[Federal Register Volume 63, Number 33 (Thursday, February 19, 1998)]
[Notices]
[Pages 8477-8480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4201]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration
[Docket No. 96-6]


Townwood Pharmacy; Revocation of Registration

    On October 31, 1995, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Townwood Pharmacy (Respondent) of Houston, 
Texas, notifying the pharmacy of an opportunity to show cause as to why 
DEA should not revoke its DEA Certificate of Registration, AT8866468, 
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

[[Page 8478]]

the public interest pursuant to 21 U.S.C. 824(a)(4).
    By letter dated November 15, 1995, Respondent, through counsel, 
timely filed a request for a hearing, and following prehearing 
procedures, a hearing was held in San Antonio, Texas on October 16, 
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. Respondent 
did not submit any posthearing filing. On November 10, 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 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 Respondent is a retail 
pharmacy located in Houston, Texas. A.B. Hurd, has been a licensed 
pharmacist for 25 years and has been Respondent's owner and operator 
for 17 years. In late 1992, DEA received information from the Houston 
Police Department that Respondent pharmacy had a reputation for 
diverting controlled substances.
    As a result of this information, DEA initiated an investigation of 
Respondent, which included five undercover visits between December 17, 
1992 and July 9, 1993. The purpose of these visits was to determine 
whether Respondent would dispense controlled substances for no 
legitimate medical purpose. DEA obtained a total of nine controlled 
substance prescriptions written by a local Houston orthopedic physician 
for a Symone Williams to be used in the undercover investigation. Five 
of these prescriptions were for various quantities of Tylenol #4 with 
codeine, a Schedule III controlled substance, and four were for various 
quantities of Valium 10 mg., a Schedule IV controlled substance. 
However, none of the prescriptions were for an excessive quantity of 
either drug, given that each undercover visit was made more than a 
month after the previous visit. The prescriptions did not contain the 
patient's address or the date of issuance. Four out of the five visits 
were conducted by an undercover agent posing as Symone Williams and the 
fifth visit was conducted by an undercover agent posing as Ms. 
Williams' boyfriend.
    On each occasion, the undercover agent had a conversation with Mr. 
Hurd while he was filling the prescriptions. At least four of these 
visits were tape recorded and transcripts of these recordings are in 
evidence in this proceeding. During the course of these visits, the 
undercover agents made a number of statements to Mr. Hurd in an attempt 
to indicate to him that the controlled substances were not going to be 
used for a legitimate medical purpose. For instance, during the first 
visit, the undercover agent told Mr. Hurd, ``I just tell my doctor to 
write 'em, I don't tell him anything''; ``I like the brand, `cause 
that's what my boyfriend likes''; and ``He's gonna have some alcohol 
with it anyway.'' During the second visit, the undercover agent told 
Mr. Hurd, ``Me and my boyfriend used [the controlled substances,] they 
worked good''; and ``take that with a little bit of Crown,'' referring 
to alcohol. On another occasion, the agent made the following comments 
to Mr. Hurd: ``I go back to my doctor and * * * I told him I'm feeling 
