[Federal Register Volume 64, Number 176 (Monday, September 13, 1999)]
[Notices]
[Pages 49507-49510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23667]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
KK Pharmacy; Revocation of Registration
On April 2, 1999, the Deputy Assistant Administrator, Office of
Division Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to KK Pharmacy, of Osage Each, Missouri, notifying
it of an opportunity to show cause as to why DEA should not revoke its
DEA Certificate of Registration BK1488104 pursuant to 21 U.S.C.
824(a)(1), 824(a)(4) and 824(a)(5), and deny any pending applications
for renewal of such registration pursuant to 21 U.S.C. 823(f), for
reason that the pharmacy materially falsified an application for DEA
registration, is continued registration would be inconsistent with the
public interest, and it has been mandatorily excluded from
participation in a program pursuant to 41 U.S.C. 1320a-7(a). The order
also notified KK Pharmacy that should no request for a hearing be field
within 30 days of receipt of the Order to Show Cause, its hearing right
would be deemed waived.
DEA received a signed receipt indicating that the Order to Show
Cause was received on April 10, 1999. No request for a hearing or any
other reply was received by DEA from KK Pharmacy or anyone purporting
to represent it in this matter. Therefore, the Deputy Administrator,
finding that (1) 30 days have passed since the receipt of the Order to
Show Cause, and (2) no request for a hearing have been received,
concludes that KK Pharmacy is deemed to have waived its hearing right.
After considering material from the investigative file in this matter,
the Deputy Administrator now enters his final order without a hearing
pursuant to 21 CFR 1301.43(d) and (e) and 1301.46.
The Deputy Administrator finds that Daniel J. Vossman is the owner
of KK Pharmacy and is also its pharmacist-in-charge. KK Pharmacy is
located in Missouri and currently possesses DEA Certificate of
Registration BK1488104.
In 1980, Mr. Vossman was the vice president of a corporation which
owned several pharmacies and a wholesale distributor in Kansas. In June
of 1980, Mr. Vossman admitted to the Kansas Pharmacy Board (Kansas
Board) that on paper, he had been transferring the controlled substance
Eskatrol from the distributor to one of the pharmacies, but in fact, he
had been giving the drug to his wife for her personal use without a
physician's authorization. According to Mr. Vossman, he diverted
approximately 1,300 dosage units of the drug this way. A subsequent
audit revealed a shortage of 1,300 dosage units of the drug this way. A
subsequent audit revealed a shortage of 1,897 dosage units of Eskatrol
from the pharmacy and 150 dosage units from the distributor. A later
investigation revealed that prescriptions could not be found for many
Schedule II prescription numbers and many Schedule II prescriptions
that were on hand were unsigned. In addition, an audit covering the
period January 1, 1977 to August 25, 1980, revealed discrepancies for a
number of Schedule II controlled substances, including a shortage of
2,207 dosage units of Eskatrol or 53.2% for which it was accountable.
As a result, on December 3, 1980, the Kansas Board issued an Order
effective October 1, 1980, which suspended Mr. Vossman's pharmacist
registration for 90 days, 60 days of which were suspended, and then
placed his registration on probation for one year. In addition, the
wholesale distributor's registration was limited to non-
[[Page 49508]]
controlled substances only. Since the wholesale distributor was not
longer authorized to handle controlled substances by the state, Mr.
Vossman surrendered the wholesale distributor's DEA Certificate of
Registration on January 12, 1981.
On December 5, 1990, Mr. Vossman filed an application to review KK
Pharmacy's DEA Certificate of Registration BK1488104. Mr. Vossman
answered ``No'' to the question on the application (hereinafter
referred to as the liability question) which asks, ``If the applicant
is a * * * pharmacy, has any officer, partner, stockholder or
proprietor * * * ever surrendered or had a Federal controlled substance
registration revoked, suspended, restricted or denied, or ever had a
State professional license or controlled substance registration
revoked, suspended, denied, restricted or placed on probation?''
Between July 22, 1988 and December 16, 1997, the Missouri Board of
Pharmacy (Missouri Board) conducted ten inspections of KK Pharmacy.
