[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Notices]
[Pages 51415-51417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21060]


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 DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Ideal Pharmacy Care, Inc., D/B/A Esplanade Pharmacy; Revocation 
of Registration

    On November 12, 2010, I, the then Deputy Administrator of the Drug 
Enforcement Administration, issued an Order to Show Cause and Immediate 
Suspension of Registration to Ideal Pharmacy Care, Inc., d/b/a 
Esplanade Pharmacy (Registrant), of New Orleans, Louisiana. The Show 
Cause Order proposed the revocation of Registrant's DEA Certificate of 
Registration FF1125651, which authorizes it to dispense controlled 
substances in schedules II through V as a retail pharmacy, on the 
ground that it has committed acts which render its registration 
``inconsistent with the public interest.'' Show Cause Order at 1 
(citing 21 U.S.C. 824(a)(4)). The Show Cause Order also proposed the 
denial of any pending applications to renew or modify Registrant's 
registration. Id.
    The Show Cause Order specifically alleged that on October 14, 2010, 
investigators conducted an accountability audit of Registrant and found 
that it had ``significant shortages'' of various controlled substances. 
Id. The Order alleged that these included shortages of: (1) 3,891 
dosage units of hydrocodone 7.5/650 mg, 78 percent of the accountable 
total; (2) 27,179 dosage units of hydrocodone 7.5/750 mg, 59 percent of 
the accountable total; (3) 5,514 dosage units of hydrocodone 10/500 mg, 
48 percent of the accountable total; (4) 114,826 dosage units of 
hydrocodone 10/650 mg, 96 percent of the accountable total; (5) 83,254 
dosage units of alprazolam 2 mg, 96 percent of the accountable total; 
and (6) 1,616,420 ml of promethazine with codeine, 99 percent of the 
accountable total. Id. at 1-2. Based on the audit results, the Order 
alleged that the Registrant had violated 21 U.S.C. 827(a)(3) and 
842(a)(5), as well as 21 CFR 1304.03, 1304.04, and 1304.21. Id. at 2.
    Next, the Show Cause Order alleged that various distributors make 
deliveries of controlled substances to Registrant when it ``is 
closed,'' and that the ``deliveries are received and signed for by'' 
non-employees who work ``at the grocery store in which [it] is 
located,'' and that the deliveries are then ``diverted in violation of 
21 U.S.C. 843(a)(3).'' Id. The Order thus alleged that Registrant ``has 
failed to provide effective controls'' against theft and diversion of 
controlled substances. Id. (citing 21 CFR 1301.71).
    The Show Cause Order also alleged that Registrant had violated a 
Memorandum of Agreement (MOA) it entered into with DEA. Id. The Order 
alleged that in the MOA, Registrant agreed that it would not employ its 
former owners ``in any capacity relating to [its] business,'' and that 
it would not permit its former owners to have ``access to any area of 
[it] where controlled substances are kept, stored, or maintained.'' Id. 
The Order alleged that Registrant ``has permitted [its former owners] 
to enter the pharmacy where controlled substances are present in 
violation of'' the MOA and 21 CFR 1301.72(d). Id.
    Based on the matters set forth above, I concluded that Registrant's 
continued registration during the pendency of the proceeding would 
constitute ``an imminent danger to public health and safety.'' Id. 
(citing 21 U.S.C. 824(d)). I, therefore, ordered the immediate 
suspension of Registrant's registration. Id.
    On November 17, 2010, the Order to Show Cause and Immediate 
Suspension of Registration, which also notified Registrant of its right 
to request a hearing on the allegations or to submit a written 
statement in lieu of a hearing, the procedures for doing either, and 
the consequences for failing to do either, id. at 3 (citing 21 CFR 
1301.43(a) & (c)), was personally served on Registrant's Pharmacist-in-
Charge. GX 2. Since the date of service of the Order, more than thirty 
days have now passed, and neither Registrant, nor anyone purporting to 
represent it, has requested a hearing or submitted a written statement. 
Accordingly, I find that Registrant has waived its right to a hearing 
or to submit a written statement in lieu of a hearing. 21 CFR 
1301.43(a), (c) & (d). I, therefore, issue this Decision and Final 
Order based on relevant material contained in the record submitted by 
the Government. 21 CFR 1301.43(e).

