. The record includes prescriptions for 75 Dilaudid 8 mg and 90 methadone 10 mg issued on January 21, 2013, by Dr. E.G.-R. (who was not affiliated with VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 24th Century) to T.F. of Brooksville; Respondent filled the prescriptions the same day. GX 14, at 7–8. While the back of each prescription includes a handwritten notation dated ‘‘1/21/13,’’ id. at 8, Mr. Parrado testified that he did not ‘‘know what that is’’ and the notation ‘‘doesn’t tell me anything.’’ Tr. 110. After testifying that the distance in miles between Brooksville and Tampa is ‘‘maybe 30, 40 miles,’’ Mr. Parrado testified that it is ‘‘not so much the distance’’ but that ‘‘it’s not an easy drive’’ as there are ‘‘a lot of stop lights and a lot of traffic to get’’ to the doctor’s clinic, which was located ‘‘several miles’’ from Respondent. Id. at 111. Mr. Parrado then explained that he would want to know why the patient had ‘‘come there,’’ that he ‘‘would have had concern’’ as to the methadone dose, and that he ‘‘would have wanted to verify’’ why the doctor had prescribed ‘‘two immediate release medications.’’ Id. However, Mr. Parrado did not see any evidence that the red flags were resolved. Id. Mr. Parrado testified that while a prescription (GX 14, at 11–12), which was written by Dr. S.A.-H. of 24th Century, was for ‘‘only 90 tablets’’ of oxycodone 30 mg, the patient’s address was in Middleburg, Florida, which is ‘‘a good ways from Tampa.’’ Tr. 111. According to the stipulation, Middleburg is 175 miles from Tampa. R.D. at 7. Mr. Parrado also testified that the price of the prescription, ‘‘$675 for just 90 tablets[,] seems like a very high price.’’ Tr. 112. Aside from the first four prescriptions in GX 14, each of the remaining 16 prescriptions was written by a doctor with the 24th Century clinic. See GX 14, at 11–42. Asked if the red flags of ‘‘the distance where the patient lived’’ and ‘‘the fact that they came from the same clinic’’ were ‘‘inherent in all’’ of the 16 prescriptions, Mr. Parrado answered ‘‘yes,’’ and that he did not ‘‘see any evidence of any kind of documentation’’ that the red flags were resolved. Tr. 112–13. While the back of each of the prescriptions issued by the 24th Century physicians also contains checkmarks or scribble, Mr. Parrado testified that ‘‘that just looks like they’re verifying the quantity and possibly the directions, but . . . not addressing the red flag.’’ Id. at 113. Mr. Parrado then explained that ‘‘[i]t’s common for pharmacists when they’re verifying a prescription . . . before a prescription can be dispensed, the pharmacist has to look at [it] to make sure the right drug is being dispensed, the right quantity, directions are correct on the label. That looks like PO 00000 Frm 00012 Fmt 4701 Sfmt 4703 that’s what was being checked off there.’’ Id. Government Exhibit 15 contains an additional 13 prescriptions. GX 15. The first two prescriptions were written by Dr. V.S. on January 28, 2013 to J.A. and were for 56 Adderall 30 mg and 84 Dilaudid 8 mg. Id. at 1, 3. While the prescriptions list Dr. V.S.’s affiliation as the MD Plus Clinic in Lakeland, Florida, id., Dr. V.S. was also listed as one of the prescribers affiliated with 24th Century. GX 3, at 33; GX 13, at 1. Id. On neither prescription did Dr. V.S. write J.A.’s address; according to the labels attached to the back of each prescription, J.A. resided in Winter Haven, which is 60 miles from Respondent. GX 15, at 2, 4; R.D., at 7. Mr. Parrado testified that Adderall is a stimulant and that the patient was ‘‘getting an upper and downer together.’’ Tr. 114. Asked if this was a red flag, Mr. Parrado testified that ‘‘I would have wanted to know why they were giving an upper and a downer together. Maybe the patient was having some kind of narcolepsy . . . from one drug to cause him to need a stimulant from the other side, but I would have expected to see some documentation on that.’’ Id. Mr. Parrado then testified that Winter Haven is ‘‘a very long way from Tampa,’’ although he erroneously stated that the distance was ‘‘a hundred plus miles.’’ Id. He then testified that he did not see any evidence that the red flags were resolved. Id. at 115. As for the rest of the prescriptions in GX 15, the patients lived in Citra (117 miles from Respondent), Brooksville (46 miles), Gainesville (134 miles), Tarpon Springs (18 miles), Ocala (100 miles), Nokomis (79 miles), and Newberry (145 miles). GX 15, at 6, 8, 10, 12, 14, 16, 18, 20, 22, 24, and 26. Mr. Parrado testified that the distances travelled by the patients raised red flags and that he did not see any evidence on the prescriptions that there was any attempt to resolve the red flags. Tr. 116. Asked by the Government whether Respondent’s pharmacists ‘‘exercise[d] the appropriate standard of care in the State of Florida,’’ id. at 119–20, Mr. Parrado testified: No. In my opinion, there are multiple things that a pharmacist has to do before he dispenses a prescription. He has to establish the appropriateness of the therapy. He has to discuss the . . . excessive and inappropriate quantities. He has to assess the therapeutic duplication of the two immediate release medications, all of which are in the laws and rules of the practice of pharmacy. * * * There are probably four or five other notations in the Florida law that things the pharmacist would have had to have done to verify the prescription and make sure it was E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 appropriate and everything was correct before he dispensed it, and I didn’t see where any of that was done. Therefore, I didn’t think he reached the standard of care. Id. at 120. After a series of objections to the Government’s questions were sustained by the ALJ, Mr. Parrado subsequently testified that he ‘‘would not have dispensed these [prescriptions] without having resolved any of the red flags.’’ Id. On cross-examination, Mr. Parrado acknowledged that every red flag he had ‘‘talked about . . . could potentially be resolved.’’ Id. at 127. He further acknowledged that there are millions of people who do not have insurance and must pay for their prescriptions with cash. Id. at 131. However, when asked whether he had ever filled a controlled substance prescription for someone who did not have ‘‘insurance to cover their [sic] prescription,’’ Mr. Parrado answered that he was not going to give ‘‘a yes or no answer because . . . a person who . . . can’t afford insurance . . . is not going to pay 1,200 or 1,300 dollars for a prescription.’’ Id. at 132. Mr. Parrado further testified that whether the prescription was paid for with cash, credit card, or check, it’s ‘‘all the same to me.’’ Id. at 133. After Mr. Parrado reiterated his earlier testimony that he ‘‘didn’t see where anything [as to the resolution of red flags] was documented,’’ Respondent’s counsel asked if it is ‘‘true that Florida does not require a pharmacist to document the resolution of red flags on the face of the prescription?’’ Id. at 134. Mr. Parrado answered: ‘‘I would never document it on the face, I’d write it on the back.’’ Id. at 135. Mr. Parrado then acknowledged that ‘‘there’s no regulation that says you have to, but that’s just the standard of practice and has been for decades.’’ Id. When then asked whether a pharmacist could document the resolution of a red flag ‘‘somewhere other than the back of the prescriptions,’’ Mr. Parrado replied: ‘‘I’ve never seen it documented anywhere other than that.’’ Id. However, Mr. Parrado subsequently acknowledged that resolution of a red flag could be documented other than on the back of a prescription. Id. at 136. And he later agreed with Respondent’s counsel that if a patient had been a regular and long standing patient of the pharmacy, it would not be ‘‘necessary to do the full-blown documentation that you would do on the first prescription once you’ve resolved the red flag.’’ Id. at 177. However, he maintained that some notation should still be made on the prescription so that if the prescription was questioned by a regulatory agency, there would be some VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 evidence to defend the dispensing decision. Id.; see also id. at 190. Mr. Parrado also acknowledged that ‘‘some pharmacists document [the] resolution of red flags so that it is . . . available to help their colleagues who [are] filling in for them.’’ Id. at 191. Mr. Parrado rejected, however, the suggestion of Respondent’s counsel that documentation need not be placed on the prescription because ‘‘there’s no way for the floater pharmacist . . . who takes over to actually go through [the prescription file] and know where those [notes] are because they’re all written on the back of prescriptions.’’ Id. at 192. As Mr. Parrado explained, the pharmacist would see the prescription number when he looked up the patient’s profile on the computer, and ‘‘it would be very easy to go pull that prescription out of the file.’’ Id. Then asked how a pharmacist would know which prescription to pull if the patient had been filling the prescription every month for ten years, Mr. Parrado testified: ‘‘That’s why you would have documented this as a regular patient. You would have done something on that scrip[t].’’ Id. at 192. However, he then acknowledged that notes generally can be made in the pharmacy’s dispensing software. Id. at 193. Mr. Parrado acknowledged that a patient who has been on opiates for a significant time and who has developed tolerance may need to exceed the manufacturer’s daily recommended dosage. Id. at 137. He acknowledged that the dosing depends on ‘‘the specifics’’ of the patient’s condition. Id. He also agreed that having a patient on a narcotic contract so that the patient only obtains narcotics from a single clinic could be helpful in resolving red flags. Id. at 137–38. He further agreed that if the narcotic contract ‘‘called for routine urine screens to ensure that the patient was actually taking the drug,’’ that would ‘‘be helpful’’ in ‘‘prevent[ing] diversion.’’ Id. at 138. Asked if he had reviewed PMP data to determine the drug history of any of the patient, Mr. Parrado said that he had not and that the law did not allow him to. Id. While he testified that he looked at thousands of prescriptions from Respondent which covered more than two years, DEA did not give him noncontrolled prescriptions and he looked only at the schedule II prescriptions. Id. Given this, Respondent’s counsel later asked Mr. Parrado if he had ‘‘no way of knowing what . . . adjunct drug therapies . . . any of these patients were taking?’’ Id. at 160. Mr. Parrado answered: PO 00000 Frm 00013 Fmt 4701 Sfmt 4703 49827 Well, only because of what I saw in the Respondent’s exhibits where there were some partial medical records that did have all the drugs the patient was taking on a very few cases, and on those it was the same on every one of them, the same group, same combination. Id. Mr. Parrado acknowledged that Florida law (Fla. Stat. § 893.04(2)(a)) states that a pharmacist may dispense a controlled substance in the exercise of his professional judgment when the pharmacist or pharmacist’s agent has obtained satisfactory patient information from the patient or the patients’ agent. Tr. 139. After Respondent’s counsel pointed that this provision does not require that the pharmacist alone talk to the physician alone and allows a pharmacist to talk to the patient or the patient’s agent, Mr. Parrado testified that ‘‘it says in [Fla. Admin. Code r.] 64B16–27.831 that when you have a concern you shall contact the prescriber.’’ Id. at 139–40. Turning to J.A., the patient who had received prescriptions for Adderall and Dilaudid, Mr. Parrado conceded that while opiates ‘‘have a respiratory depressant effect,’’ they are not categorized as depressants under the Controlled Substances Act. Id. at 141– 42. He also acknowledged that when a drug has a shortage and its wholesale price rises, the retail price would also rise. Id. When then asked whether it is standard practice to input the average wholesale price of a drug into a pharmacy’s dispensing software and that the software has algorithms that actually generate the retail price, Mr. Parrado explained that ‘‘[t]here are different ways to fix that algorithm’’ and that he had sometimes overridden the price set by the software. Id. at 143. While Mr. Parrado acknowledged that, in 2008 and 2009, two major oxycodone manufacturers had recalled their products resulting in shortages and that wholesalers would take advantage of this and charge higher prices, he disagreed with the suggestion that ‘‘those shortages continued and had ripple effects throughout Florida well into 2010 and 2011.’’ Id. at 144. Rather, he testified that the shortages did not have ‘‘that much’’ of an effect and ‘‘[o]nce it became available again the prices were not that far skewed’’ 17 Id. While Mr. Parrado acknowledged that he did not go to the pharmacy closest to his home because he knows the pharmacist at the pharmacy he goes to, he explained that ‘‘[m]ost people go to 17 By contrast, Mr. George testified that from 2010 through 2012, the wholesale ‘‘price sometimes went three times to 10 times more.’’ Tr. 538–39. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49828 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices a pharmacy for . . . some sort of a convenience, or a reason, and he [the patient] had to have a reason to go to that pharmacy. That’s what I would want to know. That’s what I would want to document.’’ Id. at 146. Asked if he documented on the back of every controlled substance prescription the reason a patient had driven 10 or 15 miles on roads with stop lights to get to his pharmacy, Mr. Parrado answered: ‘‘No, of course not.’’ Id. at 148. However, he then adhered to his position that ‘‘[s]tandard practice is if you have the red flag to document it.’’ Id. As for whether it would be a red flag if the patient ‘‘lives 20 or 30 miles away and [has] seen a doctor who’s in close proximity to the pharmacy’’ and ‘‘[t]hat red flag then is resolved?’’; Mr. Parrado testified that ‘‘I’d still want to know the address. There’s going to be multiple red flags here.’’ Id. at 148–49. On a further question regarding ‘‘the red flag of someone driving 10 or 15 miles’’ and ‘‘[i]f the physician happens to be in close proximity to the pharmacy, that resolves the red flag, doesn’t it?’’; Mr. Parrado testified: ‘‘Not necessarily’’ and explained that: ‘‘[i]t’s not just one thing. It’s multiple things. That’s the combination of red flags.’’ Id. at 149. Mr. Parrado testified that the drugs themselves (hydromorphone and oxycodone 30) raised a red flag as they are known drugs of abuse. Id. at 149–50. While Mr. Parrado acknowledged that he had filled prescriptions for oxycodone 30, he could not ‘‘remember ever filling a prescription for hydromorphone.’’ Id. at 150. However, when asked what he would document on a prescription when he was practicing and was presented with a prescription for oxycodone 30 but there were no other red flags, Mr. Parrado testified: ‘‘[n]othing because it wasn’t a red flag.’’ Id. at 151; see also id. at 166. Asked the same question with respect to hydromorphone, Mr. Parrado answered: ‘‘Well, you know, there again, looking at the dose, I would have to look at the patient profile, see if the patient has developed a tolerance to that drug, and at that point the red flag—there’s nothing to write down because there isn’t a red flag.’’ Id.at 151. Later, on cross-examination, Mr. Parrado acknowledged that his review of the prescriptions did not include any information that would have allowed him to determine whether the patients had been on narcotics for a significant period and developed tolerance as he reviewed only what DEA gave him. Id. at 161–62. He also acknowledged that neither the prescription nor the prescription label ‘‘tells you anything VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 about the patient [sic] history.’’ Id. at 177. Turning to the red flag of pattern prescribing, Mr. Parrado acknowledged that if a physician prescribed different narcotics for different patients, sometimes wrote for extended release drugs and other times immediate release drugs, and varied the strength of the drugs, this would not be pattern prescribing. Tr. 153. Mr. Parrado then agreed that the same would hold true for the clinic itself. Id. And he subsequently acknowledged that pain management is a legitimate medical practice, which often times requires the prescribing of opioids in significant quantities as patients develop tolerance. Id. at 154. As for the red flag of therapeutic duplication, Mr. Parrado agreed that extended release drugs ‘‘were expensive’’ even though ‘‘[t]here were some generics available’’ during the time period at issue and that a patient who lacked insurance ‘‘would have difficulty paying for an extended release oxycodone product.’’ Id. at 155–56. Mr. Parrado then acknowledged that if a patient required oxycodone 30 for his ‘‘normal pain,’’ the physician would not be acting illegally if he prescribed a lower strength drug for the patient’s ‘‘breakthrough pain.’’ Id. at 156. Turning to the methadone prescription which Respondent filled for B.W. (GX 14, at 3) (on the same day it also filled a Dilaudid prescription for him), Mr. Parrado conceded that he did not have any evidence that B.W. had overdosed, abused the drug, or sold it on the street. Tr. 158–59. Mr. Parrado then acknowledged that he had no evidence that any of the prescriptions were abused or sold on the street. Id. at 159. Asked whether his concern about methadone-related overdoses was a general concern or a specific concern related to B.W., Mr. Parrado testified: That was a concern that I would have wanted to have seen a red flag resolved. Why is he on hydromorphone and methadone both, which are both immediate release . . . you know, you don’t use two immediate release opioids for breakthrough pain. You use a long acting as a base and then the immediate release for breakthrough. Id. Later, on cross examination, Mr. Parrado explained that the problem with using methadone for pain management ‘‘is that the pain relief you get . . . probably peaks at about three to four hours and tapers off rather quickly after that, but the respiratory depressant part . . . continues to grow even after the pain relief has gone down, so people are apt to take another pill,’’ thus increasing the respiratory depressant effect. Id. at 174. However, Mr. Parrado PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 acknowledged that methadone may be appropriate for certain patients. Id. Mr. Parrado then agreed with Respondent’s counsel that ‘‘it’s not common, but it’s not completely unheard of for individuals who may not have insurance or may have allergies or other reasons why certain long-acting drugs do not work’’ 18 Id. at 159–60. And he also agreed with Respondent’s counsel that because of genetic differences, some persons may metabolize certain opiates in a more effective manner than others. Id. Mr. Parrado further acknowledged that the DEA Pharmacist’s Manual does not use the term red flag and does not specifically tell pharmacists how to identify red flags. Id. at 163. However, he then testified that the ‘‘[M]anual gives you a lot of information that you have to use your professional judgment . . . . It’s not going to list line by line, but that’s why you have pharmacists exercising professional judgment.’’ Id. Mr. Parrado further testified that a pharmacist ‘‘should be able to defend that professional judgment.’’ Id. After acknowledging that neither the CSA nor DEA regulations use the term ‘‘red flags,’’ as well as that the CSA and DEA regulations do not ‘‘talk about distances from patients,’’ Mr. Parrado agreed that ‘‘there is no bright line that . . . if it’s beyond a certain distance, it’s always wrong.’’ Id. at 164. However, Mr. Parrado subsequently testified that if patient lived more than 40 miles from the doctor’s office, that would be ‘‘one of the red flags for diversion.’’ Id. at 208. As for whether family members seeing the same doctor ‘‘makes the doctor’s prescriptions for those family members invalid,’’ Mr. Parrado testified that ‘‘[i]t raises a question. It may not make it invalid.’’ Id. at 164. Mr. Parrado then explained that ‘‘I have to validate—I have to verify the validity of that script.’’ Id. at 165. While Mr. Parrado acknowledged that a pharmacist could ‘‘possibly’’ resolve the red flags created by the circumstances of two people in the same household ‘‘need[ing] the exact same drug and pay[ing] those large quantities of money,’’ he rejected the suggestion of Respondent’s counsel that this could legitimately occur where ‘‘family members . . . live together, didn’t have insurance’’ and had to ‘‘pay out of pocket.’’ Id. Mr. Parrado then testified: ‘‘You can buy a lot of insurance for $2,700’’ and that the costs 18 Mr. Parrado subsequently acknowledged that extended release opioids could be problematic for patients who have had bariatric surgery. Tr. 175. Also, on questioning by the ALJ, he testified that if a patient was allergic to a medication, ‘‘you wouldn’t be filling’’ that prescription. Id. at 213. E:\FR\FM\28JYN2.SGM 28JYN2 49829 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices of the prescriptions would be a red flag that he ‘‘could not have resolved.’’ Id. Mr. Parrado further acknowledged that in evaluating whether a pharmacist had complied with the standards of practice in dispensing a prescription, ‘‘it would be helpful’’ to know various information. Id. at 177. These include ‘‘what the pharmacist knew’’ about: (1) The patient, including his/her medical condition, history, diagnosis, cause of the pain and drug utilization; (2) the prescribing physician, including his/her specialty, board certifications, practice location, and reputation; and (3) the drug being prescribed . Id. at 178; see also id. at 202–03. Asked if he was aware that one of the physicians who issued the prescriptions he had testified about ‘‘is a noted anesthesiologist,’’ Mr. Parrado testified that ‘‘if it doesn’t say it on the prescriptions itself, I wouldn’t know it.’’ Id. at 183–84. Then asked by Respondent if he knew ‘‘that that particular noted anesthesiologist was a physician at a major regional hospital before being involved in the practice of pain management care,’’ Mr. Parrado answered: ‘‘[n]o, I would not have known that.’’ Id. at 184. Mr. Parrado also testified to the effect that the fact that the physicians (with the exception of one who had since died) who practiced at 24th Century have had their registrations renewed would not change his opinion. Id. at 186. Mr. Parrado further acknowledged that the issue of prescribers not placing the patient’s address on prescriptions has become ‘‘very common,’’ but that the pharmacist has to verify the patient’s address. Id. at 193. He also testified that in 2008, DEA sent a letter to pharmacists which stated that the pharmacist ‘‘could add in’’ the patient’s address. Id. at 194. Mr. Parrado then agreed that if the prescription was only missing the patient’s address, this does not raise ‘‘a concern about diversion.’’ Id. at 195. Subsequently, the Government identified several prescriptions where the patient’s address had not been placed on the front of the prescription. Id. at 206 (discussing GX 13, at 3, 5, 21, 27, and 29). However, in each instance, the patient’s address was on the dispensing label which was affixed to the back of the prescription.19 See id. at 4, 6, 22, 28, and 30. 19 Asked by Respondent’s counsel if ‘‘Florida law says there shall appear on the face of the prescription or written record thereof’’ and thus allows for the patient’s address to be placed on the back, Mr. Parrado testified: ‘‘[t]hat law was changed. At the time these prescriptions were written, that law did not say on the prescription record thereof. . . . It just said it had to be on the VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 While Mr. Parrado continued practicing through 2012, he could not remember the pharmacies he worked at having ever filled prescriptions written by a doctor at the 24th Century clinic. Id. at 195–96. While Mr. Parrado acknowledged filling prescriptions that came from the Kenaday Clinic (see GX 14, at 7–10), he testified that ‘‘[o]n the ones I filled, I called and checked them very carefully.’’ Tr. 196–97. Asked what he did to resolve the red flags, Mr. Parrado testified that there was an issue of dosing and whether ‘‘the patient had developed a tolerance for that dose,’’ and that he called the doctor.20 Id. Mr. Parrado added that he had spoken to the doctor twice, after which he ‘‘wouldn’t fill anymore.’’ Id. at 199. Asked whether there were other concerns besides the dosing with the prescriptions written by the Kenaday doctor, Mr. Parrado testified that another prescription presented a distance concern and he did not fill the prescription and gave it back to the patient. Id. Subsequently, Mr. Parrado then acknowledged that the prescription that presented the dosing issue may also have presented another issue, that being that the doctor had prescribed ‘‘a combination of hydrocodone, Xanax, [and] Soma.’’ Id.at 200. Mr. Parrado testified that after talking to the physician and believing that the prescriptions had a legitimate medical purpose, ‘‘after that I didn’t feel comfortable anymore and after speaking with the doctor a couple more times I decided I could not take his word for the validity and I wouldn’t fill them anymore.’’ Id. at 201. As Mr. Parrado further testified, ‘‘[o]nce I saw the pattern of prescribing coming from that clinic is when I stopped.’’ Id. at 202. Finally, Mr. Parrado acknowledged that a doctor can issue a prescription for a legitimate medical purpose and the patient may nonetheless misuse it or sell it on the street, but that this does not make the prescription invalid. Id. at 204. Nor does a patient’s misuse or selling of the drug to another make a pharmacist’s decision to dispense the prescription wrong unless the face of the prescription.’’ Tr. 209. According to the 2011 Florida statutes, Section 893.04(c) stated that ‘‘[t]here shall appear on the face of the prescription or written record thereof for the controlled substance . . . [t]he full name and address of the person for whom . . . the controlled substance is prescribed.’’ Fla Stat. Ann. § 893.04(c) (2011). Contrary to Mr. Parrado’s testimony, the statute had the same wording throughout the relevant time period. 20 At this point the Government objected that the question was ‘‘beyond the scope of direct examination.’’ Tr. 197. Respondent’s counsel replied that the question went to Mr. Parrado’s credibility, and the ALJ overruled the objection. Id. at 198. PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 pharmacist knew or should have known that the patient was going to misuse or sell the drug. Id. at 205. Respondent’s PIC’s Testimony As noted above, Respondent’s Expert Mr. Badawi did not address any of the prescriptions which the Government submitted into evidence. Kasey George, Respondent’s PIC, did offer testimony as to why some of the prescriptions were dispensed. Mr. George testified that he has been a pharmacist for 21 years, that he has 12 to 13 years of experience in retail pharmacy, and that he has been Respondent’s PIC for seven years. Tr. 445–46. Mr. George holds an active pharmacist’s license in Florida and holds inactive licenses in three other States. Id. at 446. He testified that he does not have either a criminal history or a disciplinary history on his pharmacy license. Id. at 445. He also testified that he had obtained his pharmacy degree from Temple University in 1994, that he had taken continuing education classes, and that he had attended a class on dispensing controlled substances in 2013 at which Mr. Parrado had spoken. Id. at 447–48. Mr. George testified that he is the only full-time pharmacist at Respondent, which is open six days a week, and that if he has a day off, he schedules a temporary pharmacist to work that day. Id. at 448. Respondent’s counsel then asked what controlled substance dispensing protocols were in place at Respondent from 2011 through February 2013, when the Administrative Inspection Warrant was served. Id. at 448–49. According to Mr. George, the protocol: involves many things, including first we have check [sic] that the doctor’s office is located within 20 miles from the pharmacy. Then we check the patient’s ID, Florida ID, and make sure that the patient has a Florida ID. The next step we do is we check the prescribing physician’s address and their phone number, and we check in the publicly listed Web site to see that it matches what’s printed on the prescription. Then we check that the doctor has a valid DEA license active and also an active NPI number. * * * * * . . . And we check the—call the doctor’s office and get the diagnosis for the condition treated. And also we ask for the diagnosis studies they have done and make sure that the studies are consistent with the medical condition that is being treated and also the prescription. . . . And we ask for all the records to be sent to the pharmacy, and we check that they have the narcotic contract with the patient. . . . And also we ask for the urine drug test result and those records. Then we are not done with that. And we have to check the patient’s ID, which is present with the DMV Web site to E:\FR\FM\28JYN2.SGM 28JYN2 49830 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices see that address is correct. Then . . . end of 2011, PDMP came. From that day onwards, we check for every new patient, and every time they come we have to check the PDMP to see any doctor shopping or any early filling and check also . . . the patient’s credibility because if their [sic] address is available there. And after that, all that pharmacist’s professional judgment also comes into that protocol. Id. at 449–51. Mr. George testified that he reviewed the prescriptions submitted by the Government and he acknowledged that he was the dispensing pharmacist on ‘‘the vast majority of’’ them. Id. at 451. He testified that he had used the above protocol in dispensing the prescriptions. Id. He then denied that he was required to fill prescriptions that originated at certain clinics or that were presented by certain patients. Id. Mr. George testified that he was ‘‘required to document every conversation with a patient or physician if the conversation was about concern related to’’ a controlled substance prescription. Id. at 451–52. Asked by Respondent’s counsel ‘‘where was that documented?’’; Mr. George testified: ‘‘[w]e have a two-page pharmacist’s due diligence checklist separately filed in a binder in an A to Z format according to patient’s last name, and all the documents pertaining to that patient’s prescription is [sic] attached to that in the file.’’ Id. at 452. Mr. George further testified that he had used the due diligence forms for the patients whose prescriptions were at issue in this case. Id. Mr. George then testified that when DEA executed the AIW, they did not ask him to provide the due diligence forms and did not take them. Id. Nor did they ask him to provide documentation showing that he had made inquiries and resolved red flags. Id. at 452–53. Asked by Respondent’s counsel where he would ‘‘document the resolution of questions about’’ a controlled substance prescription, Mr. George answered: mstockstill on DSK3G9T082PROD with NOTICES2 It used to be if it is one or two items you used to document on the face of the prescription. Since the information needed to prevent the abuse and misuse and diversion, a lot of documents [sic] involved, if I decided to go extra step to get all the available documents filed in a separate sheet and document a pharmacist’s checklist so I can do beyond the required, more than the required and go and fill in in vast places. Id. at 455–56. Noting his testimony that he had formerly documented the resolution of such questions on the back of the prescription, Respondent’s counsel asked Mr. George when he changed to using checklists and obtaining the records he described. Id. at 456. Mr. George testified that it was ‘‘[f]rom 2010 onwards.’’ Id. at 457. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Mr. George then explained that his protocol also included interviewing the patients to ‘‘ask them their conditions and why they’re being [sic] taken [sic] these prescriptions.’’ Id. Mr. George further asserted that ‘‘in that interview, I can find out what is the real need and also if they have any intention to abuse or misuse or any diversion involved in that scheme.’’ Id. at 458. Mr. George testified that ‘‘we verify . . . the credibility of the doctors through the paperwork and the documents.’’ Id. He further stated that ‘‘I visit the doctor’s office and the clinic occasionally and get to know the doctors,’’ and ‘‘I talk personally to the doctors and also make sure that they have a protocol in place, which I also make sure that that is inconsistent of our protocol.’’ Id. Continuing, Mr. George testified that ‘‘I make sure that all that paper which I mentioned, narcotic contract and opiate contract, all are in place.’’ Id. Mr. George acknowledged that he was familiar with the physicians who wrote the prescriptions at issue, and that most of them worked for 24th Century, which ‘‘is a pain management clinic.’’ Id. at 459. Asked by Respondent’s counsel what he knows about the specialties and certifications of 24th Century’s doctors, Mr. George answered: One doctor, he is no more. He’s [sic] passed away three or four years ago. He was the director of this clinic, and he was the chief anesthesiologist in [sic] Tampa General Hospital. He was a famous doctor, and his expertise was a big asset at clinic, and many patients liked him. Id. Subsequently, Mr. George testified that the name of this doctor was Cornelius Ruperto. Id. at 466. Notably, Dr. Ruperto did not write any of the prescriptions at issue in this matter. See generally GXs 3, 13, 14, and 15. Moreover, his name is not listed on any of the prescription forms. See generally GXs 3, 13, 14, and 15. This is for good reason, as according to Dr. Ruperto’s online obituary of which I take official notice,21 Dr. Ruperto died on December 8, 2008, more than two years before the earliest prescription in evidence. And of further note, Mr. George offered no testimony regarding the specialties or board certifications of the doctors who actually wrote the prescriptions at issue in this matter. Asked by Respondent’s counsel how he resolved the red flag of multiple patients presenting similar narcotic 21 See www.legacy.com/obituaries/tbo/ obituary.aspx?n=cornelio-aquinoruperto&pid=121231660. Respondent may dispute my finding by filing a properly supported motion no later than 15 calendar days from the date this Order is mailed. PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 prescriptions which were written by the same doctor, Mr. George acknowledged that ‘‘[i]f I see that a doctor is writing a certain medication and the same quantity and same way to every patient, then it is a red flag to me.’’ Id. at 467. Continuing, Mr. George explained: ‘‘[b]ut . . . when I see that doctor write the medications, but in different doses and different quantity . . . it’s different, and they write different medication along with it, and their treatment plan is different, then after my due diligence is being done, I feel comfortable filling that prescription.’’ Id. Mr. George subsequently testified that the 24th Century doctors prescribed oxycodone in both 15 and 30 mg dosages, methadone in 5 and 10 mg dosages, morphine in 30, 60 and 100 mg dosages, hydromorphone in 4 and 8 mg dosages, and sometimes Opana. Id. at 475–76. Next, Respondent’s counsel asked Mr. George about the oxycodone 30 prescriptions whose labels bear sequential RX Numbers and which were dispensed on August 4, 2011 to J.P. and T.P., who have the same last name and had travelled from Saint Augustine (196 miles). GX 3, at 2–3. Mr. George asserted that ‘‘I remember that case in detail’’ and that J.P. and T.P. were husband and wife and that T.P. had a bulged disc from a 1998 accident and ‘‘was our patient from 2009.’’ Tr. 468. He also asserted that J.P. had ‘‘a motor vehicle accident’’ and ‘‘had problems with his neck and . . . back.’’ Id. at 468–69. Mr. George did not explain when J.P.’s accident had occurred or how long he had been Respondent’s patient. See id. While Mr. George asserted that he filled the prescriptions, because ‘‘after doing all the due diligence and following the protocols, talking to the doctors, I was comfortable within my professional judgment to fill that prescription,’’ id., Respondent produced no evidence to corroborate his testimony, not even the two-page due diligence checklists. Of consequence, the ALJ did not find Mr. George’s testimony credible as to the actions he took to resolve the red flags presented by J.P.’s and T.P.’s prescriptions.22 R.D. 48. 22 Mr. George further testified that in 2012, ‘‘J.P. was filling the prescription in the pharmacy, and when I called the doctor’s office, I found that J.P. had an admission’’ to a hospital in St. Augustine. Id. at 469–70. According to Mr. George, the doctor then requested the records from the hospital in St. Augustine; the records showed that J.P. ‘‘was positive for his oxycodone and Valium he was on,’’ as well as cocaine. Id. at 470. According to Mr. George, J.P. was then discharged from the clinic for breaching his contract and he decided to stop filling prescriptions for him. Id. Mr. George did not explain, however, why J.P. had the prescription he was attempting to fill if he had been discharged from 24th Century. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices Mr. George also acknowledged that a prescription that exceeds the manufacturer’s recommended daily dosage presents a red flag. Tr. 470. Mr. George testified that the prescription ‘‘does not say the whole story’’ and when the patient’s dose is above the manufacturer’s recommended dose, the pharmacist ‘‘ha[s] to go and look at the patient’s profile and profile history to make sure why this patient is taking higher doses.’’ Id. at 471. Mr. George further testified that ‘‘everybody know [sic] that tolerance plays a big role in the doses prescribed’’ and that ‘‘there is no ceiling doses for opiates.’’ Id. Mr. George then testified that when a prescription is for a higher dose than the recommended dose, ‘‘the pharmacist’s duty is to call the physician and check with them . . . and go through [the] profile and see how long [the patient’s] been on that medication and . . . learn how much the tolerance is.’’ Id. Mr. George then maintained that when he filled prescriptions that exceeded the maximum recommended dosage, he did all of these steps ‘‘and I write my notes on my due diligence checklist why I did it.’’ Id. at 472. Addressing the prescriptions that were missing patient addresses, Mr. George testified that the former head of the Office of Diversion Control had published a memo which ‘‘says that if the pharmacist has to make any changes in C2 prescriptions, they have to follow state laws and guidelines.’’ Tr. 472. Mr. George then noted that Florida law ‘‘clearly says that [the address] shall be on the face of the prescription or the written record thereof,’’ and added that he would ‘‘verify the patient’s address though the DMV Web site[] [a]nd also check the PDMP’’ and use the prescription label to provide the address. Id. at 472–73. As for the instances in which patients presented prescriptions for two shortacting opiates, Mr. George testified that ‘‘there are many reasons’’ that ‘‘doctors write two prescriptions,’’ including that ‘‘the patient is allergic to certain medications,’’ ‘‘has intolerance for the drug,’’ may have had ‘‘gastric bypass surgery,’’ or be a ‘‘dialysis patient.’’ Id. at 474. However, Mr. George testified that ‘‘[n]ormally doctors write the longacting medication along with the shortacting.’’ Id. As for how he resolved the red flag, Mr. George testified that ‘‘you . . . study the situations [sic] and what is the condition of the patient through talking to the doctors and talking to the patients and checking their profiles [and] history.’’ Id. Asked by Respondent’s counsel if those are ‘‘actual examples of things that occurred where you got VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 information like that from patients who filled prescriptions,’’ Mr. George answered: ‘‘Yeah. We will get information. That’s the case.’’ Id. at 474–75. Mr. George did not, however, offer any testimony identifying the specific conditions of those patients who presented two prescriptions for short-acting narcotics which were filled by Respondent. Mr. George further testified that he obtained medical records from the 24th Century clinic. Id. at 477. Respondent’s counsel then asked Mr. George if he had ‘‘seen Respondent’s Exhibit 3 before today?’’ Id. at 479. Mr. George answered ‘‘yeah,’’ and added that ‘‘it is actually from one of the copies which I get from the clinic’’; he then testified that these records ‘‘were maintained at’’ Respondent and that the records were present when DEA executed the AIW. Id. Mr. George also testified that the Exhibit contained an accurate representation of the records Respondent maintained on three of its patients, K.D. (pages 1 through 17); S.D. (pages 18 through 33); and H.C., Jr. (pages 34 through 51). Tr. 480, 482. Notably, the records contained such items as driver’s license verifications, radiology reports, progress notes, and opioid contracts. See generally RX 3. On voir dire, the Government asked Mr. George how he received the records from the clinic. Tr. 490–91. Mr. George answered: ‘‘sometimes it is in a block of a—I send my technician to get it because patients are waiting in my—I go and ask them to get the copy and get it to me so I can verify it before filling it.’’ Id. at 491. Mr. George subsequently testified that Respondent’s Exhibit 3 was ‘‘a representative sample of the type of record [he] got for hundreds of patients [of his] pharmacy.’’ Id. at 498. Asked by Respondent’s counsel ‘‘what, if any information on pages 20 through 29 . . . was important to [him] at the time’’ he was deciding to fill controlled substance prescriptions for S.D., Mr. George testified that the records told him ‘‘what the diagnosis is, why this patient [is] being treated for the medication they [sic] are [sic] prescribed.’’ Id. at 480–81. He further asserted that he looked at the progress notes (RX 3, at 29) to ‘‘see any changes in there,’’ as well as page 30, which told him that ‘‘the patient has [an] opiate contract there.’’ Id. at 481. Mr. George then testified that he looked at these records as ‘‘an extra step to prevent the abuse and misuse of the controlled substances.’’ Id. Asked whether his training as a pharmacist gives him ‘‘the ability to understand certain things within the medical record as far as the diagnosis and the condition PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 49831 of the patient,’’ Mr. George testified that ‘‘[t]hrough experience, I learned to look through these forms and understand it [sic].’’ Id. Mr. George then testified that the records included indications of conditions that would cause pain. Id. at 481–82. Asked whether there was information on page 44 (a December 6, 2012 Visit Note for H.C., Jr.) that would allow a layperson and pharmacist ‘‘to determine what condition the patient was being treated for,’’ Mr. George answered ‘‘yes.’’ Id. at 482. Asked if ‘‘the information contained in these medical records [is] consistent with the patient having pain and needing a controlled substance prescription from a pharmacist’s perspective?’’, Mr. George again answered ‘‘yes.’’ Id. at 482–83. Next, Mr. George was asked about the prescription (GX 3, at 1) Respondent dispensed on July 28, 2011 to T.V., who lived in Pensacola—472 miles from Respondent—for 210 tablets of oxycodone 30. Tr. 493. Mr. George testified that she had been his patient ‘‘since 2009,’’ and that in deciding to fill her prescription, he had had done ‘‘all my due diligence, checked with the doctors, checked all the medical records [he] could’’ and ‘‘interviewed the patient.’’ Id. at 494. Mr. George further testified that ‘‘when this patient came in the counseling and when I was talking . . . [the] patient knew that distance is a very fact that pharmacist may not fill it.’’ Id. According to Mr. George, T.V. said she had gone ‘‘through four back surgeries’’ and had tried ‘‘interventional pain injections’’ which ‘‘failed.’’ Id. Mr. George then testified that T.V. ‘‘lifted her shirt and said, look at my back, and I looked that there were four scars’’ and T.V. ‘‘mentioned that there were rods and plates placed here.’’ Id. at 495. Mr. George thus maintained that ‘‘even though the distance was far, through my experience and the need of the patients [sic], it made me come to a conclusion that this patient, I will fill the prescriptions.’’ Id. While on cross-examination, Mr. George testified that another pharmacist had filled this specific prescription, id. at 578–79, he reiterated his earlier testimony that T.V. had ‘‘been coming from 2009 onwards.’’ Id. at 579. He then added that ‘‘I know this patient very well, and I have a very well written record on this patient.’’ Id. After again stating that he did not fill the prescription, Mr. George testified that ‘‘every pharmacist who worked in that Hills Pharmacy have [sic] that file. That’s the reason the due diligence paper is filed separately.’’ Id. at 579–80. Mr. George then testified that ‘‘[w]hen this patient comes again, that E:\FR\FM\28JYN2.SGM 28JYN2 49832 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices pharmacist has the opportunity to go and look at why this patient’s prescription was filled last month’’ and ask ‘‘[i]s there any reason, or should I reject this?’’ Id. at 580. Continuing, Mr. George testified: ‘‘[w]hen they [sic] see other pharmacist, especially my notes, saying that all the due diligence were [sic] done and all the red flags were resolved, that pharmacist will be comfortable looking at. And they will probably call the doctors, I don’t know [sic] he called or not. But that is his duty to call the doctor and verify.’’ Id. Mr. George again reiterated that this documentation was written down ‘‘[i]n my due diligence sheet’’ which is ‘‘in the pharmacy.’’ Id.; see also id. at 551 (Mr. George’s testimony that the due diligence forms are in a binder which is ‘‘[s]till in the pharmacy.’’). Subsequently, the ALJ asked Mr. George if he recalled why T.V. ‘‘travelled from Pensacola to Hills Pharmacy?’’ Id. at 588. After answering ‘‘yes,’’ Mr. George testified: This patient had multiple surgeries done in Tampa General Hospital and that time the doctor, the chief anesthesiologist was Dr. Cornelio Ruperto, and he become [sic] the director of the clinic where this prescription was written. So she used to come and see that doctor always. And while I was interviewing that patient she said she likes the doctor and she wanted to continue seeing that doctor. That’s why she was coming from that 450 miles. mstockstill on DSK3G9T082PROD with NOTICES2 Id. (emphasis added). Respondent’s counsel then asked Mr. George about the back side of two prescriptions for 180 oxycodone 30 (GX 3, at 35) which cost $1350 each and were written for H.C., Sr., and H.C., Jr.; the latter is the same person whose records are found at pages 34 through 51 of Respondent’s Exhibit 3. Tr. 495–96. Asked to explain what inquiry he made to learn about him and his condition, Mr. George testified: [W]hen I got this prescription, I did all my due diligence and followed my protocols. Then I looked—he has a bulging disc, and I filled this prescription. He is coming in my pharmacy from 2009 onwards. And when he came to pharmacy with all these conditions, he’d been filling for [sic] insurance—he had insurance coverage that time. Then that time he was paying $35, was the copay. So he’d been paying that from 2009 ‘till end . . . of 2010. Then he left the pharmacy. Then two years he did not come to the pharmacy. Then in 2012, he came back to the pharmacy with a prescription, and he did not have insurance, which Hills Pharmacy always ask when he was in where is your insurance, and he said he lost the insurance. He didn’t have any insurance coverage. Then he said that I need this medication, I’m on this medication. And he brought a profile also where he was. And I don’t VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 remember that it is a—and he showed me he was taking this medication. So he said he’s willing to pay whatever the cash price at that time. And I filled this prescription for cash. Id. at 496–97. Mr. George then testified that H.C., Jr.’s drug therapy had not changed from when he had insurance. Id. at 497. Mr. George did not, however, offer any testimony regarding his decision to also dispense oxycodone 30 to H.C., Sr. Mr. George subsequently testified that he had no knowledge that any of the patients who received the prescriptions at issue abused or diverted the drugs he dispensed to them. Id. at 498. Respondent’s counsel then asked him ‘‘how do you respond to the allegations . . . that you filled prescriptions that had red flags on them?’’ Id. at 498–99. Mr. George testified: From 2013 onwards, I modified my protocol and changed it to print out patients’ residence to less than 15 miles, and also in our protocol changes that we only fill the doses consistent with the manufacturer’s recommended doses, and also we will not fill for patient for the controlled substances who reside in the same addresses. So after making that [sic] changes, if it—today I will—that red flag will be considered in a different way and say that this is not according to my protocol, so I will not be comfortable. That doesn’t mean that what I did before that was not written for legitimate medical purpose, but at this point, because my protocol is more stringent and more strong, in my effort to prevent the misuse and abuse and diversion, I will check one more time. Id. at 499–500.23 Mr. George then testified that as of February 19, 2015 (three weeks before the hearing), Respondent ‘‘completely stopped’’ filling controlled substance prescriptions ‘‘issued from any pain management clinic.’’ Id. at 500. Asked why he had made this change, Mr. George testified that ‘‘I know we all have a part to do to prevent the abuse and misuse and diversion of the controlled substances. As a professional provider, and the Government—DEA is trying to prevent that. And as a professional provider, I also have a responsibility for that.’’ Id. at 500–01. He then added that part of the reason he had changed his policies was because ‘‘always there are bad apples everywhere’’ and ‘‘I know that I’m less 23 On cross-examination, however, Mr. George was asked if a patient’s address being 63 miles from Tampa presented a red flag. Tr. 570. Mr. George testified: Sixty-three miles, this time, yes, I will not fill that 63 miles, above 50 miles because my protocol has changed after the administrative warrant then to less than 50 miles. But at that time then when I filled it, it was a red flag, but I did my due diligence and followed the protocol, so that time it was okay in that I resolved that red flag. Id. at 570–71. PO 00000 Frm 00018 Fmt 4701 Sfmt 4703 than the perfect.’’ Id. at 501. Mr. George then testified that he had ‘‘never’’ filled a controlled substance prescription having ‘‘knowledge that it was not issued for a legitimate medical purpose.’’ Id. at 502. Next, Mr. George testified regarding a chart he had created which shows from January 1, 2011 through November 30, 2014, the total prescriptions dispensed by Respondent during each year (except for 2014), the total non-controlled and schedule II prescriptions dispensed, and the total schedule III through V prescriptions dispensed. RX 2, at 1. Notably, the chart does not provide any data for the schedule II prescriptions alone, and instead adds them to the non-controlled prescriptions. See id. The chart also purports to show the percentage of Respondent’s total dispensings comprised by schedule III through V drugs, the ‘‘percentage change from previous year’’ and the ‘‘percentage change from 2011.’’ Id. While five of the six entries in the latter two columns show percentage reductions, the chart does not state whether the percentage change is in the total schedule III through Vs dispensings or in the percentage of total dispensings comprised by schedule III through V drugs. Moreover, the 2014 figures do not include data for the month of December. Another chart shows data for Schedule II through V for the years 2011 through 2013 and for 2014 through November 30. RX 2, at 3. The chart reflects a decrease in the total number of controlled substance prescriptions dispensed and a decrease in the percentage of total dispensings comprised by schedule II through V dispensings. See id. Subsequently, Mr. George answered ‘‘yes’’ when asked by Respondent’s counsel: ‘‘[d]o you accept responsibility for the fact that you filled prescriptions for controlled substances that had red flags on them?’’ Tr. 507. However, when then asked if he had ‘‘ever knowingly ignored your duties as a pharmacist to exercise your professional judgment?’’, Mr. George answered: ‘‘No, I never did.’’ Id. at 507–08. Mr. George further testified that ‘‘even though I did my best, our best to control that and prevent the abuse and misuse, that is not perfect. It is always less than perfect. Human beings are not perfect. I accept that responsibility.’’ Id. at 539–40. On cross-examination, Mr. George acknowledged that a prescription which calls for the dispensing of ‘‘a high quantity’’ of a controlled substance presents a red flag as do ‘‘patients coming from long distance.’’ Id. at 552. However, he then maintained that he E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices had resolved all the red flags and had documented this on the due diligence checklists which were in the binder ‘‘in the pharmacy.’’ Id. He further testified that he would consult the medical records he obtained before dispensing controlled substances. Id. at 553. Asked by the Government if he ‘‘understand[s] medical records,’’ Mr. George testified: mstockstill on DSK3G9T082PROD with NOTICES2 I don’t understand it the way the doctors are trained to understand. By experience, I look whether this prescription was issued for a legitimate medical reason. This is not my duty as a pharmacist. I would do something above and beyond in order to support the effort to prevent abuse and misuse. It is not part of my duty to read the medical report. I am doing an extra step for myself and to serve the community. Id. at 554–55. The Government then asked Mr. George about Respondent’s dispensing of 240 oxycodone 30 tablets to K.D., on April 21, 2011, pursuant to a prescription issued by Dr. S.A.-H. of the 24th Century Clinic (GX 3, at 20); K.D. is one of the patients whose partial records were submitted into evidence. See RX 3, at 1–17. Asked whether he ‘‘consult[ed] the medical record that is accompanying this prescription before dispensing that prescription,’’ Mr. George answered: ‘‘I didn’t say that. I said my medical records are filed in the pharmacy, not with this prescription.’’ Tr. 557. Then asked whether he had dispensed the prescription, Mr. George testified that he did not dispense ‘‘[t]hat particular prescription’’ and that ‘‘another pharmacist’’ had filled the prescription. Id. When asked ‘‘who would that person be,’’ Mr. George testified that the copy was ‘‘very faint’’ and that could not see ‘‘the signature on that page, because the copy is faded.’’ Id. I find, however, that the prescription label is readable and bears Mr. George’s initials. The Government then asked Mr. George if he had dispensed the prescription found in the patient file for S.D., who resided in Panama City, Florida. Id. at 560. This prescription, which was written on January 19, 2012 by Dr. R.R. of 24th Century clinic, authorized the dispensing of 120 tablets of oxycodone 30. RX 3, at 33. Mr. George acknowledged that he had dispensed the prescription. Tr. 560. He also acknowledged that he had reviewed the partial medical file before dispensing the prescription. Id. at 560– 61. However, when then asked if he could ‘‘tell from this medical record what other controlled substances were dispensed on that particular day,’’ Mr. George testified: concern on that time. Where other places or where the patient got the medication, if I have the PDMP, that will support me on that cause. If I get the medical record, I have no way of saying and understanding where the patient had a different prescription unless I talk to the patient or doctors if he write any other prescriptions. I cannot guess where the prescription was filled for that patient. And . . . I have one more thing to add on that question. This, as I said, these documents I am looking at, looking [sic] all these documents, above and beyond what the duty required of me because to help. It is not my pharmacist job to read, that is doctor’s job. DEA give [sic] license to the doctors and they are well trained in writing these prescriptions, and they have the capacity to look at the patient’s record and they are the one who is writing this prescription. I call them—give me a second. I call them, verify them, why they did it, what is the treatment plan, and I look above and beyond what are required of pharmacist. I go all the papers and I make my professional judgment whether this patient can be—this prescription can be dispensed. Id. at 561–62. Asked whether he saw a treatment plan in S.D.’s medical record, Mr. George testified: In this, all records when you go through the records, there is a medical, the copy of the MRIs and the report from the radiologist and why they are treating it and the notes from the doctor’s office, and it say what medication they are writing there, and the doctors notes, the visitation notes there. Id. at 562. Then asked whether he looked at S.D.’s MRI, Mr. George testified: ‘‘I don’t look at MRI. I look at what is the diagnosis in that, whether patient, if it says that a patient has a bulging disc. A couple of the reasons why this medication being prescribed. That’s my scope there.’’ Tr. 563. Mr. George then testified that he did look at the MRI report before dispensing the prescription. Id. Mr. George then denied that he was familiar with the term drug cocktail. Id. at 563–64. Significantly, the note for S.D.’s January 19, 2012 visit lists multiple drugs that were prescribed by the doctor, including 120 oxycodone 30, MS Contin, Soma (carisoprodol), Xanax, and also included the note of ‘‘add Dilaudid 8 mg #120.’’ RX 3, at 29. S.D.’s patient file also includes a visit note dated June 13, 2012. RX 3, at 24– 27. This note states that ‘‘Pt. has not taken meds in 5 months’’ and lists S.D.’s current medications as including five drugs: (1) Carisoprodol 350 mg, one tablet twice daily; (2) Dilaudid 8 mg 24; (3) MS Contin CR 30 mg, one tablet daily; (4) oxycodone 30 mg, one tablet ‘‘every 4–6 hours’’; and (5) Xanax 1 mg., No. I look only for my prescription which is received in my hand. That is only my VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 PO 00000 24 No one tablet ‘‘twice daily.’’ Id. at 25. According to the visit note, a drug screen was conducted and S.D. tested negative for opiates. Id. at 26. Finally, the visit note lists the prescriptions issued by the physician at this visit; with the exception of Dilaudid, which was discontinued, the prescriptions for carisoprodol, MS Contin, oxycodone 30, and Xanax were re-issued with the previous dosing instructions. Id. at 27. However, none of the prescriptions issued to S.D. at this visit are in the record. Subsequently, the Government asked Mr. George if he had filled the prescription (GX 3, at 16) issued by Dr. P.C. (24th Century) to C.B. of Big Pine Key, which authorized the dispensing of 196 oxycodone 30. Tr. 568–69. Mr. George acknowledged that he had filled the prescription. Id. at 569. Asked if he knew where Big Pine Key is, Mr. George stated that he knew that it was in Florida. Id. Then asked if he knew how far it was from Respondent, Mr. George testified: ‘‘I don’t know. It is written in my due diligence list.’’ Id. When later asked if he recalled investigating why C.B. had travelled from Big Pine Key to get the prescription, Mr. George answered: On this particular patient I don’t remember, but I know that when it is more than this distance, definitely I did counsel the patient and record it in the due diligence sheet why they travel. In many cases, I don’t remember particularly this patient again. Many cases the reasons are their [sic] spouse are [sic] living in Tampa, they’re [sic] in job assignment, or their [sic] doctor is here and they like the doctor. So there are many reasons, but I don’t particularly remember. This is from 2011. Id. at 573.25 25 To similar effect, the Government asked Mr. George if he knew where Floral City is. Tr. 569. Mr. George answered: ‘‘Again, I don’t know where the city [sic] located in, but I know it is in Florida.’’ Id. After acknowledging that the distance from Floral City to Tampa (63 miles) was a red flag, Mr. George maintained that ‘‘I resolved the red flag looking at all the, doing the due diligence and checking with the doctors whether the patient need [sic] the medications and now all the treatment.’’ Id. at 571. And asked whether he ever determined why the patient had travelled 63 miles to get the prescription, Mr. George stated that ‘‘[o]n most of the patients when I talk to them and interview them and counsel them why they are traveling, and the reasons I get I will put in my due diligence sheet.’’ Id. Then asked by the Government ‘‘[s]o you don’t know the reason right now,’’ Mr. George answered: ‘‘right now, because if you said yesterday I would have looked at it.’’ Id. On re-direct, Respondent’s counsel, having noted the Government’s questions ‘‘about remembering specifics about certain patients,’’ asked Mr. George how many patients he had ‘‘dispensed controlled substances for in the last five years?’’ Id. at 586. Mr. George testified that ‘‘I cannot remember because daily three, four patients comes [sic], in five years, dosing instruction was listed. Frm 00019 Fmt 4701 Sfmt 4703 49833 Continued E:\FR\FM\28JYN2.SGM 28JYN2 49834 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 The Government’s Rebuttal Case Subsequently, the Government recalled Mr. Parrado to question him about Mr. George’s testimony with respect to the medical records in Respondent’s Exhibit 3. Tr. 598–99. Mr. Parrado testified that he had ‘‘never had medical records in any pharmacy I’ve ever worked in or managed.’’ Id. at 599. With respect to the medical record for S.D., which, as found above, showed that he had received prescriptions for oxycodone 30, MS Contin, carisoprodol and Xanax, even though he had not been on medications for five months and had tested negative for opiates, Mr. Parrado explained that ‘‘[t]here were some notations in his chart that caused me concern.’’ Id. at 601. Mr. Parrado specifically noted the notation that SD ‘‘had not taken his medication in five months’’ and that his drug screen was negative for opiates ‘‘but yet he was prescribed a lethal dose of oxycodone that day.’’ Id. Asked on cross-examination that ‘‘you know that there’s no ceiling on narcotics, don’t you,’’ Mr. Parrado answered: ‘‘[W]ell, but there is. On an ¨ opioid naıve patient there is.’’ Id. at 601–02. Asked ‘‘[d]o you know whether ¨ S.D. was opioid naıve,’’ Mr. Parrado testified: ‘‘[F]rom seeing the record, yes. He had not taken the medication in five months per his own dosing.’’ Id. at 602. Mr. Parrado then added that the S.D.’s visit note stated that he had tested negative for opioids. Id. Asked if he knew from Respondent’s Exhibit that ‘‘S.D. had been taking opioids for years? 26’’, Mr. Parrado answered: ‘‘[y]es, but he had not taken them in five months per his own.’’ Id. at 603. While how I calculate it, it’s not possible. And it is very hard to remember that. And I am a human being doing other business too, so I cannot remember everything, keep everything.’’ Id. at 586–87. While that may be, Respondent certainly knew what prescriptions were at issue well in advance of the hearing, and if it was true that Respondent was maintaining the due diligence checklists, Mr. George could have reviewed those checklists with respect to the patients who filled the prescriptions. 26 Notwithstanding the question, there is nothing in the 16 pages of S.D.’s records that establish that he had been taking opioids for years. To be sure, there is a 2009 MRI report; a document indicating that a driver license check was performed on June 24, 2010, and another document indicating that S.D. made visits on monthly basis from August 12, 2011 through January 19, 2012, before reappearing five months later on June 13, 2012. However, the only evidence as to the prescriptions he had received prior to the June 2012 visit is the January 19, 2012 Progress Note and the prescription of the same date. In any event, Mr. Badawi was ‘‘still present in the hearing room’’ when Mr. Parrado was called in rebuttal and the ALJ explained that ‘‘if there’s some expert conflict over this testimony, there’s an opportunity for counsel to explore that.’’ Tr. 597. Respondent did not call Mr. Badawi to challenge ¨ Mr. Parrado’s testimony that S.D. was opioid naıve at the time he presented the June 2012 prescription. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Mr. Parrado acknowledged that he had no personal knowledge that S.D. had not taken the drugs for five months, Mr. Parrado explained: ‘‘[W]hat I’m talking about, if I as a pharmacist was looking at that chart and seeing that, I could not have dispensed that. My professional judgment would have prevented me from dispensing that prescription.’’ Id. And after Respondent’s counsel asked whether he knew if the notation meant ‘‘that the patient didn’t get medication from the clinic for five months or whether . . . the patient was not seen at all anywhere for five months?’’, id. at 604, Mr. Parrado testified: The notations said, and if I’m going to be looking at a chart as a pharmacist to determine if there was something, if this dose is appropriate to begin with, the fact the patient said he had not taken the medication, I’m seeing in the medical record that the drug screen says opiate negative. That’s telling me ¨ I now have an opioid naıve patient. I have a concern. Id. at 605. On further questioning by Respondent’s counsel, Mr. Parrado reiterated that the patient’s statement that he had not taken medication in five months ‘‘was in that chart that I looked at.’’ Id. However, notwithstanding that Respondent obtained the visit note, which lists multiple controlled substance prescriptions that were issued to S.D. at his June 13, 2012 visit, the Government did not submit any prescriptions (and their labels) showing that Respondent actually dispensed any of the prescriptions listed in the visit note. Discussion Under the CSA, ‘‘[a] registration pursuant to section 823 of this title to manufacture, distribute, or dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render [its] registration under section 823 of this title inconsistent with the public interest as determined under such section.’’ 21 U.S.C. 824(a)(4). In the case of a retail pharmacy, which is deemed to be a practitioner, see id. § 802(21), Congress directed the Attorney General to consider the following factors in making the public interest determination: (1) The recommendation of the appropriate State licensing board or professional disciplinary authority. (2) The applicant’s experience in dispensing or conducting research with respect to controlled substances. (3) The applicant’s conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances. PO 00000 Frm 00020 Fmt 4701 Sfmt 4703 (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. ‘‘[T]hese factors are . . . considered in the disjunctive.’’ Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). It is well settled that I ‘‘may rely on any one or a combination of factors, and may give each factor the weight [I] deem[] appropriate in determining whether’’ to suspend or revoke an existing registration. Id.; see also MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011); Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005). Moreover, while I am required to consider each of the factors, I ‘‘need not make explicit findings as to each one.’’ MacKay, 664 F.3d at 816 (quoting Volkman, 567 F.3d at 222); see also Hoxie, 419 F.3d at 482.27 Under the Agency’s regulation, ‘‘[a]t any hearing for the revocation or suspension of a registration, the Administration shall have the burden of proving that the requirements for such revocation or suspension pursuant to . . . 21 U.S.C. [§ ]824(a) . . . are satisfied.’’ 21 CFR 1301.44(e). In this matter, while I have considered all of the factors, the Government’s evidence in support of its prima facie case is confined to factors two and four.28 I find 27 In short, this is not a contest in which score is kept; the Agency is not required to mechanically count up the factors and determine how many favor the Government and how many favor the registrant. Rather, it is an inquiry which focuses on protecting the public interest; what matters is the seriousness of the registrant’s or applicant’s misconduct. Jayam Krishna-Iyer, 74 FR 459,462 (2009). Accordingly, as the Tenth Circuit has recognized, findings under a single factor can support the revocation of a registration. MacKay, 664 F.3d at 821. Likewise, findings under a single factor can support the denial of an application. 28 As to factor one, there is no evidence that the Florida Department of Health has either made a recommendation to the Agency with respect to Respondent, or taken any disciplinary action against Respondent. See 21 U.S.C. 823(f)(1). However, even assuming that Respondent currently possesses authority to dispense controlled substances under Florida law and thus meets a prerequisite for maintaining its registration, this finding is not dispositive of the public interest inquiry. See Mortimer Levin, 57 FR 8680, 8681 (1992) (‘‘[T]he Controlled Substances Act requires that the Administrator . . . make an independent determination [from that made by state officials] as to whether the granting of controlled substance privileges would be in the public interest.’’). Accordingly, this factor is not dispositive either for, or against, the revocation of Respondent’s registration. Paul Weir Battershell, 76 FR 44359, 44366 (2011) (citing Edmund Chein, 72 FR 6580, 6590 (2007), pet. for rev. denied, Chein v. DEA, 533 F.3d 828 (D.C. Cir. 2008)). As to factor three, I acknowledge that there is no evidence that Respondent, its owner, its manager, or any of its pharmacists, has been convicted of an E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices that the record taken as a whole provides substantial evidence that Respondent’s pharmacists violated their corresponding responsibility when they dispensed many of the prescriptions at issue. I also find that the Government has established by substantial evidence that Respondent has failed to maintain accurate records, as well as other violations. Accordingly, I conclude that the Government has established that Respondent has committed numerous acts which render its continued ‘‘registration inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4). Because I further agree with the ALJ’s finding that Respondent has not accepted responsibility for its misconduct, I also agree with the ALJ that it has not rebutted the Government’s prima facie showing. Because I find that Respondent’s misconduct is egregious, I will order that Respondent’s registration be revoked and that any pending application be denied. Factors Two and Four—The Respondent’s Experience in Dispensing Controlled Substances and Compliance With Applicable Laws Related to Controlled Substances mstockstill on DSK3G9T082PROD with NOTICES2 The Dispensing Allegations ‘‘Except as authorized by’’ the CSA, it is ‘‘unlawful for any person [to] knowingly or intentionally . . . manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.’’ 21 U.S.C. 841(a)(1). Under the Act, a pharmacy’s registration authorizes it ‘‘to dispense,’’ id. § 823(f), which ‘‘means to deliver a controlled substance to an ultimate user . . . by, or pursuant to the lawful order of, a practitioner.’’ Id. § 802(10). The CSA’s implementing regulations set forth the standard for a lawful controlled substance prescription. 21 offense under either federal or Florida law ‘‘relating to the manufacture, distribution or dispensing of controlled substances.’’ 21 U.S.C. 823(f)(3). However, there are a number of reasons why even a person who has engaged in criminal misconduct may never have been convicted of an offense under this factor, let alone prosecuted for one. Dewey C. MacKay, 75 FR 49956, 49973 (2010), pet. for rev. denied, MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011). The Agency has therefore held that ‘‘the absence of such a conviction is of considerably less consequence in the public interest inquiry’’ and is therefore not dispositive. Id. While the Government did not allege in the Show Cause Order any misconduct with respect to factor five, following the hearing, the Government argued that Mr. George provided incredible testimony. Because I consider his testimony in evaluating the evidence as to the dispensing allegations, as well as whether Respondent has credibly accepted responsibility for its misconduct, I deem it unnecessary to separately address Mr. George’s testimony under factor five. VerDate Sep<11>2014 19:19 Jul 27, 2016 Jkt 238001 CFR 1306.04(a). Under the regulation, ‘‘[a] prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.’’ Id. Continuing, the regulation provides that: [T]he responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription. An order purporting to be a prescription issued not in the usual course of professional treatment . . . is not a prescription within the meaning and intent of section 309 of the Act (21 U.S.C. 829) and the person knowingly filling such a purported prescription . . . shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.29 Id. (emphasis added). As the Agency has made clear, to prove a violation of the corresponding responsibility, the Government must show that the pharmacist acted with the requisite degree of scienter. See JM Pharmacy Group, Inc., d/b/a Farmacia Nueva and Best Pharma Corp., 80 FR 28667, 28669 (2015). Thus, the Government can prove a violation by showing either that: (1) The pharmacist filled a prescription notwithstanding his/her actual knowledge that the prescription lacked a legitimate medical purpose; or (2) the pharmacist was willfully blind (or deliberately ignorant) to the fact that the prescription lacked a legitimate medical purpose. See id. at 28671–72. As to establishing that a pharmacist acted with ‘‘willful blindness, proof is required that: ‘(1) The defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.’ ’’ Id. at 28672 (quoting GlobalTech Appliances, Inc., v. SEB S.A., 563 U.S. 754, 769 (2011)). Here, the Government makes no claim that any of Respondents’ pharmacists dispensed the prescriptions having actual knowledge that the prescriptions lacked a legitimate medical purpose. Instead, relying primarily on Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195, 77 FR 62316, 62341 (2012), the Government argues that a pharmacist violates the corresponding the Supreme Court has explained, ‘‘the prescription requirement . . . ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse. As a corollary, the provision also bars doctors from peddling to patients who crave the drugs for those prohibited uses.’’ Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United States v. Moore, 423 U.S. 122, 135, 143 (1975)). PO 00000 29 As Frm 00021 Fmt 4701 Sfmt 4703 49835 responsibility rule when he/she dispenses a controlled substance prescription ‘‘in the face of a red flag (i.e.[,] a circumstance that does or should raise a reasonable suspicion as to the validity of a prescription) unless he . . . takes steps to resolve the red flag and ensure that the prescription is valid.’’ Gov. Post-Hrng. Br. 21. The Government argues that Respondent’s pharmacists violated this regulation by filling prescriptions for such drugs such oxycodone, hydromorphone, and MS Contin (morphine sulfate) which presented various ‘‘red flags’’ which were never resolved. Gov. Post-Hrng. Br. 22–24. It contends that its expert, Mr. Parrado, gave ‘‘unrefuted testimony’’ that ‘‘Respondent repeatedly distributed controlled substances pursuant to prescriptions that contained one or more unresolved red flags for diversion.’’ Id. at 22. And after listing six different circumstances which Mr. Parrado identified as presenting red flags, it argues that he ‘‘testified that no evidence could be found to show the red flags had been resolved prior to dispensing.’’ Id. As evidence that the red flags were not resolved, it relies on Mr. Parrado’s testimony that it is the standard of pharmacy practice that the resolution of a red flag is documented on the prescription itself and that none of the prescriptions entered into evidence contain any such documentation.30 Id. at 23. However, with the exception of a provision of Florida law which requires that a pharmacist document that he has checked a patient’s identification (or made a photocopy of the identification and attached it to the prescription), no provision of the CSA, DEA regulations, Florida law, or the Board of Pharmacy’s rules requires that a pharmacist document the resolution of a red flag or flags on the prescription itself. While it may be the custom of the pharmacy profession to document the resolution of a red flag or flags on the prescription, that does not make it improper to document the resolution someplace else. Recently, I rejected allegations that a registrant’s pharmacists had failed to resolve red flags when the only evidence the Government offered to prove that fact was the absence of 30 In fact, the record includes several prescriptions which contain notations on the back of the prescriptions suggesting a phone call was made to someone about the prescriptions. GX 14, at 7–10. These prescriptions were issued by a doctor at a clinic other than 24th Century. See id. at 7, 9. However, the Government did not ask Mr. George to explain the notations even though his initials are on the dispensing labels as the dispensing pharmacist. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49836 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices documentation on the prescriptions themselves. See Superior Pharmacy I and II, 81 FR 31310 (2016). In Superior, I noted that ‘‘while evidence of a custom certainly has probative value, it is not conclusive proof.’’ Id. at 31335 n. 55 (citing Sorrels v. NCL (Bahamas) Ltd., 796 F.3d 1275, 1282 (11th Cir. 2015) (‘‘[E]vidence of custom within a particular industry, group, or organization is admissible as bearing on the standard of care in determining negligence. Compliance or noncompliance with such custom, though not conclusive on the issue of negligence is one of the factors the trier of fact may consider in applying the standard of care.’’) (emphasis added) (quoting Muncie Aviation Corp. v. Party Doll Fleet, Inc., 519 F.2d 1178, 1180–81 (5th Cir. 1975))). See also II Wigmore, Evidence, § 379, at 403 (Tillers rev. ed. 1983) (explaining that with respect to evidence of custom or usage of trade, ‘‘the question is not whether the offered instances fully prove the custom alleged, but merely whether they are receivable as having probative value’’). Thus, while the absence of documentation on the prescriptions is clearly probative evidence that Respondent’s pharmacists failed to resolve the strong suspicion presented by many of the prescriptions—indeed, Mr. George testified that he previously documented the resolution of red flags on the prescriptions until 2010 when he started using the due diligence checklists, Tr. 455–57,—the absence of documentation on the prescriptions is not conclusive proof that Respondent’s pharmacists failed to do so. Moreover, while there is no requirement that a pharmacist document the resolution of a red flag on a prescription, a regulation of the Florida Board of Pharmacy (then in effect) specifically required that ‘‘[a] patient record system . . . be maintained by all pharmacies for patients to whom new or refill prescriptions are dispensed’’ and that the ‘‘system shall provide for the immediate retrieval of information necessary for the dispensing pharmacist to identify previously dispensed drugs at the time a new or refill prescription is presented for dispensing.’’ Fla. Admin. Code r. 64B–16–27.800. This rule also required that the pharmacy maintain ‘‘[a] list of all new and refill prescriptions obtained by the patient at the pharmacy . . . during the two years immediately preceding the most recent entry’’ and include the ‘‘prescription number, name and strength of the drug, VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 the quantity and date received, and the name of the prescriber.31’’ Id. The rule further required that the record include the ‘‘[p]harmacist[’s] comments relevant to the individual’s drug therapy, including any other information peculiar to the specific patient or drug.’’ Id. And the rule also required that the pharmacist make ‘‘a reasonable effort . . . to obtain from the patient . . . and record any known allergies, drug reactions, idiosyncrasies, and chronic conditions or disease states of the patient and the identity of any other drugs . . . being used by the patient which may relate to prospective drug review.’’ Id. Finally, the rule required that ‘‘[t]he pharmacist . . . record any related information indicated by a licensed health care practitioner.’’ Id. Of further note, the Board of Pharmacy’s rules require that a pharmacist ‘‘review the patient record and each new and refill prescription presented for dispensing in order to promote therapeutic appropriateness.’’ Fla Admin Code r. 64B16–27.810. This rule specifically requires that a pharmacist identify such issues as: ‘‘[o]ver-utilization,’’ ‘‘[t]herapeutic duplication,’’ ‘‘[d]rug-drug interactions,’’ ‘‘[i]ncorrect drug dosage,’’ and ‘‘[c]linical abuse/misuse.’’ Id. Notwithstanding that the Board’s rule specifically requires that a pharmacist document in the patient record his/her comments relevant to the patient’s drug therapy and ‘‘other information peculiar to the patient’’ or drug, as well as ‘‘any related information’’ provided by the patient’s physician, and thus, would seem to provide relevant evidence in assessing whether a pharmacist resolved the suspicion created by the prescriptions, the Government did not introduce any of the patient profiles. Nor did it provide any of the patient profiles to Mr. Parrado, Tr. 300, even though on cross-examination, he acknowledged that a pharmacist would generally need to see the patient profile to determine whether a patient had developed tolerance.32 Id. at 151. In Superior Pharmacy I and II, I found the Government’s evidence, which was limited to the prescriptions (which contained no documentation that the red flags were resolved) and its Expert’s testimony, insufficient to establish that 31 This rule remains in effect today; however, the rule now requires that the information be maintained for a period of four years preceding the most recent entry. 32 It is not that the patient profiles were unobtainable, as the evidence shows that Respondent’s computer was digitally imaged by the AIW team, Tr. 217, 301; and thus, the profiles could have been extracted. PO 00000 Frm 00022 Fmt 4701 Sfmt 4703 the pharmacists violated their corresponding responsibility. Here, however, there is additional evidence, which establishes by a preponderance of the evidence, that Respondent’s pharmacists acted knowingly or with willful blindness when they dispensed at least some of the prescriptions, which lacked a legitimate medical purpose. More specifically, both Mr. George’s testimony and the partial medical records support this finding with respect to some of the prescriptions. At the outset, the evidence shows that more than 90 percent of the schedule II prescriptions Respondent filled between January 3, 2011 and February 4, 2013 were written by doctors employed by Victor Obi, the brother of Respondent’s owner. GX 12, at 2. See also, e.g., United States v. Leal, 75 F.3d 219, 223 (6th Cir. 1996) (holding that where ‘‘more than 90% of the prescriptions’’ a pharmacist filled were written by one doctor was probative evidence that pharmacist knew of illegitimate prescribing practice). Mr. George clearly knew that the overwhelming majority of the schedule II prescriptions Respondent filled were issued by Mr. Obi’s employees. As found above, on July 28, 2011, Respondent dispensed 210 tablets of oxycodone 30 to T.V., who had travelled 472 miles from Pensacola to obtain a prescription from Dr. P.C., one of the doctors at 24th Century. GX 3, at 1. I find that the distance T.V. travelled to obtain the prescription, as well as the drug—a known drug of abuse—and dosing, were sufficient to establish a subjective belief on the part of the pharmacist who filled the prescription that there was a high probability that the prescription lacked a legitimate medical purpose.33 Indeed, Mr. George 33 Respondent argues that the Government cannot establish that a pharmacist has violated his corresponding responsibility unless it first establishes that the prescription lacked a legitimate medical purpose and that the issuing physician acted outside of the usual course of professional practice. Resp.’s Exceptions, at 9. It argues that ‘‘neither the fact of this corresponding responsibility nor the pharmacist’s performance of his corresponding responsibility affects whether the prescription was, in the first place, issued to the patient for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.’’ Id. And it further argues that ‘‘the test for the proper dispensing of a controlled substances remains at its foundation a medical question’’ and that ‘‘the Government provided not one scintilla of evidence to prove that the prescriptions at issue were issued for other than a legitimate medical purpose.’’ Id. at 9–10. Respondent is mistaken. While it is true that a pharmacist cannot violate his corresponding responsibility if a prescription was nonetheless issued for a legitimate medical purpose, Respondent ignores that the invalidity of a prescription can be proved by circumstantial evidence. See, e.g., United States v. Leal, 75 F.3d E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 acknowledged that the distance T.V. was travelling was a red flag. Tr. 494. Regarding T.V., Mr. George testified that she had been a patient since 2009, that she had shown him scars from back surgeries, and that ‘‘even though the distance was far,’’ his experience and ‘‘the need of the patients’’ [sic] led him to fill the prescription. Id. at 494–95. Mr. George further justified dispensing 219, 223 (6th Cir. 1996); United States v. Veal, 23 F.3d 985, 988 (6th Cir. 1994) (per curiam); United States v. Hayes, 595 F.2d 258, 261 (5th Cir. 1979). I find that to be the case here. For similar reason, I reject Respondent’s contention that the Government failed to meet its burden because Mr. Parrado is a pharmacist with ‘‘no medical training or experience that would have allowed him to evaluate the legitimacy of a physician’s prescribing.’’ Resp. Exceptions, at 20. In its Exceptions, Respondent also argues that ‘‘[i]n Holiday CVS, there was evidence that two prescribers lacked a valid DEA registration’’ and that ‘‘[t]here was also evidence that the red flags were irresolvable.’’ Exceptions, at 10. Respondent then argues that the decision’s ‘‘three-factor test is therefore founded upon evidence that prescriptions were, in fact, issued outside the usual course of professional practice (e.g., by a prescriber without a valid DEA registration)[,]’’ and that [h]aving established the threshold question, the three-factor test was applied to determine if all of the red flags that a reasonably prudent pharmacist would have identified were conclusively resolved prior to dispensing.’’ Id. Here too, Respondent is mistaken. To be sure, in Holiday CVS, the Agency relied in part on the prescriptions the two pharmacies filled that had been written by two physicians who were no longer registered (one had allowed his registration to expire, the other’s registration had been revoked). 77 FR at 62316. With respect to these prescriptions, the Agency did so because the evidence showed that the pharmacies subscribed to a database which compiles information as to physicians’ registration status, and thus, the pharmacists should have known that the physicians were no longer registered; the order also noted that in the case of the doctor whose registration had been revoked, that order was published in the Federal Register and yet one the pharmacies was still filling his prescriptions more than six months later. Id. These prescriptions were not merely suspicious, they were flat out illegal, and as such, there was nothing for the pharmacists to resolve, as under no circumstance could they be lawfully filled. See 21 CFR 1306.03(a). This, however, was only one part—and a small part—of the case, and the three-part test was discussed in the context of the pharmacies’ decisions to dispense prescriptions for oxycodone 30 and alprazolam 2, which were written by doctors in South Florida for patients, many of whom had travelled from out-of-state (e.g., Kentucky and Tennessee) to the pharmacies which were located in Sanford, Florida, 200 miles or more from the physicians. Id. at 62318. Of further note, in Holiday CVS, while the Government sponsored the testimony of an expert in pharmacy practice, it did not offer any testimony from a physician as to the medical propriety of the prescriptions. See generally id. at 62325–34 (recommended decision’s discussion of Government’ evidence). Here too, the Government relied on the circumstantial evidence that the prescriptions lacked a legitimate medical purpose. Accordingly, I reject Respondent’s contention that ‘‘the Government provided not one scintilla of evidence to prove that the prescriptions . . . were issued for other than a legitimate medical purpose.’’ Resp. Exceptions, at 10. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 T.V.’s prescriptions,34 explaining that she had multiple surgeries at Tampa General Hospital when Dr. Ruperto was its Chief Anesthesiologist, and that he had become the director of the 24th Century clinic. Id. at 588. Mr. George then explained T.V. ‘‘used to come and see that doctor always. And while I was interviewing that patient she said she likes the doctor and she wanted to continue seeing that doctor. That’s why she was coming from that 450 miles.’’ Id. (emphasis added). Dr. Ruperto did not, however, issue the July 28, 2011 prescription. Indeed, his name does not appear among the lists of physicians on any of the 24th Century prescriptions. And while Mr. George testified that T.V. saw Dr. Ruperto ‘‘always’’ because she liked the doctor and that she had been coming to Respondent ‘‘from 2009 onwards,’’ Dr. Ruperto had died in December 2008, before T.V. had even started patronizing Respondent. I thus find that Mr. George’s testimony as to why Respondent filled the prescription disingenuous. And I further conclude that Respondent’s pharmacist knowingly filled an unlawful prescription. On January 19, 2012, Respondent dispensed 120 tablets of oxycodone 30 to S.D., who had travelled 331 miles from Panama City to obtain the prescription from Dr. R.R. of the 24th Century Clinic. GX 3, at 33. In addition to the strong suspicion created by the distance S.D. had travelled, the partial medical records—which Mr. George testified he would obtain and review before dispensing—show that Dr. R.R. prescribed five different controlled substances to S.D. at this visit including oxycodone, MS Contin, Soma (carisoprodol), Xanax and Dilaudid, the latter being added at this visit. RX 3, at 29; see also id. at 27. Thus, S.D.’s partial medical record created additional strong grounds for Mr. George (whose initials are on the prescription label as the dispensing pharmacist) to subjectively believe that there was a high probability that the prescriptions lacked a legitimate medical purpose. First, the record showed that Dr. R.R. had prescribed a drug cocktail of CNS depressants of opiates (oxycodone), benzodiazepines, and carisoprodol, which as Mr. Parrado explained, is known as the Holy Trinity and to be highly abused on the street. Notably, Mr. Badawi offered no testimony refuting Mr. Parrado on this there is only one prescription for T.V. in the record, Mr. George’s testimony suggests that there were other prescriptions that Respondent had filled for her. PO 00000 34 While Frm 00023 Fmt 4701 Sfmt 4703 49837 issue. And while Mr. George denied being familiar with drug cocktails, Tr. 563–64, DEA had identified this combination of drugs in several final decisions as being highly abused prior to the events at issue here. See Paul Volkman, 73 FR 30630, 30637 (2008); see also East Main Street Pharmacy, 75 FR 66149, 66157–58 (2010). Mr. Parrado also testified that the maximum recommended dose of Dilaudid (hydromorphone) was 24 mg per day and that patients usually do not take the eight milligram dosage unless they have terminal cancer; he also testified that prescribing two short acting opiates is inappropriate therapy and raises a red flag. Id. at 57–58. As to Mr. Parrado’s testimony regarding the maximum recommended dosing of Dilaudid, Mr. Badawi offered no testimony in refutation and he also agreed that prescribing a quantity ‘‘larger than the manufacturer’s recommended dosage’’ creates a red flag. Id. at 402–03. Nor did Mr. Badawi offer any testimony refuting Mr. Parrado’s testimony that the eight milligram dose was not usually prescribed unless the patient had terminal cancer. See generally id. at 402–40. Of note, neither of the progress notes in S.D.’s partial medical file indicates that he had been diagnosed with cancer of any stage, let alone terminal. RX 3, at 28–29 (Jan. 19, 2012 visit); id. at 26 (June 13, 2012). Mr. Badawi also agreed with Mr. Parrado that the prescribing of two short-acting opiates together is a red flag that would require further investigation. Tr. 419. He then testified that a patient with kidney failure who undergoes dialysis could legitimately require two short-acting opiates. There is, however, no documentation on either progress note that S.D. had kidney failure. RX 3, at 25–29. And while Mr. Parrado acknowledged that prescribing an extended release drug would be problematic for a patient who had undergone bariatric surgery, S.D. was prescribed MS Contin, which is an extended-release drug.35 Of further note, Mr. George testified that he had reviewed S.D.’s partial file before dispensing the prescription. Tr. 560–61. However, Mr. George offered no testimony other than his generalized assertion that he always did his due diligence, which neither the ALJ nor I find credible, to explain how he resolved the suspicion created by S.D.’s prescriptions. Thus, given the sum total 35 While Mr. George asserted that a patient could have allergies and thus need to be prescribed two short-acting medications, here too, there is no evidence in either progress note that S.D. had such an allergy. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49838 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices of the information Mr. George had available to him when he dispensed oxycodone to S.D., I find that Mr. George was willfully blind to the fact that the prescription he dispensed lacked a legitimate medical purpose. Likewise, the partial medical record for H.C., Jr., shows that on December 6, 2012, he, too, received the cocktail known as the Holy Trinity from Dr. R.R. of the 24th Century Clinic. RX 3, at 47. More specifically, he received a prescription for 180 oxycodone 30 mg, along with prescriptions for 112 tablets of OxyContin 40 mg, 84 tablets of carisoprodol 350 mg, and 84 tablets of Xanax (alprazolam) 1 mg. Id. The evidence further showed that he paid $1350 just to fill the oxycodone 30 prescription. GX 3, at 35. Mr. George offered a lengthy explanation as to why he had filled H.C., Jr.’s, prescription. More specifically, Mr. George explained that H.C., Jr., had been a patient who previously had insurance, that for two years he did not come to the pharmacy, and that when he returned he had lost his insurance but said he needed the medication and brought Mr. George a profile showing he had been on the medication and was ‘‘willing to pay whatever the cash price at that time.’’ Tr. 496–97. While Mr. George asserted that when he got the oxycodone 30 prescription, he did his due diligence and followed his protocols and determined that H.C., Jr. had a bulging disc, id.at 496, he offered no testimony specifically explaining what steps he took to resolve the high degree of suspicion which arose from H.C., Jr.’s being prescribed this highly abused combination of drugs by Dr. R.R. or any other physician who had previously prescribed this combination of drugs to H.C., Jr. I thus find that Mr. George subjectively believed that there was a high probability that the prescription lacked a legitimate medical purpose and that he deliberately avoided learning of this fact. And Mr. George offered no testimony as to why he also filled an oxycodone 30 prescription of the same quantity for H.C., Sr. The evidence also shows that on the same day, J.P. and T.P. who, according to Mr. George, were husband and wife, travelled 196 miles from St. Augustine to 24th Century, where they obtained prescriptions for 196 and 224 tablets respectively of oxycodone 30. GX 3, at 2–3. The sequential prescription numbers also support the inference that J.P. and T.P. presented their prescriptions to Mr. George one after the VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 other, which he then filled.36 GX 3, at 2–3. Mr. George asserted that he remembered the case of J.P. and T.P. ‘‘in detail.’’ Tr. 468. He asserted that T.P. had a bulged disc from an accident in 1998 and ‘‘was our patient from 2009’’ and that J.P. had a ‘‘motor vehicle accident’’ and ‘‘had problems with his neck and . . . back’’; however, he offered no evidence as to when J.P.’s accident had occurred and how long he had been a patient. Id. Here, notwithstanding Mr. George’s statement that he remembered the case ‘‘in detail,’’ he offered no testimony as to why T.P. and J.P. needed to travel 196 miles each way to obtain medication for their purported conditions when there were likely a number of other clinics where they could have obtained treatment that are located far closer to St. Augustine then the 24th Century clinic. And while Mr. George asserted that he filled the prescriptions because he ‘‘was comfortable within [his] professional judgment’’ ‘‘after doing all the due diligence and following the protocols, talking to the doctors,’’ id.at 573, Respondent produced no evidence to corroborate his testimony, not even the two-page due diligence checklists for T.P. and J.P. Notably, the ALJ did not find Mr. George’s testimony credible,37 nor do I. Indeed, I conclude that the exact opposite of what Mr. George testified to is true. See, e.g., NLRB v. Walton Manufacturing Co., 369 U.S. 404, 408 (1962) (quoting Dyer v. McDougall, 201 F.2d 265, 269 (2d Cir. 1952) (‘‘the demeanor of a witness . . . ‘may satisfy the tribunal, not only that the witness’ testimony is not true, but that the truth is the opposite of his story; for the denial of one who has a motive to deny, may be uttered with such hesitation, discomfort, arrogance or defiance, as to give assurance that he is fabricating, and that, if he is, there is no alternative but to assume the truth of what he denies’ ’’)).38 I therefore conclude that 36 Both prescription labels include the initials ‘‘KG.’’ GX 3, at 2–3. 37 There are numerous examples that support the ALJ’s finding that Mr. George’s testimony was incredible. One such example is his story of how, in 2012, he discovered that J.P. had been discharged from 24th Century clinic after the clinic determined that J.P. had tested positive for cocaine during an admission to a hospital in St. Augustine. According to Mr. George, this occurred when J.P. attempted to fill a prescription. Mr. George did not explain why J.P. would even have a prescription if he had been discharged by the clinic. 38 I thus reject Respondent’s contention (Resp. Exceptions, at 11–13) that the ALJ improperly drew the adverse inference that Mr. George’s testimony was not credible when he testified that he ‘‘always’’ conducted his due diligence. Respondent also argues that the ALJ’s credibility finding is not PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 Mr. George either knew that the prescriptions T.P. and J.P. presented lacked a legitimate medical purpose or subjectively believed that there was a high probability that the oxycodone prescriptions he filled for T.P. and J.P. on August 4, 2011 lacked a legitimate medical purpose and that Mr. George deliberately avoided learning of this fact. On April 21, 2011, Mr. George dispensed a prescription for 196 oxycodone 30 to C.B., which was written by Dr. P.C. of the 24th Century clinic. Tr. 569; GX 3, at 16. C.B. lived in Big Pine Key, which is near Key West and a distance of 400 miles from Respondent. GX 3, at 16; R.D. at 6. Asked if he knew where Big Pine Key is, Mr. George answered that he knew it was in Florida. Asked if he recalled investigating why C.B. had travelled from Big Pine Key to Tampa to get the prescription, Mr. George asserted that he didn’t ‘‘remember particularly this patient again.’’ Tr. 569. He then offered a generalized explanation as to why patients had addresses indicating that they lived a considerable distance from Tampa, such as ‘‘their [sic] spouse are [sic] living in Tampa, they’re [sic] in job assignment, or their [sic] doctor is here and they like the doctor,’’ before acknowledging that ‘‘I don’t particularly remember’’ the patient. Id. Here again, he asserted that ‘‘definitely I did counsel the patient and record it in the due diligence sheet why they travel.’’ Id. at 573. However, Respondent failed to produce the due diligence sheets to corroborate Mr. George’s testimony. Here again, I conclude that the exact opposite of what Mr. George testified to is true—that he did not determine why C.B. had travelled from Big Pine Key to fill the prescription. Walton Manufacturing Co., 369 U.S. at 408 (quoting Dyer v. McDougall, 201 F.2d at 269). And I further conclude that Mr. George either knew that the prescription lacked a legitimate medical purpose or subjectively believed that there was a high probability that the prescription C.B. presented lacked a legitimate medical purpose and that he deliberately avoided learning of that fact. Mr. George did not otherwise address how he resolved the various red flags presented by any other specific supported by substantial evidence because ‘‘the record lacks any evidence that Mr. George failed to utilize a system for resolving the red flags presented by the prescriptions at issue’’ and that his testimony was unrefuted. See also id. at 38–39. Contrary to Respondent’s understanding, the ALJ, who observed Mr. George testify, could reasonably find that ‘‘the opposite of his story’’ is true based solely on her observation of him. Walton Manufacturing, 369 U.S. at 408 (quoting Dyer, 201 F.2d at 269). E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices prescription. As for the remaining prescriptions, he testified that he had used the protocol he described in dispensing the prescriptions, Tr. 451, that he resolved all of the red flags, and that he documented his resolution of all of the red flags on the due diligence checklists which were in the binder in the pharmacy. Id. at 552–53. The ALJ specifically found that Mr. George did not ‘‘credibly assert[ ] that he took this action for each of the prescriptions entered into this record.’’ R.D. 48. And she further found that he did not provide any other ‘‘evidence that he utilized this system in regards to the 85 prescriptions in this record that contain red flags.’’ Id. Relying on International Union (UAW) v. NLRB, 459 F.2d 1329, 1336 (D.C. Cir. 1972), the ALJ concluded that ‘‘an adverse inference’’ was warranted as ‘‘[e]ither the due diligence files do not exist, or the files present evidence that is adverse to the Respondent’s case.’’ R.D. 49. The ALJ thus concluded that ‘‘[t]he Government has . . . proved that the Respondent filled prescriptions that presented red flags, and the red flags were not otherwise resolved prior to the pharmacy dispensing such prescriptions. Respondent’s inaction in failing to resolve these red flags violates the pharmacy’s corresponding responsibility.’’ Id. (citing 21 CFR 1306.04(a); Holiday CVS, LLC, d/b/a CVS Pharmacy Nos. 219 and 5195, 77 FR 62316 (2012)). I agree with the ALJ that an adverse inference is warranted based on Respondent’s failure to produce the due diligence checklists and her assessment of Mr. George’s credibility on the issue of whether he resolved all of the red flags. I nonetheless do not adopt her conclusion that Respondent’s pharmacists violated their corresponding responsibility with respect to each of the 85 prescriptions in the record. In Superior, I noted that Holiday CVS defines the term ‘‘red flag’’ to mean ‘‘a circumstance that does or should raise a reasonable suspicion as to the validity of a prescription.’’ 81 FR at 31335. I further explained that ‘‘[a]ll red flags do not have the same hue’’ and that ‘‘proof that a pharmacist dispensed a controlled substance prescription without resolving a red flag which only created a ‘reasonable suspicion’ that the prescription lacked a legitimate medical purpose, is not enough to establish that a pharmacist acted with the requisite scienter’’ of willful blindness, and thus violated 21 CFR 1306.04(a). Id. at n.54; see also Global-Tech, 563 U.S. at 769. However, I also noted that even ‘‘where there are multiple red flags, none of VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 which alone would establish the requisite scienter, the combination of red flags may well create a subjective belief that there is a high probability that a prescription lacks a legitimate medical purpose.’’ 81 FR at 31335 n.54. As explained above, establishing the requisite scienter for a violation requires more than simply showing that a prescription presented a red flag. The ALJ, however, simply concluded that because each of the prescriptions presented a red flag or flags, without any assessment of the level of suspicion created by the red flag or flags, a violation was established because she found Mr. George not credible when he testified that he resolved all of the red flags. This approach is too untethered to the text of 21 CFR 1306.04(a) to support findings that Respondent’s pharmacists either acted knowingly or with willful blindness when they dispensed each of the prescriptions. To demonstrate, the record contains multiple prescriptions for MS Contin. The record is, however, devoid of any evidence as to why the quantities prescribed were suspicious, and certainly the prices paid for the prescriptions are not so outlandish as to support the conclusion that only a person who was abusing the drugs or selling them to others would be willing pay the amount charged by Respondent for the drug.39 Nor, despite its placement in Schedule II of the CSA, is there any evidence that MS Contin was known to be highly sought after by drug abusers. Thus, the only red flag presented are the distances travelled by the patients. Even then, however, a number of the persons filling the prescriptions lived in towns, such as Tarpon Springs and Spring Hill, which are within commuting range of Tampa. As to these prescriptions, it is unclear why the distance travelled by the patient was enough to establish that the pharmacist (whether Mr. George or others) subjectively believed that there was a high probability that the prescription lacked a legitimate medical purpose.40 This is so even when coupled with Mr. George’s knowledge that 90 percent of the prescriptions were being issued by Mr. Obi’s employees. The record does, however, establish that Respondent filled multiple 39 The most expensive prescription was for 84 tablets of MS Contin 100 mg and cost $218.40. GX 14, at 23–24. Yet other prescriptions cost as little as $25.20. GX 13, at 5–6. 40 It is acknowledged that some of the patients who filled the MS Contin prescriptions came from such places as Ocala, Gainesville and St. Augustine (196 miles). However, I deem it unnecessary to decide whether each of these prescriptions was unlawfully dispensed. PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 49839 prescriptions for Dilaudid (hydromorphone) which authorized the dispensing of high quantities and called for daily dosing well above the 12–24 milligrams average daily dose. Specifically, Mr. George dispensed 240 tablets of Dilaudid 8 mg to D.K., which would provide a daily dose of 64 mg, and 196 tablets of Dilaudid 8 mg to G.C., which would provide a daily dose of approximately 52 mg. As noted previously, Mr. Parrado provided unrefuted testimony that Dilaudid 8 mg is an ‘‘extremely, extremely potent opioid,’’ that the dose was ‘‘almost double the recommended upper daily dose’’ (it was actually more), and that the prescription provided ‘‘a high dose because mostly people don’t take Dilaudid 8 [mg] unless they’re in a terminal stage of cancer.’’ Tr. 90. Mr. Parrado then testified that ‘‘[t]o see multiple prescriptions for 200 tablets would be almost a nonresolvable red flag to me.’’ Id. I conclude that Mr. Parrado’s unrefuted testimony on this issue provides substantial evidence that Mr. George subjectively believed that there was a high probability that these prescriptions were not issued for a legitimate medical purpose. As for whether Mr. George resolved the high probability that the prescriptions were illegitimate raised by their dosing and quantity, Mr. George did not specifically address these two prescriptions. To be sure, Mr. George testified as a general matter that he resolved the suspicion presented when a prescription authorizes the dispensing of a controlled substance in quantities and dosing which exceed the maximum ¨ recommended dose in opioid naıve patients by looking at the patient profiles to see if the patient had developed tolerance. However, while looking at a patient profile to determine how large a quantity a patient had previously been prescribed might well resolve whether a patient has developed tolerance, it does not conclusively resolve the issue of whether a prescription was issued for a legitimate medical purpose. See T.J. McNichol, 77 FR 57133, 57148 (2012). Indeed, just as legitimate patients may, over time, require larger prescriptions to obtain the same level of analgesia, so too, addicted persons require larger doses to obtain the same high. Also, a patient who seeks prescription narcotics for the purpose of reselling them has an economic incentive to seek large quantities. Moreover, Mr. George testified that while he always documented how he resolved the suspicion presented by a prescription, and, consistent with Mr. Parrado’s testimony as to the standard of E:\FR\FM\28JYN2.SGM 28JYN2 49840 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 practice, that he had formerly done so on the prescriptions themselves, Mr. George then maintained that from 2010 onwards he started doing so on the due diligence checklists. Yet, even though Respondent knew what prescriptions were at issue, it failed to produce the due diligence checklists for the patients who received these prescriptions. And while Respondent chose to put Mr. George on the stand, Mr. George did not address how he resolved the suspicious circumstances presented by these two prescriptions.41 Thus, I find that Mr. George either knew that the Dilaudid prescriptions issued to D.K. and G.C. lacked a legitimate medical purpose or subjectively believed that there was a high probability that the prescriptions lacked a legitimate medical purpose. I further find that an adverse inference is warranted that Respondent did not conclusively resolve the high probability that the Dilaudid prescriptions issued to D.K. and G.C. lacked a legitimate medical purpose. I therefore conclude that substantial evidence supports a finding that Mr. George violated 21 CFR 1306.04(a) when he dispensed these two prescriptions.42 41 While I rejected similar allegations in Superior I and II because the evidence that the pharmacists had failed to resolve the suspicious circumstances was limited to the absence of such documentation on the prescriptions and faulted the Government for failing to produce the patient profiles, in that matter, neither party called any of the pharmacists who dispensed the prescriptions. I also note that after the Government rested, Respondent sought partial summary disposition on the dispensing allegations arguing that the Government did not ‘‘meet its burden of proof to show that the red flags were not resolved’’ and that all that ‘‘the Government has proven is that the resolution of the red flags was not present on the back of the prescriptions.’’ Tr. 336. The ALJ denied the motion, ruling that ‘‘Respondent has not provided any legal authority that supports [its] position that I can grant summary disposition of an issue in the course of this hearing,’’ and that she only had authority to recommend that I grant summary disposition. Id. at 340. Even if the ALJ committed error when she denied Respondent’s motion, Respondent had the option of not putting forward evidence on the dispensing allegations. Respondent nonetheless chose to present Mr. George’s testimony and submit the partial medical records. Cf. United States v. Sherod, 960 F.2d 1075, 1076 (1992) (‘‘It is the universal rule in the federal circuits that ‘a criminal defendant who, after denial of a motion for judgment of acquittal at the close of the government’s case-inchief, proceeds to the presentation of his own case, waives his objection to the denial.’ ’’) (quoting United States v. Foster, 783 F.2d 1082, 1085 (D.C. Cir. 1986) (en banc)). Thus, I am not required to ignore this evidence in adjudicating the dispensing allegations. 