Throughout these inspections, various repeated violations of state and
federal controlled substance laws were noted, such as controlled
substances were dispensed on a number of occasions without a
physician's authorization, required information was missing from
prescriptions, prescriptions were missing from the pharmacy's files,
and a photocopied prescription for a Schedule II controlled substance
was filled by the pharmacy. As a result of these inspections, the
Missouri regulatory authorities took action on several occasions
against KK Pharmacy's state permits.
On August 17, 1993, the Missouri Board issued a Stipulation and
Agreement which placed the pharmacy permit of KK Pharmacy on probation
from August 27, 1993 through August 26, 1998. This agreement was
declared null and void in November 1996.
Mr. Vossman submitted another renewal application for his DEA
Certificate of Registration on November 28, 1993. Again, Mr. Vossman
Answered ``No'' to the liability question, and also answered ``No'' to
another liability question which asks whether, ``the applicant [has]
ever * * * had a State professional license or controlled substance
registration revoked, suspended, restricted or denied or ever had a
State professional license or controlled substance registration
revoked, suspended, denied, restricted or place on probation?''
On February 2, 1994, KK Pharmacy entered into a Memorandum of
Understanding with the Missouri Bureau of Narcotics and Dangerous Drugs
(Missouri BNDD). Mr. Vossman agreed that for five years he would
provide the Missouri BNDD with prescription and refill information on a
quarterly basis; permit access to pharmacy records by the Missouri
Board and the Missouri BNDD; and meet all conditions set forth in the
Stipulation and Agreement with the Missouri Board.
KK Pharmacy failed to provide the Missouri BNDD with prescription
information as required by the Memorandum of Understanding, and failed
to renew its Missouri controlled substance registration. As a result,
on February 16, 1995, KK Pharmacy entered into a second Memorandum of
Understanding with the Missouri BNDD, in which Mr. Vossman agreed to
take a completed and accurate inventory by hand of all controlled
substances upon the signing of the Memorandum. In addition, Mr. Vossman
agreed that for seven years he would, among other things, take an exact
count of all controlled substances on hand every six months; maintain a
perpetual inventory of all controlled substances; provide the Missouri
BNDD with prescription and refill information on a quarterly basis;
maintain all records in accordance with state and federal laws;
maintain Schedule II order forms in accordance with federal law; not
dispense Schedule II controlled substances without a signed
prescription; not partially fill Schedule II prescriptions; and meet
annually with the Missouri BNDD.
On November 15, 1996, a 29-count felony information was filed
against Mr. Vossman in the Circuit Court of Camden County, Missouri
alleging that Mr. Vossman, d/b/a KK Pharmacy made false statements to
receive health care payments. Two of these counts involved controlled
substances. On October 1, 1997, Mr. Vossman pled guilty to one count of
the information, and was sentenced to probation for five years.
On November 22, 1996, Mr. Vossman submitted an application to renew
KK Pharmacy's DEA Certificate of Registration. On this application, Mr.
Vossman answered ``Yes'' to the liability questions. In his explanation
accompanying the application, Mr. Vossman indicated that he had been
charged with making a false statement to receive a health care benefit,
and that he had signed a Memorandum of Understanding with the Missouri
BNDD on February 16, 1995, but that this Memorandum was being contested
in the Circuit Court of Cole County, Missouri. However, Mr. Vossman
failed to mention the 1980 suspension and probation of his license to
practice pharmacy in Kansas, his surrender in 1981 of the wholesale
distributor's DEA registration, or the 1994 Memorandum of Understanding
with the Missouri BNDD.
By letter dated August 16, 1996, the Missouri Department of Health
proposed the denial of KK Pharmacy's application for renewal of its
controlled substance registration. The letter stated that Mr. Vossman
has failed to provide satisfactory proof that the managing officers of
KK Pharmacy are of good moral character. The letter further stated that
registration of KK Pharmacy is inconsistent with the public interest
because the pharmacy has not maintained effective controls against the
diversion of controlled substances, has not operated in compliance with
applicable state and federal law and has provided false or fraudulent
material information on its application for registration.
Ultimately, by letter dated December 3, 1996, Mr. Vossman was
advised that KK Pharmacy's application for a state controlled substance
registration was denied and that he had 30 days to request a hearing.
