FR Doc E8-31414[Federal Register: January 6, 2009 (Volume 74,
Number 3)] [Notices] [Page 457-459] From the Federal Register
Online via GPO Access [wais.access.gpo.gov] [DOCID:fr06ja09-48]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Wonderyears, Inc.; Denial of Application
On December 17, 2007, the Deputy Assistant Administrator,
Office of Diversion Control, Drug Enforcement Administration,
issued an Order to Show Cause to Wonderyears, Inc. (Respondent),
of Deerfield Beach, Florida. The Show Cause Order proposed the
denial of Respondent's pending application for a DEA Certificate
of Registration as a retail pharmacy on the ground that its
registration "would be inconsistent with the public interest.''
Show Cause Order at 1.
The Show Cause Order specifically alleged that on January 10,
2007, Daniel L. Dailey, Respondent's President and Chief
Executive Officer, had applied for a DEA pharmacy registration
to dispense controlled substances in schedules II through V. Id.
The Show Cause Order alleged, inter alia, that Dailey had
previously been the President and CEO of Powermedica, an entity
which had held a DEA registration as a retail pharmacy, and that
on several occasions, Special Agents of the Food and Drug
Administration had obtained from Powermedica, anabolic steroids,
which are schedule III controlled substances, without having any
contact with a physician, in violation of federal and state
laws. Id. at 2 (citing 21
U.S.C. 841; 21
CFR 1306.04, Fla. Stat. Ann. Sec. 465.015(2)(c)).
On December 26, 2007, the Show Cause Order, which also
notified Respondent of its rights under 21 CFR 1301.43, was
served on it by certified mail to the address of its proposed
registered location. Since that date, neither Respondent, nor
anyone purporting to represent it, has requested a hearing.
Because more than thirty days have elapsed since Respondent was
served with the Show Cause Order, and Respondent has not
requested a hearing, I conclude that Respondent has waived its
right to a hearing. 21
CFR 1301.43(d). I therefore enter this Decision and Final
Order based on relevant material contained in the investigative
file and make the following findings.
Findings
Respondent is a Florida Corporation whose President is Daniel
L. Dailey. On January 10, 2007, Respondent submitted an
application for a DEA Certificate of Registration as a retail
pharmacy and sought authority to handle controlled substances in
schedules II through V, at the proposed location of 270 SW 12th
Ave., Deerfield Beach, Florida. Respondent's application was
prepared by Daniel L. Dailey.
On March 16, 2007, DEA Diversion Investigators (DIs) went to
Respondent's principal place of business (which was an address
different than that listed on its application) to conduct a pre-
registration investigation and met with Dailey. Dailey, who was
the only corporate officer of the entity, provided the DIs with
a copy of Respondent's Articles of Incorporation and told the
DIs that it would compound veterinary medications for swines and
equines. Respondent, however, held only a community pharmacy
license from the State of Florida and Dailey told the
investigator that he had not even applied to the State for a
compounding pharmacy license. Dailey further maintained that he
would not compound steroids, but rather, only non- controlled
medications such as creams and gels.
A week later, Dailey telephoned one of the DIs and told her
that he now needed a DEA registration because he was seeking a
contract with two AIDS clinics. He also stated that he planned
to sell controlled substances to physicians.
Dailey further told the DI that he had first become involved
in the pharmaceutical business in November 2000, when he
invested Powermedica, Inc. According to the records of the State
of Florida, as well as a letter he submitted to the DI, Dailey "was
the President and CEO of a company Powermedica, Inc.[,] which
was the subject of [an] FDA investigation in 2005.'' In the
letter, Dailey further stated that Powermedica had "not been
charged or fined by the Federal Authorities.''
According to the investigative file, on June 20, 2005, the
Florida Department of Health ordered the emergency suspension of
the pharmacy permit held by Powermedica, Inc. See Order of
Emergency Suspension of Permit, In re: The Emergency Suspension
of the Permit of PowerMedica, Inc., 1 (Fla. Dep't Health, 2005).
The order found that "at all times material to [the] cases,
Daniel L. Dailey was chief executive of Powermedica.'' Id. at 2.
The order further found that on August 13, 2004, an FDA Special
Agent (S/A) had visited Powermedica's Website and made an
undercover purchase of stanozol (4 mg.), an anabolic steroid and
schedule III controlled substance, by "complet[ing] a brief
medical questionnaire,'' and entering some personal information
including a "mailing address and credit card authorization.''