42 The record also contains a number other Dilaudid 8 mg prescriptions which were for quantities and dosages that exceeded the upper recommended dosage by nearly two fold or more. See GX 13, at 23 (168 du); 27 (240 du); and at 35 (196 du); GX 14, at 29 (168 du); 31(180 du); 33 (180 du); 35 (168 du); 37 (180 du); and 41 (180 du); GX VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Mr. Parrado also identified as suspicious two instances in which patients (B.W. and T.F.) presented prescriptions for both Dilaudid 8 and methadone 10 which were issued on the same day. Tr. 107–11. Mr. George filled B.W.’s prescriptions, which were for 100 Dilaudid 8 mg and 60 methadone 10 mg, notwithstanding that: (1) B.W. had travelled from Tallevast (54 miles from Respondent); (2) the dosing instruction for the Dilaudid was to take one tablet every four hours for pain, thus resulting in a daily doses of 48 mg, double the upper recommended dose; and (3) that Dilaudid and methadone ‘‘are immediate release opioids, both of which could contribute to respiratory depression, which could be a serious concern,’’; and (4) while methadone’s analgesic effect peaks at ‘‘three to four hours and tapers off rather quickly,’’ the respiratory depression effects continue to grow. Tr. 107, 174. Notably, even Mr. Badawi agreed that the simultaneous prescribing of two immediate release narcotics presents a red flag which requires further investigation. Id. at 418–19. And while the record includes evidence that there may be instances in which it is appropriate to prescribe two shortacting narcotics due to kidney failure (and perhaps an allergy), Mr. George offered no explanation as to how he resolved the high probability that the prescriptions lacked a legitimate medical purpose and decided to dispense the prescriptions.43 In addition to the oxycodone 30 prescriptions Respondent dispensed to T.V., J.P., T.P., H.C., Jr., and C.B., the record contains an additional 29 oxycodone prescriptions which provided for the dispensing of quantities and dosing in excess of the 80 mg daily limit. Notably, 25 of the 15, at 13 (180 du); 15 (168 du); 17 (180 du); 19 (168 du); 21 (168 du); 23 (168 du); and 25 (180 du). For the same reasons set forth in my discussion of the Dilaudid prescriptions filled by D.K. and G.C., I conclude that Respondent’s pharmacists violated their corresponding responsibility when they filled these prescriptions. As for the remaining Dilaudid prescriptions, with the exception of the prescriptions dispensed to B.W. and T.F., I decline to address whether Respondent’s pharmacists violated 21 CFR 1306.04(a) when they dispensed them. 43 With respect to the Dilaudid 8 mg and methadone 10 mg prescriptions which Mr. George filled for T.F., Mr. Parrado identified, inter alia, the simultaneous prescribing of these two-short acting medications together and the dosing of the methadone (2 tablets in the morning, one at bedtime) as raising concerns over the legitimacy of the prescriptions. Of note, on the back of each prescription, there are notations dated ‘‘1/21/13’’ (the same day the prescription was filled), as well what appears to be ‘‘ILKA,’’ and ‘‘Director— Operation.’’ Mr. George did not, however, explain the meaning of the notations. PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 prescriptions provided for the dispensing of 168 du or more, and 13 of the prescriptions provided for the dispensing of 224 du or more. See generally GX 3; GX 13. Moreover, most of the prescriptions for 168 du provided a dosing instruction of one tablet every four hours, for a total of 180 mg per day, and the prescriptions for 224 du typically provided a dosing instruction of one tablet every three to four hours, for up to 240 mg per day. See GX 3, at 8–9, 12–13, 19, 23, 30; GX 13, at 39 (prescriptions for 168 du); see also GX 3, at 3, 4–5,10–11, 14–15, 17, 20, 24, 26, 28, 29; GX 13, at 1–2, 3–4, 37–38 (prescriptions for 224 du or more).44 As Mr. Parrado testified, ‘‘[o]ne of the things that a pharmacist knows or should know is that oxycodone . . . 80 milligrams a day has been listed in the literature as a lethal dose for or an ¨ opioid naıve patient. So, when being presented with a prescription for a dose that would exceed 80 milligrams in one day, that pharmacist would need to stop and take a look and verify that the ¨ patient[ ] is not opioid naıve and has been on a regimen[ ] that has led him to develop a tolerance to that dose.’’ Tr. 57. Mr. Badawi did not refute Mr. Parrado’s testimony as to the maximum ¨ recommended dose for an opioid naıve patient and he agreed that when a prescription calls for the dispensing of a ‘‘very large or larger than normal amounts of a narcotic,’’ or an amount ‘‘larger than the manufacturer’s recommended dosage,’’ a pharmacist must make an inquiry. Id. at 402–03. While Mr. Badawi then testified that looking at the patient profile would show whether the patient has developed tolerance, as explained previously, even if the profile shows that the patient has previously received large doses, this does not conclusively resolve the issue of whether the prescription was issued for a legitimate medical purpose. Here, the Government produced numerous prescriptions which provided quantities and dosing instructions that were two to three times the 80 milligram level. Moreover, Mr. George acknowledged that a prescription that exceeds the manufacturer’s recommended daily dosage presents a red flag, and I conclude that when a narcotic prescription exceeds that dosage by the amounts present here, that red flag establishes that there was a high probability that the prescription lacks a legitimate medical purpose and that Mr. George subjectively believed as much. 44 There were also prescriptions for quantities ranging from 180 du to 210 du. See generally GX 3. E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices As for the issue of whether Mr. George conclusively resolved that the prescriptions were issued for a legitimate medical purpose, as previously explained, Mr. George offered only his generalized and not credible testimony that he always checked the patient profiles and did his due diligence and failed to specifically address how he resolved any of these other prescriptions. That, plus Respondent’s failure to produce the purported due diligence checklists to corroborate his testimony, support the adverse inference that he failed to do so. I therefore find that Respondent’s pharmacists violated 21 CFR 1306.04(a) when they dispensed numerous other oxycodone prescriptions.45 While I conclude that the quantities and dosing of these prescriptions alone support a finding that there was a high probability that the oxycodone prescriptions lacked a legitimate medical purpose, Mr. Parrado also identified another red flag—the high prices Respondent charged for the oxycodone prescriptions and the fact that patients were paying for them in cash or cash equivalents. Tr. 71–72, 75– 76, 87–89, 112, 132–33, 165. As the evidence shows, the price Respondent charged for a 180 du prescription ranged from $675 in April 2011 to $1350 in in December 2012, and many of the prescriptions costs $800 or more. GX 3, at 1, 3, 5,11,15,17, 20, 24, 26, 28, 29, 30, 34, 35. As Mr. Parrado explained with respect to a prescription for 196 du which, at that time, cost $784: You don’t see people paying $784 in cash. You tell a person they have a $50 co-pay and they go ballistic on you. And for a person to willingly pay $784 and not have any documentation as to why they did that and to see that over and over every day is a concern to me. . . . That’s a red flag I couldn’t resolve. mstockstill on DSK3G9T082PROD with NOTICES2 Tr. 71. And when asked on crossexamination if he had ever filled a prescription for someone who did not have insurance, Mr. Parrado answered that he was not going to give ‘‘a yes or no answer because . . . a person who . . . can’t afford insurance . . . is not going to pay 1,200 or 1,300 for a prescription.’’ Id. at 132. 45 I do not adopt a categorical rule as to the distance a patient must have travelled to render a controlled substance prescription suspicious. Distance is just one of the factors that a pharmacist must evaluate, and while a patient’s willingness to travel a long distance to obtain a prescription is highly suspicious, a patient who seeks drugs for other than legitimate medical purposes may live in the same city as the prescriber and/or pharmacy. Indeed, several of the patients who lived in Tampa presented prescriptions for such quantities of oxycodone 30 as 168 du, 180 du, 210 du, and 224 du. See GX 3, at 18, 19, 26, and 35. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Notably, Mr. Badawi offered no testimony refuting Mr. Parrado’s testimony that the cost of the prescriptions was also a red flag. Indeed, were these patients legitimate chronic pain patients, they would presumably require oxycodone on a monthly basis and would have spent $7,000 to $10,000 a year for this medication in 2011 (when Respondent’s prices were lowest) and thousands more the following year.46 This evidence further supports the conclusion that Respondent’s pharmacists either knew that the prescriptions lacked a legitimate medical purpose or subjectively believed that there was a high probability that the prescriptions were illegitimate and deliberately failed to investigate further. Against this evidence, Respondent points to the changes it made in its due diligence procedures after the AIW was served, the data it submitted showing that it has substantially decreased its dispensing of controlled substance prescriptions, and its decision—made three weeks before the hearing—to stop dispensing controlled substance prescriptions issued from pain management clinics. While Mr. George explained that he made these changes because ‘‘[a]s a professional provider,’’ he had ‘‘a part to do to prevent the abuse and misuse and diversion of . . . controlled substances,’’ even were I to accept his testimony as true, it does not outweigh the substantial evidence that he and Respondent’s other pharmacists 46 I do not adopt the Government’s contention that the prescriptions also presented the red flag of pattern prescribing. At most, the Government identified 10 prescriptions for oxycodone 30 that were written by physicians from 24th Century and filled by Respondent on the same day—April 21, 2011. GX 3, at 16–25. Notably, the prescriptions ranged in dosage from 140 to 240 tablets. See id. Moreover, another Government Exhibit refutes this contention as it includes twenty prescriptions written by doctors from the 24th Century clinic and filled by Respondent from April 14 through April 20, 2011. See generally GX 13. Notably, the exhibit includes four prescriptions for oxycodone 30, nine prescriptions for Dilaudid (some in the 4 mg tablet, others in the 8 mg), and 7 prescriptions for MS Contin (some in 30 mg tablet, others in 60 mg). See id. As the evidence shows, when the Government obtained Respondent’s records, it took only the schedule II prescriptions and provided only these prescriptions to Mr. Parrado. Notably, during the period of 2011 through early 2013, combination hydrocodone drugs, which are among the most highly prescribed drugs overall and are prescribed for pain, were in schedule III of the CSA, and any such prescriptions were not provided to Mr. Parrado. So too, Mr. Parrado was not provided with the prescriptions, if any, written by the 24th Century doctors for other drugs they may have prescribed for pain such as Tylenol with codeine (also in schedule III), pregabalin (Lyrica, schedule V), as well as non-controlled medications such as ibuprofen and naproxen. Thus, there is no basis to conclude that the 24th Century doctors were engaged in pattern prescribing. PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 49841 violated their corresponding responsibility and knowingly diverted controlled substances. 21 CFR 1306.04(a). Other Allegations The Government also alleged that Respondent violated various recordkeeping provisions of the CSA and DEA regulations. The allegations included that Respondent: (1) Had failed to complete a biennial inventory, (2) did not notate on its schedule II order forms the date and quantity it received of schedule II drugs, (3) failed to retain Copy 3 of its order forms, and (4) its records were not readily retrievable. The Government further points to the results of an audit it conducted which found multiple overages and a shortage of schedule II drugs. The Availability of Respondent’s Records The Government alleged that Respondent ‘‘failed to maintain records of [s]chedule II prescriptions, inventory records, and receiving records . . . in a readily retrievable form at its registered location in violation of 21 CFR 1304.04(a) and (h)(2).’’ ALJ Ex. 1, at 4 As found above, a DI testified that Respondent was not able to provide all of the records when the AIW was executed, specifically the prescriptions from February 4, 2011 through April 2011, the inventories from February 4, 2011 through the end of 2011, and the receiving records from February 4, 2011 through the end of 2011. Tr. 252. According to the DI, he personally witnessed an attorney for Respondent state that the records were offsite and that the office manager had the key but was not available that day. Id. at 253. Reasoning that the attorney’s statement was hearsay, the ALJ specifically found credible Mr. George’s testimony that the records were locked in a storage room at the back of the pharmacy but that he did not have the key to the room on the date that the AIW was executed. R.D. at 45 n.30. While Mr. George testified that Respondent’s owner showed up with the key within a couple of hours but after the Investigators had left, the Government put forward no evidence as to how long the Investigators were on the premises. Under generally applicable regulations, except as otherwise provided, ‘‘every inventory and other records required to be kept under [21 CFR 1304] must be kept by the registrant and be available, for at least 2 years from the date of such inventory or records, for inspection and copying by E:\FR\FM\28JYN2.SGM 28JYN2 49842 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 authorized employees of the Administration.’’ 21 CFR 1304.04(a). Under the regulation applicable to a pharmacy, ‘‘[i]nventories and records of all controlled substances in Schedule . . . II shall be maintained separately from all other records of the pharmacy.’’ 21 CFR 1304.04(h)(1). As to the schedule II order forms, ‘‘[t]he purchaser must retain Copy 3 of each executed DEA Form 222’’ and the forms ‘‘must be maintained separately from all other records of the registrant’’ and ‘‘be kept available for inspection for a period of two years’’ at the registered location. Id. § 1305.17(a) & (c). Moreover, ‘‘[p]aper prescriptions for Schedule II controlled substances shall be maintained at the registered location in a separate prescription file.’’ 21 CFR 1304.04(h)(2).47 Unlike the provision applicable to prescriptions in schedules III though V, this provision does not authorize the maintenance of schedule II prescriptions ‘‘in such form that they are readily retrievable from other prescription records of the pharmacy.’’ 21 CFR 1304.04(h)(4). Indeed, none of the above regulations allows for these records to be kept with other records of the pharmacy as long as they are ‘‘readily retrievable from [those] other’’ records. In the Order to Show Cause, the Government nonetheless alleged that Respondent ‘‘failed to maintain records . . . in a readily retrievable form at its registered location.’’ ALJ Ex. 1, at 4. I find the violation proved. As explained above, the ALJ reasoned that the attorney’s statement was hearsay and therefore gave it less weight than Mr. George’s testimony. However, contrary to the ALJ’s understanding, the attorney’s statement was not hearsay because it was an admission of a partyopponent. Cf. Fed. R. Evid. R. 801(d)(2). Attorneys typically do not make admissions on behalf of clients to Government investigators without a factual basis for doing so.48 Moreover, 47 While invoices (but not schedule II order forms) ‘‘may be kept at a central location, rather than the registered location,’’ to do so, a registrant must notify the Special Agent in Charge in writing ‘‘of [its] intention to keep central records.’’ 21 CFR 1304.04(a)(1). While the DI subsequently identified GX 10 (which contain only schedule II order forms as containing receiving records, it is otherwise unclear whether the DI’s reference to receiving records also included the invoices. See, e.g., GX 11. As to the invoices, there is no evidence in the record as to whether Respondent ever notified the Agency of its intent to keep records at other than its registered location. 48 According to the DI, some of the Investigators attempted to interview Mr. George, but shortly into the interview, the attorney arrived and did not allow the Investigators to speak with Mr. George or any another employees and ‘‘[a]ll questions were to be directed through [the attorney] at that point.’’ Tr. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 the attorney’s statement was made contemporaneously with the inspection, unlike Mr. George’s testimony which was offered well after fact and during a proceeding in which he had ample motive to misstate the facts. Accordingly, I find that various records including some of the schedule II prescriptions and schedule II order forms were not kept on the premises of Respondent’s registered location as required by federal regulations. The Allegations That Respondent Failed To Complete a Biennial Inventory According to the DI, during the inspection, Respondent produced a document for the audited drugs on which it kept a perpetual inventory, i.e, a running total of the balance on hand listed by the date of various transactions. Specifically, the log listed: (1) The results of inventories which were actual ‘‘physical count[s] of what was on hand,’’ Tr. 270; (2) dispensings by prescription number and the quantity dispensed; (3) the quantities received by each order form number and invoice numbers; and (4) returns by patients. GX 5. According to the DI, the inventories did not comply with federal law because ‘‘there was not one date [when] every controlled substance was inventoried.’’ Tr. 235. More specifically, the records showed that methadone 10 was inventoried on January 2, 2012. GX 5, at 1. While morphine sulfate 30 mg immediate release and morphine sulfate 100 m extended release were inventoried on January 2, 2012, morphine sulfate 60 mg extended release was inventoried on January 3, 2012, and morphine sulfate 30 mg extended release was not inventoried until June 9, 2012. GX 5, at 2–5. As for hydromorphone 8 mg, the only inventory listed is one taken on July 24, 2012, and while an inventory of Dilaudid 4 mg was taken on January 2, 2012, the sheet for generic hydromorphone 4 mg lists an inventory date of June 6, 2012 and the quantity on hand as ‘‘-4’’ while also including the undated notation of ‘‘60’’ in the header for the ‘‘balance’’ column. See id. at 6– 8. Finally, the sheet for oxycodone 30 lists the inventory date as June 27, 2012, yet there is also an undated entry in the header for the ‘‘balance’’ column with the notation of ‘‘1030’’; the sheet also lists multiple prescriptions, a receipt from a distributor and what appears to be a return from a patient. Id. at 9. 283. Thus, the attorney clearly acted as Respondent’s authorized representative and made the statement that the missing records were offsite within the scope of his relationship with Respondent. PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 Against this evidence, Respondent introduced an exhibit which purports to be an ‘‘Annual Inventory’’ of its schedule II controlled substances which was taken on January 2, 2012 and which lists Mr. George as its pharmacist. See RX 4. Asked on cross-examination whether he had seen this document before, the DI answered ‘‘no,’’ and testified that the document was not provided to the Government during the execution of the AIW. Tr. 276. Respondent, however, points to a Florida Department of Health Inspection Report which states that during a September 14, 2012 inspection, the State Investigator found that Respondent had taken a controlled substance inventory on a biennial basis and that the inventory was available for inspection; the report also noted that ‘‘[t]he most recent Biennial Inventory is dated 01–02–12.’’ RX 4, at 6. The ALJ surmised that at the time of the AIW, either the DI did not request the biennial inventory or that Respondent’s personnel did not understand the request. R.D. at 8–9 n.3. Nor does the record establish why this document was not turned over pursuant to the AIW (the AIW not being in the record either) with the documents that were subsequently turned over by Respondent’s attorney. In any event, I find the evidence insufficient to support the allegation that Respondent failed to complete a biennial inventory as required by 21 CFR 1304.11(c). ALJ Ex. 1, at 4. Allegations Related to Respondent’s Maintenance of Its Schedule II Order Forms The Government also alleged that Respondent’s manner of keeping its schedule II order forms violated DEA regulations in two respects. First, it alleges that Respondent failed to document on the forms the ‘‘receipt date or quantity received.’’ Id. (citing 21 U.S.C. 827(b); 21 CFR 1305.13(e)). Second, it alleges that Respondent failed to retain Copy 3 of the order form. Id. (citing 21 U.S.C. 827(b); 21 CFR 1305.13(a) and 1305.17(a)). As support for the allegations, the Government submitted copies of 11 ‘‘purchaser’s Copy 3’’ of order forms Respondent submitted to various distributors. Under DEA’s regulation, ‘‘[t]he purchaser must record on Copy 3 . . . the number of commercial or bulk containers furnished on each item and the dates on which the containers are received by the purchaser.’’ 21 CFR 1305.13(e). However, under another DEA regulation, an order form is not valid ‘‘more than 60 days after its E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices execution by the purchaser.’’ Id. § 1305.13(b). With respect to the 11 order forms, each of the forms includes notations indicating one or more items was filled by the supplier, with a handwritten notation as to the number of packages received, the date of receipt, and initials. See generally GX 10. Two of the order forms contain a notation that a number of packages were received but no entry for the date the package was received. Id. at 9 (entry for methadone 10); id. at 11 (line no. 1—indicating 12 packages of hydromorphone 8 were received but leaving blank the date received). Respondent thus violated 21 CFR 1305.13(e) by failing to notate the date these two packages were received. The order forms also included line items that were not filled in any part by the supplier, and the forms were left blank in the columns for ‘‘No. of Packages Received’’ and ‘‘Date Received.’’ See generally GX 10. According to the DI, when Respondent did not ‘‘receive a drug,’’ it was required ‘‘to write a zero’’ in the column for the number of packages received. Tr. 255. The DI was, however, unsure if Respondent was required to also include a date. Id. at 256. As to this contention, DEA regulations do not require a purchaser to notate on the order form that no portion of a particular item was received and a date. See 21 CFR 1305.13(e). Accordingly, to the extent this allegation relies on Respondent’s failure to notate and date the non-receipt of items it ordered, the allegation is rejected.49 As for the allegations that Respondent ‘‘failed to retain Copy 3 of the’’ order forms, the Government proof was comprised of a single 222 form which, according to the DI, was a xerox and not the original Copy 3. GX 11, at 2. This is a violation, as under 21 CFR 1305.17(a), ‘‘[t]he purchaser must retain Copy 3 of each executed DEA Form 222.’’ However, this violation, as well as the two other violations based on Respondent’s failure to notate the date on which the packages were received, are of minor consequence.50 mstockstill on DSK3G9T082PROD with NOTICES2 49 The Government put forward no evidence with respect to any of the order forms that Respondent had actually received any of the drugs listed in the line items which were left blank. 50 Invoking a DEA regulation which grants the ALJ ‘‘all power necessary’’ to conduct a fair hearing, Respondent apparently argues that I should give no weight to the Government’s documentary evidence, because following the execution of the AIW, the Investigators ‘‘illegally retain[ed] the documents for 611 days’’ and ‘‘never provided a meaningful accounting of the documents seized.’’ Resp. Exceptions, at 16. As Respondent further argues: ‘‘To give any weight to the DEA’s documentary evidence would be tantamount to sanctioning the VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 The Audit Allegations The Government also put forth evidence that it conducted an audit of Respondent’s handling of seven controlled substances and found that it had overages in six drugs and a shortage in one drug. With respect to the latter, the audit found that Respondent was short 4,135 du of hydromorphone 4 mg. With respect to the overages, as alleged by the Government, the most significant were those of 8,758 du of hydromorphone 8 mg and 1,306 du of oxycodone 30 mg. ‘‘Recordkeeping is one of the CSA’s central features; a registrant’s accurate and diligent adherence to this obligation is absolutely essential to protect against the diversion of controlled substances.’’ Paul H. Volkman, 73 FR 30630, 30644 (2008); see also Fred Samimi, 79 FR 18698, 18712 (2014) (finding, where physician ‘‘had shortages totaling more than 40,000 dosage units’’ of various drugs, that his ‘‘inability to account for this significant number of dosage units creates a grave risk of diversion,’’ and that ‘‘even were there no other proven violations, the audit results alone are sufficient to . . . establish[ ] that [physician’s] registration[ ] ‘would be inconsistent with the public interest’ ’’) (citations omitted). Respondent raises a variety of challenges to the audit results. First, it asserts that the audits were flawed because they used figures from Respondent’s perpetual inventory for the initial inventory rather than the inventory they produced at the hearing but had not provided to the Government previously. Resp. Exceptions, at 4. It further asserts that ‘‘[h]ad DEA started with the record that the Agency actually requires registrant to keep . . . . (the biennial inventory), DEA would have had to use all of Respondent’s records of receipt and dispensing during 2012, and DEA would not have found the alleged overages and shortages that its investigators claimed to find.’’ Id. Yet the Investigator testified repeatedly that the so-called perpetual unlawful conduct of the investigators and would work a great procedural and substantive injustice on Respondent. The only fair action (thus, a ‘‘necessary action’’) is to give no weight to the DEA’s documentary evidence and to give no weight to the testimony about those documents.’’ Id. at 18. In its Exceptions, Respondent does not identify a single allegation that it has been unable to respond to because of the Government’s delay in returning the documents or its failure to provide a meaningful accounting of the documents. Because Respondent has failed to establish prejudice, I reject its claim. See Air Canada v. Department of Trans., 148 F.3d 1142, 1156 (D.C. Cir. 1998) (‘‘As incorporated into the APA, the harmless error rule requires the party asserting error to demonstrate prejudice from the error.’’) (citing 5 U.S.C. 706). PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 49843 inventory is all that Respondent provided to him. Most significantly, the Investigator testified that Mr. George ‘‘stated that every line marked inventory was a physical count of what was on hand.’’ Tr. 270. I therefore find no basis to reject the audit result because the Government used the physical counts listed on the perpetual inventory. As for the Government’s audit of the hydromorphone 4 mg, Respondent produced a listing by date, prescription number, and the quantity dispensed for the period of July 30, 2012 through February 4, 2013. See RX 5, at 2–3. Notably, each of the dispensings corresponds with the dispensings listed in the perpetual inventory and both documents show that Respondent dispensed a total of 4,659 du during the audit period, a figure which is 120 dosage units less than that determined (4,779) by the Government.51 See GX 4. The effect, however, is that Respondent’s shortage was even larger than that found by the Government. As for the closing inventory figures, while Respondent argues that I should reject the Government’s figures because Mr. George did not attest to the accuracy of the figures (see Resp. Exceptions at 8– 9, Resp. Post-Hrng Br. at 53), the difference between the Government’s count (202) and Respondent’s (200) was two (2) tablets, a difference of inconsequence. By contrast, there is a substantial difference between the figures the Government and Respondent calculated for Respondent’s receipts during the audit period. According to the Government, Respondent acquired 7,900 tablets during the period; according to Respondent, it acquired only 3,900 tablets. Compare GX 4 with RX 5, at 1. This disparity is explained, however, by the Government’s identification of an additional transaction on January 28, 2013, when Respondent acquired 4,000 du from Nucare Pharmaceuticals. GX 6, at 8. Notably, this transaction does not appear on Respondent’s list of its acquisitions. Compare id. with RX 5, at 1. Significantly, Respondent put 51 Respondent’s perpetual inventory shows that an inventory was taken on July 24, 2012 of its stock of hydromorphone 4 mg, and that 1096 tablets were on hand; it also shows that Respondent did not dispense a prescription for the drug until July 30, 2012. RX 5, at 4. The evidence also shows that Respondent maintained a separate perpetual inventory log for Dilaudid (branded hydromorphone) 4 mg. GX 5, at 8. The log has only three entries; the entries provide inventory figures for January 2, 2012, June 9, 2012, and December 31, 2012. See id. On each date, Respondent had 120 tablets in stock. This figure, when added to the July 24, 2012 inventory for hydromorphone of 1096, equals 1216, the same figure which the Government used as its initial inventory. E:\FR\FM\28JYN2.SGM 28JYN2 49844 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 forward no evidence refuting the Government’s finding that the transaction occurred or that Respondent had received the drugs as of the date of the AIW. Thus, not only do I find no reason to reject the Government’s finding with respect to Respondent’s handling of hydromorphone 4 mg, I find that the shortage was even larger than alleged by the Government.52 As for the overage in hydromorphone 8 mg, Respondent disputed the Government’s figure for the amounts received, the quantities distributed or dispensed, and the closing inventory. With respect to the amounts received, both the Government and Respondent provided a list of the shipments by date, order number, distributor’s name, and quantity. Notably, Respondent’s list includes four shipments which are not on the Government’s list. The first of these is an order purportedly filled by Harvard Drug on November 11, 2012 for 400 du pursuant to Order Form #121140458. RX 6, at 1. The order is, however, unsupported by an invoice, and notably, while 52 Respondent also challenges the audit results, arguing that the Investigator ‘‘did not account for any controlled substances in the pharmacy’s willcall bin, returns to stock, or those drugs quarantined for disposal.’’ Resp. Post-Hrng. Br. 52; see also Resp. Exceptions at 5–6. It further argues that under the Agency’s regulation, ‘‘when conducting an inventory, the pharmacy must account for all controlled substances on hand at the pharmacy at the time of the inventory.’’ Id. (citing 21 CFR 1304.11(a)). As for Respondent’s contention that the Agency was required to count the drugs in the ‘‘will-call bin,’’ by implication the regulation does not require counting these drugs. See 21 CFR 1301.11(a) (‘‘Controlled substances shall be deemed ‘on hand’ if they are . . . ordered by a customer but not yet invoiced[.]’’). Notably, those drugs in the ‘‘will-call bin’’ have a dispensing label attached and are otherwise accounted for as having been dispensed, even if the customer has yet to pick up the prescription. As for Respondent’s contention that the Government did not include those drugs that were returned to stock, where Respondent produced such documentation, I have considered the returns. Finally, Respondent produced no evidence that at the time the Investigators took the closing inventory, it had in its possession any dosage units of the drugs being audited that were quarantined for disposal. Finally, Respondent argues that the DI ‘‘willfully chose to ignore’’ evidence in its ARCOS database regarding its purchases of schedule II drugs, apparently because he did not obtain Respondent’s complete ARCOS data and compare it with his calculations. Resp. Exceptions, at 18. There is, however, no requirement that the Government obtain ARCOS data, which is not submitted by pharmacies but rather distributors and is thus dependent upon the accuracy of their submissions, and indeed, one of the purposes of doing an audit is to determine whether the registrant being audited is maintaining complete and accurate records. In any event, as I have carefully reviewed Respondent’s invoices and credited Respondent for those receipts which were supported by its records but were omitted by the Government, this argument is moot. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 Respondent submitted a copy of Order Form #121140458, that form was used to place an order with a different distributor, Red Parrot Distribution. See id. at 1; see also id. at 78, 80, 84 (invoices for the shipments received from Red Parrot on 11/17, 11/15, and 11/21/12); id. at 85 (DEA Form 222 #12114058). I thus find that Respondent did not receive 400 du from Harvard on November 11, 2012. Respondent’s list of receipts also includes shipments received from Attain Med on December 19 and 24, 2012, each of which was for 2,400 du, pursuant to Order Form #12x00003. RX 6, at 1. Respondent provided a copy of the order form and the invoices for each shipment. Id. at 92 (Order Form #12xx00003); id. at 91 (invoice for 24 packages shipped on 12/18/12 under same Order Form Number); id. at 90 (invoice for 24 packages shipped on 12/ 24/12 under same Order Form Number). The Government’s list includes, however, only the first shipment for 2,400 du. GX 6, at 6. I therefore find that Respondent received both shipments and that the second shipment should have been credited by the Government. Respondent’s list also included two receipts of 2,500 du totaling 5,000 du from Nucare Pharmaceuticals pursuant to Order From #121140485. RX 6, at 1. According to the Government’s list, Respondent received only one of these shipments. GX 6, at 6. Respondent, however, produced both a Form 222 (dated 12/17/12) which is annotated to reflect both shipments by date and quantity, as well as two invoices documenting its receipt of 5,000 du from Nucare pursuant to Order Form #121140485. See RX 6, at 97 (Form 222); id. at 96 (01/15/13 invoice for second shipment of 2500 du under Order #121140485); id. at 118 (12/26/12 invoice for first shipment of 2500 du under Order #121140485). I therefore find that Respondent received an additional 2,500 du pursuant to this order than was credited by the Government. Respondent also listed a receipt of 2,400 du from Attain Med on January 19, 2013, pursuant to Order Form #13XX00001, RX 6, at 2; this shipment is not included on the Government’s list. See GX 6, at 6–7. While Respondent did not produce the Order Form, it did produce an invoice showing that 2,400 du were shipped to it on January 19, 2013 pursuant to the aforesaid Order Form number and should have been credited by the Government. RX 6, at 102. Finally, while the Government’s list includes an order for 4,000 du which was filled by Nucare and received by PO 00000 Frm 00030 Fmt 4701 Sfmt 4703 Respondent on January 28, 2013 pursuant to Order Form #121140486,53 Respondent’s list also includes a shipment for 1,000 du pursuant to the same order form which it received on January 29, 2012. RX 6, at 2. While Respondent did not produce the order form, it did produce invoices for both shipments. RX 6, at 105–06. Thus, the additional 1,000 du should have been credited by the Government. However, the Government also credited Respondent as having received two orders for 800 du each from Red Parrot on February 1, 2012 pursuant to Order Form #121140488. GX 6, at 7. Notably, while the DEA Form 222 shows that on January 29, 2013, Respondent ordered a total of 4,800 du, on the Order Form (as well as in his Perpetual Inventory), Respondent documented the receipt of only 800 du on February 1, 2013, an amount consistent with the invoice. See RX 6, at 108 (Form 222); id. at 107; id. at 37. According to Respondent’s perpetual inventory, it did not receive an additional shipment from Red Parrot for hydromorphone 8 mg until February 6, 2013, after the closing date of the audit. See id. at 38. Thus, I have excluded this amount in calculating Respondent’s receipts. I therefore find that Respondent actually received an additional 7,500 du from its distributors than the amount calculated by the Government.54 Moreover, the Government did not include the 433 du which were returned by the patients. Thus, Respondent was accountable for a total of 75,333 du. As for the dispensings, the Government calculated the total at 71,759 du, Respondent at 72,195. Respondent’s figure, however, includes six prescriptions totaling 858 du which were dispensed on February 4, 2013, the date of the AIW. RX 6, at 16–17. The Government’s evidence shows, however, that the closing inventory was taken at the beginning of business, and thus these prescriptions are not properly included in the audit period. GX 7; Tr. 237. Thus, according to Respondent’s data, its total dispensings during the audit period were 71,337 du, a difference of 422 du from the Government’s figure. The disparity is explained by five prescriptions, four of which are listed 53 While the Government lists the Order Number as 121140497, GX 6, at 6; Respondent listed it as 121140486, which corresponds with the invoices. RX 6, at 2, 105–06. 54 While this may have been caused by Respondent’s failure to provide the records pursuant to the AIW, it may also have been caused by mistakes made by the Investigator who prepared the audit. The record does not, however, allow me to make a determination either way. E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES2 on the Government’s list (GX 8, at 8–18) but not on Respondent’s list (RX 6, at 4– 17), as well as one prescription which is listed on Respondent’s list but not the Government. More specifically, the Government’s list includes: (1) RX #2039300 for 140 du (compare GX 8, at 8, with RX 6, at 5); (2) RX #2039764 for 150 du (compare GX 8, at 13, with RX 6, at 11); (3) RX #2039782 for 84 du (compare GX 8, at 13, with RX 6, at 11); and (4) RX#2039952 for 168 du (compare GX 8, at 16, with RX 6, at 14); Respondent’s list includes RX#2039243 for 120 du (compare RX 6, at 4, with GX 8, at 8).55 The four prescriptions on the Government’s lists (which total 542 du) and the prescription on Respondent’s list (120 du) thus account for the 422 du disparity in the dispensings (after subtracting out Respondent’s post-audit dispensings). As for the closing inventory figures, the Government put forward evidence that Respondent had 5,114 du on hand at the beginning of business, which included 48 full 100 count bottles and 314 other du. GX 7. Respondent asserted that it had on hand 4,086 du; however, this figure appears to have been determined after Respondent dispensed six prescriptions totaling 858 du on February 4, 2013. RX 6, at 17. Adding back in the 858 units Respondent represents that it dispensed on that date, yields a total of 4,944 du. And adding the 71,337 du Respondent represented that it had dispensed to its closing inventory figure of 4,944 du yields a total of 76,281 dosage units, this being the total Respondent accounted for. This compares with the total of Respondent’s opening inventory, its receipts (including both its purchases and the dosage units returned by patients) of 75,333. Thus, even using Respondent’s figures for its receipts, dispensings, and closing inventory, it still had an overage of 948 dosage units. While this is substantially less that the figure calculated by the Government, it is still material and supports a finding that Respondent did not maintain complete and accurate records as required by 21 U.S.C. 827(a). 55 Respondent’s Perpetual Inventory included entries for RX#2039300 and RX#2039782. RX 6, at 20, 29. As for RX#2039300, the Perpetual Inventory included the notation ‘‘wrong’’ with a line drawn through the prescription number, the date, the quantity, and Mr. George’s initials. RX 6, at 20. Respondent did not, however, add back in the quantity to the balance. Id. As for RX#2039782, the entry states ‘‘voided’’ to the left of the prescription number. Id. at 29. The record contains no further evidence establishing whether these prescriptions, or the other two prescriptions which were on the Government’s list but not Respondent’s, were actually dispensed. VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 As for the audit’s finding that Respondent had an overage of 1,306 du of oxycodone 30, GX 4, Respondent disputed the Government’s finding that it received 17,200 du during the audit period. Instead, it put forward evidence that it received 18,300 du from distributors during the period and a comparison of the orders compiled by the Government with the orders compiled by Respondent shows that it placed two orders which totaled 1,100 du that were not included in the Government’s count. More specifically, the Government’s count did not include an order filled by PD–RX for 500 du on September 12, 2012 (Order Form Number 12X000019), and an order for 600 du filled by Attain Med on December 5, 2012. Compare GX 6, at 9, with RX 7, at 1. Moreover, Respondent provided the invoices to support its receipt of each order. See RX 7, at 40– 41; id. at 87. Including the 12 dosage units that were returned by a customer, Respondent received a total of 18,312 dosage units during the audit period. Notably, Respondent’s Narcotic Control Sheet (RX 7, at 1) lists the same beginning count as the Government used (39 du), and the parties agreed that Respondent dispensed 18,322 du during the audit period. Including the orders that the Government did not include, Respondent was accountable for 18,351 du during the audit period and subtracting out the dispensings, should have had on hand 29 tablets at the time of the closing inventory. While Respondent’s Narcotic Control Sheet lists the results of a physical inventory which was purportedly conducted on February 4, 2013 as 35 du (the same figure listed on Respondent’s Perpetual Inventory as of February 4, 2013), this figure cannot possibly be accurate because on January 30, Respondent received an order of 300 du and its records show that it had only dispensed a single prescription for 140 du prior to the execution of the AIW and thus should have had at least 160 tablets on hand when the closing inventory was taken.56 Thus, I find that the 56 Given the impossibility that Respondent’s closing inventory figure is accurate, and the Government’s evidence that two investigators counted the oxycodone 30, I find the Government’s inventory figure to be accurate. However, Respondent argues that because Mr. George did not participate in counting the drugs for the closing inventory, ‘‘the Government violated its own credibility safeguards.’’ Resp. Exceptions at 6; see also id. at 4 (noting that this approach ‘‘was contrary to the agency’s internal guidance and customary practice’’) (citation omitted). Even so, two Agency employees counted the drugs and vouched for the accuracy of the counts. Thus, while I do not condone the Investigators’ failure to have Mr. George participate—at least in the absence of evidence that Mr. George was unwilling to do so— PO 00000 Frm 00031 Fmt 4701 Sfmt 4703 49845 Government’s closing inventory figure of 223 du is accurate and that Respondent had an overage of 194 du. While this overage is substantially smaller than that alleged by the Government, Respondent offered no explanation for the overage. Sanction 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). The Agency has also repeatedly held that the level of candor exhibited by a registrant’s principals during ‘‘the hearing itself is an important factor to be considered in determining both whether [it] has accepted responsibility as well as for the appropriate sanction.’’ Michael S. Moore, 76 FR 45867, 45868 (2011); see also Robert F. Hunt, 75 FR 49995, 50004 (2010); Jeri Hassman, 75 FR 8194, 8236 (2010); Hoxie, 419 F.3d at 483 (‘‘Candor during DEA investigations, regardless of the severity of the violations alleged, is considered by the DEA to be an important factor when assessing whether a . . . registration is consistent with the public interest.’’). Nor are these 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 I nonetheless find no reason to conclude that the closing inventory figures found by the Government were unreliable. E:\FR\FM\28JYN2.SGM 28JYN2 mstockstill on DSK3G9T082PROD with NOTICES2 49846 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices 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 (2011) (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). The Agency has also held that ‘‘‘[n]either Jackson, nor any other agency decision, holds . . . that the Agency cannot consider the deterrent value of a sanction in deciding whether a registration should be [suspended or] revoked.’’’ Gaudio, 74 FR at 10094 (quoting Southwood, 72 FR at 36504); see also Robert Raymond Reppy, 76 FR 61154, 61158 (2011); Moore, 76 FR at 45868. This is so, 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’’). Here, the ALJ found that Mr. George did not credibly accept responsibility for Respondent’s misconduct. R.D. at 52. The ALJ specifically noted Mr. George’s testimony that ‘‘[a]s the pharmacist in charge . . . I accept the responsibility of conduct of the pharmacy. Again while I did all my due diligence and protocol, as I said before, still I’m less than perfect.’’ Id. (citing Tr. 507). See also Tr. at 539–40 (‘‘even though I did my best, our best to control that and prevent the abuse and misuse, that is not perfect. It is always less than perfect. Human beings are not perfect. I accept that responsibility.’’). Asking whether this was a sufficient acceptance of responsibility, the ALJ concluded that Mr. George was ‘‘still asserting that he had done all of his due diligence and had followed the Respondent’s protocol’’ and that his ‘‘statement lacks credibility.’’ R.D., at 52. And she also found that Mr. George’s testimony that he had ‘‘always’’ done his due diligence lacked credibility. I agree with the ALJ that Mr. George’s testimony was not credible and that Respondent has not accepted VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 responsibility. Indeed, much of Mr. George’s testimony was contrived and other portions were plainly disingenuous. Of particular note is Mr. George’s testimony regarding the reason that Respondent filled the prescription (for 210 oxycodone 30) for T.V., who had traveled 472 miles from Pensacola. According to Mr. George, T.V. had been coming to Respondent since 2009 and the reason she was travelling this distance was because ‘‘she used to come and see that doctor [Dr. Ruperto] always. And while I was interviewing that patient she said she likes the doctor and she wanted to continue seeing that doctor.’’ Tr. 588 (emphasis added). Yet the prescription which the Government submitted into evidence was written by Dr. P.C., and was written more than two and a half years after Dr. Ruperto’s death. Indeed, while Mr. George testified that T.V. had been coming to his pharmacy since 2009, Tr. 494, 579; Dr. Ruperto died in December 2008, before T.V. even began filling her prescriptions at Respondent. Yet Mr. George maintained that he had done all of his due diligence with respect to T.V.’s prescription. So too, with respect to H.C., Jr., Mr. George testified that notwithstanding that he no longer had insurance and had not filled a prescription at Respondent for two years, he was ‘‘willing to pay whatever the cash price at that time’’ was for his oxycodone 30 prescription— $1350—because he ‘‘need[ed] this medication.’’ Tr. 496–97. Mr. George thus stated that he ‘‘filled this prescription for cash.’’ Id. at 497. Yet based on the progress note Mr. George obtained, he knew that at the same visit, H.C., Jr. had also been prescribed three other controlled substances, including 112 OxyContin 40 mg, 84 Xanax 1 mg, and 84 carisoprodol. While Mr. George denied knowing anything about drug cocktails, as Mr. Parrado testified, the combination of an opioid, benzodiazepine and carisoprodol was widely known for its abuse potential. RX 3, at 47. Also unexplained by Mr. George is how a patient, who had lost his insurance, would be able to pay $1350 a month, each month, for this one prescription alone, as would be expected if the patient was a legitimate chronic pain patient. Here too, I do not believe his testimony. In still other instances, Mr. George gave inconsistent testimony. For example, Mr. George testified that he looked at the partial medical records as ‘‘an extra step to prevent the abuse and misuse of the controlled substances’’ and that ‘‘through experience, [he] learned to look through these forms and PO 00000 Frm 00032 Fmt 4701 Sfmt 4703 understand’’ them. Tr. 481. However, when asked with regard to patient S.D. whether he had reviewed the medical record before filling an oxycodone 30 prescription and if he could tell from the record what other controlled substances were dispensed that day, Mr. George testified that he ‘‘look[ed] only for my prescription which is received in my hand. That is only my concern.’’ Tr. 561. He then added that ‘‘[i]f I get the medical record, I have no way of saying and understanding where the patient had a different prescription unless I talk to the patient or doctors if he write any other prescriptions. I cannot guess where the prescription was filled for that patient.’’ 57 Id. Yet the progress note in S.D.’s file clearly showed that the physician had also prescribed four other controlled substances to S.D. at this visit, including MS Contin, Soma, Xanax, and Dilaudid. RX 3, at 29. Mr. George then testified that in ‘‘looking [at] all these documents,’’ he was ‘‘going above and beyond what the duty’’ of a pharmacist requires of him, and that ‘‘it is not [a] pharmacist’s job to read, that is doctor’s job.’’ Tr. 561–62. To be sure, as Mr. Parrado explained, pharmacists usually do not obtain medical records in the course of dispensing. Tr. 599. Nonetheless, registrants (and their principals such as Mr. George) are not excused from ignoring the information they do obtain and one does not need a degree in medicine to read S.D.’s progress note and recognize that S.D. had been prescribed five different controlled substances at the same visit, including not only duplicative therapy in the form of two short-acting narcotics (oxycodone 30 and Dilaudid 8 mg), see Fla. Admin Code r.64B16–27.810, but also a drug cocktail well known to be abused on the street. 57 Mr. George, however, had also previously testified that under the protocol that was in place when he filled this prescription, ‘‘we check that they have narcotic contract with the patient.’’ Tr. 450. See also id. at 458. Notably, one of the terms of S.D.’s narcotic contract was that ‘‘I will have prescriptions filled at only one pharmacy,’’ and the contract then listed Superior (and not Respondent) as the only pharmacy. RX 3, at 30–31. Certainly, Mr. George knew from the progress note what other prescriptions were written on that date and whether they were being presented at Respondent for filling. Apparently, it was not a concern that S.D. was filling the prescription at his pharmacy, rather than the pharmacy listed on his narcotic contract. At another point, Mr. George testified that ‘‘[f]rom 2013 onwards,’’ he had ‘‘modified [his] protocol and changed it to print out patient’s residence to less than 15 miles,’’ Tr. 499, thus suggesting (although there is an argument that his answer was incoherent) that he would no longer fill the prescriptions if the patient lived more than 15 miles away. Yet he later testified that after DEA executed the AIW (on Feb. 4, 2013), he changed the protocol to fill only for patients who lived within 50 miles. Id. at 570–71. E:\FR\FM\28JYN2.SGM 28JYN2 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices I thus agree with the ALJ that Mr. George, as Respondent’s principal, has not adequately accepted responsibility for its misconduct. This finding provides reason alone to conclude that Respondent has not rebutted the Government’s prima facie showing that it has committed acts which render its continued registration ‘‘inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4). And having found that Mr. George and Respondent knowingly diverted controlled substances, there is no need to consider Respondent’s remedial efforts as they are rendered irrelevant by its failure to acknowledge its misconduct. See The Medicine Shoppe, 79 FR 59504, 59510 (2014), pet. for rev. denied 626 Fed. Appx. 2 (Mem.) (D.C. Cir. 2015); Jayam Krishna-Iyer, 74 FR 459, 464 (2009) (‘‘Because of the grave and increasing harm to public health and safety caused by the diversion of prescription controlled substances, even where the Agency’s proof establishes that a practitioner has committed only a few acts of diversion, this Agency will not grant or continue the practitioner’s registration unless he accepts responsibility for his misconduct.’’). As the Tenth Circuit has recognized in the context of physician practitioners: mstockstill on DSK3G9T082PROD with NOTICES2 The DEA may properly consider whether a physician admits fault in determining if the physician’s registration should be revoked. When faced with evidence that a doctor has a history of distributing controlled VerDate Sep<11>2014 17:57 Jul 27, 2016 Jkt 238001 substances unlawfully, it is reasonable for the [DEA] to consider whether that doctor will change his or her behavior in the future. And that consideration is vital to whether continued registration is in the public interest. MacKay v. DEA, 664 F.3d 808, 820 (10th Cir. 2011) (citing Hoxie v. DEA, 419 F.3d at 483 (6th Cir. 2005)). See also Hoxie, 419 F.3d at 483 (‘‘The DEA properly considers the candor of the physician . . . and admitting fault [to be] important factors in determining whether the physician’s registration should be revoked.’’). I further find that the misconduct proven on this record is egregious and supports the revocation of Respondent’s registration. More specifically, my finding that Respondent’s pharmacists dispensed multiple prescriptions in violation of their corresponding responsibility and thereby knowingly diverted controlled substances is, by itself, sufficient to support the revocation of its registration. Revocation is also warranted by my finding that Respondent was short more than 4,000 du of hydromorphone 4 mg. And I also find that revocation is supported by Mr. George’s lack of candor during his testimony. I further find that the Agency’s interest in deterring future misconduct both on the part of Respondent (and Mr. George) as well as the community of pharmacy registrants supports revocation. As for the issue of specific deterrence, the revocation of PO 00000 Frm 00033 Fmt 4701 Sfmt 9990 49847 Respondent’s registration is not a permanent bar, and as to Mr. George, because pharmacists are not required to be registered under the CSA, revocation is warranted to deter Mr. George from engaging in future misconduct in the event he procures employment elsewhere. As for the issue of general deterrence, those members of the regulated community who contemplate using their registrations to divert controlled substances need to know that there will be serious consequences if they choose to do so. I therefore conclude that the revocation of Respondent’s registration is necessary to protect the public interest. And I will further order that any application of Respondent to renew or modify its registration be denied. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration FH0772257 issued to Hills Pharmacy, LLC, be, and it hereby is, revoked. I further order that any application of Hills Pharmacy, LLC, to renew or modify its registration, be, and it hereby is, denied. This order is effective August 29, 2016. Dated: July 19, 2016. Chuck Rosenberg, Acting Administrator. [FR Doc. 2016–17721 Filed 7–27–16; 8:45 am] BILLING CODE 4410–09–P E:\FR\FM\28JYN2.SGM 28JYN2