The letter listed as reasons for the denial that Mr. Vossman made a
false statement on an application for a Missouri controlled substance
registration; between June 1994 and August 1995, KK Pharmacy filled or
refilled 81 controlled substance prescriptions without a physician's
authorization; the pharmacy did not maintain 25 controlled substance
prescriptions on file for a period of two years; it filled two Schedule
II prescriptions in excess of a 30-day supply without a physician's
written justification; it filled four Schedule II prescriptions for
which there was no signed prescription order; and it filled two
Schedule II prescriptions without the dispenser's signature. Mr.
Vossman requested a hearing on the denial.
On July 16, 1997, Mr. Vossman and the Missouri BNDD filed a `Joint
Stipulation of Facts, With Proposed AHC [Administrative Hearing
Committee] Conclusions of Law and Proposed AHC Order and with Joint
Agreement and Terms of Discipline,'' hereinafter referred to as the
Joint Agreement. In this filing the parties stipulated that KK
Pharmacy's Missouri controlled substance registration expired on July
31, 1994 and was not renewed until February 16, 1995, yet the pharmacy
continued to dispense controlled substances. The parties also
stipulated that KK Pharmacy furnished false information to the Missouri
BNDD on three applications and dispensed 27 refills of generic Darvocet
N-100 to a
[[Page 49509]]
customer in 1992 and 1993 without a physician's knowledge or
authorization.
As a result of this Joint Agreement, KK Pharmacy was issued a
Missouri controlled substance registration which was placed on
probation for five years subject to various terms and conditions,
including that KK Pharmacy will maintain a perpetual inventory for all
controlled substances using the Pharmacy's computer, conduct background
checks on all current and future pharmacist employees; maintain records
showing the dates and times each pharmacy employee works; employ a
consulting pharmacist to review the pharmacy's controlled substance
handling; provide the Missouri BNDD with prescription and refill
information on a quarterly basis; not accept any Schedule II telephone
prescription; verify that all information on controlled substance
prescriptions is complete and accurate; and verify on a daily basis a
printout of prescription data for that day.
On November 20, 1997, the consulting pharmacist filed her first
report with the Missouri BNDD noting that KK Pharmacy seemed to be
making efforts to comply with the Joint Agreement, however she was
still finding problems with the Schedule III through V perpetual
inventory resulting in an ability to reconcile the drugs. The
consulting pharmacist submitted her second report on March 10, 1998, in
which she noted a decline in KK Pharmacy's compliance with the Joint
Agreement and many violations of pharmacy law. The consulting
pharmacist stated in her report that ``I must also say that over the
last three months I have felt that there have been attempts to hide or
cover missing information needed by me to make an accurate assessment
of the pharmacy's compliance with the agreement.'' The consulting
pharmacist further ``found it to be virtually impossible to reconcile
the inventory in this pharmacy because there have been so many errors
and corrections that there is no way to trace [the drugs.]'' The
consulting pharmacist concluded that ``[o]ver the last three months I
have felt that Mr. Vossman has not taken the initiative to be
responsible for the pharmacy, but has expected that I or the
technicians would come in and do the job for him[,]'' and that ``I am
not sure that Mr. Vossman has the incentive or the skills needed to
comply with the terms of this agreement.''
By letter dated February 27, 1998, Mr. Vossman was notified by the
Department of Health and Human Services that he was being excluded from
participation in the Medicare, Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for Social Services
programs for a period of five years pursuant to 42 U.S.C. 1320a-7(a).
On March 11, 1998, a Felony Conviction Complaint was filed with the
Missouri Board stating that Mr. Vossman's conviction is an offense
reasonably related to the qualifications, functions, or duties of a
pharmacist or involves moral turpitude, and asking the Missouri Board
to conduct a hearing and to impose appropriate discipline. Following a
hearing, not attended by Mr. Vossman or a representative, the Missouri
Board issued its Findings of Fact, Conclusions of Law, and Order of
Discipline (Order) on April 23, 1998, revoking Mr. Vossman's pharmacist
license. Thereafter, on April 30, 1998, Mr. Vossman filed a Petition
for Review of the Missouri Board's Order stating that he did not attend
the disciplinary hearing because he was not aware of it, and even had
he been aware of the hearing, he would not have had sufficient time to
prepare for it. In addition, Mr. Vossman filed a motion on April 30,
1998, in the Circuit Court of Cole County, Missouri seeking a stay of
the Missouri Board's Order pending resolution of the appeal. The Court
granted Mr. Vossman's motion for a stay on April 30, 1998.
