Jerrod Nichols Smith: Debarment Order, 101-102 [2020-29052]
Download as PDF
<![CDATA[
Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices
306 of the FD&C Act (section
306(c)(1)(B) of the FD&C Act). Note that,
for purposes of section 306 of the FD&C
Act, a ‘‘drug product’’ is defined as a
drug subject to regulation under section
505, 512, or 802 of the FD&C Act (21
U.S.C. 355, 360b, or 382) or under
section 351 of the Public Health Service
Act (42 U.S.C. 262) (section 201(dd) of
the FD&C Act (21 U.S.C. 321(dd))).
Any application by Ms. Lee for
special termination of debarment under
section 306(d)(4) of the FD&C Act
should be identified with Docket No.
FDA–2020–N–1415 and sent to the
Dockets Management Staff (see
ADDRESSES). The public availability of
information in these submissions is
governed by 21 CFR 10.20.
Publicly available submissions will be
placed in the docket and will be
viewable at https://www.regulations.gov
or at the Dockets Management Staff (see
ADDRESSES) between 9 a.m. and 4 p.m.,
Monday through Friday, 240–402–7500.
Dated: December 28, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for
Policy.
[FR Doc. 2020–29044 Filed 12–31–20; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2019–N–3794]
Jerrod Nichols Smith: Debarment
Order
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
The Food and Drug
Administration (FDA or Agency) is
issuing an order permanently debarring
Jerrod Nichols Smith from providing
services in any capacity to a person that
has an approved or pending drug
product application. FDA bases this
order on a finding that Mr. Smith was
convicted of multiple felony counts
under Federal law for conduct that
relates to the regulation of a drug
product under the Federal, Food, Drug,
and Cosmetic Act (the FD&C Act). Mr.
Smith was given notice of the proposed
permanent debarment and was given an
opportunity to request a hearing to show
why he should not be debarred. As of
September 27, 2020 (30 days after
receipt of the notice), Mr. Smith had not
responded. Mr. Smith’s failure to
respond and request a hearing
constitutes a waiver of his right to a
hearing concerning this action.
SUMMARY:
VerDate Sep<11>2014
17:28 Dec 31, 2020
Jkt 253001
DATES:
This order is effective January 4,
2021.
Submit applications for
termination of debarment to the Dockets
Management Staff, Food and Drug
Administration, 5630 Fishers Lane, Rm.
1061, Rockville, MD 20852, 240–402–
7500, or at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Jaime Espinosa, Division of Enforcement
(ELEM–4029), Office of Strategic
Planning and Operational Policy, Office
of Regulatory Affairs, Food and Drug
Administration, 12420 Parklawn Dr.,
Rockville, MD 20857, 240–402–8743, or
at debarments@fda.hhs.gov.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
I. Background
Section 306(a)(2)(B) of the FD&C Act
(21 U.S.C. 335a(a)(2)(B)) requires
debarment of an individual from
providing services in any capacity to a
person that has an approved or pending
drug product application if FDA finds
that the individual has been convicted
of a felony under Federal law for
conduct relating to the regulation of any
drug product under the FD&C Act. On
July 16, 2018, Mr. Smith was convicted
as defined in section 306(l)(1)(A) of the
FD&C Act when judgment was entered
against him in the U.S. District Court for
the Middle District of Tennessee,
Nashville Division, after a jury trial, to
one count of conspiracy to commit mail
fraud in violation of 18 U.S.C. 371, 15
counts of mail fraud in violation of 18
U.S.C. 1341, and one count of
obstruction of justice in violation of 18
U.S.C. 1001.
The factual basis for these convictions
is as follows: Mr. Smith was one of the
owners and operators of Cumberland
Distribution, Inc. (‘‘Cumberland’’),
formerly known as Midwest Pharmacy,
which was a wholesale drug
distribution company incorporated in
Nevada and Tennessee. Mr. Smith was
engaged in the business of wholesale
distribution of prescription drugs, as
defined by 21 U.S.C. 353(e)(3)(B), to
pharmacy customers throughout the
United States. From December 2006
through August 2009, Mr. Smith, along
with others, purchased millions of
dollars of prescription drugs, through
Cumberland. The vast majority of the
prescription drugs purchased by
Cumberland and received at the
company’s warehouse facilities were
sold to Cumberland, directly and
indirectly, by individuals and entities
whom Mr. Smith knew were not
licensed by any State to engage in the
wholesale distribution of prescription
drugs and were not otherwise
authorized to distribute prescription
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
101
drugs pursuant to 21 U.S.C. 353. These
unauthorized sellers obtained their
prescription drugs from various
networks of street level drug diverters.
