Wayne Pharmacy; Decision and Order, 63579-63583 [2020-22216]
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Federal Register / Vol. 85, No. 196 / Thursday, October 8, 2020 / Notices
Issued: October 5, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020–22321 Filed 10–7–20; 8:45 am]
BILLING CODE 7020–02–P
INTERNATIONAL TRADE
COMMISSION
[Investigation No. 337–TA–1188]
Certain Pick-Up Truck Folding Bed
Cover Systems and Components
Thereof; Commission Determination
Not To Review an Initial Determination
Terminating the Investigation Based
Upon Withdrawal of the Complaint;
Termination of the Investigation
U.S. International Trade
Commission.
ACTION: Notice.
AGENCY:
Notice is hereby given that
the U.S. International Trade
Commission (the ‘‘Commission’’) has
determined not to review an initial
determination (‘‘ID’’) (Order No. 18)
granting complainants’ motion to
terminate the present investigation in its
entirety based on withdrawal of the
complaint. The investigation is
terminated.
FOR FURTHER INFORMATION CONTACT: Carl
P. Bretscher, Office of the General
Counsel, U.S. International Trade
Commission, 500 E Street SW,
Washington, DC 20436, telephone (202)
205–2382. Copies of non-confidential
documents filed in connection with this
investigation may be viewed on the
Commission’s electronic docket (EDIS)
at https://edis.usitc.gov. For help
accessing EDIS, please email
EDIS3Help@usitc.gov. General
information concerning the Commission
may also be obtained by accessing its
internet server at https://www.usitc.gov.
Hearing-impaired persons are advised
that information on this matter can be
obtained by contacting the
Commission’s TDD terminal, telephone
(202) 205–1810.
SUPPLEMENTARY INFORMATION: On
December 30, 2019, the Commission
instituted the present investigation on a
complaint, as supplemented, filed by
Extang Corporation and Laurmark
Enterprises, Inc. (d/b/a Bak Industries)
(collectively, ‘‘Complainants’’), both of
Ann Arbor, Michigan. 84 FR 71975–76
(Dec. 30, 2019). The complaint alleges a
violation of Section 337 of the Tariff Act
of 1930, as amended, 19 U.S.C. 1337
(‘‘Section 337’’), in the importation, sale
for importation, and sale in the United
States after importation of certain pickup truck folding bed cover systems and
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SUMMARY:
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components thereof by reason of
infringement of certain claims of U.S.
Patent Nos. 7,484,788 and 8,061,758
(‘‘the 758 patent’’). Id. The complaint
further alleges that an industry exists in
the United States. Id.
The notice of investigation names the
following parties as respondents: Tyger
Auto Inc. of Rialto, California; Cixi City
Liyuan Auto Parts Co. of Zhejiang
Province, China; and Hong Kong Car
Start Industries Co., of Zhijian Province,
China (collectively, ‘‘Respondents’’). Id.
The notice of investigation also names
the Office of Unfair Import
Investigations (‘‘OUII’’) as a party. Id.
On March 18, 2020, the presiding
administrative law judge (‘‘ALJ’’) issued
an ID (Order No. 6), granting
Complainants’ unopposed motion to
amend the complaint and notice of
investigation in order to supplement
and clarify the allegations of the original
complaint and notice of investigation
regarding the 758 patent. The
Commission determined not to review
the ID. Comm’n Notice (April 17, 2020).
On September 22, 2020, the ALJ
issued the subject ID (Order No. 18)
granting Complainants’ unopposed
motion to terminate the investigation in
its entirety based upon the withdrawal
of the complaint. The ALJ finds no
extraordinary circumstances that would
prevent termination of this
investigation, and no agreements,
written or oral, express or implied,
between the parties concerning the
subject matter of the investigation. The
ALJ also granted Complainants’ request
to stay the procedural schedule pending
final resolution of this ID.
No party filed a petition for review of
Order No. 18.
The Commission has determined not
to review the subject ID. The
investigation is terminated in its
entirety.
The Commission voted to approve
this determination on October 2, 2020.
The authority for the Commission’s
determination is contained in Section
337 of the Tariff Act of 1930, as
amended (19 U.S.C. 1337), and in part
210 of the Commission’s Rules of
Practice and Procedure (19 CFR part
210).
By order of the Commission.
Issued: October 2, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020–22230 Filed 10–7–20; 8:45 am]
BILLING CODE 7020–02–P
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63579
JUDICIAL CONFERENCE OF THE
UNITED STATES
Committee on Rules of Practice and
Procedure; Meeting of the Judicial
Conference
Committee on Rules of Practice
and Procedure, Judicial Conference of
the United States.
ACTION: Notice of open meeting.
AGENCY:
The Committee on Rules of
Practice and Procedure will hold a
virtual meeting on January 5, 2021. The
meeting is open to the public. When a
meeting is held virtually, members of
the public may join by telephone
conference to listen but not participate.
An agenda and supporting materials
will be posted at least 7 days in advance
of the meeting at: https://
www.uscourts.gov/rules-policies/
records-and-archives-rules-committees/
agenda-books.
DATES: January 5, 2021, TIME: 10 a.m.–
5 p.m. (Eastern).
FOR FURTHER INFORMATION CONTACT:
Rebecca A. Womeldorf, Secretary,
Committee on Rules of Practice and
Procedure of the Judicial Conference of
the United States, Thurgood Marshall
Federal Judiciary Building, One
Columbus Circle, NE, Suite 7–300,
Washington, DC 20544, Telephone (202)
502–1820, RulesCommittee_Secretary@
ao.uscourts.gov.
SUMMARY:
Authority: 28 U.S.C. 2073.
Dated: October 5, 2020.
Shelly L. Cox,
Management Analyst, Rules Committee Staff.
[FR Doc. 2020–22326 Filed 10–7–20; 8:45 am]
BILLING CODE 2210–55–P
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Wayne Pharmacy; Decision and Order
On March 30, 2018, the Deputy
Assistant Administrator, Office of
Diversion Control, Drug Enforcement
Administration, issued an Order to
Show Cause (hereinafter, OSC) to
Wayne Pharmacy (hereinafter,
Registrant), which proposed the
revocation of its DEA Certificate of
Registration BW8625785. Government’s
Request for Final Agency Action Exhibit
(hereinafter, RFAAX) 2 (OSC). The OSC
alleged that Registrant’s ‘‘continued
registration is inconsistent with the
public interest.’’ OSC, at 1 (citing 21
U.S.C. 824(a)(4) and 823(f)). The OSC
also proposed to deny any pending
application by Registrant for renewal as
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well as applications for new DEA
registrations. Id.
In response to the OSC, Registrant
issued a timely request for an
administrative hearing, RFAAX 14
(Order Terminating Proceedings), and a
hearing was scheduled for July 17, 2018.
Id. On July 6, 2018, DEA and Registrant
reached an administrative settlement,
which required, among other things, for
Registrant to admit to Paragraphs 2
through 8 of the OSC and to withdraw
its request for a hearing. RFAAX 12
(Memorandum of Agreement), at 2–3.
On July 9, 2018, pursuant to the
settlement, Registrant withdrew its
request for an administrative hearing.
RFAAX 14.
On September 21, 2018, the
Government forwarded a Request for
Final Agency Action, along with the
evidentiary record for this matter, to my
office. Having considered the record in
its entirety, I find that the record
establishes, by substantial evidence, that
Registrant committed acts rendering its
continued registration inconsistent with
the public interest. Accordingly, I
conclude that the appropriate sanction
is for Registrant’s DEA registration to be
revoked.
