[Federal Register Volume 69, Number 209 (Friday, October 29, 2004)]
[Notices]
[Pages 63178-63182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24235]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


EZRX, LLC Revocation of Registration

    On May 17, 2004, the Deputy Administrator of the Drug Enforcement 
Administration (DEA) issued an Order to Show Cause and Immediate 
Suspension of Registration to EXRX, LLC (EZRX) of Union, New Jersey. 
EZRX was notified of an opportunity to show cause as to why DEA should 
not revoke its DEA Certificate of Registration, BE8488783, as a retail 
pharmacy, and deny any pending applications for renewal or modification 
of such registration pursuant to 21 U.S.C. 823(f) and 824(a)(4) for 
reason that its continued registration would be inconsistent with the 
public interest. EZRX was further notified that its DEA registration 
was immediately suspended as an imminent danger to the public health 
and safety pursuant to 21 U.S.C. 824(d).
    The Order to Show Cause and Immediate Suspension alleged in sum, 
that EZRX was engaged in illegally dispensing controlled substances as 
part of a scheme in which controlled substances were dispensed by EZRX 
based on Internet orders placed by customers and approved by associated 
physicians, based solely on their review of Internet questionnaires and 
without personal contact, examination or bona fide physician/patient 
relationships. Such prescriptions were not issued ``in the usual course 
of professional treatment'' and violated 21 CFR 1306.04 and 21 U.S.C. 
841(a). This action was part of a nationwide enforcement operation by 
DEA titled Operation Pharmnet, which targeted online suppliers of 
prescription drugs, including owners, operators, pharmacists and 
doctors, who have illegally and unethically been marketing controlled 
substances via the Internet.
    According to the investigative file on May 26, 2004, the Order to 
Show Cause and Immediate Suspension of Registration was personally 
served by Special Agents and Diversion Investigators of the DEA at 
EZRX's registered premises in Union, New Jersey. More than thirty days 
have passed since the Order to Show Cause

[[Page 63179]]