Mr. Smith directed employees to take
steps to conceal the true origins of the
diverted prescription drugs shipped to
the company’s warehouse facilities
before shipping them to pharmacy
customers around the country. Such
steps included, but were not limited to,
falsification of documents concerning
the chain of custody or pedigree of a
drug. These falsified pedigree
documents, which Mr. Smith provided
to his pharmacy customers or
maintained at Cumberland, inaccurately
represented that the diverted products
had been obtained from licensed
wholesale distributors. Mr. Smith also
used shell companies to receive and
relabel diverted prescription drugs
before sending them to Cumberland’s
warehouse facilities to create the false
appearance that his company was
purchasing prescription drugs from
licensed wholesale distributors.
The diverted drugs included, but were
not limited to, drugs used to treat
human immunodeficiency virus/
acquired immunodeficiency syndrome,
antipsychotic medications,
antidepressants, blood pressure
medications, and diabetes medications.
Numerous pharmacies reported
problems with drugs they purchased
from Cumberland, including
prescription drug bottles containing the
wrong medicine, the wrong dosage
information, and foreign objects inside.
At trial, several witnesses testified that
at least one bottle of prescription drugs
sold by Cumberland contained Tic Tacs
instead of medicine. Through the course
of this scheme, Mr. Smith’s company
had gross proceeds of approximately
$58,984,912. His profits were
approximately $14,689,782.
As a result of these convictions, FDA
sent Mr. Smith by certified mail on July
16, 2020, a notice proposing to
permanently debar him from providing
services in any capacity to a person that
has an approved or pending drug
product application. The proposal was
based on a finding, under section
306(a)(2)(B) of the FD&C Act, that Mr.
Smith was convicted of felonies under
Federal law for conduct relating to the
regulation of a drug product under the
FD&C Act. The proposal also offered Mr.
Smith an opportunity to request a
hearing, providing him 30 days from the
date of receipt of the letter in which to
file the request, and advised him that
failure to request a hearing constituted
an election not to use the opportunity
for a hearing and a waiver of any
contentions concerning this action. Mr.
E:\FR\FM\04JAN1.SGM
04JAN1
102
Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices
Smith received the proposal on August
28, 2020. Mr. Smith did not request a
hearing within the timeframe prescribed
by regulation and has, therefore, waived
his opportunity for a hearing and any
contentions concerning his debarment
(21 CFR part 12).
II. Findings and Order
17:28 Dec 31, 2020
Dated: December 28, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for
Policy.
[FR Doc. 2020–29052 Filed 12–31–20; 8:45 am]
BILLING CODE 4164–01–P
Therefore, the Assistant
Commissioner, Office of Human and
Animal Food Operations, under section
306(a)(2)(B) of the FD&C Act, under
authority delegated to the Assistant
Commissioner, finds that Mr. Smith has
been convicted of multiple felonies
under Federal law for conduct
otherwise relating to the regulation of a
drug product under the FD&C Act.
As a result of the foregoing finding,
Mr. Smith is permanently debarred from
providing services in any capacity to a
person with an approved or pending
drug product application, effective (see
DATES) (see section 306(a)(2)(B) and
(c)(2)(A)(ii) of the FD&C Act). Any
person with an approved or pending
drug product application who
knowingly employs or retains as a
consultant or contractor, or otherwise
uses the services of Mr. Smith, in any
capacity during his debarment, will be
subject to civil money penalties (section
307(a)(6) of the FD&C Act (21 U.S.C.
