Registrant Actions - 2012
[Federal Register Volume 77, Number 148 (Wednesday, August 1, 2012)]
[Notices]
[Pages 45675-45688]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18749]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 11-57]
Margy Temponeras, M.D.; Decision and Order
On December 15, 2011, Administrative Law Judge (ALJ) Timothy D.
Wing issued the attached recommended decision. Neither party filed
exceptions to the decision.
Having considered the entire record, I have decided to adopt the
ALJ's recommended rulings, factual findings, and his legal conclusions,
except as discussed below.\1\ I further hold that the record
establishes that Respondent engaged in acts which are sufficiently
egregious to warrant the revocation of her registration and that she
has not rebutted this conclusion.\2\
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\1\ All citations to the ALJ's recommend decision are to the
slip opinion.
\2\ In discussing the public interest factors of 21 U.S.C.
823(f), the ALJ "conclude[d] that the reference in 21 U.S.C.
823(f)(5) to 'other conduct which may threaten public health and
safety' would as a matter of statutory interpretation logically
encompasses the factors listed in Section 824(a)." ALJ at 19 n.24
(citing Kuen H. Chen, M.D., 58 FR 65401, 65402 (1993)).
To be sure, the Agency decision in Chen stated that "[t]he
administrative law judge has concluded here that the reference in 21
U.S.C. 823(f)(5) to 'other conduct which may threaten the public
health and safety' would as a matter of statutory interpretation
logically encompass the bases listed in 21 U.S.C. 824(a)." 58 FR at
65402. However, whether this constitutes a holding or merely dictum,
Chen is totally devoid of any indication that the traditional tools
of statutory construction (i.e, text, structure, statutory purpose,
and legislative history) were employed in reaching this conclusion.
Indeed, while factor five focuses on "other conduct," several of
the grounds for revocation are based on a registrant's status and do
not require inquiry into the nature of the underlying conduct. See
21 U.S.C. 824(a)(3) (authorizing revocation where registrant "has
had his State license or registration suspended, revoked, or denied
by competent State authority and is no longer authorized" to engage
in controlled substance activities or such sanction has been
recommended by competent state authority); id. Sec. 824(a)(5)
(authorizing revocation where registrant has been excluded or is
subject to exclusion from participating in federal healthcare
programs under mandatory exclusion provisions). In addition,
construing factor five in this manner renders superfluous factor
one, which authorizes the Agency to consider the recommendation of
the state licensing board or disciplinary authority, as well as the
provision of section 823(f) stating that the "[t]he Attorney
General shall register practitioners * * * if the applicant is
authorized to dispense * * * controlled substances under the laws of
the State in which he practices."
Finally, it should be noted that since shortly after the CSA's
enactment and years before section 823(f) was amended to include the
public interest factors, DEA "has consistently held that where a
registration can be revoked under section 824, it can, a fortiori,
be denied under section 823 since the law would not require an
agency to indulge in the useless act of granting a license on one
day only to withdraw it on the next." Serling Drug Co. v. Detroit
Prescription Wholesaler, Inc., 40 FR 11918, 11919 (1975). See also
John R. Amato, 40 FR 22852 (1975) (Denying application where
practitioner's state license had been revoked, holding that section
823(f) "must logically give the Administrator the authority to deny
a registration if the practitioner is not authorized by the State to
dispense controlled substances. * * * To hold otherwise would mean
that all applications would have to be granted only to be revoked
the next day under 21 U.S.C. 824(a)(3). This [A]gency has
consistently held that where a registration can be revoked under
section 824, it can, a fortiori, be denied under section 823.").
Indeed, no court has ever questioned the Agency's longstanding
and consistent interpretation that it has authority to deny an
application on any of the grounds set forth in section 824(a). Cf.
National Muffler Dealers Assn., Inc., v. United States, 440 U.S.
472,477 (2011) ("A regulation may have particular force if it is a
substantially contemporaneous construction of the statute by those
presumed to have been aware of congressional intent."); EEOC v.
Associated Dry Goods Corp., 449 U.S. 590, 600 n.17 (1981) ("a
contemporaneous construction deserves special deference when it has
remained consistent over a long period of time").
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[[Page 45676]]
The ALJ's Footnote 9
Among the allegations raised by the Government were: (1) That
Respondent had failed to include required information on various
prescriptions (such as a patient's address) in violation of 21 CFR
1306.05(a); (2) that she failed to take initial and biennial
inventories of the controlled substances she obtained and dispensed, in
violation of 21 CFR 1304.11(b) & (c); and (3) that she failed to
properly complete various order forms for schedule II controlled
substances (DEA Form 222), in violation of 21 CFR 1305.13(e). ALJ Ex.
1, at 3 (Order to Show Cause). According to the record, the
prescriptions were seized pursuant to a search warrant executed at a
local pharmacy. Tr. 53-55. As for the inventories and DEA 222s, these
were apparently seized during the execution of a search warrant at
Respondent's registered location.
At the hearing, Respondent's counsel requested that the Government
turn over the prescriptions, see Tr. 124-25; some fifty DEA Form 222s,
see id. at 80-81, 353-54; and the daily inventories done by the
employees of Respondent's dispensary. Id. at 423. The Government
objected to each of these requests on the ground that there is no right
to discovery in these proceedings. See id. at 80, 128, 423. The ALJ
denied each of these requests, explaining in his opinion that the
requests were "untimely and unsupported by applicable legal
authority." ALJ at 6 n.9 (citing Roy E. Berkowitz, 74 FR 36,578,
36,760 (2009) (holding that there is no "general right to discovery
under either the APA or DEA regulations") (citing Nicholas A. Sychak,
d/b/a Medicap Pharmacy, 65 FR 75,959. 75,961 (2000))).
While I adopt the ALJ's rulings, I do so only because the requests
were untimely. In his Supplemental Pre-Hearing Ruling, which was issued
on August 5, 2011, the ALJ made clear that "[a]ny requests for
subpoenas by either party are to be filed no later than 4:00 p.m. EDT
on August 26, 2011." ALJ Ex. 8, at 7. Respondent did not comply with
the ALJ's order and instead waited until the hearing to request the
documents. Respondent, however, had notice of the Government's intent
to litigate these issues from the outset of the proceeding; thus, she
cannot claim that she was unaware until the hearing that she would need
the various documents to respond to the allegations.\3\ Because
Respondent failed to timely request the documents, the ALJ properly
denied those requests.\4\
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\3\ Moreover, having reviewed the record, it contains
substantial evidence (as the ALJ found) to support each of these
allegations.
\4\ That there is no general right to discovery in these
proceedings would not have barred a timely request for these
documents. Respondent did not seek broad-based discovery of whatever
the Government had obtained in the course of its investigation, but
rather, specific documents which were clearly relevant and material
to these three allegations because they are the very basis for the
three allegations. Thus, if the requests had been timely, this case
would have been governed by the principle that "[d]iscovery must be
granted if in the particular situation a refusal to do so would so
prejudice a party as to deny him due process." McClellan v. Andrus,
606 F.2d 1278, 1286 (DC Cir. 1979) (noting that report was subject
to discovery in administrative proceeding because it was potentially
"uniquely relevant to appellant's case" and ordering agency to
turn over report to administrative tribunal for in camera review to
determine relevancy and to allow Government to assert any claim of
privilege). See also Echostar Communications Corp. v. FCC, 292 F.3d
749, 756 (DC Cir. 2002) (noting that "McClelland was seeking a
specific document 'uniquely relevant to [his] case' "). See also 5
U.S.C. 555(d) ("Agency subpoenas authorized by law shall be issued
to a party on request and, when required by rules of procedure, on a
statement or showing of general relevance and reasonable scope of
the evidence sought."). See also 21 U.S.C. 875 & 876.
As the Agency has previous noted, under Goldberg v. Kelly, 397
U.S. 254, 270 (1970), " 'where governmental action seriously
injures an individual, and the reasonableness of the action depend
on fact findings, the evidence used to prove the Government's case
must be disclosed to the individual so that he has an opportunity to
show that it is untrue.' " Beau Boshers, M.D., 76 FR 19401, 19403
(2011) (quoting 397 U.S. at 270). Moreover, the Supreme Court has
further explained that " 'the Due Process Clause forbids an agency
to use evidence in a way that forecloses an opportunity to offer a
contrary presentation.' " Id. (quoting Bowman Transp., Inc., v.
Arkansas-Best Freight System, Inc., 419 U.S. 281, 288 n.4 (1974)).
Where the Government alleges that one has failed to properly
maintain or complete required records, it cannot seize those records
and then refuse to turn them over in response to a timely request
for them.
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The ALJ's Legal Conclusions Regarding Respondent's Operation of a
Dispensary
The gravamen of the Government's case was Respondent's operation of
a dispensary, which in the Government's view was illegal because
Respondent dispensed thousands of controlled substance prescriptions
which were issued by her father, who was not registered at the location
of Respondent's practice, and Respondent does not hold a pharmacy
registration under the Controlled Substances Act. See ALJ Ex. 1, at 1.
The evidence showed that beginning in either November or December 2008,
Respondent began dispensing controlled substances at her practice
location and that during the period in which it operated, the
dispensary filled 3,397 prescriptions for controlled substances issued
by her father, most of which were for oxycodone, a schedule II
narcotic, and Xanax, a schedule IV benzodiazepine. Tr. 210-11. In
addition, the evidence showed that the prescriptions were filled and
delivered to the patients by employees who were not licensed as
pharmacists.
The ALJ concluded that Respondent violated Ohio law because she was
not licensed as a Terminal Distributor of Dangerous Drugs and did not
fall within the exemption provided under state law for "a business
practice with a sole shareholder who is a licensed health
professional." See ALJ at 21 (citing Ohio Rev. Code Ann. Sec.
4729.51(B)(1)(j)).\5\ The ALJ based his reasoning in part on the
evidence showing "that Respondent established, solely owned, and
operated two limited liability companies, Unique Pain Management ([her]
medical practice) and Unique Relief ([her] dispensary), both of which
are located at 418 Center Street, Wheelersburg, Ohio," and that the
two entities were "physically separate" from each other, although
Respondent could observe the dispensary through a system of security
cameras and a monitor she maintained in her office. Id. The ALJ also
noted that the dispensary also filled "a significant
[[Page 45677]]
portion" of the prescriptions issued by Respondent's father. Id. at
22.
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\5\ The ALJ also noted that an Ohio Board of Pharmacy guidance
document, which interprets this provision, states that "if the
business practice has a single prescriber * * * who is the sole
shareholder, member, or owner of the practice, then this business
practice is not required to be licensed as a Terminal Distributor of
Dangerous Drugs with the Ohio Board of Pharmacy. Previously, this
exemption was only for a prescriber who practices as a Sole
Proprietor." ALJ at 21 (quoting Ohio State Board of Pharmacy,
Licensing Issues For Prescribers--Updated (July 2008)).
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Continuing, the ALJ reasoned that:
[t]o the extent Ohio law permits a sole practitioner to dispense
or personally furnish controlled substances directly to a patient
without a Terminal Distributor license, Respondent's dispensing
practices were well outside of those parameters. Respondent
established a distinctly separate legal entity to fill prescriptions
that was physically separate from Respondent's medical office.
Furthermore, Respondent's dispensary was not limited to filling
prescriptions issued only by Respondent, but also routinely filled
prescriptions issued by Respondent's father, notwithstanding the
fact that Respondent did not have a Terminal Distributor license as
required by state law.
Id. (citing Ohio Rev. Code Ann. Sec. Sec. 4729.51(B)(1)(j) &
4729.551).
