[Federal Register Volume 62, Number 65 (Friday, April 4, 1997)]
[Notices]
[Pages 16191-16193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8558]


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DEPARTMENT OF JUSTICE
[Docket No. 95-44]


Hagura Pharmacy; Denial of Application

    On May 23, 1995, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA) issued an 
Order to Show Cause to Hagura Pharmacy (Respondent) of Philadelphia, 
Pennsylvania, notifying it of an opportunity to show cause as to why 
DEA should not deny its application for registration as a retail 
pharmacy under 21 U.S.C. 823(f), for reason that such registration 
would be inconsistent with the public interest.
    By letter dated June 22, 1995, the Respondent, through counsel, 
timely filed a request for a hearing, and following prehearing 
procedures, a hearing was held in Philadelphia, Pennsylvania on March 
19, 1996, before Administrative Law Judge Mary Ellen Bittner. At the 
hearing, both parties called a witness to testify and introduced 
documentary evidence. After the hearing, both parties submitted 
proposed findings of fact, conclusions of law and argument. On December 
6, 1996, Judge Bittner issued her Opinion and Recommended Ruling, 
Findings of Fact, Conclusions of Law and Decision, recommending that 
Respondent's application for a DEA Certificate of Registration be 
denied. Neither party filed exceptions to her Opinion and Recommended 
Ruling and on January 9, 1997, Judge Bittner transmitted the record of 
these proceedings to the Acting Deputy Administrator.
    The Acting 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 Acting Deputy Administrator adopts, in full, the Opinion and 
Recommended Ruling, Findings of Fact, Conclusions of Law and Decision 
of the Administrative Law Judge. The Acting Deputy Administrator's 
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 Acting Deputy Administrator finds that Respondent pharmacy is 
located in Philadelphia, Pennsylvania and is owned and operated by 
Tahir Abdullah, R.Ph., M.D. (hereinafter referred to as Dr. Abdullah). 
Respondent pharmacy is seeking registration with DEA in order to handle 
controlled substances.
    Dr. Abdullah received his pharmacy training in Pakistan and came to 
the United States in 1973. From approximately 1977 until 1985, Dr. 
Abdullah owned another pharmacy, also named Hagura Pharmacy, at another 
location in Philadelphia, Pennsylvania. In 1979, Dr. Abdullah's brother 
came to the United States and worked at Hagura Pharmacy as a clerk. Dr. 
Abdullah was the pharmacist-in-charge at Hagura Pharmacy until 
approximately 1981 when he began his medical education outside of the 
United States. Beginning in 1981, Dr. Abdullah's brother and the 
pharmacist-in-charge handled the daily operations of the pharmacy and 
Dr. Abdullah's wife paid the bills. In 1983, he returned to the United 
States after the university he was attending closed. While he was in 
Philadelphia for the most part from 1983 through 1985, Dr. Abdullah 
only occasionally went to Hagura Pharmacy and was not involved in the 
daily operations of the pharmacy.
    In 1984, unbeknownst to Dr. Abdullah, his brother attempted to 
fraudulently assume ownership of Hagura Pharmacy. However in this 
proceeding, it is undisputed that Dr. Abdullah remained the owner of 
Hagura Pharmacy. In February 1985, Dr. Abdullah decided to sell Hagura 
Pharmacy to his brother-in-law and on February 28, 1995, papers were 
filed with the State Board of Pharmacy for a change of ownership and 
listing the new name of the pharmacy as Khawaja

[[Page 16192]]