335b(a)(6))). If Mr. Smith provides
services in any capacity to a person with
an approved or pending drug product
application during his period of
debarment he will be subject to civil
money penalties (section 307(a)(7) of the
FD&C Act). In addition, FDA will not
accept or review any abbreviated new
drug applications from Mr. Smith
during his period of debarment, other
than in connection with an audit under
section 306 of the FD&C Act (section
306(c)(1)(B) of the FD&C Act). Note that,
for purposes of section 306 of the FD&C
Act, a ‘‘drug product’’ is defined as a
drug subject to regulation under section
505, 512, or 802 of the FD&C Act (21
U.S.C. 355, 360b, or 382) or under
section 351 of the Public Health Service
Act (42 U.S.C. 262) (see section 201(dd)
of the FD&C Act (21 U.S.C. 321(dd))).
Any application by Mr. Smith for
special termination of debarment under
section 306(d)(4) of the FD&C Act
should be identified with Docket No.
FDA–2019–N–3794 and sent to the
Dockets Management Staff (see
ADDRESSES). The public availability of
information in these submissions is
governed by 21 CFR 10.20.
Publicly available submissions will be
placed in the docket and will be
viewable at https://www.regulations.gov
or at the Dockets Management Staff (see
VerDate Sep<11>2014
ADDRESSES) between 9 a.m. and 4 p.m.,
Monday through Friday, 240–402–7500.
Jkt 253001
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2020–N–1372]
Alec Burlakoff: Final Debarment Order
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
The Food and Drug
Administration (FDA or Agency) is
issuing an order under the Federal
Food, Drug, and Cosmetic Act (FD&C
Act) permanently debarring Alec
Burlakoff from providing services in any
capacity to a person that has an
approved or pending drug product
application. FDA bases this order on a
finding that Alec Burlakoff was
convicted of a felony under Federal law
for conduct that relates to the regulation
of a drug product under the FD&C Act.
Mr. Burlakoff was given notice of the
proposed permanent debarment and
was given an opportunity to request a
hearing to show why he should not be
debarred. As of July 24, 2020 (30 days
after receipt of the notice), Mr. Burlakoff
had not responded. Mr. Burlakoff’s
failure to respond and request a hearing
constitutes a waiver of his right to a
hearing concerning this action.
DATES: This order is applicable January
4, 2021.
ADDRESSES: Submit applications for
special termination of debarment to the
Dockets Management Staff (HFA–305),
Food and Drug Administration, 5630
Fishers Lane, Rm. 1061, Rockville, MD
20852, 240–402–7500.
FOR FURTHER INFORMATION CONTACT:
Jaime Espinosa, Division of
Enforcement, Office of Strategic
Planning and Operational Policy, Office
of Regulatory Affairs, Food and Drug
Administration, 12420 Parklawn Dr.,
Rockville, MD 20857, debarments@
fda.hhs.gov, 240–402–8743.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
Section 306(a)(2)(B) of the FD&C Act
(21 U.S.C. 335a(a)(2)(B)) requires
debarment of an individual from
providing services in any capacity to a
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
person that has an approved or pending
drug product application if FDA finds
that the individual has been convicted
of a felony under Federal law for
conduct relating to the regulation of any
drug product under the FD&C Act. On
January 23, 2020, Mr. Burlakoff was
convicted as defined in section 306(l)(1)
of the FD&C Act when judgment was
entered against him in the U.S. District
Court for the District of Massachusetts,
after his plea of guilty, to one count of
Racketeering Conspiracy in violation of
18 U.S.C. 1962(d). The pattern of
racketeering activity he was convicted
of included engaging in multiple acts of
illegal distribution of a controlled
substance (21 U.S.C. 841(a)(1)); mail
fraud (18 U.S.C. 1341); wire fraud (18
U.S.C. 1343); honest services mail fraud
(18 U.S.C. 1341 and 1346); and, honest
services wire fraud (18 U.S.C. 1343 and
1346).
The factual basis for this conviction is
as follows: Mr. Burlakoff held executive
management positions at Insys
Therapeutics Inc. (Insys), including
Regional Sales Manager for the
Southeast Region and Vice President of
Sales. Insys is a Delaware Corporation,
with headquarters in Chandler, Arizona.
Insys developed and owned a drug
called SUBSYS, a liquid formulation of
fentanyl to be applied under the tongue.