I. Findings of Fact
A. DEA Registration
Registrant is registered with DEA as a
retail pharmacy authorized to handle
controlled substances in schedules II–V
under DEA Registration No.
BW8625785, with a registered location
of 1055 Hamburg Turnpike, Wayne,
New Jersey, 07470. RFAAX 1 (DEA
Certificate of Registration). Registrant is
owned by Barbara Kleiber (hereinafter,
the Owner). Id.; RFAAX 13 (May 31,
2018 Prehearing Ruling), at Stipulation
No. 2.
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B. Administrative Settlement and
Registrant’s Admissions
In lieu of an administrative hearing on
this matter, Registrant and the
Government came to an administrative
settlement, the terms of which were
memorialized in a Memorandum of
Agreement (hereinafter, MOA). RFAAX
12. As part of the settlement, Registrant,
and its Owner, both ‘‘accepted
responsibility for their misconduct and
for their failure to comply with federal
laws pertaining to controlled substances
as alleged in the [OSC].’’ Id. at 2.
Specifically, the Owner, both in her
individual capacity and in her capacity
as the owner of Registrant, admitted to
the following factual allegations made
in paragraphs 2 through 8 of the OSC
against Registrant:
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(1) Registrant is owned by Barbara
Kleiber. M.B.1 is a former employee of
Registrant and the son of the Owner;
(2) In May 2017, Registrant’s
Pharmacist-in-Charge (‘‘PIC’’) Deborah
Clark reported to the Wayne Police
Department that in the course of
investigating the loss of a bottle of
oxycodone 30mg, she had conducted an
audit and discovered that approximately
47,000 tablets of oxycodone 30mg were
missing.
(3) Although Registrant became aware
of the loss of 47,000 tablets of
oxycodone 30mg in May 2017,
Registrant did not file a DEA 106 notice
of theft or loss until June 14, 2017, after
DEA conducted its own inspection of
Registrant, and in violation of 21 CFR
1301.76(b).
(4) On June 1, 2017, DEA inspected
Registrant’s records pursuant to a Notice
of Inspection. During this inspection, an
audit was conducted covering the May
1, 2015 to June 1, 2017 time period.
DEA’s audit of Registrant’s records
found that Registrant committed
systematic violations of the Controlled
Substances Act (hereinafter, CSA), 21
U.S.C. 801 et seq., and DEA regulations,
including the following:
a. Registrant’s inventories resulted in
inaccurate inventories in violation of 21
CFR 1304.22(c).
i. For the audit period, Registrant was
accountable for 543,575 tablets of
oxycodone 30 mg, but could only
account for 510,994 tablets, a shortfall of
32,581 tablets.
ii. For the audit period, Registrant was
accountable for 120,102 tablets of
oxycodone/acetaminophen 10/325 mg,
but could only account for 96,102, a
shortfall of 24,000 tablets.
iii. For the audit period, Registrant
was accountable for 41,004 tablets of
Morphine IR 30 mg, but could only
account for 34,487 tablets, a shortfall of
6,517 tablets.
(5) On September 18, 2017, DEA
conducted an additional review of
Registrant’s records pursuant to an
Administrative Inspection Warrant.
DEA’s audit of Registrant’s records
found that Registrant continued to
commit systematic violations of the CSA
and DEA regulations.
a. The five controlled substances that
were audited on June 1, 2017, were
again audited with an audit period of
June 1, 2017 to September 18, 2017.
Registrant’s inventory continued to be
inaccurate in violation of 21 CFR
1304.22(c).
i. For the audit period, Registrant was
accountable for 44,954 tablets of
1 I have used initials to refer to all of Registrant’s
employees except for the Pharmacist in Charge.
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oxycodone 30 mg, but could only
account for 44,626 tablets, a shortfall of
328 tablets.
ii. For the audit period, Registrant was
accountable for 12,389 tablets of
oxycodone/acetaminophen 10/325 mg,
but could only account for 12,193 a
shortfall of 196 tablets.
iii. For the audit period, Registrant
was accountable for 2,557 tablets of
Morphine IR 30 mg, but could only
account for 2,354 tablets, a shortfall of
203 tablets.
b. In addition to auditing the same
controlled substances that were audited
on June 1, 2017, DEA conducted an
audit of additional controlled
substances. For these additional
controlled substances, the audit period
was May 1, 2017 to September 18, 2017.
Registrant’s inventory was inaccurate
with respect to these controlled
substances in violation of 21 CFR
1304.22(c).
i. For the audit period, Registrant was
accountable for 4,428 tablets of
alprazolam 2 mg, but could only
account for 3,318 tablets, a shortfall of
573 tablets.
ii. For the audit period, Registrant was
accountable for 880 tablets of Tylenol
with codeine #4, but could only account
for 812 tablets, a shortfall of 68 tablets.
iii. For the audit period, Registrant
was accountable for 2,487 tablets of
Adderall IR 30 mg, but could only
account for 2,292 tablets, a shortfall of
195 tablets.
(6) In December 2017, Registrant hired
its own auditor to inspect its records.
Using the audit period of January 1,
2017, to December 19, 2017, Registrant’s
own auditor found significant shortages.
Specifically, Registrant’s auditor found
that during this time period, Registrant
could not account for 15,264 tablets of
oxycodone 30 mg, 13,966 tablets of
oxycodone 15 mg, 4,140 tablets of
alprazolam 2 mg, and 1,192 tablets of
Adderall (generic) 30 mg.
(7) When the DEA conducted its audit
on June 1, 2017, the Owner told DEA
that Registrant was in the process of
improving its practices since
discovering the massive shortages that
caused Registrant to report missing
oxycodone to the Wayne Police
Department. Specifically, the Owner
advised DEA that Registrant was in the
process of taking additional security
measures; namely (1) ordering of a safe
to store controlled substances (as
opposed to the locked glass cabinet
currently in use); and (2) tallying daily
inventories of controlled substances.
Neither of these alleged additional
safeguards were effective, as the
controlled substances continued to be
stored in such a way that all employees
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had access to them, and the daily
inventories were conducted in such a
way that any employee could alter the
inventory. As such Registrant, on an
ongoing basis, failed to adequately
secure its controlled substances in
violation of 21 CFR 1301.71.
The Owner and Registrant also both
admitted that ‘‘[the Owner] was given
notice by DEA that there was reasonable
basis to believe that [M.B.] was diverting
controlled substances, but [the Owner]
did not terminate [M.B.]’s employment
for at least four months.’’ RFAAX 12, at
2–3.
C. Government’s Allegations
In addition to the factual allegations
the Registrant admitted in the MOA, the
Government has also alleged that M.B.,
the son of Registrant’s owner and a
former employee of Registrant, was
involved in the theft of controlled
substances from Registrant and that
Registrant failed to terminate M.B. in
the face of evidence that he was
diverting controlled substances. OSC, at
4–5; RFAA, at 9–10. To support this
allegation, the Government submitted
recordings and transcripts of interviews
the Wayne Police Department
conducted with one of Registrant’s
Pharmacists and its PIC (which were
also attended by DEA officers and
investigators), RFAAX 5–9; text
messages between Registrant’s PIC and
a DEA Task Force Officer (hereinafter,
TFO One), RFAAX 11, 16; and the
declaration of a DEA Diversion
Investigator (hereinafter, DI One), who
recounted conversations he had with
Registrant’s employees, owner, and
representatives. RFAAX 15.
