[Federal Register Volume 61, Number 7 (Wednesday, January 10, 1996)]
[Notices]
[Pages 726-728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-338]



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DEPARTMENT OF JUSTICE

Drug Enforcement Administration
[Docket No. 94-49]


Farmacia Ortiz; Revocation of Registration

    On May 6, 1994, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Farmacia Ortiz, a pharmacy owned by Wayne Ortiz 
Ramirez (hereinafter ``Owner'') of San German, Puerto Rico, notifying 
him of an opportunity to show cause as to why DEA should not revoke the 
retail pharmacy's DEA Certificate of Registration, AF1619040 
(hereinafter ``registration''), under 21 U.S.C. Secs. 824(a)(4) and 
823(f), as being inconsistent with the public interest. Specifically, 
the Order to Show Cause recorded ten allegations of recordkeeping 
violations, of alteration of expiration dates on seven bottles of 
controlled substances, of providing controlled substances to an 
undercover operative without a valid prescription, of providing 
controlled substances to individuals with photocopied or altered 
prescriptions, of possession of controlled substances not accounted for 
in its inventory, and of the owner-pharmacist's entering of a guilty 
plea in Federal court to a single count of dispensing Schedule II 
controlled substances without a prescription.
    On May 28, 1994, the Owner, on behalf of Farmacia Ortiz, requested 
a hearing, and following prehearing procedures, a hearing was held in 
Hato Rey, Puerto Rico, on January 25, 1995, before Administrative Law 
Judge Paul A. Tenney. At the hearing the Owner represented the 
interests of the pharmacy, both parties called witnesses to testify and 
introduced documentary evidence, and after the hearing, the Government 
counsel submitted proposed findings of fact, conclusions of law and 
argument. No post-hearing submissions were offered for the pharmacy. On 
March 22, 1995, Judge 