However, I need not decide whether under Ohio law, Respondent's
creation of "a distinctly separately legal entity to fill
prescriptions," id., required her to hold a Terminal Distributor
license, because the Government did not raise this issue in either the
Order to Show Cause or its pre-hearing statements. Nor are the few
fragments of testimony regarding this license (which primarily involved
the Board of Pharmacy Compliance Agent's statements regarding the
reason for his February 2011 visit to the dispensary) sufficient to
conclude that the parties litigated the issue by implied consent.
Indeed, any such conclusion is belied by the fact that when
Respondent's counsel attempted to question the Board's Compliance Agent
about whether a Board employee had told Respondent's staff that she did
not need to have a Terminal Distributor's License, the Government
objected that the questions were outside the scope of direct
examination as well as irrelevant and the ALJ sustained the
objections.\6\ Tr. 345-47.
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\6\ Subsequently, Respondent succeeded in eliciting testimony
from one of her employees regarding a phone conversation he had with
an employee of the pharmacy board regarding whether she was required
to have a Terminal Distributor's license. Tr. 567. However, given
that the Government had already argued that this line of questioning
was irrelevant, which it was in light of the Government's failure to
disclose its intent to litigate the issue in either the Show Cause
Order or its pre-hearing statement, I conclude that this testimony
is not enough to establish implied consent and that the issue is not
properly before the Agency.
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Under these circumstances, it is clear that the issue was not
"fairly and fully litigated at [the] hearing" and therefore cannot be
the basis for a sanction. Yellow Freight System, Inc., v. Martin, 954
F.2d 353, 358 (6th Cir. 1992). As the Sixth Circuit further explained:
[A]n agency may not base its decision upon an issue the parties
tried inadvertently. Implied consent is not established merely
because one party introduced evidence relevant to an unpleaded issue
and the opposing party failed to object to its introduction. It must
appear that the parties understood the evidence to be aimed at the
unpleaded issue.
Id. (citing MBI Motor Co., Inc. v. Lotus/East, Inc., 506 F.2d 709,
711 (6th Cir. 1974)).
Moreover, "where the Government's case 'focus[es] on another issue
and [the] evidence of [an] uncharged violation [is] "at most
incidental,' " the Government has not satisfied its constitutional
obligation to provide a full and fair opportunity to litigate the issue
and it cannot rely on the incidental issue as a basis for imposing a
sanction." CBS Wholesale Distributors, 74 FR 36746, 36750 (2009)
(quoting Pergament United Sales, Inc., v. NLRB, 920 F.2d 130, 136 (2d
Cir.1990) (quoting NLRB v. Majestic Weaving Co., 355 F.2d 854, 861-62
(2d Cir. 1966))). Thus, because the issue was not properly raised and
the evidence was at most incidental, I reject the ALJ's legal
conclusion (and his discussion of Ohio law) that Respondent violated
Ohio law because she failed to obtain an Ohio Terminal Distributor's
license.
However, the ALJ also concluded that Respondent violated federal
law because she "dispensed or directed and authorized the dispensing
of controlled substances from an unregistered location on numerous
occasions between November 2008 and May 2011." ALJ at 24 (citing 21
U.S.C. 822(a)(2) & (e); id. Sec. 841; 21 CFR 1306.06). The ALJ
offered no further explanation for this conclusion. While I hold that
the ALJ erred in concluding that she violated section 822(e), which
requires "[a] separate registration * * * at each principal place of
business or professional practice where the applicant * * * dispenses
controlled substances," 21 U.S.C. 822(e), the record clearly supports
a finding that Respondent's dispensing activities violated the CSA.
The evidence of record shows that Respondent's dispensary was
located at the same address as her medical practice. This was also the
address at which Respondent was registered with the Agency.\7\ See GX
1. Thus, Respondent did not violate the requirement that she obtain a
separate registration for each principal place of professional practice
where she dispensed controlled substances.
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\7\ There is no evidence that the dispensary had a separate
suite number as might be the case in a large medical office
building.
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Rather, Respondent violated the CSA because she exceeded the
authority granted by her registration when she dispensed controlled
substance prescriptions issued by her father without holding a pharmacy
registration. Under 21 U.S.C. 822(b), "[p]ersons registered by the
[Agency] under this subchapter to * * * dispense controlled substances
* * * are authorized to possess * * * or dispense such substances * * *
to the extent authorized by their registration and in conformity with
the other provisions of this subchapter." (emphasis added).
Under Federal law and DEA regulations, a registered physician is
authorized to prescribe, administer or "dispense directly" to her
patients in the course of professional practice. See 21 CFR 1306.11(b)
("An individual practitioner may administer or dispense directly a
controlled substance listed in Schedule II in the course of his
professional practice without a prescription. * * *"); id. Sec.
1306.21(b) ("An individual practitioner may administer or dispense
directly a controlled substance listed in Schedule III, IV, or V in the
course of his/her professional practice without a prescription * *
*."). See also 21 U.S.C. 829 ("Except when dispensed directly by a
practitioner, other than a pharmacist, to an ultimate user, no
controlled substance in schedule II, which is a prescription drug under
the Federal Food, Drug, and Cosmetic Act * * * may be dispensed
without" a prescription); id. Sec. 829(b) (schedule III & IV).
In addition, DEA regulations provide that "[a] prescription for a
controlled substance may only be filled by a pharmacist, acting in the
usual course of his professional practice and either registered
individually or employed in a registered pharmacy, or registered
institutional practitioner." 21 CFR 1306.06. Accordingly, Respondent,
who did not hold a pharmacy registration, exceeded the authority of her
registration because she authorized her employees to fill prescriptions
issued by her father.\8\ See 21 U.S.C. 822(b); id. Sec. 841(a)
(rendering unlawful the knowing or intentional dispensing of a
controlled substance "[e]xcept as authorized by this subchapter").
And in filling her father's prescriptions, she also violated 21 CFR
1306.06.
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\8\ The evidence also showed that Respondent's father did not
hold a registration at the address of Respondent's dispensary.
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So too, Respondent violated Ohio law because she allowed unlicensed
[[Page 45678]]
personnel to fill the prescriptions and failed to personally furnish
the controlled substances to her patients.\9\ See ALJ at 23-24. As the
ALJ found, Respondent used unlicensed personnel to fill the
prescriptions which her dispensary delivered to her patients. While
Ohio law exempts "a prescriber," which includes a physician who is
authorized to practice medicine and prescribe drugs, see Ohio Rev. Code
Ann. Sec. 4729.01(I), from the prohibition against the unauthorized
practice of pharmacy under Ohio Rev. Code Ann. Sec. 4729.28, the
exemption requires that the physician "personally furnish [ ] the
[prescriber's] patients with drugs, within the prescriber's scope of
professional practice." Id. Sec. 4729.29(A)(1).\10\ Moreover,
"[w]hen a prescriber personally furnishes drugs to a patient pursuant
to [the exemption], the prescriber shall ensure that the drugs are
labeled and packaged in accordance with state and federal drug laws and
any rules and regulations adopted pursuant to those laws." Id. Sec.
4729.29(B).
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\9\ In contrast to the issue of whether Respondent was required
to hold an Ohio Terminal Distributor's license, the Government
provided notice of its intent to litigate the issue of Respondent's
use of unlicensed individuals to fill controlled substance
prescriptions. ALJ Ex. 5, at 5.
\10\ This citation, as well as the citation to section
4729.29(B), are to the provisions which were in effect during the
period at issue here.
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Respondent did present evidence that she had a security camera
system and monitor in her office which allowed her to observe the
operation of her dispensary. See Resp. Br. 3 (citing Tr. 400). However,
given that she was actively seeing patients, her counsel's suggestion
that she observed the actually delivery of the drugs to the patients,
and thus was in compliance with Ohio's requirement that she
"personally furnish" the drugs, is, as a factual matter, ludicrous. I
thus hold that she violated Ohio law because she did not personally
furnish the controlled substances to her patients.\11\
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\11\ As for the other violations, I agree with the ALJ's
conclusions that Respondent failed to properly complete DEA Form
222s for the schedule II controlled substances she purchased, and
that the records were not kept separate from other records as
required by DEA regulations. See ALJ at 25-26 (citations omitted). I
also agree with the ALJ's conclusion that Respondent failed to
include required information on some prescriptions. See ALJ at 30
(citing GX 7).
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In her brief, Respondent further claims that she "was ill-advised
by counsel" as to whether she needed a pharmacy registration "and was
specifically told she was doing everything correctly with respect to
operating the dispensary." Resp. Br. 7. Respondent then maintains that
"[i]f a mistake was made it was not the Respondent's." Id. While the
ALJ recounted the testimony of one Respondent's employees regarding the
purported legal advice she received, see ALJ at 17 (citing Tr. 545,
559-60), he did not address Respondent's contention.
I do and I reject the contention. Even crediting the testimony of
Respondent's employee that he had a discussion with an attorney
regarding the dispensary's compliance with DEA regulations and was told
that "we were doing it perfectly," Tr. 545, the employee's testimony
was exceedingly vague as to what issues were discussed and does not
establish that Respondent discussed whether she needed to obtain a DEA
pharmacy registration because she was filling the prescriptions issued
by her father. Thus, even were the Agency to recognize a defense of
good faith reliance on legal advice, the defense fails here because
Respondent has not established that there was a "full disclosure of
all pertinent facts" to the attorney and that her reliance was "in
good faith." United States v. Lindo, 18 F.3d 353, 356 (6th Cir.1994);
see also United States v. Painter, 314 F.2d 939, 943 (4th Cir. 1963).
Indeed, the contention is belied by the employee's testimony that he
really "didn't trust some of the opinions [he] was getting from" the
attorney and that upon looking at the DEA rules, he determined that
Respondent's father had to be registered at her clinic if narcotics
were stored there.\12\ Tr. 559-60. Moreover, because Respondent invoked
her Fifth Amendment privilege and declined to answer any questions
(other than to state her name and that she had a registration as an
individual practitioner), she cannot establish that she relied in good
faith on the attorney's advice.
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\12\ Having concluded that the Government did not provide
adequate notice of its intent to litigate the issue of whether
Respondent was required to hold a Terminal Distributor's license, it
is unnecessary to decide the issue of whether Respondent properly
relied on the statement of an Ohio Pharmacy Board employee that
Respondent did not need to hold this license. Tr. 548.
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The Inventory Violations
The ALJ found that Respondent violated DEA regulations requiring
that she take initial and biennial inventories. ALJ at 27-29. While I
agree that the evidence establishes various violations, I find much of
the ALJ's discussion of the evidence and his reasoning confusing.
The ALJ found that Respondent did not have an initial inventory as
required by DEA regulations. See ALJ at 27 (citing 21 CFR 1304.11(b) &
(c)). While I adopt this finding, I do so based solely on the evidence
that when the Board of Pharmacy Compliance Agent conducted his February
9, 2011 inspection, Respondent's dispensary manager stated that "one
had not been done." Tr. 314. Under Federal law, "every registrant * *
* shall * * * as soon * * * as such registrant first engages in the * *
* dispensing of controlled substances, and every second year
thereafter, make a complete and accurate record of all stocks thereof
on hand." 21 U.S.C. 827(a). Moreover, under DEA regulations, "[i]n
the event a person commences business with no controlled substances on
hand, he/she shall record this fact as the initial inventory." 21 CFR
1304.11(b). While under DEA regulations, a registrant is required to
keep, and make available for inspection, an inventory for only two
years, see 21 U.S.C. 827(b), a period which, given the evidence that
Respondent opened the dispensary in November or December 2008, would
have lapsed at the time of the February 2011 inspection, the statement
of the dispensary manager is sufficient to find that this violation
occurred.