On June 1, 2017, DEA conducted an
inspection at Registrant. DI One stated
that he interviewed one of Registrant’s
pharmacy technicians, who recounted
to him an incident from 2016, in which
she discovered a trail of oxycodone
tablets leading toward the restroom
immediately after M.B. was involved in
counting oxycodone tablets and then
left for the restroom. GX 15, at 2.
On June 2, 2017, the Wayne Police
Department interviewed a former
pharmacist at Registrant, C.R. RFAAX 6
(Recording of C.R. Interview) and 7
(Transcript of C.R. Interview); see also
RFAAX 16 (Declaration of TFO One).
TFO One attended and participated in
the interview. RFAAX 16. During the
interview, C.R. described an incident he
had with M.B. when C.R. was working
as a pharmacist at Registrant and M.B.
was working as a pharmacy technician.
RFAAAX 7, at 12–13. C.R. stated that he
caught M.B. putting a bottle of
morphine sulfate 30 mg in his pocket.
Id. C.R. said he confronted M.B., and
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M.B. produced the bottle from his
pocket. Id. C.R. stated that after the
pharmacy closed that night, he told the
Owner about the incident. Id.
The Wayne Police Department
interviewed Registrant’s PIC, Deborah
Clark, on June 9, 2017 and June 14,
2017. RFAAX 5 (Recordings of PIC
interviews), 8 (Transcript of June 9 PIC
Interview), 9 (Transcript of June 14 PIC
Interview); see also RFAAX 15, at 2. DI
One attended the June 9 interview.
RFAAX 15, at 2. During the June 9
interview, PIC Clark reported an
incident from May 4, 2017, where M.B.
was involved in putting away an order
at the pharmacy, which included six
bottles of oxycodone. RFAAX 8, at 12.
According to PIC Clark, M.B. abruptly
left the pharmacy, and, after he left the
pharmacy, a bottle of oxycodone was
found to be missing. Id. When M.B.
returned to the pharmacy, he appeared,
in PIC Clark’s opinion, to be ‘‘spacey.’’
Id. PIC Clark reported the missing bottle
to the Owner. Id.
DI One also declared that DEA
repeatedly told Registrant that there was
a reasonable basis to believe that M.B.
was diverting controlled substances.
RFAAX 15, at 4. DI One stated that he
told the Owner during the September
2017 audit that DEA believed her son,
M.B., was diverting controlled
substances. Id. DI One also said he was
present ‘‘at a meeting between
representatives of the Department of
Justice, DEA and [Registrant] which
took place on January 8, 2018 and
February 7, 2018,’’ and ‘‘[a]t both of
those meetings [Registrant]’s
representatives were told that [M.B.]
was involved in diversion of controlled
substances’’ and at both of those
meetings ‘‘[Registrant]’s representatives
indicated that [M.B.] still worked at
Wayne Pharmacy.’’ Id.
II. Discussion
A. Registrant’s Registration Is
Inconsistent With the Public Interest
Under the Controlled Substances Act,
‘‘[a] registration . . . to . . . 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 his 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
‘‘practitioner,’’ which is defined in 21
U.S.C. 802(21) to include a ‘‘physician,’’
Congress directed the Attorney General
to consider the following factors in
making the public interest
determination:
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(1) The recommendation of the
appropriate State licensing board or
professional disciplinary authority.
(2) The [registrant]’s experience in
dispensing . . . controlled substances.
(3) The [registrant]’s conviction record
under Federal or State laws relating to
the . . . 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.
21 U.S.C. 823(f). These factors are
considered in the disjunctive. Robert A.
Leslie, M.D., 68 FR 15,227, 15,230
(2003).
According to Agency decisions, 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 revoke a
registration. Id.; see also Jones Total
Health Care Pharm., LLC v. Drug Enf’t
Admin., 881 F.3d 823, 830 (11th Cir.
2018) (citing Akhtar-Zaidi v. Drug Enf’t
Admin., 841 F.3d 707, 711 (6th Cir.
2016); MacKay v. Drug Enf’t Admin.,
664 F.3d 808, 816 (10th Cir. 2011);
Volkman v. Drug Enf’t Admin., 567 F.3d
215, 222 (6th Cir. 2009); Hoxie v. Drug
Enf’t Admin., 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. ‘‘In short, . . .
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 misconduct.’’ Jayam
Krishna-Iyer, M.D., 74 FR 459, 462
(2009). Accordingly, findings under a
single factor can support the revocation
of a registration. MacKay, 664 F.3d at
821.
The Government has the burden of
proving that the requirements for
revocation of a DEA registration in 21
U.S.C. 824(a) are satisfied. 21 CFR
1301.44(e). When the Government has
met its prima facie case, the burden
then shifts to the registrant to show that
revoking registration would not be
appropriate, given the totality of the
facts and circumstances on the record.
Med. Shoppe-Jonesborough, 73 FR 364,
387 (2008).
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, Four, and Five. I find the
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Government has satisfied its prima facie
burden of showing that Registrant’s
continued registration would be
‘‘inconsistent with the public interest.’’
21 U.S.C. 824(a)(4).
1. Factors Two and/or Four—The
Registrant’s Experience in Dispensing
Controlled Substances and Compliance
With Applicable Laws Related to
Controlled Substances
As already discussed, pursuant to
section 304 of the CSA, in conjunction
with section 303 of the CSA, I am to
consider evidence of Registrant’s
compliance (or non-compliance) with
laws related to controlled substances
and experience dispensing controlled
substances in determining whether
Registrant’s continued registration is
‘‘consistent with the public interest.’’ 21
U.S.C. 824(a)(4). ‘‘[A] registrant’s
‘ignorance of the law is no excuse’ for
actions that are inconsistent with
responsibilities attendant upon a
registration.’’ Daniel A. Glick, D.D.S., 80
FR 74,800, 74,809 (2015) (quoting Sigrid
Sanchez, M.D., 78 FR 39,331, 39,336
(2013)). Instead, ‘‘[a]ll registrants are
charged with knowledge of the CSA, its
implementing regulations, as well as
applicable state laws and rules.’’ Id. at
74,809 (internal citations omitted).
Further, the Agency has consistently
concluded that a pharmacy’s
registration is subject to revocation due
to the unlawful activity of the
pharmacy’s owners, majority
shareholders, officers, managing
pharmacist, or other key employee.
EZRX, LLC, 69 FR 63,178, 63,181 (2004);
Plaza Pharmacy, 53 FR 36,910, 36,911
(1988).
In support of its contention that
Registrant’s continued registration is
inconsistent with the public interest, the
Government has alleged that Registrant
violated several federal laws related to
controlled substances. Specifically, the
Government has alleged that Registrant
violated its recordkeeping obligations
under the CSA, as implemented in 21
CFR 1304.22(c), to maintain accurate
inventories of its controlled substances.
The Government also alleged that
Registrant violated 21 CFR 1301.71 and
1301.76 by failing to adequately secure
its controlled substances and failing to
timely notify DEA after Registrant
discovered it was missing controlled
substances.
A. Recordkeeping Allegations
Recordkeeping is one of the CSA’s
principal tools for preventing the
diversion of controlled substances.
