[Federal Register Volume 63, Number 20 (Friday, January 30, 1998)]
[Notices]
[Pages 4668-4672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2374]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration
[Docket No. 95-49]


Singer-Andreini Pharmacy, Inc., Revocation of Registration

    On June 13, 1995, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to singers-Andreini Pharmacy, Inc. (Respondent) of 
West New York, New Jersey, notifying the pharmacy of an opportunity to 
show cause as to why DEA should not revoke its DEA Certificate of 
Registration, AS0666757, and deny any pending applications for renewal 
of such registration as a retail pharmacy under 21 U.S.C 823(f), for 
reason that the pharmacy's continued registration would be inconsistent 
with the public interest pursuant to 21 U.S.C. 824(a)(4).
    On July 10, 1995, Respondent filed a timely request for a hearing, 
and following prehearing procedures, a hearing was held in New York, 
New York on June 11 and 12, 1996, before Administrative Law Judge Mary 
Ellen Bittner. At the hearing, both parties called witnesses to testify 
and introduced documentary evidence. After the hearing, Government 
counsel submitted proposed findings of fact, conclusions of law and 
argument, and counsel for Respondent submitted a closing argument 
summation. On October 23, 1997, Judge Bittner issued her Opinion and 
Recommended Ruling, Findings of Fact, Conclusions of Law and Decision, 
recommending that Respondent's DEA Certificate of Registration be 
revoked. Neither party

[[Page 4669]]

filed exceptions to her decision, and on December 12, 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, 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 Acting Deputy Administrator finds that Harry Richman is a 
registered pharmacist who has been involved with Respondent pharmacy 
for over 30 years. Mr. Richman has jointly owned Respondent with the 
Andreini family for a number of years, and during all relevant times to 
this case has been the pharmacist-in-charge, responsible for the day-
to-day operation of the pharmacy.
    In 1983, DEA conducted an inspection of Respondent after it 
received a report from a distributor that Respondent had purchased more 
than 88,000 dosage units of Tranxene, a Schedule IV controlled 
substance, between April 1, 1982 and February 15, 1983. As part of the 
inspection, DEA conducted an accountability audit covering the period 
April 1, 1982 to February 15, 1983, which revealed that Respondent 
could not account for approximately 4,000 dosage units of various 
strengths of Tranxene. This shortage was most likely understated since 
DEA used a zero beginning balance in conducting the audit, and as a 
result, Respondent was not held accountable for any Tranxene that it 
may have had on hand at the beginning of the audit period. In addition 
to the audit results, the inspection revealed the following violations 
of Federal regulations: numerous prescriptions lacked the patients' 
addresses, issuance dates and dates filled; several Schedule II 
prescriptions were not maintained separately from other controlled 
substance prescriptions; and several Schedule III through V 
prescriptions were refilled more than six months after the issuance 
date of the prescription. In a letter to DEA dated July 1, 1983, 
Respondent indicated that it would correct the alleged violations, 
however it did not mention the shortage of Tranxene.
    In July 1985, the New Jersey Division of Consumer Affairs conducted 
a routine Board of Pharmacy inspection of Respondent. This inspection 
noted a number of deficiencies including: (1) A total of 177 outdated 
medications were found in the active stock inventory; (2) 12 
medications were improperly stored; (3) stock shelves were extremely 
dirty and in some places liquid medications had spilled on the shelves 
and dried making it difficult to remove some containers; (4) Respondent 
failed to dispense generic alternatives for some brand name medications 
pursuant to state and Medicaid requirements; (5) patient addresses were 
missing from the Exempt Narcotic Register; (6) patient addresses were 
not written on some controlled substance prescriptions; (7) DEA numbers 
were not written on some controlled substance prescriptions; (8) 