Agencies

[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Notices]
[Pages 49815-49847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17721]

[[Page 49815]]

Vol. 81

Thursday,

No. 145

July 28, 2016

Part III

Department of Justice

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Drug Enforcement Administration

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Hills Pharmacy, LLC; Decision and Order; Notices

Federal Register / Vol. 81 , No. 145 / Thursday, July 28, 2016 /
Notices

[[Page 49816]]

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 15-4]

Hills Pharmacy, LLC; Decision and Order

On October 8, 2014, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Hills Pharmacy, LLC (hereinafter, Hills or Respondent),
which proposed the revocation of its DEA Certificate of Registration
FH0772257, pursuant to which it is authorized to dispense controlled
substances in schedules II through V as a retail pharmacy, at the
registered location of 7730 W. Hillsborough Ave., Tampa, Florida. ALJ
Ex. 1, at 1. As grounds for the proposed action (which also includes
the denial of any pending applications), the Show Cause Order alleged
that Respondent's ``continued registration is inconsistent with the
public interest, as that term is defined in 21 U.S.C. 823(f).'' Id.;
see also 21 U.S.C. 824(a)(4).
More specifically, the Show Cause Order alleged that Respondent's
``pharmacists repeatedly failed to exercise their corresponding
responsibility to ensure that controlled substances they dispensed were
dispensed pursuant to prescriptions issued for legitimate medical
purposes by practitioners acting within the usual course of their
professional practice'' and that its ``pharmacists ignored readily
identifiable red flags that [the] controlled substances prescribed were
being diverted and dispensed despite unresolved red flags.'' Id.
(citing 21 CFR 1306.04(a); Holiday CVS, L.L.C., d/b/a CVS Pharmacy Nos.
219 and 5195, 77 FR 62315, 62319 (2012)). The Show Cause Order further
alleged that Respondent's ``pharmacists dispensed controlled substances
when they knew or should have known that the prescriptions were not
issued in the usual course of professional practice or for a legitimate
medical purpose, including circumstances where the pharmacist knew or
should have known that the controlled substances were abused and/or
diverted by the customer.'' Id. at 2.
The Show Cause Order listed various red flags which Respondent's
pharmacists allegedly failed to resolve before dispensing
prescriptions, including: (1) ``multiple individuals presenting
prescriptions for the same drugs in the same quantities from the same
doctor''; (2) ``individuals presenting prescriptions for controlled
substances known to be highly abused, such as oxycodone and
hydromorphone''; (3) ``individuals paying high prices . . . for
controlled substances with cash''; and (4) ``individuals residing long
distances from the pharmacy.'' Id.
The Show Cause Order then alleged that between July 28 and August
4, 2011, Respondent's ``pharmacists dispensed large and substantially
similar quantities of'' oxycodone 30 mg tablets ``to at least nine
customers, all of whom received their prescriptions from physicians
working at the same clinic,'' and that seven of the customers ``resided
at least [50] miles from'' Respondent and five of the customers
``resided more than [100] miles from'' it. Id. The Government
specifically alleged that ``on July 28, 2011, a Hills . . . pharmacist
dispensed 210'' tablets of oxycodone 30 mg ``to T.V., who resided in
Pensacola, . . . more than [450] miles from'' Respondent. The Order
also alleged that ``on August 4, 2011, one or more Hills . . .
pharmacists dispensed large quantities of oxycodone pursuant to
prescriptions written by the same physician on the same day to two
customers with the same last name'' (J.P. and T.P.), both of whom
``resided in St., Augustine, Florida, more than [180] miles from'' it.
Id.
Next, the Show Cause Order alleged that ``[o]n April 21, 2011, one
or more Hills['] . . . pharmacists dispensed large and substantially
similar quantities of . . . oxycodone 30 to at least [12] customers,
three of whom resided more than [50] miles from [it], and two of whom
resided more than [100] miles away.'' Id. The Show Cause Order then
alleged that ``[a]ll of these prescriptions were written by physicians
working at the same clinic and were for amounts ranging from 168 to 240
tablets.'' Id.
To similar effect, the Show Cause Order alleged that on January 16,
2012, Hills' pharmacists dispensed three prescriptions for oxycodone 30
mg tablets in quantities which ranged from 168 to 224 tablets to three
persons who ``resided more than [50] miles from Hills,'' which were all
``issued by physicians working at the same clinic.'' Id. at 3. The Show
Cause Order then alleged that on January 19, 2012, a Hills' pharmacist
dispensed 120 oxycodone 30 tablets to a person who resided in Panama
City, Florida, which is ``located more than [350] miles from'' it. Id.
The Show Cause Order also alleged that on December 10, 2012, Hills'
pharmacists engaged in a further instance of dispensing prescriptions
(for 180 oxycodone 30) to two persons with the same last name on the
same date ``at or about the same time.'' Id. at 3. With respect to
these prescriptions, the Government also alleged that ``both customers
were willing to pay as much as [$7.50] per tablet despite evidence that
Hills . . . was now charging double for oxycodone than it charged the
previous year.'' Id. And the Show Cause Order further alleged that on
December 10, 2011, a Hills' pharmacist dispensed 224 tablets of
oxycodone 30 to a resident of Bradenton, Florida, ``who willingly paid
. . . $1232 for the same prescription he purchased just four months
earlier for . . . $896,'' and that ``[b]oth of these prescriptions were
also facially invalid inasmuch as they contained no patient address.''
Id.
Finally, the Show Cause Order alleged that in October 2011, Hills'
pharmacists dispensed prescriptions for 196 and 240 tablets of
hydromorphone 8 mg to two persons. Id. The Show Cause Order alleged
that the prescriptions, ``if taken as directed, far exceeded the
recommended [daily] dosage of'' the drug. Id. The Order also alleged
that both ``prescriptions were issued by the same physician and one of
them was facially invalid . . . as it contained no patient address.''
Id.
Next, the Show Cause Order alleged that Respondent ``failed to
create and maintain accurate records in violation of 21 U.S.C.
842(a)(5).'' Id. at 4. More specifically, the Order alleged that: (1)
Respondent ``failed to complete a biennial inventory as required by 21
CFR 1304.11(c)''; (2) its DEA schedule II order forms did not contain
the ``receipt date or quantity received in violation of 21 U.S.C.
827(b) and 21 CFR 1305.13(e)''; (3) it ``failed to retain Copy 3 of''
its schedule II order forms ``as required by 21 U.S.C. 827(b) and 21
CFR 1305.13(a) and 1305.17(a)''; and (4) its schedule II records were
not ``readily retrievable . . . at its registered location in violation
of 21 CFR 1304.04(a) and (h)(2).'' Id.
Finally, the Show Cause Order alleged that a DEA audit of various
schedule II drugs found both shortages and overages. The Order alleged
that an audit for the period of July 24, 2012 through February 4, 2013
found ``a shortage of 4,135'' tablets of hydromorphone 4 mg and ``an
overage of 8,758'' tablets of hydromorphone 8 mg. Id. The Order also
alleged that an audit for the period of June 27, 2012 through February
4, 2013 found an overage of 1,306 tablets of oxycodone 30 mg, and an
audit for the period of June 9, 2012 through February 4, 2013 found
overages of 113 tablets of morphine 60 mg and 88 tablets of morphine 30
mg. Id.
On October 17, 2014, the Order to Show Cause was served on
Respondent

[[Page 49817]]

by delivery to an attorney who was representing it in the
investigation, and who had emailed a Diversion Investigator the day
before that he would ``accept any service of process in that regard for
Hills Pharmacy.'' ALJ Ex. 4. On November 14, 2014, Respondent, through
its counsel, filed a request for a hearing with the Office of
Administrative Law Judges. ALJ Ex. 2. The matter was then assigned to
ALJ Gail Randall, who proceeded to conduct pre-hearing proceedings.\1\
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\1\ Respondent raised no objection to the adequacy of service.
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On December 2, 2014, the Government filed its Prehearing Statement.
ALJ EX. 7. Of note, the Government's Prehearing Statement contained no
additional information beyond that provided by the Show Cause Order as
to the identities of the patients whose prescriptions were at issue.
Compare ALJ Ex. 1, at 2-3, with ALJ Ex. 7, at 4-5. Thereafter,
Respondent moved for an extension, which the Government did not oppose,
and on December 16, 2014, the ALJ granted its motion.
On January 9, 2015, Respondent filed its Prehearing Statement. ALJ
Ex. 14. Respondent proposed to call as witnesses, ``[a]ny and all
patients whose prescriptions were seized by . . . DEA pursuant to the
Administrative Inspection Warrant [AIW] executed February 4, 2013 or
whose prescriptions for controlled substances were dispensed between
January 1, 2011 and February 4, 2013.'' Id. at 3. Respondent further
attached to its Prehearing Statement a list of 1,461 persons. Id. at
Exhibit A. Respondent also proposed to call as witnesses all of the
physicians who had issued the prescriptions that were seized pursuant
to the AIW and the controlled substance prescriptions that it dispensed
between January 1, 2011 and February 4, 2013. Id. at 3. Respondent
attached to its Prehearing Statement a list of more than 130 doctors.
Id. at Exhibit B. Respondent further estimated that it would require 45
to 60 days to present its case, exclusive of cross-examination and
rebuttal.\2\ Id. at 9.
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\2\ Respondent also sought to call the physicians who issued
controlled substance prescriptions to the patients listed in Exhibit
A after February 4, 2013, as well as the pharmacists who dispensed
those prescriptions. ALJ Ex. 14, at 3. It also proposed to call as a
witness,``[e]ach and every . . . Diversion Investigator, Special
Agent, and/or Task Force Officer who participated in the preparation
of the application for the'' AIW or the ``the execution of the''
AIW, and ``[a]ny and all witnesses identified in the Government's
Prehearing Statement.'' Id. at 4.
Respondent also proposed to call a consultant, who was a former
Supervisory Diversion Investigator, who would testify regarding
``his knowledge and experience in the investigation, preparation and
execution of'' AIWs, purported errors in the audits, and
Respondent's ``procedure for resolving potential `red flag' issues
and compliance with recordkeeping requirements.'' Id. at 3, 5-6.
Finally, Respondent proposed to call its own expert who would
testify as to ``the legal and ethical responsibilities of the
pharmacists dispensing prescriptions at'' it, the procedures used by
it to resolve red flags, and his review of ``the prescriptions at
issue.'' Id. at 6.
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On January 14, 2015, the ALJ conducted an on-the-record prehearing
conference. Noting that the Government had referred to the patients by
their initials, the ALJ ascertained that Government intended to request
a protective order. Tr. 6 (Jan. 14, 2015). Continuing, the ALJ noted
``the scope of the Respondent's [counsel's] prehearing statement and
his inability up to this point to identify the witnesses'' and asked
the Government if it was ``willing to exchange the prescriptions which
it intend[ed] to utilize . . . so Respondent can ID the actual patients
involved?'' Id. at 6-7. Government counsel represented that the
prescriptions would be sent by Fed Ex that day. Id. at 7. Subsequently,
the ALJ noted that Respondent's counsel had ``proposed in excess of
1,500 named witnesses and approximately 13,500 pages of documents'' and
asked if this was ``still [his] current plan?'' Id. at 10. Respondent's
counsel replied that if ``the Court limits the scope of the
Government's case to just those prescriptions that are provided to us,
I may be able to wean that down slightly.'' Id.
The ALJ then asked Respondent's counsel to explain the purpose of
the patients' testimony. Id. Respondent's counsel stated that ``the
Government ha[d] not listed in their list of witnesses any of the
patients . . . to whom prescriptions were dispensed and ha[d] not
identified any of the physicians who issued [the] prescriptions.'' Id.
at 11. Respondent's counsel then explained that it was his position
that the Government's Expert's ``testimony should be excluded because
he hasn't had any contact with any of the patients or prescribers to
determine whether or not the red flags that he's identified can be
resolved.'' Id. at 11-12. Respondent's counsel then maintained that if
the Government's Expert was allowed to testify on these issues, ``it
would be incumbent upon Respondent to demonstrate by the testimony of
the patients regarding the inquiry and discussion between the patients
and the pharmacists to resolve any of those red flags as identified by
[the Expert], and for those prescribers to testify about their basis
for issuing the prescriptions for those particular patients.'' Id. at
12.
On January 15, the ALJ issued a Preliminary Order Regarding Scope
Of Proceedings. ALJ Ex. 19. Therein, the ALJ explained that ``any of
those proposed patient and physician witnesses who are not linked to a
prescription transaction which the Government asserts created a `red
flag' present[s] the potential for providing no relevant evidence.''
Id. at 3. However, the ALJ also held that ``to the extent warranted by
the Government's disclosure (and potentially its case-in-chief at the
hearing), the Respondent may seek leave to present evidence from
prescribing practitioners and/or patient-customers on the narrow issue
of rebutting Government evidence that controlled substances were
dispensed in the face of `red flags' of diversion with no attempts made
to contact those witnesses to attempt to resolve the `red flag(s).' ''
Id. The ALJ thus concluded that ``[a]s the proffer stands now . . . an
insufficient basis has been presented for presenting the testimony of
all of these 1598 proposed witnesses.'' Id. (citing Respondent's
Prehearing Statement, at 3 and Exhibits A & B).
Addressing Respondents' proffers of 13,510 pages of documents, the
ALJ found ``that many of these documents are not relevant to this
proceeding.'' Id. at 4. The ALJ thus excluded Respondent from admitting
any documents ``not linked to inventory practices, the controlled
substance audit, or prescription transactions specified in the Order to
Show Cause.'' Id. Finally, the ALJ precluded Respondent's Pharmacy
Expert from testifying ``regarding applicable legal standards and any
aspect of the Respondent's legal obligations as a DEA registrant.'' Id.
at 5. However, the ALJ held that Respondent's Pharmacy Expert would be
permitted to testify as to other areas in accordance with Respondent's
proffer. Id. at 4.
The same day, the ALJ also issued her Prehearing Ruling. In
addition to setting the date of the evidentiary hearing, the Ruling
also advised each party that if it chose to amend its witness list to
include a new witness, it must file a supplement to its Prehearing
Statement and include a summary of the witness's proposed testimony.
ALJ Ex. 20, at 3. The Ruling further explained ``that witnesses not
properly identified and testimony not summarized in prehearing
statements or supplements thereto will be excluded at the hearing,''
and that if either party ``wished to raise any issues of inadequacies
or ambiguities regarding the proposed witness' testimony . . . [it] may
do so by motion.'' Id. Finally, the Ruling specified the date by which
all

[[Page 49818]]

documentary evidence as well as any affidavits were to be provided to
both the tribunal and the opposing party.\3\ Id.
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\3\ There were numerous motions filed during the course of the
pre-hearing procedures. My discussion of the motions and rulings is
confined to those which limited the scope of the proceeding and the
evidence that was admissible.
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Thereafter, both of Respondent's counsels moved to withdraw; the
ALJ granted the motions. ALJ Exs. 24, 25, 29, 31. Subsequently, new
counsel entered an appearance and simultaneously moved for a
continuance. ALJ Ex. 27, 30. The ALJ granted the motion and continued
the hearing for three weeks, scheduling it for March 10 through March
13, 2015. ALJ Ex. 40. In the meantime, both parties filed supplemental
prehearing statements, ALJ Ex. 34 & 37, requests for subpoenas, and
additional motions.
On March 10 through 12, 2015, the ALJ conducted an evidentiary
hearing in Tampa, Florida. See Recommended Decision (hereinafter, cited
as R.D.), at 5. At the hearing, both parties elicited testimony from
multiple witnesses and submitted various exhibits. Following the
hearing, the ALJ left the record open so that the Government could
submit an affidavit from a Special Agent who was then out of the
country. Tr. 613. On April 16, 2015, the Government submitted the
affidavit, and on April 21, 2015, the ALJ admitted the affidavit and
closed the record. ALJ 52. Thereafter, both parties filed briefs
containing their proposed findings of fact, conclusions of law, and
argument.
On April 29, 2015, the ALJ issued her Recommended Decision.
Therein, the ALJ found that the Government had ``proved its prima facie
case for revocation through the failing of Respondent's accountability
practice and its violation of its corresponding responsibility by
dispensing controlled substances without first resolving red flags
raised by the prescriptions.'' R.D. 50 (citing 21 CFR 1306.04(a)). The
ALJ further held that the testimony of Respondent's pharmacist-in-
charge (PIC) on the issue of acceptance of responsibility ``lack[ed]
credibility.'' Id. at 52. Noting that while its PIC had stated that he
had done due diligence in accordance with its protocols prior to
dispensing the prescriptions at issue, the ALJ drew an adverse
inference based on Respondent's failure to produce evidence to
corroborate the PIC's assertion. Id. The ALJ thus ``conclude[d] that
the Respondent's representatives have not accepted responsibility for
the full extent of their actions proven by the Government,'' thus
rendering its evidence of remedial measures irrelevant. Id. The ALJ
then recommended that Respondent's registration be revoked and that any
pending applications be denied. Id. at 53.
Respondent filed Exceptions to the Recommended Decision and the
Government filed a Response to Respondent's Exceptions. Thereafter, the
record was forwarded to me for Final Agency Action.
Having considered the record in its entirety, including
Respondent's Exceptions (which I discuss throughout this decision), I
adopt the ALJ's legal conclusions that Respondent violated the
corresponding responsibility rule of 21 CFR 1306.04(a) with respect to
many of the prescriptions. I also agree with her legal conclusion that
Respondent failed to maintain accurate records as required by 21 U.S.C.
827. And I further agree with her legal conclusion that Respondent has
failed to accept responsibility for the misconduct which has been
proven on the record of the proceeding. Accordingly, I agree with the
ALJ's ultimate conclusion that Respondent has committed acts which
render its continued registration inconsistent with the public interest
and will adopt her recommendation that I revoke Respondent's
registration and deny any pending applications. I make the following

Findings of Fact

Respondent is the holder of DEA Certificate of Registration
FH0772257, pursuant to which it is authorized to dispense controlled
substances in schedules II through V, as a retail pharmacy, at the
registered location of 7730 W. Hillsborough Ave., Tampa, Florida 33615.
GX 1. This registration does not expire until October 31, 2016. Id.
According to Respondent's registration, it is owned by Hills Pharmacy,
L.L.C.\4\ Id. No evidence was put forward as to Respondent's current
licensure status with the Florida Department of Health.
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\4\ Notwithstanding its representation in its opening statement
that it would ``show that Hills Pharmacy is owned by Hope'' Aladiume
and ``her brother is Victor Obi Aladiume,'' Tr. 9, the Government
put forward no evidence establishing Hope Aladiume's relationship to
Respondent, or whether Victor Obi is her brother. Of note, Victor
Obi was the owner of two Tampa pharmacies whose registrations I
recently revoked. Superior Pharmacy I and Superior Pharmacy II, 81
FR 31310, 31341 (2016). Moreover, Victor Obi served as ``the
designated representative of the Respondent'' during this
proceeding. Tr. 4.
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The Investigation of Respondent

On February 4, 2013, DEA Investigators executed an Administrative
Inspection Warrant (AIW) at Respondent. Tr. 233. The lead Investigator
presented the AIW to Respondent's PIC (Mr. George), and obtained
various records from Respondent including inventory records, receipt
records, and prescriptions. Id. According to the Investigator, he asked
for two years' worth of records.\5\ Id. The DI further testified that
while Respondent provided him with a perpetual inventory of various
schedule II drugs, the document ``did have physical inventory dates in
there.'' \6\ Id. at 235. According to the Investigator, ``there was not
one date [when] every controlled substance was inventoried.'' Id. Thus,
the beginning dates for the drugs that were audited varied. Id. at 236.
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\5\ According to the DI, ``not all of the required records were
onsite.'' Tr. 252. The DI specifically identified the offsite
records as including prescriptions from February 4, 2011 through
April 2011, inventories from February 4, 2011 through the end of
2011, and receiving records from February 4, 2011 through the end of
2011. Id. at 253. The DI further testified that Respondent's
attorney had stated that the records were offsite and that the
office manager had the key and was not available that day. Id.
Respondent, however, disputed that the records were offsite. Its
PIC testified that the records were onsite in a locked storage room,
but that he had left the storeroom key at home that day, and that
when Respondent's owner arrived with the duplicate key ``two hours
later,'' ``the officers [had] left'' so he provided the records to
its lawyer. Id. at 536.
\6\ According to the transcript, the Government asked the DI:
``Did you inquire whether Hills had a bi-annual inventory?'' Tr.
234. After he explained that he was provided with the above-
mentioned perpetual inventory, the Government asked the DI: ``So
that's how you conclude there was no bi-annual inventory?'' Id. at
235. The DI answered ``correct.'' Id.
Federal law requires, however, that a registrant take biennial
and not biannual inventories. 21 U.S.C. 827(a). Moreover, the
transcript was not corrected. Thus, I take the transcript as it is.
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The DI further testified that as part of executing the AIW, a
closing inventory was taken in which various schedule II drugs were
physically counted. Id. at 237. According to the DI, the closing counts
were taken by Mr. George (Respondent's PIC) and were recorded on a
document.\7\ Id.; GX 7. However, the closing inventory was signed by
another Diversion Investigator and witnessed by a DEA Special Agent
rather than Mr. George. GXs 7 & 16; Tr. 312.
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\7\ However, other testimony was to the effect that the closing
inventory counts were done by the PIC, another DI, and the Special
Agent who signed the inventory as a witness. Tr. 287, 312. Moreover,
Mr. George testified that he did not participate in the counting of
the drugs on hand. Tr. 535. And he further testified that the
Investigators did not tell him that they were ``doing the actual
count.'' Id. Be that as it may, I find no reason to reject the
closing count.
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Using the inventories and the records of Respondent's receipts and
prescriptions, the DI conducted an audit of Hills' handling of seven
schedule II

[[Page 49819]]

controlled substances. According to the DI, he conducted the audit by
adding Respondent's purchases to the initial inventory figures to
calculate the quantity of each drug that Respondent was accountable
for. Tr. 237. The DI then explained that the ``total accounted for''
was calculated by using the closing inventory (i.e., the inventory
taken on the date of the inspection) and adding the amounts distributed
or transferred of each drug. Id. According to the DI, the latter was
``basically . . . what they filled at the pharmacy'' as the
Investigators did not ``come across'' any ``sales . . . to other
pharmacies.'' Id. He further testified that in calculating Respondent's
purchases, ``the only numbers that [he] used was stuff that we actually
had a physical 222 [form] or [a] CSOS representation'' and that he did
not count product which was recorded in the perpetual inventory if
there was no 222 form for it. Id. at 273.
Comparing the ``total accountable for'' with the ``total accounted
for'' for the seven drugs, the DI found that Respondent had overages in
six of the drugs, the most significant being 1,306 dosage units (du) of
oxycodone 30 mg and 8,758 du of hydromorphone 8 mg.\8\ GX 4. Moreover,
Respondent had a shortage of 4,135 du of hydromorphone 4 mg. Id.
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\8\ According to the Government, Respondent had overages of 5 du
in methadone 10 mg, 82 or 88 du in morphine sulfate 30 mg, 113 du in
morphine sulfate 60 mg, and 2 du in morphine sulfate 100 mg. GX 4,
at 1.
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Respondent disputed the accuracy of the audits. Specifically, its
PIC testified that there were controlled substances in the will-call
bins. Tr. 536-37. Respondent's PIC then explained that these drugs
would be prescriptions that were finished in ``vials with the label''
and ``waiting for the patient to come and collect it.'' Id. at 537.
Moreover, a DI testified that the audit team did not count the
prescriptions in the will-call bins. Id. at 290. He also did not recall
if drugs that were quarantined for disposal were counted. Id.
Respondent, however, put forward no evidence that there were any
drugs quarantined for disposal on the date that the AIW was executed,
let alone that any of those drugs were those being audited.
Subsequently, the DI testified that ``[w]e asked where the controlled
substances were,'' and counted the drugs in the safe because ``that's
where we were shown.'' Id. at 291.
Respondent's PIC also testified that there were some medications
that were returned to the pharmacy's stock when they were not picked up
by the customer. Tr. 525. He further identified a document (RX 6, at 3)
which lists six instances (by date, RX number, patient name, and
quantity) in which a patient apparently did not pick up a prescription
for hydromorphone 8 and the drugs were returned to stock. Tr. 525. The
PIC testified that he did not know if DEA counted the pills that were
returned to stock if they were still on hand. Id.
Respondent did, however, introduce into evidence various documents
for each of the audited drugs, including a list of the prescriptions
that were dispensed, its perpetual inventory for the drug, the invoices
and scheduled II order forms for its receipts, and, as explained above,
in some instances, a document listing ``returns to stock'' from
patients. As discussed later in this decision, with respect to the
overages alleged by the Government as to oxycodone 30 mg and
hydromorphone 8 mg, the records show that Respondent placed additional
orders that were not counted by the Government and establish that the
overages in these two drugs were substantially less than the quantities
alleged by the Government. Respondent's records do not, however, call
into question the conclusion that it had a large shortage in
hydromorphone 4 mg and actually support the conclusion that the
shortage was even larger than that alleged by the Government.
The same DI also testified as to other alleged violations. More
specifically, the DI testified that several DEA Order Forms for
Schedule II drugs (Form 222) were not properly completed, because
``[w]hen they don't receive a drug, they need to write a zero if they
didn't receive anything.'' Tr. 255. While the DI did identify an
instance in which Respondent had notated the receipt of six packages of
methadone 10 mg, he noted that Respondent had failed to include the
date that the packages were received. Id.; see also GX 10, at 9. He
then testified regarding a further order form, on which three of the
four line items had been filled in with both the quantity received and
the date received, explaining with respect to an entry that was not
completed, that the forms ``are missing [the] number of packages
received, [the] date received.'' Tr. 255. However, when asked by the
ALJ whether the pharmacist would ``put the date that he entered the
zero'' for a similar entry which was left blank (GX 10, at 1, line 2),
the DI testified; ``I'm not sure about that, but we need the number
zero at least.'' Tr. 256.
The DI also testified that there were some instances in which
Respondent provided him with a photocopy of the purchaser's copy of the
222 form, rather than the original which it is required to maintain for
a period of two years. Id. at 257 (discussing GX 11, at 2). The DI also
testified that Respondent did not have any inventory document other
than the perpetual inventory documents that its PIC provided. Id. at
270. Re-emphasizing the point, the DI subsequently testified that
``that's all we had, so we had to use it.'' Id. at 278.

The Allegations of Dispensing Violations

Following the execution of the warrant, another DI provided a CD
which contained copies of the schedule II prescriptions \9\ that were
seized to Robert Parrado, R.Ph., who reviewed them and testified as an
Expert for the Government. The DI testified that the Investigators did
not obtain the patient profiles (which apparently could have been
extracted from the computer which was imaged by the inspection team)
and thus did not provide them to Mr. Parrado. Tr. 300.
---------------------------------------------------------------------------

\9\ According to the DI, the Investigator did not seize ``any
noncontrolled prescriptions'' and ``just took [the] [s]chedule [II]
scrips.'' Tr. 299.
---------------------------------------------------------------------------

Mr. Parrado testified that he obtained his B.S. in Pharmacy in 1970
from the University of Florida College of Pharmacy and that he has held
a Florida pharmacist's license since 1971. Tr. 14; GX 2, at 1. Mr.
Parrado testified that he has practiced as a pharmacist at both
community pharmacies as well as hospital pharmacies; he also testified
that he had been the pharmacy department manager at multiple
pharmacies, including two pharmacies that he owned for approximately 19
years. Tr. 15-16; GX 2, at 1-2.
Mr. Parrado was a member of the Florida Board of Pharmacy from
January 2001 through February 2009, and served as both Vice Chairman
and Chairman of the Board. Tr. 17; GX 2, at 3. He is a member of the
Florida Pharmacy Association, having served as both its President and
then Chairman of the Board. GX 2, at 3. He is also a member of the
Hillsborough County Alcohol & Drug Abuse Task Force, the National
Community Pharmacists Association, and the American Society for
Pharmacy Law. Id. Finally, he has made numerous presentations on the
dispensing of controlled substances by pharmacists, id. at 3-7, and has
testified as an expert witness for both the prosecution and defense in
criminal and administrative matters. Tr. 18.
On voir dire, Mr. Parrado explained that he reviewed only the front
and back of the prescriptions in forming his opinions, and that while
he had also recently been provided with and looked at ``some Respondent
exhibits [that]

[[Page 49820]]

looked like partial . . . medical records . . . for about 25
patients,'' he had already formed his opinion before he reviewed those
documents. Tr. 29-30, 32. Mr. Parrado also testified that he did not
interview any patients, doctors or pharmacists, and that he was not
provided with any information regarding interviews conducted by DEA
personnel of the patients, doctors, or pharmacists. Id. at 39. Mr.
Parrado testified that he did a limited amount of research on his own,
which included doing Google map searches to determine how far the
patients lived from Tampa, looking to see whether the doctors had a
valid license, looking up the pharmacy on the Board of Pharmacy's Web
site to determine its ownership and prescription department manager,
and looking to see whether the pharmacists had valid licenses and a
disciplinary history. Id. at 40-42. After an extensive voir dire by
Respondent's counsel, Respondent objected to Mr. Parrado's being
recognized as an expert in community pharmacy practice. Id. at 50. The
ALJ properly overruled the objection, finding that Mr. Parrado was
qualified to testify as an expert in retail pharmacy practice based on
``his knowledge, skill, experience, training, and education.'' Id. at
52.
On resumption of direct examination, the Government asked Mr.
Parrado if there is ``a specific protocol'' that a pharmacist must
follow ``before dispensing a controlled substance?'' Id. at 53-54. Mr.
Parrado explained that a pharmacist ``has to ensure that the
prescription is valid,'' and that under both the Florida Statutes and
federal regulations, ``a pharmacist has to ensure the prescription is
valid by making sure that it was written by a doctor in the course of
his professional practice and that it was for a legitimate medical
purpose.'' Id. at 54. Asked what a pharmacist is ``required to look for
on the actual prescription,'' Mr. Parrado testified:

Well, there are certain requirements that have to be on a
prescription. What creates a red flag is anything that causes a
pharmacist concern about that prescription. . . . [T]here is a thing
a pharmacist has to do before he fills a prescription that is called
prospective drug review. He has to go over that prescription. He has
to evaluate the prescription for appropriateness of therapy, for
seeing if there is any therapeutic duplications of medications. Are
there any drug/drug interactions? Are there any drug/disease
interactions? Is the prescription for--does it show signs of
clinical abuse or misuse? You know, that's just a basic thing a
pharmacist does before he fills a prescription.
And then, knowing all the requirement of a prescription, what
must be on that prescription as far as the patient name and address,
the physician's name and address, the DEA number, the name of the
medication, the strength, the directions, all those things, the
quantity, have to be on that prescription.

Id. at 54-55.
Asked by the Government to explain what a ``red flag'' is and to
give examples, Mr. Parrado testified that ``a red flag . . . is
anything that would cause a pharmacist concern,'' and that ``[t]here
are lots of things that lead to red flags'' when a pharmacist is
``trying to determine'' if a prescription was issued ``for a legitimate
medical purpose.'' Id. at 55-56. Mr. Parrado then identified multiple
red flags, including, what he termed the ``first red flag,'' that being
``the drug itself,'' as there are ``known drugs of abuse'' that are
being ``commonly'' abused. Id. at 56. Mr. Parrado then identified
additional red flags to include: the ``the dosing''; ``[a] person
travelling a long distance to acquire that drug''; ``a person willing
to pay a lot, a lot of money in cash to obtain that drug''; and ``a
person getting . . . certain cocktails of drugs.'' Id. As to the
latter, Mr. Parrado explained that:

A cocktail is multiple drugs . . . that are known to be abused
on the street, and the most common . . . has a name, it's called the
Holy Trinity, which would be oxycodone, which is an opioid, a
benzodiazepine, which would be a tranquilizer such as Xanax, and a
muscle relaxer like Soma. Those three together are well known
combinations or cocktails that are abused on the street.

Id.
Next, the Government asked whether ``a pharmacist look[s] at the
actual amounts that are prescribed when determining whether there's a
red flag on that prescription?'' Id. Mr. Parrado answered that a
pharmacist is ``required by law . . . to make sure that the dosing is
not excessive or inappropriate'' and ``[t]hat's one of our things that
we are trained in.'' Id. at 57. Continuing, Mr. Parrado explained that:

One of the things that a pharmacist knows or should know is that
oxycodone . . . that 80 milligrams a day has been listed in the
literature as a lethal dose for an opioid na[iuml]ve patient. So,
when being presented with a prescription for a dose that would
exceed 80 milligrams in one day, that pharmacist would need to stop
and take a look and verify that the patient is not opioid na[iuml]ve
and has been on a regiment [sic] that has led him to develop a
tolerance to that dose.

Id.
Mr. Parrado further identified as a red flag the simultaneous
prescribing of two immediate release opioids, which he stated ``would
be inappropriate therapy.'' Id. at 58. He also identified as a red flag
``pattern prescribing,'' which he defined as ``when I see the same
medications, the same groups of medications, same combinations of
medications in very similar quantities and very similar doses coming
out of one . . . clinic.'' Id. Continuing, Mr. Parrado testified:

When I see multiple people presenting with a very similar group
or combination of prescriptions coming from one particular clinic,
that is very much a red flag. That's not what happens in the average
course of a day in a pharmacy. You don't see groups of people coming
in from the same clinic, all getting the same drugs in large
quantities and all willing to pay cash.

Id. at 59.
Mr. Parrado identified a further red flag as ``multiple people
living in one household all receiving the same medications.'' Id. Mr.
Parrado then testified: ``[i]s it possible? It could be, but it's just
not--it doesn't happen on an everyday basis'' and that he ``would have
to resolve [this red flag] before [he] could fill'' the prescriptions.
Id.
Mr. Parrado testified that ``the basic way of resolving a red flag
is . . . to verify [the prescription] with the prescriber,'' and that
``you consult with the prescriber'' and not his staff or nurse, ``over
your concerns.'' Id. at 60. According to Mr. Parrado, the pharmacist
must then ``use [his/her] professional judgment'' and ask ``[d]id I
believe what I just heard? . . . [Are] there any red flags in the
conversation I just had?'' Id. Mr. Parrado added that ``I've had many,
many instances where after a conversation with the physician I said
absolutely I'm not going to fill that prescription.'' Id.
Mr. Parrado further testified that some red flags are unresolvable.
Id. As an example of unresolvable red flags that would lead him to
refuse to fill a prescription, he identified ``a group of multiple
people travelling a long distance, all getting the exact same or very
similar prescriptions from one physician and all coming in with very,
very large quantities of cash.'' Id. at 60-61. Mr. Parrado then
testified that ``if you do see a red flag and you can resolve it, you
document it on the prescription and then you fill it.'' Id. at 61. Mr.
Parrado reiterated that the resolution is written ``[o]n the
prescription itself.'' Id.
To counter Mr. Parrado's testimony as to the procedures a
pharmacist must follow in dispensing controlled substances, Respondent
called Dr. Sam Badawi. Dr. Badawi obtained his Doctor of Pharmacy
degree from Samford University in 2002, and he is licensed to practice
pharmacy in both Alabama and Florida, becoming licensed in the latter
State in 2010. Tr. 346. He also

[[Page 49821]]

holds Juris Doctor degrees from both the Birmingham School of Law
(2008) and Stetson University (2014), as well as an L.L.M. (2011) from
Stetson in international intellectual property. Id.
Mr. Badawi testified that he had worked as a full-time retail
pharmacist in Alabama until sometime in 2004 or 2005, when he
``transitioned into clinical pharmacy and IV infusion,'' which involved
working ``with hospice patients who required intravenous pain
prescriptions'' and ``morphine pumps.'' Tr. 348. While Mr. Badawi
asserted that he continued to work on a part-time basis in retail
pharmacy, he subsequently went to work for Amgen, a biotechnology
company where his duties involved clinical trial design. Id. at 366.
On voir dire, Mr. Badawi testified that while he had worked in
retail pharmacy for about ten years, four of those years were as an
intern. And while he then asserted that he had worked in retail
pharmacy ``from 02 all the way up to 08, when [he] moved to Florida,''
id. 372, his testimony was that for much of this time he worked only on
a ``floating'' or ``part-time basis.'' Id. at 374. Mr. Badawi also
acknowledged that when he worked at Amgen, as well as when he worked as
a clinical pharmacy director, he did not interact directly with
patients. Id. at 374-76. He further acknowledged that he had never
taught pharmacy or published any articles; he also testified that his
experience managing a pharmacy was limited to doing so on an interim
basis ``for a couple of months.'' Id. at 376.
Mr. Badawi further acknowledged that he is not currently practicing
pharmacy. Id. at 377. As for his experience testifying as an expert
witness, Mr. Badawi testified that it is limited to a single criminal
case in which he was listed as a witness but did not testify. Id. at
381. While the Government objected to Mr. Badawi's being qualified as
an expert witness on the standard of pharmacy practice as it affects
the dispensing of controlled substances, the ALJ overruled the
objection and deemed him qualified ``as an expert in the standard of
[pharmacy] practice as to the effective dispensing of controlled
substances.'' Id. at 390.
On direct examination, Mr. Badawi testified that when a controlled
substance prescription presents a red flag, ``[a] reasonable, prudent
pharmacist will follow the DEA [Pharmacist's] Manual,'' which was
published in 2010 and which at ``page 67'' lists criteria that ``may be
an indication . . . that [the] prescription was not issued for a
legitimate medical purpose.'' Id. at 391. Continuing, Mr. Badawi
testified that ``[a]nd you have six options. And then it tells you what
to do.'' Id. at 391-92. Mr. Badawi then referenced a Florida Board of
Pharmacy Rule (Fla. Admin. Code r.64B16-27.831), which states that ``a
prescription that is not issued for a legitimate medical purpose is not
a valid prescription,'' and ``gives you five different scenarios''
before adding that ``in a retail setting, I would follow first the DEA
Manual.'' Id. at 392.
Mr. Badawi then testified as to the prevention techniques listed in
the Manual, which include ``[k]now[ing] your patient . . . what's the
story behind that patient,'' ``know[ing] your drug, and know[ing] the
prescriber and the DEA.'' Id. at 393. Mr. Badawi asserted that this is
what a reasonably prudent pharmacist would do, ignoring that the Manual
then states that ``[w]hen there is a question about any aspect of the
prescription order, the pharmacist should contact the prescriber for
verification or clarification.'' Pharmacist's Manual, at 67.
Mr. Badawi then testified that ``[a] red flag is a caution sign for
the pharmacist,'' but ``on its face alone does not mean the
prescription is invalid.'' Id. at 394. Continuing, Mr. Badawi testified
that the Manual says that:

if any of these criterias [sic] are found . . . the prescription may
not be issued for [a] legitimate medical purpose. So actually it's a
caution sign. You stop and you look, meaning that you default back
on your training, your knowledge, state laws, federal laws, common
sense as a professional, and you exercise that professional
judgment, meaning a discretion.
So after you stop with that red flag, and then you proceed with
caution, and you exercise your discretion. So, if a pharmacist
chooses to exercise that discretion favorably by resolving the red
flag, then you dispense it. If not, then you don't dispense it.

