[Federal Register Volume 61, Number 137 (Tuesday, July 16, 1996)]
[Notices]
[Pages 37081-37090]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18025]
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DEPARTMENT OF JUSTICE
[Docket No. 94-77]
RX Returns, Inc.; Revocation of Registration
On August 15, 1994, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to RX Returns, Inc., (Respondent) of Palm,
Pennsylvania, notifying it of an opportunity to show cause as to why
DEA should not revoke its DEA Certificate of Registration, RR0166113,
and deny any pending applications for renewal of its registration as a
distributor (disposer), under 21 U.S.C. 823(e), as being inconsistent
with the public interest. Specifically, the Order to Show Cause alleged
in relevant part that:
(1) On March 19, 1992, the Respondent entered into a Memorandum of
Understanding (MOU) with DEA, where, in exchange for its receiving a
DEA registration as a distributor (disposer) of controlled substances,
it agreed to comply with security, inventory, and recordkeeping
requirements of a DEA registrant;
(2) In July 1992, a DEA investigation of the Respondent revealed
numerous recordkeeping and security violations. As a result, on
September 24, 1992, DEA conducted an informal hearing in which the
Respondent was given an opportunity to reply to allegations regarding
violations of 17 recordkeeping and security requirements.
[[Page 37082]]
(3) In lieu of further administrative proceedings, on June 18,
1993, the Respondent entered into a second MOU with DEA, in which it
agreed to correct the 17 alleged violations and to comply with laws and
regulations relating to the handling of controlled substances.
(4) On May 5, 1994, DEA attempted to conduct an audit of seven
controlled substances at the Respondent's firm. However, DEA was unable
to conduct the audit based upon the Respondent's failure to maintain
records of the receipt, distribution and/or disposal of controlled
substances. In addition, DEA again uncovered numerous recordkeeping and
security violations, most of which the Respondent had agreed to correct
pursuant to the June 18, 1993, MOU.
On September 13, 1994, the Respondent, through counsel, filed a
timely request for a hearing, and following prehearing procedures, a
hearing was held in Philadelphia, Pennsylvania, on June 13, 14, and 15,
1995, and continued in Allentown, Pennsylvania, on July 19 and 20,
1995, before Administrative Law Judge Paul A. Tenney. At the hearing,
both parties called witnesses to testify and introduced documentary
evidence, and after the hearing, counsel for both sides submitted
proposed findings of fact, conclusions of law and argument. Both
parties were given the opportunity to respond to the other side's
brief, and counsel for each side submitted a reply brief. On November
14, 1995, Judge Tenney issued his Findings of Fact, Conclusions of Law
and Recommendations, recommending that the Respondent's DEA
registration be continued and no action be taken against it. On
December 5, 1995, the Government filed Exceptions to Judge Tenney's
opinion and recommendation, and on December 15, 1995, the Respondent
filed a brief in support of Judge Tenney's opinion and recommendation.
On December 20, 1995, Judge Tenney transmitted the record of these
proceedings to the Deputy Administrator.
The Deputy Administrator has considered the record in its entirety,
and pursuant to 21 C.F.R. 1316.67, hereby issues his final order based
upon findings of fact and conclusions of law as hereinafter set forth.
The Deputy Administrator adopts, with noted exceptions, the Findings of
Fact, Conclusions of Law, and Recommended Ruling of the Administrative
Law Judge, and his adoption is in no manner diminished by any
recitation of facts, issues and conclusions herein, or of any failure
to mention a matter of fact or law.
The Deputy Administrator finds that the Respondent is a disposal
company founded in 1989 by Mr. Jeffrey Dershem (President), a
registered pharmacist. The Respondent receives pharmaceutical products,
to include controlled substances, from various sources or customers,
such as health care facilities, retailers, and wholesalers. The
substances are accepted for either destruction or for distribution back
to the original manufacturer for credit. The President testified before
Judge Tenney, stating that the Respondent employed, in either a part-
time, full-time, or temporary basis, approximately 60 to 65 people,
with a payroll of approximately $1.5 million annually.
In the Summer of 1991, the President contacted the local DEA office
concerning an application for a DEA registration to handle controlled
substances. He was informed that, because of the unique nature of the
Respondent's business, it did not fall under any then existing
categories of DEA registrants. After negotiating with DEA personnel,
the President was told to apply for registration for the Respondent as
a distributor of controlled substances. A local DEA Diversion
Investigator consulted with management for the Respondent throughout
the pre-registration process. The Respondent's proposed processing and
recordkeeping systems initially were found acceptable to the DEA, and a
preliminary DEA Certificate of Registration was granted to the
Respondent on September 12, 1991.
In March of 1992, the Respondent entered into an MOU with the DEA,
which stated that the Respondent would (1) install storage facilities
for controlled substances in substantial compliance with the provisions
of 21 C.F.R. 1301.71 and 1301.72; (2) maintain complete and accurate
records of all controlled substances received, distributed or destroyed
as required by 21 C.F.R. Part 1304; (3) inventory all controlled
substances received and intended for disposal on a DEA Form 41 or
approved equivalent, and comply with the provisions of 21 C.F.R.
1307.21; and (4) advise the appropriate DEA office of security measures
to be taken to prevent diversion of the controlled substances awaiting
disposal. In return, the DEA agreed (1) to issue a registration for a
distributor handling controlled substances in Schedules III through V,
to the Respondent, when installed security had been approved by DEA;
and (2) to review with the Respondent the adequacy of its proposed
recordkeeping system, noting that ``necessary modifications to the
system proposed by the [Respondent would] be discussed with [it].''
This MOU was entered into because there were no specific DEA
regulations governing disposers of controlled substances in the Code of
Federal Regulations. Although not yet finalized, on August 23, 1995,
the DEA did publish proposed regulations applicable to disposers of
controlled substances. See 60 FR 43732 (1995).
On June 22, 1992, the DEA conducted an on-site review of the
Respondent's facility. Investigators discovered that the Respondent was
storing controlled substances and non-controlled substances together
inside the controlled substance cage, in violation of DEA regulations.
By letter dated July 22, 1992, the President was reminded that on
October 10, 1991, and on June 25, 1992, the DEA had informed him not to
store controlled substances and non-controlled substances together, but
rather to keep them segregated, as required by 21 C.F.R.
1301.72(b)(8)(ii).