Schedule IV controlled substance prescriptions were filed with other 
prescriptions for legend drugs without being marked with the required 
red letter ``C''; (9) prescriptions received over the telephone failed 
to include the physician's address, the patient's address and/or the 
physician's DEA number; and (10) Respondent dispensed 13 oral emergency 
prescriptions for Schedule II substances without subsequently obtaining 
written prescriptions for these dispensations. As a result of this 
inspection, by letter dated March 6, 1987, the New Jersey Board of 
Pharmacy offered Respondent ``the opportunity to settle this matter and 
avoid the initiation of formal disciplinary proceedings'' by paying a 
civil penalty of $5,175.00. There is no evidence in the record to 
indicate whether Respondent paid this penalty.
    On March 19, 1986, another Board of Pharmacy inspection was 
conducted of Respondent. This inspection revealed that Respondent: (1) 
Maintained 32 outdated medications in the active inventory; (2) failed 
to dispense formulary alternatives for popular brand name medications; 
(3) dispensed six emergency telephone prescriptions for Schedule II 
substances without subsequently obtaining a written prescription; and 
(4) dispensed Schedule II substances pursuant to nine prescriptions 
that did not include the patients' addresses. Like with the prior state 
inspection, by letter dated May 23, 1988, Respondent was offered the 
opportunity to avoid formal disciplinary proceedings by paying a 
$750.00 civil penalty. Again, there is no evidence in the record to 
indicate whether Respondent paid this penalty.
    Subsequently, DEA was contacted by a postal employee who indicated 
that in September 1990 he had injured his arm at work. According to the 
employee, the postmaster encouraged him not to seek medical attention, 
and instead told the employee that he would get the employee any drug 
he wanted. The employee stated that he told the postmaster that he 
wanted Darvocet, a Schedule IV controlled substance, and that 
ultimately he was given an unlabeled vial containing approximately 10 
to 12 pills inscribed ``Darvocet N-100.'' DEA then interviewed the 
postmaster, who at first denied that he was involved in distributing 
controlled substances, but later admitted that he had obtained the 
Darvocet for the employee from Mr. Richman at Respondent without a 
physician's prescription for the medication. At the hearing in this 
matter, Mr. Richman asked, ``how could anybody accuse me of that when 
there's no label on the bottle?''
    DEA then conducted another inspection of Respondent in October 
1990. As part of this inspection, DEA audited Respondent's handling of 
Darvocet and its generic equivalent, and various strengths of Dilaudid, 
a Schedule II controlled substance. The audit covered the period July 1 
to October 30, 1990, and revealed a shortage of over 1,000 dosage units 
of Darvocet N-100, and over 300 dosage units of Dilaudid 4 mg. The 
shortage of Dilaudid was most likely understated since DEA used a zero 
beginning balance in conducting the audit, and as a result, Respondent 
was not held accountable for any Dilaudid 4 mg. that it may have had on 
hand at the beginning of the audit period. In addition to the audit 
discrepancies, the inspection of Respondent's records revealed other 
violations of controlled substance related regulations during the audit 
period. Respondent refilled some controlled substance prescriptions 
more than six months after the original prescription was issued and 
refilled some controlled substance prescriptions more than five times. 
On numerous occasions, Respondent dispensed controlled substances 
pursuant to prescriptions which did not bear a DEA number for the 
prescribing practitioner and dispend controlled substances on several 
occasions pursuant to prescriptions which contained incorrect DEA 
numbers. In addition, Respondent filled a Darvocet prescription even 
though the patient's address was not on the prescription, and 
Respondent failed to maintain some receiving records, including a copy 
of a DEA official order form.
    Subsequent to this inspection, DEA investigators interviewed two 
physicians who had purportedly issued