bad, and he just give it to me''; and ``[Y]ep, we'll get high. That's 
right, some Crown and some Tylenol.'' During several of these visits, 
the undercover agent posing as Symone Williams kept talking about 
``partying'' with Mr. Hurd. Throughout the transcripts of these visits, 
almost all of Mr. Hurd's comments, especially those in response to the 
above statements, were unintelligible. Mr. Hurd filled all of the 
prescriptions presented to him by the undercover agents. The 
prescriptions for Valium were filled with its generic equivalent 
diazepam.
    Following the undercover visits, the undercover agent telephoned 
Mr. Hurd on September 27, and October 12, 1993, in an attempt to obtain 
controlled substances without presenting a prescription. Mr. Hurd did 
not agree to dispense any more controlled substances to the undercover 
agent. At the hearing, Mr. Hurd testified that he denied the undercover 
agent's telephone requests because there were no refills listed on the 
previously presented prescriptions and the agent had not authorized Mr. 
Hurd to contact the doctor to request a refill.
    Mr. Hurd testified at the hearing before Judge Bittner that he did 
not recall any of the undercover agent's comments about using the 
controlled substances with alcohol or sharing them with her boyfriend. 
In addition, there was testimony that there was music or a television 
playing in the background during these visits: that the undercover 
agent and Mr. Hurd were approximately two arms' length apart during the 
transactions; that the undercover agent was also having conversations 
with the pharmacy's clerk; and that the undercover agent was not 
standing directly in front of Mr. Hurd when she was making conversation 
with him.
    In addition, Mr. Hurd testified that he was familiar with the 
doctor who purportedly issued the prescriptions; that the doctor has a 
good reputation in the Houston area; and that Respondent pharmacy had 
never had any problems with the doctor's prescriptions in the past. Mr. 
Hurd further testified that the prescriptions appeared to be facially 
valid to him; that the quantities prescribed and the frequency of the 
prescriptions did not raise suspicions; and that Tylenol # 4 with 
codeine and Valium are commonly prescribed by orthopedic physicians. He 
also testified that he cannot determine whether or not a customer has 
pain and/or anxiety simply from looking at the individual. Mr. Hurd 
testified that he observed the undercover agent and that she had a 
professional appearance, her eyes were not red, and her speech was not 
slurred.
    Mr. Hurd testified that he concluded that the prescriptions were 
valid, and that had he suspected that the prescriptions were invalid, 
he would not have filled them. Instead, he would have reported the 
prescriptions to the appropriate authorities and/or called the 
prescribing physician for verification.
    Another area pharmacist testified at the hearing before Judge 
Bittner on behalf of Respondent. He stated that he has worked as a 
retail pharmacist in Houston for 27 years and has known Mr. Hurd since 
1967. Like Mr. Hurd, this pharmacist testified that he is familiar with 
the physician who issued the prescriptions used in the undercover 
operation; that the physician has a good reputation; and that so long 
as the physician's prescriptions met the legal requirements, he would 
fill them. This pharmacist also testified that his practice is similar 
to that of Respondent and that it is not at all unusual for customers 
to strike up a conversation with him while he is filling a 
prescription, but that he does not pay too much attention to what a 
customer