and Immediate Suspension of Registration was served on EZRX and DEA has 
not received a request for hearing or any other reply from EZRX or 
anyone purporting to represent it in this matter.
    Therefore, the Deputy Administrator of DEA, finding that (1) thirty 
days having passed since the delivery of the Order to Show Cause and 
Immediate Suspension of Registration to EZRX, and (2) no request for 
hearing having been received, concludes that EZRX is deemed to have 
waived its hearing right. See David W. Linder, 67 FR 12,579 (2002). 
After considering material from the investigative file in this matter, 
the Deputy Administrator now enters her final order without a hearing 
pursuant to 21 CFR 1301.43(d) and (e) and 1301.46.
    The Deputy Administrator finds EZRX is currently registered with 
DEA as a retail pharmacy under DEA Registration, BE8488783 to dispense 
Schedule II through V Controlled Substances. That registration expires 
on August 31, 2006. The owners of EZRX are Frank C. Hernandez and his 
wife, Amada Hernandez.
    In 2003, the DEA Miami Field Division initiated regulatory 
investigations of C&H Wholesale, Inc. (C&H) and Lifeline Pharmacy, Inc. 
(Lifeline). C&H was registered with DEA as a distributor of Schedule II 
through V controlled substances and Lifeline was registered as a retail 
pharmacy of the same substances. Both companies are owned by Mr. and 
Mrs. Hernandez and the registered premises they occupy are physically 
connected and share floor space with the Hernandez' non-drug 
businesses.
    During the regulatory examination of C&H, it was discovered that 
C&H was distributing controlled substances almost exclusively to South 
Florida pharmacies, including Lifeline, which were filling Internet 
controlled substance prescriptions. The majority of distributions were 
for Schedule III and IV controlled substance weight loss medications 
including, but not limited to substantial quantities of phentermine, 
phendimetrazine tartrate, Dexedrine and tenuate.
    On October 10, 2003, as a result of investigative findings that C&H 
and Lifeline were facilitating and dispensing controlled substances by 
virtue of prescriptions issued not for legitimate medical purposes and 
not in the usual course of professional medical practice, the then-
Acting Deputy Administrator issued orders to show cause to C&H and 
Lifeline and immediately suspended their registrations on grounds that 
the posed an immediate threat to the public health and safety.
    Subsequent investigation by Miami DEA investigators revealed that 
on August 21, 2003, the same day a federal search warrant was being 
executed on Lifeline's Florida premises, Mr. Hernandez filed a new 
application for registration on behalf of EZRX, as a retail pharmacy in 
New Jersey. That application was inadvertently routinely processed in 
New Jersey while the Miami investigation was still in process and it 
was approved on September 9, 2003. Later, in the course of document 
review, DEA Miami investigators found paperwork indicating Mr. and Mrs. 
Hernandez were the owners of EZRX and that two Florida employees, Mr. 
Hernandez' nephew and wife, were also key employees of the New Jersey 
retail pharmacy.
    On November 6, 2003, DEA Miami investigators made an undercover buy 
from a Florida-based website. Using a fictitious name and an undercover 
Internet e-mail account and computer, investigators placed an order for 
Bontril, a Schedule IV controlled substance weight loss medication. 
After filling out a medical questionnaire on the website and sending a 
money order to an affiliated company, E.V.A. Global, Inc., a package 
was received at the undercover address via Federal Express. It was 
shipped by EZRX on November 11, 2003, from its registered address and 
contained 89 Bontril SR 105mg capsules. The prescription label 
indicated it had been dispensed by EZRX and the issuing physician was 
an individual, later identified as a DEA registrant, who had prescribed 
controlled substances during similar undercover purchases made through 
Lifeline. There was no contact between the prescribing physician and 
the undercover investigator, other than transmission of the Internet 
questionnaire.
    Another physician involved with Internet prescribing thorough 
E.V.A. Global, Inc. was interviewed by investigators and described the 
process. He would access a web site provided him by E.V.A. Global, 
Inc., where customers' medical questionnaires would be posted. The 
physician would access the questionnaires one at a time, review the 
questionnaire and either approve or deny the prescription request. He 
did not have the ability to suggest an alternative drug or an alternate 
amount and there was never any contact between the physician and either 
the ``patient'' or the dispensing pharmacy.
    It was determined that from September through November 2003, EZRX 
ordered in excess of 300,000 dosage units of Schedule III and IV 
controlled substances, including the controlled substances commonly 
sold through websites affiliated with E.V.A. Global, Inc., to include 
phentermine, Ionamin, Meridia, Didrex, phendimetrazine tartrate and 
Ambien.
    The Controlled Substances Act (CSA) establishes a ``closed system'' 
of distribution that regulates the movement of controlled substance 
prescription medications from importation or manufacture through their 
delivery to the ultimate user patient via the dispensing, administering 
or prescribing, pursuant to the lawful order of a practitioner. The 
regulations implementing the CSA explicitly describe the parameters of 
a lawful prescription as follows: ``A prescription for a controlled 
substance to be effective must be issued for a legitimate medical 
purpose by an individual practitioner acting in the usual course of his 
professional practice.'' 21 CFR 1306.04(a).
    Prescriptions issued not in the ``usual course of professional 
treatment'' are not ``prescriptions'' for purposes of the CSA and 
individuals issuing and filling such purported prescriptions are 
subject to the penalties for violating the CSA's controlled substances 
provisions.
    In United States v. Moore, 423 U.S. 122 (1975), the Supreme Court 
held that, ``Implicit in the registration of a physician is the 
understanding that he is authorized only to act `as a physician'.'' 
Id., at 141. In Moore the court implicitly approved a jury instruction 
that acting ``as a physician'' is acting ``in the usual course of a 
professional practice and in accordance with a standard of medical 
practice generally recognized and accepted in the United States.'' Id., 
at 138-139; see, United States v. Norris, 780 F.2d 1207, 1209 (5th Cir. 
1986).
    Responsible professional organizations have issued guidance in this 
area. The American Medical Association's guidance for physicians on the 
appropriate use of the Internet in prescribing medication (H-120.949 
Guidance for Physicians on Internet Prescribing) states:
    ``Physicians who prescribe medications via the Internet shall 
establish, or have established, a valid patient-physician relationship, 
including, but not limited to, the following components. The physician 
shall:
    i. Obtain a reliable medical history and perform a physical 
examination of the patient, adequate to establish the diagnosis for 
which the drug is being prescribed and to identify underlying