On July 22, 1992, after having provided the Respondent advanced
notice, the DEA conducted its first official inspection of the
Respondent's facility and business operations. A DEA Diversion
Investigator (Investigator) testified before Judge Tenney, stating that
the DEA was unable to complete an audit of controlled substances during
this inspection because of the Respondent's inaccurate or incomplete
records. Further, many recordkeeping and security violations were
discovered, including the continued storage of non-controlled and
controlled substances together, the lack of an initial inventory of
controlled substances, the lack of receiving records and distribution
records, the failure to submit ARCOS reports, the failure to record the
exact quantity of controlled substances received, and the improper
preparation of DEA Form 41. Further, the Investigator testified about
the security concerns created by this lack of documentation, stating
that such a lack of tracking records created a ``greater likelihood of
things being diverted just in between the customer and the firm.'' She
concluded that ``[o]verall the [processing] system left a lot of
loopholes that an employee could, if they (sic) so felt like it,
possibly get access to any of the drugs and the firm would probably not
know about it because it sometimes took months for things to be
processed even into their computer for them to get an inventory.'' The
DEA recorded seventeen violations identified during this inspection.
After being served with a Notice of Hearing listing all seventeen
violations, the Respondent met with the DEA at an informal
administrative hearing on
[[Page 37083]]
September 24, 1992. At this meeting, representatives from the DEA and
the Respondent discussed the seventeen violations and the Respondent's
proposed remedies for these violations. Specifically, the DEA
representatives emphasized that the dates of receipt and shipment of
controlled substances, and the maintenance of precise receiving
records, were needed accountability systems given the Respondent's
business.
As a result of this hearing, the Respondent and the DEA entered
into a second MOU, in which the Respondent agreed to correct all
seventeen cited violations and to comply with all applicable laws and
regulations regarding controlled substances. For example, the MOU notes
that the Respondent had (1) ``[f]ailed to properly segregate Schedule
3-5 substances from non-controlled substances, * * * within the DEA
approved overnight storage cage as required by 21 CFR
1304.72(b)(8)(ii); (2) ``[f]ailed to maintain receiving records
(packing slips, invoices) and DEA-41 destruction forms for at least two
years from the date of such record for inspection and copying by
employees of DEA, as required by 21 CFR 1304.04(a)''; (3) ``[f]ailed to
maintain inventories and records of controlled substances in Schedules
3, 4, and 5 either separately from all other records of the
registrant[,] or in such form that the information required is readily
retrievable from the ordinary business records of the registrant, as
required by 21 CFR 1304.04 ((f)(2)''; (4) (4) ``[f]ailed to maintain on
a current basis a complete and accurate record of each such substance *
* * received, sold, delivered, or otherwise disposed of as required by
21 CFR 1304.21 (a)''; and (5) ``[f]ailed to maintain records showing
the actual quantity of controlled substances received, including the
date of receipt, as required by 21 CFR 1304.21 (b) and (c).''
This MOU also memorialized the corrective action needed, to
include: (1) ``Respondent will obtain receipt documents (i.e., invoices
or packing slips) from its suppliers and maintain these records for at
least two years from the date of each record for inspection and copying
by employees of DEA as required by 21 CFR 1303.04(a)''; (2)
``Respondent will maintain on a current basis a complete and accurate
record of each such substance * * * received, sold, delivered, or
otherwise disposed of as required by 21 CFR 1304.21(a)''; (3)
``Respondent will maintain records showing the actual quantity (i.e.
number of dosage units, volume of liquid, etc.) received, including the
date of receipt, as required by 21 CFR 1304.23(b) and (c)''; and (4)
``Respondent will maintain records showing the actual quantities (i.e.
number of dosage units, volume of liquid, etc.) of controlled
substances distributed to other persons, including the date of
distribution, and the name, address and DEA registration number of the
person or firm to whom the distribution was made, as required by 21 CFR
1304.23 (b) and (e).'' The agreement also required the Respondent to
notify the local DEA office of any proposed change to its current
disposal site. This MOU was signed on June 18, 1993.
The DEA allowed the Respondent one-and-a-half years to correct the
violations set out in this second MOU, for a second inspection was not
conducted until May of 1994. Again, however, the DEA found further
problems with the Respondent's processing, recordkeeping, and security
systems. The investigators were unable to conduct an audit, initially
because of a lack of records showing the date of distribution of the
controlled substances from the Respondent's location to other
destinations. Also, the DEA noted in relevant part that (1) the
Respondent was accepting patient prescription medications for
destruction, after having been informed by DEA representatives at the
informal hearing that the Respondent was not authorized to accept such
medications; (2) the Respondent had not conducted a biennial inventory
of all controlled substances in the Respondent's warehouse in September
1993, the date the inventory should have been conducted as required by
DEA regulations; (3) the Respondent's computer records had indicated
that the Respondent had shipped out controlled substances, although the
products actually were found at the Respondent's warehouse; (4) the
Respondent had destroyed controlled substances at a destruction site
different from the one approved by the DEA, in violation of the second
MOU, which had stated that if the Respondent wished to change its
disposal site, it was required to first notify the local DEA Division
Office; and (5) that the Respondent had constructed a Schedule II vault
without prior approval of the local DEA office, for by regulation, any
vault that is to be used to store Schedule II controlled substances
must first be approved by the DEA before being used for such storage.
Also, the Investigator testified before Judge Tenney, stating that
Ms. Smith had informed her that patient prescriptions were not entered
in the computer system, although such substance had been received at
the Respondent's location. The Investigator stated that this
recordkeeping practice led her to the following conclusion:
If I had been trying to do an audit before this, this would have
completely killed it because our audits are basically a record of
all controlled substances that go through a company. If things are
coming in that we don't know about, then we can't really tell if
diversion would be occurring.
Concerning an audit attempt in May of 1994, the Investigator also
stated that ``[t]heir records were so bad, I couldn't put together
numbers because I had no accurate numbers on a large variety of records
* * *. The May, 1994 audit was the follow up to the 1992 audit * * *.
Our follow up was to say, enough's enough. We have three years here of
a firm not being in compliance.''
However, the Investigator also testified that, since 1992, the
Respondent had corrected a prior error by reporting to the ARCOS unit
as required. Yet, due to the problems with the actual recording of
shipment dates, the Investigator opined that the ARCOS reports were
probably inaccurate.
As for other documentary problems, the Investigator also testified
that the Respondent's personnel continued to improperly prepare the DEA
Form 41, stating that the documents reviewed still failed to accurately
reflect burned products and actual quantities of substances destroyed.
