[Federal Register Volume 61, Number 52 (Friday, March 15, 1996)]
[Notices]
[Pages 10791-10796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6220]



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DEPARTMENT OF JUSTICE
[Docket No. 94-55]


Service Pharmacy, Inc.; Continued Registration

    On June 14, 1994, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Service Pharmacy, Inc., (Respondent) of Marion, 
North Carolina, notifying it of an opportunity to show cause as to why 
DEA should

[[Page 10792]]
not revoke its DEA Certificate of Registration, AS3172157, and deny any 
pending applications for renewal, under 21 U.S.C. 823(f) and 824(a)(4), 
as being inconsistent with the public interest.
    On July 8, 1994, the Respondent, through counsel, filed a timely 
request for a hearing, and following prehearing procedures, a hearing 
was held in Asheville, North Carolina, on April 18 through April 19, 
1995, before Administrative Law Judge Paul A. Tenney. At the hearing, 
both parties called witnesses to testify and introduced documentary 
evidence, and after the hearing, counsel for both sides submitted 
proposed findings of fact, conclusions of law and argument. On July 31, 
1995, Judge Tenney issued his Findings of Fact, Conclusions of Law, and 
Recommended Ruling, recommending that the Deputy Administrator take no 
action against the Respondent's registration. Neither party filed 
exceptions to his decision, and on September 1, 1995, Judge Tenney 
transmitted his opinion and the record of these proceedings to the 
Deputy Administrator.
    The Deputy Administrator has considered the record in its entirety, 
and pursuant to 21 CFR 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 Opinion and Recommended 
Ruling, Findings of Fact, Conclusions of Law and Decision of the 
Administrative Law Judge, and his adoption is in no manner diminished 
by any recitation of facts, issues and conclusions herein, or of any 
failure to mention a matter of fact or law.
    The Deputy Administrator finds that the investigation of the 
Respondent was initiated in February of 1990 after an investigator 
(Investigator) from the North Carolina Board of Pharmacy (Pharmacy 
Board) received information from the attorney for the Estate of James 
Toney that the Respondent had billed the Estate for prescriptions that 
the deceased's family did not believe to be properly authorized by the 
deceased's physicians. The Investigator interviewed Mrs. Toney, the 
deceased's wife, who related that her husband had had a friendship with 
John Lowder and Bill Jordan, the original owners of the Respondent 
pharmacy. James Segars had purchased Bill Jordan's half ownership 
interest in the pharmacy in 1984. Mrs. Toney also related an incident 
when she had confronted her husband about whether he used Halcion, and 
Mr. Toney had started that he did take Halcion, and that ``the 
pharmacists were taking care of him.'' Halcion is a brand name for a 
product containing triazolam, a Schedule IV controlled substance 
pursuant to 21 CFR 1308.14(c).
    The Investigator also jointly interviewed Mr. Toney's adult son and 
daughter, who corroborated the information received from Mrs. Toney. 
The son lived adjacent to Mr. Toney's home, believed that he had ``a 
good feel'' for his father's affairs, and did not believe that his 
father had been to any physicians recently. Also according to family 
members, Mr. Toney had been very depressed prior to his death. In 
addition, the Investigator received from the family prescription vials, 
receipts, and canceled checks, indicating that the Respondent was the 
source of the medication dispensed to Mr. Toney.
    Next, the Investigator apprised Mr. Segars of the information he 
had received concerning Mr. Toney, and Mr. Segars denied any 
wrongdoing. The Investigator then obtained various records and data 
from the pharmacy, with the help of one of its employees, and using the 
data, compiled a computer printout of prescriptions filled by the 
