[Federal Register Volume 61, Number 106 (Friday, May 31, 1996)]
[Notices]
[Pages 27368-27370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13685]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Maxicare Pharmacy, Revocation of Registration
On November 1, 1995, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Maxicare Pharmacy, (Respondent) of Houston,
Texas, notifying it of an opportunity to show cause as to why DA should
not revoke its DEA Certificate of Registration, BM3971644, under U.S.C.
824(a) (2) and (4), and deny any pending application under 21 U.S.C.
823(f), as being inconsistent with the public interest. Specifically,
the Order to Show Cause alleged, among other things, that (1) on
September 26, 1994, the Respondent's pharmacist and owner (Owner)
provided falsified controlled substance records to DEA, allegedly
documenting receipt of controlled substances from a local distributor,
when subsequently it was determined that an employee of the distributor
was unlawfully supplying controlled substances to the Respondent; (2)
on January 12, 1995, the Owner and her husband were indicated on
numerous counts of violating the Texas Health and Safety code related
to the handling of controlled substances; (3) on July 25, 1995, the
Owner was found guilty on nine counts of engaging in organized criminal
activity related to theft of controlled substances by a public servant,
and she was found guilty of fraud, theft and commercial violations of
the controlled substances act, for which she was sentenced to ten years
imprisonment and was ordered to pay a $3,000.00 fine; and (4) the
Owner's husband was found guilty of two counts of engaging in organized
criminal activity related to theft of controlled substances, and he was
sentenced to seven years imprisonment.
The Order was mailed in the U.S. Mail, and a signed receipt dated
November 6, 1995, was returned to DEA. However, neither the Respondent
nor anyone purporting to represent it has replied to the Order to Show
Cause. More than thirty days have passed since the Order was served
upon the Respondent. Therefore, pursuant to 21 CFR 1301.54(d), the
Deputy Administrator finds that the Respondent has waived its
opportunity for a hearing on the issues raised by the Order to Show
Cause, and, after considering the investigative file, enters his final
order in this matter without a hearing pursuant to 21 CFR 1301.54(e)
and 1301.57.
The Deputy Administrator finds that the Respondent was issued DEA
Certificate of Registration BM3971644 on April 22, 1994, as a retail
pharmacy, owned by the Owner and her husband (Co-owner). A DEA
investigation revealed that, as a result of a DEA audit, the Respondent
had significant overages of clonazepam and alprazolam, both Schedule IV
controlled substances pursuant to 21 C.F.R. 1308.14. Specifically, on
September 20, 1994, pursuant to a federal administrative inspection
warrant executed at the Respondent pharmacy, a DEA Diversion
Investigator (Investigator) conducted an audit of four different
controlled substances, to include clonazepam and alprazolam. The
Investigator and the Owner, who was also the pharmacist-in-charge,
counted the existing inventory of these substances, to include trade
names and generic equivalents, and compared the number on hand with
documents which noted the amounts purchased, dispensed, or loaned by
the Respondent to other pharmacies. As a result of this audit, it was
determined that on September 20, 1994, there were 1,000 more clonazepam
tablets than could be accounted for by the Respondent's records, to
include purchase invoices and filled prescriptions. Also, on that date,
there were 1,400 more alprazolam tablets than could be accounted for by
the Respondent's records, and a total variance for all four substances
of 3,438 tablets.
During the inspection, the Investigator asked the Owner to provide
the Respondent pharmacy's records for alprazolam and clonazepam. The
Owner told the Investigator that some of her acquisition invoices were
at home, but she agreed to deliver these documents to the Investigator.
On September 26, 1994, the Owner delivered to the Investigator several
invoices from Abbey Pharmaceutical which were dated between July 1,
1994, and September 2, 1994. The Owner also told the Investigator that
a named employee (Employee) of Abbey Pharmaceutical had agreed to loan
the Respondent pharmacy these controlled substances for up to one year,
and at the end of that year, the Owner was either to replace the
substances or to pay for them. However, when the Investigator
[[Page 27369]]
interviewed the Employee, he stated that he did not know the Owner or
the Respondent pharmacy. The Investigator also interviewed other
officials of Abbey Pharmaceuticals, who stated that the Respondent
pharmacy was not a customer, and that Abbey Pharmaceutical had not
sold, loaned, or shipped controlled substances to the Respondent.
Further investigation revealed that the Owner was involved in a
scheme with an employee of Abbey Pharmaceutical, whereby the Owner
received clonazepam and alprazolam and blank invoices for her to
complete to create a record justifying receipt of these controlled
substances. Further, the Co-owner was also involved in a scheme
resulting in the transfer of medications from a local hospital to his
residence. On July 25, 1995, the Owner was found guilty of the felony
offenses of engaging in organized criminal activity related to theft of
controlled substances by a public servant, fraud, theft, and commercial
violations of the controlled substances act, by the 228th District
Court of Harris County, Texas. On September 21, 1995, the Owner was
sentenced to serve ten years confinement and to pay a $3,000.00 fine.
The Co-owner was found guilty of engaging in organized criminal
activity related to the theft of controlled substances, and he was
sentenced to serve seven years in prison.
Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy
Administrator may revoke the Respondent's DEA Certificate of
Registration, and deny any pending renewal of that registration, if he
determines that the continued registration would be inconsistent with
the public interest. Further, 21 U.S.C. 824(a)(2) provides in relevant
part that a registration may be revoked upon a finding that the
registrant has been convicted, under State law, of a felony related to
any controlled substance.
As to the Respondent's ``conviction,'' the DEA has previously
determined that the registration of a corporate registrant may be
revoked upon a finding that a natural person who is an owner, officer,
or key employee, or has some responsibility for the operation of the
registrant's controlled substances business, has been convicted of a
felony offense relating to controlled substances. See Robert Hozdish,
d/b/a/ A.J. Meyer Pharmacy, 53 FR 13338 (1998) (revoking a pharmacy's
registration on the basis of the pharmacist's and owner's controlled
substance-related felony conviction); see also, Taneytown Pharmacy, 51
FR 45068 (1986) and cases cited therein. Here, the record clearly
establishes that the Owner, who also served as the pharmacist-in-
charge, and the Co-owner of the Respondent were convicted in a Texas
court of felony offenses involving controlled substances. Therefore,
the Deputy Administrator concludes that a lawful basis exists for the
revocation of the Respondent's DEA registration under 21 U.S.C.
824(a)(2).
As to the public interest in this matter, Section 823(f) provides
that the following factors be considered:
(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 or
safety. These factors are to be considered in the disjunctive; the
Deputy Administrator may rely on any one or a combination of factors
and may give each factor the weight he deems appropriate in determining
whether a registration should be revoked or an application for
registration denied. See Henry J. Schwarz, Jr., M.D., 54 FR 16422
(1989). In this case, factors four and five are relevant in determining
whether the Respondent's continued registration would be inconsistent
with the public interest.
As to factor four, the Respondent's ``[c]ompliance with applicable
State, Federal, or local laws relating to controlled substances,'' the
record shows that record-keeping violations were found during a DEA
audit of the Respondent. As for recordkeeping requirements, pursuant to
21 U.S.C. 827(a)(3), ``every registrant under this subchapter * * *
dispensing a controlled substance or substances shall maintain, on a
current basis, a complete and accurate record of each substance * * *
received, sold, delivered, or otherwise disposed of by him,'' and 21
U.S.C. 827(b) provides that, ``Every inventory or other record required
under this section (1) shall be in accordance with, and contain such
relevant information as may be required by, regulations of the Attorney
General.''
Applicable federal recordkeeping regulations also exist, and 21
C.F.R. 1304.21 requires a registrant to ``maintain on a current basis a
complete and accurate record of each such substance * * * received,
sold, delivered, * * * or otherwise disposed of by him.'' Further, 21
C.F.R. 1304.24 requires dispensers to maintain records for each
controlled substance reflecting, among other things, the number of
commercial containers received, and ``including the date of and number
of containers in each receipt and the name, address, and registration
number of the person from whom the containers were received,'' the
number of units dispensed, with detailed information concerning the
person to whom it was dispensed, and information concerning any other
method of disposal of the substance.
Here, as a result of a DEA audit, the Respondent pharmacy's
controlled substance records revealed significant overages of
clonazepam and alprazolam, both Schedule IV controlled substances.
Also, the Owner failed to provide accurate records or other documentary
evidence to reconcile the amounts of controlled substances on hand with
the legitimate acquisition and disposition of the medications as
required by DEA regulations. Such unexplained overages were indicative
of the Owner's violation of the regulated distribution system, which
was established to protect the public interest by preventing diversion
of such substances. DEA has previously found that a failure to maintain
adequate records in a threat to the public interest and is a basis for
revoking the Respondent's registration. See, generally, Taneytown
Pharmacy, supra.
As to factor five, ``[s]uch other conduct which may threaten the
public health or safety,'' the Deputy Administrator finds it
significant that, when the Owner was questioned concerning the audit
results, she ultimately provided false receiving documents with the
intention of deceiving the Investigator into believing that she had
legitimately received the controlled substances from Abbey
Pharmaceuticals. The Owner's willingness to falsify documents
pertaining to controlled substances and to deceive a DEA investigator
is further evidence of the Owner's lack of trustworthiness in handling
controlled substances. As the owner and primary pharmacist for the
Respondent, her conduct established such a threat to the public
interest as to justify the revocation of the Respondent's DEA
Certificate of Registration. Therefore, the Deputy Administrator finds
that the public interest is best served by revoking the Respondent's
registration and by denying any pending renewal application.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the
[[Page 27370]]
authority vested in him by 21 U.S.C. 823 and 824, and 28 C.F.R.
0.100(b) and 0.104, hereby orders that DEA Certificate of Registration
BM3971644, previously issued to Maxicare Pharmacy, be, and it hereby
is, revoked. It is further ordered that any pending applications for
renewal of said registration be, and hereby are, denied. This order is
effective July 1, 1996.
Dated: May 28, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-13685 Filed 5-30-96; 8:45 am]
BILLING CODE 4410-09-M