Specifically, the Investigator recounted that ``I have a whole lot of
forms that don't give me the product name, much less an accurate idea
of what these numbers represent when they're in the columns saying * *
* controlled substance doses [, and] controlled substance use.''
In response, Deborah Smith testified before Judge Tenney, stating
that she was the Respondent's executive vice president and general
manager, and that she was responsible for insuring that the
Respondent's operation complied with DEA regulations and requirements.
During the course of her testimony, a videotape, which has been
prepared the day before the hearing, was presented. The videotape
demonstrated the processes used when a product is returned by a
customer to the Respondent's facility. The Investigator confirmed that
this product-processing system was in place when she conducted the
investigation in January of 1995.
Specifically, as to the handling of controlled substances, Ms.
Smith testified that, prior to sending the Respondent pharmaceutical
products, a customer had to first contact the Respondent to receive a
Return Authorization Number. If controlled substances were to be
shipped, the
[[Page 37084]]
customer would receive an authorization number ending in a ``5.''
Customers were then sent a return label preprinted with the
authorization number, and the customers were instructed to place the
label on the front of all boxes. The customer was also sent an
information packet, which instructed the customer to conduct an
inventory of all scheduled drugs and to send the inventory with any
shipment containing controlled substances. Ms. Smith testified that
controlled substances received without customer inventories were to be
returned to the customer with a letter identifying the flaw in the
shipment. The customers were also informed that the Respondent was not
authorized to receive Schedule II controlled substances, and if such
substances were shipped, they would be returned to the customer.
Customers were further instructed to place controlled substances in a
sealed pouch in the first box of any shipment. Ms. Smith stated that,
when a customer's shipment containing controlled substances arrives at
the Respondent's location, the employees in the receiving department
note the return authorization number ending in a ``5,'' and know to
immediately take the package to the security cage.
Ms. Smith also stated that, after the controlled substances arrive
at the security cage, another employee authorized to handle such
substances would take a count of all controlled substances. If the
physical count did not match the customer's inventory, the Respondent
would send the customer a letter identifying the discrepancy. After
inprocessing the controlled substances, the product would then be
stored in the security cage according to proposed disposition (i.e.
return to manufacturer for credit or destroy) until such time as the
products would be shipped from the Respondent's facility.
When controlled substance are to be shipped, the product is
reinventoried and information regarding the destination of the shipment
would be entered into the secured computer system. The controlled
substances would then be packaged for shipment inside the cage, taken
to the loading dock manager, and put on a truck leaving the facility
before the close of that business day. If the products were to be
destroyed, they are taken to an incinerator where one of the
Respondent's officers, usually the President, would witness the burn. A
signed, computer-generated DEA Form 41, would then be sent to DEA, and
copies would be retained in the customer's file and at the security
cage.
Ms. Smith testified that, if a product was not in its original
packaging, the Respondent's personnel would use a reference book to
obtain the information needed to complete the computer records as to
the identity of the product. Once the information had been located, it
would be entered into the computer database so that records for
products not in manufacturer packaging contain the same information as
records for products in manufacturer packaging. This newly developed
system replaced the less precise computer entry of ``repackaged
goods,'' which the DEA had found lacked the necessary processing
information.
Before Judge Tenney, Ms. Smith addressed the DEA-identified
discrepancies. Specifically, she testified that she had understood from
discussions with the DEA that the Respondent was allowed to accept
patient medications, as long as relevant records were kept separate
from the main recordkeeping system. However, after the Investigator
informed her that the Respondent was not allowed to accept patient
prescriptions under any conditions, the Respondent ceased accepting
such drugs. Ms. Smith testified that ``[i]f any of the agents that are
at our facility come back and make a recommendation to me, I make a
procedural change to accommodate exactly what they want me to do.'' The
Respondent also implemented a procedure to return the patient-
prescription substances with a reminder to customers, informing them of
the Respondent's inability to process such substances.
As to the lack of a biennial inventory in September of 1993, Ms.
Smith testified that she had informed the DEA that the Respondent was
conducting monthly inventories, and she was under the impression that
those inventories would fulfill the biennial inventory requirement.
However, Ms. Smith testified, and the Investigator concurred, that
after the Investigator informed her of the need for a separate biennial
inventory, and after the Respondent's new computer system was in place,
such an inventory was conducted in October of 1994.
Ms. Smith testified in great detail concerning the shipping and
receiving documents utilized by the Respondent's company personnel. She
stated that during the January 1995 inspection, the Investigator's
interpretation of the shipping records continued to be misleading. The
DEA investigators had failed to ask the appropriate personnel at the
Respondent's firm why the shipping records, as read by the
Investigator, appeared to contradict the actual existence of the
substances under review inside the security cage. For example, in one
instance, Ms. Smith testified that the Investigator had misread the
computer record, thinking that a substance had been shipped, when in
fact it was still at the Respondent's warehouse awaiting the customer's
authorization to return the substances. Ms. Smith testified that the
shipping records would have shown that the controlled substances in
question had never left the warehouse, and, in fact, were awaiting
authorization from the customer for the return shipment.
As to the violation of destroying controlled substances at a
facility not previously disclosed to the DEA as required, Ms. Smith
admitted that the Respondent had sent controlled substances for
destruction to a new facility without first notifying the DEA. She
stated that the incident had been a trial run because the Respondent
needed to find a new destruction site. Due to a change in the
municipality code, the prior destruction company was prohibited by law
from accepting the Respondent's destruction business.
The Investigator also testified that the Respondent had violated
the June 1993 MOU when it had failed to destroy controlled substances
during a ten-month period. The MOU stated: ``Respondent will provide
periodic monthly reports (DEA Form 41's) of controlled substance
disposals to the DEA Philadelphia D.O. Respondent agrees that such
disposals will occur on the last Thursday of each month * * *.
Respondent does not need to notify the Philadelphia Division Office if
it elects not to destroy controlled substances during any particular
month.'' Although admitting that ten months had elapsed prior to
destruction of controlled substances, Ms. Smith strongly denied that
the accumulation of controlled substances for this ten-month period
compromised the security of the Respondent's storage cage. She stated
that the ten-month period was the time taken by the President to
locate, to inspect, and to conduct a background check of another
destruction site. Ms. Smith also testified that she had provided DEA
with a verbal notification of the change in location, but had not
provided written verification. Also, the Investigator had agreed that,
after the initial destruction at the previously undisclosed facility,
the Respondent had conducted subsequent destructions at a DEA-disclosed
facility in compliance with the regulation and the MOU.