Respondent for Mr. Toney from January 1986 until January 1990.
    The Investigator then visited the offices of five physicians, Dr. 
Van Blaricom, Dr. Croft, Dr. Hart, Dr. Larry Boyles, and Dr. Wayne 
Boyles, who purportedly had issued prescriptions to Mr. Toney during 
the time frame in question. He obtained an affidavit from Dr. Van 
Blaricom, indicating that he had not authorized Mr. Toney's 
prescriptions for Tylenol No. 3 on October 30, 1988, nor Valium, 5 mg., 
on October 30, 1988, or on May 24, 1989. The parties stipulated to the 
fact that Tylenol No. 3 is a Schedule III controlled substance pursuant 
to 21 CFR 1308.13(e), and Valium is a brand name for a product 
containing diazepam, a Schedule IV controlled substance pursuant to 21 
CFR 1308.14(c).
    The Investigator also received an affidavit from Dr. Croft, stating 
that the doctor had reviewed his record for Mr. Toney ``back to 1983'', 
and from then until the date that he executed the affidavit, April 26, 
1990, ``neither he nor any member of his staff prescribed or otherwise 
authorized the Halcion .25 mg. or Amitriptyline 50 mg.'' to Mr. Toney. 
The Respondent pharmacy, however, had filled prescriptions for 120 
units of Halcion (.25 mg.), and 900 units of Amitriptyline (50 mg.) 
between 1986 and 1990, that were purportedly authorized by Dr. Croft 
for Mr. Toney.
    The Investigator also obtained an affidavit from Dr. Hart. He 
denied authorizing prescriptions for 270 units of Tylenol No. 3 to Mr. 
Toney, which were filled by the Respondents between November 1, 1987, 
and June 13, 1988.
    After interviewing Dr. Larry Boyles, the Investigator obtained an 
affidavit regarding his treatment of Mr. Toney. Dr. Larry Boyles denied 
treating or prescribing any controlled substances for Mr. Toney since 
July 21, 1986. The Investigator also interviewed and obtained an 
affidavit from Dr. Wayne Boyles, who denied ever treating Mr. Toney or 
authorizing any prescriptions for him. The Respondent pharmacy had 
dispensed from December of 1986 to January of 1990, 840 units of 
Halcion (.25 mg.) to Mr. Toney without authorization from either of 
these two physicians.
    On April 6, 1990, the Investigator separately interviewed three of 
the Respondent's pharmacy technicians. He testified that each 
technician had ``characterized the pharmacist or pharmacy staff at the 
Respondent pharmacy as being highly ethical. They estimated that the 
pharmacy filled in excess of 300 prescriptions a day[,] and each denied 
any knowledge of any illegal activity occurring at the store.''
    On April 9, 1990, the Investigator interviewed and obtained written 
statements from Mr. Lowder, Mr. Seagars, and Mr. Jordan, all 
pharmacists associated with the Respondent pharmacy. It was undisputed 
that Mr. Toney was suffering from several debilitating medical 
conditions. Both Mr. Lowder's and Mr. Jordan's statements characterized 
Mr. Toney as a trusted friend with legitimate medical problems. Also, 
Mr. Jordan acknowledged that he had filled a ``call-in type 
prescription without checking with the physician'' based simply on the 
representation that the physician wanted Mr. Toney to continue using a 
particular medication. According to Mr. Lowder's statement, he also had 
filled prescriptions for Mr. Toney without physician authorization and 
based solely on Mr. Toney's representations.
    According to Mr. Segars' statement, he also had filled call-in type 
prescriptions for Mr. Toney without checking with the physicians. He 
wrote that, based on Mr. Jordan's and Mr. Lowder's trust in Mr. Toney, 
he had relied on Mr. Toney's representation that the physician wanted 
him to continue using the requested medication. Mr. Segars admitted 
that ``where his name appears on the [prescription] profile [attached 
to his written statement] as the dispensing pharmacist, he is 
responsible for that dispening[,] and where his name appears as the 
original dispensing pharmacist[,] he is responsible for creating that 
prescription without