[[Page 4670]]

controlled substance prescriptions that were found in Respondent's 
records. In one instance, the prescription found in the pharmacy was 
dated May 31, 1990, however the dispensing log indicated that it was 
dated October 9, 1990. The physician told the investigators that while 
he had a patient by that name, a check of his records indicated that he 
had written a prescription for that patient on May 31, 1990, but had 
not authorized a prescription for the patient in October 1990. The 
investigators interviewed the second physician regarding a prescription 
that appeared to be either a photocopy and/or a forgery. The physician 
indicated that he had not seen the patient listed on the prescription 
on the date the prescription was supposedly issued; that he did not 
issue the prescription; and that he did not write the numeral ``8'' the 
way it looked on the prescription.
    On July 20, 1992, DEA again inspected Respondent pharmacy and 
conducted an accountability audit covering the period October 30, 1990 
to July 20, 1992, of the same controlled substances audited in October 
1990. This audit revealed total shortages of over 8,000 dosage units. 
In addition, a review of Respondent's records during this period 
revealed that on a number of occasions, Respondent's dispensing logs 
did not list the prescribing physician's DEA number; a number of 
controlled substance telephone prescriptions did not contain required 
information such as the prescribing physician's DEA number, patient 
addresses, dates, physician's addresses, the number of authorized 
refills, or a stamped red ``C'' denoting that the prescription was for 
a controlled substance. Also, this inspection revealed that Respondent 
dispensed Schedule II controlled substances on numerous occasions 
pursuant to telephone prescriptions without subsequently obtaining any 
written prescriptions for these dispensations, and that several 
Schedule II prescriptions were found in the same files as prescriptions 
for Schedule III and IV substances. Further, the inspection revealed a 
prescription for a Schedule IV controlled substance that was refilled 
12 times. The review of the records also revealed that several Schedule 
II order forms were missing from Respondent's files.
    Following the inspection, DEA investigators interviewed several 
physicians who purportedly issued controlled substance prescriptions 
that were found in Respondent's files. One physician was asked about 
two prescriptions that appeared to be photocopies. The physician 
checked his records and determined that he did have a patient by the 
name listed on the prescriptions, but that he did not issue photocopied 
prescriptions. A second physician was asked about a prescription that 
had pertinent information such as the patient's name and address, the 
date, and part of the doctor's name covered with correction fluid, and 
other information written over those portions of the prescription. The 
physician stated that while she did have a patient by the name listed 
on the prescription, she had not seen the patient on the date noted on 
the prescription. Another physician was interviewed about a 
prescription where the date was covered with correction fluid and 
January 23, 1991 was written over it. The physician stated that he had 
treated that patient on May 26, 1990, but not on January 23, 1991. A 
DEA investigator testified that if the prescription is held up to the 
light, it appears that the original date under the correction fluid is 
May 26, 1990. A fourth physician was interviewed about a prescription 
for 25 Percocet, a Schedule II controlled substance. The physician 
indicated that she did not have a patient by the name listed on the 
prescription and that she would not issue a Percocet prescription 
unless a patient had undergone surgery. The investigators interviewed 
another physician about a telephone prescription for Darvocet 
Respondent's records of this prescription did not indicate the 
patient's or physician's address, the physician's DEA number, nor any 
indication as to whether refills were authorized. Nonetheless, 
Respondent's records showed that this prescription was refilled twice. 
The physician indicated that he did not have a patient by the name 
indicated on the prescription. Finally, a physician was interviewed 
about a prescription that she had purportedly issued for an individual 
for 40 dosage units of Percocet. It appeared that there was correction 
fluid on the prescription and that the quantity authorized had been 
altered from 10 to 40 dosage units. After checking her records, the 
physician confirmed that she had issued a prescription for the 
individual on the date listed, however she had only authorized 10 
dosage units.
    During the course of the investigation, DEA investigators 
interviewed a former employee of Respondent who alleged that the clerk/
bookkeeper at Respondent would divert controlled substances from orders 
received at Respondent, then telephone the distributor telling it that 
it had forgotten to ship whatever she had taken, and then sell or trade 
the drugs. The former employee also told the investigators that when 
Mr. Richman would leave Respondent for whatever reason, he would leave 
a pharmacy intern in charge of the pharmacy, and that the pharmacy 
interns would divert controlled substances and distribute them without 
a prescription. At the hearing, Mr. Richman characterized the former 
employee as a ``disgruntled person'' who understood very little 
English.
    The former employee's daughter had worked at Respondent as a clerk 
and she also was interviewed by the investigators. She stated that she 
saw Mr. Richman give controlled substances to customers without a 
prescription; that Mr. Richman's employees and friends took controlled 
substances from Respondent; and that she saw Mr. Richman and pharmacy 
interns exchange controlled substances for food with an individual who 
worked at a local food store. At the hearing, Mr. Richman testified 
that the former employee's daughter, ``never, never worked the drug 
counter. * * * So she couldn't hear anything and she didn't have enough 
intelligence to sense anything.'' The former employee's son told the 
investigators that he sometimes ran errands for Respondent and that he 
has seen the owner of the business next door to Respondent go into 
Respondent's dispensing area and take medication. At the hearing, Mr. 
Richman testified that the son never worked for him and that ``he was a 
special ed student.''
    On February 10, 1994, DEA investigators conducted another 
inspection of Respondent during which Respondent's prescription files 
were seized. Upon reviewing Respondent's records, the investigators 
determined that a number of prescriptions and 134 daily dispensing logs 
had not been provided by Respondent. Consequently, the investigators 
returned to Respondent on two other occasions in order to obtain from 
Respondent's computer the dispensing information necessary to conduct 
an accountability audit. DEA then conducted an audit of certain 
Schedule II controlled substances for the period May 4, 1993 through 
February 10, 1994, and of certain Schedule III through V controlled 
substances for the period May 7, 1993 to February 10, 1994. The audits 
revealed discrepancies in Respondent's recordkeeping, including a 
shortage of 3,351 dosage units of Fiorinal with codeine #3, a Schedule 
III controlled substance.
    In addition to the audit results, the 1994 inspection revealed 
other violations of Federal regulations relating to controlled 
substances. A review of