Id. at 395.
Respondent's counsel then questioned Mr. Badawi about the specific
red flags identified by the Government's Expert and how a pharmacist
should resolve the red flag. Id. at 395-96. As to how a pharmacist
should resolve the circumstance where prescriptions are presented
``from multiple individuals for the same or similar types of drugs
[narcotics] in similar quantities,'' Mr. Badawi acknowledged that this
is a red flag. Id. Mr. Badawi then testified that a pharmacist should
``fall back to the DEA Manual rules'' and ``[k]now the patient. So I
have two patients with the same address from the same prescriber, so I
would actually inquire into the circumstance of these two patients.''
Id. at 396. Continuing, Mr. Badawi added that ``then you want to know
the doctor'' and whether he is ``a pain management'' or ``an ortho
surgeon'' and ``[w]hat's the origination of that prescription?'' Id.
According to Mr. Badawi, if the pharmacist still had doubts despite
knowing this:

you pick up the phone and ask to speak to the prescriber to find out
more of the story because sometimes your patients are not going to
tell you everything. So I don't want to miss the whole picture. So I
would call the prescriber and verify. And if I still have doubts, I
would not dispense that prescription. So that goes all under
professional judgment, not just looking at the piece of paper and
making a decision.

Id. at 396-97. Mr. Badawi maintained, however, that this red flag could
be resolved and the prescription could be dispensed. Id. at 397.
Respondent's counsel then asked Mr. Badawi whether the fact the
drug alone was for oxycodone 30 mg was a red flag of the prescription's
potential illegitimacy. Id. at 397-98. While Mr. Badawi initially
answered that ``[t]he drug by itself, no,'' he then testified that a
Board of Pharmacy Regulation ``says that if the patient, all he or she
is getting [is a] controlled substance, the oxycodone by itself could
be under Florida law a red flag because it meets that criteria.'' Id.
at 399. Then asked what a pharmacist should do to meet the standard of
practice where a patient presents only a prescription for oxycodone 30
mg, Mr. Badawi answered: ``Know your patient. So I would actually look
into the patient profile history of that patient'' to see ``if there
are any notes being documented in the computer from prior pharmacists
that actually dispense [sic] for this individual.'' Id. Mr. Badawi then
explained that one of the reasons for reviewing the patient profile is
that ``there are certain drugs'' that you ``want to steer away from
opioid-na[iuml]ve patients'' and that a pharmacist ``want[s to] make
sure that the patient is able to tolerate the drug because it's a CNS-
depressant.'' Id. at 400. Mr. Badawi also explained that the pharmacist
must review the patient profile to determine whether there are any
``drug-drug interactions.'' Id. at 401.
Mr. Badawi acknowledged his agreement with Mr. Parrado's testimony
that a prescription that calls for the dispensing of a ``very large or
larger than normal amounts of a narcotic'' raises a red flag which
requires that the pharmacist make an inquiry. Id. at 402-03. He also
acknowledged that a narcotic prescription which provides for dosing
that is ``larger-than-normal,'' or ``larger-than the manufacturer's
recommended dosage'' also creates a red flag which requires the
pharmacist to

[[Page 49822]]

look at the patient profile and determine if the patient has developed
tolerance. Id. at 403-04. Mr. Badawi then explained that the doses of
patients being treated with narcotics ``typically increase[ ] over time
to achieve the pharmacological effect and also with respect to
tolerance,'' and it ``very common'' for a patient to be prescribed both
an extended release drug and immediate release drug ``for breakthrough
pain.'' Id. at 404.
As for the circumstance of a patient presenting prescriptions for
two short acting narcotics, Mr. Badawi testified that he ``would
consider it as a red flag, and I would investigate further, and I would
exercise my professional judgment.'' Id. at 418-19. When later asked on
cross-examination, what possible explanation there could be for a
patient to be prescribed two short-acting opiates together, Mr. Badawi
suggested that a patient with kidney failure who is undergoing dialysis
three times a week may require a combination because ``the drug is
being excreted by the kidneys.'' Id. at 435-36.
Mr. Badawi further testified that it is ``common for physicians to
issue prescriptions for [schedule II] drugs without the address being
on the face of the prescription.'' Id. at 406. However, he testified
that DEA had issued guidance that a pharmacist is to look at his/her
State's rule'' to determine whether the patient's address could be
added to the prescription. Id. at 406-07.
As for how a pharmacist would address the circumstance in which a
patient lives ``a significant distance . . . from the pharmacy,'' Mr.
Badawi testified that ``you want to know the patient, the reason why
they're 100 miles way.'' Id. at 407-08. Mr. Badawi then suggested that
the patient could be ``on a special assignment to MacDill Air Force
Base,'' which is located in South Tampa; that the patient could be a
snowbird and that Florida has ``a lot of snowbirds''; the patient could
be on a three-month job assignment in Tampa or ``moving in with his
fiancée.'' Id. at 408. Mr. Badawi then testified that he was
``not discounting that'' this ``is a red flag,'' and that a pharmacist
should ``investigate more.'' Id. He then maintained that ``there is a
professional judgment for the pharmacist to exercise, and based on the
fact, you act accordingly.'' Id. And he further asserted that the
proximity of the prescribing doctor to the pharmacy could explain why
the patient who had travelled a long distance was filling the
prescription at the pharmacy. Id. at 409.
Later, in response to a question by the ALJ, Mr. Badawi maintained
that even if the patient was travelling a long distance, if the patient
was a regular patron, ``that would actually resolve the distance.'' Id.
at 437-38. However, after again testifying that the pharmacist should
know his patient, the prescriber and the medical condition, Mr. Badawi
explained that the pharmacist ``may want to inquire more about the
patient [sic] reasons for being in hypothetically Tampa.'' Id. at 438.
Asked what types of prescriptions a reasonable pharmacist would
``expect to see'' when ``there is a pain management facility that is
seeing a large number of patients for chronic pain,'' Mr. Badawi
testified that a pharmacist would expect the prescriptions to be for
``primarily opioids.'' Id. at 416. Then asked what a pharmacist should
do ``to adhere to the standard of practice . . . and address that
issue,'' Mr. Badawi testified that ``when I was there, most of the
patients . . . were regulars, and they were getting it actually on set
intervals.'' Id. at 416. As for ``a new patient, you would go through
ID verification [and] [y]ou would actually have them fill out more of a
history, diagnosis.'' Id. at 417. Mr. Badawi then agreed with
Respondent's counsel's suggestion that knowing that the clinic
administered random drugs screens would ``assist a reasonable
pharmacist.'' Id. Asked what other information a pharmacist would want
to know about the practices of a pain management clinic, Mr. Badawi
testified that a pharmacist would want know that the practitioners
``hold a valid DEA license'' and that the clinic has ``an active state
license to conduct business.'' Id. at 418. Continuing, Mr. Badawi
explained that ``you utilize the [Prescription Drug Monitoring Program]
and the patient profile. So it's the totality of the circumstances, not
just one angle, like a tunnel vision, when you actually want to verify
these red flags.'' Id.
Mr. Badawi then testified that standing alone, none of the red
flags identified by the Government's Expert render a prescription
invalid. Id. at 419. He then explained that ``[r]ed flags are meant for
the pharmacist to stop and inquire. So, now, if you have a combination
thereof, not just one flag, maybe the weight of the inquiry is probably
more than just one red flag.'' Id. at 419-20. He then testified that
none of the red flags or combinations thereof identified by the
Government's Expert required that the pharmacist reject the
prescription. Id.
Mr. Badawi then testified that with the exception of a Board rule
which requires a pharmacist to make a photocopy of a patient's
identification, or if a copier is not available, to document
descriptive information on the back of a prescription, there is no
requirement that a pharmacist document his resolution of a red flag on
the prescription. Id. at 421. Asked whether it is the standard practice
for a pharmacist to document how he/she resolved every red flag, Mr.
Badawi answered:

. . . I don't know if you could document every single thing. I mean,
you pick your battles. You want to document the major issues, and
documentation nowadays, especially with these computer systems that
would make you approve a prescription via a thumbprint scan, you
don't even have to put a code on the computer anymore. These
electronic records are kept.
I would rather, as a reasonable, prudent pharmacist, and to
benefit my other colleagues who are working after my shift, to have
access to this documentation is to have it on the computer under the
patient notes so they can see what I've done versus the paper trail.

Id. at 422. However, when asked on cross-examination if it is ``within
the standard of practice . . . to not document how a red flag is
resolved,'' Mr. Badawi answered: ``No, it is not in the standard of
practice to make a blanket statement and not to document any red flags
that are being resolved.'' Id. at 436-37.
Mr. Badawi also testified that he had attended a presentation by
Mr. Parrado two years earlier on dispensing controlled substances,
during which Mr. Parrado ``said there is a lot of gray area, it's not
black or white, and to always use your professional judgment.'' Id. at
425. According to Mr. Badawi, during the presentation Mr. Parrado did
not mention that the distance a patient travels is a red flag and that
Mr. Parrado also told the attendees that ``there is no ceiling on'' the
quantity of narcotics that a patient can be prescribed. Id. at 426. Mr.
Badawi also testified that Mr. Parrado did not identify as a red flag
the circumstance of a prescription missing a patient's address. Id. at
426-27. He also asserted that Mr. Parrado did not identify as a red
flag the circumstance of patients residing at the same address. Id. at
427. While the Government objected to Mr. Badawi's testimony regarding
the presentation on the ground that it had not been disclosed in
advance of the hearing, to which Respondent's counsel asserted that
this testimony was offered to impeach Mr. Parrado, id. at 424-25, 427;
the ALJ overruled the objection. Id. at 427.
On cross-examination, Mr. Badawi acknowledged that he had not
looked at any of the prescriptions. Id. at 430. Nor did he look at any
of the patient profiles. Id. Asked if ``traveling hundreds of miles to
see a physician is

[[Page 49823]]

a potential red flag,'' Mr. Badawi testified: ``It's not a potential
red flag. It is a red flag.'' Id. When then asked if travelling
hundreds of miles to see a physician whose clinic was affiliated with
the pharmacy was a red flag, id., Mr. Badawi testified that the
affiliation raised a separate issue regarding possible ``kickbacks and
Stark laws,'' but that ``has nothing to do with the controlled
substance dispensing.'' Id. at 431. However, after again agreeing that
distance ``is a red flag,'' Mr. Badawi stated that ``[i]f they're
sending patients in the back door and the pharmacists suspect that's a
red flag, that's a separate issue on its own.'' Id.
On questioning by the ALJ, Mr. Badawi acknowledged that there are
some red flags that are not resolvable such as a prescription for some
astronomical number of a drug such as morphine. Id. at 439. As an
example, he testified: ``a 12-year old with [a] high doses of opioids,
maybe in the hundred, for a broken bone. That seems excessive. So I
would actually consult with the physician.'' Id. Mr. Badawi did not,
however, explain what action he would take if the physician asserted
that the prescription was legitimate.
As another example of an unresolvable prescription, Mr. Badawi
offered where ``there is any drug-drug interactions that would deem
that the prescription is not in the best interests of the patient.''
Id. However, in Mr. Badawi's view, this involved a ``medical issue''
and ``therapeutic appropriateness'' and ``not necessarily the validity
of the prescription.'' Id. As an example, he then identified a patient
being prescribed opioids when she was pregnant because even though the
prescriptions may have been valid ``medically speaking,'' the fetus
could be born addicted. Id. at 440. Mr. Badawi did not, however,
address whether the simultaneous prescribing of drugs such as oxycodone
30, alprazolam, and carisoprodol also raises an issue of drug-drug
interactions.
As between Mr. Parrado's and Mr. Badawi's testimony, there was
substantial agreement on a number of issues. Where, however, there are
areas of disagreement, I generally find that Mr. Parrado's testimony
was more credible based on his years of service on the Florida Board of
Pharmacy and because his experience in retail pharmacy is far lengthier
and more current than that of Mr. Badawi.

The Prescription Evidence

At the hearing, the Government introduced into evidence copies of
the front and back of 83 prescriptions for schedule II controlled
substances which it alleged were dispensed by Respondent's pharmacists
in violation of 21 CFR 1306.04(a) because they presented red flags
which were not resolved. See GXs 3, 13, 14, and 15. Nearly all of the
prescriptions were issued by physicians at the 24th Century Medical
Center,\10\ which was located at 7747 W. Hillsborough Ave. in Tampa,
id., a short walk from Respondent. According to a DEA Intelligence
Research Specialist (IRS) who reviewed data that came from Respondent's
dispensing software, 1,460 patients filled a total of 4,287 schedule II
prescriptions at Respondent between January 3, 2011 and February 2,
2013. GX 12, at 2; Tr. 219. The IRS further determined that 3,867 of
these prescriptions--more than 90 percent--were written by six doctors
who worked for Victor Obi. Tr. 219, 223; GX 12, at 2. These doctors
include S. A.-H., P.C., R.R., H.D., V.S., and J.E., who worked at the
24th Century clinic. According to the online records of the Florida
Department of Health, 24th Century is a pain management clinic which
has been owned by Mr. Obi since January 4, 2010.\11\
---------------------------------------------------------------------------

\10\ Throughout this decision, the 24th Century Medical Center
is also referred to as the 24th Century clinic and 24th Century.
\11\ I take official notice of the online records of the Florida
Department of Health which establish that Victor Obi-Anadiume is the
owner of 24th Century Medical Center and has been since January 4,
2010. Under the Administrative Procedure Act (APA), an agency ``may
take official notice of facts at any stage in a proceeding-even in
the final decision.'' U.S. Dept. of Justice, Attorney General's
Manual on the Administrative Procedure Act 80 (1947) (Wm. W. Gaunt &
Sons, Inc., Reprint 1979). In accordance with the APA and DEA's
regulation, Respondent is ``entitled on timely request to an
opportunity to show to the contrary.'' 5 U.S.C. 556(e); see also 21
CFR 1316.59(e). Respondent may dispute my finding by filing a
properly supported motion within fifteen calendar days of this Order
which shall commence on the date this Order is mailed.
---------------------------------------------------------------------------

For example, the Government introduced a prescription issued by Dr.
P.C. of the 24th Century Medical Center on July 28, 2011 to T.V. for
210 oxycodone 30 mg, which Respondent filled the same day. GX 3, at 1.
While T.V.'s address was not written on the prescription, the
prescription bears an address label listing T.V.'s address as being in
Pensacola, Florida, a distance of 472 miles from Respondent. R.D. at 6.
Mr. Parrado testified that the prescription presented several red
flags, including the lack of the patient's address; that it was for
oxycodone 30 mg, a known drug of abuse; and that it was for a minimum
of 180 milligrams a day, which is ``well above the 80 milligrams
threshold'' and ``a very high dose'' and large quantity. Tr. 63. Mr.
Parrado then noted that the patient's address was in Pensacola, 472
miles from Respondent. Id. at 64; R.D. at 6.
Mr. Parrado testified there was no indication on the prescription
that ``anything was done . . . except that it was filled.'' Id. Asked
whether it was possible to resolve the various red flags, Mr. Parrado
replied that it was possible, ``but it would have taken a lot of
investigation'' and that he ``would have had to have a good reason why
that patient had to travel all the way to this clinic to get a
prescription filled.'' Id. at 64-65. Continuing, Mr. Parrado stated
that he could ``see if a patient is driving that far because they're .
. . see[ing] a specific physician that has a specialty that's not
available anywhere else.'' Id. at 65. Mr. Parrado subsequently
testified that he was not aware that the physician has any specific
specialty. Id. at 68. After the ALJ properly overruled Respondent's
counsel's objection that Mr. Parrado was testifying beyond the scope of
his expertise, the ALJ asked ``what would indicate on a prescription to
you as a pharmacist of what you're looking for in this physician?'' Id.
at 69. Mr. Parrado answered:

. . . When I look at a prescription, I look and see where it came
from. . . . You know a pharmacist has to exert his professional
judgment on all prescriptions before he fills them. So I would be
looking to see . . . I'm looking at a high dose of a very strong
opioid narcotic. Where is that coming from . . . ? Is that coming
from a cancer center, from an orthopedic office, somebody just had a
big surgery? . . . I look for things like that, and I didn't see
anything like that on here or I didn't see anything on this
prescription that would indicate that a pharmacist had called to
verify any of those things.

Id. at 69-70.
Next, on August 4, 2011, Dr. S.A.-H., also of the 24th Century
Medical Center, issued a prescription to J.P. for 196 oxycodone 30 mg;
Respondent filled the prescription the same day. GX 3, at 2. Here too,
J.P.'s address was not written on the prescription; rather a label was
attached which listed J.P.'s address as being in St. Augustine,
Florida, a distance of 196 miles from Respondent. Id.; R.D. at 6.
Asked if the prescription presented any red flags, Mr. Parrado
identified the lack of the patient's address; that is was written for
oxycodone 30, ``a known drug of abuse''; that ``it's a very high
quantity''; that the patient lived ``a rather good distance'' from
Tampa; that it came from the 24th Century clinic; and that ``[t]he
patient paid $784 in cash.'' Id. at 70-71. As to the cost of the
prescription, Mr. Parrado testified that:

You don't see people paying $784 in cash. You tell a person they
have a $50 co-pay and

[[Page 49824]]

they go ballistic on you. And for a person to willingly pay $784 and
not have any documentation as to why they did that and to see that
over and over every day is a concern to me. . . . That's a red flag
that I couldn't resolve.

Id. at 71. Mr. Parrado then explained that ``there were multiple
red flags on here'' and that ``[a]ny attempt to have . . . done
anything with them to resolve them would have been documented on the
prescription.'' Id. at 71-72. However, Mr. Parrado ``did not see any
documentation on this prescription that led me to believe anything was
done.'' Id.
Also on August 4, 2011, Dr. P.C. of the 24th Century Medical Center
issued a prescription to T.P.--who has the same last name as J.P.--for
224 oxycodone 30 mg; Respondent filled the prescription the same day.
GX 3, at 3. Here too, T.P.'s address was not written on the
prescription; rather a label was attached which listed her address as
also being in St. Augustine, Florida. Id.; R.D. at 6. Moreover,
Respondent`s dispensing software assigned the number 2037897 to J.P.'s
prescription and the number 2037898 to T.P.'s prescription. GX 3, at 2-
3.
Asked if T.P.'s prescription presented any red flags, Mr. Parrado
testified that ``[h]ere we have two people with the same last name
traveling from St. Augustine . . . to get very similar prescriptions.''
Tr. 72. After noting the quantity of each prescription, Mr. Parrado
testified that there were ``the same red flags as before. No address,
the known drug of abuse, the high quantity, traveling the long
distances'' and that T.P. ``paid $896 in cash.'' Id. According to Mr.
Parrado, T.P.'s prescription ``was the very next prescription entered''
in the dispensing software after J.P.'s. Id. at 74.
Also on August 4, 2011, Dr. P.C. issued a prescription for 240
oxycodone 30 to W.J.; Respondent filled the prescription the same day.
GX 3, at 4-5. Here too, W.J.'s address was not written on the
prescription and had been added by a label which listed his address as
being in San Antonio, Florida, a distance of 36 miles from Respondent.
Id.; R.D. 6.
Mr. Parrado testified that the prescription presented red flags
which included the lack of the patient's address; that the drug was for
oxycodone 30, a known drug abuse; that the quantity was very high; that
the patient was travelling from a town which is ``40 miles from
Tampa''; that the patient paid $960; that the prescription was written
by a doctor from the same clinic; and that the prescription number
(2037895) preceded the numbers on the prescriptions presented to J.P.
and T.P. Tr. 75. Mr. Parrado explained that ``[t]hese were all filled
on the same day, so you have multiple prescriptions coming in from
people travelling a long way, from the same clinic, for very similar
drugs, and paying in cash, very large quantities of cash.'' Id. at 75-
76. Mr. Parrado then testified that there was no evidence on the
prescription that the red flags were resolved. Id. at 76.
On July 29, 2011, Dr. S.A.-H. issued a prescription for 140
oxycodone 30 to W.D.; Respondent filled the prescription the same day.
GX 3, at 6-7. Here again, the prescriber had not written W.D.'s address
on the prescription and his address was added by label which listed it
as being in St. Cloud, Florida, a distance of 92 miles from Respondent.
Id.; see also R.D. at 6. Mr. Parrado testified that the prescription
presented ``the exact same red flags as . . . the previous
prescriptions,'' and that there was no documentation that the red flags
were resolved. Tr. 76-77.
Mr. Parrado provided testimony to the effect that other
prescriptions in GX 3 presented the same red flags as he had previously
identified. These included two prescriptions written on July 29, 2011
by Dr. P.C. for 168 oxycodone 30 to C.D. and 224 oxycodone 30 to D.M.,
as well as two prescriptions written by Dr. S.A.-H. the same day for
168 oxycodone 30 to B.P. and 224 oxycodone 30 to C.C. GX 3, at 8-15.
Respondent dispensed the prescriptions the same day. GX 3, at 8-15. As
written, none of the prescriptions contained the patient's address. See
id. at 8, 10, 12, and 14. However, the prescriptions bear labels which
show that C.D. and B.P. lived in Gainesville, 134 miles from
Respondent; D.M. lived in Hudson, 36 miles from Respondent; and C.C.
lived in Spring Hill, 42 miles from Respondent. See id.; see also R.D.
at 6.
Mr. Parrado testified that these prescriptions raised an additional
red flag, in that he was ``starting to see a pattern . . . coming from
this one clinic of the same prescriptions'' and that ``[t]here is no
individualization of therapy, which is important.'' Tr. 80. He also
testified that he did not see any evidence that the red flags were
resolved. Id. at 82.
On April 21, 2011, Dr. P.C. issued a prescription for 196 oxycodone
30 to C.B., which Respondent filled the same day. GX 3, at 16. Again,
Dr. P.C. did not write C.B.'s address on the prescription. Id.
According to the address label, C.B. lived in Big Pine Key, which is
near Key West and a distance of 400 miles from Respondent. Id.; R.D. at
6. Mr. Parrado testified that he did not see any evidence that the red
flags were resolved. Id. at 82.
Also on April 21, 2011, Dr. R.R. issued a prescription for 224
oxycodone 30 to S.S., which Respondent filled the same day. GX 3, at
17. Dr. R.R. did not write S.S.'s address on the prescription. See id.
According to the address label, S.S. lived in Lakeland, a distance of
44 miles from Respondent. Id.; see also R.D. at 7.
After testifying that the prescription raised the same red flags as
the previous prescriptions, Mr. Parrado explained that there was
documentation on the prescription that the pharmacist had dispensed two
different brands. Tr. 82-83; see also GX 3, at 17. However, Mr. Parrado
did not see any evidence that the red flags were resolved. Id. at 83.
Pages 18 through 25 of Government Exhibit 3 contain copies of eight
prescriptions which were also written on April 21, 2011 by physicians
from the 24th Century clinic for oxycodone 30 (in quantities that range
from 140 to 240 tablets) and filled the same day. As with the previous
prescriptions, none of the prescribers wrote the patient's address on
the prescription; instead, the prescriptions bear a label with the
address. See GX 3, at 18-25. Asked whether these prescriptions
presented any additional red flags, Mr. Parrado testified that:

It's just another day of doing the same thing. Yeah, could
something like this happen once occasionally a person travels a long
way and pays cash? Of course. Does it happen consistently day after
day after day? No. That's what would be a nonresolvable red flag.

Tr. 84.
The Government then asked Mr. Parrado if he knew where Hudson is in
relation to Tampa.\12\ Tr. 85. Mr. Parrado answered that it is 30 to 40
miles on the way to New Port Richie (which was the town or residence of
one of these patients). Id. The Government then asked why it would ``be
a red flag if it's just 30 miles?'' Id. Mr. Parrado explained:
---------------------------------------------------------------------------

\12\ None of the patients whose prescriptions are reproduced at
pages 18 through 25 resided in Hudson. See GX 3, at 18-25. Rather,
the patients were from Tampa, Wildwood (79 miles), Dunedin (14
miles), Palm Harbor (14 miles), New Port Richey (25 miles), Port
Richey (26 miles), Gainesville (134 miles) and Lutz (18 miles).
R.D., at 6-7.

It's not so much just the red flag, it's the rapidity of people
coming from other cities. You know, there's a lot of physicians'
office, a lot of pharmacies between Hudson and Tampa. Why did they
choose this pharmacy? That would have been the red flag I would have
---------------------------------------------------------------------------
wanted resolved.

Id. Mr. Parrado then testified that he did not see any documentation
that the red

[[Page 49825]]

flags presented by the April 21, 2011 prescriptions had been resolved.
Id.
Next, the Government asked Mr. Parrado about the price of a
prescription written by Dr. H.V.D. (also of 24th Century) on January
16, 2012 for 224 tablets of oxycodone 30, which Respondent filled the
same day.\13\ Tr. 86. The price of the prescription was $1,232. Id.;
see also GX 3, at 28. The Government then asked Mr. Parrado if he had
``any independent knowledge of what oxycodone normally sold for at that
time?'' Tr. 86. Respondent objected to the question on the basis that
there was no foundation as to Mr. Parrado's knowledge. Id. While the
ALJ sustained the objection she allowed the Government to establish a
foundation. Id. at 87. The Government then asked Mr. Parrado if, in his
``view as an experienced pharmacist,'' the price was ``a red flag.''
Id. Mr. Parrado answered ``yes,'' and explained:
---------------------------------------------------------------------------

\13\ Here too, the patient's address was added by a label and
had not been written by the physician; the label shows that the
patient lived in Floral City, Florida, 63 miles from Respondent. GX
3, at 28.

It's a very high price. I do know that about this time, in this
timeframe, 2012, average wholesale price of oxycodone ran anywhere
between $33 100 to maybe, depending on what wholesaler you went to,
it could run as high as $150, $200 100. But that would still--this
price would still be far exceeding anything that I would have ever,
---------------------------------------------------------------------------
ever considered charging.

Id. at 87-88. Mr. Parrado subsequently testified that ``I cannot say in
my 40 plus years as a pharmacist I have ever sold a prescription for
$1,232 cash. That's just not something I've ever seen in my practice.''
Id. at 89. Mr. Parrado then testified that he was practicing pharmacy
``[i]n 2012.'' Id. Asked to look at the prescriptions reproduced at
pages 29 and 30, both of which were written by doctors with 24th
Century, Mr. Parrado testified that they presented the same red
flags.\14\ Id.
---------------------------------------------------------------------------

\14\ The first of these prescriptions was written by Dr. R.R. on
January 18, 2012 for 224 oxycodone 30. GX 3, at 29. The patient's
address was added by a label and showed that he lived in Dunnellon,
Florida, 88 miles from Respondent. Id.; see also R.D. at 7. The
patient paid $1232 for the prescription. GX 3, at 29.
The second prescription was written by Dr. P.C. on January 19,
2012 for 168 oxycodone 30. GX 3, at 30. The patient's address was
added by a label and showed he lived in Inglis, Florida, 80 miles
from Respondent. Id.; see also R.D. at 7. The patient paid $966 for
the prescription. GX 3, at 30.
---------------------------------------------------------------------------

Next, the Government asked Mr. Parrado about two Dilaudid
(hydromorphone \15\) prescriptions which were written by Dr. R.R. of
24th Century on October 10 and 13, 2011, which Respondent filled. GX 3,
at 31-32. The first prescription authorized the dispensing of 240
tablets of Dilaudid 8 mg to D.K.; the second authorized the dispensing
of 196 tablets of Dilaudid 8 mg. to G.C.\16\ See id. The labels for
both prescriptions included the initials ``KG,'' thus indicating that
they were dispensed by Kasey George, Respondent's PIC.
---------------------------------------------------------------------------

\15\ Mr. Parrado testified that ``[h]ydromorphone is the generic
name of Dilaudid.'' Tr. 92.
\16\ As before, Dr. R.R. did not write either patient's address
on the prescription. GX 3, at 31-32. Labels attached to the
prescriptions show that D.K. lived in Clearwater, a distance of 19
miles from Respondent, and that G.C. lived in Largo, a distance of
21 miles from Respondent. See id.; R.D. 7.
---------------------------------------------------------------------------

Asked whether these prescriptions presented any other red flags,
Mr. Parrado testified:

Yeah. For starters, the drug. Dilaudid 8 milligram, extremely,
extremely potent opioid. From my education, experience, and
training, the average daily dose of Dilaudid would be probably
between 12 and 24 milligrams a day. It would be a dose that would be
a high dose because mostly people don't take Dilaudid 8 milligrams
unless they're in a terminal stage of cancer. . . . [T]hat's just a
drug that's very rarely dispensed anymore because of the potency,
especially in that quantity. And to see a patient come in and get
200 plus of these tablets would be a . . . concern. To see multiple
prescriptions for 200 tablets would be almost a nonresolvable red
flag to me.

Tr. 90. Mr. Parrado further clarified that his opinion regarding the
quantity applied to both prescriptions. Id. at 91. He then testified
that he saw no evidence that the red flags had been resolved and added
that the dose ``is almost double the recommended upper daily dose.''
Id.
On January 19, 2012, Dr. R.R. of 24th Century issued a prescription
for 120 oxycodone 30 to S.D. GX 3, at 33. According to the address
label (Dr. R.R. again not having written the patient's address on the
prescription), S.D. lived in Panama City, Florida. GX 3, at 33. Mr.
Parrado testified that Panama City is in the western panhandle of
Florida, and the parties stipulated that it is 331 miles from
Respondent. Tr. 92; R.D. at 7. Mr. Parrado again found no evidence that
the red flags had been resolved. Tr. 93.
Continuing, the Government questioned Mr. Parrado about
prescription labels found at pages 34 and 35 of its Exhibit 3 which
showed the prices Respondent was charging for oxycodone 30 in late
April 2011 and in early December 2011. Specifically, the evidence
showed that in late April 2011, Respondent was charging $3.75 for a
tablet of oxycodone 30, but that in early December 2012, it was
charging $7.50 a tablet. GX 3, at 34-35. Mr. Parrado explained that he
determined the price per tablet because he knew ``in that time frame
that the wholesale costs had not doubled.'' Tr. 96. Mr. Parrado then
testified that the price Respondent charged raised a red flag. Id. at
96-97. However, after recognizing that ``we don't have the
prescription,'' the Government did not ask whether there was any
evidence that the red flags had been resolved. Id.
The last page of Government Exhibit 3 contains the front and back
of a prescription (dated April 25, 2011) which was written by a doctor
from Tampa who was not affiliated with 24th Century. GX 3, at 36. The
prescription authorized the dispensing of 120 tablets of methadone 10
mg for pain to B.V. but did not list B.V.'s address. Id. Of note, the
front of the prescription contains the notation: ``verified by Dave''
with the date and time. Id. The back of the prescription contains a
photo copy of a state-issued identification card and the prescription
label which list B.V.'s address as Riverside, Florida. Id. According to
the stipulation, Riverside is 200 miles from Respondent. R.D. at 7.
After noting that the prescription ``had some documentation that
somebody verified something,'' Mr. Parrado testified to the effect that
it was unclear what the pharmacist verified. Tr. 97; see also id.
(``What does this mean? What did they verify? Who is this somebody? Was
that the prescriber? You know, what were they verifying?''). Then asked
what red flags were presented by the prescription, Mr. Parrado
testified:

Methadone . . . it is a drug that . . . it's being abused on the
street. There's a lot of concern. I have a lot of concern about the
use of . . . methadone because of the pharmacokinetics of the drug
and the way it acts on patients. And . . . taking two tablets every
12 hours would probably be okay. I would want to verify with the
doctor if the patient had developed a tolerance to this. I've seen
people that have overdosed and died on methadone on the third dose
of methadone because of the kinetics of that drug.

Id. at 97-98. Subsequently, Mr. Parrado reiterated his testimony that
he did not know what the pharmacist had verified with respect to the
prescription and that he did not see any evidence that ``red flag of
distance'' had been resolved. Id. at 102.
Thereafter, the Government showed its Exhibit Number 13 to Mr.
Parrado. This exhibit includes 20 prescriptions for schedule II
narcotics including oxycodone 30, MS Contin 30 (morphine sulfate
continuous release), and Dilaudid in both eight and four milligrams per
dosage unit. See generally GX 13. Each of the prescriptions was issued
by a physician with 24th Century between April 14 and 20, 2011, and on
each of the

[[Page 49826]]

prescriptions, the patient's address had not been written on the
prescription but had been added by a label. Id.
Also, each prescription presented the issue of the distance
travelled by the patient, with the closest any patient resided being in
Tarpon Springs, a distance of 18 miles to Respondent. See GX 13, at 23;
R.D., at 7. The other patients lived in Brooksville (46 miles),
Gainesville (134 miles), Newberry (145 miles), Ocala (100 miles), High
Springs (158 miles), Spring Hill (42 miles), Sarasota (58 miles), Weeki
Wachee (48 miles), Silver Springs (107 miles), Dunnellon (88 miles),
and Lecanto (70 miles). See generally GX 13; R.D. at 6-7.
Asked by the Government whether the GX 13 prescriptions raised the
same or additional red flags, Mr. Parrado answered: ``[i]t's all the
same.'' Tr. 105. After noting that one of the prescriptions was for a
patient from Dunnellon, Mr. Parrado then testified that he did not see
any indication that the red flags had been resolved. Id. at 105-06.
Next, the Government asked Mr. Parrado about two prescriptions
issued on January 8, 2013, by Dr. P.C. to B.W. and filled by Respondent
the same day. Tr. 107-8; GX 14, at 1-5. The prescriptions were for 100
Dilaudid 8 mg and 60 methadone 10 mg. GX 14, at 1-4. While Dr. P.C. was
not affiliated with 24th Century, he also failed to include B.W.'s
address on the prescriptions; however, both prescriptions bear an
address label which lists B.W.'s address as Tallevast, Florida, which
is 54 miles from Respondent. Id., at 2, 4; R.D. 7. The evidence also
showed that B.W. presented a Florida Identification Card. GX 14, at 5.
Asked if these prescriptions presented any red flags, Mr. Parrado
testified that the dosing instruction on the Dilaudid prescription
called for taking one tablet every four hours, which would result in a
daily dosage of 48 milligrams, ``double the upper recommended dose.''
Tr. 107. Mr. Parrado then noted that the prescriptions raised an
additional and serious concern because both Dilaudid and methadone were
being prescribed and both drugs ``are immediate release opioids . . .
which could contribute to respiratory depression.'' Id. Mr. Parrado
subsequently testified that B.W.'s address and presentation of an
identification card raised additional issues that ``a reasonable
pharmacist [would] want to investigate.'' Id. at 110.
The record includes prescriptions for 75 Dilaudid 8 mg and 90
methadone 10 mg issued on January 21, 2013, by Dr. E.G.-R. (who was not
affiliated with 24th Century) to T.F. of Brooksville; Respondent filled
the prescriptions the same day. GX 14, at 7-8. While the back of each
prescription includes a handwritten notation dated ``1/21/13,'' id. at
8, Mr. Parrado testified that he did not ``know what that is'' and the
notation ``doesn't tell me anything.'' Tr. 110. After testifying that
the distance in miles between Brooksville and Tampa is ``maybe 30, 40
miles,'' Mr. Parrado testified that it is ``not so much the distance''
but that ``it's not an easy drive'' as there are ``a lot of stop lights
and a lot of traffic to get'' to the doctor's clinic, which was located
``several miles'' from Respondent. Id. at 111. Mr. Parrado then
explained that he would want to know why the patient had ``come
there,'' that he ``would have had concern'' as to the methadone dose,
and that he ``would have wanted to verify'' why the doctor had
prescribed ``two immediate release medications.'' Id. However, Mr.
Parrado did not see any evidence that the red flags were resolved. Id.
Mr. Parrado testified that while a prescription (GX 14, at 11-12),
which was written by Dr. S.A.-H. of 24th Century, was for ``only 90
tablets'' of oxycodone 30 mg, the patient's address was in Middleburg,
Florida, which is ``a good ways from Tampa.'' Tr. 111. According to the
stipulation, Middleburg is 175 miles from Tampa. R.D. at 7. Mr. Parrado
also testified that the price of the prescription, ``$675 for just 90
tablets[,] seems like a very high price.'' Tr. 112.
Aside from the first four prescriptions in GX 14, each of the
remaining 16 prescriptions was written by a doctor with the 24th
Century clinic. See GX 14, at 11-42. Asked if the red flags of ``the
distance where the patient lived'' and ``the fact that they came from
the same clinic'' were ``inherent in all'' of the 16 prescriptions, Mr.
Parrado answered ``yes,'' and that he did not ``see any evidence of any
kind of documentation'' that the red flags were resolved. Tr. 112-13.
While the back of each of the prescriptions issued by the 24th
Century physicians also contains checkmarks or scribble, Mr. Parrado
testified that ``that just looks like they're verifying the quantity
and possibly the directions, but . . . not addressing the red flag.''
Id. at 113. Mr. Parrado then explained that ``[i]t's common for
pharmacists when they're verifying a prescription . . . before a
prescription can be dispensed, the pharmacist has to look at [it] to
make sure the right drug is being dispensed, the right quantity,
directions are correct on the label. That looks like that's what was
being checked off there.'' Id.
Government Exhibit 15 contains an additional 13 prescriptions. GX
15. The first two prescriptions were written by Dr. V.S. on January 28,
2013 to J.A. and were for 56 Adderall 30 mg and 84 Dilaudid 8 mg. Id.
at 1, 3. While the prescriptions list Dr. V.S.'s affiliation as the MD
Plus Clinic in Lakeland, Florida, id., Dr. V.S. was also listed as one
of the prescribers affiliated with 24th Century. GX 3, at 33; GX 13, at
1. Id. On neither prescription did Dr. V.S. write J.A.'s address;
according to the labels attached to the back of each prescription, J.A.
resided in Winter Haven, which is 60 miles from Respondent. GX 15, at
2, 4; R.D., at 7.
Mr. Parrado testified that Adderall is a stimulant and that the
patient was ``getting an upper and downer together.'' Tr. 114. Asked if
this was a red flag, Mr. Parrado testified that ``I would have wanted
to know why they were giving an upper and a downer together. Maybe the
patient was having some kind of narcolepsy . . . from one drug to cause
him to need a stimulant from the other side, but I would have expected
to see some documentation on that.'' Id. Mr. Parrado then testified
that Winter Haven is ``a very long way from Tampa,'' although he
erroneously stated that the distance was ``a hundred plus miles.'' Id.
He then testified that he did not see any evidence that the red flags
were resolved. Id. at 115.
As for the rest of the prescriptions in GX 15, the patients lived
in Citra (117 miles from Respondent), Brooksville (46 miles),
Gainesville (134 miles), Tarpon Springs (18 miles), Ocala (100 miles),
Nokomis (79 miles), and Newberry (145 miles). GX 15, at 6, 8, 10, 12,
14, 16, 18, 20, 22, 24, and 26. Mr. Parrado testified that the
distances travelled by the patients raised red flags and that he did
not see any evidence on the prescriptions that there was any attempt to
resolve the red flags. Tr. 116.
Asked by the Government whether Respondent's pharmacists
``exercise[d] the appropriate standard of care in the State of
Florida,'' id. at 119-20, Mr. Parrado testified:

No. In my opinion, there are multiple things that a pharmacist
has to do before he dispenses a prescription. He has to establish
the appropriateness of the therapy. He has to discuss the . . .
excessive and inappropriate quantities. He has to assess the
therapeutic duplication of the two immediate release medications,
all of which are in the laws and rules of the practice of pharmacy.
* * *
There are probably four or five other notations in the Florida
law that things the pharmacist would have had to have done to verify
the prescription and make sure it was

[[Page 49827]]

appropriate and everything was correct before he dispensed it, and I
didn't see where any of that was done. Therefore, I didn't think he
reached the standard of care.

Id. at 120. After a series of objections to the Government's questions
were sustained by the ALJ, Mr. Parrado subsequently testified that he
``would not have dispensed these [prescriptions] without having
resolved any of the red flags.'' Id.
On cross-examination, Mr. Parrado acknowledged that every red flag
he had ``talked about . . . could potentially be resolved.'' Id. at
127. He further acknowledged that there are millions of people who do
not have insurance and must pay for their prescriptions with cash. Id.
at 131. However, when asked whether he had ever filled a controlled
substance prescription for someone who did not have ``insurance to
cover their [sic] prescription,'' Mr. Parrado answered that he was not
going to give ``a yes or no answer because . . . a person who . . .
can't afford insurance . . . is not going to pay 1,200 or 1,300 dollars
for a prescription.'' Id. at 132. Mr. Parrado further testified that
whether the prescription was paid for with cash, credit card, or check,
it's ``all the same to me.'' Id. at 133.
After Mr. Parrado reiterated his earlier testimony that he ``didn't
see where anything [as to the resolution of red flags] was
documented,'' Respondent's counsel asked if it is ``true that Florida
does not require a pharmacist to document the resolution of red flags
on the face of the prescription?'' Id. at 134. Mr. Parrado answered:
``I would never document it on the face, I'd write it on the back.''
Id. at 135. Mr. Parrado then acknowledged that ``there's no regulation
that says you have to, but that's just the standard of practice and has
been for decades.'' Id. When then asked whether a pharmacist could
document the resolution of a red flag ``somewhere other than the back
of the prescriptions,'' Mr. Parrado replied: ``I've never seen it
documented anywhere other than that.'' Id.
However, Mr. Parrado subsequently acknowledged that resolution of a
red flag could be documented other than on the back of a prescription.
Id. at 136. And he later agreed with Respondent's counsel that if a
patient had been a regular and long standing patient of the pharmacy,
it would not be ``necessary to do the full-blown documentation that you
would do on the first prescription once you've resolved the red flag.''
Id. at 177. However, he maintained that some notation should still be
made on the prescription so that if the prescription was questioned by
a regulatory agency, there would be some evidence to defend the
dispensing decision. Id.; see also id. at 190. Mr. Parrado also
acknowledged that ``some pharmacists document [the] resolution of red
flags so that it is . . . available to help their colleagues who [are]
filling in for them.'' Id. at 191.
Mr. Parrado rejected, however, the suggestion of Respondent's
counsel that documentation need not be placed on the prescription
because ``there's no way for the floater pharmacist . . . who takes
over to actually go through [the prescription file] and know where
those [notes] are because they're all written on the back of
prescriptions.'' Id. at 192. As Mr. Parrado explained, the pharmacist
would see the prescription number when he looked up the patient's
profile on the computer, and ``it would be very easy to go pull that
prescription out of the file.'' Id. Then asked how a pharmacist would
know which prescription to pull if the patient had been filling the
prescription every month for ten years, Mr. Parrado testified: ``That's
why you would have documented this as a regular patient. You would have
done something on that scrip[t].'' Id. at 192. However, he then
acknowledged that notes generally can be made in the pharmacy's
dispensing software. Id. at 193.
Mr. Parrado acknowledged that a patient who has been on opiates for
a significant time and who has developed tolerance may need to exceed
the manufacturer's daily recommended dosage. Id. at 137. He
acknowledged that the dosing depends on ``the specifics'' of the
patient's condition. Id. He also agreed that having a patient on a
narcotic contract so that the patient only obtains narcotics from a
single clinic could be helpful in resolving red flags. Id. at 137-38.
He further agreed that if the narcotic contract ``called for routine
urine screens to ensure that the patient was actually taking the
drug,'' that would ``be helpful'' in ``prevent[ing] diversion.'' Id. at
138.
Asked if he had reviewed PMP data to determine the drug history of
any of the patient, Mr. Parrado said that he had not and that the law
did not allow him to. Id. While he testified that he looked at
thousands of prescriptions from Respondent which covered more than two
years, DEA did not give him noncontrolled prescriptions and he looked
only at the schedule II prescriptions. Id. Given this, Respondent's
counsel later asked Mr. Parrado if he had ``no way of knowing what . .
. adjunct drug therapies . . . any of these patients were taking?'' Id.
at 160. Mr. Parrado answered:

Well, only because of what I saw in the Respondent's exhibits
where there were some partial medical records that did have all the
drugs the patient was taking on a very few cases, and on those it
was the same on every one of them, the same group, same combination.