[[Page 10793]]
authorization of a physician and dispensing that product to Mr. Toney 
at the normal fee for that product.''
    On May 9, 1990, the Investigator conducted a drug accountability 
audit at the Respondent pharmacy. Mr. Lowder did not contest the audit. 
Employees of the Respondent assisted in conducting the audit, which 
covered the seven products received by Mr. Toney. Based on his audit, 
the Investigator prepared a computation chart. The pharmacy had either 
an overage or a shortage of each product, with the discrepancies 
ranging from a 0.99 percent shortage for Valium (5 mg.) to a 39.9 
percent overage for Halcion (.125 mg.). The Investigator testified that 
the discrepancies were significant enough to cause him concern.
    The Investigator also testified that he had noticed, among other 
problems, that there were ``numerous occasions where prescriptions had 
been refilled beyond their authorized or lawful limits. There had been 
numerous occasions of quantities of products dispensed in excess of 
what had been authorized on the original prescription.''
    Next the Investigator profiled and reviewed patient information for 
eight customers of the pharmacy, for whom he had noted some 
irregularities. Based on his review, the Investigator testified that he 
had ascertained that there had been unauthorized dispensing to six of 
the eight customers. For example, the Investigator's review revealed 
that the Respondent had dispensed approximately 816 units of Valium (5 
mg.) and 1620 units of Ativan (1 mg.) to a patient without a 
physician's authorization. The parties have stipulated that Ativan is a 
brand name for a product containing lorazepam, a Schedule IV controlled 
substance pursuant to 21 CFR 1308.14(c).
    On July 2, 1990, the Investigator conducted second interviews with 
Mr. Segars and Mr. Lowder, to discuss the patients other than Mr. 
Toney. In response to the ``excessive refills and excessive 
quantities.'' Mr. Segars and Mr. Lowder asserted that ``they had 
checked with the physicians before dispensing either the additional 
prescription or the additional amount on a prescription.'' Other 
accountability problems were attributed to a deficient computer system.
    On August 7, 1990, the Investigator again interviewed pharmacy 
technicians, who testified that out of the approximately 300 
prescriptions filled per day by the Respondent pharmacy, the 
technicians had witnessed Pharmacists Segars and Lowder fill 
unauthorized prescriptions two to three times a week. The technicians 
also stated that the pharmacy had received samples from two physicians, 
and that these samples had been punched out of the manufacturer's 
packaging and combined with the pharmacy's inventory. On August 29, 
1990, Pharmacists Segars and Lowder admitted the conduct concerning the 
samples, for they admitted that the pharmacy had received samples from 
two physicians, and that non-outdated samples were combined with the 
store's common stock and eventually sold to customers.
    On May 17, 1991, the Pharmacy Board issued a written notice of an 
administrative hearing to determine whether or not Pharmacists Jordan, 
Lowder, and Segars, and the Respondent pharmacy, had violated North 
Carolina law, and if so, what action to take. The Investigator had 
compiled all of the information obtained during his investigation into 
a chronological report, and he had submitted it to the Pharmacy Board.
    On July 16, 1991, a hearing was held, the parties proposed that the 
Pharmacy Board enter a consent order, and the Board agreed. In the 
Consent Order, the Pharmacy Board found that (1) from March 1986 
through January 1990, Pharmacists Lowder and Segars and ``dispensed 
Schedules III and IV controlled substances to James Toney without a 
physician's authorization;'' (2) that Pharmacist Jordan had dispensed 
Tylenol No. 3 to Mr. Toney, also without physician's authorization, on 
two occasions; (3) that unauthorized prescriptions had been filled for 
the same specific patient identified by the Investigator, and that 
excessive refills had been dispensed to that patient; (4) that 
Pharmacists Lowder and Segars had dispensed Schedules III and IV 
controlled substances to five patients in excess of the number of 
refills shown on the prescription; (5) that the pharmacy's computer 
system was lacking; (6) that samples had been combined with the normal 
pharmacy stock; and (7) that a drug accountability audit had revealed 
shortages of controlled substances. Based on its findings, the Pharmacy 
Board concluded that the pharmacists and the Respondent pharmacy had 
violated both Federal and State law. Therefore, the Pharmacy Board 
ordered revocation of Mr. Lowder's and Mr. Segars' licenses, but stayed 
that revocation for a period of ten years and imposed the following 
conditions on each of their licenses: (1) An active suspension of their 
licenses for 120 days each; (2) successful completion of the Board's 
jurisprudence exam; (3) successful completion of the University of 
Kentucky College of Pharmacy's course on prescribing and use of 
controlled substances, or the equivalent thereof; and (4) no violations 
of any laws governing the practice of pharmacy or the distribution of 
drugs, nor of any regulations or rules of the Pharmacy Board, during 
the ten-year stay period. Pharmacist Jordan's license was placed on 
probation for five years.
    In addition, the license of the Respondent pharmacy was actively 
suspended for seven days, and revocation thereof was stayed for ten 
years. The following conditions were imposed on the pharmacy by the 
Consent Order: (1) During the seven-day active suspension, the pharmacy 
was ordered to display signs provided by the Pharmacy Board, notifying 
the public of the suspension; (2) the pharmacy was ordered to give 30 
days' advance notice to its customers before the suspension went into 
effect; and (3) the pharmacy was ordered not to violate any laws 
governing the practice of pharmacy or the distribution of drugs, or any 
regulations or rules of the Board, during the ten-year stay period.
    Both the United States Department of Justice and the North Carolina 
State authorities declined to prosecute the pharmacists. Although the 
Investigator informed the DEA of the Pharmacy Board's findings and 
provided a copy of his report and the consent order in August of 1991, 
the DEA conducted no independent investigation of the pharmacy. In 
February of 1993, a DEA Diversion Investigator visited the Respondent's 
location and asked Mr. Lowder to voluntarily surrender the DEA 
registration, but upon advice of counsel, Mr. Lowder refused. Before 
Judge Tenney, the DEA Investigator testified that the sole basis for 
the revocation of the Respondent's registration was the state 
investigator's investigation and the resulting consent order of July 
1991.
    At the hearing before Judge Tenney, Mr. Segars admitted that he had 
violated the law prior to 1991, that information was handled poorly at 
the pharmacy, and that the pharmacists did not confirm medication 
prescriptions as required by law. He also testified that he, the other 
pharmacists, and the pharmacy have carried out all of the terms and 
conditions of the consent order. Both Mr. Segars and Mr. Lowder had 
attended and completed a five-day course at the University of Kentucky 
in compliance with the order. Judge Tenney noted in his opinion:

    Mr. Segars volunteered that the course at the University of 
Kentucky, which focused on doctors with abuse problems, ``was not as 
beneficial'' as he had hoped it would be * * *. This candid 
statement, among others,

[[Page 10794]]
leads me to conclude that Mr. Segars was honest and forthright in 
his testimony. In addition, Mr. Segars' positive attitude regarding 
present and future compliance, and his conduct since 1990, are 
deemed representative of the Respondent pharmacy. Pharmacist 
[Lowder] is too sick to work now, and Pharmacist Jordan has retired 
and only works occasionally.

    Also, according to the testimony of the Investigator, a relief 
pharmacist had ``characterized the computer system at the store [as of 
September 1990] as being confusing.'' However, Mr. Segars testified 
that immediately after the consent order was executed, a new computer 
system was acquired for the pharmacy to ensure better record-keeping. 
Further, Mr. Segars attended seminars on how to use this computer 
equipment. The pharmacy's software has been updated to make internal 
reports easier, and Mr. Segars now knows how to utilize the software 
features.
    However, when asked what had caused the problems that were not 
attributable to the pharmacy's prior computer system, Mr. Segars also 
testified:

    ``We--I believed too many things, I accepted too many people's 
word and I'm not sure that they were actually misleading me or lying 
to me trying to get unauthorized medicines, but until I placed the 
call and got it on a patient's record that I did call and did get a 
refill authorized, then it is an illegal prescription. I was 
negligent in not following up on things as I should have.''