Moreover, by the date of the February 2011 Pharmacy Board
inspection, Respondent was required to have performed a biennial
inventory. See id. Sec. 827(a); 21 CFR 1304.11(c). However, while
Respondent had an "on-hand inventory" that "was within the computer
itself," Tr. 314, this did not comply with DEA regulations which
require that an inventory "be maintained in written, typewritten, or
printed form." 21 CFR 1304.11(a). And while there is evidence showing
that during the May 2011 search, documents that were labeled as
"biannual inventories" were seized, the fact remains that Respondent
was required to have on hand a proper biennial inventory at the time of
the February 2011 inspection.\13\
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\13\ Had Respondent produced at the February 2011 inspection an
inventory which complied with 21 CFR 1304.11(a) & (c), I would not
place any weight on the fact that the inventory was labeled as a
"biannual" rather than "biennial."
The ALJ further noted that it was "[o]f significance, [that]
no invoices, DEA Form 222s, or dispensing logs were used to conduct
the biennial inventory." ALJ at 28 (citing Tr. 480-82). However,
while the CSA requires that a registrant retain its invoices, form
222s, as well as a dispensing log, for at least two years, see 21
U.S.C. 827(b), taking an inventory does not require doing anything
more than counting the drugs on hand and making a record which
includes the information required under 21 CFR 1304.11(e).
The ALJ further concluded that "no compliant * * *tory was * *
*the May 17, 2011 search." ALJ at 28. However, the DI who seized
the inventories during the May 17, 2011 search did not offer any
testimony that the inventories were not compliant other than because
they were not done within two years of the opening of the
dispensary. Tr. 84. The ALJ further noted the testimony of one of
Respondent's employees "that the process to conduct a biennial
inventory consisted of [her] husband using a computer printout while
she physically counted the controlled substances, adding that she
did not 'document anything' from the inventory." ALJ at 28 (quoting
481-82).
It should be noted that even if the counts matched the
printout, at a minimum, the inventories would have been required to
document whether they were done on the opening of business or on the
closing of business. See 21 CFR 1304.11(a). However, because the
inventories were not submitted into evidence, there is no basis for
concluding that they did not contain the required information.
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[[Page 45679]]
Conclusion
Having adopted the ALJ's conclusion (as modified herein) that
Respondent violated the CSA by dispensing thousands of controlled
substance prescriptions issued by her father and thus acted outside of
the authority granted by her registration, I conclude that this conduct
is egregious and warrants the conclusion that she has committed acts
which render her continued registration inconsistent with the public
interest and is sufficient by itself to support the revocation of her
registration. See 21 U.S.C. 824(a)(4). The additional violations
established on this record--her failure to have inventories, failure to
complete form 222s, failure to include required information on
prescriptions, her commingling of schedule II records with other
records, as well as her state law violations of failing to personally
furnish the drugs to her patients--buttress this conclusion. Because I
further adopt the ALJ's findings that Respondent has presented no
evidence that she accepts responsibility for her misconduct, I will
order that her registration be revoked and that any pending application
be denied.\14\
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\14\ The ALJ noted that Respondent did not present "any
evidence demonstrating that she will not engage in future
misconduct." ALJ at 31. This is not entirely accurate as the record
suggests that following the February 2011 visit of the Pharmacy
Board's Compliance Agent, her employees did take inventories.
However, Respondent did not put on any other evidence as to remedial
measures and her failure to testify warrants, as the ALJ held, the
adverse inference that she does not accept responsibility for her
misconduct. See id. (citing cases).
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Order
Pursuant to the authority vested in me by 21 U.S.C. 824(a)(4) and
28 CFR 0.100(b), I order that DEA Certificate of Registration
BT5598214, issued to Margy Temponeras, M.D., be, and it hereby is,
revoked. I further order that any pending application of Margy
Temponeras, M.D., to renew or modify her registration, be, and it
hereby is, denied. This Order is effective August 31, 2012.
Dated: July 24, 2012.
Michele M. Leonhart,
Administrator.
D. Linden Barber, Esq. & Frank Mann, Esq., for the Government.
Bradley Davis Barbin, Esq., for the Respondent.
Recommended Ruling, Findings of Fact, Conclusions of Law and Decision
of the Administrative Law Judge
I. Introduction
Timothy D. Wing, Administrative Law Judge. This proceeding is an
adjudication pursuant to the Administrative Procedure Act (APA), 5
U.S.C. 551 et seq., to determine whether the Drug Enforcement
Administration (DEA, Agency or Government) should revoke a physician's
DEA Certificate of Registration (COR) as a practitioner pursuant to 21
U.S.C. 824(a)(4) and deny, pursuant to 21 U.S.C. 823(f), any pending
applications for renewal or modification thereof and any application
for a new COR. Without this registration, Margy Temponeras, M.D.
(Respondent), of Wheelersburg, Ohio, will be unable to lawfully
prescribe, dispense or otherwise handle controlled substances in the
course of her practice.
On May 16, 2011, the Administrator, DEA, issued an Order to Show
Cause and Immediate Suspension of Registration (OSC/IS), which was
personally served upon Respondent on May 17, 2011.\1\ The OSC/IS
immediately suspended Respondent's DEA COR as a practitioner, and also
provided notice to Respondent of an opportunity to show cause as to why
the DEA should not revoke Respondent's COR, pursuant to 21 U.S.C.
824(a)(4), and deny, pursuant to 21 U.S.C. 823(f), any pending
applications for renewal or modification thereof and any applications
for a new COR, alleging that Respondent's continued registration is
inconsistent with the public interest as that term is defined in 21
U.S.C. 823(f).
---------------------------------------------------------------------------
\1\ ALJ Exs. 1, 3.
---------------------------------------------------------------------------
The OSC/IS alleged that Respondent is registered as a practitioner
authorized to handle controlled substances in Schedules II through V
under DEA COR BT5598214.
The OSC/IS further alleged in relevant part: \2\
---------------------------------------------------------------------------
\2\ The Government represented prior to hearing that it intended
to proceed against Respondent only with regard to allegations
contained in numbered paragraphs two, eight, nine, and ten of the
OSC/IS.
---------------------------------------------------------------------------
That between approximately January 1, 2007 and November 3, 2009,
Respondent made approximately 3,397 unauthorized distributions of
controlled substances. These distributions from Respondent's registered
location were purportedly based on prescriptions issued by Dr. John
Temponeras, who is registered with DEA as a practitioner in Portsmouth,
Ohio. Respondent is not registered with DEA as a pharmacy. All in
violation of 21 U.S.C. 841 and 21 CFR 1306.06;
That Respondent failed to take an initial inventory and biennial
inventories of the controlled substances in the dispensary that
Respondent operated in violation of 21 CFR 1304.11(b) and (c);
That Respondent failed to make and keep complete and accurate
records of the receipt of controlled substances by, among other things,
failing to complete DEA Form 222 with the amount and date received of
controlled substances in violation of 21 CFR 1305.13(e); and
That Respondent frequently issued prescriptions for controlled
substances that did not contain all of the information required by 21
CFR 1306.05(a).\3\
---------------------------------------------------------------------------
\3\ The section requires in relevant part that "[a]ll
prescriptions for controlled substances shall * * * bear the full
name and address of the patient * * * [and] directions for use * *
*."
---------------------------------------------------------------------------
Following prehearing procedures, a hearing was held in Cincinnati,
Ohio between September 13, 2011, and September 14, 2011, with the
Government and Respondent each represented by counsel. Both parties
called witnesses to testify and both introduced documentary evidence.
After the hearing, both parties filed proposed findings of fact,
conclusions of law, and argument. All of the evidence and post-hearing
submissions have been considered, and to the extent the parties'
proposed findings of fact have been adopted, they are substantively
incorporated into those set forth below.
II. Issue
Whether the record establishes that Respondent's DEA COR BT5598214
as a practitioner should be revoked and any pending applications for
renewal or modification of that registration should be denied on the
grounds that Respondent's continued registration would be inconsistent
with the public interest as that term is used in 21 U.S.C. 824(a)(4)
and 823(f).
III. Evidence and Incorporated Findings of Fact \4\
---------------------------------------------------------------------------
\4\ In addition to the evidence discussed in this Section,
additional evidence and findings of fact are discussed in later
Sections of this Recommended Decision.
---------------------------------------------------------------------------
I find, by a preponderance of the evidence, the following facts:
[[Page 45680]]
A. The Government's Evidence
The Government's evidence included testimony from five witnesses:
Respondent; DEA Diversion Investigator (DI) Christopher Kresnak (DI
Kresnak); DI Paula Albert (DI Albert); Ohio State Board of Pharmacy
Compliance Agent Joseph Kinneer (Agent Kinneer); and DI Stephanie
Burkhart (DI Burkhart). In addition to testimonial evidence, the
Government also introduced various documentary exhibits, to include:
Respondent's COR record; \5\ three DEA Form 222 purchaser records;\6\
copies of prescriptions issued by Respondent between August and
November 2006; \7\ and a document reflecting standard procedures for
Unique Pain Management.\8\
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\5\ Gov't Ex. 1.
\6\ Gov't Ex. 6.
\7\ Gov't Ex. 7.
\8\ Gov't Ex. 8.
---------------------------------------------------------------------------
Respondent was called to testify but refused to answer any
questions related to the relevant allegations in the OSC/IS by
asserting her Fifth Amendment privilege. (Tr. 35-36; 41-42.)
DI Kresnak testified in substance that he has approximately eight
years of experience with DEA as a DI. (Tr.45.) DI Kresnak testified
that Respondent is registered with DEA as a practitioner under DEA COR
BT5598214 with an expiration date of November 30, 2012, and a current
status listed as "under suspension." (Tr. 47; Gov't Ex. 1.) DI
Kresnak further testified that Respondent has never held any other type
of DEA registration, including a pharmacy registration. (Tr. 48.)
Respondent has never been registered with the State of Ohio as a
pharmacist and has never held a pharmacy license in Ohio. (Id.)
DI Kresnak next testified that Respondent owns and operates two
limited liability companies-her medical practice, Unique Pain
Management, and her dispensary, Unique Relief. (Tr. 48-49.) Both of
Respondent's businesses are located in the same building at 418 Center
Street, Wheelersburg, Ohio. (Tr. 49.) DI Kresnak testified that he was
present inside both businesses on May 17, 2011, and he described the
physical layout of the location to include Respondent's office on the
far left hand corner from the entrance, with the "dispensary* * * on
the right-hand side of the building, * * *." (Tr. 50-51.) DI Kresnak
testified that he interviewed Respondent on that same day, and in
response to a question about why the dispensary was operating,
Respondent "said words to the effect that many of the local pharmacies
stopped filling for her prescriptions and that she wanted to provide a
low-cost convenience for her patients." (Tr. 52.)
DI Kresnak also testified that pursuant to a search warrant at
Prime Pharmacy Group d/b/a Medi-Mart Pharmacy, in Portsmouth, Ohio, he
obtained prescriptions covering the time period 2005 to 2006 for
Schedule III through V controlled substances, and identified twelve
controlled substance prescriptions issued by Respondent. (Tr. 53, 54-
55.) The twelve prescriptions related to more than one patient, but DI
Kresnak did not know how many patients exactly, nor could he recall any
of the patients' names.\9\ (Tr. 118, 188.) DI Kresnak testified that of
the twelve prescriptions, only one was compliant with DEA regulations.
Eleven were noncompliant because they lacked a patient address. (Tr.
54; 123-24.)
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\9\ None of the twelve prescriptions were produced by the
Government at hearing, and DI Kresnak was uncertain if any of the
twelve were the same as those contained in Government Exhibit 7.