[[Page 63180]]

conditions and/or contraindications to the treatment recommended/
provided;
    ii. Have sufficient dialogue with the patient regarding treatment 
options and the risks and benefits of treatment(s);
    iii. As appropriate, follow up with the patient to assess the 
therapeutic outcome;
    iv. Maintain a contemporaneous medical record that is readily 
available to the patient and, subject to the patient's consent, to his 
or her other health care professionals; and
    v. Include the electronic prescription information as part of the 
patient medical record.''
    In April 2000, the Federation of State Medical Boards adopted Model 
Guidelines for the Appropriate use of the Internet in Medical Practice, 
which states, in pertinent part, that:

    Treatment and consultation recommendations made in an online 
setting, including issuing a prescription via electronic means, will 
be held to the same standards of appropriate practice as those in 
traditional (face-to-face) settings. Treatment, including issuing a 
prescription, based solely on an online questionnaire or 
consultation does not constitute an acceptable standard of care.

    The CSA regulations establish certain responsibilities not only on 
individual practitioners who issue prescriptions for controlled 
substances, but also on pharmacists who fill them. A pharmacist's 
``corresponding responsibility'' regarding the proper dispensing of 
controlled substances is explicitly described in 21 CFR 1306.04(a). It 
provides:

    A prescription for a controlled substance to be effective must 
be issued for a legitimate medical purpose by an individual 
practitioner acting in the usual course of his professional 
practice. The responsibility for the proper prescribing and 
dispensing of controlled substances is upon the prescribing 
practitioner, but a corresponding responsibility rests with the 
pharmacist who fills the prescription.

    In an April 21, 2001, policy statement, entitled, Dispensing and 
Purchasing Controlled Substances Over the Internet, 66 FR 21,181 
(2001), DEA delineated certain circumstances in which prescribing over 
the Internet is unlawful. The policy provides, inter alia, that a 
controlled substance should not be issued or dispensed unless there was 
a bona fide doctor/patient relationship. Such a relationship required 
that the patient has a medical complaint, a medical history be taken, a 
physical examination performed, and some logical connection exists 
between the medical complaint, the medical history, the physical 
examination, and the drug prescribed. The policy statement specifically 
explained that the completion of ``a questionnaire that is then review 
by a doctor hired by the Internet pharmacy could not be considered the 
basis for a doctor/patient relationship * * * '' Id., at 21,182-21,183.
    Rogue Internet Pharmacies bypass a legitimate doctor-patient 
relationship, usually by use of a cursory and incomplete online 
questionnaire or perfunctory telephone ``consult'' with a doctor, who 
usually has a contractual arrangement with the online pharmacy and is 
often paid on the basis of prescriptions issued. The Food and Drug 
Administration (FDA) considers the questionnaire, in lieu of face-to-
face interaction, to be a practice that undermines safeguards of direct 
medical supervision and amounts to substandard medical care. See U.S. 
Food and Drug Administration, Buying Medicines and Medical Products 
Online, General FAQs (http://fda.gov/oc/buyonline/default.htm).
    The National Association of Boards of Pharmacy considers internet 
pharmacies to be suspect if:

They dispense prescription medications without requiring the 
consumer to mail in a prescription, and if they dispense 
prescription medications and do not contact the patient's prescriber 
to obtain a valid verbal prescription. Further, online pharmacies 
are suspect if they dispense prescription medications solely based 
upon the consumer completing an online questionnaire without the 
consumer having a pre-existing relationship with a prescriber and 
the benefit of an in-person physical examination. State boards of 
pharmacy, boards of medicine, the FDA, as well as the AMA, condemn 
this practice and consider it to be unprofessional.