Grider Drug 1 & Grider Drug 2, 77 FR
44,070, 44,100 (citing Paul H. Volkman,
73 FR 30,630, 30,644 (2008)). DEA
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decisions have explained that ‘‘a
registrant’s accurate and diligent
adherence to [its recordkeeping]
obligations is absolutely essential to
protect against the diversion of
controlled substances.’’ Volkman, 73 FR
at 30,644. Under the Act, ‘‘every
registrant . . . dispensing a controlled
substance or substances shall maintain,
on a current basis, a complete and
accurate record of each such substance
. . . received, sold, delivered, or
otherwise disposed of by him.’’ 21
U.S.C. 827(a). The CSA’s implementing
regulations specify at 21 CFR 1304.22(c)
the records that a dispenser, such as
Registrant, is required to maintain
regarding the controlled substances it
receives and dispenses.
Registrant’s records were audited
twice by DEA—on June 1, 2017 and
September 18, 2017—and once by an
auditor hired by Registrant in December
2017. As Registrant admitted in its MOA
with the Government, each audit found
significant shortages in Registrant’s
inventories of controlled substances. A
shortage in an inventory audit of
controlled substances occurs when a
pharmacy is unable to account for all of
the controlled substances it should have
in its inventory.
It is clear from the shortages that
Registrant was not maintaining required
records. Accordingly, I find the
unrefuted evidence supports a finding
that Registrant violated its
recordkeeping obligations under the
CSA. This finding weighs against
entrusting Registrant with a registration.
B. Security Controls Allegations
The Government alleged that
Registrant violated 21 CFR 1301.71 and
1301.76(b) by failing to promptly report
the loss of 47,000 tablets of oxycodone
30mg to DEA. 21 1301.76(b) requires
registrants to notify its area DEA Field
Division Office of ‘‘the theft or
significant loss of any controlled
substances within one business day of
discovery of such loss or theft’’ and to
submit a DEA Form 106 regarding the
loss or theft. The regulation provides
factors to determine whether a loss is
‘‘significant,’’ which include ‘‘the actual
quantity of controlled substances lost in
relation to the type of business,’’ and
‘‘[w]hether the loss of the controlled
substances can be associated with
access to those controlled substances by
specific individuals.’’ 21 CFR
1301.76(b).
Registrant admitted that it became
aware of the loss of 47,000 tablets of
oxycodone 30mg in May 2017. The loss
of such a large number of tablets of
oxycodone, a schedule II controlled
substance, is clearly significant under
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Fmt 4703
Sfmt 4703
the factors listed in 21 CFR 1301.76(a).
Registrant was required to report this
significant loss of controlled substances
within one business day of discovering
the loss. Registrant, however, did not
file a DEA 106 notice of theft or loss
until June 14, 2017, after DEA
conducted its own inspection of
Registrant. Registrant’s failure to notify
DEA of the significant loss of controlled
substances within one business day of
discovering the loss was a violation of
21 CFR 1301.76(b) and a violation of 21
CFR 1301.71, which requires all
registrants to provide ‘‘effective controls
and procedures to guard against theft
and diversion of controlled substances’’
as set forth in 1301.72–76.
2. Factor Five—Such Other Conduct
Which May Threaten Public Health and
Safety
Under Factor Five, the Administrator
is authorized to consider ‘‘[s]uch other
conduct which may threaten the public
health and safety.’’ 5 U.S.C. 823(f)(5).
Although Factor Five is broad, DEA
decisions have qualified its breadth by
limiting the considerations made under
that factor to those where there is ‘‘a
substantial relationship between the
conduct and the CSA’s purpose of
preventing drug abuse and diversion.’’
Zvi H. Perper, M.D., 77 FR 64,131,
64,141 (2012) (citing Tony T. Bui, 75 FR
49,979, 49,988 (2010)). As the Agency
has previously stated, ‘‘‘[c]areless or
negligent handling of controlled
substances creates the opportunity for
diversion and [can] justify’ the
revocation of an existing registration or
the denial of an application for a
registration.’’ Lon F. Alexander, M.D., 82
FR 49,704, 49,725 n.43 (2017) (quoting
Paul J. Caragine, Jr. 63 FR 51,592,
51,601 (1998)).
The uncontested evidence in this case
shows that Registrant was losing large
quantities of controlled substances from
its inventory and that these losses
continued even when Registrant knew
about the losses and therefore could
have taken measures to stop them. After
the DEA’s June 2017 audit, Registrant
was unquestionably aware that it was
losing large quantities of controlled
substances, but the DEA’s September
2017 audit and the December 2017 audit
conducted by Registrant’s auditor show
that Registrant continued to lose
significant quantities of controlled
substances throughout 2017.
Furthermore, Registrant’s employees
had reported at least three incidents to
Registrant’s owner where it appeared to
the employee that M.B. had stolen
controlled substances from Registrant or
where the employee had thwarted
M.B.’s attempt to steal controlled
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substances from the pharmacy. DEA
also told Registrant on three separate
occasions that there was a reasonable
basis to believe that M.B. was diverting
controlled substances. Despite these
reports, Registrant continued to employ
M.B. until at least February 2018.
There is also no evidence on the
record that Registrant took any real
measures to increase security at the
pharmacy or otherwise stop the losses.
Registrant’s owner told DEA on June 1,
2017, that Registrant was in the process
of taking additional security measures—
namely ordering a safe to store
controlled substances and taking daily
inventories of controlled substances—
and that M.B. no longer worked at
Registrant. RFAAX 15, at 2. Registrant’s
PIC, however, told DEA on July 27,
2017, that Registrant’s narcotics were
being stored in an unlocked case and
that any pharmacy employee could
change the inventory quantities in
Registrant’s computer. RFAAX 11 (text
messages between PIC and DEA TFO).
Registrant also admitted that ‘‘[n]either
of these alleged additional safeguards
were effective, as the controlled
substances continued to be stored in
such a way that all employees have
access to them, and the daily
inventories were conducted in such a
way that any employee could alter the
inventory.’’ RFAAX 12, at 2 (admitting
to the factual allegations in paragraphs
2–8 of the OSC); OSC, at 4. Furthermore,
PIC Clark told the DEA that, as of July
27, 2017, M.B. was working as a
pharmacy tech at Registrant. RFAA 11.
Registrant confirmed that M.B. was still
employed by Registrant in meetings
with DEA on January 8, 2018 and
February 7, 2018. RFAAX 15, at 4.
‘‘[A] DEA registrant is obligated at all
times to act in the public interest.’’ Peter
F. Kelly, D.P.M., 82 FR 28,676, 28,688
(2017). Registrant’s failure to take action
to stop the illicit flow of controlled
substances out of the pharmacy was a
breach of its duty as a registrant to act
in the public interest. Moreover, it likely
permitted the additional diversion of
hundreds (if not thousands) of units of
controlled substances. I, therefore, find
that Registrant’s failure to stem the
known diversion of controlled
substances from its inventory
constitutes ‘‘conduct which may
threaten the public health and safety.’’
21 U.S.C. 823(f)(5).
Having considered all of the factors, I
conclude that the evidence pertinent to
factors two, four, and five demonstrate
a prima facie showing that Registrant
‘‘has committed such acts as would
render [its] registration . . . inconsistent
with the public interest.’’ 21 U.S.C.
824(a)(4). I further conclude that
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17:48 Oct 07, 2020
Jkt 253001
Registrant has not rebutted the
Government’s prima facie case.
III. Sanction
Where, as here, the Government has
met its prima facie burden of showing
that Registrant’s continued registration
is inconsistent with the public interest,
the burden shifts to the Registrant to
show why it can be entrusted with a
registration. Garrett Howard Smith,
M.D., 83 FR 18,882, 18,910 (2018)
(collecting cases).