Id.
Mr. Parrado acknowledged that Florida law (Fla. Stat. Sec.
893.04(2)(a)) states that a pharmacist may dispense a controlled
substance in the exercise of his professional judgment when the
pharmacist or pharmacist's agent has obtained satisfactory patient
information from the patient or the patients' agent. Tr. 139. After
Respondent's counsel pointed that this provision does not require that
the pharmacist alone talk to the physician alone and allows a
pharmacist to talk to the patient or the patient's agent, Mr. Parrado
testified that ``it says in [Fla. Admin. Code r.] 64B16-27.831 that
when you have a concern you shall contact the prescriber.'' Id. at 139-
40.
Turning to J.A., the patient who had received prescriptions for
Adderall and Dilaudid, Mr. Parrado conceded that while opiates ``have a
respiratory depressant effect,'' they are not categorized as
depressants under the Controlled Substances Act. Id. at 141-42. He also
acknowledged that when a drug has a shortage and its wholesale price
rises, the retail price would also rise. Id. When then asked whether it
is standard practice to input the average wholesale price of a drug
into a pharmacy's dispensing software and that the software has
algorithms that actually generate the retail price, Mr. Parrado
explained that ``[t]here are different ways to fix that algorithm'' and
that he had sometimes overridden the price set by the software. Id. at
143. While Mr. Parrado acknowledged that, in 2008 and 2009, two major
oxycodone manufacturers had recalled their products resulting in
shortages and that wholesalers would take advantage of this and charge
higher prices, he disagreed with the suggestion that ``those shortages
continued and had ripple effects throughout Florida well into 2010 and
2011.'' Id. at 144. Rather, he testified that the shortages did not
have ``that much'' of an effect and ``[o]nce it became available again
the prices were not that far skewed'' \17\ Id.
---------------------------------------------------------------------------

\17\ By contrast, Mr. George testified that from 2010 through
2012, the wholesale ``price sometimes went three times to 10 times
more.'' Tr. 538-39.
---------------------------------------------------------------------------

While Mr. Parrado acknowledged that he did not go to the pharmacy
closest to his home because he knows the pharmacist at the pharmacy he
goes to, he explained that ``[m]ost people go to

[[Page 49828]]

a pharmacy for . . . some sort of a convenience, or a reason, and he
[the patient] had to have a reason to go to that pharmacy. That's what
I would want to know. That's what I would want to document.'' Id. at
146. Asked if he documented on the back of every controlled substance
prescription the reason a patient had driven 10 or 15 miles on roads
with stop lights to get to his pharmacy, Mr. Parrado answered: ``No, of
course not.'' Id. at 148. However, he then adhered to his position that
``[s]tandard practice is if you have the red flag to document it.'' Id.
As for whether it would be a red flag if the patient ``lives 20 or 30
miles away and [has] seen a doctor who's in close proximity to the
pharmacy'' and ``[t]hat red flag then is resolved?''; Mr. Parrado
testified that ``I'd still want to know the address. There's going to
be multiple red flags here.'' Id. at 148-49. On a further question
regarding ``the red flag of someone driving 10 or 15 miles'' and ``[i]f
the physician happens to be in close proximity to the pharmacy, that
resolves the red flag, doesn't it?''; Mr. Parrado testified: ``Not
necessarily'' and explained that: ``[i]t's not just one thing. It's
multiple things. That's the combination of red flags.'' Id. at 149.
Mr. Parrado testified that the drugs themselves (hydromorphone and
oxycodone 30) raised a red flag as they are known drugs of abuse. Id.
at 149-50. While Mr. Parrado acknowledged that he had filled
prescriptions for oxycodone 30, he could not ``remember ever filling a
prescription for hydromorphone.'' Id. at 150. However, when asked what
he would document on a prescription when he was practicing and was
presented with a prescription for oxycodone 30 but there were no other
red flags, Mr. Parrado testified: ``[n]othing because it wasn't a red
flag.'' Id. at 151; see also id. at 166.
Asked the same question with respect to hydromorphone, Mr. Parrado
answered: ``Well, you know, there again, looking at the dose, I would
have to look at the patient profile, see if the patient has developed a
tolerance to that drug, and at that point the red flag--there's nothing
to write down because there isn't a red flag.'' Id.at 151. Later, on
cross-examination, Mr. Parrado acknowledged that his review of the
prescriptions did not include any information that would have allowed
him to determine whether the patients had been on narcotics for a
significant period and developed tolerance as he reviewed only what DEA
gave him. Id. at 161-62. He also acknowledged that neither the
prescription nor the prescription label ``tells you anything about the
patient [sic] history.'' Id. at 177.
Turning to the red flag of pattern prescribing, Mr. Parrado
acknowledged that if a physician prescribed different narcotics for
different patients, sometimes wrote for extended release drugs and
other times immediate release drugs, and varied the strength of the
drugs, this would not be pattern prescribing. Tr. 153. Mr. Parrado then
agreed that the same would hold true for the clinic itself. Id. And he
subsequently acknowledged that pain management is a legitimate medical
practice, which often times requires the prescribing of opioids in
significant quantities as patients develop tolerance. Id. at 154.
As for the red flag of therapeutic duplication, Mr. Parrado agreed
that extended release drugs ``were expensive'' even though ``[t]here
were some generics available'' during the time period at issue and that
a patient who lacked insurance ``would have difficulty paying for an
extended release oxycodone product.'' Id. at 155-56. Mr. Parrado then
acknowledged that if a patient required oxycodone 30 for his ``normal
pain,'' the physician would not be acting illegally if he prescribed a
lower strength drug for the patient's ``breakthrough pain.'' Id. at
156.
Turning to the methadone prescription which Respondent filled for
B.W. (GX 14, at 3) (on the same day it also filled a Dilaudid
prescription for him), Mr. Parrado conceded that he did not have any
evidence that B.W. had overdosed, abused the drug, or sold it on the
street. Tr. 158-59. Mr. Parrado then acknowledged that he had no
evidence that any of the prescriptions were abused or sold on the
street. Id. at 159.
Asked whether his concern about methadone-related overdoses was a
general concern or a specific concern related to B.W., Mr. Parrado
testified:

That was a concern that I would have wanted to have seen a red
flag resolved. Why is he on hydromorphone and methadone both, which
are both immediate release . . . you know, you don't use two
immediate release opioids for breakthrough pain. You use a long
acting as a base and then the immediate release for breakthrough.

Id. Later, on cross examination, Mr. Parrado explained that the problem
with using methadone for pain management ``is that the pain relief you
get . . . probably peaks at about three to four hours and tapers off
rather quickly after that, but the respiratory depressant part . . .
continues to grow even after the pain relief has gone down, so people
are apt to take another pill,'' thus increasing the respiratory
depressant effect. Id. at 174. However, Mr. Parrado acknowledged that
methadone may be appropriate for certain patients. Id.
Mr. Parrado then agreed with Respondent's counsel that ``it's not
common, but it's not completely unheard of for individuals who may not
have insurance or may have allergies or other reasons why certain long-
acting drugs do not work'' \18\ Id. at 159-60. And he also agreed with
Respondent's counsel that because of genetic differences, some persons
may metabolize certain opiates in a more effective manner than others.
Id.
---------------------------------------------------------------------------

\18\ Mr. Parrado subsequently acknowledged that extended release
opioids could be problematic for patients who have had bariatric
surgery. Tr. 175. Also, on questioning by the ALJ, he testified that
if a patient was allergic to a medication, ``you wouldn't be
filling'' that prescription. Id. at 213.
---------------------------------------------------------------------------

Mr. Parrado further acknowledged that the DEA Pharmacist's Manual
does not use the term red flag and does not specifically tell
pharmacists how to identify red flags. Id. at 163. However, he then
testified that the ``[M]anual gives you a lot of information that you
have to use your professional judgment . . . . It's not going to list
line by line, but that's why you have pharmacists exercising
professional judgment.'' Id. Mr. Parrado further testified that a
pharmacist ``should be able to defend that professional judgment.'' Id.
After acknowledging that neither the CSA nor DEA regulations use
the term ``red flags,'' as well as that the CSA and DEA regulations do
not ``talk about distances from patients,'' Mr. Parrado agreed that
``there is no bright line that . . . if it's beyond a certain distance,
it's always wrong.'' Id. at 164. However, Mr. Parrado subsequently
testified that if patient lived more than 40 miles from the doctor's
office, that would be ``one of the red flags for diversion.'' Id. at
208.
As for whether family members seeing the same doctor ``makes the
doctor's prescriptions for those family members invalid,'' Mr. Parrado
testified that ``[i]t raises a question. It may not make it invalid.''
Id. at 164. Mr. Parrado then explained that ``I have to validate--I
have to verify the validity of that script.'' Id. at 165. While Mr.
Parrado acknowledged that a pharmacist could ``possibly'' resolve the
red flags created by the circumstances of two people in the same
household ``need[ing] the exact same drug and pay[ing] those large
quantities of money,'' he rejected the suggestion of Respondent's
counsel that this could legitimately occur where ``family members . . .
live together, didn't have insurance'' and had to ``pay out of
pocket.'' Id. Mr. Parrado then testified: ``You can buy a lot of
insurance for $2,700'' and that the costs

[[Page 49829]]

of the prescriptions would be a red flag that he ``could not have
resolved.'' Id.
Mr. Parrado further acknowledged that in evaluating whether a
pharmacist had complied with the standards of practice in dispensing a
prescription, ``it would be helpful'' to know various information. Id.
at 177. These include ``what the pharmacist knew'' about: (1) The
patient, including his/her medical condition, history, diagnosis, cause
of the pain and drug utilization; (2) the prescribing physician,
including his/her specialty, board certifications, practice location,
and reputation; and (3) the drug being prescribed . Id. at 178; see
also id. at 202-03.
Asked if he was aware that one of the physicians who issued the
prescriptions he had testified about ``is a noted anesthesiologist,''
Mr. Parrado testified that ``if it doesn't say it on the prescriptions
itself, I wouldn't know it.'' Id. at 183-84. Then asked by Respondent
if he knew ``that that particular noted anesthesiologist was a
physician at a major regional hospital before being involved in the
practice of pain management care,'' Mr. Parrado answered: ``[n]o, I
would not have known that.'' Id. at 184. Mr. Parrado also testified to
the effect that the fact that the physicians (with the exception of one
who had since died) who practiced at 24th Century have had their
registrations renewed would not change his opinion. Id. at 186.
Mr. Parrado further acknowledged that the issue of prescribers not
placing the patient's address on prescriptions has become ``very
common,'' but that the pharmacist has to verify the patient's address.
Id. at 193. He also testified that in 2008, DEA sent a letter to
pharmacists which stated that the pharmacist ``could add in'' the
patient's address. Id. at 194. Mr. Parrado then agreed that if the
prescription was only missing the patient's address, this does not
raise ``a concern about diversion.'' Id. at 195. Subsequently, the
Government identified several prescriptions where the patient's address
had not been placed on the front of the prescription. Id. at 206
(discussing GX 13, at 3, 5, 21, 27, and 29). However, in each instance,
the patient's address was on the dispensing label which was affixed to
the back of the prescription.\19\ See id. at 4, 6, 22, 28, and 30.
---------------------------------------------------------------------------

\19\ Asked by Respondent's counsel if ``Florida law says there
shall appear on the face of the prescription or written record
thereof'' and thus allows for the patient's address to be placed on
the back, Mr. Parrado testified: ``[t]hat law was changed. At the
time these prescriptions were written, that law did not say on the
prescription record thereof. . . . It just said it had to be on the
face of the prescription.'' Tr. 209. According to the 2011 Florida
statutes, Section 893.04(c) stated that ``[t]here shall appear on
the face of the prescription or written record thereof for the
controlled substance . . . [t]he full name and address of the person
for whom . . . the controlled substance is prescribed.'' Fla Stat.
Ann. Sec. 893.04(c) (2011). Contrary to Mr. Parrado's testimony,
the statute had the same wording throughout the relevant time
period.
---------------------------------------------------------------------------

While Mr. Parrado continued practicing through 2012, he could not
remember the pharmacies he worked at having ever filled prescriptions
written by a doctor at the 24th Century clinic. Id. at 195-96. While
Mr. Parrado acknowledged filling prescriptions that came from the
Kenaday Clinic (see GX 14, at 7-10), he testified that ``[o]n the ones
I filled, I called and checked them very carefully.'' Tr. 196-97. Asked
what he did to resolve the red flags, Mr. Parrado testified that there
was an issue of dosing and whether ``the patient had developed a
tolerance for that dose,'' and that he called the doctor.\20\ Id. Mr.
Parrado added that he had spoken to the doctor twice, after which he
``wouldn't fill anymore.'' Id. at 199.
---------------------------------------------------------------------------

\20\ At this point the Government objected that the question was
``beyond the scope of direct examination.'' Tr. 197. Respondent's
counsel replied that the question went to Mr. Parrado's credibility,
and the ALJ overruled the objection. Id. at 198.
---------------------------------------------------------------------------

Asked whether there were other concerns besides the dosing with the
prescriptions written by the Kenaday doctor, Mr. Parrado testified that
another prescription presented a distance concern and he did not fill
the prescription and gave it back to the patient. Id. Subsequently, Mr.
Parrado then acknowledged that the prescription that presented the
dosing issue may also have presented another issue, that being that the
doctor had prescribed ``a combination of hydrocodone, Xanax, [and]
Soma.'' Id.at 200. Mr. Parrado testified that after talking to the
physician and believing that the prescriptions had a legitimate medical
purpose, ``after that I didn't feel comfortable anymore and after
speaking with the doctor a couple more times I decided I could not take
his word for the validity and I wouldn't fill them anymore.'' Id. at
201. As Mr. Parrado further testified, ``[o]nce I saw the pattern of
prescribing coming from that clinic is when I stopped.'' Id. at 202.
Finally, Mr. Parrado acknowledged that a doctor can issue a
prescription for a legitimate medical purpose and the patient may
nonetheless misuse it or sell it on the street, but that this does not
make the prescription invalid. Id. at 204. Nor does a patient's misuse
or selling of the drug to another make a pharmacist's decision to
dispense the prescription wrong unless the pharmacist knew or should
have known that the patient was going to misuse or sell the drug. Id.
at 205.

Respondent's PIC's Testimony

As noted above, Respondent's Expert Mr. Badawi did not address any
of the prescriptions which the Government submitted into evidence.
Kasey George, Respondent's PIC, did offer testimony as to why some of
the prescriptions were dispensed.
Mr. George testified that he has been a pharmacist for 21 years,
that he has 12 to 13 years of experience in retail pharmacy, and that
he has been Respondent's PIC for seven years. Tr. 445-46. Mr. George
holds an active pharmacist's license in Florida and holds inactive
licenses in three other States. Id. at 446. He testified that he does
not have either a criminal history or a disciplinary history on his
pharmacy license. Id. at 445. He also testified that he had obtained
his pharmacy degree from Temple University in 1994, that he had taken
continuing education classes, and that he had attended a class on
dispensing controlled substances in 2013 at which Mr. Parrado had
spoken. Id. at 447-48.
Mr. George testified that he is the only full-time pharmacist at
Respondent, which is open six days a week, and that if he has a day
off, he schedules a temporary pharmacist to work that day. Id. at 448.
Respondent's counsel then asked what controlled substance dispensing
protocols were in place at Respondent from 2011 through February 2013,
when the Administrative Inspection Warrant was served. Id. at 448-49.
According to Mr. George, the protocol:

involves many things, including first we have check [sic] that the
doctor's office is located within 20 miles from the pharmacy. Then
we check the patient's ID, Florida ID, and make sure that the
patient has a Florida ID. The next step we do is we check the
prescribing physician's address and their phone number, and we check
in the publicly listed Web site to see that it matches what's
printed on the prescription. Then we check that the doctor has a
valid DEA license active and also an active NPI number.
* * * * *
. . . And we check the--call the doctor's office and get the
diagnosis for the condition treated. And also we ask for the
diagnosis studies they have done and make sure that the studies are
consistent with the medical condition that is being treated and also
the prescription. . . . And we ask for all the records to be sent to
the pharmacy, and we check that they have the narcotic contract with
the patient. . . . And also we ask for the urine drug test result
and those records. Then we are not done with that.
And we have to check the patient's ID, which is present with the
DMV Web site to

[[Page 49830]]

see that address is correct. Then . . . end of 2011, PDMP came. From
that day onwards, we check for every new patient, and every time
they come we have to check the PDMP to see any doctor shopping or
any early filling and check also . . . the patient's credibility
because if their [sic] address is available there. And after that,
all that pharmacist's professional judgment also comes into that
protocol.

Id. at 449-51.
Mr. George testified that he reviewed the prescriptions submitted
by the Government and he acknowledged that he was the dispensing
pharmacist on ``the vast majority of'' them. Id. at 451. He testified
that he had used the above protocol in dispensing the prescriptions.
Id. He then denied that he was required to fill prescriptions that
originated at certain clinics or that were presented by certain
patients. Id.
Mr. George testified that he was ``required to document every
conversation with a patient or physician if the conversation was about
concern related to'' a controlled substance prescription. Id. at 451-
52. Asked by Respondent's counsel ``where was that documented?''; Mr.
George testified: ``[w]e have a two-page pharmacist's due diligence
checklist separately filed in a binder in an A to Z format according to
patient's last name, and all the documents pertaining to that patient's
prescription is [sic] attached to that in the file.'' Id. at 452. Mr.
George further testified that he had used the due diligence forms for
the patients whose prescriptions were at issue in this case. Id. Mr.
George then testified that when DEA executed the AIW, they did not ask
him to provide the due diligence forms and did not take them. Id. Nor
did they ask him to provide documentation showing that he had made
inquiries and resolved red flags. Id. at 452-53.
Asked by Respondent's counsel where he would ``document the
resolution of questions about'' a controlled substance prescription,
Mr. George answered:

It used to be if it is one or two items you used to document on
the face of the prescription. Since the information needed to
prevent the abuse and misuse and diversion, a lot of documents [sic]
involved, if I decided to go extra step to get all the available
documents filed in a separate sheet and document a pharmacist's
checklist so I can do beyond the required, more than the required
and go and fill in in vast places.

Id. at 455-56. Noting his testimony that he had formerly documented the
resolution of such questions on the back of the prescription,
Respondent's counsel asked Mr. George when he changed to using
checklists and obtaining the records he described. Id. at 456. Mr.
George testified that it was ``[f]rom 2010 onwards.'' Id. at 457.
Mr. George then explained that his protocol also included
interviewing the patients to ``ask them their conditions and why
they're being [sic] taken [sic] these prescriptions.'' Id. Mr. George
further asserted that ``in that interview, I can find out what is the
real need and also if they have any intention to abuse or misuse or any
diversion involved in that scheme.'' Id. at 458.
Mr. George testified that ``we verify . . . the credibility of the
doctors through the paperwork and the documents.'' Id. He further
stated that ``I visit the doctor's office and the clinic occasionally
and get to know the doctors,'' and ``I talk personally to the doctors
and also make sure that they have a protocol in place, which I also
make sure that that is inconsistent of our protocol.'' Id. Continuing,
Mr. George testified that ``I make sure that all that paper which I
mentioned, narcotic contract and opiate contract, all are in place.''
Id.
Mr. George acknowledged that he was familiar with the physicians
who wrote the prescriptions at issue, and that most of them worked for
24th Century, which ``is a pain management clinic.'' Id. at 459. Asked
by Respondent's counsel what he knows about the specialties and
certifications of 24th Century's doctors, Mr. George answered:

One doctor, he is no more. He's [sic] passed away three or four
years ago. He was the director of this clinic, and he was the chief
anesthesiologist in [sic] Tampa General Hospital. He was a famous
doctor, and his expertise was a big asset at clinic, and many
patients liked him.

Id. Subsequently, Mr. George testified that the name of this doctor was
Cornelius Ruperto. Id. at 466.
Notably, Dr. Ruperto did not write any of the prescriptions at
issue in this matter. See generally GXs 3, 13, 14, and 15. Moreover,
his name is not listed on any of the prescription forms. See generally
GXs 3, 13, 14, and 15. This is for good reason, as according to Dr.
Ruperto's online obituary of which I take official notice,\21\ Dr.
Ruperto died on December 8, 2008, more than two years before the
earliest prescription in evidence. And of further note, Mr. George
offered no testimony regarding the specialties or board certifications
of the doctors who actually wrote the prescriptions at issue in this
matter.
---------------------------------------------------------------------------

\21\ See www.legacy.com/obituaries/tbo/obituary.aspx?n=cornelio-aquino-ruperto&pid=121231660. Respondent may dispute my finding by
filing a properly supported motion no later than 15 calendar days
from the date this Order is mailed.
---------------------------------------------------------------------------

Asked by Respondent's counsel how he resolved the red flag of
multiple patients presenting similar narcotic prescriptions which were
written by the same doctor, Mr. George acknowledged that ``[i]f I see
that a doctor is writing a certain medication and the same quantity and
same way to every patient, then it is a red flag to me.'' Id. at 467.
Continuing, Mr. George explained: ``[b]ut . . . when I see that doctor
write the medications, but in different doses and different quantity .
. . it's different, and they write different medication along with it,
and their treatment plan is different, then after my due diligence is
being done, I feel comfortable filling that prescription.'' Id. Mr.
George subsequently testified that the 24th Century doctors prescribed
oxycodone in both 15 and 30 mg dosages, methadone in 5 and 10 mg
dosages, morphine in 30, 60 and 100 mg dosages, hydromorphone in 4 and
8 mg dosages, and sometimes Opana. Id. at 475-76.
Next, Respondent's counsel asked Mr. George about the oxycodone 30
prescriptions whose labels bear sequential RX Numbers and which were
dispensed on August 4, 2011 to J.P. and T.P., who have the same last
name and had travelled from Saint Augustine (196 miles). GX 3, at 2-3.
Mr. George asserted that ``I remember that case in detail'' and that
J.P. and T.P. were husband and wife and that T.P. had a bulged disc
from a 1998 accident and ``was our patient from 2009.'' Tr. 468. He
also asserted that J.P. had ``a motor vehicle accident'' and ``had
problems with his neck and . . . back.'' Id. at 468-69. Mr. George did
not explain when J.P.'s accident had occurred or how long he had been
Respondent's patient. See id. While Mr. George asserted that he filled
the prescriptions, because ``after doing all the due diligence and
following the protocols, talking to the doctors, I was comfortable
within my professional judgment to fill that prescription,'' id.,
Respondent produced no evidence to corroborate his testimony, not even
the two-page due diligence checklists. Of consequence, the ALJ did not
find Mr. George's testimony credible as to the actions he took to
resolve the red flags presented by J.P.'s and T.P.'s prescriptions.\22\
R.D. 48.
---------------------------------------------------------------------------

\22\ Mr. George further testified that in 2012, ``J.P. was
filling the prescription in the pharmacy, and when I called the
doctor's office, I found that J.P. had an admission'' to a hospital
in St. Augustine. Id. at 469-70. According to Mr. George, the doctor
then requested the records from the hospital in St. Augustine; the
records showed that J.P. ``was positive for his oxycodone and Valium
he was on,'' as well as cocaine. Id. at 470. According to Mr.
George, J.P. was then discharged from the clinic for breaching his
contract and he decided to stop filling prescriptions for him. Id.
Mr. George did not explain, however, why J.P. had the prescription
he was attempting to fill if he had been discharged from 24th
Century.

---------------------------------------------------------------------------

[[Page 49831]]

Mr. George also acknowledged that a prescription that exceeds the
manufacturer's recommended daily dosage presents a red flag. Tr. 470.
Mr. George testified that the prescription ``does not say the whole
story'' and when the patient's dose is above the manufacturer's
recommended dose, the pharmacist ``ha[s] to go and look at the
patient's profile and profile history to make sure why this patient is
taking higher doses.'' Id. at 471. Mr. George further testified that
``everybody know [sic] that tolerance plays a big role in the doses
prescribed'' and that ``there is no ceiling doses for opiates.'' Id.
Mr. George then testified that when a prescription is for a higher dose
than the recommended dose, ``the pharmacist's duty is to call the
physician and check with them . . . and go through [the] profile and
see how long [the patient's] been on that medication and . . . learn
how much the tolerance is.'' Id. Mr. George then maintained that when
he filled prescriptions that exceeded the maximum recommended dosage,
he did all of these steps ``and I write my notes on my due diligence
checklist why I did it.'' Id. at 472.
Addressing the prescriptions that were missing patient addresses,
Mr. George testified that the former head of the Office of Diversion
Control had published a memo which ``says that if the pharmacist has to
make any changes in C2 prescriptions, they have to follow state laws
and guidelines.'' Tr. 472. Mr. George then noted that Florida law
``clearly says that [the address] shall be on the face of the
prescription or the written record thereof,'' and added that he would
``verify the patient's address though the DMV Web site[] [a]nd also
check the PDMP'' and use the prescription label to provide the address.
Id. at 472-73.
As for the instances in which patients presented prescriptions for
two short-acting opiates, Mr. George testified that ``there are many
reasons'' that ``doctors write two prescriptions,'' including that
``the patient is allergic to certain medications,'' ``has intolerance
for the drug,'' may have had ``gastric bypass surgery,'' or be a
``dialysis patient.'' Id. at 474. However, Mr. George testified that
``[n]ormally doctors write the long-acting medication along with the
short-acting.'' Id.
As for how he resolved the red flag, Mr. George testified that
``you . . . study the situations [sic] and what is the condition of the
patient through talking to the doctors and talking to the patients and
checking their profiles [and] history.'' Id. Asked by Respondent's
counsel if those are ``actual examples of things that occurred where
you got information like that from patients who filled prescriptions,''
Mr. George answered: ``Yeah. We will get information. That's the
case.'' Id. at 474-75. Mr. George did not, however, offer any testimony
identifying the specific conditions of those patients who presented two
prescriptions for short-acting narcotics which were filled by
Respondent.
Mr. George further testified that he obtained medical records from
the 24th Century clinic. Id. at 477. Respondent's counsel then asked
Mr. George if he had ``seen Respondent's Exhibit 3 before today?'' Id.
at 479. Mr. George answered ``yeah,'' and added that ``it is actually
from one of the copies which I get from the clinic''; he then testified
that these records ``were maintained at'' Respondent and that the
records were present when DEA executed the AIW. Id. Mr. George also
testified that the Exhibit contained an accurate representation of the
records Respondent maintained on three of its patients, K.D. (pages 1
through 17); S.D. (pages 18 through 33); and H.C., Jr. (pages 34
through 51). Tr. 480, 482. Notably, the records contained such items as
driver's license verifications, radiology reports, progress notes, and
opioid contracts. See generally RX 3.
On voir dire, the Government asked Mr. George how he received the
records from the clinic. Tr. 490-91. Mr. George answered: ``sometimes
it is in a block of a--I send my technician to get it because patients
are waiting in my--I go and ask them to get the copy and get it to me
so I can verify it before filling it.'' Id. at 491. Mr. George
subsequently testified that Respondent's Exhibit 3 was ``a
representative sample of the type of record [he] got for hundreds of
patients [of his] pharmacy.'' Id. at 498.
Asked by Respondent's counsel ``what, if any information on pages
20 through 29 . . . was important to [him] at the time'' he was
deciding to fill controlled substance prescriptions for S.D., Mr.
George testified that the records told him ``what the diagnosis is, why
this patient [is] being treated for the medication they [sic] are [sic]
prescribed.'' Id. at 480-81. He further asserted that he looked at the
progress notes (RX 3, at 29) to ``see any changes in there,'' as well
as page 30, which told him that ``the patient has [an] opiate contract
there.'' Id. at 481.
Mr. George then testified that he looked at these records as ``an
extra step to prevent the abuse and misuse of the controlled
substances.'' Id. Asked whether his training as a pharmacist gives him
``the ability to understand certain things within the medical record as
far as the diagnosis and the condition of the patient,'' Mr. George
testified that ``[t]hrough experience, I learned to look through these
forms and understand it [sic].'' Id. Mr. George then testified that the
records included indications of conditions that would cause pain. Id.
at 481-82.
Asked whether there was information on page 44 (a December 6, 2012
Visit Note for H.C., Jr.) that would allow a layperson and pharmacist
``to determine what condition the patient was being treated for,'' Mr.
George answered ``yes.'' Id. at 482. Asked if ``the information
contained in these medical records [is] consistent with the patient
having pain and needing a controlled substance prescription from a
pharmacist's perspective?'', Mr. George again answered ``yes.'' Id. at
482-83.
Next, Mr. George was asked about the prescription (GX 3, at 1)
Respondent dispensed on July 28, 2011 to T.V., who lived in Pensacola--
472 miles from Respondent--for 210 tablets of oxycodone 30. Tr. 493.
Mr. George testified that she had been his patient ``since 2009,'' and
that in deciding to fill her prescription, he had had done ``all my due
diligence, checked with the doctors, checked all the medical records
[he] could'' and ``interviewed the patient.'' Id. at 494. Mr. George
further testified that ``when this patient came in the counseling and
when I was talking . . . [the] patient knew that distance is a very
fact that pharmacist may not fill it.'' Id. According to Mr. George,
T.V. said she had gone ``through four back surgeries'' and had tried
``interventional pain injections'' which ``failed.'' Id. Mr. George
then testified that T.V. ``lifted her shirt and said, look at my back,
and I looked that there were four scars'' and T.V. ``mentioned that
there were rods and plates placed here.'' Id. at 495. Mr. George thus
maintained that ``even though the distance was far, through my
experience and the need of the patients [sic], it made me come to a
conclusion that this patient, I will fill the prescriptions.'' Id.
While on cross-examination, Mr. George testified that another
pharmacist had filled this specific prescription, id. at 578-79, he
reiterated his earlier testimony that T.V. had ``been coming from 2009
onwards.'' Id. at 579. He then added that ``I know this patient very
well, and I have a very well written record on this patient.'' Id.
After again stating that he did not fill the prescription, Mr.
George testified that ``every pharmacist who worked in that Hills
Pharmacy have [sic] that file. That's the reason the due diligence
paper is filed separately.'' Id. at 579-80. Mr. George then testified
that ``[w]hen this patient comes again, that

[[Page 49832]]

pharmacist has the opportunity to go and look at why this patient's
prescription was filled last month'' and ask ``[i]s there any reason,
or should I reject this?'' Id. at 580. Continuing, Mr. George
testified: ``[w]hen they [sic] see other pharmacist, especially my
notes, saying that all the due diligence were [sic] done and all the
red flags were resolved, that pharmacist will be comfortable looking
at. And they will probably call the doctors, I don't know [sic] he
called or not. But that is his duty to call the doctor and verify.''
Id. Mr. George again reiterated that this documentation was written
down ``[i]n my due diligence sheet'' which is ``in the pharmacy.'' Id.;
see also id. at 551 (Mr. George's testimony that the due diligence
forms are in a binder which is ``[s]till in the pharmacy.'').
Subsequently, the ALJ asked Mr. George if he recalled why T.V.
``travelled from Pensacola to Hills Pharmacy?'' Id. at 588. After
answering ``yes,'' Mr. George testified:

This patient had multiple surgeries done in Tampa General
Hospital and that time the doctor, the chief anesthesiologist was
Dr. Cornelio Ruperto, and he become [sic] the director of the clinic
where this prescription was written. So she used to come and see
that doctor always. And while I was interviewing that patient she
said she likes the doctor and she wanted to continue seeing that
doctor. That's why she was coming from that 450 miles.

Id. (emphasis added).
Respondent's counsel then asked Mr. George about the back side of
two prescriptions for 180 oxycodone 30 (GX 3, at 35) which cost $1350
each and were written for H.C., Sr., and H.C., Jr.; the latter is the
same person whose records are found at pages 34 through 51 of
Respondent's Exhibit 3. Tr. 495-96. Asked to explain what inquiry he
made to learn about him and his condition, Mr. George testified:

[W]hen I got this prescription, I did all my due diligence and
followed my protocols. Then I looked--he has a bulging disc, and I
filled this prescription. He is coming in my pharmacy from 2009
onwards. And when he came to pharmacy with all these conditions,
he'd been filling for [sic] insurance--he had insurance coverage
that time. Then that time he was paying $35, was the copay. So he'd
been paying that from 2009 `till end . . . of 2010.
Then he left the pharmacy. Then two years he did not come to the
pharmacy. Then in 2012, he came back to the pharmacy with a
prescription, and he did not have insurance, which Hills Pharmacy
always ask when he was in where is your insurance, and he said he
lost the insurance. He didn't have any insurance coverage.
Then he said that I need this medication, I'm on this
medication. And he brought a profile also where he was. And I don't
remember that it is a--and he showed me he was taking this
medication. So he said he's willing to pay whatever the cash price
at that time. And I filled this prescription for cash.

Id. at 496-97. Mr. George then testified that H.C., Jr.'s drug therapy
had not changed from when he had insurance. Id. at 497. Mr. George did
not, however, offer any testimony regarding his decision to also
dispense oxycodone 30 to H.C., Sr.
Mr. George subsequently testified that he had no knowledge that any
of the patients who received the prescriptions at issue abused or
diverted the drugs he dispensed to them. Id. at 498. Respondent's
counsel then asked him ``how do you respond to the allegations . . .
that you filled prescriptions that had red flags on them?'' Id. at 498-
99. Mr. George testified:

From 2013 onwards, I modified my protocol and changed it to
print out patients' residence to less than 15 miles, and also in our
protocol changes that we only fill the doses consistent with the
manufacturer's recommended doses, and also we will not fill for
patient for the controlled substances who reside in the same
addresses. So after making that [sic] changes, if it--today I will--
that red flag will be considered in a different way and say that
this is not according to my protocol, so I will not be comfortable.
That doesn't mean that what I did before that was not written
for legitimate medical purpose, but at this point, because my
protocol is more stringent and more strong, in my effort to prevent
the misuse and abuse and diversion, I will check one more time.

Id. at 499-500.\23\ Mr. George then testified that as of February 19,
2015 (three weeks before the hearing), Respondent ``completely
stopped'' filling controlled substance prescriptions ``issued from any
pain management clinic.'' Id. at 500. Asked why he had made this
change, Mr. George testified that ``I know we all have a part to do to
prevent the abuse and misuse and diversion of the controlled
substances. As a professional provider, and the Government--DEA is
trying to prevent that. And as a professional provider, I also have a
responsibility for that.'' Id. at 500-01. He then added that part of
the reason he had changed his policies was because ``always there are
bad apples everywhere'' and ``I know that I'm less than the perfect.''
Id. at 501. Mr. George then testified that he had ``never'' filled a
controlled substance prescription having ``knowledge that it was not
issued for a legitimate medical purpose.'' Id. at 502.
---------------------------------------------------------------------------

\23\ On cross-examination, however, Mr. George was asked if a
patient's address being 63 miles from Tampa presented a red flag.
Tr. 570. Mr. George testified:
Sixty-three miles, this time, yes, I will not fill that 63
miles, above 50 miles because my protocol has changed after the
administrative warrant then to less than 50 miles. But at that time
then when I filled it, it was a red flag, but I did my due diligence
and followed the protocol, so that time it was okay in that I
resolved that red flag.
Id. at 570-71.
---------------------------------------------------------------------------

Next, Mr. George testified regarding a chart he had created which
shows from January 1, 2011 through November 30, 2014, the total
prescriptions dispensed by Respondent during each year (except for
2014), the total non-controlled and schedule II prescriptions
dispensed, and the total schedule III through V prescriptions
dispensed. RX 2, at 1. Notably, the chart does not provide any data for
the schedule II prescriptions alone, and instead adds them to the non-
controlled prescriptions. See id. The chart also purports to show the
percentage of Respondent's total dispensings comprised by schedule III
through V drugs, the ``percentage change from previous year'' and the
``percentage change from 2011.'' Id. While five of the six entries in
the latter two columns show percentage reductions, the chart does not
state whether the percentage change is in the total schedule III
through Vs dispensings or in the percentage of total dispensings
comprised by schedule III through V drugs. Moreover, the 2014 figures
do not include data for the month of December.
Another chart shows data for Schedule II through V for the years
2011 through 2013 and for 2014 through November 30. RX 2, at 3. The
chart reflects a decrease in the total number of controlled substance
prescriptions dispensed and a decrease in the percentage of total
dispensings comprised by schedule II through V dispensings. See id.
Subsequently, Mr. George answered ``yes'' when asked by
Respondent's counsel: ``[d]o you accept responsibility for the fact
that you filled prescriptions for controlled substances that had red
flags on them?'' Tr. 507. However, when then asked if he had ``ever
knowingly ignored your duties as a pharmacist to exercise your
professional judgment?'', Mr. George answered: ``No, I never did.'' Id.
at 507-08. Mr. George further testified that ``even though I did my
best, our best to control that and prevent the abuse and misuse, that
is not perfect. It is always less than perfect. Human beings are not
perfect. I accept that responsibility.'' Id. at 539-40.
On cross-examination, Mr. George acknowledged that a prescription
which calls for the dispensing of ``a high quantity'' of a controlled
substance presents a red flag as do ``patients coming from long
distance.'' Id. at 552. However, he then maintained that he

[[Page 49833]]

had resolved all the red flags and had documented this on the due
diligence checklists which were in the binder ``in the pharmacy.'' Id.
He further testified that he would consult the medical records he
obtained before dispensing controlled substances. Id. at 553. Asked by
the Government if he ``understand[s] medical records,'' Mr. George
testified:

I don't understand it the way the doctors are trained to
understand. By experience, I look whether this prescription was
issued for a legitimate medical reason. This is not my duty as a
pharmacist. I would do something above and beyond in order to
support the effort to prevent abuse and misuse. It is not part of my
duty to read the medical report. I am doing an extra step for myself
and to serve the community.

Id. at 554-55.
The Government then asked Mr. George about Respondent's dispensing
of 240 oxycodone 30 tablets to K.D., on April 21, 2011, pursuant to a
prescription issued by Dr. S.A.-H. of the 24th Century Clinic (GX 3, at
20); K.D. is one of the patients whose partial records were submitted
into evidence. See RX 3, at 1-17. Asked whether he ``consult[ed] the
medical record that is accompanying this prescription before dispensing
that prescription,'' Mr. George answered: ``I didn't say that. I said
my medical records are filed in the pharmacy, not with this
prescription.'' Tr. 557. Then asked whether he had dispensed the
prescription, Mr. George testified that he did not dispense ``[t]hat
particular prescription'' and that ``another pharmacist'' had filled
the prescription. Id. When asked ``who would that person be,'' Mr.
George testified that the copy was ``very faint'' and that could not
see ``the signature on that page, because the copy is faded.'' Id. I
find, however, that the prescription label is readable and bears Mr.
George's initials.
The Government then asked Mr. George if he had dispensed the
prescription found in the patient file for S.D., who resided in Panama
City, Florida. Id. at 560. This prescription, which was written on
January 19, 2012 by Dr. R.R. of 24th Century clinic, authorized the
dispensing of 120 tablets of oxycodone 30. RX 3, at 33. Mr. George
acknowledged that he had dispensed the prescription. Tr. 560. He also
acknowledged that he had reviewed the partial medical file before
dispensing the prescription. Id. at 560-61. However, when then asked if
he could ``tell from this medical record what other controlled
substances were dispensed on that particular day,'' Mr. George
testified:

No. I look only for my prescription which is received in my
hand. That is only my concern on that time. Where other places or
where the patient got the medication, if I have the PDMP, that will
support me on that cause. If I get the medical record, I have no way
of saying and understanding where the patient had a different
prescription unless I talk to the patient or doctors if he write any
other prescriptions. I cannot guess where the prescription was
filled for that patient.
And . . . I have one more thing to add on that question. This,
as I said, these documents I am looking at, looking [sic] all these
documents, above and beyond what the duty required of me because to
help. It is not my pharmacist job to read, that is doctor's job. DEA
give [sic] license to the doctors and they are well trained in
writing these prescriptions, and they have the capacity to look at
the patient's record and they are the one who is writing this
prescription. I call them--give me a second. I call them, verify
them, why they did it, what is the treatment plan, and I look above
and beyond what are required of pharmacist. I go all the papers and
I make my professional judgment whether this patient can be--this
prescription can be dispensed.

Id. at 561-62.
Asked whether he saw a treatment plan in S.D.'s medical record, Mr.
George testified:

In this, all records when you go through the records, there is a
medical, the copy of the MRIs and the report from the radiologist
and why they are treating it and the notes from the doctor's office,
and it say what medication they are writing there, and the doctors
notes, the visitation notes there.

Id. at 562.
Then asked whether he looked at S.D.'s MRI, Mr. George testified:
``I don't look at MRI. I look at what is the diagnosis in that, whether
patient, if it says that a patient has a bulging disc. A couple of the
reasons why this medication being prescribed. That's my scope there.''
Tr. 563. Mr. George then testified that he did look at the MRI report
before dispensing the prescription. Id.
Mr. George then denied that he was familiar with the term drug
cocktail. Id. at 563-64. Significantly, the note for S.D.'s January 19,
2012 visit lists multiple drugs that were prescribed by the doctor,
including 120 oxycodone 30, MS Contin, Soma (carisoprodol), Xanax, and
also included the note of ``add Dilaudid 8 mg #120.'' RX 3, at 29.
S.D.'s patient file also includes a visit note dated June 13, 2012.
RX 3, at 24-27. This note states that ``Pt. has not taken meds in 5
months'' and lists S.D.'s current medications as including five drugs:
(1) Carisoprodol 350 mg, one tablet twice daily; (2) Dilaudid 8 mg
\24\; (3) MS Contin CR 30 mg, one tablet daily; (4) oxycodone 30 mg,
one tablet ``every 4-6 hours''; and (5) Xanax 1 mg., one tablet ``twice
daily.'' Id. at 25. According to the visit note, a drug screen was
conducted and S.D. tested negative for opiates. Id. at 26. Finally, the
visit note lists the prescriptions issued by the physician at this
visit; with the exception of Dilaudid, which was discontinued, the
prescriptions for carisoprodol, MS Contin, oxycodone 30, and Xanax were
re-issued with the previous dosing instructions. Id. at 27. However,
none of the prescriptions issued to S.D. at this visit are in the
record.
---------------------------------------------------------------------------

\24\ No dosing instruction was listed.
---------------------------------------------------------------------------

Subsequently, the Government asked Mr. George if he had filled the
prescription (GX 3, at 16) issued by Dr. P.C. (24th Century) to C.B. of
Big Pine Key, which authorized the dispensing of 196 oxycodone 30. Tr.
568-69. Mr. George acknowledged that he had filled the prescription.
Id. at 569. Asked if he knew where Big Pine Key is, Mr. George stated
that he knew that it was in Florida. Id. Then asked if he knew how far
it was from Respondent, Mr. George testified: ``I don't know. It is
written in my due diligence list.'' Id. When later asked if he recalled
investigating why C.B. had travelled from Big Pine Key to get the
prescription, Mr. George answered:

On this particular patient I don't remember, but I know that
when it is more than this distance, definitely I did counsel the
patient and record it in the due diligence sheet why they travel. In
many cases, I don't remember particularly this patient again. Many
cases the reasons are their [sic] spouse are [sic] living in Tampa,
they're [sic] in job assignment, or their [sic] doctor is here and
they like the doctor. So there are many reasons, but I don't
particularly remember. This is from 2011.

Id. at 573.\25\
---------------------------------------------------------------------------

\25\ To similar effect, the Government asked Mr. George if he
knew where Floral City is. Tr. 569. Mr. George answered: ``Again, I
don't know where the city [sic] located in, but I know it is in
Florida.'' Id. After acknowledging that the distance from Floral
City to Tampa (63 miles) was a red flag, Mr. George maintained that
``I resolved the red flag looking at all the, doing the due
diligence and checking with the doctors whether the patient need
[sic] the medications and now all the treatment.'' Id. at 571. And
asked whether he ever determined why the patient had travelled 63
miles to get the prescription, Mr. George stated that ``[o]n most of
the patients when I talk to them and interview them and counsel them
why they are traveling, and the reasons I get I will put in my due
diligence sheet.'' Id. Then asked by the Government ``[s]o you don't
know the reason right now,'' Mr. George answered: ``right now,
because if you said yesterday I would have looked at it.'' Id.
On re-direct, Respondent's counsel, having noted the
Government's questions ``about remembering specifics about certain
patients,'' asked Mr. George how many patients he had ``dispensed
controlled substances for in the last five years?'' Id. at 586. Mr.
George testified that ``I cannot remember because daily three, four
patients comes [sic], in five years, how I calculate it, it's not
possible. And it is very hard to remember that. And I am a human
being doing other business too, so I cannot remember everything,
keep everything.'' Id. at 586-87.
While that may be, Respondent certainly knew what prescriptions
were at issue well in advance of the hearing, and if it was true
that Respondent was maintaining the due diligence checklists, Mr.
George could have reviewed those checklists with respect to the
patients who filled the prescriptions.

---------------------------------------------------------------------------

[[Page 49834]]

The Government's Rebuttal Case

Subsequently, the Government recalled Mr. Parrado to question him
about Mr. George's testimony with respect to the medical records in
Respondent's Exhibit 3. Tr. 598-99. Mr. Parrado testified that he had
``never had medical records in any pharmacy I've ever worked in or
managed.'' Id. at 599.
With respect to the medical record for S.D., which, as found above,
showed that he had received prescriptions for oxycodone 30, MS Contin,
carisoprodol and Xanax, even though he had not been on medications for
five months and had tested negative for opiates, Mr. Parrado explained
that ``[t]here were some notations in his chart that caused me
concern.'' Id. at 601. Mr. Parrado specifically noted the notation that
SD ``had not taken his medication in five months'' and that his drug
screen was negative for opiates ``but yet he was prescribed a lethal
dose of oxycodone that day.'' Id.
Asked on cross-examination that ``you know that there's no ceiling
on narcotics, don't you,'' Mr. Parrado answered: ``[W]ell, but there
is. On an opioid na[iuml]ve patient there is.'' Id. at 601-02. Asked
``[d]o you know whether S.D. was opioid na[iuml]ve,'' Mr. Parrado
testified: ``[F]rom seeing the record, yes. He had not taken the
medication in five months per his own dosing.'' Id. at 602. Mr. Parrado
then added that the S.D.'s visit note stated that he had tested
negative for opioids. Id. Asked if he knew from Respondent's Exhibit
that ``S.D. had been taking opioids for years? \26\'', Mr. Parrado
answered: ``[y]es, but he had not taken them in five months per his
own.'' Id. at 603. While Mr. Parrado acknowledged that he had no
personal knowledge that S.D. had not taken the drugs for five months,
Mr. Parrado explained: ``[W]hat I'm talking about, if I as a pharmacist
was looking at that chart and seeing that, I could not have dispensed
that. My professional judgment would have prevented me from dispensing
that prescription.'' Id. And after Respondent's counsel asked whether
he knew if the notation meant ``that the patient didn't get medication
from the clinic for five months or whether . . . the patient was not
seen at all anywhere for five months?'', id. at 604, Mr. Parrado
testified:
---------------------------------------------------------------------------

\26\ Notwithstanding the question, there is nothing in the 16
pages of S.D.'s records that establish that he had been taking
opioids for years. To be sure, there is a 2009 MRI report; a
document indicating that a driver license check was performed on
June 24, 2010, and another document indicating that S.D. made visits
on monthly basis from August 12, 2011 through January 19, 2012,
before reappearing five months later on June 13, 2012. However, the
only evidence as to the prescriptions he had received prior to the
June 2012 visit is the January 19, 2012 Progress Note and the
prescription of the same date. In any event, Mr. Badawi was ``still
present in the hearing room'' when Mr. Parrado was called in
rebuttal and the ALJ explained that ``if there's some expert
conflict over this testimony, there's an opportunity for counsel to
explore that.'' Tr. 597. Respondent did not call Mr. Badawi to
challenge Mr. Parrado's testimony that S.D. was opioid na[iuml]ve at
the time he presented the June 2012 prescription.