[[Page 4671]]

Respondent's dispensing logs disclosed a number of instances where an 
invalid DEA number was listed for the prescribing physician, and a 
number of occasions where Respondent dispensed Schedule II controlled 
substances pursuant to telephone prescriptions without subsequently 
obtaining any written prescriptions for these dispensations. A review 
of Respondent's prescription files revealed numerous prescriptions that 
did not contain required information such as the physician's name, the 
physician's DEA number, the patient's name, the patient's address, and/
or the date issued. In addition, approximately 13 Schedule II 
controlled substance prescriptions were filed with prescriptions for 
Schedule III and IV substances instead of separately. Also, while 
conducting the inspection of Respondent, a DEA investigator observed a 
note taped to the wall in the dispensing area that appeared to be an 
``IOU'' for Demerol, A Schedule II controlled substance, and Klonopin, 
a Schedule IV controlled substance. When asked about the note, Mr. 
Richman replied that another area pharmacy had loaned him the drugs, 
however the investigator found no order form or other record of this 
controlled substance transfer.
    After reviewing records seized during the 1994 inspection, DEA 
sought to verify three controlled substance prescriptions found in 
Respondent's files that had purportedly been written by physicians 
working at a local hospital. The hospital's records indicated that none 
of these prescriptions were authorized, however the DEA investigator 
did not contact the physicians who purportedly issued the prescriptions 
to determine whether they had authorized them. In addition, the DEA 
investigator interviewed four physicians about a total of nine 
controlled substance prescriptions that were purportedly issued by them 
and found in Respondent's files. The physicians all indicated that they 
did not authorize the prescriptions attributed to them.
    At the hearing in this matter, Mr. Richman did not offer any 
explanation for the audit discrepancies or recordkeeping violations 
discovered during the various inspections of Respondent. Respondent 
testified that no one at Respondent pharmacy ever forged a 
prescription. In addition, Mr. Richman testified that ``[a]nytime we 
get a narcotic that's of a tremendous amount and quantity and we don't 
know who the patient is, especially from out of town New York, which we 
don't even fill, we always call a doctor.'' Further, Mr. Richman 
testified that the prescriptions with correction fluid found at 
Respondent were probably first brought to another pharmacy and not 
filled for some reason.
    Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy 
Administrator may revoke a DEA Certificate of Registration and deny any 
pending applications, 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 of 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 F.R. 
16,422 (1989).
    As a preliminary matter, Respondent argues that its registration 
should not be revoked because most of the Government's case is based on 
hearsay and is therefore unreliable. The Acting Deputy Administrator 
disagree with Respondent's contention. ``. . .[H]earsay is both 
admissible, and may, standing by itself, constitute substantial 
evidence in support of an administrative decision.'' Klinestiver v. 
Drug Enforcement Administration, 606 F.2d 1128 (D.C. Cir. 1979).
    Regarding factor one, there is evidence in the record that the New 
Jersey Board of Pharmacy conducted inspections of Respondent in 1985 
and 1986, both of which revealed numerous violations. In both instances 
the Board of Pharmacy offered Respondent the opportunity to pay civil 
penalties in order to avoid formal disciplinary action, however, there 
is no evidence in the record whether Respondent even paid these fines. 
There is also no evidence in the record to suggest that the Board of 
Pharmacy has restricted Respondent's pharmacy permit or Mr. Richman's 
license to practice pharmacy. But as Judge Bittner notes, ``sate 
licensure is a necessary but not sufficient condition for DEA 
registration.'' Therefore, the fact that Respondent currently possesses 
and unrestricted state license is not dispositive of the issue of 
whether or not to revoke its DEA registration.
    Factors two and four, Respondent's experience in dispensing 
controlled substances and its compliance with applicable laws and 
regulations relating to controlled substances, are extremely relevant 
in this proceeding. The record clearly establishes Respondent's long 
history of failure to comply with the laws and regulations relating to 
the dispensing of controlled substances. The state conducted 
inspections of Respondent in 1985 and 1986 and DEA conducted 
inspections, which included accountability audits, in 1983, 1990, and 
1994. Each of these inspections revealed numerous recordkeeping 
deficiencies.
    The state inspections revealed a number of violations of state 
requirements relating to controlled substances. The DEA inspections 
revealed Respondent's failure to keep complete and accurate records of 
its handling of controlled substances as required by 21 U.S.C. 827 and 
21 CFR 1304.21, and as evidenced by the various audit results. In 
addition, Respondent dispensed controlled substances pursuant to both 
oral and written prescriptions found in its files that did not contain 
information required by 21 CFR 1306.05(a), such as the physician's DEA 
registration number, the patient's address, and/or the date of 
issuance. Also, oral prescriptions for Schedule II controlled 
substances were dispensed without subsequently obtaining a written 
prescription for the dispensation in violation of 21 CFR 1306.11, and 
Schedule II prescriptions were intermingled in Respondent's files with 
Schedule III and IV controlled substance prescriptions in violation of 
21 CFR 1304.04(h)(1). Further, Respondent refilled substance 
prescriptions more than five times, and in some instances, more than 
six months after the original prescription was issued, both in 
violation of 21 CFR 1306.22(a).
    In addition, Respondent dispensed controlled substances without a 
valid prescription in violating of 21 U.S.C. 829, as evidenced by the 
Darvocet given to the postal employee in 1990. The Acting Deputy 
Administrator further finds that the physician interviews conducted by 
DEA establish that Respondent dispensed controlled substances without a 
physician's authorization. As Judge Bittner notes, ``although the 
evidence as to

