[Federal Register Volume 61, Number 106 (Friday, May 31, 1996)]
[Notices]
[Pages 27368-27370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13685]



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DEPARTMENT OF JUSTICE
Drug Enforcement Administration


Maxicare Pharmacy, Revocation of Registration

    On November 1, 1995, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Maxicare Pharmacy, (Respondent) of Houston, 
Texas, notifying it of an opportunity to show cause as to why DA should 
not revoke its DEA Certificate of Registration, BM3971644, under U.S.C. 
824(a) (2) and (4), and deny any pending application under 21 U.S.C. 
823(f), as being inconsistent with the public interest. Specifically, 
the Order to Show Cause alleged, among other things, that (1) on 
September 26, 1994, the Respondent's pharmacist and owner (Owner) 
provided falsified controlled substance records to DEA, allegedly 
documenting receipt of controlled substances from a local distributor, 
when subsequently it was determined that an employee of the distributor 
was unlawfully supplying controlled substances to the Respondent; (2) 
on January 12, 1995, the Owner and her husband were indicated on 
numerous counts of violating the Texas Health and Safety code related 
to the handling of controlled substances; (3) on July 25, 1995, the 
Owner was found guilty on nine counts of engaging in organized criminal 
activity related to theft of controlled substances by a public servant, 
and she was found guilty of fraud, theft and commercial violations of 
the controlled substances act, for which she was sentenced to ten years 
imprisonment and was ordered to pay a $3,000.00 fine; and (4) the 
Owner's husband was found guilty of two counts of engaging in organized 
criminal activity related to theft of controlled substances, and he was 
sentenced to seven years imprisonment.
    The Order was mailed in the U.S. Mail, and a signed receipt dated 
November 6, 1995, was returned to DEA. However, neither the Respondent 
nor anyone purporting to represent it has replied to the Order to Show 
Cause. More than thirty days have passed since the Order was served 
upon the Respondent. Therefore, pursuant to 21 CFR 1301.54(d), the 
Deputy Administrator finds that the Respondent has waived its 
opportunity for a hearing on the issues raised by the Order to Show 
Cause, and, after considering the investigative file, enters his final 
order in this matter without a hearing pursuant to 21 CFR 1301.54(e) 
and 1301.57.
    The Deputy Administrator finds that the Respondent was issued DEA 
Certificate of Registration BM3971644 on April 22, 1994, as a retail 
pharmacy, owned by the Owner and her husband (Co-owner). A DEA 
investigation revealed that, as a result of a DEA audit, the Respondent 
had significant overages of clonazepam and alprazolam, both Schedule IV 
controlled substances pursuant to 21 C.F.R. 1308.14. Specifically, on 
September 20, 1994, pursuant to a federal administrative inspection 
warrant executed at the Respondent pharmacy, a DEA Diversion 
Investigator (Investigator) conducted an audit of four different 
controlled substances, to include clonazepam and alprazolam. The 
Investigator and the Owner, who was also the pharmacist-in-charge, 
counted the existing inventory of these substances, to include trade 
names and generic equivalents, and compared the number on hand with 
documents which noted the amounts purchased, dispensed, or loaned by 
the Respondent to other pharmacies. As a result of this audit, it was 
determined that on September 20, 1994, there were 1,000 more clonazepam 
tablets than could be accounted for by the Respondent's records, to 
include purchase invoices and filled prescriptions. Also, on that date, 
there were 1,400 more alprazolam tablets than could be accounted for by 
the Respondent's records, and a total variance for all four substances 
of 3,438 tablets.
    During the inspection, the Investigator asked the Owner to provide 
the Respondent pharmacy's records for alprazolam and clonazepam. The 
Owner told the Investigator that some of her acquisition invoices were 
at home, but she agreed to deliver these documents to the Investigator. 
On September 26, 1994, the Owner delivered to the Investigator several 
invoices from Abbey Pharmaceutical which were dated between July 1, 
1994, and September 2, 1994. The Owner also told the Investigator that 
a named employee (Employee) of Abbey Pharmaceutical had agreed to loan 
the Respondent pharmacy these controlled substances for up to one year, 
and at the end of that year, the Owner was either to replace the 
substances or to pay for them. However, when the Investigator

[[Page 27369]]