Pharmacy. A new DEA Certificate of Registration was issued to Khawaja 
Pharmacy. However, after only one payment was made by Dr. Abdullah's 
brother-in-law, Khawaja Pharmacy was closed and the inventory was 
transferred to another local pharmacy in mid-April 1985. Dr. Abdullah 
testified at the hearing in this matter that he arranged for the sale 
of Khawaja Pharmacy. There is some question as to whether Dr. 
Abdullah's brother-in-law was ever the actual owner of Khawaja 
Pharmacy, however in light of the findings below, the Acting Deputy 
Administrator finds it unnecessary to resolve this issue.
    In 1985, DEA initiated an investigation of the controlled substance 
handling practices of Hagura Pharmacy and Khawaja Pharmacy. This 
investigation was initiated after DEA had received a number of reports 
from Hagura Pharmacy's suppliers that the pharmacy was purchasing an 
excessive amount of Schedule II controlled substances. On May 23, 1985, 
DEA investigators attempted to serve an administrative inspection 
warrant at then-Khawaja Pharmacy. After discovering that the pharmacy 
was closed, the investigators contacted Dr. Abdullah at the suggestion 
of the State Board of Pharmacy. Dr. Abdullah and the pharmacist-in-
charge of Hagura Pharmacy and Khawaja Pharmacy met with the 
investigators at a building where the controlled substance records of 
the pharmacies were maintained. Dr. Abdullah signed, as the owner of 
the pharmacy, a receipt for the records turned over to the 
investigators.
    The investigators then conducted an accountability audit of 
Schedule II controlled substances using the records supplied by Dr. 
Abdullah, as well as information provided by Hagura Pharmacy's 
suppliers and the inventory conducted by the pharmacist-in-charge of 
Khawaja Pharmacy upon its closure. The audit covered the period January 
3, 1984 through April 17, 1985, and revealed a shortage of 2,359 dosage 
units of Ritalin 20 mg. and overages of the other audited substances.
    In conducting the audit, the investigators noted that at least 85% 
of the approximately 2,400 Schedule II prescriptions filled during the 
audit period were issued by one of three doctors, all of whose offices 
were located at least ten miles from Hagura Pharmacy. The investigators 
interviewed those doctors and showed them copies of the prescriptions. 
Each of the doctors stated that the names on the prescriptions were not 
patients of the doctor, that it was not the doctor's signature on the 
prescriptions, and that no one from either Hagura Pharmacy or Khawaja 
Pharmacy had ever telephoned the doctor attempting to verify the 
prescriptions. The investigators then telephonically contacted the 
other doctors whose prescriptions were found in the pharmacies' records 
to verify their legitimacy. The investigators determined that 
fraudulent prescriptions found in the records of the pharmacies 
accounted for 89% of the approximately 174,000 dosage units of the 
audited Schedule II substances dispensed during the audit period, and 
approximately 90% of the fraudulent prescriptions were filled when the 
pharmacy was operating under the name Hagura Pharmacy. For purposes of 
the audit, the investigators included the fraudulent prescriptions in 
the total amount of controlled substances dispensed during the audit 
period. However, if those prescriptions were excluded, the results of 
the audit would be significantly different, with the shortage being 
larger and the overages turning into shortages.
    Dr. Abdullah graduated from medical school in 1987, however as of 
the date of the hearing he was not licensed to practice medicine in the 
United States. Dr. Abdullah testified that if Respondent pharmacy is 
issued a DEA Certificate of Registration, he will be the managing 
pharmacist, and if he becomes licensed to practice medicine in the 
United States, he will close Respondent pharmacy and surrender its DEA 
registration.
    The Government contends that Respondent's registration would be 
inconsistent with the public interest based upon the fact that Hagura 
Pharmacy, while owned by Dr. Abdullah, did not keep accurate controlled 
substance dispensing records as evidenced by the results of the 
accountability audit and the significant number of fraudulent 
prescriptions that were filled by the pharmacy. The Government also 
contends that Respondent's registration would not be in the public 
interest because Dr. Abdullah blames others for the problems of Hagura 
Pharmacy, even though he was the owner.
    Respondent contends that although he was the owner, he was not 
involved in the daily operations of Hagura Pharmacy from 1981 through 
1985, and therefore, was not involved in any alleged wrongdoing. 
Respondent further argues that any alleged wrongdoing occurred prior to 
1985 and therefore, DEA's proposed denial of its application for 
registration is barred by the doctrine of laches and/or principles of 
equity.
    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny an 
application for a DEA Certificate of Registration if he determines that 
such registration would be inconsistent with the public interest. In 
determining the public interest, the following factors are 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 and 
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 be denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-
42, 54 FR 16,422 (1989).
    Regarding factor one, there is no evidence in the record that any 
state licensing authority has taken any action against Dr. Abdullah or 
any of his pharmacies. As Judge Bittner noted ``that although state 
licensure is a prerequisite for a DEA registration, it is not the only 
factor to be considered.''
    As to factor two, the Acting Deputy Administrator finds that while 
DEA registers pharmacies, a pharmacy can only act through its officers 
and agents. As Judge Bittner stated in her opinion, ``[i]t is well 
settled that the Deputy Administrator may revoke, suspend, or deny a 
registration to a pharmacy `based on the controlled substance handling 
practices of the pharmacy's owner, majority shareholder, officer, 
managing pharmacist or other key employee.' '' Cumberland Prescription 
Center, Inc., 52 FR 37,224 (1987). Therefore, in determining 
Respondent's experience in dispensing controlled substances, the Acting 
Deputy Administrator considers the experience of Respondent's owner/
pharmacist, Dr. Abdullah.
    It is undisputed that Dr. Abdullah was the owner of Hagura Pharmacy 
from 1977 until at least the end of February 1985. The DEA audit of 
Hagura Pharmacy/Khawaja Pharmacy, covering the period January 3, 1984 
through April 17, 1985, revealed that more than 2,400 fraudulent 
prescriptions were filed by the pharmacy. Further investigation 
revealed that three doctors' names appeared as the