See, National Association of Boards of Pharmacy, VIIPS Program, Most 
Frequently Asked Questions (http://www.nabp.net/vipps/consumer/faq.asp).
    Rogue Internet pharmacies often use persons with limited or no 
knowledge of medications and standard pharmacy practices to fill 
prescriptions, do not advertise the availability of pharmacists for 
medication consultation, and focus on select medications, usually 
lifestyle, obesity and pain medications. Rogue Internet pharmacies 
generally do not protect the integrity of original faxed prescriptions 
by requiring that they be received directly from the prescriber (not 
the patient) and do not verify the authenticity of suspect 
prescriptions.
    When the established safeguards of an authentic doctor-patient 
relationship are lacking, controlled substance prescription drugs can 
not only be misused, but also present potentially serious health risks 
to patients. Rogue Internet pharmacies facilitate the easy 
circumvention of legitimate medical practice. The FDA has stated:

    We know that adverse events are under-reported and we know from 
history that tolerating the sale of unproven, fraudulent, or 
adulterated drugs results in harm to the public health. It is 
reasonable to expect that the illegal sales of drugs over the 
Internet and the number of resulting injuries will increase as sales 
on the Internet grow. Without clear and effective law enforcement, 
violators will have no reason to stop their illegal practices. 
Unless we begin to act now, unlawful conduct and the resulting harm 
to consumers most likely will increase.

See U.S. Food and Drug Administration, Buying Medicines and Medical 
Products Online, General FAQs (http://fda.gov/oc/buyonline/default.htm).
    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 application for renewal of such registration, if she determines 
that the continued registration would be inconsistent with the public 
interest. Section 823(f) requires that the following factors be 
considered in determining the public interest:
    (1) The recommendation of the appropriate state licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing or conducting research 
with respect to controlled substances.
    (3) The applicant's conviction record under federal or state laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (4) Compliance with applicable state, federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health or 
safety.
    These factors are to be considered in the disjunctive; the Deputy 
Administrator may rely on any one or a combination of factors and may 
give each factor the weight she deems appropriate in determining 
whether a registration should be revoked or an application for 
registration denied. See Henry J. Schwartz, Jr., M.D., 54 FR 16,422 
(1989).
    In this case, the Deputy Administrator finds factors two, four and 
five relevant to a determination of whether EZRX's continued 
registration remains consistent with the public interest.
    With regard to factor one, the recommendation of the appropriate 
state licensing board or professional disciplinary authority, there is 
no evidence in the investigative file that EZRX has been the subject of 
a state disciplinary proceeding, nor is there

[[Page 63181]]