[[Page 8479]]

says because his main objective is to fill the prescription. However, 
the pharmacist conceded on cross-examination that he would be concerned 
if a customer represented that he was going to take the prescribed 
controlled substance with alcohol.
    After the completion of the undercover investigation, DEA conducted 
an accountability audit of ten controlled substances at Respondent. The 
audit covered the period February 26, 1993 to January 25, 1994, and 
revealed discrepancies for nine of the audited substances. Of 
particular note, Respondent could not account for 5,363 dosage units of 
diazepam 10 mg., 1,077 dosage units of hydrocodone 7.5/500, and 6,207 
dosage units of APAP with codeine 60 mg. During the course of 
conducting the audit, it was discovered that Respondent did not 
maintain copies of 12 prescriptions and 6 purchase invoices. Respondent 
was nonetheless given credit for these dispensations and purchases by 
the investigators conducting the audit. Following the audit, the 
results were discussed with Mr. Hurd and he was given the opportunity 
to provide any additional records. Mr. Hurd subsequently provided the 
investigators with copies of additional prescriptions, however the 
prescriptions did not change the audit results because they were either 
not for the audited substances or were outside of the audit period. In 
addition, Mr. Hurd subsequently informed the investigators that he had 
discovered another bottle of diazepam, which the investigators counted 
and included in the audit calculations.
    At the hearing in this matter, Mr. Hurd indicated that when 
conducting Respondent's yearly inventory to satisfy state requirements, 
he estimates the number of Schedule III through V controlled substances 
on hand. Respondent's February 26, 1993 inventory was used as the 
initial inventory for DEA's accountability audit.
    Following the audit of Respondent, DEA was contacted by an 
individual who stated that her daughter had a drug problem, was 
currently in drug rehabilitation, and previously had overdosed 
approximately four to five times on prescription drugs that she had 
been getting from an employee of Respondent. DEA investigators later 
spoke to the daughter who confirmed that she had been getting her 
supply of controlled substances from Respondent's employee. Both of 
these individuals provided DEA investigators with a bag of drugs. A DEA 
investigator testified at the hearing that there were in fact some 
valid prescriptions for the individual on file at Respondent, but that 
the individual claimed that she also obtained controlled substances 
from Respondent without a prescription. The investigator further 
testified however that the drugs the individual actually presented to 
DEA had another pharmacy's label on the bottles.
    DEA investigators never spoke to Respondent's employee about the 
individual, however Mr. Hurd testified that he spoke with the employee 
and the employee never admitted to giving the individual any drugs 
without a prescription. Mr. Hurd nonetheless instructed the employee 
not to fill any more prescriptions for the individual.
    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 law 
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 any 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 that any action has been 
taken against Respondent's state license. As Judge Bittner notes 
however, since ``state licensure is a necessary but not sufficient 
condition for DEA registration, * * * this factor is not dispositive.''
    The Acting Deputy Administrator finds that factors two and four, 
Respondent's experience in dispensing controlled substances and its 
compliance with applicable laws relating to controlled substances, are 
extremely relevant in determining the public interest in this matter. 
Under the Controlled Substances Act and its implementing regulations, 
pharmacists have a corresponding responsibility to ensure that 
controlled substances are prescribed and dispensed for a legitimate 
medical purpose. 21 CFR 1306.04(a). The Government contends that 
Respondent dispensed controlled substances to the undercover agents 
knowing that the drugs were not for a legitimate medical purpose. 
However, the Acting Deputy Administrator agrees with Judge Bittner's 
conclusion that, ``[i]t is not clear from the record whether or not Mr. 
Hurd filled the prescriptions knowing that [the undercover agent] 
intended to use the drugs for no medical purposes.'' While the 
undercover agents' statements indicating a nonmedical purpose for the 
drugs are clearly reflected in the transcripts of the visits, Mr. 
Hurd's responses are unintelligible and Mr. Hurd testified that he did 
not hear the undercover agents make these statements. In addition, no 
testimony was elicited from either the undercover agent or the 
investigator who was monitoring the undercover visits as to what Mr. 
Hurd's responses were to the undercover agents' statements.
    Judge Bittner does point out however, that on one occasion, the 
transcript indicates that Mr. Hurd asked the undercover agent when she 
was going to ``party'' with him, and therefore, Mr. Hurd was somewhat 
aware of the undercover agent's statements. Also at the hearing, Mr. 
Hurd testified that he dismissed the undercover agent's comment that 
``My doctor writes anything I want,'' because he was familiar with the 
prescribing doctor and felt that the doctor would not prescribe 
improperly. This testimony by Mr. Hurd indicates that he in fact heard 
the undercover agent's statement.
    The Acting Deputy Administrator finds that the record does not 
clearly establish whether Respondent dispensed controlled substances to 
the undercover agent for no legitimate medical purpose. But, like Judge 
Bittner, the Acting Deputy Administrator concludes that ``in light of 
the discussion below,* * * it [is] unnecessary to decide whether the 
record establishes that Mr. Hurd's filling of the prescriptions for 
Symone Williams would, standing alone, warrant revocation of 
Respondent's registration.''
    The Acting Deputy Administrator finds that the record is clear that 
Respondent has failed, at the very least, to comply with the 
recordkeeping requirements of both Federal and state law as evidenced 
by the violations revealed by the accountability audit. Respondent 
failed to maintain complete