On June 18, 1998, Mr. Vossman filed a request for rehearing while
his petition for review of the Missouri Board's revocation of his
pharmacist license was pending. The Missouri Board withdrew its April
23, 1998 Order, and a hearing was held on July 9, 1998. On July 16,
1998, the Missouri Board issued its Findings of Fact, Conclusions of
Law, and Order of Discipline (Order) revoking Mr. Vossman's pharmacist
license and prohibiting him from applying for reinstatement of his
license for three years. Mr. Vossman again filed a petition for review
of the Missouri Board's Order on July 24, 1998, in the Circuit Court of
Cole County, Missouri. Mr. Vossman also filed a motion in the Circuit
Court of Cole County, Missouri, requesting a stay of the Missouri
Board's Order pending appeal, which was granted on July 27, 1998. There
is no further evidence in the file regarding the disposition of this
matter.
The Deputy Administrator may revoke or suspend a DEA Certificate of
Registration under 21 U.S.C. 824(a), upon a find that the registrant:
(1) Has materially falsified any application filed pursuant to or
required by this subchapter or subchapter II of this chapter;
(2) Has been convicted of a felony under this subchapter or
subchapter II of this chapter or any other law of the United States, or
of any State, relating to any substance defined in this subchapter as a
controlled substance;
(3) Has had his State license or registration suspended, revoked,
or denied by competent State authority and is no longer authorized by
State law to engage in the manufacturing, distribution, or dispensing
of controlled substances or has had the suspension, revocation or
denial of his registration recommended by competent State authority;
(4) Has committed such acts as would render his registration under
section 823 of this title inconsistent with the public interest as
determined under such section; or
(5) Has been excluded (or directed to be excluded) from
participation in a program pursuant to section 1320a-7(a) or Title 42.
The Deputy Administrator finds that it is well-settled that a
pharmacy operates under the control of owners, stockholders,
pharmacists or other employees, and therefore the acts of these
individuals are relevant in determining whether grounds exist to revoke
a pharmacy's DEA Certificate of Registration. See Rick's Pharmacy,
Inc., 62 FR 42595 (1997), Maxicare Pharmacy, 61 FR 27368 (1996); Big-T
Pharmacy, Inc. 47 FR 51830 (1982).
Pursuant to 21 U.S.C. 824(a)(1), a registration may be revoked if
the registrant has materially falsified an application for
registration. DEA has previously held that in finding that there has
been a material falsification of an application, it must be determined
that the applicant knew or should have known that the response given to
the liability question was false. See, Martha Hernandez, M.D., 62 FR
61145 (1997); Herbert J. Robinson, M.D. 59 FR 6304 (1994).
On KK Pharmacy's renewal application dated December 5, 1990, Mr.
Vossman answered ``No'' to the liability question, even though his
Kansas pharmacist license had been suspended and then placed on
probation in 1980, and he surrendered his wholesale distributor's DEA
registration in 1981.
Mr. Vossman also falsified KK Pharmacy's renewal application dated
November 28, 1993, by again answering ``No'' to the liability question.
Like the 1900 renewal application, Mr. Vossman should have disclosed
the action against his Kansas pharmacist license in 1980 and the
surrender of his wholesale distributor DEA registration in 1981. In
addition, Mr. Vossman should have answered the liability question in
the affirmative based upon the Missouri Board's action in August 1993
placing
[[Page 49510]]
the pharmacy permit of KK pharmacy on probation for five years. While
the Missouri Board's action was ultimately declared null and void in
November 1996, it was in effect in November 1993 when Mr. Vossman
submitted the renewal application.
Finally, while Mr. Vossman did answer ``Yes'' to the liability
question on KK Pharmacy's renewal application dated November 22, 1996,
he failed to note in his explanation for his response that he had
entered into a Memorandum of Understanding with the Missouri BNDD in
1994; that his Kansas pharmacist license was suspended and then placed
on probation in 1980; and that he surrendered the DEA registration of
his wholesale distributor in 1981.
The Deputy Administrator concludes that Mr. Vossman materially
falsified KK Pharmacy's 1990, 1993 and 1996 renewal applications for
its DEA Certificate of Registration, and therefore grounds exists to
revoke the pharmacy's DEA registration.
Next, 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 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., 54 FR 16422 (1989).