FDA approved SUBSYS for the
management of breakthrough pain in
adult cancer patients who are already
receiving and are already tolerant to
opioid therapy for their underlying
persistent cancer pain. From May 2012
and continuing until December 2015, he
participated in a conspiracy whereby
employees of Insys bribed and provided
kickbacks to medical practitioners in
various states to get those practitioners
to increase prescribing SUBSYS to their
patients, many of whom did not have
cancer. The bribes and kickbacks took
various forms to include honoraria for
the practitioners’ participation in
educational events, payment of the
practitioner’s staff salaries, and the
completion of office tasks for the
provider performed by Insys employees.
Mr. Burlakoff and his co-conspirators
used pharmacy data acquired from third
parties to identify practitioners who
either prescribed unusually high
volumes of rapid-onset opioids, or had
demonstrated a capacity to prescribe
unusually large volumes of rapid-onset
opioids. In exchange for bribes and
kickbacks to these targeted practitioners,
the practitioners increased the number
of new SUBSYS prescriptions they
wrote and increased the dosage and
number of units of SUBSYS for new and
existing prescriptions. Many of the
targeted practitioner’s patients for
E:\FR\FM\04JAN1.SGM
04JAN1
]]>Agencies
[Federal Register Volume 86, Number 1 (Monday, January 4, 2021)]
[Notices]
[Pages 101-102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-29052]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2019-N-3794]
Jerrod Nichols Smith: Debarment Order
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA or Agency) is issuing an
order permanently debarring Jerrod Nichols Smith from providing
services in any capacity to a person that has an approved or pending
drug product application. FDA bases this order on a finding that Mr.
Smith was convicted of multiple felony counts under Federal law for
conduct that relates to the regulation of a drug product under the
Federal, Food, Drug, and Cosmetic Act (the FD&C Act). Mr. Smith was
given notice of the proposed permanent debarment and was given an
opportunity to request a hearing to show why he should not be debarred.
As of September 27, 2020 (30 days after receipt of the notice), Mr.
Smith had not responded. Mr. Smith's failure to respond and request a
hearing constitutes a waiver of his right to a hearing concerning this
action.
DATES: This order is effective January 4, 2021.
ADDRESSES: Submit applications for termination of debarment to the
Dockets Management Staff, Food and Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, or at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Jaime Espinosa, Division of
Enforcement (ELEM-4029), Office of Strategic Planning and Operational
Policy, Office of Regulatory Affairs, Food and Drug Administration,
12420 Parklawn Dr., Rockville, MD 20857, 240-402-8743, or at
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B))
requires debarment of an individual from providing services in any
capacity to a person that has an approved or pending drug product
application if FDA finds that the individual has been convicted of a
felony under Federal law for conduct relating to the regulation of any
drug product under the FD&C Act. On July 16, 2018, Mr. Smith was
convicted as defined in section 306(l)(1)(A) of the FD&C Act when
judgment was entered against him in the U.S. District Court for the
Middle District of Tennessee, Nashville Division, after a jury trial,
to one count of conspiracy to commit mail fraud in violation of 18
U.S.C. 371, 15 counts of mail fraud in violation of 18 U.S.C. 1341, and
one count of obstruction of justice in violation of 18 U.S.C. 1001.
The factual basis for these convictions is as follows: Mr. Smith
was one of the owners and operators of Cumberland Distribution, Inc.
(``Cumberland''), formerly known as Midwest Pharmacy, which was a
wholesale drug distribution company incorporated in Nevada and
Tennessee. Mr. Smith was engaged in the business of wholesale
distribution of prescription drugs, as defined by 21 U.S.C.
353(e)(3)(B), to pharmacy customers throughout the United States. From
December 2006 through August 2009, Mr. Smith, along with others,
purchased millions of dollars of prescription drugs, through
Cumberland. The vast majority of the prescription drugs purchased by
Cumberland and received at the company's warehouse facilities were sold
to Cumberland, directly and indirectly, by individuals and entities
whom Mr. Smith knew were not licensed by any State to engage in the
wholesale distribution of prescription drugs and were not otherwise
authorized to distribute prescription drugs pursuant to 21 U.S.C. 353.
These unauthorized sellers obtained their prescription drugs from
various networks of street level drug diverters. Mr. Smith directed
employees to take steps to conceal the true origins of the diverted
prescription drugs shipped to the company's warehouse facilities before
shipping them to pharmacy customers around the country. Such steps
included, but were not limited to, falsification of documents
concerning the chain of custody or pedigree of a drug. These falsified
pedigree documents, which Mr. Smith provided to his pharmacy customers
or maintained at Cumberland, inaccurately represented that the diverted
products had been obtained from licensed wholesale distributors. Mr.