The notations said, and if I'm going to be looking at a chart as
a pharmacist to determine if there was something, if this dose is
appropriate to begin with, the fact the patient said he had not
taken the medication, I'm seeing in the medical record that the drug
screen says opiate negative. That's telling me I now have an opioid
---------------------------------------------------------------------------
na[iuml]ve patient. I have a concern.

Id. at 605.
On further questioning by Respondent's counsel, Mr. Parrado
reiterated that the patient's statement that he had not taken
medication in five months ``was in that chart that I looked at.'' Id.
However, notwithstanding that Respondent obtained the visit note, which
lists multiple controlled substance prescriptions that were issued to
S.D. at his June 13, 2012 visit, the Government did not submit any
prescriptions (and their labels) showing that Respondent actually
dispensed any of the prescriptions listed in the visit note.

Discussion

Under the CSA, ``[a] registration pursuant to section 823 of this
title to manufacture, distribute, or dispense a controlled substance .
. . may be suspended or revoked by the Attorney General upon a finding
that the registrant . . . has committed such acts as would render [its]
registration under section 823 of this title inconsistent with the
public interest as determined under such section.'' 21 U.S.C.
824(a)(4). In the case of a retail pharmacy, which is deemed to be a
practitioner, see id. Sec. 802(21), Congress directed the Attorney
General to consider the following factors in making the public interest
determination:

(1) The recommendation of the appropriate State licensing board
or professional disciplinary authority.
(2) The applicant's experience in dispensing or conducting
research with respect to 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.
``[T]hese factors are . . . considered in the disjunctive.'' Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). It is well settled that I
``may rely on any one or a combination of factors, and may give each
factor the weight [I] deem[] appropriate in determining whether'' to
suspend or revoke an existing registration. Id.; see also MacKay v.
DEA, 664 F.3d 808, 816 (10th Cir. 2011); Volkman v. DEA, 567 F.3d 215,
222 (6th Cir. 2009); Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005).
Moreover, while I am required to consider each of the factors, I ``need
not make explicit findings as to each one.'' MacKay, 664 F.3d at 816
(quoting Volkman, 567 F.3d at 222); see also Hoxie, 419 F.3d at
482.\27\
---------------------------------------------------------------------------

\27\ In short, this is not a contest in which score is kept; the
Agency is not required to mechanically count up the factors and
determine how many favor the Government and how many favor the
registrant. Rather, it is an inquiry which focuses on protecting the
public interest; what matters is the seriousness of the registrant's
or applicant's misconduct. Jayam Krishna-Iyer, 74 FR 459,462 (2009).
Accordingly, as the Tenth Circuit has recognized, findings under a
single factor can support the revocation of a registration. MacKay,
664 F.3d at 821. Likewise, findings under a single factor can
support the denial of an application.
---------------------------------------------------------------------------

Under the Agency's regulation, ``[a]t any hearing for the
revocation or suspension of a registration, the Administration shall
have the burden of proving that the requirements for such revocation or
suspension pursuant to . . . 21 U.S.C. [Sec. ]824(a) . . . are
satisfied.'' 21 CFR 1301.44(e). In this matter, while I have considered
all of the factors, the Government's evidence in support of its prima
facie case is confined to factors two and four.\28\ I find

[[Page 49835]]

that the record taken as a whole provides substantial evidence that
Respondent's pharmacists violated their corresponding responsibility
when they dispensed many of the prescriptions at issue. I also find
that the Government has established by substantial evidence that
Respondent has failed to maintain accurate records, as well as other
violations. Accordingly, I conclude that the Government has established
that Respondent has committed numerous acts which render its continued
``registration inconsistent with the public interest.'' 21 U.S.C.
824(a)(4). Because I further agree with the ALJ's finding that
Respondent has not accepted responsibility for its misconduct, I also
agree with the ALJ that it has not rebutted the Government's prima
facie showing. Because I find that Respondent's misconduct is
egregious, I will order that Respondent's registration be revoked and
that any pending application be denied.
---------------------------------------------------------------------------

\28\ As to factor one, there is no evidence that the Florida
Department of Health has either made a recommendation to the Agency
with respect to Respondent, or taken any disciplinary action against
Respondent. See 21 U.S.C. 823(f)(1). However, even assuming that
Respondent currently possesses authority to dispense controlled
substances under Florida law and thus meets a prerequisite for
maintaining its registration, this finding is not dispositive of the
public interest inquiry. See Mortimer Levin, 57 FR 8680, 8681 (1992)
(``[T]he Controlled Substances Act requires that the Administrator .
. . make an independent determination [from that made by state
officials] as to whether the granting of controlled substance
privileges would be in the public interest.''). Accordingly, this
factor is not dispositive either for, or against, the revocation of
Respondent's registration. Paul Weir Battershell, 76 FR 44359, 44366
(2011) (citing Edmund Chein, 72 FR 6580, 6590 (2007), pet. for rev.
denied, Chein v. DEA, 533 F.3d 828 (D.C. Cir. 2008)).
As to factor three, I acknowledge that there is no evidence
that Respondent, its owner, its manager, or any of its pharmacists,
has been convicted of an offense under either federal or Florida law
``relating to the manufacture, distribution or dispensing of
controlled substances.'' 21 U.S.C. 823(f)(3). However, there are a
number of reasons why even a person who has engaged in criminal
misconduct may never have been convicted of an offense under this
factor, let alone prosecuted for one. Dewey C. MacKay, 75 FR 49956,
49973 (2010), pet. for rev. denied, MacKay v. DEA, 664 F.3d 808
(10th Cir. 2011). The Agency has therefore held that ``the absence
of such a conviction is of considerably less consequence in the
public interest inquiry'' and is therefore not dispositive. Id.
While the Government did not allege in the Show Cause Order any
misconduct with respect to factor five, following the hearing, the
Government argued that Mr. George provided incredible testimony.
Because I consider his testimony in evaluating the evidence as to
the dispensing allegations, as well as whether Respondent has
credibly accepted responsibility for its misconduct, I deem it
unnecessary to separately address Mr. George's testimony under
factor five.
---------------------------------------------------------------------------

Factors Two and Four--The Respondent's Experience in Dispensing
Controlled Substances and Compliance With Applicable Laws Related to
Controlled Substances

The Dispensing Allegations

``Except as authorized by'' the CSA, it is ``unlawful for any
person [to] knowingly or intentionally . . . manufacture, distribute,
or dispense, or possess with intent to manufacture, distribute, or
dispense, a controlled substance.'' 21 U.S.C. 841(a)(1). Under the Act,
a pharmacy's registration authorizes it ``to dispense,'' id. Sec.
823(f), which ``means to deliver a controlled substance to an ultimate
user . . . by, or pursuant to the lawful order of, a practitioner.''
Id. Sec. 802(10).
The CSA's implementing regulations set forth the standard for a
lawful controlled substance prescription. 21 CFR 1306.04(a). Under the
regulation, ``[a] prescription for a controlled substance to be
effective must be issued for a legitimate medical purpose by an
individual practitioner acting in the usual course of his professional
practice.'' Id. Continuing, the regulation provides that:

[T]he responsibility for the proper prescribing and dispensing
of controlled substances is upon the prescribing practitioner, but a
corresponding responsibility rests with the pharmacist who fills the
prescription. An order purporting to be a prescription issued not in
the usual course of professional treatment . . . is not a
prescription within the meaning and intent of section 309 of the Act
(21 U.S.C. 829) and the person knowingly filling such a purported
prescription . . . shall be subject to the penalties provided for
violations of the provisions of law relating to controlled
substances.\29\
---------------------------------------------------------------------------

\29\ As the Supreme Court has explained, ``the prescription
requirement . . . ensures patients use controlled substances under
the supervision of a doctor so as to prevent addiction and
recreational abuse. As a corollary, the provision also bars doctors
from peddling to patients who crave the drugs for those prohibited
uses.'' Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United
States v. Moore, 423 U.S. 122, 135, 143 (1975)).

---------------------------------------------------------------------------
Id. (emphasis added).

As the Agency has made clear, to prove a violation of the
corresponding responsibility, the Government must show that the
pharmacist acted with the requisite degree of scienter. See JM Pharmacy
Group, Inc., d/b/a Farmacia Nueva and Best Pharma Corp., 80 FR 28667,
28669 (2015). Thus, the Government can prove a violation by showing
either that: (1) The pharmacist filled a prescription notwithstanding
his/her actual knowledge that the prescription lacked a legitimate
medical purpose; or (2) the pharmacist was willfully blind (or
deliberately ignorant) to the fact that the prescription lacked a
legitimate medical purpose. See id. at 28671-72. As to establishing
that a pharmacist acted with ``willful blindness, proof is required
that: `(1) The defendant must subjectively believe that there is a high
probability that a fact exists and (2) the defendant must take
deliberate actions to avoid learning of that fact.' '' Id. at 28672
(quoting Global-Tech Appliances, Inc., v. SEB S.A., 563 U.S. 754, 769
(2011)).
Here, the Government makes no claim that any of Respondents'
pharmacists dispensed the prescriptions having actual knowledge that
the prescriptions lacked a legitimate medical purpose. Instead, relying
primarily on Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195,
77 FR 62316, 62341 (2012), the Government argues that a pharmacist
violates the corresponding responsibility rule when he/she dispenses a
controlled substance prescription ``in the face of a red flag (i.e.[,]
a circumstance that does or should raise a reasonable suspicion as to
the validity of a prescription) unless he . . . takes steps to resolve
the red flag and ensure that the prescription is valid.'' Gov. Post-
Hrng. Br. 21.
The Government argues that Respondent's pharmacists violated this
regulation by filling prescriptions for such drugs such oxycodone,
hydromorphone, and MS Contin (morphine sulfate) which presented various
``red flags'' which were never resolved. Gov. Post-Hrng. Br. 22-24. It
contends that its expert, Mr. Parrado, gave ``unrefuted testimony''
that ``Respondent repeatedly distributed controlled substances pursuant
to prescriptions that contained one or more unresolved red flags for
diversion.'' Id. at 22. And after listing six different circumstances
which Mr. Parrado identified as presenting red flags, it argues that he
``testified that no evidence could be found to show the red flags had
been resolved prior to dispensing.'' Id. As evidence that the red flags
were not resolved, it relies on Mr. Parrado's testimony that it is the
standard of pharmacy practice that the resolution of a red flag is
documented on the prescription itself and that none of the
prescriptions entered into evidence contain any such documentation.\30\
Id. at 23.
---------------------------------------------------------------------------

\30\ In fact, the record includes several prescriptions which
contain notations on the back of the prescriptions suggesting a
phone call was made to someone about the prescriptions. GX 14, at 7-
10. These prescriptions were issued by a doctor at a clinic other
than 24th Century. See id. at 7, 9. However, the Government did not
ask Mr. George to explain the notations even though his initials are
on the dispensing labels as the dispensing pharmacist.
---------------------------------------------------------------------------

However, with the exception of a provision of Florida law which
requires that a pharmacist document that he has checked a patient's
identification (or made a photocopy of the identification and attached
it to the prescription), no provision of the CSA, DEA regulations,
Florida law, or the Board of Pharmacy's rules requires that a
pharmacist document the resolution of a red flag or flags on the
prescription itself. While it may be the custom of the pharmacy
profession to document the resolution of a red flag or flags on the
prescription, that does not make it improper to document the resolution
someplace else.
Recently, I rejected allegations that a registrant's pharmacists
had failed to resolve red flags when the only evidence the Government
offered to prove that fact was the absence of

[[Page 49836]]

documentation on the prescriptions themselves. See Superior Pharmacy I
and II, 81 FR 31310 (2016). In Superior, I noted that ``while evidence
of a custom certainly has probative value, it is not conclusive
proof.'' Id. at 31335 n. 55 (citing Sorrels v. NCL (Bahamas) Ltd., 796
F.3d 1275, 1282 (11th Cir. 2015) (``[E]vidence of custom within a
particular industry, group, or organization is admissible as bearing on
the standard of care in determining negligence. Compliance or
noncompliance with such custom, though not conclusive on the issue of
negligence is one of the factors the trier of fact may consider in
applying the standard of care.'') (emphasis added) (quoting Muncie
Aviation Corp. v. Party Doll Fleet, Inc., 519 F.2d 1178, 1180-81 (5th
Cir. 1975))). See also II Wigmore, Evidence, Sec. 379, at 403 (Tillers
rev. ed. 1983) (explaining that with respect to evidence of custom or
usage of trade, ``the question is not whether the offered instances
fully prove the custom alleged, but merely whether they are receivable
as having probative value''). Thus, while the absence of documentation
on the prescriptions is clearly probative evidence that Respondent's
pharmacists failed to resolve the strong suspicion presented by many of
the prescriptions--indeed, Mr. George testified that he previously
documented the resolution of red flags on the prescriptions until 2010
when he started using the due diligence checklists, Tr. 455-57,--the
absence of documentation on the prescriptions is not conclusive proof
that Respondent's pharmacists failed to do so.
Moreover, while there is no requirement that a pharmacist document
the resolution of a red flag on a prescription, a regulation of the
Florida Board of Pharmacy (then in effect) specifically required that
``[a] patient record system . . . be maintained by all pharmacies for
patients to whom new or refill prescriptions are dispensed'' and that
the ``system shall provide for the immediate retrieval of information
necessary for the dispensing pharmacist to identify previously
dispensed drugs at the time a new or refill prescription is presented
for dispensing.'' Fla. Admin. Code r. 64B-16-27.800. This rule also
required that the pharmacy maintain ``[a] list of all new and refill
prescriptions obtained by the patient at the pharmacy . . . during the
two years immediately preceding the most recent entry'' and include the
``prescription number, name and strength of the drug, the quantity and
date received, and the name of the prescriber.\31\'' Id.
---------------------------------------------------------------------------

\31\ This rule remains in effect today; however, the rule now
requires that the information be maintained for a period of four
years preceding the most recent entry.
---------------------------------------------------------------------------

The rule further required that the record include the
``[p]harmacist['s] comments relevant to the individual's drug therapy,
including any other information peculiar to the specific patient or
drug.'' Id. And the rule also required that the pharmacist make ``a
reasonable effort . . . to obtain from the patient . . . and record any
known allergies, drug reactions, idiosyncrasies, and chronic conditions
or disease states of the patient and the identity of any other drugs .
. . being used by the patient which may relate to prospective drug
review.'' Id. Finally, the rule required that ``[t]he pharmacist . . .
record any related information indicated by a licensed health care
practitioner.'' Id.
Of further note, the Board of Pharmacy's rules require that a
pharmacist ``review the patient record and each new and refill
prescription presented for dispensing in order to promote therapeutic
appropriateness.'' Fla Admin Code r. 64B16-27.810. This rule
specifically requires that a pharmacist identify such issues as:
``[o]ver-utilization,'' ``[t]herapeutic duplication,'' ``[d]rug-drug
interactions,'' ``[i]ncorrect drug dosage,'' and ``[c]linical abuse/
misuse.'' Id.
Notwithstanding that the Board's rule specifically requires that a
pharmacist document in the patient record his/her comments relevant to
the patient's drug therapy and ``other information peculiar to the
patient'' or drug, as well as ``any related information'' provided by
the patient's physician, and thus, would seem to provide relevant
evidence in assessing whether a pharmacist resolved the suspicion
created by the prescriptions, the Government did not introduce any of
the patient profiles. Nor did it provide any of the patient profiles to
Mr. Parrado, Tr. 300, even though on cross-examination, he acknowledged
that a pharmacist would generally need to see the patient profile to
determine whether a patient had developed tolerance.\32\ Id. at 151.
---------------------------------------------------------------------------

\32\ It is not that the patient profiles were unobtainable, as
the evidence shows that Respondent's computer was digitally imaged
by the AIW team, Tr. 217, 301; and thus, the profiles could have
been extracted.
---------------------------------------------------------------------------

In Superior Pharmacy I and II, I found the Government's evidence,
which was limited to the prescriptions (which contained no
documentation that the red flags were resolved) and its Expert's
testimony, insufficient to establish that the pharmacists violated
their corresponding responsibility. Here, however, there is additional
evidence, which establishes by a preponderance of the evidence, that
Respondent's pharmacists acted knowingly or with willful blindness when
they dispensed at least some of the prescriptions, which lacked a
legitimate medical purpose. More specifically, both Mr. George's
testimony and the partial medical records support this finding with
respect to some of the prescriptions.
At the outset, the evidence shows that more than 90 percent of the
schedule II prescriptions Respondent filled between January 3, 2011 and
February 4, 2013 were written by doctors employed by Victor Obi, the
brother of Respondent's owner. GX 12, at 2. See also, e.g., United
States v. Leal, 75 F.3d 219, 223 (6th Cir. 1996) (holding that where
``more than 90% of the prescriptions'' a pharmacist filled were written
by one doctor was probative evidence that pharmacist knew of
illegitimate prescribing practice). Mr. George clearly knew that the
overwhelming majority of the schedule II prescriptions Respondent
filled were issued by Mr. Obi's employees.
As found above, on July 28, 2011, Respondent dispensed 210 tablets
of oxycodone 30 to T.V., who had travelled 472 miles from Pensacola to
obtain a prescription from Dr. P.C., one of the doctors at 24th
Century. GX 3, at 1. I find that the distance T.V. travelled to obtain
the prescription, as well as the drug--a known drug of abuse--and
dosing, were sufficient to establish a subjective belief on the part of
the pharmacist who filled the prescription that there was a high
probability that the prescription lacked a legitimate medical
purpose.\33\ Indeed, Mr. George

[[Page 49837]]

acknowledged that the distance T.V. was travelling was a red flag. Tr.
494.
---------------------------------------------------------------------------

\33\ Respondent argues that the Government cannot establish that
a pharmacist has violated his corresponding responsibility unless it
first establishes that the prescription lacked a legitimate medical
purpose and that the issuing physician acted outside of the usual
course of professional practice. Resp.'s Exceptions, at 9. It argues
that ``neither the fact of this corresponding responsibility nor the
pharmacist's performance of his corresponding responsibility affects
whether the prescription was, in the first place, issued to the
patient for a legitimate medical purpose by an individual
practitioner acting in the usual course of his professional
practice.'' Id. And it further argues that ``the test for the proper
dispensing of a controlled substances remains at its foundation a
medical question'' and that ``the Government provided not one
scintilla of evidence to prove that the prescriptions at issue were
issued for other than a legitimate medical purpose.'' Id. at 9-10.
Respondent is mistaken. While it is true that a pharmacist
cannot violate his corresponding responsibility if a prescription
was nonetheless issued for a legitimate medical purpose, Respondent
ignores that the invalidity of a prescription can be proved by
circumstantial evidence. See, e.g., United States v. Leal, 75 F.3d
219, 223 (6th Cir. 1996); United States v. Veal, 23 F.3d 985, 988
(6th Cir. 1994) (per curiam); United States v. Hayes, 595 F.2d 258,
261 (5th Cir. 1979). I find that to be the case here. For similar
reason, I reject Respondent's contention that the Government failed
to meet its burden because Mr. Parrado is a pharmacist with ``no
medical training or experience that would have allowed him to
evaluate the legitimacy of a physician's prescribing.'' Resp.
Exceptions, at 20.
In its Exceptions, Respondent also argues that ``[i]n Holiday
CVS, there was evidence that two prescribers lacked a valid DEA
registration'' and that ``[t]here was also evidence that the red
flags were irresolvable.'' Exceptions, at 10. Respondent then argues
that the decision's ``three-factor test is therefore founded upon
evidence that prescriptions were, in fact, issued outside the usual
course of professional practice (e.g., by a prescriber without a
valid DEA registration)[,]'' and that [h]aving established the
threshold question, the three-factor test was applied to determine
if all of the red flags that a reasonably prudent pharmacist would
have identified were conclusively resolved prior to dispensing.''
Id.
Here too, Respondent is mistaken. To be sure, in Holiday CVS,
the Agency relied in part on the prescriptions the two pharmacies
filled that had been written by two physicians who were no longer
registered (one had allowed his registration to expire, the other's
registration had been revoked). 77 FR at 62316. With respect to
these prescriptions, the Agency did so because the evidence showed
that the pharmacies subscribed to a database which compiles
information as to physicians' registration status, and thus, the
pharmacists should have known that the physicians were no longer
registered; the order also noted that in the case of the doctor
whose registration had been revoked, that order was published in the
Federal Register and yet one the pharmacies was still filling his
prescriptions more than six months later. Id. These prescriptions
were not merely suspicious, they were flat out illegal, and as such,
there was nothing for the pharmacists to resolve, as under no
circumstance could they be lawfully filled. See 21 CFR 1306.03(a).
This, however, was only one part--and a small part--of the case,
and the three-part test was discussed in the context of the
pharmacies' decisions to dispense prescriptions for oxycodone 30 and
alprazolam 2, which were written by doctors in South Florida for
patients, many of whom had travelled from out-of-state (e.g.,
Kentucky and Tennessee) to the pharmacies which were located in
Sanford, Florida, 200 miles or more from the physicians. Id. at
62318. Of further note, in Holiday CVS, while the Government
sponsored the testimony of an expert in pharmacy practice, it did
not offer any testimony from a physician as to the medical propriety
of the prescriptions. See generally id. at 62325-34 (recommended
decision's discussion of Government' evidence). Here too, the
Government relied on the circumstantial evidence that the
prescriptions lacked a legitimate medical purpose. Accordingly, I
reject Respondent's contention that ``the Government provided not
one scintilla of evidence to prove that the prescriptions . . . were
issued for other than a legitimate medical purpose.'' Resp.
Exceptions, at 10.
---------------------------------------------------------------------------

Regarding T.V., Mr. George testified that she had been a patient
since 2009, that she had shown him scars from back surgeries, and that
``even though the distance was far,'' his experience and ``the need of
the patients'' [sic] led him to fill the prescription. Id. at 494-95.
Mr. George further justified dispensing T.V.'s prescriptions,\34\
explaining that she had multiple surgeries at Tampa General Hospital
when Dr. Ruperto was its Chief Anesthesiologist, and that he had become
the director of the 24th Century clinic. Id. at 588. Mr. George then
explained T.V. ``used to come and see that doctor always. And while I
was interviewing that patient she said she likes the doctor and she
wanted to continue seeing that doctor. That's why she was coming from
that 450 miles.'' Id. (emphasis added).
---------------------------------------------------------------------------

\34\ While there is only one prescription for T.V. in the
record, Mr. George's testimony suggests that there were other
prescriptions that Respondent had filled for her.
---------------------------------------------------------------------------

Dr. Ruperto did not, however, issue the July 28, 2011 prescription.
Indeed, his name does not appear among the lists of physicians on any
of the 24th Century prescriptions. And while Mr. George testified that
T.V. saw Dr. Ruperto ``always'' because she liked the doctor and that
she had been coming to Respondent ``from 2009 onwards,'' Dr. Ruperto
had died in December 2008, before T.V. had even started patronizing
Respondent. I thus find that Mr. George's testimony as to why
Respondent filled the prescription disingenuous. And I further conclude
that Respondent's pharmacist knowingly filled an unlawful prescription.
On January 19, 2012, Respondent dispensed 120 tablets of oxycodone
30 to S.D., who had travelled 331 miles from Panama City to obtain the
prescription from Dr. R.R. of the 24th Century Clinic. GX 3, at 33. In
addition to the strong suspicion created by the distance S.D. had
travelled, the partial medical records--which Mr. George testified he
would obtain and review before dispensing--show that Dr. R.R.
prescribed five different controlled substances to S.D. at this visit
including oxycodone, MS Contin, Soma (carisoprodol), Xanax and
Dilaudid, the latter being added at this visit. RX 3, at 29; see also
id. at 27.
Thus, S.D.'s partial medical record created additional strong
grounds for Mr. George (whose initials are on the prescription label as
the dispensing pharmacist) to subjectively believe that there was a
high probability that the prescriptions lacked a legitimate medical
purpose. First, the record showed that Dr. R.R. had prescribed a drug
cocktail of CNS depressants of opiates (oxycodone), benzodiazepines,
and carisoprodol, which as Mr. Parrado explained, is known as the Holy
Trinity and to be highly abused on the street. Notably, Mr. Badawi
offered no testimony refuting Mr. Parrado on this issue. And while Mr.
George denied being familiar with drug cocktails, Tr. 563-64, DEA had
identified this combination of drugs in several final decisions as
being highly abused prior to the events at issue here. See Paul
Volkman, 73 FR 30630, 30637 (2008); see also East Main Street Pharmacy,
75 FR 66149, 66157-58 (2010).
Mr. Parrado also testified that the maximum recommended dose of
Dilaudid (hydromorphone) was 24 mg per day and that patients usually do
not take the eight milligram dosage unless they have terminal cancer;
he also testified that prescribing two short acting opiates is
inappropriate therapy and raises a red flag. Id. at 57-58. As to Mr.
Parrado's testimony regarding the maximum recommended dosing of
Dilaudid, Mr. Badawi offered no testimony in refutation and he also
agreed that prescribing a quantity ``larger than the manufacturer's
recommended dosage'' creates a red flag. Id. at 402-03. Nor did Mr.
Badawi offer any testimony refuting Mr. Parrado's testimony that the
eight milligram dose was not usually prescribed unless the patient had
terminal cancer. See generally id. at 402-40. Of note, neither of the
progress notes in S.D.'s partial medical file indicates that he had
been diagnosed with cancer of any stage, let alone terminal. RX 3, at
28-29 (Jan. 19, 2012 visit); id. at 26 (June 13, 2012).
Mr. Badawi also agreed with Mr. Parrado that the prescribing of two
short-acting opiates together is a red flag that would require further
investigation. Tr. 419. He then testified that a patient with kidney
failure who undergoes dialysis could legitimately require two short-
acting opiates. There is, however, no documentation on either progress
note that S.D. had kidney failure. RX 3, at 25-29. And while Mr.
Parrado acknowledged that prescribing an extended release drug would be
problematic for a patient who had undergone bariatric surgery, S.D. was
prescribed MS Contin, which is an extended-release drug.\35\
---------------------------------------------------------------------------

\35\ While Mr. George asserted that a patient could have
allergies and thus need to be prescribed two short-acting
medications, here too, there is no evidence in either progress note
that S.D. had such an allergy.
---------------------------------------------------------------------------

Of further note, Mr. George testified that he had reviewed S.D.'s
partial file before dispensing the prescription. Tr. 560-61. However,
Mr. George offered no testimony other than his generalized assertion
that he always did his due diligence, which neither the ALJ nor I find
credible, to explain how he resolved the suspicion created by S.D.'s
prescriptions. Thus, given the sum total

[[Page 49838]]

of the information Mr. George had available to him when he dispensed
oxycodone to S.D., I find that Mr. George was willfully blind to the
fact that the prescription he dispensed lacked a legitimate medical
purpose.
Likewise, the partial medical record for H.C., Jr., shows that on
December 6, 2012, he, too, received the cocktail known as the Holy
Trinity from Dr. R.R. of the 24th Century Clinic. RX 3, at 47. More
specifically, he received a prescription for 180 oxycodone 30 mg, along
with prescriptions for 112 tablets of OxyContin 40 mg, 84 tablets of
carisoprodol 350 mg, and 84 tablets of Xanax (alprazolam) 1 mg. Id. The
evidence further showed that he paid $1350 just to fill the oxycodone
30 prescription. GX 3, at 35.
Mr. George offered a lengthy explanation as to why he had filled
H.C., Jr.'s, prescription. More specifically, Mr. George explained that
H.C., Jr., had been a patient who previously had insurance, that for
two years he did not come to the pharmacy, and that when he returned he
had lost his insurance but said he needed the medication and brought
Mr. George a profile showing he had been on the medication and was
``willing to pay whatever the cash price at that time.'' Tr. 496-97.
While Mr. George asserted that when he got the oxycodone 30
prescription, he did his due diligence and followed his protocols and
determined that H.C., Jr. had a bulging disc, id.at 496, he offered no
testimony specifically explaining what steps he took to resolve the
high degree of suspicion which arose from H.C., Jr.'s being prescribed
this highly abused combination of drugs by Dr. R.R. or any other
physician who had previously prescribed this combination of drugs to
H.C., Jr. I thus find that Mr. George subjectively believed that there
was a high probability that the prescription lacked a legitimate
medical purpose and that he deliberately avoided learning of this fact.
And Mr. George offered no testimony as to why he also filled an
oxycodone 30 prescription of the same quantity for H.C., Sr.
The evidence also shows that on the same day, J.P. and T.P. who,
according to Mr. George, were husband and wife, travelled 196 miles
from St. Augustine to 24th Century, where they obtained prescriptions
for 196 and 224 tablets respectively of oxycodone 30. GX 3, at 2-3. The
sequential prescription numbers also support the inference that J.P.
and T.P. presented their prescriptions to Mr. George one after the
other, which he then filled.\36\ GX 3, at 2-3.
---------------------------------------------------------------------------

\36\ Both prescription labels include the initials ``KG.'' GX 3,
at 2-3.
---------------------------------------------------------------------------

Mr. George asserted that he remembered the case of J.P. and T.P.
``in detail.'' Tr. 468. He asserted that T.P. had a bulged disc from an
accident in 1998 and ``was our patient from 2009'' and that J.P. had a
``motor vehicle accident'' and ``had problems with his neck and . . .
back''; however, he offered no evidence as to when J.P.'s accident had
occurred and how long he had been a patient. Id.
Here, notwithstanding Mr. George's statement that he remembered the
case ``in detail,'' he offered no testimony as to why T.P. and J.P.
needed to travel 196 miles each way to obtain medication for their
purported conditions when there were likely a number of other clinics
where they could have obtained treatment that are located far closer to
St. Augustine then the 24th Century clinic. And while Mr. George
asserted that he filled the prescriptions because he ``was comfortable
within [his] professional judgment'' ``after doing all the due
diligence and following the protocols, talking to the doctors,'' id.at
573, Respondent produced no evidence to corroborate his testimony, not
even the two-page due diligence checklists for T.P. and J.P.
Notably, the ALJ did not find Mr. George's testimony credible,\37\
nor do I. Indeed, I conclude that the exact opposite of what Mr. George
testified to is true. See, e.g., NLRB v. Walton Manufacturing Co., 369
U.S. 404, 408 (1962) (quoting Dyer v. McDougall, 201 F.2d 265, 269 (2d
Cir. 1952) (``the demeanor of a witness . . . `may satisfy the
tribunal, not only that the witness' testimony is not true, but that
the truth is the opposite of his story; for the denial of one who has a
motive to deny, may be uttered with such hesitation, discomfort,
arrogance or defiance, as to give assurance that he is fabricating, and
that, if he is, there is no alternative but to assume the truth of what
he denies' '')).\38\ I therefore conclude that Mr. George either knew
that the prescriptions T.P. and J.P. presented lacked a legitimate
medical purpose or subjectively believed that there was a high
probability that the oxycodone prescriptions he filled for T.P. and
J.P. on August 4, 2011 lacked a legitimate medical purpose and that Mr.
George deliberately avoided learning of this fact.
---------------------------------------------------------------------------

\37\ There are numerous examples that support the ALJ's finding
that Mr. George's testimony was incredible. One such example is his
story of how, in 2012, he discovered that J.P. had been discharged
from 24th Century clinic after the clinic determined that J.P. had
tested positive for cocaine during an admission to a hospital in St.
Augustine. According to Mr. George, this occurred when J.P.
attempted to fill a prescription. Mr. George did not explain why
J.P. would even have a prescription if he had been discharged by the
clinic.
\38\ I thus reject Respondent's contention (Resp. Exceptions, at
11-13) that the ALJ improperly drew the adverse inference that Mr.
George's testimony was not credible when he testified that he
``always'' conducted his due diligence. Respondent also argues that
the ALJ's credibility finding is not supported by substantial
evidence because ``the record lacks any evidence that Mr. George
failed to utilize a system for resolving the red flags presented by
the prescriptions at issue'' and that his testimony was unrefuted.
See also id. at 38-39. Contrary to Respondent's understanding, the
ALJ, who observed Mr. George testify, could reasonably find that
``the opposite of his story'' is true based solely on her
observation of him. Walton Manufacturing, 369 U.S. at 408 (quoting
Dyer, 201 F.2d at 269).
---------------------------------------------------------------------------

On April 21, 2011, Mr. George dispensed a prescription for 196
oxycodone 30 to C.B., which was written by Dr. P.C. of the 24th Century
clinic. Tr. 569; GX 3, at 16. C.B. lived in Big Pine Key, which is near
Key West and a distance of 400 miles from Respondent. GX 3, at 16; R.D.
at 6.
Asked if he knew where Big Pine Key is, Mr. George answered that he
knew it was in Florida. Asked if he recalled investigating why C.B. had
travelled from Big Pine Key to Tampa to get the prescription, Mr.
George asserted that he didn't ``remember particularly this patient
again.'' Tr. 569. He then offered a generalized explanation as to why
patients had addresses indicating that they lived a considerable
distance from Tampa, such as ``their [sic] spouse are [sic] living in
Tampa, they're [sic] in job assignment, or their [sic] doctor is here
and they like the doctor,'' before acknowledging that ``I don't
particularly remember'' the patient. Id. Here again, he asserted that
``definitely I did counsel the patient and record it in the due
diligence sheet why they travel.'' Id. at 573. However, Respondent
failed to produce the due diligence sheets to corroborate Mr. George's
testimony.
Here again, I conclude that the exact opposite of what Mr. George
testified to is true--that he did not determine why C.B. had travelled
from Big Pine Key to fill the prescription. Walton Manufacturing Co.,
369 U.S. at 408 (quoting Dyer v. McDougall, 201 F.2d at 269). And I
further conclude that Mr. George either knew that the prescription
lacked a legitimate medical purpose or subjectively believed that there
was a high probability that the prescription C.B. presented lacked a
legitimate medical purpose and that he deliberately avoided learning of
that fact.
Mr. George did not otherwise address how he resolved the various
red flags presented by any other specific

[[Page 49839]]

prescription. As for the remaining prescriptions, he testified that he
had used the protocol he described in dispensing the prescriptions, Tr.
451, that he resolved all of the red flags, and that he documented his
resolution of all of the red flags on the due diligence checklists
which were in the binder in the pharmacy. Id. at 552-53. The ALJ
specifically found that Mr. George did not ``credibly assert[ ] that he
took this action for each of the prescriptions entered into this
record.'' R.D. 48. And she further found that he did not provide any
other ``evidence that he utilized this system in regards to the 85
prescriptions in this record that contain red flags.'' Id.
Relying on International Union (UAW) v. NLRB, 459 F.2d 1329, 1336
(D.C. Cir. 1972), the ALJ concluded that ``an adverse inference'' was
warranted as ``[e]ither the due diligence files do not exist, or the
files present evidence that is adverse to the Respondent's case.'' R.D.
49. The ALJ thus concluded that ``[t]he Government has . . . proved
that the Respondent filled prescriptions that presented red flags, and
the red flags were not otherwise resolved prior to the pharmacy
dispensing such prescriptions. Respondent's inaction in failing to
resolve these red flags violates the pharmacy's corresponding
responsibility.'' Id. (citing 21 CFR 1306.04(a); Holiday CVS, LLC, d/b/
a CVS Pharmacy Nos. 219 and 5195, 77 FR 62316 (2012)).
I agree with the ALJ that an adverse inference is warranted based
on Respondent's failure to produce the due diligence checklists and her
assessment of Mr. George's credibility on the issue of whether he
resolved all of the red flags. I nonetheless do not adopt her
conclusion that Respondent's pharmacists violated their corresponding
responsibility with respect to each of the 85 prescriptions in the
record.
In Superior, I noted that Holiday CVS defines the term ``red flag''
to mean ``a circumstance that does or should raise a reasonable
suspicion as to the validity of a prescription.'' 81 FR at 31335. I
further explained that ``[a]ll red flags do not have the same hue'' and
that ``proof that a pharmacist dispensed a controlled substance
prescription without resolving a red flag which only created a
`reasonable suspicion' that the prescription lacked a legitimate
medical purpose, is not enough to establish that a pharmacist acted
with the requisite scienter'' of willful blindness, and thus violated
21 CFR 1306.04(a). Id. at n.54; see also Global-Tech, 563 U.S. at 769.
However, I also noted that even ``where there are multiple red flags,
none of which alone would establish the requisite scienter, the
combination of red flags may well create a subjective belief that there
is a high probability that a prescription lacks a legitimate medical
purpose.'' 81 FR at 31335 n.54.
As explained above, establishing the requisite scienter for a
violation requires more than simply showing that a prescription
presented a red flag. The ALJ, however, simply concluded that because
each of the prescriptions presented a red flag or flags, without any
assessment of the level of suspicion created by the red flag or flags,
a violation was established because she found Mr. George not credible
when he testified that he resolved all of the red flags. This approach
is too untethered to the text of 21 CFR 1306.04(a) to support findings
that Respondent's pharmacists either acted knowingly or with willful
blindness when they dispensed each of the prescriptions.
To demonstrate, the record contains multiple prescriptions for MS
Contin. The record is, however, devoid of any evidence as to why the
quantities prescribed were suspicious, and certainly the prices paid
for the prescriptions are not so outlandish as to support the
conclusion that only a person who was abusing the drugs or selling them
to others would be willing pay the amount charged by Respondent for the
drug.\39\ Nor, despite its placement in Schedule II of the CSA, is
there any evidence that MS Contin was known to be highly sought after
by drug abusers. Thus, the only red flag presented are the distances
travelled by the patients. Even then, however, a number of the persons
filling the prescriptions lived in towns, such as Tarpon Springs and
Spring Hill, which are within commuting range of Tampa. As to these
prescriptions, it is unclear why the distance travelled by the patient
was enough to establish that the pharmacist (whether Mr. George or
others) subjectively believed that there was a high probability that
the prescription lacked a legitimate medical purpose.\40\ This is so
even when coupled with Mr. George's knowledge that 90 percent of the
prescriptions were being issued by Mr. Obi's employees.
---------------------------------------------------------------------------

\39\ The most expensive prescription was for 84 tablets of MS
Contin 100 mg and cost $218.40. GX 14, at 23-24. Yet other
prescriptions cost as little as $25.20. GX 13, at 5-6.
\40\ It is acknowledged that some of the patients who filled the
MS Contin prescriptions came from such places as Ocala, Gainesville
and St. Augustine (196 miles). However, I deem it unnecessary to
decide whether each of these prescriptions was unlawfully dispensed.
---------------------------------------------------------------------------

The record does, however, establish that Respondent filled multiple
prescriptions for Dilaudid (hydromorphone) which authorized the
dispensing of high quantities and called for daily dosing well above
the 12-24 milligrams average daily dose. Specifically, Mr. George
dispensed 240 tablets of Dilaudid 8 mg to D.K., which would provide a
daily dose of 64 mg, and 196 tablets of Dilaudid 8 mg to G.C., which
would provide a daily dose of approximately 52 mg.
As noted previously, Mr. Parrado provided unrefuted testimony that
Dilaudid 8 mg is an ``extremely, extremely potent opioid,'' that the
dose was ``almost double the recommended upper daily dose'' (it was
actually more), and that the prescription provided ``a high dose
because mostly people don't take Dilaudid 8 [mg] unless they're in a
terminal stage of cancer.'' Tr. 90. Mr. Parrado then testified that
``[t]o see multiple prescriptions for 200 tablets would be almost a
non-resolvable red flag to me.'' Id. I conclude that Mr. Parrado's
unrefuted testimony on this issue provides substantial evidence that
Mr. George subjectively believed that there was a high probability that
these prescriptions were not issued for a legitimate medical purpose.
As for whether Mr. George resolved the high probability that the
prescriptions were illegitimate raised by their dosing and quantity,
Mr. George did not specifically address these two prescriptions. To be
sure, Mr. George testified as a general matter that he resolved the
suspicion presented when a prescription authorizes the dispensing of a
controlled substance in quantities and dosing which exceed the maximum
recommended dose in opioid na[iuml]ve patients by looking at the
patient profiles to see if the patient had developed tolerance.
However, while looking at a patient profile to determine how large a
quantity a patient had previously been prescribed might well resolve
whether a patient has developed tolerance, it does not conclusively
resolve the issue of whether a prescription was issued for a legitimate
medical purpose. See T.J. McNichol, 77 FR 57133, 57148 (2012). Indeed,
just as legitimate patients may, over time, require larger
prescriptions to obtain the same level of analgesia, so too, addicted
persons require larger doses to obtain the same high. Also, a patient
who seeks prescription narcotics for the purpose of reselling them has
an economic incentive to seek large quantities.
Moreover, Mr. George testified that while he always documented how
he resolved the suspicion presented by a prescription, and, consistent
with Mr. Parrado's testimony as to the standard of

[[Page 49840]]

practice, that he had formerly done so on the prescriptions themselves,
Mr. George then maintained that from 2010 onwards he started doing so
on the due diligence checklists. Yet, even though Respondent knew what
prescriptions were at issue, it failed to produce the due diligence
checklists for the patients who received these prescriptions. And while
Respondent chose to put Mr. George on the stand, Mr. George did not
address how he resolved the suspicious circumstances presented by these
two prescriptions.\41\
---------------------------------------------------------------------------

\41\ While I rejected similar allegations in Superior I and II
because the evidence that the pharmacists had failed to resolve the
suspicious circumstances was limited to the absence of such
documentation on the prescriptions and faulted the Government for
failing to produce the patient profiles, in that matter, neither
party called any of the pharmacists who dispensed the prescriptions.
I also note that after the Government rested, Respondent sought
partial summary disposition on the dispensing allegations arguing
that the Government did not ``meet its burden of proof to show that
the red flags were not resolved'' and that all that ``the Government
has proven is that the resolution of the red flags was not present
on the back of the prescriptions.'' Tr. 336. The ALJ denied the
motion, ruling that ``Respondent has not provided any legal
authority that supports [its] position that I can grant summary
disposition of an issue in the course of this hearing,'' and that
she only had authority to recommend that I grant summary
disposition. Id. at 340.
Even if the ALJ committed error when she denied Respondent's
motion, Respondent had the option of not putting forward evidence on
the dispensing allegations. Respondent nonetheless chose to present
Mr. George's testimony and submit the partial medical records. Cf.
United States v. Sherod, 960 F.2d 1075, 1076 (1992) (``It is the
universal rule in the federal circuits that `a criminal defendant
who, after denial of a motion for judgment of acquittal at the close
of the government's case-in-chief, proceeds to the presentation of
his own case, waives his objection to the denial.' '') (quoting
United States v. Foster, 783 F.2d 1082, 1085 (D.C. Cir. 1986) (en
banc)). Thus, I am not required to ignore this evidence in
adjudicating the dispensing allegations.
---------------------------------------------------------------------------

Thus, I find that Mr. George either knew that the Dilaudid
prescriptions issued to D.K. and G.C. lacked a legitimate medical
purpose or subjectively believed that there was a high probability that
the prescriptions lacked a legitimate medical purpose. I further find
that an adverse inference is warranted that Respondent did not
conclusively resolve the high probability that the Dilaudid
prescriptions issued to D.K. and G.C. lacked a legitimate medical
purpose. I therefore conclude that substantial evidence supports a
finding that Mr. George violated 21 CFR 1306.04(a) when he dispensed
these two prescriptions.\42\
---------------------------------------------------------------------------

\42\ The record also contains a number other Dilaudid 8 mg
prescriptions which were for quantities and dosages that exceeded
the upper recommended dosage by nearly two fold or more. See GX 13,
at 23 (168 du); 27 (240 du); and at 35 (196 du); GX 14, at 29 (168
du); 31(180 du); 33 (180 du); 35 (168 du); 37 (180 du); and 41 (180
du); GX 15, at 13 (180 du); 15 (168 du); 17 (180 du); 19 (168 du);
21 (168 du); 23 (168 du); and 25 (180 du). For the same reasons set
forth in my discussion of the Dilaudid prescriptions filled by D.K.
and G.C., I conclude that Respondent's pharmacists violated their
corresponding responsibility when they filled these prescriptions.
As for the remaining Dilaudid prescriptions, with the exception of
the prescriptions dispensed to B.W. and T.F., I decline to address
whether Respondent's pharmacists violated 21 CFR 1306.04(a) when
they dispensed them.
---------------------------------------------------------------------------

Mr. Parrado also identified as suspicious two instances in which
patients (B.W. and T.F.) presented prescriptions for both Dilaudid 8
and methadone 10 which were issued on the same day. Tr. 107-11. Mr.
George filled B.W.'s prescriptions, which were for 100 Dilaudid 8 mg
and 60 methadone 10 mg, notwithstanding that: (1) B.W. had travelled
from Tallevast (54 miles from Respondent); (2) the dosing instruction
for the Dilaudid was to take one tablet every four hours for pain, thus
resulting in a daily doses of 48 mg, double the upper recommended dose;
and (3) that Dilaudid and methadone ``are immediate release opioids,
both of which could contribute to respiratory depression, which could
be a serious concern,''; and (4) while methadone's analgesic effect
peaks at ``three to four hours and tapers off rather quickly,'' the
respiratory depression effects continue to grow. Tr. 107, 174.
Notably, even Mr. Badawi agreed that the simultaneous prescribing
of two immediate release narcotics presents a red flag which requires
further investigation. Id. at 418-19. And while the record includes
evidence that there may be instances in which it is appropriate to
prescribe two short-acting narcotics due to kidney failure (and perhaps
an allergy), Mr. George offered no explanation as to how he resolved
the high probability that the prescriptions lacked a legitimate medical
purpose and decided to dispense the prescriptions.\43\
---------------------------------------------------------------------------

\43\ With respect to the Dilaudid 8 mg and methadone 10 mg
prescriptions which Mr. George filled for T.F., Mr. Parrado
identified, inter alia, the simultaneous prescribing of these two-
short acting medications together and the dosing of the methadone (2
tablets in the morning, one at bedtime) as raising concerns over the
legitimacy of the prescriptions. Of note, on the back of each
prescription, there are notations dated ``1/21/13'' (the same day
the prescription was filled), as well what appears to be ``ILKA,''
and ``Director--Operation.'' Mr. George did not, however, explain
the meaning of the notations.
---------------------------------------------------------------------------

In addition to the oxycodone 30 prescriptions Respondent dispensed
to T.V., J.P., T.P., H.C., Jr., and C.B., the record contains an
additional 29 oxycodone prescriptions which provided for the dispensing
of quantities and dosing in excess of the 80 mg daily limit. Notably,
25 of the prescriptions provided for the dispensing of 168 du or more,
and 13 of the prescriptions provided for the dispensing of 224 du or
more. See generally GX 3; GX 13. Moreover, most of the prescriptions
for 168 du provided a dosing instruction of one tablet every four
hours, for a total of 180 mg per day, and the prescriptions for 224 du
typically provided a dosing instruction of one tablet every three to
four hours, for up to 240 mg per day. See GX 3, at 8-9, 12-13, 19, 23,
30; GX 13, at 39 (prescriptions for 168 du); see also GX 3, at 3, 4-
5,10-11, 14-15, 17, 20, 24, 26, 28, 29; GX 13, at 1-2, 3-4, 37-38
(prescriptions for 224 du or more).\44\
---------------------------------------------------------------------------

\44\ There were also prescriptions for quantities ranging from
180 du to 210 du. See generally GX 3.
---------------------------------------------------------------------------

As Mr. Parrado testified, ``[o]ne of the things that a pharmacist
knows or should know is that oxycodone . . . 80 milligrams a day has
been listed in the literature as a lethal dose for or an opioid
na[iuml]ve patient. So, when being presented with a prescription for a
dose that would exceed 80 milligrams in one day, that pharmacist would
need to stop and take a look and verify that the patient[ ] is not
opioid na[iuml]ve and has been on a regimen[ ] that has led him to
develop a tolerance to that dose.'' Tr. 57. Mr. Badawi did not refute
Mr. Parrado's testimony as to the maximum recommended dose for an
opioid na[iuml]ve patient and he agreed that when a prescription calls
for the dispensing of a ``very large or larger than normal amounts of a
narcotic,'' or an amount ``larger than the manufacturer's recommended
dosage,'' a pharmacist must make an inquiry. Id. at 402-03. While Mr.
Badawi then testified that looking at the patient profile would show
whether the patient has developed tolerance, as explained previously,
even if the profile shows that the patient has previously received
large doses, this does not conclusively resolve the issue of whether
the prescription was issued for a legitimate medical purpose.
Here, the Government produced numerous prescriptions which provided
quantities and dosing instructions that were two to three times the 80
milligram level. Moreover, Mr. George acknowledged that a prescription
that exceeds the manufacturer's recommended daily dosage presents a red
flag, and I conclude that when a narcotic prescription exceeds that
dosage by the amounts present here, that red flag establishes that
there was a high probability that the prescription lacks a legitimate
medical purpose and that Mr. George subjectively believed as much.