The CSA authorizes the Attorney
General to ‘‘promulgate and enforce any
rules, regulations, and procedures
which he may deem necessary and
appropriate for the efficient execution of
his functions under this subchapter.’’ 21
U.S.C. 871(b). This authority
specifically relates ‘‘to ‘registration’ and
‘control,’ and ‘for the efficient execution
of his functions’ under the statute.’’
Gonzales, 546 U.S. at 259. ‘‘Because
‘past performance is the best predictor
of future performance, ALRA Labs, Inc.
v. Drug Enf’t Admin., 54 F.3d 450, 452
(7th Cir. 1995), [the Agency] has
repeatedly held that where a registrant
has committed acts inconsistent with
the public interest, the registrant must
accept responsibility for [the
registrant’s] actions and demonstrate
that [registrant] will not engage in future
misconduct.’ ’’ Jayam Krishna-Iyer, 74
FR at 463 (quoting Medicine Shoppe, 73
FR 364, 387 (2008)); see also Jackson, 72
FR at 23,853; John H. Kennnedy, M.D.,
71 FR 35,705, 35,709 (2006); Prince
George Daniels, D.D.S., 60 FR 62,884,
62,887 (1995). The issue of trust is
necessarily a fact-dependent
determination based on the
circumstances presented by the
individual registrant; therefore, the
Agency looks at factors, such as the
acceptance of responsibility, and the
credibility of that acceptance as it
relates to the probability of repeat
violations or behavior, and the nature of
the misconduct that forms the basis for
sanction, while also considering the
Agency’s interest in deterring similar
acts. See Arvinder Singh, M.D., 81 FR
8247, 8248 (2016).
Registrant accepted responsibility for
most of its misconduct in the MOA, in
which it admitted to many of the factual
allegations in the OSC in exchange for
certain agreements from the
Government. Registrant, however, did
not present any evidence of remorse for
its past misconduct and did not provide
any assurances that it would not engage
in such conduct in the future. Further,
it provided no evidence of rehabilitative
actions taken to correct its past unlawful
behavior, except an agreement from the
Owner, in her individual capacity, that
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Sfmt 4703
63583
‘‘she will not serve as an officer, partner,
stockholder, proprietor, owner, partial
owner, or pharmacist in charge of any
entity that either possesses or is seeing
a DEA Certificate of Registration’’ for so
long as the MOA between the
Government and Registrant remains in
effect. Absent such evidence and such
assurances in this matter, I find that
continued registration of Registrant is
inconsistent with the public interest.
Registrant’s silence weighs against its
continued registration. Zvi H. Perper,
M.D., 77 FR 64,131, 64,142 (2012)
(citing Med. Shoppe-Jonesborough, 73
FR at 387); see also Samuel S. Jackson,
72 FR 23,848, 23,853 (2007).
Accordingly, I find that the factors
weigh in favor of sanction and I shall
order the sanction the Government
requested, as contained in the Order
below.
IV. Order
Pursuant to 28 CFR 0.100(b) and the
authority vested in me by 21 U.S.C.
824(a), I hereby revoke DEA Certificate
of Registration BW8625785 issued to
Wayne Pharmacy. This Order is
effective November 9, 2020.
Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020–22216 Filed 10–7–20; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. DEA–642]
Importer of Controlled Substances
Application: MMJ Biopharma
Cultivation, Inc.
ACTION:
Notice of application.
Registered bulk manufacturers of
the affected basic class(es), and
applicants therefore, may file written
comments on or objections to the
issuance of the proposed registration on
or before November 9, 2020. Such
persons may also file a written request
for a hearing on the application on or
before November 9, 2020.
ADDRESSES: Written comments should
be sent to: Drug Enforcement
Administration, Attention: DEA Federal
Register Representative/DPW, 8701
Morrissette Drive, Springfield, Virginia
22152. All requests for a hearing must
be sent to: Drug Enforcement
Administration, Attn: Administrator,
8701 Morrissette Drive, Springfield,
Virginia 22152. All requests for a
hearing should also be sent to: (1) Drug
Enforcement Administration, Attn:
DATES:
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]]>Agencies
[Federal Register Volume 85, Number 196 (Thursday, October 8, 2020)]
[Notices]
[Pages 63579-63583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22216]
=======================================================================
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Wayne Pharmacy; Decision and Order
On March 30, 2018, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause (hereinafter, OSC) to Wayne Pharmacy (hereinafter,
Registrant), which proposed the revocation of its DEA Certificate of
Registration BW8625785. Government's Request for Final Agency Action
Exhibit (hereinafter, RFAAX) 2 (OSC). The OSC alleged that Registrant's
``continued registration is inconsistent with the public interest.''
OSC, at 1 (citing 21 U.S.C. 824(a)(4) and 823(f)). The OSC also
proposed to deny any pending application by Registrant for renewal as
[[Page 63580]]
well as applications for new DEA registrations. Id.
In response to the OSC, Registrant issued a timely request for an
administrative hearing, RFAAX 14 (Order Terminating Proceedings), and a
hearing was scheduled for July 17, 2018. Id. On July 6, 2018, DEA and
Registrant reached an administrative settlement, which required, among
other things, for Registrant to admit to Paragraphs 2 through 8 of the
OSC and to withdraw its request for a hearing. RFAAX 12 (Memorandum of
Agreement), at 2-3. On July 9, 2018, pursuant to the settlement,
Registrant withdrew its request for an administrative hearing. RFAAX
14.
On September 21, 2018, the Government forwarded a Request for Final
Agency Action, along with the evidentiary record for this matter, to my
office. Having considered the record in its entirety, I find that the
record establishes, by substantial evidence, that Registrant committed
acts rendering its continued registration inconsistent with the public
interest. Accordingly, I conclude that the appropriate sanction is for
Registrant's DEA registration to be revoked.
I. Findings of Fact
A. DEA Registration
Registrant is registered with DEA as a retail pharmacy authorized
to handle controlled substances in schedules II-V under DEA
Registration No. BW8625785, with a registered location of 1055 Hamburg
Turnpike, Wayne, New Jersey, 07470. RFAAX 1 (DEA Certificate of
Registration). Registrant is owned by Barbara Kleiber (hereinafter, the
Owner). Id.; RFAAX 13 (May 31, 2018 Prehearing Ruling), at Stipulation
No. 2.
B. Administrative Settlement and Registrant's Admissions
In lieu of an administrative hearing on this matter, Registrant and
the Government came to an administrative settlement, the terms of which
were memorialized in a Memorandum of Agreement (hereinafter, MOA).
RFAAX 12. As part of the settlement, Registrant, and its Owner, both
``accepted responsibility for their misconduct and for their failure to
comply with federal laws pertaining to controlled substances as alleged
in the [OSC].'' Id. at 2. Specifically, the Owner, both in her
individual capacity and in her capacity as the owner of Registrant,
admitted to the following factual allegations made in paragraphs 2
through 8 of the OSC against Registrant:
(1) Registrant is owned by Barbara Kleiber. M.B.\1\ is a former
employee of Registrant and the son of the Owner;
---------------------------------------------------------------------------
\1\ I have used initials to refer to all of Registrant's
employees except for the Pharmacist in Charge.