Smith also used shell companies to receive and relabel diverted
prescription drugs before sending them to Cumberland's warehouse
facilities to create the false appearance that his company was
purchasing prescription drugs from licensed wholesale distributors.
The diverted drugs included, but were not limited to, drugs used to
treat human immunodeficiency virus/acquired immunodeficiency syndrome,
antipsychotic medications, antidepressants, blood pressure medications,
and diabetes medications. Numerous pharmacies reported problems with
drugs they purchased from Cumberland, including prescription drug
bottles containing the wrong medicine, the wrong dosage information,
and foreign objects inside. At trial, several witnesses testified that
at least one bottle of prescription drugs sold by Cumberland contained
Tic Tacs instead of medicine. Through the course of this scheme, Mr.
Smith's company had gross proceeds of approximately $58,984,912. His
profits were approximately $14,689,782.
As a result of these convictions, FDA sent Mr. Smith by certified
mail on July 16, 2020, a notice proposing to permanently debar him from
providing services in any capacity to a person that has an approved or
pending drug product application. The proposal was based on a finding,
under section 306(a)(2)(B) of the FD&C Act, that Mr. Smith was
convicted of felonies under Federal law for conduct relating to the
regulation of a drug product under the FD&C Act. The proposal also
offered Mr. Smith an opportunity to request a hearing, providing him 30
days from the date of receipt of the letter in which to file the
request, and advised him that failure to request a hearing constituted
an election not to use the opportunity for a hearing and a waiver of
any contentions concerning this action. Mr.
[[Page 102]]
Smith received the proposal on August 28, 2020. Mr. Smith did not
request a hearing within the timeframe prescribed by regulation and
has, therefore, waived his opportunity for a hearing and any
contentions concerning his debarment (21 CFR part 12).
II. Findings and Order
Therefore, the Assistant Commissioner, Office of Human and Animal
Food Operations, under section 306(a)(2)(B) of the FD&C Act, under
authority delegated to the Assistant Commissioner, finds that Mr. Smith
has been convicted of multiple felonies under Federal law for conduct
otherwise relating to the regulation of a drug product under the FD&C
Act.
As a result of the foregoing finding, Mr. Smith is permanently
debarred from providing services in any capacity to a person with an
approved or pending drug product application, effective (see DATES)
(see section 306(a)(2)(B) and (c)(2)(A)(ii) of the FD&C Act). Any
person with an approved or pending drug product application who
knowingly employs or retains as a consultant or contractor, or
otherwise uses the services of Mr. Smith, in any capacity during his
debarment, will be subject to civil money penalties (section 307(a)(6)
of the FD&C Act (21 U.S.C. 335b(a)(6))). If Mr. Smith provides services
in any capacity to a person with an approved or pending drug product
application during his period of debarment he will be subject to civil
money penalties (section 307(a)(7) of the FD&C Act). In addition, FDA
will not accept or review any abbreviated new drug applications from
Mr. Smith during his period of debarment, other than in connection with
an audit under section 306 of the FD&C Act (section 306(c)(1)(B) of the
FD&C Act). Note that, for purposes of section 306 of the FD&C Act, a
``drug product'' is defined as a drug subject to regulation under
section 505, 512, or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382)
or under section 351 of the Public Health Service Act (42 U.S.C. 262)
(see section 201(dd) of the FD&C Act (21 U.S.C. 321(dd))).
Any application by Mr. Smith for special termination of debarment
under section 306(d)(4) of the FD&C Act should be identified with
Docket No. FDA-2019-N-3794 and sent to the Dockets Management Staff
(see ADDRESSES). The public availability of information in these
submissions is governed by 21 CFR 10.20.
Publicly available submissions will be placed in the docket and
will be viewable at https://www.regulations.gov or at the Dockets
Management Staff (see ADDRESSES) between 9 a.m. and 4 p.m., Monday
through Friday, 240-402-7500.
Dated: December 28, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2020-29052 Filed 12-31-20; 8:45 am]
BILLING CODE 4164-01-P