    Mr. Segars also related an instance when he had received a doctor's 
request for a controlled substance, and unsure of the propriety of the 
request, he had called the Pharmacy Board for assistance. He testified 
that he now calls the Pharmacy Board whenever he is in doubt about 
dispensing a particular medication in a particular situation. Mr. 
Segars also testified that he had physically rearranged the interior of 
the pharmacy to ensure greater supervision therein, and to insure that 
no ``mistakes'' would be made at the Respondent pharmacy.
    The investigator testified that he had no information of wrongdoing 
by the Respondent pharmacy since the entry of the consent order in 
1991. Also, the Investigator's supervisor, by affidavit, wrote that the 
pharmacy and its pharmacists appear to be in full compliance with the 
consent order, and that his office has received no new reports of any 
violations of the laws governing the practice of pharmacy or the 
distribution of drugs by any of the individual pharmacists ``or the 
Pharmacy itself.'' Also, to renew their pharmacist licenses each year, 
Mr. Segars, Mr. Lowder, and Mr. Jordan must complete 10 hours annually 
of continuing education.
    Numerous witnesses from Marion, North Carolina, and its surrounding 
areas, testified before Judge Tenney on behalf of the Respondent and 
its pharmacists. The witnesses, including a Sheriff's Detective, the 
President of the McDowell Technical Community College, a Pastor, and a 
customer, testified to the good character of the pharmacists and to the 
excellent reputation of the Respondent pharmacy. As noted by Judge 
Tenney, ``[s]ome of the witnesses emphasized the importance of the 
pharmacy's free-delivery policy and the fact that it sells products on 
store credit. The pharmacists' familiarity with customers' allergies 
and their concerns over drug interactions were also identified as 
important safeguards provided by the pharmacy. [The] Pastor [    ] 
testified about the pharmacy's role in providing medicine to indigents 
in affiliation with the First United Methodist Church.'' Also, several 
of the Respondent's character witnesses expressed the opinion that the 
pharmacists are the type of people who learn from their mistakes and 
correct their ways. Even the Investigator testified that the 
pharmacists exhibited a receptiveness to changing their ways.
    The Respondent also submitted twenty additional affidavits by 
medical doctors who serve or served the community, and the affiants 
attested to the good reputation of the pharmacy and its pharmacists. 
The pharmacy's free-delivery policy was cited as providing a valuable 
service to the community's elderly and shut-ins.
    Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy 
Administrator may revoke or suspend 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 in determining the ``public interest:''
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health or 
safety.
    These factors are to be considered in the disjunctive; the Deputy 
Administrator may rely on any one or a combination of factors and may 
give each factor the weight he deems appropriate in determining whether 
a registration should be revoked or an application for registration 
denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-42, 54 FR 16422 
(1989).
    In this case, all five factors are relevant in determining whether 
the Respondent's continued registration would be inconsistent with the 
public interest. As to factor one, ``recommendation of the appropriate 
State licensing board, * * *'' the Pharmacy Board, through the consent 
order, reviewed the thorough investigation report of the Investigator, 
and determined, despite the documented violations, that the pharmacy 
and the pharmacists should continue in operation, after a short 
suspension period and with stringent rehabilitative requirements. The 
Investigator's supervisor affirmed that the pharmacy and the 
pharmacists have complied with the consent order, and that his office 
has received no new reports of any violations of the laws governing the 
practice of pharmacy or the distribution of drugs. Despite the 
Investigator's statement of his opinion, that the Respondent's 
continued registration would be inconsistent with the public's 
interest, Judge Tenney noted:

    In light of the incongruous nature of [the] Investigator ['s] [  
  ] personal opinion and the actions and mandate of the North 
Carolina Board of Pharmacy, together with a perceived lack of 
conviction with which [the] Investigator [    ] stated his opinion. 
Little weight is assigned to his opinion that continued registration 
of the pharmacy is inconsistent with the public interest.
    Thus, although no formal recommendation has been made by the 
North Carolina Board of Pharmacy, the fact that the Board has 
permitted the Respondent to continue dispensing controlled 
substances to the public amounts to an assessment by the Board that 
the pharmacy no longer ``present[s] a danger to the public health, 
safety and welfare.'' This fact weighs in favor of the Respondent.