As to factor one, the file is replete with actions against KK
Pharmacy and Mr. Vossman by various state licensing agencies. Mr.
Vossman's Kansas pharmacist license was suspended in 1980 and then
placed on probation. KK Pharmacy entered into a Memorandum of
Understanding with the Missouri BNDD in 1994, and again in 1995. Action
was taken by the Missouri BNDD to deny KK Pharmacy's state controlled
substance registration in December 1996. The pharmacy was ultimately
issued a new state controlled substance registration in July 1997 that
was subject to various terms and conditions for five years. Then in
1998, Mr. Vossman's pharmacist permit was revoked by the Missouri
Board, but that revocation was stayed pending appeal of the Missouri
Board's Order.
Factors two and four, KK Pharmacy's experience in dispensing
controlled substances and its compliance with applicable laws, are
clearly relevant in determining the public interest. In 1980, Mr.
Vossman diverted controlled substances from his then pharmacy and
wholesale distributor for his wife's personal use without a physician's
authorization. Between 1988 and 1997, the Missouri Board conducted ten
inspections of the pharmacy which revealed numerous repeated
violations. Particularly noteworthy is that Mr. Vossman continued to
dispense controlled substances on a number of occasions without a
physican's authorization.
In 1997, Mr. Vossman was given another chance by the Missouri Board
to come into compliance. However, the consulting pharmacist hired to
review KK Pharmacy's handling of controlled substances reported in
March 1998 that, ``there have been attempts to hide or cover missing
information needed * * * to make an accurate assessment of the
pharmacy's compliance with the agreement.'' The consulting pharmacist
concluded that, ``Mr. Vossman has not taken the initiative to be
responsible for the pharmacy, but has expected that I or the
technicians would come in and do the job for him,'' and that ``I am not
sure that Mr. Vossman has the incentive or the skills needed to comply
with the terms of this agreement.''
While there is no evidence under factor three that Mr. Vossman or
KK Pharmacy has been convicted of a controlled substance related
offense, the Deputy Administrator does find Mr. Vossman's conviction
for making a false statement to receive a health care benefit relevant
under factor five. A registrant's truthfulness and trustworthiness are
appropriately considered in determining the public interest.
The Deputy Administrator concludes that there are serious questions
as to whether Mr. Vossman and KK Pharmacy can be trusted to responsibly
handle controlled substances. Accordingly, the Deputy Administrator
concludes that KK Pharmacy's continued registration would be
inconsistent with the public interest and therefore grounds exist to
revoke the pharmacy's DEA Certificate of Registration pursuant to 21
U.S.C. 824(a)(4).
Finally, there is a basis to revoke KK Pharmacy's DEA Certificate
of Registration pursuant to 21 U.S.C. 824(a)(5). Mr. Vossman was
advised by letter from the Department of Health and Human Services
dated February 27, 1998, that pursuant to 42 U.S.C. 1320a-7(a) he was
excluded from participation in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to States for Social
Services programs for a period of five years. The Deputy Administrator
finds that while this exclusion was based upon Mr. Vossman's conviction
for a non-controlled substance related offense, DEA has previously held
that misconduct which does not involve controlled substances may
constitute grounds, under 21 U.S.C. 824(a)(5), for the revocation of a
DEA Certificate of Registration. See Stanley Dubin, D.D.S., 61 FR 60727
(1996), George D. Osafo, M.D., 58 FR 37508 (1993); Gilbert L. Franklin,
D.D.S., 57 FR 3441 (1992).
Therefore, the Deputy Administrator concludes that grounds exist to
revoke KK Pharmacy's DEA Certificate of Registration pursuant to 21
U.S.C. 824(a)(1), (4), and (5). No evidence of explanation or
mitigating circumstances was offered by KK Pharmacy, Mr. Vossman, or
anyone purporting to represent the pharmacy.
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 CFR 0.100(b) and 0.104, hereby orders that DEA
Certificate of Registration BK1488104, previously issued to KK
Pharmacy, be, and it hereby is, revoked. The Deputy Administrator
further orders that any pending applications for renewal of such
registration, be, and they hereby are, denied. This order is effective
October 13, 1999.
Dated: August 24, 1999.
Donnie R. Marshall,
Deputy Administration.
[FR Doc. 99-23667 Filed 9-10-99; 8:45 am]
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