[[Page 49841]]

As for the issue of whether Mr. George conclusively resolved that
the prescriptions were issued for a legitimate medical purpose, as
previously explained, Mr. George offered only his generalized and not
credible testimony that he always checked the patient profiles and did
his due diligence and failed to specifically address how he resolved
any of these other prescriptions. That, plus Respondent's failure to
produce the purported due diligence checklists to corroborate his
testimony, support the adverse inference that he failed to do so. I
therefore find that Respondent's pharmacists violated 21 CFR 1306.04(a)
when they dispensed numerous other oxycodone prescriptions.\45\
---------------------------------------------------------------------------

\45\ I do not adopt a categorical rule as to the distance a
patient must have travelled to render a controlled substance
prescription suspicious. Distance is just one of the factors that a
pharmacist must evaluate, and while a patient's willingness to
travel a long distance to obtain a prescription is highly
suspicious, a patient who seeks drugs for other than legitimate
medical purposes may live in the same city as the prescriber and/or
pharmacy. Indeed, several of the patients who lived in Tampa
presented prescriptions for such quantities of oxycodone 30 as 168
du, 180 du, 210 du, and 224 du. See GX 3, at 18, 19, 26, and 35.
---------------------------------------------------------------------------

While I conclude that the quantities and dosing of these
prescriptions alone support a finding that there was a high probability
that the oxycodone prescriptions lacked a legitimate medical purpose,
Mr. Parrado also identified another red flag--the high prices
Respondent charged for the oxycodone prescriptions and the fact that
patients were paying for them in cash or cash equivalents. Tr. 71-72,
75-76, 87-89, 112, 132-33, 165. As the evidence shows, the price
Respondent charged for a 180 du prescription ranged from $675 in April
2011 to $1350 in in December 2012, and many of the prescriptions costs
$800 or more. GX 3, at 1, 3, 5,11,15,17, 20, 24, 26, 28, 29, 30, 34,
35. As Mr. Parrado explained with respect to a prescription for 196 du
which, at that time, cost $784:

You don't see people paying $784 in cash. You tell a person they
have a $50 co-pay and they go ballistic on you. And for a person to
willingly pay $784 and not have any documentation as to why they did
that and to see that over and over every day is a concern to me. . .
. That's a red flag I couldn't resolve.

Tr. 71. And when asked on cross-examination if he had ever filled a
prescription for someone who did not have insurance, Mr. Parrado
answered that he was not going to give ``a yes or no answer because . .
. a person who . . . can't afford insurance . . . is not going to pay
1,200 or 1,300 for a prescription.'' Id. at 132.
Notably, Mr. Badawi offered no testimony refuting Mr. Parrado's
testimony that the cost of the prescriptions was also a red flag.
Indeed, were these patients legitimate chronic pain patients, they
would presumably require oxycodone on a monthly basis and would have
spent $7,000 to $10,000 a year for this medication in 2011 (when
Respondent's prices were lowest) and thousands more the following
year.\46\ This evidence further supports the conclusion that
Respondent's pharmacists either knew that the prescriptions lacked a
legitimate medical purpose or subjectively believed that there was a
high probability that the prescriptions were illegitimate and
deliberately failed to investigate further.
---------------------------------------------------------------------------

\46\ I do not adopt the Government's contention that the
prescriptions also presented the red flag of pattern prescribing. At
most, the Government identified 10 prescriptions for oxycodone 30
that were written by physicians from 24th Century and filled by
Respondent on the same day--April 21, 2011. GX 3, at 16-25. Notably,
the prescriptions ranged in dosage from 140 to 240 tablets. See id.
Moreover, another Government Exhibit refutes this contention as it
includes twenty prescriptions written by doctors from the 24th
Century clinic and filled by Respondent from April 14 through April
20, 2011. See generally GX 13. Notably, the exhibit includes four
prescriptions for oxycodone 30, nine prescriptions for Dilaudid
(some in the 4 mg tablet, others in the 8 mg), and 7 prescriptions
for MS Contin (some in 30 mg tablet, others in 60 mg). See id.
As the evidence shows, when the Government obtained Respondent's
records, it took only the schedule II prescriptions and provided
only these prescriptions to Mr. Parrado. Notably, during the period
of 2011 through early 2013, combination hydrocodone drugs, which are
among the most highly prescribed drugs overall and are prescribed
for pain, were in schedule III of the CSA, and any such
prescriptions were not provided to Mr. Parrado. So too, Mr. Parrado
was not provided with the prescriptions, if any, written by the 24th
Century doctors for other drugs they may have prescribed for pain
such as Tylenol with codeine (also in schedule III), pregabalin
(Lyrica, schedule V), as well as non-controlled medications such as
ibuprofen and naproxen. Thus, there is no basis to conclude that the
24th Century doctors were engaged in pattern prescribing.
---------------------------------------------------------------------------

Against this evidence, Respondent points to the changes it made in
its due diligence procedures after the AIW was served, the data it
submitted showing that it has substantially decreased its dispensing of
controlled substance prescriptions, and its decision--made three weeks
before the hearing--to stop dispensing controlled substance
prescriptions issued from pain management clinics. While Mr. George
explained that he made these changes because ``[a]s a professional
provider,'' he had ``a part to do to prevent the abuse and misuse and
diversion of . . . controlled substances,'' even were I to accept his
testimony as true, it does not outweigh the substantial evidence that
he and Respondent's other pharmacists violated their corresponding
responsibility and knowingly diverted controlled substances. 21 CFR
1306.04(a).

Other Allegations

The Government also alleged that Respondent violated various
recordkeeping provisions of the CSA and DEA regulations. The
allegations included that Respondent: (1) Had failed to complete a
biennial inventory, (2) did not notate on its schedule II order forms
the date and quantity it received of schedule II drugs, (3) failed to
retain Copy 3 of its order forms, and (4) its records were not readily
retrievable. The Government further points to the results of an audit
it conducted which found multiple overages and a shortage of schedule
II drugs.

The Availability of Respondent's Records

The Government alleged that Respondent ``failed to maintain records
of [s]chedule II prescriptions, inventory records, and receiving
records . . . in a readily retrievable form at its registered location
in violation of 21 CFR 1304.04(a) and (h)(2).'' ALJ Ex. 1, at 4 As
found above, a DI testified that Respondent was not able to provide all
of the records when the AIW was executed, specifically the
prescriptions from February 4, 2011 through April 2011, the inventories
from February 4, 2011 through the end of 2011, and the receiving
records from February 4, 2011 through the end of 2011. Tr. 252.
According to the DI, he personally witnessed an attorney for Respondent
state that the records were offsite and that the office manager had the
key but was not available that day. Id. at 253.
Reasoning that the attorney's statement was hearsay, the ALJ
specifically found credible Mr. George's testimony that the records
were locked in a storage room at the back of the pharmacy but that he
did not have the key to the room on the date that the AIW was executed.
R.D. at 45 n.30. While Mr. George testified that Respondent's owner
showed up with the key within a couple of hours but after the
Investigators had left, the Government put forward no evidence as to
how long the Investigators were on the premises.
Under generally applicable regulations, except as otherwise
provided, ``every inventory and other records required to be kept under
[21 CFR 1304] must be kept by the registrant and be available, for at
least 2 years from the date of such inventory or records, for
inspection and copying by

[[Page 49842]]

authorized employees of the Administration.'' 21 CFR 1304.04(a). Under
the regulation applicable to a pharmacy, ``[i]nventories and records of
all controlled substances in Schedule . . . II shall be maintained
separately from all other records of the pharmacy.'' 21 CFR
1304.04(h)(1).
As to the schedule II order forms, ``[t]he purchaser must retain
Copy 3 of each executed DEA Form 222'' and the forms ``must be
maintained separately from all other records of the registrant'' and
``be kept available for inspection for a period of two years'' at the
registered location. Id. Sec. 1305.17(a) & (c). Moreover, ``[p]aper
prescriptions for Schedule II controlled substances shall be maintained
at the registered location in a separate prescription file.'' 21 CFR
1304.04(h)(2).\47\ Unlike the provision applicable to prescriptions in
schedules III though V, this provision does not authorize the
maintenance of schedule II prescriptions ``in such form that they are
readily retrievable from other prescription records of the pharmacy.''
21 CFR 1304.04(h)(4). Indeed, none of the above regulations allows for
these records to be kept with other records of the pharmacy as long as
they are ``readily retrievable from [those] other'' records.
---------------------------------------------------------------------------

\47\ While invoices (but not schedule II order forms) ``may be
kept at a central location, rather than the registered location,''
to do so, a registrant must notify the Special Agent in Charge in
writing ``of [its] intention to keep central records.'' 21 CFR
1304.04(a)(1). While the DI subsequently identified GX 10 (which
contain only schedule II order forms as containing receiving
records, it is otherwise unclear whether the DI's reference to
receiving records also included the invoices. See, e.g., GX 11. As
to the invoices, there is no evidence in the record as to whether
Respondent ever notified the Agency of its intent to keep records at
other than its registered location.
---------------------------------------------------------------------------

In the Order to Show Cause, the Government nonetheless alleged that
Respondent ``failed to maintain records . . . in a readily retrievable
form at its registered location.'' ALJ Ex. 1, at 4. I find the
violation proved. As explained above, the ALJ reasoned that the
attorney's statement was hearsay and therefore gave it less weight than
Mr. George's testimony. However, contrary to the ALJ's understanding,
the attorney's statement was not hearsay because it was an admission of
a party-opponent. Cf. Fed. R. Evid. R. 801(d)(2). Attorneys typically
do not make admissions on behalf of clients to Government investigators
without a factual basis for doing so.\48\ Moreover, the attorney's
statement was made contemporaneously with the inspection, unlike Mr.
George's testimony which was offered well after fact and during a
proceeding in which he had ample motive to misstate the facts.
Accordingly, I find that various records including some of the schedule
II prescriptions and schedule II order forms were not kept on the
premises of Respondent's registered location as required by federal
regulations.
---------------------------------------------------------------------------

\48\ According to the DI, some of the Investigators attempted to
interview Mr. George, but shortly into the interview, the attorney
arrived and did not allow the Investigators to speak with Mr. George
or any another employees and ``[a]ll questions were to be directed
through [the attorney] at that point.'' Tr. 283. Thus, the attorney
clearly acted as Respondent's authorized representative and made the
statement that the missing records were offsite within the scope of
his relationship with Respondent.
---------------------------------------------------------------------------

The Allegations That Respondent Failed To Complete a Biennial Inventory

According to the DI, during the inspection, Respondent produced a
document for the audited drugs on which it kept a perpetual inventory,
i.e, a running total of the balance on hand listed by the date of
various transactions. Specifically, the log listed: (1) The results of
inventories which were actual ``physical count[s] of what was on
hand,'' Tr. 270; (2) dispensings by prescription number and the
quantity dispensed; (3) the quantities received by each order form
number and invoice numbers; and (4) returns by patients. GX 5.
According to the DI, the inventories did not comply with federal law
because ``there was not one date [when] every controlled substance was
inventoried.'' Tr. 235.
More specifically, the records showed that methadone 10 was
inventoried on January 2, 2012. GX 5, at 1. While morphine sulfate 30
mg immediate release and morphine sulfate 100 m extended release were
inventoried on January 2, 2012, morphine sulfate 60 mg extended release
was inventoried on January 3, 2012, and morphine sulfate 30 mg extended
release was not inventoried until June 9, 2012. GX 5, at 2-5. As for
hydromorphone 8 mg, the only inventory listed is one taken on July 24,
2012, and while an inventory of Dilaudid 4 mg was taken on January 2,
2012, the sheet for generic hydromorphone 4 mg lists an inventory date
of June 6, 2012 and the quantity on hand as ``-4'' while also including
the undated notation of ``60'' in the header for the ``balance''
column. See id. at 6-8. Finally, the sheet for oxycodone 30 lists the
inventory date as June 27, 2012, yet there is also an undated entry in
the header for the ``balance'' column with the notation of ``1030'';
the sheet also lists multiple prescriptions, a receipt from a
distributor and what appears to be a return from a patient. Id. at 9.
Against this evidence, Respondent introduced an exhibit which
purports to be an ``Annual Inventory'' of its schedule II controlled
substances which was taken on January 2, 2012 and which lists Mr.
George as its pharmacist. See RX 4. Asked on cross-examination whether
he had seen this document before, the DI answered ``no,'' and testified
that the document was not provided to the Government during the
execution of the AIW. Tr. 276. Respondent, however, points to a Florida
Department of Health Inspection Report which states that during a
September 14, 2012 inspection, the State Investigator found that
Respondent had taken a controlled substance inventory on a biennial
basis and that the inventory was available for inspection; the report
also noted that ``[t]he most recent Biennial Inventory is dated 01-02-
12.'' RX 4, at 6.
The ALJ surmised that at the time of the AIW, either the DI did not
request the biennial inventory or that Respondent's personnel did not
understand the request. R.D. at 8-9 n.3. Nor does the record establish
why this document was not turned over pursuant to the AIW (the AIW not
being in the record either) with the documents that were subsequently
turned over by Respondent's attorney. In any event, I find the evidence
insufficient to support the allegation that Respondent failed to
complete a biennial inventory as required by 21 CFR 1304.11(c). ALJ Ex.
1, at 4.

Allegations Related to Respondent's Maintenance of Its Schedule II
Order Forms

The Government also alleged that Respondent's manner of keeping its
schedule II order forms violated DEA regulations in two respects.
First, it alleges that Respondent failed to document on the forms the
``receipt date or quantity received.'' Id. (citing 21 U.S.C. 827(b); 21
CFR 1305.13(e)). Second, it alleges that Respondent failed to retain
Copy 3 of the order form. Id. (citing 21 U.S.C. 827(b); 21 CFR
1305.13(a) and 1305.17(a)).
As support for the allegations, the Government submitted copies of
11 ``purchaser's Copy 3'' of order forms Respondent submitted to
various distributors. Under DEA's regulation, ``[t]he purchaser must
record on Copy 3 . . . the number of commercial or bulk containers
furnished on each item and the dates on which the containers are
received by the purchaser.'' 21 CFR 1305.13(e). However, under another
DEA regulation, an order form is not valid ``more than 60 days after
its

[[Page 49843]]

execution by the purchaser.'' Id. Sec. 1305.13(b).
With respect to the 11 order forms, each of the forms includes
notations indicating one or more items was filled by the supplier, with
a handwritten notation as to the number of packages received, the date
of receipt, and initials. See generally GX 10. Two of the order forms
contain a notation that a number of packages were received but no entry
for the date the package was received. Id. at 9 (entry for methadone
10); id. at 11 (line no. 1--indicating 12 packages of hydromorphone 8
were received but leaving blank the date received). Respondent thus
violated 21 CFR 1305.13(e) by failing to notate the date these two
packages were received.
The order forms also included line items that were not filled in
any part by the supplier, and the forms were left blank in the columns
for ``No. of Packages Received'' and ``Date Received.'' See generally
GX 10. According to the DI, when Respondent did not ``receive a drug,''
it was required ``to write a zero'' in the column for the number of
packages received. Tr. 255. The DI was, however, unsure if Respondent
was required to also include a date. Id. at 256.
As to this contention, DEA regulations do not require a purchaser
to notate on the order form that no portion of a particular item was
received and a date. See 21 CFR 1305.13(e). Accordingly, to the extent
this allegation relies on Respondent's failure to notate and date the
non-receipt of items it ordered, the allegation is rejected.\49\
---------------------------------------------------------------------------

\49\ The Government put forward no evidence with respect to any
of the order forms that Respondent had actually received any of the
drugs listed in the line items which were left blank.
---------------------------------------------------------------------------

As for the allegations that Respondent ``failed to retain Copy 3 of
the'' order forms, the Government proof was comprised of a single 222
form which, according to the DI, was a xerox and not the original Copy
3. GX 11, at 2. This is a violation, as under 21 CFR 1305.17(a),
``[t]he purchaser must retain Copy 3 of each executed DEA Form 222.''
However, this violation, as well as the two other violations based on
Respondent's failure to notate the date on which the packages were
received, are of minor consequence.\50\
---------------------------------------------------------------------------

\50\ Invoking a DEA regulation which grants the ALJ ``all power
necessary'' to conduct a fair hearing, Respondent apparently argues
that I should give no weight to the Government's documentary
evidence, because following the execution of the AIW, the
Investigators ``illegally retain[ed] the documents for 611 days''
and ``never provided a meaningful accounting of the documents
seized.'' Resp. Exceptions, at 16. As Respondent further argues:
``To give any weight to the DEA's documentary evidence would be
tantamount to sanctioning the unlawful conduct of the investigators
and would work a great procedural and substantive injustice on
Respondent. The only fair action (thus, a ``necessary action'') is
to give no weight to the DEA's documentary evidence and to give no
weight to the testimony about those documents.''
Id. at 18.
In its Exceptions, Respondent does not identify a single
allegation that it has been unable to respond to because of the
Government's delay in returning the documents or its failure to
provide a meaningful accounting of the documents. Because Respondent
has failed to establish prejudice, I reject its claim. See Air
Canada v. Department of Trans., 148 F.3d 1142, 1156 (D.C. Cir. 1998)
(``As incorporated into the APA, the harmless error rule requires
the party asserting error to demonstrate prejudice from the
error.'') (citing 5 U.S.C. 706).
---------------------------------------------------------------------------

The Audit Allegations

The Government also put forth evidence that it conducted an audit
of Respondent's handling of seven controlled substances and found that
it had overages in six drugs and a shortage in one drug. With respect
to the latter, the audit found that Respondent was short 4,135 du of
hydromorphone 4 mg. With respect to the overages, as alleged by the
Government, the most significant were those of 8,758 du of
hydromorphone 8 mg and 1,306 du of oxycodone 30 mg.
``Recordkeeping is one of the CSA's central features; a
registrant's accurate and diligent adherence to this obligation is
absolutely essential to protect against the diversion of controlled
substances.'' Paul H. Volkman, 73 FR 30630, 30644 (2008); see also Fred
Samimi, 79 FR 18698, 18712 (2014) (finding, where physician ``had
shortages totaling more than 40,000 dosage units'' of various drugs,
that his ``inability to account for this significant number of dosage
units creates a grave risk of diversion,'' and that ``even were there
no other proven violations, the audit results alone are sufficient to .
. . establish[ ] that [physician's] registration[ ] `would be
inconsistent with the public interest' '') (citations omitted).
Respondent raises a variety of challenges to the audit results.
First, it asserts that the audits were flawed because they used figures
from Respondent's perpetual inventory for the initial inventory rather
than the inventory they produced at the hearing but had not provided to
the Government previously. Resp. Exceptions, at 4. It further asserts
that ``[h]ad DEA started with the record that the Agency actually
requires registrant to keep . . . . (the biennial inventory), DEA would
have had to use all of Respondent's records of receipt and dispensing
during 2012, and DEA would not have found the alleged overages and
shortages that its investigators claimed to find.'' Id.
Yet the Investigator testified repeatedly that the so-called
perpetual inventory is all that Respondent provided to him. Most
significantly, the Investigator testified that Mr. George ``stated that
every line marked inventory was a physical count of what was on hand.''
Tr. 270. I therefore find no basis to reject the audit result because
the Government used the physical counts listed on the perpetual
inventory.
As for the Government's audit of the hydromorphone 4 mg, Respondent
produced a listing by date, prescription number, and the quantity
dispensed for the period of July 30, 2012 through February 4, 2013. See
RX 5, at 2-3. Notably, each of the dispensings corresponds with the
dispensings listed in the perpetual inventory and both documents show
that Respondent dispensed a total of 4,659 du during the audit period,
a figure which is 120 dosage units less than that determined (4,779) by
the Government.\51\ See GX 4. The effect, however, is that Respondent's
shortage was even larger than that found by the Government. As for the
closing inventory figures, while Respondent argues that I should reject
the Government's figures because Mr. George did not attest to the
accuracy of the figures (see Resp. Exceptions at 8-9, Resp. Post-Hrng
Br. at 53), the difference between the Government's count (202) and
Respondent's (200) was two (2) tablets, a difference of inconsequence.
---------------------------------------------------------------------------

\51\ Respondent's perpetual inventory shows that an inventory
was taken on July 24, 2012 of its stock of hydromorphone 4 mg, and
that 1096 tablets were on hand; it also shows that Respondent did
not dispense a prescription for the drug until July 30, 2012. RX 5,
at 4. The evidence also shows that Respondent maintained a separate
perpetual inventory log for Dilaudid (branded hydromorphone) 4 mg.
GX 5, at 8. The log has only three entries; the entries provide
inventory figures for January 2, 2012, June 9, 2012, and December
31, 2012. See id. On each date, Respondent had 120 tablets in stock.
This figure, when added to the July 24, 2012 inventory for
hydromorphone of 1096, equals 1216, the same figure which the
Government used as its initial inventory.
---------------------------------------------------------------------------

By contrast, there is a substantial difference between the figures
the Government and Respondent calculated for Respondent's receipts
during the audit period. According to the Government, Respondent
acquired 7,900 tablets during the period; according to Respondent, it
acquired only 3,900 tablets. Compare GX 4 with RX 5, at 1.
This disparity is explained, however, by the Government's
identification of an additional transaction on January 28, 2013, when
Respondent acquired 4,000 du from Nucare Pharmaceuticals. GX 6, at 8.
Notably, this transaction does not appear on Respondent's list of its
acquisitions. Compare id. with RX 5, at 1. Significantly, Respondent
put

[[Page 49844]]

forward no evidence refuting the Government's finding that the
transaction occurred or that Respondent had received the drugs as of
the date of the AIW. Thus, not only do I find no reason to reject the
Government's finding with respect to Respondent's handling of
hydromorphone 4 mg, I find that the shortage was even larger than
alleged by the Government.\52\
---------------------------------------------------------------------------

\52\ Respondent also challenges the audit results, arguing that
the Investigator ``did not account for any controlled substances in
the pharmacy's will-call bin, returns to stock, or those drugs
quarantined for disposal.'' Resp. Post-Hrng. Br. 52; see also Resp.
Exceptions at 5-6. It further argues that under the Agency's
regulation, ``when conducting an inventory, the pharmacy must
account for all controlled substances on hand at the pharmacy at the
time of the inventory.'' Id. (citing 21 CFR 1304.11(a)).
As for Respondent's contention that the Agency was required to
count the drugs in the ``will-call bin,'' by implication the
regulation does not require counting these drugs. See 21 CFR
1301.11(a) (``Controlled substances shall be deemed `on hand' if
they are . . . ordered by a customer but not yet invoiced[.]'').
Notably, those drugs in the ``will-call bin'' have a dispensing
label attached and are otherwise accounted for as having been
dispensed, even if the customer has yet to pick up the prescription.
As for Respondent's contention that the Government did not
include those drugs that were returned to stock, where Respondent
produced such documentation, I have considered the returns. Finally,
Respondent produced no evidence that at the time the Investigators
took the closing inventory, it had in its possession any dosage
units of the drugs being audited that were quarantined for disposal.
Finally, Respondent argues that the DI ``willfully chose to
ignore'' evidence in its ARCOS database regarding its purchases of
schedule II drugs, apparently because he did not obtain Respondent's
complete ARCOS data and compare it with his calculations. Resp.
Exceptions, at 18. There is, however, no requirement that the
Government obtain ARCOS data, which is not submitted by pharmacies
but rather distributors and is thus dependent upon the accuracy of
their submissions, and indeed, one of the purposes of doing an audit
is to determine whether the registrant being audited is maintaining
complete and accurate records. In any event, as I have carefully
reviewed Respondent's invoices and credited Respondent for those
receipts which were supported by its records but were omitted by the
Government, this argument is moot.
---------------------------------------------------------------------------

As for the overage in hydromorphone 8 mg, Respondent disputed the
Government's figure for the amounts received, the quantities
distributed or dispensed, and the closing inventory. With respect to
the amounts received, both the Government and Respondent provided a
list of the shipments by date, order number, distributor's name, and
quantity. Notably, Respondent's list includes four shipments which are
not on the Government's list.
The first of these is an order purportedly filled by Harvard Drug
on November 11, 2012 for 400 du pursuant to Order Form #121140458. RX
6, at 1. The order is, however, unsupported by an invoice, and notably,
while Respondent submitted a copy of Order Form #121140458, that form
was used to place an order with a different distributor, Red Parrot
Distribution. See id. at 1; see also id. at 78, 80, 84 (invoices for
the shipments received from Red Parrot on 11/17, 11/15, and 11/21/12);
id. at 85 (DEA Form 222 #12114058). I thus find that Respondent did not
receive 400 du from Harvard on November 11, 2012.
Respondent's list of receipts also includes shipments received from
Attain Med on December 19 and 24, 2012, each of which was for 2,400 du,
pursuant to Order Form #12x00003. RX 6, at 1. Respondent provided a
copy of the order form and the invoices for each shipment. Id. at 92
(Order Form #12xx00003); id. at 91 (invoice for 24 packages shipped on
12/18/12 under same Order Form Number); id. at 90 (invoice for 24
packages shipped on 12/24/12 under same Order Form Number). The
Government's list includes, however, only the first shipment for 2,400
du. GX 6, at 6. I therefore find that Respondent received both
shipments and that the second shipment should have been credited by the
Government.
Respondent's list also included two receipts of 2,500 du totaling
5,000 du from Nucare Pharmaceuticals pursuant to Order From #121140485.
RX 6, at 1. According to the Government's list, Respondent received
only one of these shipments. GX 6, at 6. Respondent, however, produced
both a Form 222 (dated 12/17/12) which is annotated to reflect both
shipments by date and quantity, as well as two invoices documenting its
receipt of 5,000 du from Nucare pursuant to Order Form #121140485. See
RX 6, at 97 (Form 222); id. at 96 (01/15/13 invoice for second shipment
of 2500 du under Order #121140485); id. at 118 (12/26/12 invoice for
first shipment of 2500 du under Order #121140485). I therefore find
that Respondent received an additional 2,500 du pursuant to this order
than was credited by the Government.
Respondent also listed a receipt of 2,400 du from Attain Med on
January 19, 2013, pursuant to Order Form #13XX00001, RX 6, at 2; this
shipment is not included on the Government's list. See GX 6, at 6-7.
While Respondent did not produce the Order Form, it did produce an
invoice showing that 2,400 du were shipped to it on January 19, 2013
pursuant to the aforesaid Order Form number and should have been
credited by the Government. RX 6, at 102.
Finally, while the Government's list includes an order for 4,000 du
which was filled by Nucare and received by Respondent on January 28,
2013 pursuant to Order Form #121140486,\53\ Respondent's list also
includes a shipment for 1,000 du pursuant to the same order form which
it received on January 29, 2012. RX 6, at 2. While Respondent did not
produce the order form, it did produce invoices for both shipments. RX
6, at 105-06. Thus, the additional 1,000 du should have been credited
by the Government.
---------------------------------------------------------------------------

\53\ While the Government lists the Order Number as 121140497,
GX 6, at 6; Respondent listed it as 121140486, which corresponds
with the invoices. RX 6, at 2, 105-06.
---------------------------------------------------------------------------

However, the Government also credited Respondent as having received
two orders for 800 du each from Red Parrot on February 1, 2012 pursuant
to Order Form #121140488. GX 6, at 7. Notably, while the DEA Form 222
shows that on January 29, 2013, Respondent ordered a total of 4,800 du,
on the Order Form (as well as in his Perpetual Inventory), Respondent
documented the receipt of only 800 du on February 1, 2013, an amount
consistent with the invoice. See RX 6, at 108 (Form 222); id. at 107;
id. at 37. According to Respondent's perpetual inventory, it did not
receive an additional shipment from Red Parrot for hydromorphone 8 mg
until February 6, 2013, after the closing date of the audit. See id. at
38. Thus, I have excluded this amount in calculating Respondent's
receipts.
I therefore find that Respondent actually received an additional
7,500 du from its distributors than the amount calculated by the
Government.\54\ Moreover, the Government did not include the 433 du
which were returned by the patients. Thus, Respondent was accountable
for a total of 75,333 du.
---------------------------------------------------------------------------

\54\ While this may have been caused by Respondent's failure to
provide the records pursuant to the AIW, it may also have been
caused by mistakes made by the Investigator who prepared the audit.
The record does not, however, allow me to make a determination
either way.
---------------------------------------------------------------------------

As for the dispensings, the Government calculated the total at
71,759 du, Respondent at 72,195. Respondent's figure, however, includes
six prescriptions totaling 858 du which were dispensed on February 4,
2013, the date of the AIW. RX 6, at 16-17. The Government's evidence
shows, however, that the closing inventory was taken at the beginning
of business, and thus these prescriptions are not properly included in
the audit period. GX 7; Tr. 237. Thus, according to Respondent's data,
its total dispensings during the audit period were 71,337 du, a
difference of 422 du from the Government's figure.
The disparity is explained by five prescriptions, four of which are
listed

[[Page 49845]]

on the Government's list (GX 8, at 8-18) but not on Respondent's list
(RX 6, at 4-17), as well as one prescription which is listed on
Respondent's list but not the Government. More specifically, the
Government's list includes: (1) RX #2039300 for 140 du (compare GX 8,
at 8, with RX 6, at 5); (2) RX #2039764 for 150 du (compare GX 8, at
13, with RX 6, at 11); (3) RX #2039782 for 84 du (compare GX 8, at 13,
with RX 6, at 11); and (4) RX#2039952 for 168 du (compare GX 8, at 16,
with RX 6, at 14); Respondent's list includes RX#2039243 for 120 du
(compare RX 6, at 4, with GX 8, at 8).\55\ The four prescriptions on
the Government's lists (which total 542 du) and the prescription on
Respondent's list (120 du) thus account for the 422 du disparity in the
dispensings (after subtracting out Respondent's post-audit
dispensings).
---------------------------------------------------------------------------

\55\ Respondent's Perpetual Inventory included entries for
RX#2039300 and RX#2039782. RX 6, at 20, 29. As for RX#2039300, the
Perpetual Inventory included the notation ``wrong'' with a line
drawn through the prescription number, the date, the quantity, and
Mr. George's initials. RX 6, at 20. Respondent did not, however, add
back in the quantity to the balance. Id. As for RX#2039782, the
entry states ``voided'' to the left of the prescription number. Id.
at 29. The record contains no further evidence establishing whether
these prescriptions, or the other two prescriptions which were on
the Government's list but not Respondent's, were actually dispensed.
---------------------------------------------------------------------------

As for the closing inventory figures, the Government put forward
evidence that Respondent had 5,114 du on hand at the beginning of
business, which included 48 full 100 count bottles and 314 other du. GX
7. Respondent asserted that it had on hand 4,086 du; however, this
figure appears to have been determined after Respondent dispensed six
prescriptions totaling 858 du on February 4, 2013. RX 6, at 17. Adding
back in the 858 units Respondent represents that it dispensed on that
date, yields a total of 4,944 du. And adding the 71,337 du Respondent
represented that it had dispensed to its closing inventory figure of
4,944 du yields a total of 76,281 dosage units, this being the total
Respondent accounted for. This compares with the total of Respondent's
opening inventory, its receipts (including both its purchases and the
dosage units returned by patients) of 75,333.
Thus, even using Respondent's figures for its receipts,
dispensings, and closing inventory, it still had an overage of 948
dosage units. While this is substantially less that the figure
calculated by the Government, it is still material and supports a
finding that Respondent did not maintain complete and accurate records
as required by 21 U.S.C. 827(a).
As for the audit's finding that Respondent had an overage of 1,306
du of oxycodone 30, GX 4, Respondent disputed the Government's finding
that it received 17,200 du during the audit period. Instead, it put
forward evidence that it received 18,300 du from distributors during
the period and a comparison of the orders compiled by the Government
with the orders compiled by Respondent shows that it placed two orders
which totaled 1,100 du that were not included in the Government's
count. More specifically, the Government's count did not include an
order filled by PD-RX for 500 du on September 12, 2012 (Order Form
Number 12X000019), and an order for 600 du filled by Attain Med on
December 5, 2012. Compare GX 6, at 9, with RX 7, at 1. Moreover,
Respondent provided the invoices to support its receipt of each order.
See RX 7, at 40-41; id. at 87. Including the 12 dosage units that were
returned by a customer, Respondent received a total of 18,312 dosage
units during the audit period.
Notably, Respondent's Narcotic Control Sheet (RX 7, at 1) lists the
same beginning count as the Government used (39 du), and the parties
agreed that Respondent dispensed 18,322 du during the audit period.
Including the orders that the Government did not include, Respondent
was accountable for 18,351 du during the audit period and subtracting
out the dispensings, should have had on hand 29 tablets at the time of
the closing inventory. While Respondent's Narcotic Control Sheet lists
the results of a physical inventory which was purportedly conducted on
February 4, 2013 as 35 du (the same figure listed on Respondent's
Perpetual Inventory as of February 4, 2013), this figure cannot
possibly be accurate because on January 30, Respondent received an
order of 300 du and its records show that it had only dispensed a
single prescription for 140 du prior to the execution of the AIW and
thus should have had at least 160 tablets on hand when the closing
inventory was taken.\56\ Thus, I find that the Government's closing
inventory figure of 223 du is accurate and that Respondent had an
overage of 194 du. While this overage is substantially smaller than
that alleged by the Government, Respondent offered no explanation for
the overage.
---------------------------------------------------------------------------

\56\ Given the impossibility that Respondent's closing inventory
figure is accurate, and the Government's evidence that two
investigators counted the oxycodone 30, I find the Government's
inventory figure to be accurate.
However, Respondent argues that because Mr. George did not
participate in counting the drugs for the closing inventory, ``the
Government violated its own credibility safeguards.'' Resp.
Exceptions at 6; see also id. at 4 (noting that this approach ``was
contrary to the agency's internal guidance and customary practice'')
(citation omitted). Even so, two Agency employees counted the drugs
and vouched for the accuracy of the counts. Thus, while I do not
condone the Investigators' failure to have Mr. George participate--
at least in the absence of evidence that Mr. George was unwilling to
do so--I nonetheless find no reason to conclude that the closing
inventory figures found by the Government were unreliable.
---------------------------------------------------------------------------

Sanction

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).
The Agency has also repeatedly held that the level of candor
exhibited by a registrant's principals during ``the hearing itself is
an important factor to be considered in determining both whether [it]
has accepted responsibility as well as for the appropriate sanction.''
Michael S. Moore, 76 FR 45867, 45868 (2011); see also Robert F. Hunt,
75 FR 49995, 50004 (2010); Jeri Hassman, 75 FR 8194, 8236 (2010);
Hoxie, 419 F.3d at 483 (``Candor during DEA investigations, regardless
of the severity of the violations alleged, is considered by the DEA to
be an important factor when assessing whether a . . . registration is
consistent with the public interest.'').
Nor are these 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

[[Page 49846]]

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 (2011)
(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).
The Agency has also held that ```[n]either Jackson, nor any other
agency decision, holds . . . that the Agency cannot consider the
deterrent value of a sanction in deciding whether a registration should
be [suspended or] revoked.''' Gaudio, 74 FR at 10094 (quoting
Southwood, 72 FR at 36504); see also Robert Raymond Reppy, 76 FR 61154,
61158 (2011); Moore, 76 FR at 45868. This is so, 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'').
Here, the ALJ found that Mr. George did not credibly accept
responsibility for Respondent's misconduct. R.D. at 52. The ALJ
specifically noted Mr. George's testimony that ``[a]s the pharmacist in
charge . . . I accept the responsibility of conduct of the pharmacy.
Again while I did all my due diligence and protocol, as I said before,
still I'm less than perfect.'' Id. (citing Tr. 507). See also Tr. at
539-40 (``even though I did my best, our best to control that and
prevent the abuse and misuse, that is not perfect. It is always less
than perfect. Human beings are not perfect. I accept that
responsibility.''). Asking whether this was a sufficient acceptance of
responsibility, the ALJ concluded that Mr. George was ``still asserting
that he had done all of his due diligence and had followed the
Respondent's protocol'' and that his ``statement lacks credibility.''
R.D., at 52. And she also found that Mr. George's testimony that he had
``always'' done his due diligence lacked credibility.
I agree with the ALJ that Mr. George's testimony was not credible
and that Respondent has not accepted responsibility. Indeed, much of
Mr. George's testimony was contrived and other portions were plainly
disingenuous.
Of particular note is Mr. George's testimony regarding the reason
that Respondent filled the prescription (for 210 oxycodone 30) for
T.V., who had traveled 472 miles from Pensacola. According to Mr.
George, T.V. had been coming to Respondent since 2009 and the reason
she was travelling this distance was because ``she used to come and see
that doctor [Dr. Ruperto] always. And while I was interviewing that
patient she said she likes the doctor and she wanted to continue seeing
that doctor.'' Tr. 588 (emphasis added). Yet the prescription which the
Government submitted into evidence was written by Dr. P.C., and was
written more than two and a half years after Dr. Ruperto's death.
Indeed, while Mr. George testified that T.V. had been coming to his
pharmacy since 2009, Tr. 494, 579; Dr. Ruperto died in December 2008,
before T.V. even began filling her prescriptions at Respondent. Yet Mr.
George maintained that he had done all of his due diligence with
respect to T.V.'s prescription.
So too, with respect to H.C., Jr., Mr. George testified that
notwithstanding that he no longer had insurance and had not filled a
prescription at Respondent for two years, he was ``willing to pay
whatever the cash price at that time'' was for his oxycodone 30
prescription--$1350--because he ``need[ed] this medication.'' Tr. 496-
97. Mr. George thus stated that he ``filled this prescription for
cash.'' Id. at 497. Yet based on the progress note Mr. George obtained,
he knew that at the same visit, H.C., Jr. had also been prescribed
three other controlled substances, including 112 OxyContin 40 mg, 84
Xanax 1 mg, and 84 carisoprodol. While Mr. George denied knowing
anything about drug cocktails, as Mr. Parrado testified, the
combination of an opioid, benzodiazepine and carisoprodol was widely
known for its abuse potential. RX 3, at 47. Also unexplained by Mr.
George is how a patient, who had lost his insurance, would be able to
pay $1350 a month, each month, for this one prescription alone, as
would be expected if the patient was a legitimate chronic pain patient.
Here too, I do not believe his testimony.
In still other instances, Mr. George gave inconsistent testimony.
For example, Mr. George testified that he looked at the partial medical
records as ``an extra step to prevent the abuse and misuse of the
controlled substances'' and that ``through experience, [he] learned to
look through these forms and understand'' them. Tr. 481. However, when
asked with regard to patient S.D. whether he had reviewed the medical
record before filling an oxycodone 30 prescription and if he could tell
from the record what other controlled substances were dispensed that
day, Mr. George testified that he ``look[ed] only for my prescription
which is received in my hand. That is only my concern.'' Tr. 561. He
then added that ``[i]f I get the medical record, I have no way of
saying and understanding where the patient had a different prescription
unless I talk to the patient or doctors if he write any other
prescriptions. I cannot guess where the prescription was filled for
that patient.'' \57\ Id. Yet the progress note in S.D.'s file clearly
showed that the physician had also prescribed four other controlled
substances to S.D. at this visit, including MS Contin, Soma, Xanax, and
Dilaudid. RX 3, at 29.
---------------------------------------------------------------------------

\57\ Mr. George, however, had also previously testified that
under the protocol that was in place when he filled this
prescription, ``we check that they have narcotic contract with the
patient.'' Tr. 450. See also id. at 458. Notably, one of the terms
of S.D.'s narcotic contract was that ``I will have prescriptions
filled at only one pharmacy,'' and the contract then listed Superior
(and not Respondent) as the only pharmacy. RX 3, at 30-31.
Certainly, Mr. George knew from the progress note what other
prescriptions were written on that date and whether they were being
presented at Respondent for filling. Apparently, it was not a
concern that S.D. was filling the prescription at his pharmacy,
rather than the pharmacy listed on his narcotic contract.
At another point, Mr. George testified that ``[f]rom 2013
onwards,'' he had ``modified [his] protocol and changed it to print
out patient's residence to less than 15 miles,'' Tr. 499, thus
suggesting (although there is an argument that his answer was
incoherent) that he would no longer fill the prescriptions if the
patient lived more than 15 miles away. Yet he later testified that
after DEA executed the AIW (on Feb. 4, 2013), he changed the
protocol to fill only for patients who lived within 50 miles. Id. at
570-71.
---------------------------------------------------------------------------

Mr. George then testified that in ``looking [at] all these
documents,'' he was ``going above and beyond what the duty'' of a
pharmacist requires of him, and that ``it is not [a] pharmacist's job
to read, that is doctor's job.'' Tr. 561-62. To be sure, as Mr. Parrado
explained, pharmacists usually do not obtain medical records in the
course of dispensing. Tr. 599. Nonetheless, registrants (and their
principals such as Mr. George) are not excused from ignoring the
information they do obtain and one does not need a degree in medicine
to read S.D.'s progress note and recognize that S.D. had been
prescribed five different controlled substances at the same visit,
including not only duplicative therapy in the form of two short-acting
narcotics (oxycodone 30 and Dilaudid 8 mg), see Fla. Admin Code
r.64B16-27.810, but also a drug cocktail well known to be abused on the
street.

[[Page 49847]]

I thus agree with the ALJ that Mr. George, as Respondent's
principal, has not adequately accepted responsibility for its
misconduct. This finding provides reason alone to conclude that
Respondent has not rebutted the Government's prima facie showing that
it has committed acts which render its continued registration
``inconsistent with the public interest.'' 21 U.S.C. 824(a)(4). And
having found that Mr. George and Respondent knowingly diverted
controlled substances, there is no need to consider Respondent's
remedial efforts as they are rendered irrelevant by its failure to
acknowledge its misconduct. See The Medicine Shoppe, 79 FR 59504, 59510
(2014), pet. for rev. denied 626 Fed. Appx. 2 (Mem.) (D.C. Cir. 2015);
Jayam Krishna-Iyer, 74 FR 459, 464 (2009) (``Because of the grave and
increasing harm to public health and safety caused by the diversion of
prescription controlled substances, even where the Agency's proof
establishes that a practitioner has committed only a few acts of
diversion, this Agency will not grant or continue the practitioner's
registration unless he accepts responsibility for his misconduct.'').
As the Tenth Circuit has recognized in the context of physician
practitioners:

The DEA may properly consider whether a physician admits fault
in determining if the physician's registration should be revoked.
When faced with evidence that a doctor has a history of distributing
controlled substances unlawfully, it is reasonable for the [DEA] to
consider whether that doctor will change his or her behavior in the
future. And that consideration is vital to whether continued
registration is in the public interest.

MacKay v. DEA, 664 F.3d 808, 820 (10th Cir. 2011) (citing Hoxie v. DEA,
419 F.3d at 483 (6th Cir. 2005)). See also Hoxie, 419 F.3d at 483
(``The DEA properly considers the candor of the physician . . . and
admitting fault [to be] important factors in determining whether the
physician's registration should be revoked.'').
I further find that the misconduct proven on this record is
egregious and supports the revocation of Respondent's registration.
More specifically, my finding that Respondent's pharmacists dispensed
multiple prescriptions in violation of their corresponding
responsibility and thereby knowingly diverted controlled substances is,
by itself, sufficient to support the revocation of its registration.
Revocation is also warranted by my finding that Respondent was short
more than 4,000 du of hydromorphone 4 mg. And I also find that
revocation is supported by Mr. George's lack of candor during his
testimony.
I further find that the Agency's interest in deterring future
misconduct both on the part of Respondent (and Mr. George) as well as
the community of pharmacy registrants supports revocation. As for the
issue of specific deterrence, the revocation of Respondent's
registration is not a permanent bar, and as to Mr. George, because
pharmacists are not required to be registered under the CSA, revocation
is warranted to deter Mr. George from engaging in future misconduct in
the event he procures employment elsewhere. As for the issue of general
deterrence, those members of the regulated community who contemplate
using their registrations to divert controlled substances need to know
that there will be serious consequences if they choose to do so.
I therefore conclude that the revocation of Respondent's
registration is necessary to protect the public interest. And I will
further order that any application of Respondent to renew or modify its
registration be denied.

Order

Pursuant to the authority vested in me by 21 U.S.C. 823(f) and
824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of
Registration FH0772257 issued to Hills Pharmacy, LLC, be, and it hereby
is, revoked. I further order that any application of Hills Pharmacy,
LLC, to renew or modify its registration, be, and it hereby is, denied.
This order is effective August 29, 2016.

Dated: July 19, 2016.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2016-17721 Filed 7-27-16; 8:45 am]
BILLING CODE 4410-09-P