(Tr. 118-20.) Respondent requested production of the records at
hearing and the Government objected, arguing in substance the lack
of legal authority for such a discovery request. I denied
Respondent's discovery request since it was untimely and unsupported
by applicable legal authority. There is no "general right to
discovery under either the APA or DEA regulations, but rather only a
limited right to receive in advance of hearing the documentary
evidence and summaries of the testimony which the Government intends
to rely upon." Roy E. Berkowitz, M.D., 74 FR 36,758, 36,760 (DEA
2009) (citing Nicholas A. Sychak, d/b/a Medicap Pharmacy, 65 FR
75,959, 75,961 (DEA 2000). Respondent made various untimely requests
for discovery throughout hearing with regard to other documents,
such as original Form 222s, which were denied for similar reasons.
---------------------------------------------------------------------------
DI Kresnak next explained that DEA Form 222s are used by industry
to order Schedule II controlled substances, and are issued to
registrants by DEA. (Tr. 55.) DI Kresnak testified that a DEA Form 222
contains, among other information, the name and address of a
registrant, "what the registrant is authorized to order," and a
serial number. (Tr. 56.) A DEA Form 222 consists of three copies: the
"brown sheet," which goes to the distributor; a carbonated second
"green" copy, which also goes to the distributor; and a "blue"
copy, which is maintained at the registrant or practitioner's
registered address when the registrant or practitioner orders Schedule
II controlled substances. (Tr. 56-57.) DI Kresnak further explained
that the distributor completes relevant information on the Form 222 at
time of shipping, to include the National Drug Code (NDC) and number of
controlled substances shipped. (Tr. 58.) The distributor then sends the
green carbonated copy to the DEA office where the distributor is
located. (Tr. 58.)
DI Kresnak testified that he reviewed approximately fifty DEA Form
222s seized from Respondent's dispensary, and on approximately six to
ten forms he observed various discrepancies:
Many of them weren't filled out properly, missing information.
Several of them didn't even indicate whether a shipment had been
received. One * * * just doesn't reflect anything. There were
several, maybe seven lines filled out on it and there's nothing
indicating any product was received.
(Tr. 60.) DI Kresnak compared the green copies of DEA Form 222s sent to
DEA by the distributor with those seized from Respondent's dispensary,
and testified that he recalled a specific discrepancy:
I observed one particular 222 * * * where the distributor
indicated that they [sic] did not fill the order. The blue copy of
the 222, which is found in the dispensary, which is required by the
Code to fill out how many is [sic] received, indicated that there
were 60 received. There were 60 ordered. The blue copy was
indicating 60 received, but the distributor's copy to DEA
indicate[d] they did not fill that order.
(Tr. 63.) DI Kresnak further testified that he reviewed data from DEA's
Automated Reports and Consolidated Order System (ARCOS),\10\ which
confirmed that the information reflected on the distributor's DEA Form
222 was accurate. (Tr. 63-64.)
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\10\ "Registrants are also required to report records of sales
or acquisitions of controlled substances in Schedules I and II, of
narcotic controlled substances listed in Schedules III, IV and V,
and of psychotropic controlled substances listed in Schedules III
and IV with the DEA's Automation of Reports and Consolidated Orders
System (ARCOS). 21 CFR 1304.33(c); 21 U.S.C. [Sec. ] 827(d). These
reports must be filed every quarter not later than the 15th day of
the month succeeding the quarter for which it is submitted. 21 CFR
1304.33(b)." Easy Returns Worldwide, Inc. v. United States, 266 F.
Supp. 2d 1014, 1016 (E.D. Mo. 2003).
---------------------------------------------------------------------------
DI Kresnak also testified about three specific DEA Form 222s seized
from Respondent's dispensary on May 17, 2011, which he found to be
deficient. (Tr. 64-65; Gov't Ex. 6.) DI Kresnak testified that one was
deficient "[i]f these drugs were received * * * [because] a date
received is omitted." (Tr. 65; Gov't Ex. 6, at 1.) A second form is
deficient because the "number of packages received is omitted and the
date received is omitted." (Tr. 66; Gov't Ex. 6, at 2.) A third form
is deficient because the "number of packages is omitted on both items
and the date received." (Tr. 66; Gov't Ex. 3, at 3.) DI Kresnak
further testified somewhat tepidly with regard to whether the
controlled substances were actually shipped to Respondent, that he
"believed they were" further explaining that he believed "we found
[[Page 45681]]
documentation that these were shipped, yes." \11\ (Tr. 82.)
---------------------------------------------------------------------------
\11\ DI Kresnak's testimony was further qualified by his
statement that "[w]e found invoices that reflect some of these."
(Tr. 83.) Additionally, DI Kresnak explained that ARCOS reports
indicated shipments of the relevant controlled substances to
Respondent. (Tr. 134-36.)
---------------------------------------------------------------------------
DI Kresnak testified that during the first two years that
Respondent operated her dispensary, the majority of Respondent's
ordering was completed through an electronic DEA controlled substance
ordering system (CSOS), rather than using paper Form 222s. (Tr. 195-
96.)\12\
---------------------------------------------------------------------------
\12\ 21 CFR1300.03. DI Kresnak explained that CSOS is only for
Schedule II controlled substances and is "used to eliminate paper
flow." (Tr. 194.)
---------------------------------------------------------------------------
DI Kresnak next testified that during the search of Respondent's
dispensary, documents related to inventories were found, to include one
marked opening inventory, which "indicated that the date that they
opened the dispensary there was a zero inventory." (Tr. 83.) "No
biennial inventory was ever found." (Tr. 84.) Rather, several
documents entitled "Biannual Inventories" were found in a folder
marked "DEA inventories." (Tr. 144.) DI Kresnak testified that
Respondent's dispensary opened "sometime in November 2008, maybe
December 2008." (Tr. 99.) Although DI Kresnak could not recall all of
the details, he testified that the inventories appeared to be computer
generated, listing the drugs on the far left and dollar values in
another column. DI Kresnak did not know what the dollar values
represented. He also testified that each inventory was marked
"biannual," contained a date, and appeared to be signed by
Respondent. (Tr. 136-137.) DI Kresnak testified that as a result of his
investigation he determined that "there was one particular oxycodone
product that 100% was missing for the month of April, 2011." (Tr.
150.) DI Kresnak further explained that he does not "recall the number
of dosages * * * missing * * * without referring to the audit." \13\
(Tr. 153.) DI Kresnak testified that he has not seen any inventories in
electronic format seized from Respondent, but noted that he has not as
yet looked for any. (Tr. 173.)
---------------------------------------------------------------------------
\13\ No audit was produced at hearing.
---------------------------------------------------------------------------
DI Kresnak next testified that Respondent and Respondent's father,
Dr. John Temponeras, were the only practitioners who issued
prescriptions for controlled substances in Schedules II through V that
were filled at Respondent's dispensary. (Tr. 101.) DI Kresnak further
testified that Dr. John Temponeras had previously been a DEA registrant
with a registered location in Portsmouth, Ohio. DI Kresnak interviewed
Dr. John Temponeras regarding his application for a DEA registration at
Respondent's Center Street location in Wheelersburg, Ohio, and learned
"he had written prescriptions [for controlled substances] that were
filled at the dispensary, and he basically said he was needing a DEA
registration at that location because his daughter said he needed one
there." (Tr. 102.)
DI Albert testified in substance that she has eleven years of
experience with DEA as a diversion investigator. DI Albert testified
that she was present at Respondent's business location in Wheelersburg,
Ohio, on May 17, 2011, assisting in the execution of a federal search
warrant and service of the OSC/IS. (Tr. 202.) DI Albert described the
location as "a medical clinic and a--I guess, a dispensary." (Tr.
202.) By dispensary, DI Albert testified that she meant "[t]hey filled
prescriptions and dispense[d] medication to patients." (Id.) The
location was described as having the doctor's office on the left of the
building, and on the right after passing through a door there was
another lobby and "[i]nside that lobby there was a set of windows with
thick glass, and behind those windows were [sic] the dispensary." (Tr.
203.)
DI Albert further testified that Darryl Leadingham (Mr. Leadingham)
and Sue Leadingham (Mrs. Leadingham) were working in the dispensary on
May 17, 2011. DI Albert interviewed Mr. Leadingham regarding his
responsibilities in the pharmacy, and learned that "he was responsible
for the computer system, the security system in the whole building, the
cameras. * * * [H]e ordered the controlled substances that were
dispensed out of the dispensary, and he also worked as far as entering
patient information into the computer system, printing labels,
dispensing the controlled substances, billing patients' insurance, * *
*." (Tr. 203-04.) In terms of dispensing, Mr. Leadingham indicated
that patients would bring a physical hard copy prescription that either
Respondent or Respondent's father had issued with an original
signature. The information was entered in the computer system which
would generate three labels, the first for the prescription bottle,
second for the original hard copy prescriptions, and third on the
outside bag containing all of the bottles of medicine distributed. (Tr.
208.)
DI Albert testified that Mrs. Leadingham similarly stated that
"she was there to dispense the medication and put the information,
print the labels and bill the insurance or accept cash." (Tr. 209.) DI
Albert further testified that both Mr. Leadingham and Mrs. Leadingham
stated during the May 17, 2011 interview:
Dr. John Temponeras had filled in and had seen [Respondent's]
patients and that there were prescriptions that patients brought to
the dispensary with [Dr. John Temponeras'] name on them. And Darryl
Leadingham told me that at some point he figured out that it was no
longer--or that they shouldn't be doing that and that he had told
[Respondent] that her father needed to get his own DEA registration
for that location.
(Tr. 213.)
DI Albert testified that based on information contained within the
Ohio Automated Rx Reporting System (OARRS),\14\ the only prescriptions
filled at the dispensary were issued by Respondent or Respondent's
father. (Tr. 209.) DI Albert testified that OARRS data reflected that
from November or December 2008 until 2011, Respondent's dispensary
filled approximately 3,397 prescriptions issued by Respondent's father
for controlled substances, "mostly oxycodone products and Xanax or the
Schedule IV." (Tr. 210-11.) Regarding prescriptions issued by
Respondent, DI Albert testified in April 2010 alone, Respondent
"filled 500 prescriptions at her dispensary, which came out to--after
I compared that to other pharmacies, it was over eighty-three percent
of her prescriptions were filled by herself." (Tr. 211.) DI Albert did
not know why eighty-three percent of the patients chose to go to
Respondent's dispensary and no cost analysis of pharmacies in the
region was conducted by DI Albert. (Tr. 231.)
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\14\ DI Albert testified that OARRS is a prescription monitoring
system run by the Ohio Board of Pharmacy based on information
submitted by pharmacies. (Tr. 209-10.) See also Ohio Admin. Code R.
4729-37-03 (2011).
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DI Albert next testified that as part of her investigation of
Respondent, she reviewed ARCOS system data pertaining to "all the
oxycodone products [Respondent] ordered" from the opening of the
dispensary in 2008 until her last order in May 2011, finding a total of
"approximately 1.6 million dosage units" of oxycodone, a Schedule II
controlled substance. (Tr. 206-07.) DI Albert testified that she
recalled the presence of various drugs at the dispensary on May 17,
2011, described as "mostly controlled substances, oxycodone,
OxyContin, benzos,\[15]\ Xanax, Valium." (Tr. 204.) DI Albert believed
there may have been a small quantity of hydrocodone and "a couple
[[Page 45682]]
of other Schedule II substances, such as morphine." (Tr. 204-05.)
---------------------------------------------------------------------------
\15\ DI Albert explained her use of the term "benzos" was
short-hand for benzodiazepines, a Schedule IV controlled substance.