---------------------------------------------------------------------------
(2) In May 2017, Registrant's Pharmacist-in-Charge (``PIC'')
Deborah Clark reported to the Wayne Police Department that in the
course of investigating the loss of a bottle of oxycodone 30mg, she had
conducted an audit and discovered that approximately 47,000 tablets of
oxycodone 30mg were missing.
(3) Although Registrant became aware of the loss of 47,000 tablets
of oxycodone 30mg in May 2017, Registrant did not file a DEA 106 notice
of theft or loss until June 14, 2017, after DEA conducted its own
inspection of Registrant, and in violation of 21 CFR 1301.76(b).
(4) On June 1, 2017, DEA inspected Registrant's records pursuant to
a Notice of Inspection. During this inspection, an audit was conducted
covering the May 1, 2015 to June 1, 2017 time period. DEA's audit of
Registrant's records found that Registrant committed systematic
violations of the Controlled Substances Act (hereinafter, CSA), 21
U.S.C. 801 et seq., and DEA regulations, including the following:
a. Registrant's inventories resulted in inaccurate inventories in
violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 543,575
tablets of oxycodone 30 mg, but could only account for 510,994 tablets,
a shortfall of 32,581 tablets.
ii. For the audit period, Registrant was accountable for 120,102
tablets of oxycodone/acetaminophen 10/325 mg, but could only account
for 96,102, a shortfall of 24,000 tablets.
iii. For the audit period, Registrant was accountable for 41,004
tablets of Morphine IR 30 mg, but could only account for 34,487
tablets, a shortfall of 6,517 tablets.
(5) On September 18, 2017, DEA conducted an additional review of
Registrant's records pursuant to an Administrative Inspection Warrant.
DEA's audit of Registrant's records found that Registrant continued to
commit systematic violations of the CSA and DEA regulations.
a. The five controlled substances that were audited on June 1,
2017, were again audited with an audit period of June 1, 2017 to
September 18, 2017. Registrant's inventory continued to be inaccurate
in violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 44,954
tablets of oxycodone 30 mg, but could only account for 44,626 tablets,
a shortfall of 328 tablets.
ii. For the audit period, Registrant was accountable for 12,389
tablets of oxycodone/acetaminophen 10/325 mg, but could only account
for 12,193 a shortfall of 196 tablets.
iii. For the audit period, Registrant was accountable for 2,557
tablets of Morphine IR 30 mg, but could only account for 2,354 tablets,
a shortfall of 203 tablets.
b. In addition to auditing the same controlled substances that were
audited on June 1, 2017, DEA conducted an audit of additional
controlled substances. For these additional controlled substances, the
audit period was May 1, 2017 to September 18, 2017. Registrant's
inventory was inaccurate with respect to these controlled substances in
violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 4,428
tablets of alprazolam 2 mg, but could only account for 3,318 tablets, a
shortfall of 573 tablets.
ii. For the audit period, Registrant was accountable for 880
tablets of Tylenol with codeine #4, but could only account for 812
tablets, a shortfall of 68 tablets.
iii. For the audit period, Registrant was accountable for 2,487
tablets of Adderall IR 30 mg, but could only account for 2,292 tablets,
a shortfall of 195 tablets.
(6) In December 2017, Registrant hired its own auditor to inspect
its records. Using the audit period of January 1, 2017, to December 19,
2017, Registrant's own auditor found significant shortages.
Specifically, Registrant's auditor found that during this time period,
Registrant could not account for 15,264 tablets of oxycodone 30 mg,
13,966 tablets of oxycodone 15 mg, 4,140 tablets of alprazolam 2 mg,
and 1,192 tablets of Adderall (generic) 30 mg.
(7) When the DEA conducted its audit on June 1, 2017, the Owner
told DEA that Registrant was in the process of improving its practices
since discovering the massive shortages that caused Registrant to
report missing oxycodone to the Wayne Police Department. Specifically,
the Owner advised DEA that Registrant was in the process of taking
additional security measures; namely (1) ordering of a safe to store
controlled substances (as opposed to the locked glass cabinet currently
in use); and (2) tallying daily inventories of controlled substances.
Neither of these alleged additional safeguards were effective, as the
controlled substances continued to be stored in such a way that all
employees
[[Page 63581]]
had access to them, and the daily inventories were conducted in such a
way that any employee could alter the inventory. As such Registrant, on
an ongoing basis, failed to adequately secure its controlled substances
in violation of 21 CFR 1301.71.
The Owner and Registrant also both admitted that ``[the Owner] was
given notice by DEA that there was reasonable basis to believe that
[M.B.] was diverting controlled substances, but [the Owner] did not
terminate [M.B.]'s employment for at least four months.'' RFAAX 12, at
2-3.
C. Government's Allegations
In addition to the factual allegations the Registrant admitted in
the MOA, the Government has also alleged that M.B., the son of
Registrant's owner and a former employee of Registrant, was involved in
the theft of controlled substances from Registrant and that Registrant
failed to terminate M.B. in the face of evidence that he was diverting
controlled substances. OSC, at 4-5; RFAA, at 9-10. To support this
allegation, the Government submitted recordings and transcripts of
interviews the Wayne Police Department conducted with one of
Registrant's Pharmacists and its PIC (which were also attended by DEA
officers and investigators), RFAAX 5-9; text messages between
Registrant's PIC and a DEA Task Force Officer (hereinafter, TFO One),
RFAAX 11, 16; and the declaration of a DEA Diversion Investigator
(hereinafter, DI One), who recounted conversations he had with
Registrant's employees, owner, and representatives. RFAAX 15.
On June 1, 2017, DEA conducted an inspection at Registrant. DI One
stated that he interviewed one of Registrant's pharmacy technicians,
who recounted to him an incident from 2016, in which she discovered a
trail of oxycodone tablets leading toward the restroom immediately
after M.B. was involved in counting oxycodone tablets and then left for
the restroom. GX 15, at 2.
On June 2, 2017, the Wayne Police Department interviewed a former
pharmacist at Registrant, C.R. RFAAX 6 (Recording of C.R. Interview)
and 7 (Transcript of C.R. Interview); see also RFAAX 16 (Declaration of
TFO One). TFO One attended and participated in the interview. RFAAX 16.
During the interview, C.R. described an incident he had with M.B. when
C.R. was working as a pharmacist at Registrant and M.B. was working as
a pharmacy technician. RFAAAX 7, at 12-13. C.R. stated that he caught
M.B. putting a bottle of morphine sulfate 30 mg in his pocket. Id. C.R.
said he confronted M.B., and M.B. produced the bottle from his pocket.
Id. C.R. stated that after the pharmacy closed that night, he told the
Owner about the incident. Id.
The Wayne Police Department interviewed Registrant's PIC, Deborah
Clark, on June 9, 2017 and June 14, 2017. RFAAX 5 (Recordings of PIC
interviews), 8 (Transcript of June 9 PIC Interview), 9 (Transcript of
June 14 PIC Interview); see also RFAAX 15, at 2. DI One attended the
June 9 interview. RFAAX 15, at 2. During the June 9 interview, PIC
Clark reported an incident from May 4, 2017, where M.B. was involved in
putting away an order at the pharmacy, which included six bottles of
oxycodone. RFAAX 8, at 12. According to PIC Clark, M.B. abruptly left
the pharmacy, and, after he left the pharmacy, a bottle of oxycodone
was found to be missing. Id. When M.B. returned to the pharmacy, he
appeared, in PIC Clark's opinion, to be ``spacey.'' Id. PIC Clark
reported the missing bottle to the Owner. Id.