evidence demonstrating that its state pharmacy license or state 
controlled substance authority are currently restricted in any form. 
Nevertheless, state licensure is a necessary, but not sufficient 
condition for registration, and therefore, this factor is not 
dispositive. See e.g., Wesley G. Harline, M.D., 65 FR 5,665-01 (2000); 
James C. LaJevic, D.M.D., 64 FR 55,962 (1999).
    With regard to factors two and four, the Deputy Administrator finds 
that the primary conduct at issue in this proceeding (i.e., the 
unlawful dispensing of controlled substance prescriptions for use by 
Internet customers) relates to both EZRX's and its owners' experience 
in dispensing controlled substances, as well as its compliance with 
applicable state, federal, or local laws relating to controlled 
substances. DEA has consistently held that the registration of a 
pharmacy may be revoked as the result of the unlawful activity of the 
pharmacy's owners, majority shareholders, officers, managing pharmacist 
or other key employee. See Plaza Pharmacy, 53 FR 36,910 (1988)
    A DEA registration authorizes a physician to prescribe or dispense 
controlled substances only within the usual course of his or her 
professional practice. For a prescription to have been issued within 
the course of a practitioner's professional practice, it must have been 
written for a legitimate medical purpose within the context of a valid 
physician-patient relationship. See Mark Wade, M.D., 69 FR 7,018 
(2004). 51,600 (1998). Legally, there is absolutely no difference 
between the sale of an illicit drug on the street and the illicit 
dispensing of a licit drug by means of a physician's prescription. See 
Floyd A Santner, M.D., 55 FR 37,581 (1990).
    Factors two and four are relevant to EZRX's dispensing of Internet 
prescribed controlled substances. The Deputy Administrator concludes 
from a review of the record that the physicians issuing these 
prescriptions did not establish valid physician-patient relationships 
with Internet customers to whom they prescribed controlled substances. 
DEA has previously found that prescriptions issued through a pharmacy 
Internet Web site are not considered as having been issued in the usual 
course of medical practice, in violation of 21 CFR 1306.04 and has 
revoked the DEA registrations of several physicians for participating 
in Internet prescribing schemes similar to or identical to that of 
EZRX. See, Marvin L. Gibbs, Jr., M.D., 69 FR 11,658 (2004); Mark Wade, 
M.D., supra, 69 FR 7,018; Ernesto A. Cantu, M.D., 69 FR 7,104-02 
(2004); Rick Joe Nelson, M.D., 66 FR 30,752 (2001).
    Similarly, in the past few years, DEA has issued orders to show 
cause and subsequently revoked the DEA registrations of pharmacies 
which failed to fulfill their corresponding responsibility in Internet 
prescribing operations, similar to those of EZRX and its principals and 
their affiliated companies. See Prescriptiononline.com, 69 FR 5,583 
(2004); Pill Box Pharmacy (surrendered DEA registration as part of 
owner's and pharmacy's guilty plea to 21 U.S.C. 841(a)(1) violation); 
Friendly Pharmacy (pharmacist pled guilty and owner convicted at trial, 
of violating 21 U.S.C. 841(a). Indeed, C&H and Lifeline, the 
predecessor Internet pharmacy entities owned by EZRX's principals, were 
both subjects of orders to show cause with immediate suspensions and 
both companies surrendered their DEA Certificates of Registration.
    In the instant case, physicians associated with the Internet 
operation authorized prescriptions for controlled substances without 
the benefit of face-to-face physician-patient contact, physical exam or 
medical test. There is no information in the investigative file 
demonstrating that the issuing physicians even took the time 
corroborate responses to questionnaires that were submitted by EZRX's 
customers. Here, it is clear that the issuance of controlled substance 
prescriptions to persons whom the prescribing physician has not 
established a valid physician-patient relationship is a radical 
departure from the normal course of professional practice and that EZRX 
knowingly participating in this scheme.
    With regard to factor three, applicant's conviction record under 
federal or state laws relating to the dispensing of controlled 
substances, the record does not reflect that EZRX or its principals 
have been convicted of a felony related to controlled substances.
    Regarding factor five, such other conduct which may threaten the 
public health or safety, the Deputy Administrator finds this factor 
relevant to EZRX's continued dispensing to Internet customers after 
issuance of policy statements designed to assist licensed practitioners 
and pharmacists in the proper prescribing and dispensing of dangerous 
controlled drugs.
    Factor five is also relevant to EZRX's continued Internet 
prescribing after C&H and Lifeline, both owned by the principals of 
EZRX, were served with Orders to Show Cause and for Immediate 
Suspensions in October 2003. These entities sought an order in United 
States District Court seeking to restrain DEA from imposing the 
immediate suspensions of their registrations. After the District Court 
held hearings to make a threshold determination that DEA had some basis 
to back up its allegations regarding the Internet prescribing 
activities of C&H and Lifeline, the Court upheld the immediate 
suspensions by DEA, finding ``there is not a substantial likelihood 
that C&H and Lifeline will prevail on the merits.'' It further stated, 
``the danger of the public obtaining controlled substances outweighs 
the threatened injury to C&H and Lifeline. Granting the preliminary 
injunction would affect the public interest, again putting the public 
in danger of obtaining controlled substances.'' See C&H Wholesale, Inc. 
and Lifeline Pharmacy, Inc., CIV 03-61910 (S.D. Fla., October 23, 
2003). Nevertheless after the District Court's Order, EZRX continued 
this practice and dispensed the controlled substance ordered over the 
Internet by undercover agents on November 6, 2003.
    Similarly, factor five is relevant to Mr. Hernandez' timing in 
applying for EZRX's DEA registration on August 21, 2003. This is the 
date a federal search warrant was executed on Lifeline, his Florida 
pharmacy and further suggests the New Jersey operation was established 
by Mr. Hernandez to continue Internet dispensing as a back up to his 
Florida operations.
    The Deputy Administrator has previously expressed her deep concern 
about the increased risk of diversion which accompanies Internet 
controlled substance transactions. Given the nascent practice of cyber-
distribution of controlled drugs to faceless individuals, where 
interaction between individuals is limited to information on a computer 
screen or credit card, it is virtually impossible to insure that these 
highly addictive, and sometimes dangerous products will reach the 
intended recipient, and if so, whether the person purchasing these 
products has an actual need for them. The ramifications of obtaining 
dangerous and highly addictive drugs with the ease of logging on to a 
computer and the use of a credit card are disturbing and immense, 
particularly when one considers the growing problem of the abuse of 
prescription drugs in the United States. See, Mark Wade, M.D., supra, 
69 FR 7,018.
    The Deputy Administrator has also previously found that in a 2001 
report, the National Clearinghouse for Alcohol and Drug Information 
estimated that 4 million Americans ages 12 and older had acknowledged 
misusing