(Tr. 205.)
---------------------------------------------------------------------------
DI Albert further testified that she has reviewed the originals of
the DEA Form 222s reflected in Government Exhibit 6, which were seized
from Respondent's dispensary on May 17, 2011, and did not remove any
attachments from the originals nor was she aware of any other DEA
personnel removing attachments. (Tr. 215.) DI Albert testified that she
reviewed and compared distributor copies of the Form 222s with copies
retained by Respondent, and found discrepancies between what the
distributors indicated they shipped and what Respondent reported
receiving. (Tr. 216-17.) DI Albert elaborated:
I believe there were times where [hellip] on the distributor's
copy, or the one that [the distributor] provide[d] to DEA, it
indicates that they actually shipped a different quantity or they
voided out the line, where, in fact, the copy that we found in the
dispensary will show that they received a quantity and the
distributor says that [the distributor] voided it.
(Tr. 218; Gov't Ex. 6.)
Finally, DI Albert testified that she reviewed various
prescriptions for controlled substances issued to Patient [IM] by
Respondent, dated between August and November 2006, and determined that
the prescriptions were missing the address of the patient, as required
by regulation. (Tr. 220-21, 249-50; Gov't Ex. 7.)
Agent Kinneer testified that he has been employed with the Ohio
Board of Pharmacy as a Compliance Agent for approximately seventeen
years.\16\ Agent Kinneer further testified that he was familiar with
Respondent's professional practice, explaining that in December 2010,
Respondent applied for a Terminal Distributor license,\17\ which would
allow for the purchase of prescription drugs and controlled substances.
(Tr. 301-02.)
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\16\ Agent Kinneer's duties include inspection of entities
licensed by the Ohio Board of Pharmacy, to include physicians,
pharmacies, pharmacists, dentists, and paramedics. Agent Kinneer's
duties further include investigation of drug diversion. (Tr. 300.)
\17\ The license was for Respondent's dispensary, Unique Relief,
located within the same building as Respondent's medical practice.
(Tr. 308.)
---------------------------------------------------------------------------
Agent Kinneer next testified that based on Respondent's application
for a Terminal Distributor license, he conducted an inspection of
Respondent's location on February 9, 2011. (Tr. 303.) As a result of
the inspection, Agent Kinneer determined that the dispensary was
operated by Mr. Leadingham, who had been introduced as the dispensary
manager. (Tr. 307.) Agent Kinneer further determined that for the past
two years, Respondent had no role in the physical delivery of
controlled substances to her patients. (Tr. 307, 334.)
Agent Kinneer explained that during his inspection, he observed a
dispensing practice that failed to properly document the filling of
prescriptions. "What would happen is, you had one prescription that
had all three labels on it * * * [a]nd then the other two had no labels
at all. So there was no way to document that those prescriptions had
actually been filled." (Tr. 313.)
Agent Kinneer testified that he requested an opening inventory and
none was produced. Instead, Mr. Leadingham stated that "one had not
been done." (Tr. 314.) Mr. Leadingham was also unable to produce a
biennial inventory. (Tr. 315.) Agent Kinneer further testified that he
conducted a series of audits of individual drugs using a running
inventory from the computer in Respondent's dispensary. (Tr. 316-17.)
He determined a slight overage for two controlled substances and a
shortage of two other controlled substances. (Tr. 317.) Agent Kinneer
testified that "our demonstration was to show Mr. Leadingham that you
cannot rely on a running inventory. There actually needs to be a hard
copy. And the purpose of it was to show that those things can be off."
(Tr. 317.) The running audit also revealed that "[t]here was drugs
[sic] that were dead on." (Tr. 318.) Agent Kinneer further testified
that there was no way to tell whether Respondent's dispensary had
significant shortages or overages, since the absence of a starting
point for the audit precluded a true inventory of controlled substances
within Respondent's dispensary.
Remember, this [running inventory] was just a tool to show
Darryl Leadingham and Sue Leadingham that they cannot rely on the
running inventory as a true inventory, that they needed an opening
inventory as well as their DEA inventory. In order for me to do an
audit I need a starting point. And that's what I am trying to
express to them.
(Tr. 373-75.)
Agent Kinneer also reviewed DEA Form 222s during his inspection,
specifically requesting the production of "their blue copy where they
actually receipted the medication." (Tr. 318.) Based on a review of a
two to three inch stack of DEA Form 222s on the counter at the
dispensary, Agent Kinneer testified that none had been "receipted,"
explaining that none "had a date or quantity on a filled-out line for
those individual drugs that had been ordered and received." (Tr. 319,
362-63.) A review of DEA Form 222s kept in a vault within the
dispensary also revealed that none had been receipted.\18\ Agent
Kinneer testified that Mr. Leadingham was unaware of the requirement to
do so, instead indicating "that he had been trained just to * * * do
the invoices * * * [and] documenting it in the computer that they had
received them." (Tr. 320.) Agent Kinneer further testified that he did
not recall seeing invoices attached to the DEA Form 222s that he looked
at, noting that it did not matter since that is not the requirement.
(Tr. 320-21.) Agent Kinneer does not recall seeing staple marks on the
DEA Form 222s that he reviewed, but explained he was not looking for
staple marks. (Tr. 348.)
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\18\ Agent Kinneer testified that his inspection did not focus
on how many dispensary orders were electronic as compared with
orders using hand-written Form 222's with an accompanying blue copy.
"We were solely looking at the blue copies." (Tr. 360.)
---------------------------------------------------------------------------
Agent Kinneer testified that controlled substances were ordered by
the dispensary manager, Mr. Leadingham, using Respondent's DEA
registration, but there was no indication that Respondent was active or
accountable for the accuracy and completeness of the dispensary's
records. (Tr. 321-22.) Agent Kinneer further testified that at the
completion of the inspection, he informed Mr. Leadingham that "from
what we were witnessing he was running a pharmacy, which was illegal."
(Tr. 323.) Agent Kinneer testified that Respondent's dispensary was not
registered with the Ohio Board of Pharmacy as a pharmacy, nor were any
personnel working in the dispensary licensed as pharmacists in Ohio.
(Tr. 324-25.)
DI Burkhart was called in rebuttal by the Government, and testified
in substance that she participated in the execution of a federal search
warrant at Respondent's location on May 17, 2011, to include seizing
the blue copies of DEA Form 222s. (Tr. 600-01.) Specifically, DI
Burkhart testified that she seized and reviewed approximately fifty DEA
Form 222s and only two blue copies had an invoice stapled to the back
of them. (Tr. 601.) The fifty seized DEA Form 222s included the three
reflected in Government Exhibit 6, which did not have any documents or
invoices stapled to them at the time they were seized. (Id.) DI
Burkhart further testified that she seized the DEA Form 222s from
within the dispensary vault and in other places in the dispensary. (Tr.
607-08.)
I find the foregoing witness testimony fully credible in that each
of the witnesses presented testimony that was internally consistent and
evidenced a
[[Page 45683]]
reasonable level of memory for past events. Each witness presented
testimony in a professional manner and the material portions of the
testimony were consistent with other credible evidence of record, as
discussed more fully below.
C. Respondent's Evidence
Respondent's evidence included testimony from two witnesses: Mrs.
Leadingham and Mr. Leadingham. Respondent also introduced a letter
dated April 27, 2010, from the Director of the Ohio Department of
Health.\19\ Mrs. Leadingham testified in substance as to her background
and experience, to include having worked for approximately five years
at an assisted living center before beginning work in Respondent's
dispensary in or about November 2008. (Tr. 385, 390.) Prior to working
for Respondent, Mrs. Leadingham had no prior working experience
dispensing drugs at a pharmacy. (Tr. 457.) Mrs. Leadingham testified
that when hired in November 2008, she worked for Ken Days (Mr. Days) in
Respondent's dispensary. (Tr. 390-91.) Mrs. Leadingham described her
duties to include counting pills, labeling medicine bottles, helping
with inventory, filing, and handling invoices and DEA Form 222s. (Tr.
391.) Mrs. Leadingham further testified that she loved working for
Respondent, who she described as caring and "the best employer I have
ever had." (Id.) Mrs. Leadingham explained that Respondent's
dispensary operated like a pharmacy to include the use of pharmacy
software called Rx30, as well as printed prescriptions, labeled drugs,
and the filling of prescriptions, all consistent with that of a
pharmacy. (Tr. 473.) Mrs. Leadingham testified that the dispensary
filled controlled substance prescriptions for Respondent and
Respondent's father, on a regular basis between 2008 and late 2010,
when Respondent's father stopped issuing prescriptions. (Tr. 485.)
---------------------------------------------------------------------------
\19\ Resp't Ex. 6. This was the only exhibit offered by
Respondent at hearing.
---------------------------------------------------------------------------
Mrs. Leadingham next testified that Respondent's role in the
dispensary included stopping by every morning and evening to answer
questions or discuss issues. (Tr. 400.) "She had a monitor in her
office that she watched us the whole time we were at work. She could
see everything we did at any given time." (Id.) Mrs. Leadingham later
contradicted this testimony, admitting that Respondent could not watch
the dispensary while she was examining patients throughout the day.
(Tr. 478.) No monitors were present in patient examination rooms. (Tr.
469.) Mrs. Leadingham further testified to the physical layout of the
dispensary, to include security measures. (Tr. 403-04.)
Mrs. Leadingham testified that the dispensary kept detailed daily
inventories, and also completed a biennial inventory every two years
that was kept "in a file in the vault." (Tr. 407.) Other than working
from a computerized printout, Mrs. Leadingham testified that she did
not document anything from the biennial inventory. (Tr. 481-82.) Mrs.
Leadingham further testified that she believes the physical copy of the
inventory was seized by DEA on May 17, 2011, since the folder was gone
from the dispensary after that date. (Tr. 408, 412.)
Mrs. Leadingham testified that she worked in Respondent's
dispensary until April 2009, when she was fired along with Mr.
Leadingham. (Tr. 419.) Mrs. Leadingham testified that she returned to
work at Respondent's dispensary on July 1, 2009, along with Mr.
Leadingham, explaining the circumstances of why Respondent asked them
to return to work:
[Respondent] was very, very concerned with the way the
dispensary was being run. She was allowed no access to the
dispensary itself in these two months that we were gone. When we got
back, I know we got a lot of complaints from the patients that there
was pills missing, they weren't treated well, * * *."
(Tr. 421.) Mrs. Leadingham further testified that upon her return to
Respondent's dispensary in July 2009 she observed pills that had been
put in unmarked vials, to include some pills that appeared to have been
crushed. (Tr. 427.)
Mrs. Leadingham also testified as to her understanding and practice
with regard to DEA Form 222s, stating in substance that she always
stapled the invoices for incoming controlled substances to the Form
222. (Tr. 428.) Mrs. Leadingham further testified that most controlled
substance orders were placed electronically, but approximately fifty
paper copies of DEA Form 222s would have been present in the dispensary
within folders identified by suppliers. (Tr. 440-41.) Prior to February
2010, the dispensary practice was not to put the date and amount of
controlled substances received on DEA Form 222s, but rather to staple
the invoice for controlled substances to the form. (Tr. 462-63.) Mrs.
Leadingham testified that following the Ohio Pharmacy Board inspection
of the dispensary in February 2011, she personally wrote the amount and
date received on DEA Form 222s. (Tr. 464-65.)
Mrs. Leadingham next testified to completing pill counts within the
dispensary to ensure that the numbers on hand matched the computer
records, and does not recall any significant discrepancies of greater
than one percent. (Tr. 446.) Mrs. Leadingham further testified that
Respondent has been present in the dispensary on at least one occasion
and counted medications which were matched with inventories.