DI One also declared that DEA repeatedly told Registrant that there
was a reasonable basis to believe that M.B. was diverting controlled
substances. RFAAX 15, at 4. DI One stated that he told the Owner during
the September 2017 audit that DEA believed her son, M.B., was diverting
controlled substances. Id. DI One also said he was present ``at a
meeting between representatives of the Department of Justice, DEA and
[Registrant] which took place on January 8, 2018 and February 7,
2018,'' and ``[a]t both of those meetings [Registrant]'s
representatives were told that [M.B.] was involved in diversion of
controlled substances'' and at both of those meetings ``[Registrant]'s
representatives indicated that [M.B.] still worked at Wayne Pharmacy.''
Id.
II. Discussion
A. Registrant's Registration Is Inconsistent With the Public Interest
Under the Controlled Substances Act, ``[a] registration . . . to .
. . 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 his
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 ``practitioner,'' which is defined in 21
U.S.C. 802(21) to include a ``physician,'' 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 [registrant]'s experience in dispensing . . . controlled
substances.
(3) The [registrant]'s conviction record under Federal or State
laws relating to the . . . 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.
21 U.S.C. 823(f). These factors are considered in the disjunctive.
Robert A. Leslie, M.D., 68 FR 15,227, 15,230 (2003).
According to Agency decisions, 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 revoke a registration. Id.; see
also Jones Total Health Care Pharm., LLC v. Drug Enf't Admin., 881 F.3d
823, 830 (11th Cir. 2018) (citing Akhtar-Zaidi v. Drug Enf't Admin.,
841 F.3d 707, 711 (6th Cir. 2016); MacKay v. Drug Enf't Admin., 664
F.3d 808, 816 (10th Cir. 2011); Volkman v. Drug Enf't Admin., 567 F.3d
215, 222 (6th Cir. 2009); Hoxie v. Drug Enf't Admin., 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. ``In short, . . . 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 misconduct.'' Jayam Krishna-Iyer, M.D.,
74 FR 459, 462 (2009). Accordingly, findings under a single factor can
support the revocation of a registration. MacKay, 664 F.3d at 821.
The Government has the burden of proving that the requirements for
revocation of a DEA registration in 21 U.S.C. 824(a) are satisfied. 21
CFR 1301.44(e). When the Government has met its prima facie case, the
burden then shifts to the registrant to show that revoking registration
would not be appropriate, given the totality of the facts and
circumstances on the record. Med. Shoppe-Jonesborough, 73 FR 364, 387
(2008).
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, Four, and Five. I find the
[[Page 63582]]
Government has satisfied its prima facie burden of showing that
Registrant's continued registration would be ``inconsistent with the
public interest.'' 21 U.S.C. 824(a)(4).
1. Factors Two and/or Four--The Registrant's Experience in Dispensing
Controlled Substances and Compliance With Applicable Laws Related to
Controlled Substances
As already discussed, pursuant to section 304 of the CSA, in
conjunction with section 303 of the CSA, I am to consider evidence of
Registrant's compliance (or non-compliance) with laws related to
controlled substances and experience dispensing controlled substances
in determining whether Registrant's continued registration is
``consistent with the public interest.'' 21 U.S.C. 824(a)(4). ``[A]
registrant's `ignorance of the law is no excuse' for actions that are
inconsistent with responsibilities attendant upon a registration.''
Daniel A. Glick, D.D.S., 80 FR 74,800, 74,809 (2015) (quoting Sigrid
Sanchez, M.D., 78 FR 39,331, 39,336 (2013)). Instead, ``[a]ll
registrants are charged with knowledge of the CSA, its implementing
regulations, as well as applicable state laws and rules.'' Id. at
74,809 (internal citations omitted). Further, the Agency has
consistently concluded that a pharmacy's registration is subject to
revocation due to the unlawful activity of the pharmacy's owners,
majority shareholders, officers, managing pharmacist, or other key
employee. EZRX, LLC, 69 FR 63,178, 63,181 (2004); Plaza Pharmacy, 53 FR
36,910, 36,911 (1988).
In support of its contention that Registrant's continued
registration is inconsistent with the public interest, the Government
has alleged that Registrant violated several federal laws related to
controlled substances. Specifically, the Government has alleged that
Registrant violated its recordkeeping obligations under the CSA, as
implemented in 21 CFR 1304.22(c), to maintain accurate inventories of
its controlled substances. The Government also alleged that Registrant
violated 21 CFR 1301.71 and 1301.76 by failing to adequately secure its
controlled substances and failing to timely notify DEA after Registrant
discovered it was missing controlled substances.
A. Recordkeeping Allegations
Recordkeeping is one of the CSA's principal tools for preventing
the diversion of controlled substances. Grider Drug 1 & Grider Drug 2,
77 FR 44,070, 44,100 (citing Paul H. Volkman, 73 FR 30,630, 30,644
(2008)). DEA decisions have explained that ``a registrant's accurate
and diligent adherence to [its recordkeeping] obligations is absolutely
essential to protect against the diversion of controlled substances.''
Volkman, 73 FR at 30,644. Under the Act, ``every registrant . . .
dispensing a controlled substance or substances shall maintain, on a
current basis, a complete and accurate record of each such substance .
. . received, sold, delivered, or otherwise disposed of by him.'' 21
U.S.C. 827(a). The CSA's implementing regulations specify at 21 CFR
1304.22(c) the records that a dispenser, such as Registrant, is
required to maintain regarding the controlled substances it receives
and dispenses.
Registrant's records were audited twice by DEA--on June 1, 2017 and
September 18, 2017--and once by an auditor hired by Registrant in
December 2017. As Registrant admitted in its MOA with the Government,
each audit found significant shortages in Registrant's inventories of
controlled substances. A shortage in an inventory audit of controlled
substances occurs when a pharmacy is unable to account for all of the
controlled substances it should have in its inventory.
It is clear from the shortages that Registrant was not maintaining
required records. Accordingly, I find the unrefuted evidence supports a
finding that Registrant violated its recordkeeping obligations under
the CSA. This finding weighs against entrusting Registrant with a
registration.
B. Security Controls Allegations
The Government alleged that Registrant violated 21 CFR 1301.71 and
1301.76(b) by failing to promptly report the loss of 47,000 tablets of
oxycodone 30mg to DEA. 21 1301.76(b) requires registrants to notify its
area DEA Field Division Office of ``the theft or significant loss of
any controlled substances within one business day of discovery of such
loss or theft'' and to submit a DEA Form 106 regarding the loss or
theft. The regulation provides factors to determine whether a loss is
``significant,'' which include ``the actual quantity of controlled
substances lost in relation to the type of business,'' and ``[w]hether
the loss of the controlled substances can be associated with access to
those controlled substances by specific individuals.'' 21 CFR
1301.76(b).
Registrant admitted that it became aware of the loss of 47,000
tablets of oxycodone 30mg in May 2017. The loss of such a large number
of tablets of oxycodone, a schedule II controlled substance, is clearly
significant under the factors listed in 21 CFR 1301.76(a). Registrant
was required to report this significant loss of controlled substances
within one business day of discovering the loss. Registrant, however,
did not file a DEA 106 notice of theft or loss until June 14, 2017,
after DEA conducted its own inspection of Registrant. Registrant's
failure to notify DEA of the significant loss of controlled substances
within one business day of discovering the loss was a violation of 21
CFR 1301.76(b) and a violation of 21 CFR 1301.71, which requires all
registrants to provide ``effective controls and procedures to guard
against theft and diversion of controlled substances'' as set forth in
1301.72-76.