As to the problems identified by the Investigator concerning the
DEA Form
[[Page 37085]]
41, Ms. Smith testified that the old system of handwriting the Form
41's had been changed to a computer-driven process. Specifically, the
Respondent's computer system generates the form, and the current
process was created and implemented just prior to the May 1994 DEA
inspection. Ms. Smith testified that during that inspection, she had
showed the Investigator a sample of the new DEA Form 41, and that the
Investigator had told her that ``I don't have a problem with it.''
Yet during the hearing before Judge Tenney, the Government
presented a DEA Form 41 dated February 28, 1995, stating that the form
reflected destruction of ``Repackaged DEA control C-III'' substances.
As the Investigator testified, these entries were useless; for,
although DEA would know that ``1.00 item'' of a Schedule III substance
was destroyed per this document, the DEA still would have no idea what
the controlled substance was, what the dosage unit was, and what
quantity was contained in the destroyed package. From this document,
the DEA remained unable to create an accurate count of the precise
controlled substance actually destroyed. Thus, the Investigator
concluded that the DEA continued to have problems with the actually
completed DEA Form 41's being submitted by the Respondent, despite
approving, in theory, their new form.
As to the construction of a Schedule II storage vault, Ms. Smith
testified that nothing was stored in that vault. She stated, ``It's not
operational in any way, shape, or form.'' Further, the employee who
operates the Respondent's controlled substances storage area also
confirmed that nothing was stored in the Schedule II storage vault. The
Government presented no evidence to the contrary.
As a result of the May 1994 inspection results, the DEA issued an
Order to Show Cause, seeking to revoke the Respondent's registration.
In response to this order, the Respondent invited the DEA Diversion
Investigators to visit its facility for another inspection to verify
that the Respondent had achieved compliance with the DEA regulations.
The DEA conducted that inspection in January of 1995, and, for the
third time, DEA Diversion Investigators inspected the security systems
and tried to conduct an inspection of certain controlled substances.
As to the Respondent's receiving and initial customer inventory
documents, the investigators found that the Respondent had revised the
documents, ``and it looked like the firm was, in good faith, doing
everything it could to get such documents from its customers.''
Further, as previously requested by DEA personnel, the Respondent's
employees had dated the receiving documents with the actual date of
receipt of controlled substances at the Respondent's facility, rather
than using the date the substances were being handled and processed at
the Respondent's facility. On cross-examination, the Investigator
testified that ``the receiving system that the firm had is one thing
that I found in January that I felt they had made advances on and that
we could accept what they were proposing.''
However, the investigators reported, in significant part, a
substantial number of discrepancies still noted during the January 1995
inspection. Specifically, (1) DEA personnel found that the Respondent's
records were incomplete and inaccurate, failing to list drug names,
correct quantities of products on-hand or shipped, with discrepancies
being noted even among the Respondent's own internal tracking documents
covering the same period of time. (2) DEA personnel had difficulty
tracking controlled substances through the Respondent's records,
because the shipping records did not show the date of shipment of
controlled substances from the firm. (3) DEA personnel again found
Schedule II controlled substances at the Respondent's facility and
determined that those substances had been at the Respondent's location
for several months. Further, Schedule II products, as well as
controlled substances from Schedules III, IV, and V, were found at the
Respondent's warehouse in an unsecured area. (4) DEA personnel found
that the Respondent had accepted shipments of controlled substances
from customers lacking active DEA registrations. Specifically, in one
instance a controlled substance was shipped from a company in December
of 1994, but that company's DEA registration was retired by DEA on
April 1, 1991. (5) Investigators also reported that the Respondent's
shipping records failed to show the actual DEA-registered name of some
of the receiving registrants. As to this point, the Investigator stated
``I think there's something wrong in the computer system that is giving
me a['] shipped to['] name[,] and the firm is saying, `We don't take
back controlled stuff.' ''
Further, the Investigator testified that after the January 1995
inspection, the Respondent's attorney had provided her with an update
of the October 1994 biennial inventory. Specifically, she stated that
the Respondent's counsel wrote that ``the biennial inventory failed to
include 465 items that were on hand prior to October 10, 1994, and 79
items that came into the firm during the two-week inventory period.''
According to the Investigator, such a discrepancy ``[m]akes the
inventory [in]complete and inaccurate as far as we're concerned''. The
Investigator opined that missing 465 items when taking or recording a
physical inventory creates a potential for diversion; for ``somebody
could have walked off with all 465 items'' without detection.
However, the Respondent's employee, who had provided the
Investigator with a copy of the October 1994 biennial inventory,
testified before Judge Tenney, stating that the failure to list the 465
items from a single customer was a result of the Respondent's employees
conducting an inventory of those products at the customer's location.
Ms. Smith testified that, in this unusual case, this bankrupt customer
no longer had employees to conduct the customer-prepared inventory
normally required by the Respondent prior to accepting a shipment of
controlled substances. Instead, the Respondent's employees had used a
stand-alone computer system to enter the date from this inventory, and
that data had not been integrated into the Respondent's computer
network at the time of the biennial inventory. Rather, the data was
maintained on the stand-alone computer system. The employee also
testified that the remaining items did not appear on the October 1994
inventory because they were received while the inventory was being
taken, and these products had not been counted during the taking of
this inventory.
Yet the Investigator testified that the October 1994 inventory was
deficient, because it failed to indicate a time certain for
accountability purposes, as required by regulation. One of the
Respondent's employees testified that in the future the biennial
inventory would be conducted over a weekend, when no products would be
processed into the Respondent's facility, and the exact time of the
inventory would be noted on the report. However, the Investigator also
testified that the Respondent had yet to submit a verifiable biennial
inventory, as required, despite being registered with the DEA since
September 12, 1991. The Investigator testified that, lacking such an
inventory, the DEA remains unable to determine whether any diversion of
controlled substances has taken place at the Respondent's location.
The Investigator also testified about her efforts to inspect the
controlled substances on hand, to determine whether her inspection
results would coincide with inspection documents provided by the
Respondent. The
[[Page 37086]]
documents listed the controlled substances that should be on-hand in
the security cage on the day selected for the inspection. However, the
Respondent's inventory documents did not match the inventory results
reported after DEA personnel conducted their independent physical count
of the substances in the storage area.