interviewed the Employee, he stated that he did not know the Owner or 
the Respondent pharmacy. The Investigator also interviewed other 
officials of Abbey Pharmaceuticals, who stated that the Respondent 
pharmacy was not a customer, and that Abbey Pharmaceutical had not 
sold, loaned, or shipped controlled substances to the Respondent.
    Further investigation revealed that the Owner was involved in a 
scheme with an employee of Abbey Pharmaceutical, whereby the Owner 
received clonazepam and alprazolam and blank invoices for her to 
complete to create a record justifying receipt of these controlled 
substances. Further, the Co-owner was also involved in a scheme 
resulting in the transfer of medications from a local hospital to his 
residence. On July 25, 1995, the Owner was found guilty of the felony 
offenses of engaging in organized criminal activity related to theft of 
controlled substances by a public servant, fraud, theft, and commercial 
violations of the controlled substances act, by the 228th District 
Court of Harris County, Texas. On September 21, 1995, the Owner was 
sentenced to serve ten years confinement and to pay a $3,000.00 fine. 
The Co-owner was found guilty of engaging in organized criminal 
activity related to the theft of controlled substances, and he was 
sentenced to serve seven years in prison.
    Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy 
Administrator may revoke the Respondent's DEA Certificate of 
Registration, and deny any pending renewal of that registration, if he 
determines that the continued registration would be inconsistent with 
the public interest. Further, 21 U.S.C. 824(a)(2) provides in relevant 
part that a registration may be revoked upon a finding that the 
registrant has been convicted, under State law, of a felony related to 
any controlled substance.
    As to the Respondent's ``conviction,'' the DEA has previously 
determined that the registration of a corporate registrant may be 
revoked upon a finding that a natural person who is an owner, officer, 
or key employee, or has some responsibility for the operation of the 
registrant's controlled substances business, has been convicted of a 
felony offense relating to controlled substances. See Robert Hozdish, 
d/b/a/ A.J. Meyer Pharmacy, 53 FR 13338 (1998) (revoking a pharmacy's 
registration on the basis of the pharmacist's and owner's controlled 
substance-related felony conviction); see also, Taneytown Pharmacy, 51 
FR 45068 (1986) and cases cited therein. Here, the record clearly 
establishes that the Owner, who also served as the pharmacist-in-
charge, and the Co-owner of the Respondent were convicted in a Texas 
court of felony offenses involving controlled substances. Therefore, 
the Deputy Administrator concludes that a lawful basis exists for the 
revocation of the Respondent's DEA registration under 21 U.S.C. 
824(a)(2).
    As to the public interest in this matter, Section 823(f) provides 
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 a combination of factors 
and may give each factor the weight he deems appropriate in determining 
whether a registration should be revoked or an application for 
registration denied. See Henry J. Schwarz, Jr., M.D., 54 FR 16422 
(1989). In this case, factors four and five are relevant in determining 
whether the Respondent's continued registration would be inconsistent 
with the public interest.
    As to factor four, the Respondent's ``[c]ompliance with applicable 
State, Federal, or local laws relating to controlled substances,'' the 
record shows that record-keeping violations were found during a DEA 
audit of the Respondent. As for recordkeeping requirements, pursuant to 
21 U.S.C. 827(a)(3), ``every registrant under this subchapter * * * 
dispensing a controlled substance or substances shall maintain, on a 
current basis, a complete and accurate record of each substance * * * 
received, sold, delivered, or otherwise disposed of by him,'' and 21 
U.S.C. 827(b) provides that, ``Every inventory or other record required 
under this section (1) shall be in accordance with, and contain such 
relevant information as may be required by, regulations of the Attorney 
General.''
    Applicable federal recordkeeping regulations also exist, and 21 
C.F.R. 1304.21 requires a registrant to ``maintain on a current basis a 
complete and accurate record of each such substance * * * received, 
sold, delivered, * * * or otherwise disposed of by him.'' Further, 21 
C.F.R. 1304.24 requires dispensers to maintain records for each 
controlled substance reflecting, among other things, the number of 
commercial containers received, and ``including the date of and number 
of containers in each receipt and the name, address, and registration 
number of the person from whom the containers were received,'' the 
number of units dispensed, with detailed information concerning the 
person to whom it was dispensed, and information concerning any other 
method of disposal of the substance.
    Here, as a result of a DEA audit, the Respondent pharmacy's 
controlled substance records revealed significant overages of 
clonazepam and alprazolam, both Schedule IV controlled substances. 
Also, the Owner failed to provide accurate records or other documentary 
evidence to reconcile the amounts of controlled substances on hand with 
the legitimate acquisition and disposition of the medications as 
required by DEA regulations. Such unexplained overages were indicative 
of the Owner's violation of the regulated distribution system, which 
was established to protect the public interest by preventing diversion 
of such substances. DEA has previously found that a failure to maintain 
adequate records in a threat to the public interest and is a basis for 
revoking the Respondent's registration. See, generally, Taneytown 
Pharmacy, supra.
    As to factor five, ``[s]uch other conduct which may threaten the 
public health or safety,'' the Deputy Administrator finds it 
significant that, when the Owner was questioned concerning the audit 
results, she ultimately provided false receiving documents with the 
intention of deceiving the Investigator into believing that she had 
legitimately received the controlled substances from Abbey 
Pharmaceuticals. The Owner's willingness to falsify documents 
pertaining to controlled substances and to deceive a DEA investigator 
is further evidence of the Owner's lack of trustworthiness in handling 
controlled substances. As the owner and primary pharmacist for the 
Respondent, her conduct established such a threat to the public 
interest as to justify the revocation of the Respondent's DEA 
Certificate of Registration. Therefore, the Deputy Administrator finds 
that the public interest is best served by revoking the Respondent's 
registration and by denying any pending renewal application.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the

[[Page 27370]]

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 DEA Certificate of Registration 
BM3971644, previously issued to Maxicare Pharmacy, be, and it hereby 
is, revoked. It is further ordered that any pending applications for 
renewal of said registration be, and hereby are, denied. This order is 
effective July 1, 1996.

    Dated: May 28, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-13685 Filed 5-30-96; 8:45 am]
BILLING CODE 4410-09-M