[[Page 727]]
Tenney issued his opinion and recommended ruling, recommending that the 
DEA Certificate of Registration for Farmacia Ortiz be revoked. Neither 
party filed exceptions to his decision, and on April 24, 1995, Judge 
Tenney transmitted the record of these proceedings to the Deputy 
Administrator.
    The Deputy Administrator has considered the record in its entirety, 
and pursuant to 21 CFR Sec. 1316.67, hereby issues his final order 
based upon findings of fact and conclusions of law as hereinafter set 
forth. The Deputy Administrator adopts, in full, the Findings of Fact, 
Conclusions of Law and Recommended Ruling of the Administrative Law 
Judge, and his adoption is in no manner diminished by any recitation of 
facts, issues and conclusions herein, or of any failure to mention a 
matter of fact or law.
    The Deputy Administrator finds that Farmacia Ortiz (hereinafter the 
Pharmacy) was established over sixty years ago, and is owned by Mr. 
Ortiz-Ramirez, who is also the pharmacist. The investigation of the 
Pharmacy began with DEA investigators reviewing the Pharmacy's DEA 222 
order forms for Schedule II controlled substances. The investigators 
found a questionable purchasing pattern of Demerol injectables from 
1990 to 1992, specifically, an increase from approximately 2,300 in 
1990, to 5,000 in 1991, to 14,400 in 1992.
    Based on this information, the investigators conducted an audit of 
the Pharmacy for the period from December 31, 1990, until November 30, 
1992. As evidenced by the computation chart prepared by a DEA Diversion 
Investigator, the audit revealed an overage of 237 units of Demerol, 
and a shortage of 400 tablets of Percocet. The audit also revealed 
overages of Tylenol No. 3, Hydrocet, Valium, Xanax, and Halcion. Judge 
Tenney took official notice of the facts that (1) Percocet is a brand 
name for a product containing oxycodone, a Schedule II narcotic 
controlled substance pursuant to 21 CFR Sec. 1308.12(b); (2) Demerol is 
a brand name for a product containing meperidine, a Schedule II 
narcotic controlled substance pursuant to 21 CFR Sec. 1308.12(c); (3) 
Tylenol No. 3 is a brand name for a product containing codeine, a 
Schedule III narcotic controlled substance pursuant to 21 CFR 
Sec. 1308.13(e); (4) Valium is a brand name for a product containing 
diazepam, a Schedule IV narcotic controlled substance pursuant to 21 
CFR Sec. 1308.14(c); (5) Xanax is a brand name for a product containing 
alprazolam, a Schedule IV controlled substance pursuant to 21 CFR 
Sec. 1308.14(c); and (6) Halcion is a brand name for a product 
containing triazolam, a Schedule IV controlled substance pursuant to 21 
CFR Sec. 1308.14(c).
    The investigators had also concluded that the Pharmacy had neither 
an initial inventory nor a biennial inventory. However, at the hearing 
before Judge Tenney, the Owner testified that the Puerto Rican 
authorities would not give him a license unless a yearly inventory was 
made, and Judge Tenney found that this assertion was not rebutted by 
the Government.
    Further, a review of the Pharmacy's prescription records revealed 
that original prescriptions and multiple photocopies of the same 
prescriptions had been filled. A DEA Diversion Investigator testified 
that in February 1993, he had interviewed the doctors who purportedly 
issued some of these photocopied prescriptions, and each doctor 
interviewed recognized the names of the patients listed on his 
prescriptions, but denied issuing the photocopied prescriptions.
    The DEA investigators also found a large number of Demerol 
prescriptions written by Dr. Silvestry to a single named patient. Dr. 
Silvestry was interviewed, and he explained that the named patient was 
a cancer patient who frequently visited the doctor, but that Dr. 
Silvestry never gave this patient prescriptions for more than 75 or 100 
ampules of Demerol at one time. However, DEA investigators found at the 
Pharmacy multiple prescriptions for 125, 150, and 175 ampules of 
Demerol written to this patient. Also in February 1993, the 
investigators interviewed this patient, who denied receiving anything 
greater than 100 ampules of Demerol at a time, and he denied altering 
any prescriptions. However, he admitted visiting Dr. Silvestry quite 
often and filling his prescriptions from Dr. Silvestry at the Pharmacy.
    Investigators also interviewed a patient of Dr. Pluguez about 
photocopied prescriptions found at the Pharmacy with his name. The 
Pharmacy had filled a Demerol (100 mg) prescription purportedly issued 
in October 1992 by Dr. Pluguez to this patient, and the instructions on 
the prescription specified ``Sig. 1p.o. q 6 H.'' The DEA Investigator 
testified that the instructions meant that the patient was to take 
``one tablet orally every six hours.'' Both the Investigator and the 
Owner testified that 100 mg of Demerol is an injectable substance that 
comes in liquid form; it cannot be taken orally. Judge Tenney found the 
investigator's testimony credible. Although the Owner testified that 
the meaning of ``p.o.'' could differ from doctor to doctor, he did not 
provide any other meaning. Also, Judge Tenney found it significant that 
the Owner had not called Dr. Pluguez to ascertain his meaning of 
``p.o.'' prior to filling the prescription, and ``[d]espite this 
suspect prescription, [the Pharmacy] continued to fill prescriptions 
for [this patient] in October and November of 1992.''
    This same patient admitted to making the prescription photocopies 
``so he didn't have to go back to the doctor and spend the money.'' He 
also told the investigator that he took the photocopied prescriptions 
to the Pharmacy because he could get them filled without question. 
However, the Owner testified that in May 1993, the patient had offered 
a photocopied prescription, and that then he had called the doctor to 
verify the prescription. When the doctor denied issuing the 
prescription in question, the Owner had refused to fill that 
prescription.
    Next the investigators initiated two undercover visits to the 
Pharmacy, with the assistance of Dr. Pluguez's patient. During the 
first visit in April 1993, a Puerto Rican police officer observed the 
patient enter the Pharmacy supplied with two altered, photocopied 
prescriptions, one for Demerol and one for Percocet, and receive 
medication from the Owner. Shortly thereafter, the Officer and the 
patient met outside the Pharmacy, and the patient handed over 10 
ampules of Demerol and 80 capsules of Percocet, which he had received 
from the Owner. The second visit occurred on April 21, 1993, and the 
police officer, accompanied by the patient, gave the Owner altered 
prescriptions. The Owner then gave the police officer Demerol and 
Percocet.
    Further, on May 21, 1993, investigators searched the Pharmacy, 
seizing controlled substances, some of which were expired or had 
altered labels. Investigators found several bottles of controlled 
substances on which the expiration dates had been altered; 
specifically, the year of expiration had been changed on five bottles, 
and on three of those bottles, the month of expiration had been 
altered. Before Judge Tenney, the Owner denied changing any of these 
expiration dates.
    On August 18, 1993, the Owner was indicted in the United States 
District Court for the District of Puerto Rico, and pursuant to a plea 
agreement, he pled guilty to violations of 21 U.S.C. Sec. 829(a), 
842(a)(1), and 842(c)(2)(A), for dispensing Demerol and Percocet 
``based on the photocopies of the prescriptions which had not been 
prescribed on original prescriptions by 