Ms. Smith testified that on the first day of the January 1995
inspection, she had introduced herself to the DEA inspection team and
had informed them that she was the Respondent's contact person during
the inspection. However, she testified that the Investigator had failed
to inform her of the problems DEA investigators were having in reading
the Respondent's reports and collecting the data they needed to
complete the controlled substances inspection. Specifically, she stated
that the Investigator had reviewed the Respondent's records, noted an
inability to determine the name or quantity of specific substances
tracked in the records, yet had failed to inform her or any other of
the Respondent's management personnel of the problems.
Ms. Smith stated that once she became aware of the specific data
the DEA wanted to retrieve from the Respondent's records, she insured
that the report contained such information. Specifically, the
subsequent report clearly contained the identity of the controlled
substance, the quantity, and other pertinent information requested by
the DEA personnel. She also testified that such information was
recorded in the Respondent's daily records, but that the person
preparing the DEA-requested reports had failed to access the various
computer fields needed to generate the statistical information sought
during the inspection. Further, before Judge Tenney, Ms. Smith reviewed
in detail the then current documentation used in the receiving and
shipping process, noting that the substances could be tracked if the
correct document fields were retrieved to create the report.
An employee of the Respondent's also testified concerning his entry
of data, to include the name, strength, and dosage for every controlled
substance product received in the secured storage area. He confirmed
Ms. Smith's testimony concerning the extent of information recorded in
the Respondent's computer system for tracking the processing of
controlled substances through the Respondent's facility.
As for the Schedule II substances found by the DEA investigators,
Ms. Smith testified that the Respondent's personnel had retrieved six
truckloads of pharmaceutical products from a bankrupt customer. The
Respondent had contracted to remove all pharmaceutical products from
the customer with the exception of Schedule II controlled substances.
Security guards at the hospital had informed the Respondent's employees
that all Schedule II products had been collected and were stored in a
vault at the customer's facility. The Respondent's personnel did not
know that there were some Schedule II products intermingled with the
truckload of products retrieved until two months after the products had
been received and personnel were processing them. Ms. Smith testified
that, when the Schedule II products were discovered, the Respondent's
personnel promptly shipped them back to the customer's attorney for
processing, since the Respondent's registration did not authorize the
handling of Schedule II drugs.
The Respondent's personnel did not deny that other Schedule II
substances were found at the warehouse in an unsecured area. However,
Ms. Smith testified that the boxes containing the Schedule II
substances had not been authorized for shipment to the Respondent, and
that the boxes were not properly labelled as containing controlled
substances. During her testimony, Ms. Smith provided evidence of the
Respondent's pre-shipment contact with a customer, but here, since the
pre-shipping procedures had with a customer, but here, since the pre-
shipping procedures had not been followed by these customers, the
Respondent's normal safeguards had failed to prevent the improper
storage of the Schedule II substances. At the time of the DEA
inspection, the boxes in question had not even been opened, since the
Respondent had intended to return all of the unauthorized boxes to the
senders. However, since the senders were in bankruptcy status, the
Respondent was having difficulties determining were to send the boxes.
Further, as to the shipping of controlled substances to customers
lacking active DEA registrations, Ms. Smith denied that the Respondent
shipped controlled substances to such entities. She testified that the
Investigator had failed to raise this concern to her, and that, if the
Investigator had asked her for the shipping information, she could have
pulled the shipping document from the computer, which would have
reflected that the substances in question had actually been shipped to
a location with an appropriate DEA registration number.
As to the receipt of controlled substances from a company lacking a
DEA registration, Ms. Smith testified that the intent was always to
receive controlled substances only from registered entities. However,
in response to the Investigator's concerns, Ms. Smith testified that a
procedure was recently adopted that required customers to send a copy
of their DEA Certificate of Registration prior to being authorized to
actually ship substances to the Respondent's location. The copy, which
would reflect the active status of the certificate, is then placed in
that customer's file.
Finally, evidence was presented, demonstrating that in October of
1991, the Respondent had hired a consultant (Consultant) to design and
develop its computer database system. The Consultant testified before
Judge Tenney about the various stages of development and about the on-
going modifications required as the company itself developed. For
example, in April of 1994, a bar code system was added. Every product
processed by the Respondent was labelled with a bar code, and then,
``if the product got misplaced in the warehouse, all the personnel
needed to do was pick up the product, scan it in, and the computer
would be able to identify where the product belongs, who entered the
product, when it was entered [,] and so forth.'' The Consultant
testified that this system was implemented as a security measure and to
enhance efficiency. The Consultant also stated that, because the
Respondent was such a unique business, there was no existing computer
software on the market that it could purchase to do its inventory, and
that ``it was a very complex system to write.''
The Consultant also testified that, as of October of 1994, the
computer system tracks all DEA product coming into the Respondent's
facility, shipped out of the facility, or destroyed, and tracks product
that remained in the Respondent's warehouse awaiting the customer's
disposition orders. He opined that the records related to all of these
processes were readily or easily retrievable. He also stated that he
had heard the testimony concerning problems in retrieving data at the
request of DEA in October of 1994, and he opined that such problems
would be common when a company was in the process of making a system
conversion such as the one the Respondent was making in October of
1994. In conclusion, the Consultant testified that, given the tests
that had been run since the conversion, he was ``confident that DEA
products are being tracked accurately from the time they enter the
facility until the time they leave.''
[[Page 37087]]
The Respondent also presented evidence demonstrating that pre-
employment criminal records checks are performed, and that limited
access to controlled substances is effectuated by limiting access to
the work area where controlled substances are handled and stored.
Further, the Investigator testified on cross-examination that the
Respondent had installed sufficient physical security equipment.
Pursuant to 21 U.S.C. 824(a)(4), the Deputy Administrator may
suspend or revoke a DEA Certificate of Registration and deny any
pending application for such registration, if he determines that the
registrant has committed such acts as would render his continued
registration inconsistent with the ``public interest.'' In this case,
to determine the public interest, the following factors specified in 21
U.S.C. 823(e) are to be considered:
(1) maintenance of effective controls against diversion of
particular controlled substances into other than legitimate medical,
scientific, and industrial channels;
(2) compliance with applicable State and local laws;
(3) prior conviction record of registrant under Federal and State
laws relating to the manufacture, distribution, or dispensing of such
substances;
(4) past experience in the distribution of controlled substances;
and
(5) such other factors as may be relevant to and consistent with
the public health and 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).