[[Page 63182]]

prescription drugs. That accounts for 2% to 4% of the populations--a 
rate of abuse that has quadrupled since 1980. Prescription drug abuse--
typically of painkillers, sedatives and mood-altering drugs--accounts 
for one-third of all illicit drug use in the United States. See Mark 
Wade, M.D., supra, 69 FR 7,018.
    The Deputy Administrator finds that with respect to Internet 
transactions involving controlled substances, the horrific untold 
stories of drug abuse, addiction and treatment are the unintended, but 
foreseeable consequence of providing highly addictive drugs to the 
public without oversight. The closed system of distribution, brought 
about by the enactment of the Controlled Substances Act, is completely 
compromised when individuals can easily acquire controlled substances 
without regard to age or health status. Such lack of oversight 
describes EZRX, its principals, their associated companies and 
affiliated physician's practice of issuing prescriptions for and 
distributing controlled substances to indistinct Internet customers. 
Such conduct contributes to the abuse of controlled substances by 
EZRX's customers and is relevant under factor five and further supports 
revocation of its DEA Certificate of Registration.
    It appears that EZRX and its principals, motivated purely by profit 
and in pursuit of financial gain, have demonstrated a cavalier 
disregard for controlled substance laws and regulations and a 
disturbing indifference to the health and safety of customers who 
purchased dangerous drugs through the Internet. Such demonstrated lack 
of character and adherence to the responsibilities inherent in a DEA 
registration show in no uncertain terms that EZRX's continued 
registration with DEA would be inconsistent with the public interest.
    Accordingly, the Acting Deputy Administrator of the Drug 
Enforcement Administration, pursuant to the authority vested in her by 
21 U.S.C. 823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that 
DEA Certificate of Registration BE8488783, previously issued to EZRX, 
LLC, 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 November 29, 
2004.

    Dated: September 29, 2004.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 04-24235 Filed 10-28-04; 8:45 am]
BILLING CODE 4410-09-M