Additionally, Respondent received daily inventories from the
dispensary. (Tr. 453-54.)
Mrs. Leadingham was called by Respondent in rebuttal, and testified
in substance that she had separated existing DEA Form 222s from the
invoices two to three weeks prior to May 16, 2011, in order to prepare
copies for submission to the Ohio Medical Board. (Tr. 629.) Mrs.
Leadingham further testified that during the week prior to May 16,
2011, she stapled the DEA Form 222s and invoices together again, and
filed them in the dispensary vault. (Tr. 631.)
Mr. Leadingham testified in substance as to his background and
experience, to include work in Respondent's dispensary, Unique Relief,
beginning in November 2008. (Tr. 513.) Unique Relief was a separately
operated business from Respondent's medical practice, Unique Pain
Management. (Tr. 572.) The dispensary's sole purpose was to fill
prescriptions issued by Respondent and Respondent's father. (Tr. 572-
73.) Mr. Leadingham testified that he worked as the manager of the
dispensary, to include pricing, printing labels for prescriptions, and
ordering. (Id.) Mr. Leadingham testified that he received no training
prior to dispensing controlled substances from Respondent's dispensary,
other than to travel to an existing pharmacy to observe a pharmacist
for approximately two hours. (Tr. 576, 580.) Mr. Leadingham explained
that he worked for Mr. Days and Respondent, describing his relationship
with Mr. Days as "very contentious" because Mr. Days kept telling Mr.
Leadingham what to tell Respondent to do, which Mr. Leadingham would
not. (Tr. 514-15.) In April 2009, Mr. Leadingham and Mrs. Leadingham
were fired by Mr. Days. (Tr. 517.)
Mr. Leadingham testified that he returned to work for Respondent in
July 2009, after the departure of Mr. Days. (Tr. 520.) Upon return, Mr.
Leadingham testified that he completed an inventory, which was placed
in a folder and "we had written on it that it was for a DEA
biennial." (Id.) A similar inventory was
[[Page 45684]]
done in February 2011, and marked "DEA Biannual Report." (Tr. 521.)
Mr. Leadingham testified that the two files were present in the
dispensary on May 17, 2011, but following that date "[t]here was no
paperwork left in the vault." (Tr. 522.) Mr. Leadingham testified that
between July 2009 and May 17, 2011, there were never any large amounts
of drugs missing, and with regard to oxycodones, Mr. Leadingham did not
believe variances existed of "even one-tenth of a percent." (Tr.
561.)
Mr. Leadingham testified that with regard to his compliance with
federal regulations for the operation of Respondent's dispensary, he
received legal advice that "we were doing it perfectly." (Tr. 545.)
Mr. Leadingham further testified that he later questioned the legal
advice he was getting with regard to filling prescriptions issued by
Respondent's father and looked up the DEA rules "that stated there had
to be a DEA license address for the [d]octor at that address, with that
address, if there was a Schedule II narcotics there." (Tr. 559-60.)
Mr. Leadingham testified that he provided a printout of the rules to
Respondent, who then applied to DEA for a license for her father at
Respondent's address. (Tr. 560.) Mr. Leadingham testified, however,
that he did not see the DEA regulation that DEA Form 222s had to be
kept separate from all other records, and the dispensary was
"[a]pparently not" complying with that regulation. (Tr. 568.)
Respondent's witnesses presented their testimony in a professional
and serious manner, but as more fully explained in the discussion
section below, I find it only partially credible in several material
respects.
IV. Discussion
A. The Applicable Statutory and Regulatory Provisions
The Controlled Substances Act (CSA) provides that any person who
dispenses (including prescribing) a controlled substance must obtain a
registration issued by the DEA in accordance with applicable rules and
regulations.\20\ "A prescription for a controlled substance to be
effective 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" with a
corresponding responsibility on the pharmacist who fills the
prescription.\21\ It is unlawful for any person to possess a controlled
substance unless that substance was obtained pursuant to a valid
prescription from a practitioner acting in the course of their
professional practice.\22\ It is also unlawful to refuse or negligently
fail to make, keep or furnish required records.\23\
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\20\ 21 U.S.C. 802(10), 822(a)(2).
\21\ 21 CFR 1306.04(a).
\22\ 21 U.S.C. 844(a).
\23\ 21 U.S.C. 842(a)(5).
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B. The Public Interest Standard
The CSA, at 21 U.S.C. 824(a)(4), provides, insofar as pertinent to
this proceeding, that the Administrator may revoke a DEA COR if she
finds that the continued registration would be inconsistent with the
public interest as that term is used in 21 U.S.C. 823(f). Pursuant to
21 U.S.C. 823(f), the Administrator may deny an application for a DEA
COR if she determines that such registration would be inconsistent with
the public interest. In determining the public interest, the
Administrator is required to consider the following factors:
(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 and
safety.\24\
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\24\ In addition, I conclude that the reference in 21 U.S.C.
823(f)(5) to "other conduct which may threaten the public health
and safety" would as a matter of statutory interpretation logically
encompass the factors listed in Section 824(a). See Kuen H. Chen,
M.D., 58 FR 65,401, 65,402 (DEA 1993).
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As a threshold matter, the factors specified in Section 823(f) are
to be considered in the disjunctive: The Administrator may properly
rely on any one or a combination of those factors, and give each factor
the weight she deems appropriate, in determining whether a registration
should be revoked or an application for registration denied. See David
H. Gillis, M.D., 58 FR 37,507, 37,508 (DEA 1993); see also D & S Sales,
71 FR 37,607, 37,610 (DEA 2006); Joy's Ideas, 70 FR 33,195, 33,197 (DEA
2005); Henry J. Schwarz, Jr., M.D., 54 FR 16,422, 16,424 (DEA 1989).
Application of the public interest factors requires an individualized
determination and assessment of prescribing and record-keeping
practices that are "tethered securely to state law * * * and federal
regulations." Volkman v. DEA, 567 F.3d 215, 223 (6th Cir. 2009).
Additionally, in an action to revoke a registrant's COR, the DEA has
the burden of proving that the requirements for revocation are
satisfied.\25\ The burden of proof shifts to the respondent once the
Government has made its prima facie case.\26\
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\25\ See 21 CFR 1301.44(e).
\26\ See Medicine Shoppe--Jonesborough, 73 FR 364,380 (DEA
2008); see also Thomas E. Johnston, 45 FR 72,311, 72,311 (DEA 1980).
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C. The Factors to Be Considered
Factors 1 and 3: The Recommendation of the Appropriate State Licensing
Board or Professional Disciplinary Authority and Conviction Record
Under Federal or State Laws Relating to the Manufacture, Distribution
or Dispensing of Controlled Substances
In this case, regarding Factor One, it is undisputed that
Respondent currently holds a valid, unrestricted medical license in
Ohio. Although not dispositive, Respondent's possession of a valid
unrestricted medical license in Ohio weighs against a finding that
Respondent's registration would be inconsistent with the public
interest. See Robert A. Leslie, M.D., 68 FR 15,227, 15,230 (DEA 2003)
(state license is a necessary, but not a sufficient condition for
registration, and therefore, this factor is not dispositive).
Regarding Factor Three, there is no evidence that Respondent has
ever been convicted under any federal or state law relating to the
manufacture, distribution or dispensing of controlled substances. I
therefore find that this factor, although not dispositive, see Leslie,
68 FR at 15,230, weighs against a finding that Respondent's
registration would be inconsistent with the public interest.
Factors 2 and 4: Respondent's Experience in Handling Controlled
Substances and Compliance with Applicable State, Federal or Local Laws
Relating to Controlled Substances
In this case, there is indeed evidence that Respondent has failed
to remain in compliance with applicable federal and state law relating
to controlled substances, and that her past experience in handling
controlled substances and compliance with applicable laws is
inconsistent with the public interest.
1. Respondent's Dispensing Practices
Federal law requires every person who dispenses (including
prescribing) any controlled substance to obtain a registration from the
Attorney
[[Page 45685]]
General.\27\ Additionally, a separate registration must be obtained for
each principal place of practice where a registrant dispenses
controlled substances and a registrant must report any change of
address by applying to modify her registration, which shall be treated
as an application for registration.\28\ The Code of Federal Regulations
delineates the procedures a registrant must follow to request a change
in registered address.\29\ Federal regulations also mandate that a
"prescription for a controlled substance may only be filled by a
pharmacist, acting in the usual course of his professional practice and
either registered individually or employed in a registered pharmacy, a
registered central fill pharmacy, or registered institutional
practitioner." \30\
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\27\ 21 U.S.C. 822(a)(2).
\28\ 21 U.S.C. 822(e), 827(g); 21 CFR 1301.51.
\29\ See 21 CFR 1301.51.
\30\ 21 CFR 1306.06
---------------------------------------------------------------------------
Ohio law requires "[e]ach person * * * who sells dangerous drugs
[31] at retail for delivery or distribution to persons
residing in this state, shall be licensed as a terminal distributor of
dangerous drugs pursuant to sections 4729.54 and 4729.55 of the Revised
Code." Ohio Rev. Code Ann. Sec. 4729.551 (2011). It further requires
that to operate a pharmacy, a "person not a pharmacist, who owns,
manages, or conducts a pharmacy, shall employ a pharmacist to be in
full and actual charge of such pharmacy, * * * ." Ohio Rev. Code Ann.
Sec. 4729.27 (2011).
---------------------------------------------------------------------------
\31\ Dangerous drugs under Ohio law includes any "drug that may
be dispensed only upon a prescription." Ohio Rev. Code Ann. Sec.
4729.01(F) (2011).
---------------------------------------------------------------------------
Various provisions of Ohio law authorize a licensed health
professional, including a physician,\32\ to prescribe, administer, or
personally furnish controlled substances to a patient, or "[c]ause * *
* controlled substances to be administered under the prescriber's
direction and supervision." Ohio Rev. Code Ann. Sec. 3719.06
(2011).\33\ Furthermore, Ohio law exempts, under defined circumstances,
a business practice with a sole shareholder who is a licensed health
professional from the requirement of obtaining a terminal distributor
license. Ohio Rev. Code Ann. Sec. 4729.51 (B)(1)(j) (2011) (effective
September 2008). The parameters of this exemption are set forth in a
guidance document published by the Ohio State Board of Pharmacy:
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\32\ Ohio Rev. Code Ann. Sec. 4729.01(I)(4) (2011).
\33\ See also Ohio Rev. Code Ann. Sec. Sec. 4729.29, 4729.291
(2011).
---------------------------------------------------------------------------
[S]ection 4729.51(B)(1)(j) which will now allow registered
wholesale distributors of dangerous drugs to sell dangerous drugs to
a business practice that is a corporation, limited liability
company, or professional association if the business practice has a
SOLE SHAREHOLDER who is a licensed health professional authorized to
prescribe drugs (prescriber) and is authorized to provide the
professional services being offered by the practice.
This means that if the business practice has a single prescriber
(M.D. * * *) who is the sole shareholder, member, or owner of the
practice, then this business practice is not required to be licensed
as a Terminal Distributor of Dangerous Drugs with the Ohio Board of
Pharmacy. Previously, this exemption was only for a prescriber who
practiced as a Sole Proprietor.
(Emphasis in original).\34\
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\34\ Ohio State Board of Pharmacy, Licensing Issues for
Prescribers (Updated July 2008), http://www.pharmacy.ohio.gov/Licensing_Issues_for_Prescribers_07252008.pdf.