[[Page 16193]]

prescribing physicians on approximately 85% of these prescriptions and 
these doctors indicated that the prescriptions were forged and that no 
one from Hagura Pharmacy had ever contacted them to verify the 
legitimacy of the prescriptions. Of the forged prescriptions, 90% were 
filled prior to February 28, 1985, while the pharmacy was operating as 
Hagura Pharmacy with Dr. Abdullah as the owner. Dr. Abdullah contends 
that he should not be held accountable for the forged prescriptions 
that were filled at Hagura Pharmacy since he was not actively involved 
in the operation of the pharmacy at that time.
    Like Judge Bittner, the Acting Deputy Administrator rejects Dr. 
Abdullah's contention. As the owner, he was ultimately responsible for 
what occurred at his pharmacy regardless of whether he was involved in 
its daily operation or not. It was Dr. Abdullah's responsibility to 
ensure that adequate safeguards were in place to prevent the diversion 
of controlled substances. However, with Dr. Abdullah as the owner, 
Hagura Pharmacy dispensed thousands of dosage units of highly abused 
Schedule II controlled substances pursuant to fraudulent prescriptions. 
The Acting Deputy Administrator is troubled by Dr. Abdullah's continued 
assertions that he should not be held accountable for the improper 
dispensing that occurred at Hagura Pharmacy. Dr. Abdullah's failure to 
accept responsibility, does not bode well for Respondent's future 
handling of controlled substances.
    Regarding factors three and four, there is no evidence that 
Respondent or Dr. Abdullah had ever been convicted under state or 
Federal laws relating to controlled substances. However, there is 
evidence that Hagura Pharmacy, while owned by Dr. Abdullah, failed to 
comply with Federal laws relating to controlled substances. Hagura 
Pharmacy failed to maintain complete and accurate records of controlled 
substances in violation of 21 U.S.C. 827 and 21 CFR 1304.21, as 
evidenced by the accountability audit results. In addition, Hagura 
Pharmacy dispensed controlled substances without a valid prescription 
in violation of 21 U.S.C. 829 and 21 CFR 1306.04. Dr. Abdullah again 
argues that he should not be held accountable for Hagura Pharmacy's 
failure to comply with Federal laws since he was not an active 
participant in the operation of the pharmacy. However, for the reasons 
discussed in conjunction with factor two, the Acting Deputy 
Administrator rejects this argument.
    As to factor five, Judge Bittner found relevant ``* * * Dr. 
Abdullah's lack of candor regarding the ownership of the pharmacy. * * 
*'' Dr. Abdullah maintained that he was not the owner of Khawaja 
Pharmacy and therefore should not be held accountable for the actions 
of that pharmacy. Judge Bittner found this argument ``at best 
disingenuous'' in light of the fact that Dr. Abdullah arranged for the 
transfer of the inventory to another pharmacy upon Khawaja Pharmacy's 
closure, an that his brother-in-law had only made one payment to Dr. 
Abdullah at the time the pharmacy closed. But like Judge Bittner, the 
Acting Deputy Administrator finds it unnecessary to assess the impact 
of this finding on the outcome of this proceeding, since 90% of the 
fraudulent prescriptions were filed by Hagura Pharmacy while, without 
dispute, it was owned by Dr. Abdullah.
    Respondent asserts that the alleged wrongdoing occurred more than 
ten years ago and therefore the doctrine of laches or other principles 
of equity should preclude the denial of Respondent's application for 
registration. DEA has consistently held that while passage of time 
since the wrongdoing is not, by itself, dispositive, it is a 
consideration in assessing whether Respondent's registration would be 
inconsistent with the public interest. See Norman Alpert, M.D., 58 FR 
67,420 (1993). In Alpert, the then-Acting Administrator found 
significant, ``Respondent's recognition of the serious abuse of his 
privileges as a DEA registrant, and his sincere regret for his 
actions.'' Here however, Dr. Abdullah maintains that he has done 
nothing wrong and that he should not be held accountable for the 
actions of Hagura Pharmacy, even though he was its owner.
    Judge Bittner concluded that ``[i]t is clear from Dr. Abdullah's 
suggestion that he should not be held accountable for the wrongdoing of 
his pharmacy during his absence that he does not appreciate or accept 
the responsibilities that accompany owning a DEA registrant. In 
addition, there is no persuasive evidence in the record to indicate 
that Dr. Abdullah would be a more conscientious owner the second time 
around.'' The Acting Deputy Administrator agrees. Dr. Abdullah has 
exhibited a complete disregard for the tremendous responsibilities that 
accompany the issuance of a DEA registration. Therefore, the Acting 
Deputy Administrator concludes that it would be inconsistent with the 
public interest to grant Respondent pharmacy a DEA registration.
    Accordingly, the Acting Deputy Administrator of the Drug 
Enforcement Administration, pursuant to the authority vested in him by 
21 U.S.C. 823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that 
the application for registration as a retail pharmacy submitted by 
Hagura Pharmacy, be, and it hereby is, denied. This order is effective 
May 5, 1997.

    Dated: March 27, 1997.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 97-8558 Filed 4-3-97; 8:45 am]
BILLING CODE 4410-09-M