Absent evidence which raises the issues of (1) a prior conviction
record, (2) compliance, or lack thereof, with State and local law, and
(3) the Respondent's past experience in distributing controlled
substances, the Deputy Administrator finds that only factors one and
five are relevant in determining whether the Respondent's continued
registration would be inconsistent with the public interest. As to
factor one, ``maintenance of effective controls against diversion,''
the Respondent presented extensive evidence of its current physical
security measures, to include a videotape of the exterior and interior
of its facility, and testimony concerning its security cage
construction. Although there was evidence presented of prior physical
security concerns involving the relocation of the security cage, the
Investigator testified that such concerns have been remedied by the
Respondent's corrective action, to include installation of additional
bars over the skylights and mesh over the cage door to preclude theft
of controlled substances from the security cage. Further physical
security controls were also implemented, to include an extensive bar
code system to assist in tracking controlled substances through the
Respondent's warehousing process.
However, the Government has presented evidence of a lack of
accurate and precise accounting and recordkeeping controls, resulting
in the Government's inability to determine whether or not diversion had
occurred. Specifically, the Respondent's first biennial inventory was
inaccurate and incomplete, for it failed to account for approximately
500 controlled substances. Such a failure puts into question the
Respondent's inventory practices, for if those substances were
unaccounted for at the time of the inventory, then safeguards to
prevent diversion were, arguably, equally ineffective, given the fact
that the Respondent failed to identify the actual existence of these
substances in its possession at the time of the inventory. Further,
although disputed, the Investigatory testified that she was unable to
reconcile the Respondent's records with substances on hand when she
conducted her inspection in January of 1995. She also testified that,
for the four years in which the Respondent had been a registrant, DEA
had been unable to ever effectuate an accountability audit. Such a
problem again calls into question the Respondent's accountability
procedures for keeping an accurate count of controlled substances
handled on its premises during any given timeframe. If controlled
substances are on the Respondent's premises without knowledge of the
Respondent's personnel, then it becomes questionable whether the
Respondent's security procedures are adequate to prevent diversion of
such unaccounted for controlled substances.
The Government also presented evidence that in January of 1995,
Schedule II controlled substances were found on the Respondent's
premises, despite the Respondent's lack of authorization to handle such
substances. To further aggravate the situation, the substances were
found in unopened boxes outside the secured cage, and evidence was
presented to establish that they had been in an unsecured location for
at least several months. Further, the substances had not been accounted
for or processed through the Respondent's records, making their
accountability impossible during this time. Such lack of action on the
part of the Respondent resulted in a failure of the system to safeguard
the substances and to prevent their diversion.
The Respondent's response to the Investigator's testimony was to
present evidence that one customer's Schedule II controlled substances
were received by Respondent improperly, and that, because of the
customer's bankrupt status, the Respondent had had difficulty
determining where to return the substances. However, in conflict with
this characterization, the Respondent also presented evidence that
established that the Respondent's employees had actually conducted an
inventory of this customer's returned product at the customer's
location prior to boxing and shipping the goods to the Respondent's
warehouse. Therefore, the Respondent should have known what substances
were in the boxes packed by its own employees. If not, then the unknown
boxes perhaps should have been processed first to properly identify
what substances the Respondent had taken possession and control of as a
result of this business relationship.
The Deputy Administrator finds that the Respondent's failure to
know it had Schedule II substances in its possession for several
months, coupled with its cavalier storage of unknown substances outside
of its security cage, results in a finding that the Respondent has
failed to act consistent with the responsibilities inherent in a
registrant's status. Specifically, a registrant is charged with
knowing, in an expeditious manner, what controlled substances are in
its possession, and with affording those substances the necessary
protection required to prevent diversion. In this instance, the
Respondent did not know it had Schedule II substances, did not open and
identify the substances it had received for several months, and had
failed to maintain effective controls over these Schedule II substances
for a protracted period of time. Such conduct fails to result in ``the
maintenance of effective controls against diversion.''
As to factor five, ``such other factors as may be relevant to and
consistent with the public health and safety,'' the Deputy
Administrator concurs with Judge Tenney's finding that the basis for
measuring the success of the Respondent's past experience is rooted in
the 1992 MOU, and the 1993 MOU. The Deputy Administrator acknowledges
that, at the time of the first MOU, the DEA did not have
[[Page 37088]]
regulations in place which specifically addressed the Respondent's
business. The MOU acknowledges this fact by stating that ``this
registration as a DISTRIBUTOR is an interim measure until such time as
the proposed administrative actions are completed. At that time, the
distributor registration will be converted to the new category of
registration as provided under the law.'' The Deputy Administrator
agrees with Judge Tenney's interpretation of this provision of the 1992
MOU, when he writes ``[i]t indicates that the Respondent's business is
relatively new, and that the DEA is in the process of proposing
guidelines under which to register disposers of controlled substances.
Furthermore, * * * [it] suggests that the DEA and Respondent would have
to work together [] so that Respondent could fulfill its obligations
with respect to the recordkeeping and security obligations of a DEA
registrant.''
The record provides evidence of the DEA and the Respondent working
together to accomplish the goals of the 1992 MOU. In July of 1992, a
DEA inspection resulted in the identification of numerous
improprieties, the most significant of which was the DEA's inability to
conduct an accountability audit of controlled substances due to the
lack of documentation that would facilitate the DEA's need to track the
receipt and disposition of controlled substances through the
Respondent's facility. The Deputy Administrator agrees that such a lack
of verifiable accountability creates a greater likelihood of diversion,
for the Respondent, at that time, had not created an accountability
system to the degree of specifically needed to maintain a continuous
track record of the controlled substances flowing through its facility.
Yet, in the spirit of the 1992 MOU, rather than take action to revoke
the Respondent's registration, the DEA held in informal administrative
hearing on September 24, 1992, resulting in the creation of a second
MOU dated June 18, 1993.
The second MOU spelled out 17 problems found by the DEA during the
1992 inspection. Contrary to the testimonial evidence provided by the
Respondent's witnesses, the Deputy Administrator finds that these
violations are identified with a degree of specificity necessary to
enable the Respondent to initiate corrective action. These
discrepancies memorialize the fact that the DEA, after conducting an
inspection of the Respondent's physical facility and accountability
procedures, was unable to conclude that adequate security measures were
in place to preclude diversion of controlled substances, because the
DEA could not verify through an accountability audit, that the
Respondent handled controlled substances in such a manner as to
preclude diversion of the substances while in its facility. But the MOU
did not stop there, for the parties also memorialized in detail the
corrective action the Respondent needed to take.