The Deputy Administrator agrees with Judge Tenney's findings regarding 
this factor.
    As to factor two, the Respondent's ``experience in dispensing * * * 
controlled substances,'' the Respondent's pharmacists knowingly 
dispensed a significant quantity of controlled substances without 
physician authorization during the timeframe of 1983 to 1990. The 
pharmacists also refilled prescriptions beyond their authorized or 
lawful limits, and

[[Page 10795]]
dispensed excess quantities. Further, sample products were illegally 
combined with the pharmacy's common stock for sale to the public, and 
inaccurate records were maintained, as evidenced by the overages and 
shortages revealed by the Investigator's May 1990 audit.
    However, the Respondent's conduct since 1991 is also relevant under 
factor two. Specifically, after entry of the Consent Order in 1991, 
steps were taken to insure better record-keeping, to include the 
purchase, installation, and use of a new computer system. Also, the 
pharmacists took remedial training in handling controlled substances. 
The Investigator testified that he had no information of any wrongdoing 
by the pharmacy or its pharmacists since the entry of the Consent Order 
in 1991. He also testified that the pharmacists were receptive to 
changing their ways.
    As to factor three, ``the applicant's conviction record under 
Federal or State laws * * *'', it is uncontradicted that neither the 
Respondent nor any of the pharmacists has been convicted under Federal 
or State laws relating to the dispensing of controlled substances.
    As to factor four, the Respondent's ``[c]ompliance with applicable 
State, Federal, or local laws relating to controlled substances,'' the 
Deputy Administrator concurs with Judge Tenney's finding that ``[m]ost 
of the conduct discussed under factor (2) is indicative of 
noncompliance with State and Federal laws relating to controlled 
substances. For instance, by dispensing Schedule III and IV controlled 
substances without physician authorization, the Respondent pharmacy 
violated 21 CFR 1306.21(a) (requiring practitioner authorization either 
via written, facsimile, or oral prescription).'' Further, the 
Respondent's acts of combining and selling samples as common stock 
violate the Federal Prescription Drug Marketing Act. See 21 U.S.C. 301, 
331(t) and 353(c)(1). In the Consent Order, the Pharmacy Board also 
concluded that the Respondent's actions violated Federal and State law.
    As to factor five, ``[s]uch other conduct which may threaten the 
public health or safety,'' Judge Tenney noted that the Government 
contended that ``[w]here, as in this case, a pharmacist abdicates [his 
responsibility to use common sense and professional judgment], either 
intent[ional]ly or negligently, it jeopardizes the public health and 
welfare * * *.'' However, Judge Tenney concluded, and the Deputy 
Administrator concurs, that ``[a]pparently the Government is 
reiterating the same conduct under factor (5) that has been discussed 
at length under factors (2) and (4). As this does not constitute `other 
conduct,' the discussion under factors (2) and (4) shall suffice. 
Factor (5) is not deemed significant in assessing the public interest 
in this case.''
    In viewing these factors as a whole, the Deputy Administrator finds 
that the Government has established a prima facie case that continued 
registration of the Respondent by the DEA is inconsistent with the 
public interest. However, also relevant is the Respondent's evidence of 
rehabilitation. First, at the hearing before Judge Tenney and before 
the Pharmacy Board, the pharmacists took responsibility for their 
misconduct. They have also acted in compliance with the consent order, 
and actually have exceeded those requirements by installing a new 
computer system and taking classes to more competently operate the 
system to improve their defective record-keeping. Further, Mr. Segars 
testified that when he now has doubts about dispensing a medication, he 
calls the Pharmacy Board for guidance. He also acknowledged that 
``until [he] placed the call [to the physician] and got it on a 
patient's record that [he] did call and did get a refill authorized, 
then it is an illegal prescription.''
    Further, there is no evidence of wrongdoing after 1991 by the 