[[Page 8480]]

and accurate records of controlled substances in violation of 21 U.S.C. 
827 and 21 CFR 1304.21, as evidenced by the audit discrepancies. For 
less than a one year period of time, Respondent could not account for 
over 13,500 dosage units of controlled substances. Respondent did not 
actually offer any explanation for its failure to account for these 
drugs. Instead, Mr. Hurd seemed to suggest that the discrepancies were 
caused by the compounding over time of his estimates of Schedule III 
through V drugs on hand when conducting his yearly inventory. The 
Acting Deputy Administrator recognizes that it is permissible to 
estimate Schedule III through V controlled substances when-conducting 
controlled substance inventories. See 21 CFR 1304.11(e)(3). However, 
such estimations would not compound over time. Instead, for each 
inventory, Respondent would estimate what it had on hand on that date. 
It was Respondent's estimated inventory taken on February 26, 1993, 
that was used as the initial inventory for DEA's accountability audit. 
It is inconceivable that Respondent's estimations on that date were off 
by over 13,500 dosage units. Therefore, the Acting Deputy Administrator 
concludes that Respondent did not offer any plausible explanation 
whatsoever for the tremendous shortages revealed during the audit.
    Respondent's failure to maintain 6 purchase invoices and 12 
prescriptions is further evidence of its failure to maintain complete 
and accurate records of controlled substances as required by 21 U.S.C. 
827. This failure to keep accurate records also violated the Texas 
Controlled Substances Act, title 6 Tex. Health & Safety Code Secs.  
13.6(d) & 13.64(b).
    While the Acting Deputy Administrator has concluded that it is 
unnecessary to determine whether or not Respondent dispensed controlled 
substances to the undercover agents for no legitimate medical purpose, 
its dispensing of controlled substances pursuant to the prescriptions 
presented nonetheless violated 21 CFR 1306.05(a). This regulation 
imposes a ``corresponding liability [on] the pharmacist who fills a 
prescription not prepared in the form prescribed by these 
regulations.'' Pursuant to 21 CFR 1306.05(a), a prescription must 
contain, among other things, the date of issuance and the address of 
the patient. The prescriptions filled for the undercover agents did not 
contain this information. Additionally, Respondent's filling of these 
prescriptions violated the Texas Controlled Substances Act, Title 6, 
Tex. Health & Safety Code Sec. 481.074(k)(2) & (3).
    Regarding factor three, as Judge Bittner found, ''[t]here is no 
evidence that Mr. Hurd or any other officer or agent of Respondent 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's assessment that the allegation that Respondent 
dispensed controlled substances without a prescription to the 
individual who overdosed is entitled to little weight. No corroborating 
evidence was presented to support the allegation.
    Judge Bittner concluded that ``Respondent offers little in the way 
of an explanation for the serious shortages in inventory and there is 
no suggestion in this record that Respondent is likely to be more 
responsible in the future.'' Consequently, Judge Bittner found that 
Respondent's continued registration would be inconsistent with the 
public interest, and therefore recommended that its registration be 
revoked. The Acting Deputy Administrator agrees with Judge Bittner. 
Respondent's failure to account for over 13,500 dosage units of 
controlled substances over an approximately one year period of time, is 
extremely troublesome. At the very least, the shortages indicate that 
respondent has failed miserably in complying with the requirement that 
it maintain complete and accurate records of its controlled substance 
handling. These requirements are in place in order to prevent and 
detect the diversion of these potentially dangerous substances. 
Respondent's failure to recognize the seriousness of the shortages, 
does not bode well for its future compliance with the laws and 
regulations relating to controlled substances. See Rocco's Pharmacy, 62 
FR 3056 (1997). Therefore, the Acting Deputy Administrator concludes 
that Respondent's continued registration would be inconsistent with the 
public interest.
    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 AT8866468, previously issued to 
Townwood Pharmacy, 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 23, 1998.

    Dated: February 12, 1998.
Peter F. Gruden,
Acting Deputy Administrator.
[FR Doc. 98-4201 Filed 2-18-98; 8:45 am]
BILLING CODE 4401-09-M