In May of 1994, the DEA conducted another inspection of the
Respondent's facility, and the record demonstrates that the
Investigator was again unable to conduct an accountability audit.
Although acknowledging the various actions found to be in violation of
the 1993 MOU, the Deputy Administrator is most concerned with the
inability of the DEA investigators, with the assistance of the
Respondent's employees, to conduct an accountability audit. The
evidence concerning the imprecise method in which the Respondent
documented the controlled substances flowing through its facility
during this time, as ``repackaged goods'' lacking an exact identity and
count, was justifiably found to be in violation of the agreed
accountability procedures defined with specificity in the 1993 MOU.
As to the issue of the construction of the Schedule II vault, the
Deputy Administrator agrees with Judge Tenney. Although the relevant
rule specifies that a vault must be constructed to certain
specifications and approved by the DEA prior to using it to store any
Schedule II drugs, the record clearly demonstrates that the Respondent
has not stored any Schedule II substances in the vault. Further, Judge
Tenney noted that ``21 CFR 1301.71(d) permits, but does not require,
registrants to submit proposed security systems to the Special Agent in
Charge in the region in which the system is located. * * *'' The Deputy
Administrator agrees that ``[s]ince there is nothing in the regulations
that requires a registrant to obtain DEA approval before building the
vault, there has been no breach.''
The Deputy Administrator also notes that, again in the spirit of
cooperation that permeated the relationship between this Respondent and
the DEA, the DEA investigators, while this matter was pending before
Judge Tenney, again conducted an inspection of the Respondent's
facility in January of 1995. Yet against the DEA investigators were
unable to complete an accountability audit, finding the Respondent's
records incomplete and inaccurate. Specifically, the record contains
contemporaneously produced documents for DEA's inspection which lacked
quantity counts, stating instead, for example, that a ``repackaged
good'' of a Schedule III substance had been destroyed. Such
documentation failed to provide the investigator with the exact
identity and quantity of the Schedule III substance thus destroyed, in
violation of both DEA regulations and the 1993 MOU. Lacking the degree
of specificity necessary to enable the DEA investigators to conduct an
accountability audit, the records were found deficient. Significant is
the fact that the DEA investigators could not reconcile an audit of
substances on hand by using the documents presented to the DEA
employees for that purpose. From the previous four years of discussions
and MOUs, the DEA had clearly defined its concern over the
accountability of the respondent for the receipt, processing,
distribution, or destruction of controlled substances. DEA's needs were
clearly defined, yet the Respondent's personnel were unable to present
documents showing that it conducted its business in a manner consistent
with the requirements of a DEA registrant.
However, evidence was presented by the Respondent, demonstrating
that a multitude of information may have been available at the time of
the January 1995 inspection, if the DEA only had requested specific
data from the Respondent's employees. A significant issue in dispute in
this case was whether the availability of such evidence in the
Respondent's computer system equalled the ``readily retrievable''
standard established in DEA regulations for such recordkeeping. The
Deputy Administrator agrees with Judge Tenney's conclusion that ``it is
implicit from the definition of the term `readily retrievable' that the
DEA recognizes that records may be kept by `automated data processing
systems or other electronic or mechanized recordkeeping systems.' See
21 CFR 1304.02(i).'' Further, the regulations specify that ``readily
retrievable'' is defined, in relevant part, as requiring certain
``records [be] kept by automatic data processing systems or other
electronic or mechanized recordkeeping systems in such a manner that
they can be separated out from all other records in a reasonable
time.'' 21 CFR 1304.029i). However, focusing on the method of storage
of data misses the problem here.
The Deputy Administrator disagrees with Judge Tenney's analysis of
the application of this standard in this case. Judge Tenney wrote:
[The Investigator] testified that because the reports did not
contain all the necessary information, then that information was not
readily retrievable. However, the information for the reports was in
the computer and was `readily retrievable' once it was understood
[[Page 37089]]
which `fields' of information contained in the computer database
must be reflected in the reports. Many of Respondent's reports have
already been changed to reflect missing information and Respondent
appears willing to make any future adjustments to its reports.
Such an analysis places the burden upon the DEA to inform the
Respondent as to which ``fields'' of information to include misses the
point of the inspection, which is to view the reports used by the
Respondent during its normal business activities to track the
processing of controlled substances through its facility to insure that
the process is effective in preventing diversion of such substances to
unauthorized recipients. During an inspection, the Respondent is not
asked to create special reports for DEA's use. Rather, the Respondent
is to present shipping, receiving, and destruction reports utilized on
a daily basis by the Respondent to meet its accountability
responsibility as a registrant. Of course such reports may be
maintained in an automatic data processing system, but the method of
maintenance of the report is not the issue. The issue is the content of
the report and its usefulness in demonstrating the Respondent's
compliance with DEA requirements in its handling of controlled
substances during its daily operation. The DEA merely relies upon the
Respondent's existing recordkeeping system to conduct an accountability
audit.
However, here the DEA investigators have consistently been unable
to use the Respondent's documentation to reconcile the Respondent's
accountability records with substances found on hand in the
Respondent's security cage on the date of the DEA audit. As of the
January 1995 inspection, the Respondent continued to fail to meet this
obligation, an accountability obligation levied against any DEA
registrant thus handling controlled substances.
Thus, the Deputy Administrator finds that this failure, coupled
with the unauthorized storage of unaccounted for Schedule II substances
outside a security cage for an extended period of time, create a basis
for the revocation of the Respondent's registration. The Respondent had
failed to demonstrate that it had maintained effective controls against
diversion, and such a failure has created a risk to the public
interest.
In mitigation, the Deputy Administrator notes both Ms. Smith's and
the President's evidence of continuous attempts to meet DEA's
requirements during the course of the meetings and inspections
conducted by the DEA. The Deputy Administrator also takes note of the
timely and responsive manner in which Respondent's officers modified
the firm's business practices to attempt to bring them into regulatory
compliance. Their responsive and cooperative attitude indicates a
desire and a willingness to operate this returns business in compliance
with statutory and regulatory requirements. The Respondent has
committed extensive personnel and fiscal resources toward developing a
system to insure its operation is in compliance with DEA requirements.
Also, the Respondent has initiated procedures, such as employee
criminal background checks, to insure that personnel with access to
controlled substances within its facility are qualified to meet the
responsibilities of such a position.