---------------------------------------------------------------------------
The credible evidence at hearing demonstrated that Respondent
established, solely owned, and operated two limited liability
companies, Unique Pain Management (medical practice) and Unique Relief
(dispensary), both of which are located at 418 Center Street,
Wheelersburg, Ohio. (Tr. 48-49, 302-03.) Respondent's medical practice,
which included her office and patient examination rooms, was physically
separate from the dispensary, although a system of security cameras
allowed some level of observing the dispensary operation by Respondent
from a monitor located in her medical practice office. (Tr. 400.) The
dispensary filled prescriptions issued by Respondent, as well as by
Respondent's father, Dr. John Temponeras. The evidence of record
reflects that between November 2008 and May 2011, a total of
approximately 1.6 million dosage units of oxycodone, a Schedule II
controlled substance, were ordered by Respondent, among other
controlled substances. (Tr. 206-07.) The evidence further reflects that
Respondent's father issued a large number of prescriptions for
controlled substances while working at Respondent's medical practice at
least one day a week from 2008 until late 2010, a significant portion
of which were filled at Respondent's dispensary. (Tr. 181, 484-87.)
Respondent's father was registered with DEA as an individual
practitioner in Portsmouth, Ohio, but was not registered at
Respondent's practice location. (Tr. 214.)
To the extent Ohio law permits a sole practitioner to dispense or
personally furnish controlled substances directly to a patient without
a Terminal Distributor license, Respondent's dispensing practices were
well outside of those parameters. Respondent established a distinctly
separate legal entity to fill prescriptions that was physically
separate from Respondent's medical office. Furthermore, Respondent's
dispensary was not limited to filling prescriptions issued only by
Respondent, but also routinely filled prescriptions issued by
Respondent's father, notwithstanding the fact that Respondent did not
have a Terminal Distributor license as required by state law. Compare
Ohio Rev. Code Ann. Sec. 4729.551, with Sec. 4729.51(B)(1)(j) (2011).
Respondent's dispensary was not registered with DEA as a pharmacy and
none of the dispensary employees was licensed in Ohio as a pharmacist,
as required by state and federal law.\35\ (Tr. 103-04.)
---------------------------------------------------------------------------
\35\ 21 CFR 1306.06 (2011); Ohio Rev. Code Ann. Sec. 4729.27
(2011).
---------------------------------------------------------------------------
In addition to the foregoing violations, Respondent also failed to
directly monitor or supervise the dispensing activities of her
employees, none of whom were licensed, trained, or qualified to handle
and dispense controlled substances in Ohio. Rather, Respondent's
employees operated in large measure as an independent pharmacy filling
prescriptions for Respondent and Respondent's father. The weight of the
evidence demonstrated that Respondent and her father were not
personally administering, dispensing, or furnishing controlled
substances to their patients, but rather issued prescriptions for
patients to be filled either at Respondent's dispensary or at other
pharmacies. (Tr. 210-11.) The fact that patients had the option to fill
prescriptions at other locations, which occurred to some extent, is
inconsistent with personally administering or furnishing controlled
substances.\36\ While the majority of prescriptions issued by
Respondent or her father were filled at Respondent's dispensary, there
is no credible evidence of record that Respondent or her father had any
personal role or supervision of that process. Instead, the process was
left to Respondent's employees, who were unlicensed, untrained, and
unqualified to handle or distribute controlled substances.
---------------------------------------------------------------------------
\36\ A sampling of data for a one month time period in April
2010 revealed that Respondent filled approximately eighty-three
percent of her prescriptions, with the remainder filled at other
pharmacies. (Tr. 211.)
---------------------------------------------------------------------------
I do not find the testimonial evidence with regard to cameras in
the dispensary and a monitor within Respondent's office credible
insofar as establishing, consistent with Ohio law, that Respondent
effectively supervised her employees dispensing or furnishing of
[[Page 45686]]
controlled substances. For example, Mrs. Leadingham testified that
Respondent could not monitor the dispensary while treating patients in
the examination rooms, nor did the screen on the monitor allow for the
reading of labels on prescription bottles. (Tr. 471, 478.) The evidence
of record establishes at most a system of cameras that was designed for
security of the premises, rather than Respondent's direct supervision
of the dispensing or furnishing of controlled substances. Moreover,
Mrs. Leadingham testified that upon her return to work at Respondent's
dispensary in July 2009, Respondent was very concerned with the way the
dispensary had been run, to include complaints from patients and
missing pills. (Tr. 421.) Respondent "was allowed no access to the
dispensary itself in these two months that we were gone." (Id.) The
fact that Respondent continued to operate a dispensary from April to
July 2009, with admittedly no access at all, is fully consistent with
other credible evidence of record, to include testimony by Agent
Kinneer, that Respondent had for significant periods of time
essentially no role in the physical delivery of controlled substances
to her patients. (Tr. 307.)
Respondent also offered at hearing one documentary exhibit, namely
a letter from the Ohio Department of Health, dated April 27, 2010,
which apparently was in reply to a document submitted by Respondent
entitled: "Policy and Procedure for Initial Intake, Screening,
Verification of Identity and Medical Records, Monthly Processing of
Patient." (Resp't Ex. 6; Gov't Ex. 8.) The reply letter in relevant
part complimented Respondent and her staff "on your thoroughness and
intense efforts for security in preventing prescription drug abuse."
(Id.) For purposes of this recommended decision, I have given this
letter little weight. While the document facially confirms that
Respondent had a written policy related to prevention of drug abuse, it
does not address or rebut the specific evidence of Respondent's
noncompliance with various provisions of state and federal law related
to her handling of controlled substances alleged in the OSC/IS.
Additionally, there is no credible evidence of record to suggest that
the Ohio Department of Health, through Alvin D. Jackson, Director, was
aware in April 2010 of the evidence of Respondent's specific misconduct
which forms the basis of the instant proceeding, a significant portion
of which became known to state and federal authorities after April
2010.
I find by a preponderance of the evidence that Respondent dispensed
or directed and authorized the dispensing of controlled substances from
an unregistered location on numerous occasions between November 2008
and May 2011, in violation of 21 U.S.C. 841 and 822(a)(2) and (e), as
well as 21 CFR 1306.06.\37\ I further find that Respondent's dispensing
practices and lack of supervision of employees during that time period
violated applicable state law. Ohio Rev. Code Ann. Sec. Sec. 4729.551,
4729.27, and 3719.06 (2011).
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\37\ The OSC/IS alleged misconduct beginning on January 1, 2007,
but the undisputed evidence of record established that Respondent
opened her dispensary in or about November 2008, and no other
relevant evidence was offered by the Government pertaining to
"unauthorized distributions of controlled substances" by
Respondent prior to that date. See ALJ Ex. 1, at 1.
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2. Respondent's Record-Keeping Practices
Pursuant to 21 CFR 1304.03(b), 1304.21(a), 1304.22(a)(2)(iv),
1304.22(a)(2)(ix) and 1304.22(c), a registered individual practitioner
is required to maintain records of controlled substances in Schedules
II through V that are dispensed and received, including the number of
dosage units, the date of receipt or disposal and the name, address and
registration number of the distributor. It is unlawful to refuse or
negligently fail to make, keep or furnish required records.\38\ DEA
regulations require that "each registered individual practitioner
required to keep records" shall maintain inventories and records of
Schedule II controlled substances "separately from all of the records
of the registrant;" inventories and records of Schedule III through V
controlled substances "shall be maintained 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." \39\ DEA registrants are required to maintain "a
complete and accurate record of all controlled substances on hand * * *
." \40\ They must "take a new inventory * * * at least every two
years." \41\ The inventory "must be kept by the registrant and be
available[] for at least 2 years" from the date of its creation.\42\
"The inventory may be taken either as of opening of business or as of
the close of business on the inventory date and it shall be indicated
on the inventory." \43\
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\38\ 21 U.S.C. 842(a)(5).
\39\ 21 CFR 1304.04(g), (f)(2).
\40\ 21 CFR 1304.11(a).
\41\ 21 CFR 1304.11(c); see also 21 CFR 1304.04(a) ("every
inventory * * * must be kept by the registrant and be available * *
* for at least two years from the date of such inventory").
\42\ 21 CFR 1304.04(a).
\43\ 21 CFR 1304.11(a).
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Under longstanding Agency precedent, "the failure to comply with
record keeping requirements is a basis for revoking a registration."
Alexander Drug Co., 66 FR 18,299, 18,303 (DEA 2001) (citing Singer-
Andreini Pharmacy, Inc., 63 FR 4,668 (DEA 1998); Arthur Sklar, d/b/a
King Pharmacy, 54 FR 34,623 (DEA 1989); Summer Grove Pharmacy, 54 FR
28,522 (DEA 1989); and The Boro Pharmacy and Bell Apothecary, 53 FR
15,151 (DEA 1988)). The CSA's emphasis on record-keeping constitutes "
'an attempt to regulate closely the distribution of certain substances
determined by Congress to pose dangers, if freely available, to the
public at large.' " United States v. Poulin, 926 F. Supp. 246, 250 (D.
Mass. 1996) (quoting United States v. Averi, 715 F. Supp. 1508, 1510
(M.D. Ala. 1989)).
One mandatory record-keeping vehicle is DEA Form 222, the
"official triplicate order form[] used by physicians to order
scheduled narcotics" and other controlled substances.\44\ A menu of
federal regulations specifies procedures relating to DEA Form 222, such
as obtaining, 21 CFR 1305.11, executing, Sec. 1305.12, filling, Sec.
1305.13, and endorsing DEA Form 222, Sec. 1305.14, among other
procedures.\45\ In addition, 21 CFR 1305.03 requires that a DEA Form
222 be used for each distribution of a controlled substance listed in
Schedules I or II, and Section 1305.17 provides that these order forms
must be maintained separately from all other records and that they
"are required to be kept available for inspection for a period of 2
years."
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\44\ Robert L. Dougherty, Jr., M.D., 60 FR 55,047, 55,048 (DEA
1995).
\45\ See, e.g., 21 CFR 1305.15-.19.
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The evidence at hearing reflected numerous record-keeping
violations by Respondent. The evidence credibly reflects that
Respondent did not properly prepare or maintain DEA Form 222s as
required by law. The evidence also demonstrated with regard to
Respondent's dispensary, that Schedule II controlled substance records
were improperly commingled with other controlled substance records,
contrary to 21 CFR 1304.04.
Respondent's evidence did not deny the record-keeping violations
with regard to DEA Form 222 alleged by the Government in the OSC/IS.
Respondent's witnesses admitted that paper copies of DEA Form 222 were
not properly maintained with required
[[Page 45687]]
information, or in separate locations from other records. Rather, the
testimony focused on whether the improperly completed DEA Form 222s had
distributor invoices stapled to them in an apparent attempt to comply
with the substance and spirit of the applicable DEA regulations.
As a factual matter, the testimony from Respondent's witnesses that
invoices were routinely stapled to DEA Form 222s was directly
contradicted by physical evidence at hearing, namely three purchaser
copies of Form 222 seized from Respondent's dispensary on May 17, 2011,
none of which was accompanied by an invoice. (Tr. 64-65; Gov't Ex. 6.)
Additionally, all of the Government witnesses were consistent in
describing the absence of stapled invoices in the vast majority of DEA
Form 222s observed and seized from Respondent's dispensary.
Agent Kinneer credibly testified that during his February 9, 2011
inspection of Respondent's dispensary he reviewed a two to three inch
stack of Form 222s on the dispensary counter with no attached invoices,
noting that "none of them had a date or quantity on a filled-out line
for those individual drugs that had been ordered and received." (Tr.