[[Page 728]]
a licensed physician.'' The Judge accepted the plea agreement and 
sentenced him to probation for one year and to pay a $500.00 fine.
    After the plea agreement was entered, the DEA Investigator 
continued to notice that the Pharmacy still purchased large quantities 
of Demerol. Based on this information, investigators conducted a second 
audit of the Pharmacy of the period of May 21, 1993, through November 
30, 1993, and this audit revealed that the Pharmacy had a shortage of 
28 ampules of Demerol.
    Pursuant to 21 U.S.C. Secs. 823(f) and 824(a)(4), the Deputy 
Administrator may revoke a DEA Certificate of Registration if he 
determines that the continued registration would be inconsistent with 
the public interest. Section 823(f) requires that the following factors 
be considered:
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health or 
safety. These factors are to be considered in the disjunctive; the 
Deputy Administrator may rely on any one or combination of factors and 
may give each factor the weight he deems appropriate in determining 
whether a registration should be revoked or an application for 
registration denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-42, 
54 Fed. Reg. 16,422 (1989).
    In this case, factors one through five are relevant in determining 
whether the Pharmacy's continued registration would be inconsistent 
with the public interest. As to factor one, ``recommendation of the 
appropriate State licensing board,'' Judge Tenney found that there was 
``no evidence to indicate that [the Pharmacy] does not hold proper 
State authorization to operate a retail pharmacy and handle controlled 
substances.''
    As to factor two, the Respondent's ``experience in dispensing * * * 
controlled substances,'' the Deputy Administrator agrees with Judge 
Tenney that the evidence of numerous photocopied prescriptions filled 
by the Pharmacy ``clearly demonstrated poor dispensing experience under 
21 U.S.C. Sec. 823(f)(2) * * *. In addition, substantial weight must be 
given to factor (2) in evaluating the public interest based upon the 
dangerous trend concerning Demerol.'' Specifically, the Deputy 
Administrator agrees with Judge Tenney's findings concerning the 
Pharmacy's dispensing of Demeral to individuals presenting altered and 
photocopied prescriptions and to individuals presenting prescriptions 
with instructions that were inconsistent with the nature of the 
substance prescribed. Further, the Pharmacy's inability to accurately 
account for its supply of Demerol as evidenced by the overage and 
shortage revealed during DEA audits, and its inability to track its 
supply of various Schedule III and IV controlled substances, are all 
relevant concerns under factor two. Finally, the Deputy Administrator 
agrees with Judge Tenney's conclusion that ``the Government has proven 
poor dispensing experience under 21 U.S.C. Sec. 823(f)(2), and this 
conduct warrants serious concern by the DEA.''
    As to factor three, ``the applicant's conviction record * * * 
relating to the * * * distribution * * * of controlled substances, 
``the evidence shows that the Owner-pharmacist working at the Pharmacy 
had a conviction record related to the dispensing of controlled 
substances, for in August 1993, he pled guilty to charges of violating 
Federal statutes; specifically, he admitted to accepting and filling 
photocopied prescriptions in violation of 21 U.S.C. Secs. 829(a), 
842(a)(1) and 842(c)(2)(A). He was placed on probation for one year and 
fined $500.00.
    As to factor four, the Respondent's ``[c]ompliance with applicable 
State, Federal, or local laws relating to controlled substances,'' 
there was some dispute as to the evidence presented. The record 
contains testimony that the pharmacy failed to maintain an initial and 
a biennial inventory as required by regulation, and yet the Owner 
testified that he maintained a ``perpetual inventory,'' for the Puerto 
Rican authorities would not give him a license unless a yearly 
inventory was maintained. Judge Tenney found that the Owner's testimony 
on this point was credible and unrebutted, and he concluded ``in light 
of the weight that is attached to other factors under 21 U.S.C. 
Sec. 823(f), factor (4) is not considered critical in assessing the 
public interest.''
    As to factor five, ``[s]uch other conduct which may threaten the 
public health or safety,'' Judge Tenney agreed with the Government's 
position, that ``in light of [the Owner's] past conduct * * * potential 
future actions by [the Owner] may threaten the public health and safety 
* * * [for] considerable weight is attached to the alterations of 
expiration dates on bottles of controlled substances seized at the 
[Pharmacy].'' Although the Owner testified that he was unaware of the 
alterations made on the expiration dates, Judge Tenney found his 
testimony on this point lacked credibility. In the alternative, Judge 
Tenney also found that, as the owner and pharmacist at the Pharmacy, 
``it was his responsibility to assure that such alterations did not 
occur.''
    The Deputy Administrator agrees with Judge Tenney's findings and 
his conclusion that the Government proved, by a preponderance of the 
evidence, that continued registration of the Farmacia Ortiz by the DEA 
would be inconsistent with the public interest, and that any pending 
applications should be denied at the present time. See Sokoloff v 
Saxbe, 501 F. 2d 571, 576 (2d Cir. 1974) (stating that ``permanent 
revocation'' of a DEA Certificate of Registration may be ``unduly 
harsh'').
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
Secs. 823 and 824, and 28 CFR Secs. 0.100(b) and 0.104, hereby orders 
that DEA Certificate of Registration AF1619040, issued to Farmacia 
Ortiz, be, and it hereby is, revoked and any pending applications are 
hereby denied. This order is effective February 9, 1996.

    Dated: December 28, 1995.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-338 Filed 1-9-96; 8:45 am]
BILLING CODE 4410-09-M