Further, many of the problems identified in the 1992 MOU and the
1993 MOU have been resolved, such as (1) The Respondent's clearly
communicating to its customers its inability to accept Schedule II
substances and patient-prescribed substances, and the procedures
implemented to return such substances to the customer; (2) fulfilling
the ARCOs reporting requirements; (3) separately storing controlled
substances and non-controlled substances; (4) correct the Respondent's
receiving records to reflect the actual date of receipt of its
customer's products; (5) adding the requirement that a customer provide
to the Respondent a copy of its DEA Certificate of Registration and an
inventory of controlled substances actually shipped to the Respondent;
(6) providing DEA notice of its selected disposal site; and (7)
modifying the way in which records for repackaged products are created.
Procedurally, Judge Tenney recommended that the Deputy
Administrator take no action with respect to the Respondent's
registration. After receiving his recommendation, the Government timely
filed exceptions, pursuant to 21 CFR 1316.66, and the Respondent field
a brief in support of Judge Tenney's recommendation.
After reviewing the parties filings, the Deputy Administrator notes
that a significant issue forming the basis of the Government's
exception is that Judge Tenney, after reviewing the Respondent's
evidence of corrective action taken since the January 1995 inspection,
had found such corrective action persuasive in remedying the violations
previously identified by the Investigator. Specifically, the Government
took exception to Judge Tenney's finding that the Respondent had made
reasonable efforts to comply with DEA regulations, given the fact that
even as late as the January 1995 inspection, the Investigator had
continued to find numerous recordkeeping and security violations. The
Government wrote, ``[a]s recent as the July 1995 hearing, the
Respondents were still in the process of attempting to bring itself
into compliance with DEA requirements * * *. In addition, [the
Investigator] testified to matters that remained uncorrected at the
firm as of January 1995, and to date, DEA has not been able to conduct
an accountability audit at the firm because of the firm's poor record-
keeping, (sic) nor has the firm produced an accurate and verifiable
biennial inventory.'' In a related concern, the Government also took
exception to Judge Tenney's finding as to the efforts taken by the
Respondent's personnel to create a controlled substance tracking
system. The Government wrote that ``there is practically no evidence in
the record that [the] Respondent's information system has produced
accurate and verifiable information to DEA.''
The Deputy Administrator agrees with Judge Tenney's finding that
the Respondent has made efforts to comply with DEA's regulations, as
evidenced by the extensive efforts taken to create a computer system
that would assist in managing the flow of controlled substances through
the Respondent's facility. However, the Deputy Administrator also
agrees that the evidence supports the Government's concerns, for DEA
has been unable to successfully conduct an accountability audit. The
Deputy Administrator agrees that the Respondent's lack of verifiable
inventory control places the public at risk from diversion of
controlled substances.
The Government also took exception to Judge Tenney's conclusion
that the public interest was served by continuing the Respondent's
registration, in light of the Respondent's past history of non-
compliance with DEA requirements. The Deputy Administrator agrees with
the Government's assertion that ``[a]n agency rationally may conclude
that past performance is the best predictor of future performance. Alra
v. Drug Enforcement Administration, 54 F.3d 450 (7th Cir. 1995).''
However, here DEA's requirements differ from the average regulatory
case, for DEA does not have regulations responsive to and governing the
Respondent's business, since this Respondent does not manufacture,
distribute, or dispense controlled substances. The terms of the two
MOU's and the regulations incorporated into those agreements form the
basis for the DEA's regulatory requirements, and both DEA and the
Respondent acknowledged the need for
[[Page 37090]]
cooperation in applying those requirements as the Respondent's business
practices were developed. Although the Deputy Administrator
acknowledges that the overall regulatory goal of preventing diversion
of controlled substances outside of the regulated system of
distribution has applied equally to the Respondent as to any other DEA
registrant, from the inception of the Respondent's operation, the
mechanisms of compliance have had to be developed. The Deputy
Administrator must take these facts into account when reviewing this
Respondent's past history of compliance.\1\
---------------------------------------------------------------------------
\1\ The remaining Government exceptions, and the Respondent's
reply to those exceptions, have been previously addressed in this
opinion, and they require no further discussion here.
---------------------------------------------------------------------------
Yet the responsibility remains the Registrant's to conduct its
business in an accountable manner that does not place the public at
risk of diversion of controlled substances. Therefore, in the balance,
the Deputy Administrator concludes that it is in the public interest
for the Respondent's DEA registration to be revoked. However, the
Deputy Administrator feels that the evidence of changes made by the
Respondent in response to the Government's case at the hearing before
Judge Tenney, may, in operation, finally create an accountability
system adequate for the Respondent to demonstrate the requisite degree
of precision in handling controlled substances necessary to continue in
operation as a disposer. The Deputy Administrator also finds that it is
in the public interest for the Respondent to be given yet another
opportunity to demonstrate that the latest alterations to the
Respondent's business practices will adequately contain the risk to the
public of diversion from the Respondent's operation.
Therefore, the Deputy Administrator will stay the revocation and
impose a one-year probationary period to determine whether the
Respondent can now fully comply with all DEA recordkeeping, reporting,
and security requirements. During the one-year probationary period, DEA
will conduct inspections and audits in compliance with the procedures
established in 21 U.S.C. 880 and its implementing regulations. It is
significant that during this period, the Respondent will be taking its
second biennial inventory, which will afford the Respondent the
opportunity to demonstrate its ability to conduct a meaningful
inventory of controlled substances in its possession.
However, if the DEA's inspections or audits reveal either new or
repeated violations, the Deputy Administrator will remove the stay and
the DEA Certificate of Registration will be revoked immediately, and
all pending applications for renewal will be summarily denied. If,
however, at the end of the one-year period, the Respondent successfully
demonstrates its compliance with the DEA's regulatory requirements,
then the Deputy Administrator will withdraw this order and will permit
the Respondent to retain its registration, and to renew it, if
necessary, at that time.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 824, and 28 CFR 0.100(b) and 0.104, hereby orders DEA
Certificate of Registration RR0166113, issued to RX Returns, Inc., be,
and it hereby is, revoked and any pending applications for renewal are
denied. It is further ordered that this revocation order will be stayed
for a period of one year from its effective date. If during the one-
year probationary period, the Respondent is found to have violated any
DEA reporting, recordkeeping, or security requirements, the previously
imposed stay will be removed, the Respondent's DEA Certificate of
Registration will be revoked, and any pending applications for renewal
will be summarily denied. This final order is effective August 15,
1996.
Dated: July 5, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-18025 Filed 7-15-96; 8:45 am]
BILLING CODE 4410-09-M