[[Page 4672]]

unauthorized dispensing is hearsay, Respondent offered no contraditory 
evidence.'' The Acting Deputy Administrator concurs with Judge 
Bittner's conclusion that ``although it is possible that some of the 
physicians interviewed by investigators may have been mistaken, it 
strains credulity past the breaking point to find that all were.''
    Further, there is evidence in the record that Respondent dispensed 
controlled substances pursuant to prescriptions that appeared on their 
face to be forged and/or altered, and therefore not valid. Respondent 
argues that the Government did not prove that anyone at Respondent 
forged the prescriptions. The Acting Deputy Administrator finds that 
Respondent is correct, however the mere fact that Respondent dispensed 
controlled substances pursuant to clearly forged and/or altered 
prescriptions is evidence of Respondent's violation of its 
corresponding responsibility, as set forth in 21 CFR 1306.04, for the 
proper prescribing and dispensing of controlled substances.
    Other violations noted during these inspections were: failure to 
maintain all its records of receipt, including DEA order forms, as 
required by 21 CFR 1304.04 and 21 CFR 1305.13; failure to maintain 
records in a readily retrievable manner as require by 21 CFR 
1304.04(h)(2), and as evidenced by its inability to provide its 
dispensing records during the 1994 inspection; failure to use a DEA 
order form when transferring Schedule II controlled substances between 
registrants as required by 21 CFR 1305.03, and as evidence by the 
``IOU'' for Demerol found at the pharmacy during the 1994 inspection.
    The Acting Deputy Administrator concurs with Judge Bittner's 
conclusion that ``Respondent has presented no evidence explaining its 
extraordinary history of noncompliance, nor did Mr. Richman provide any 
basis for me to conclude that Respondent would be more mindful of and 
compliant with applicable law and regulations in the future.'' Of 
particular concern to the Acting Deputy Administrator is that many of 
the same violations were discovered during each of the inspections. 
There is no evidence of any effort on Respondent's part to correct the 
deficiencies after each inspection. This cavalier attitude towards 
compliance with the Controlled Substances Act and its implementing 
regulations is extremely troubling. The Acting Deputy Administrator 
finds that these factors weigh in favor of a conclusion that 
Respondents continued registration would not be in the public interest.
    Regarding factor three, there is no evidence that Respondent or Mr. 
Richman has ever been convicted under state or Federal laws relating to 
controlled substances. As to factor five, the Acting Deputy 
Administrator agrees with Judge Bittner and Government counsel that Mr. 
Richman's ``recalcitrant'' attitude evidences that he ``is either 
unwilling or unable to accept the responsibility inherent in a DEA 
registration.
    Judge Bittner concluded ``that the record as a whole establishes 
that Respondent's registration with the DEA would be inconsistent with 
the public interest,'' and therefore recommended that its registration 
be revoked. The Acting Deputy Administrator agrees. Respondent's 
continued failure to abide by the laws and regulations in place to 
prevent the diversion of controlled substances clearly justifies the 
revocation of its DEA Certificate of 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 DEA Certificate of Registration AS0666757, previously issued to 
Singers-Andreini Pharmacy, Inc., be, and it hereby is, revoked. The 
Acting Deputy Administrator further orders that any pending 
applications for the renewal of such registration, be, and they hereby 
are, denied. This order is effective March 2, 1998.

    Dated: January 20, 1998.
Peter F. Gruden,
Acting Deputy Administrator.
[FR Doc. 98-2374 Filed 1-29-98; 8:45 am]
BILLING CODE 4410-09-M