2. Factor Five--Such Other Conduct Which May Threaten Public Health and
Safety
Under Factor Five, the Administrator is authorized to consider
``[s]uch other conduct which may threaten the public health and
safety.'' 5 U.S.C. 823(f)(5). Although Factor Five is broad, DEA
decisions have qualified its breadth by limiting the considerations
made under that factor to those where there is ``a substantial
relationship between the conduct and the CSA's purpose of preventing
drug abuse and diversion.'' Zvi H. Perper, M.D., 77 FR 64,131, 64,141
(2012) (citing Tony T. Bui, 75 FR 49,979, 49,988 (2010)). As the Agency
has previously stated, ```[c]areless or negligent handling of
controlled substances creates the opportunity for diversion and [can]
justify' the revocation of an existing registration or the denial of an
application for a registration.'' Lon F. Alexander, M.D., 82 FR 49,704,
49,725 n.43 (2017) (quoting Paul J. Caragine, Jr. 63 FR 51,592, 51,601
(1998)).
The uncontested evidence in this case shows that Registrant was
losing large quantities of controlled substances from its inventory and
that these losses continued even when Registrant knew about the losses
and therefore could have taken measures to stop them. After the DEA's
June 2017 audit, Registrant was unquestionably aware that it was losing
large quantities of controlled substances, but the DEA's September 2017
audit and the December 2017 audit conducted by Registrant's auditor
show that Registrant continued to lose significant quantities of
controlled substances throughout 2017. Furthermore, Registrant's
employees had reported at least three incidents to Registrant's owner
where it appeared to the employee that M.B. had stolen controlled
substances from Registrant or where the employee had thwarted M.B.'s
attempt to steal controlled
[[Page 63583]]
substances from the pharmacy. DEA also told Registrant on three
separate occasions that there was a reasonable basis to believe that
M.B. was diverting controlled substances. Despite these reports,
Registrant continued to employ M.B. until at least February 2018.
There is also no evidence on the record that Registrant took any
real measures to increase security at the pharmacy or otherwise stop
the losses. Registrant's owner told DEA on June 1, 2017, that
Registrant was in the process of taking additional security measures--
namely ordering a safe to store controlled substances and taking daily
inventories of controlled substances--and that M.B. no longer worked at
Registrant. RFAAX 15, at 2. Registrant's PIC, however, told DEA on July
27, 2017, that Registrant's narcotics were being stored in an unlocked
case and that any pharmacy employee could change the inventory
quantities in Registrant's computer. RFAAX 11 (text messages between
PIC and DEA TFO). Registrant also admitted that ``[n]either of these
alleged additional safeguards were effective, as the controlled
substances continued to be stored in such a way that all employees have
access to them, and the daily inventories were conducted in such a way
that any employee could alter the inventory.'' RFAAX 12, at 2
(admitting to the factual allegations in paragraphs 2-8 of the OSC);
OSC, at 4. Furthermore, PIC Clark told the DEA that, as of July 27,
2017, M.B. was working as a pharmacy tech at Registrant. RFAA 11.
Registrant confirmed that M.B. was still employed by Registrant in
meetings with DEA on January 8, 2018 and February 7, 2018. RFAAX 15, at
4.
``[A] DEA registrant is obligated at all times to act in the public
interest.'' Peter F. Kelly, D.P.M., 82 FR 28,676, 28,688 (2017).
Registrant's failure to take action to stop the illicit flow of
controlled substances out of the pharmacy was a breach of its duty as a
registrant to act in the public interest. Moreover, it likely permitted
the additional diversion of hundreds (if not thousands) of units of
controlled substances. I, therefore, find that Registrant's failure to
stem the known diversion of controlled substances from its inventory
constitutes ``conduct which may threaten the public health and
safety.'' 21 U.S.C. 823(f)(5).
Having considered all of the factors, I conclude that the evidence
pertinent to factors two, four, and five demonstrate a prima facie
showing that Registrant ``has committed such acts as would render [its]
registration . . . inconsistent with the public interest.'' 21 U.S.C.
824(a)(4). I further conclude that Registrant has not rebutted the
Government's prima facie case.
III. Sanction
Where, as here, the Government has met its prima facie burden of
showing that Registrant's continued registration is inconsistent with
the public interest, the burden shifts to the Registrant to show why it
can be entrusted with a registration. Garrett Howard Smith, M.D., 83 FR
18,882, 18,910 (2018) (collecting cases).
The CSA authorizes the Attorney General to ``promulgate and enforce
any rules, regulations, and procedures which he may deem necessary and
appropriate for the efficient execution of his functions under this
subchapter.'' 21 U.S.C. 871(b). This authority specifically relates
``to `registration' and `control,' and `for the efficient execution of
his functions' under the statute.'' Gonzales, 546 U.S. at 259.
``Because `past performance is the best predictor of future
performance, ALRA Labs, Inc. v. Drug Enf't Admin., 54 F.3d 450, 452
(7th Cir. 1995), [the Agency] has repeatedly held that where a
registrant has committed acts inconsistent with the public interest,
the registrant must accept responsibility for [the registrant's]
actions and demonstrate that [registrant] will not engage in future
misconduct.' '' Jayam Krishna-Iyer, 74 FR at 463 (quoting Medicine
Shoppe, 73 FR 364, 387 (2008)); see also Jackson, 72 FR at 23,853; John
H. Kennnedy, M.D., 71 FR 35,705, 35,709 (2006); Prince George Daniels,
D.D.S., 60 FR 62,884, 62,887 (1995). The issue of trust is necessarily
a fact-dependent determination based on the circumstances presented by
the individual registrant; therefore, the Agency looks at factors, such
as the acceptance of responsibility, and the credibility of that
acceptance as it relates to the probability of repeat violations or
behavior, and the nature of the misconduct that forms the basis for
sanction, while also considering the Agency's interest in deterring
similar acts. See Arvinder Singh, M.D., 81 FR 8247, 8248 (2016).
Registrant accepted responsibility for most of its misconduct in
the MOA, in which it admitted to many of the factual allegations in the
OSC in exchange for certain agreements from the Government. Registrant,
however, did not present any evidence of remorse for its past
misconduct and did not provide any assurances that it would not engage
in such conduct in the future. Further, it provided no evidence of
rehabilitative actions taken to correct its past unlawful behavior,
except an agreement from the Owner, in her individual capacity, that
``she will not serve as an officer, partner, stockholder, proprietor,
owner, partial owner, or pharmacist in charge of any entity that either
possesses or is seeing a DEA Certificate of Registration'' for so long
as the MOA between the Government and Registrant remains in effect.
Absent such evidence and such assurances in this matter, I find that
continued registration of Registrant is inconsistent with the public
interest. Registrant's silence weighs against its continued
registration. Zvi H. Perper, M.D., 77 FR 64,131, 64,142 (2012) (citing
Med. Shoppe-Jonesborough, 73 FR at 387); see also Samuel S. Jackson, 72
FR 23,848, 23,853 (2007).
Accordingly, I find that the factors weigh in favor of sanction and
I shall order the sanction the Government requested, as contained in
the Order below.
IV. Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 824(a), I hereby revoke DEA Certificate of Registration
BW8625785 issued to Wayne Pharmacy. This Order is effective November 9,
2020.
Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-22216 Filed 10-7-20; 8:45 am]
BILLING CODE 4410-09-P