pharmacy or its pharmacists. In fact, the Investigator testified that 
the pharmacists were receptive to changing their ways, and the 
Respondent's character witnesses testified that the pharmacists are 
individuals who learn from their mistakes and do not repeat them. Judge 
Tenney concluded that ``[a]ll of the foregoing rehabilitation evidence 
leads to the conclusion that notwithstanding the illegal conduct prior 
to 1991, the Respondent can now be trusted with a DEA Certificate of 
Registration. It follows that continued registration by the DEA is not 
inconsistent with the public interest under 21 U.S.C. 823 and 824.''
    Judge Tenney also noted that there ``was never any evidence that 
the pharmacy [had] filled unauthorized prescriptions to facilitate the 
illegal resale of drugs by customers, nor any evidence that the 
pharmacy's motivation was monetary gain. For instance, Mr. Toney, the 
principal recipient of unauthorized prescriptions, had numerous medical 
ailments, and the medications at issue were legitimately prescribed on 
occasion. Although this does not diminish the seriousness of the 
pharmacists' behavior, it does evidence a humanitarian motive rather 
than greed or hedonism.'' Further, the Respondent presented evidence of 
its community service, to include free delivery and credit policies 
which benefit the public by assisting the elderly and the poor.
    As Judge Tenney rightly noted, ``[a]lthough these services are 
commendable, they would not prohibit revocation or suspension of the 
Respondent's Certificate of Registration if a threat still existed that 
the Respondent would fill unauthorized prescriptions or otherwise 
violate the law.'' However, the Deputy Administrator agrees with Judge 
Tenney's conclusions, that ``notwithstanding [that] the Respondent's 
past conduct would justify outright revocation in the absence of 
credible rehabilitation evidence, such evidence is present in this 
case. Pharmacist Segars' understanding of the Respondent's illicit 
behavior, his remorse for that past conduct, the rehabilitative steps 
taken, and the Respondent's `apparent commitment to a more responsible 
future lead to the conclusion that revocation would not be 
appropriate.' '' Steven W. Patwell, M.D., 59 FR 26814 (1994).
    Further, safeguards already exist to monitor the Respondent's 
future conduct, for the Respondent, Mr. Segars, and Mr. Lowder remain 
on probation by the North Carolina Board of Pharmacy. The Deputy 
Administrator agrees with Judge Tenney's observation that, ``in light 
of the thoroughness with which the Board conducted its investigation 
and the Board's mandate to protect the `public health, safety and 
welfare,' the Board reasonably can be expected to lift the stay of 
revocation in the highly unlikely event that the Respondent's past 
violations recur. Under such circumstances, the pharmacy would lack 
State authority to handle controlled substances, and the DEA would not 
have the authority to maintain the pharmacy's registration under the 
Controlled Substance Act.''
    Again, the Deputy Administrator emphasizes that the conclusion to 
continue the Respondent's registration in no way endorses the past 
misconduct of the Respondent. Rather, in determining whether continuing 
the Respondent's registration would be inconsistent with the public's 
interest, the Deputy Administrator has determined that, (1) given the 
commitment of the Respondent's pharmacists to future compliance, (2) 
the evidence of consistent compliance since 1991, and (3) the other 
rehabilitative actions taken, the public's interest is best served in 
this case by

[[Page 10796]]
continuing the Respondent's registration.
    Therefore, the Deputy Administrator finds that the public interest 
is best served by continuing the DEA Certificate of Registration, 
AS3172157, issued to Service Pharmacy, Inc. Accordingly, the Deputy 
Administrator of the Drug Enforcement Administration, pursuant to the 
authority vested in him by 21 U.S.C. 823 and 824, and 28 C.F.R. 
0.100(b) and 0.104, hereby orders that the Respondent's DEA Certificate 
of Registration be, and it hereby is, continued. This order is 
effective March 15, 1996.

    Dated: March 4, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-6220 Filed 3-14-96; 8:45 am]
BILLING CODE 4410-09-M