319.) Agent Kinneer also testified that he reviewed a box kept in the
dispensary vault with folders full of blue Form 222s, and none of them
had the requisite receipt information, to include date or quantity
received. (Tr. 319-20.) With regard to attached invoices, Agent Kinneer
testified that he did not go through all of the forms in the box, but
none of those he recalls reviewing had an invoice attached. (Tr. 320.)
Consistent with Agent Kinneer's testimony, DI Burkhart credibly
testified that she participated in the execution of a federal search
warrant at Respondent's dispensary on May 17, 2011, resulting in the
seizure of approximately fifty blue purchaser copies of DEA Form 222,
among other items. (Tr. 600-01.) Of the fifty, only two had an invoice
stapled to the back of them. (Tr. 601.)
In light of the foregoing testimony credibly demonstrating that on
February 9, 2011, and May 17, 2011, the vast majority of DEA Form 222s
present in Respondent's dispensary did not have accompanying invoices
attached, I do not find credible the testimony of Respondent's
witnesses to the contrary. Even if there had been credible evidence
offered to establish that Respondent routinely attached invoices to DEA
Form 222s, such evidence would "not obsolve [a registrant] from its
obligation to adhere to the law." Alexander Drug Co., 66 FR at 18,303.
The efficacy of the closed system of distribution for controlled
substances and certain chemicals mandated by Congress through the
Controlled Substances Act depends upon strict adherence by all
registrants to all record keeping requirements including those set
forth at 21 U.S.C. [Sec. Sec. ] 827, 828, 829, and 830, and all
implementing regulations found in Title 21 Code of Federal
Regulations, as well as all applicable state laws and regulations.
(Id.)
The evidence at hearing also demonstrated that Respondent did not
take an initial inventory or biennial inventories, contrary to
applicable regulations. 21 CFR 1304.11(b) and (c). Agent Kinneer
credibly testified that during his February 9, 2011 inspection, he
requested an opening inventory but was informed by Mr. Leadingham that
"one had not been done." (Tr. 314.) Nor was a biennial inventory
produced during the inspection. DI Kresnak credibly testified that as a
result of the May 2011 search of Respondent's dispensary, documents
related to inventories were found, none of which reflected a "biennial
inventory." For example, there is evidence of record that documents
were seized from Respondent's dispensary reflecting "biannual
inventories," and one marked "opening inventory" which "indicated
that the date that they opened the dispensary there was a zero
inventory." (Tr. 83.)
Respondent's evidence with regard to inventories centered primarily
on testimony by Respondent's dispensary employees that frequently
during "down time" they would count on-hand drugs, including
controlled substances, to ensure a match with computer records. Mrs.
Leadingham testified that the dispensary kept detailed daily
inventories, and completed a biennial inventory every two years, which
was kept in the dispensary vault. (Tr. 407.) Later contradicting that
testimony, Mrs. Leadingham testified that the process to conduct a
biennial inventory consisted of Mr. Leadingham using a computer
printout while she physically counted the controlled substances, adding
that she did not "document anything" from the inventory. (Tr. 481-
82.) The lack of documentation undermines the credibility of Mrs.
Leadingham's assertions that detailed inventories were kept. Of
significance, no invoices, DEA Form 222s, or dispensing logs were used
to conduct the biennial inventory. (Tr. 480-82.) Nor is there any
credible evidence that Respondent participated in the inventory process
in any meaningful way to ensure an accurate inventory was taken and
proper records maintained.\46\ Instead, the credible evidence of record
reflects that Respondent delegated that task to employees who were
neither trained nor properly supervised to perform the task.
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\46\ I have carefully considered and reject as not credible
testimony by Respondent's employees that Respondent actively
participated or supervised the inventory process. (See, e.g., Tr.
453-54.) Even if such testimony was found to be credible, the
methodology used to conduct the inventory, with or without the
Respondent, was clearly contrary to law.
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The evidence at hearing unequivocally demonstrates that
Respondent's employees, however well-intentioned, lacked the
qualifications, training, or supervision to conduct an appropriate
initial or biennial inventory, as required by applicable law and
regulation. The fact that no compliant initial or biennial inventory
was produced by Respondent or her employees during the February 9, 2011
inspection, nor seized during the May 17, 2011 search, amply
demonstrates Respondent's blatant non-compliance with this important
record-keeping requirement. As Agent Kinneer succinctly testified, a
"running inventory" is no substitute for a true inventory, since in
"order for me to do an audit I need a starting point." (Tr. 373-74.)
There is no evidence that such a starting point existed within
Respondent's dispensary records, nor any other compliant inventory
records.
Contrary to Respondent's assertion that the foregoing represents
"highly technical paperwork errors," (Resp't Br. At 7), the failure
by Respondent to properly maintain required records prevented
investigators, as well as Respondent, from determining whether
Respondent's dispensary had significant shortages or overages. (See,
e.g., Tr. 375.) The sheer volume of controlled substances handled by
Respondent, which between November 2008 and May 2011, totaled
approximately 1.6 million dosage units of the Schedule II controlled
substance oxycodone alone, demonstrates that overages or shortages had
the potential to be quantitatively significant. (See Tr. 375.) Nor was
the risk of diversion purely speculative with regard to Respondent's
dispensary given, for example, the testimony by Mrs. Leadingham that
during May and June 2009, Respondent was not allowed access to her own
dispensary. (Tr. 421.) Additionally, Mrs. Leadingham testified that
when she returned to work in Respondent's dispensary in July 2009, she
observed crushed pills and pills in unmarked vials, and received
complaints from customers of missing pills. (Tr. 421, 427.) Rather than
being technical paperwork errors, I find
[[Page 45688]]
Respondent's blatant disregard for fundamental record-keeping
requirements, among other violations, to be significantly at odds with
the public interest.
Accordingly I find by a preponderance of the evidence that
Respondent unlawfully failed to make, keep or furnish required records
relating to her handling of controlled substances, during the time
period from November 2008 to May 2011, in violation of applicable
federal law.\47\
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\47\ See 21 U.S.C. 827(a), 842(a)(5); 13 CFR 1304.11 (b) and
(c), 1305.13(e).
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3. Respondent's Issuance of Prescriptions Without Required Information
Pursuant to 21 CFR 1306.05(a), "[a]ll prescriptions for controlled
substances shall * * * bear the full name and address of the patient *
* * [and] directions for use * * *." The evidence of record included
approximately eleven prescriptions issued by Respondent for various
controlled substances to a single patient covering the time period
August to November 2006. (Tr. 219-20; Gov't Ex. 7.) Each of the eleven
prescriptions was deficient by failing to include the patient's
address. (Tr. 220-21; see Gov't Ex. 7.)
Additionally, the Government introduced testimony by DI Kresnak
that he reviewed approximately twelve prescriptions seized from a
Portsmouth, Ohio pharmacy that Respondent had issued for controlled
substances to more than one patient between 2005 and 2006. Of the
twelve reviewed, DI Kresnak testified that eleven lacked a patient
address. (Tr. 53-55, 123-24.) None of these prescriptions were
introduced by the Government at hearing, and DI Kresnak was uncertain
if any of the prescriptions he recalled reviewing from the Portsmouth,
Ohio pharmacy were the same as those identified in Government Exhibit
7. Nor could DI Kresnak recall any of the patient names from memory
without reviewing copies of the prescriptions.\48\ (Tr. 118.) In light
of this testimony, I give little overall weight to the testimony
offered by the Government with regard to the eleven prescriptions
seized from the Portsmouth, Ohio pharmacy, since those prescriptions
may or may not be the same as those contained within Government Exhibit
7. "Speculation is, of course, no substitute for evidence, and a
decision based on speculation is not supported by substantial
evidence." White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir.
1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir.
1992)).
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\48\ The Government did not seek to refresh DI Kresnak's
recollection with any documents, nor were the prescriptions at issue
introduced at hearing. See supra note 9.
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Accordingly, I find by a preponderance of the evidence that
Respondent issued approximately eleven prescriptions between August and
November 2006 for controlled substances without providing a patient
address, in violation of applicable federal regulations.
All of the above findings regarding Respondent's violation of
applicable law and regulation as it pertains to her prescribing
practices, record-keeping, and dispensing from an unregistered location
weigh heavily against a finding under Factors Two and Four of 21 U.S.C.
823(f) that Respondent's continued registration would be consistent
with the public interest.
Factor 5: Such Other Conduct Which May Threaten the Public Health and
Safety
Under Factor Five, the Administrator is authorized to consider
"other conduct which may threaten the public health and safety." 5
U.S.C. 823(f)(5). The Agency has accordingly held that "where a
registrant has committed acts inconsistent with the public interest,
the registrant must accept responsibility for his or her actions and
demonstrate that he or she will not engage in future misconduct.
Patrick W. Stodola, 74 FR 20,727, 20,734 (DEA 2009).\49\ A
"[r]espondent's lack of candor and inconsistent explanations" may
serve as a basis for denial of a registration. John Stanford Noell,
M.D., 59 FR 47,359, 47,361 (DEA 1994).
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\49\ See also Hoxie v. DEA, 419 F.3d 477, 484 (6th Cir. 2005)
(decision to revoke registration "consistent with the DEA's view of
the importance of physician candor and cooperation").
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In this case Respondent was called by the Government to testify,
but refused to answer questions by invoking her Fifth Amendment
privilege. "It is well established that the Agency may draw an adverse
inference from a respondent's failure 'to testify in response to
probative evidence offered against' [her]." Surinder Dang, M.D., 76 FR
51,417, 51,422 (DEA 2011) (citing Baxter v. Palmigiano, 425 U.S. 308,
318 (1976)). I find it appropriate on the facts of this case to draw an
adverse inference against Respondent where the Government presented
evidence of misconduct involving Respondent's prescribing, dispensing,
and record-keeping practices, yet Respondent failed to testify and
respond to this evidence. Additionally, Respondent presented no
evidence of acceptance of responsibility for past misconduct, nor any
evidence demonstrating that she will not engage in future misconduct,
which weighs heavily against a finding under Factor Five of 21 U.S.C.
823(f) that Respondent's continued registration would be consistent
with the public interest.
V. Conclusion and Recommendation
After balancing the foregoing public interest factors, I find that
the Government has established by substantial evidence a prima facie
case in support of revoking Respondent's DEA COR BT5598214, based on
Factors Two, Four and Five of 21 U.S.C. 823(f). Once DEA has made its
prima facie case for revocation or denial, the burden shifts to the
respondent to show that, given the totality of the facts and
circumstances in the record, revoking or denying the registration would
not be appropriate. See Morall v. DEA, 412 F.3d 165, 174 (D.C. Cir.
2005); Humphreys v. DEA, 96 F.3d 658, 661 (3d Cir. 1996); Shatz v.
United States Dep't of Justice, 873 F.2d 1089, 1091 (8th Cir. 1989);
Thomas E. Johnston, 45 FR 72,311 (DEA 1980). The record reveals that
Respondent has not sustained her burden in this regard. In light of the
foregoing, Respondent's evidence as a whole fails to sustain her burden
to accept responsibility for her misconduct and demonstrate that she
will not engage in future misconduct.
I recommend revocation of Respondent's DEA COR BT5598214 as a
practitioner, and denial of any pending applications for renewal or
modification, on the grounds that Respondent's continued registration
would be fully inconsistent with the public interest as that term is
used in 21 U.S.C. 824(a)(4) and 823(f).
Dated: December 15, 2011.
Timothy D. Wing,
Administrative Law Judge.
[FR Doc. 2012-18749 Filed 7-31-12; 8:45 am]
BILLING CODE 4410-09-P
NOTICE: This is an unofficial version. An official version of this publication may be obtained
directly from the Government Printing Office (GPO).
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