Id. at 3. On August 18, 2004, the FDA S/A received the stanozol.
Id. at 4. The accompanying prescription listed the prescribing
physician as Dr. Abi Almarashi. Id. Almarashi, whose office was
located in Flushing, New York, had "never performed a physical
examination of'' the S/A and had never discussed with her "treatment
options and the risks and benefits of treatment.'' Id.\1\
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\1\ According to the investigative file,
Powermedica's Web site advertised that the company offered for
sale various anabolic steroids.
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The same day, another FDA S/A visited the Powermedica Web
site and made an undercover purchase of
[[Page 458]]
another anabolic steroid and schedule III controlled
substance, nandrolone decanoate (100 mg.), by "complet[ing] a
brief medical questionnaire'' and entering his mailing address
and credit card information. Id. at 4. On August 25, 2004, the
S/A received the nandrolone and a prescription sheet which
authorized three refills. Id. The S/A "did not have a physical
examination nor did he speak to a doctor regarding this
prescription at any time before receipt of the medication.'' Id.
Subsequently, one of the FDA S/As, who had since visited
Powermedica's office and purchased human growth hormone (HGH),
introduced a Detective from the Broward County, Florida
Sheriff's Office to Tony Jones, who represented that he was a "clinical
consultant'' for Powermedica.\2\ Id. at 9. The Detective, who
was attempting to make an undercover purchase of Powermedica's
Testosterone Replacement Therapy, which included both
testosterone cypionate, an anabolic steroid and schedule III
controlled substance, and human chorionic gonadotropin, a
non-controlled drug, subsequently met with Jones, completed a
questionnaire, and paid him $175 for a lab test and "doctor's
fee.'' Id. Approximately two weeks after he underwent a blood
test, the Detective went to Powermedica's office and picked up
his order which contained 200 mg./ml. of testosterone cypionate,
needles and syringes.\3\ Id. at 11. The Detective paid $312.10
for his order. Id. Powermedica distributed the drugs to the
Detective notwithstanding that the Detective had not been
physically examined by a physician and no physician had
discussed with him the risks and benefits of using testosterone
cypionate. Id.
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\2\ The investigation also revealed that
Powermedica distributed HGH to the FDA S/A and a Detective
from the Miami-Dade Police Department based on prescriptions
issued by Dr. Almarashi. Almarashi did not physically examine
either the S/A or the Detective, and had not discussed the
risks and benefits of using HGH with either officer. Id. at 6.
Moreover, the FDA agents subsequently seized HGH which had
been shipped to Powermedica from a non-FDA approved
manufacturer in China; these imports violated the Food, Drug
and Cosmetic Act, and the Florida statutes. Id. at 10-11.
While HGH is not a controlled substance, Powermedica's
violations of federal and state laws in distributing and
importing this drug are relevant in assessing whether it would
comply with the Controlled Substances Act.
\3\ The Detective was also given a bag of
Somatropin 6 mg. along with needles and syringes. Id. at 11.
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Following the service of the suspension order, Powermedica
did not contest the State's findings. Nor did it contest the
allegations of the administrative complaints which the State
subsequently filed. Instead, it voluntarily relinquished its
pharmacy permits. See Final Order of Voluntary Relinquishment,
Department of Health v. Powermedica, Inc. (Sept. 15, 2005). On
September 18, 2005, Powermedica also surrendered its DEA
registration.\4\
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\4\ During the investigation of his new
firm's application, Dailey asserted that a Special Agent had
lied to a magistrate about obtaining controlled substances
without prescriptions. Dailey's assertion begs the question of
why he surrendered Powermedica's state license without
contesting the allegations against it which were contained in
the various complaints brought by the State.
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Discussion
Section 303(f) of the Controlled Substances Act provides that
"[t]he Attorney General may deny an application for [a pharmacy]
registration if he determines that the issuance of such
registration would be inconsistent with the public interest.'' 21
U.S.C. 823(f). In making the public interest determination,
the Act requires the consideration of the following factors:
(1) The recommendation of the appropriate State licensing
board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * *
controlled substances.
(3) The applicant's conviction record under Federal or
State laws relating to the manufacture, distribution, or
dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local
laws relating to controlled substances.
(5) Such other conduct which may threaten the public health
and safety.
Id.
"[T]hese factors are * * * considered in the disjunctive.''
Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). I "may rely
on any one or a combination of factors, and may give each factor
the weight [I] deem[] appropriate in determining whether a
registration should be revoked.'' Id. Moreover, I am "not
required to make findings as to all of the factors.'' Hoxie v.
DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also Morall v. DEA,
412 F.3d 165, 173-74 (DC Cir. 2005).
While Respondent is a corporate entity and technically has an
independent legal existence from its officers, DEA has long held
that misconduct committed by a corporation's officers and owners
(in the case of a closely held corporation) is properly
considered in determining whether to revoke an existing
registration, or deny an application for a new registration, of
a corporate entity. See MB Wholesale, Inc., 72 FR 71956, 71958
(2007); Lawson & Sons Pharmacy, 48 FR 16140, 16141 (1983).
In light of Mr. Dailey's ownership of, and role as CEO of
Powermedica, and his ownership of, and role as CEO of
Respondent, I hold that Powermedica's experience in dispensing
controlled substances and record of compliance with Federal and
State laws related to controlled substances is properly
considered in determining whether granting Respondent's
application would be inconsistent with the public interest.
As found above, Powermedica unlawfully distributed anabolic
steroids including stanozol, nandrolone decanoate, and
testosterone cypionate, which are schedule III controlled
substances, on multiple occasions. The distributions were
unlawful because they were based on prescriptions issued by a
physician who did not establish a legitimate doctor patient
relationship with the undercover officers and Dailey/
Powermedica had reason to know that the prescriptions were
illegal. Indeed, the evidence shows that the undercover officers
had no contact at all with Dr. Almarashi and that the officers'
information was routed by Dailey/Powermedica to Almarashi in
order to obtain the prescriptions necessary to dispense the
steroids.
As the State noted in the emergency suspension order, Fla.
Sta. Sec. 465.023(1)(e) "prohibits a pharmacy permittee from
dispensing any medicinal drug based upon [a] prescription when
the pharmacist knows or has reason to believe that the purported
prescription is not based upon a valid practitioner-patient
relationship that included a documented patient evaluation,
including history and a physical examination adequate to
establish the diagnosis for which any drug is prescribed.''
Order of Emergency Suspension at 16 (para. 58). These
distributions likewise violated the CSA. See 21
CFR 1306.04(a) ("A prescription for a controlled substance *
* * must be issued for a legitimate medical purpose by an
individual practitioner acting in the usual course of his
professional practice. The responsibility for the proper
prescribing and dispensing of controlled substances is upon the
prescribing practitioner, but a corresponding responsibility
rests with the pharmacist who fills the prescription.'').
Moreover, Dr. Almarashi was licensed in New York and
maintained his office in Flushing, New York. Yet he was
prescribing to persons in Florida, where he was not licensed. As
previously noted, a prescription issued by a practitioner who is
engaged in the unauthorized practice of medicine is not a
prescription which has been issued in
[[Page 459]]
the usual course of professional practice. See 21
U.S.C. 802(21) ("The term 'practitioner' means a physician *
* * licensed, registered, or otherwise permitted, by * * * the
jurisdiction in which he practices * * * to * * * dispense * * *
a controlled substance.''); United States v. Moore, 423 U.S.
122, 140-41 (1975) ("In the case of a physician, the [CSA]
contemplates that he is authorized by the State to practice
medicine and to dispense drugs in connection with his
professional practice.''); see also United Prescription
Services, Inc., 72 FR 50397, 50407 (2007) ("[A] physician who
engages in the unauthorized practice of medicine under state
laws is not a 'practitioner acting in the usual course of * * *
professional practice' under the CSA.''). I therefore conclude
that Mr. Dailey's/Powermedica's experience in dispensing
controlled substances (factor two) and his/its record of
non-compliance with applicable Federal and State laws (factor
four) amply demonstrate that granting Respondent's application
for a new registration would be "inconsistent with the public
interest.'' 21
U.S.C. 823(f).\5\ Accordingly, Respondent's application will
be denied.
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\5\ In light of my findings with respect to
factors two and four, I conclude that it is unnecessary to
make findings with respect to the remaining factors.
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Order
Pursuant to the authority vested in me by 21
U.S.C. 823(f), as well as 28 CFR 0.100(b) & 0.104, I
order that the application of Wonderyears, Inc., for a DEA
Certificate of Registration as a retail pharmacy be, and it
hereby is, denied. This Order is effective February 5, 2009.
Dated: December 19, 2008.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E8-31414 Filed 1-5-09; 8:45 am]
BILLING CODE 4410-09-P
NOTICE: This is an
unofficial version. An official version of these publications may be obtained
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