Findings

    Registrant is the holder of DEA Certificate of Registration 
FI1125651, which authorizes it to dispense controlled substances in 
schedules II through V as a retail pharmacy, at the registered address 
of 1400 Esplanade Ave., New Orleans, Louisiana. Registrant's 
registration does not expire until November 30, 2011. Registrant is 
apparently located in a building which also contains a grocery store. 
Affidavit of DI, at 8 (GX 22).
    On October 14, 2010, DEA Investigators conducted an audit of 
Registrant's handling of controlled substances. Id. at 9. The audit 
covered the period of October 22, 2008, on which date Registrant had no 
controlled substances on hand, through the beginning of business on 
October 14, 2010, at which time the closing inventory for the audit was 
taken. Id. According to the DI, she obtained invoices provided by 
Registrant's suppliers to determine the total amount of the controlled 
substances it had purchased during the audit period and was accountable 
for; the DI also obtained Registrant's records (including the 
prescriptions on file), as well as data from the state's prescription 
monitoring program showing the pharmacy's dispensings, and added the 
amount of its dispensings to the closing inventory to determine the 
total amount of each drug which it could account for. Id. Upon 
comparing the two amounts, the DI found that Registrant had large

[[Page 51416]]

shortages of six different drugs. These included:
    1. A shortage of 3,891 dosage units of hydrocodone/apap 7.5/650 mg, 
which was 78 percent of the total amount for which it was accountable;
    2. A shortage of 27,179 dosage units of hydrocodone/apap 7.5/750 
mg, which was 59 percent of the total amount for which it was 
accountable;
    3. A shortage of 5,514 dosage units of hydrocodone/apap 10/500 mg, 
which was 48 percent of the total amount for which it was accountable;
    4. A shortage of 114,826 dosage units of hydrocodone/apap 10/650 
mg. which was 96 percent of the total amount for which it was 
accountable;
    5. A shortage of 83,254 dosage units of alprazolam 2 mg., which was 
also 96 percent of the total amount for which it was accountable; and
    6. A shortage of 1,616,420 ml of promethazine with codeine, a 
shortage of 99 percent of the total amount for which it was 
accountable.

Id. at 9.
    While pharmacy employees told the DI that they were the only 
persons who accepted controlled substance deliveries, based on the 
records obtained from one of Registrant's distributors, the DI 
determined that many of the shipments had been delivered on Saturdays, 
a day when the pharmacy was closed, and that a number of the shipments 
were signed for by non-pharmacy employees who worked in the grocery 
store. Id. at 7-8, 10. Moreover, while Registrant's employees had told 
the DI that McKesson was the only distributor it purchased controlled 
substances from, Registrant was also purchasing from ANDA and Smith 
Drug Company. Id. at 7-8.

Discussion

    Section 304(a) of the Controlled Substances Act (CSA) provides that 
a registration to ``dispense a controlled substance * * * may be 
suspended or revoked by the Attorney General upon a finding that the 
registrant * * * has committed such acts as would render [its] 
registration under section 823 of this title inconsistent with the 
public interest as determined under such section.'' 21 U.S.C. 
824(a)(4). In making the public interest determination, the CSA 
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 * * * 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.

21 U.S.C. 823(f).

    These factors are considered in the disjunctive. Robert A. Leslie, 
M.D., 68 FR 15227, 15230 (2003). I may rely on any one or a combination 
of factors, and I may give each factor the weight I deem appropriate in 
determining whether to revoke an existing registration. Id. Moreover, I 
am ``not required to make findings as to all the factors.'' Hoxie v. 
DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also Morall v. DEA, 412 
F.3d 165, 173-74 (D.C. Cir. 2005). The Government bears the burden of 
proof. 21 CFR 1316.56.
    Having considered all of the factors, I conclude that the evidence 
pertinent to Registrant's compliance with applicable laws related to 
controlled substances (factor four) is dispositive and supports a 
finding that it has committed acts which render its registration 
``inconsistent with the public interest.'' 21 U.S.C. 824(a)(4).
    As found above, DIs conducted an audit of Registrant's handling of 
various controlled substances and found that it could not account for 
extraordinary quantities of four different formulations of hydrocodone, 
a schedule III controlled substance, and alprazolam 2 mg (generic for 
Xanax), a schedule IV controlled substance; both of these drugs are 
highly popular with drug abusers. See 21 CFR 1308.13(e); 13018.14(c). 
More specifically, approximately 150,000 dosage units of various 
hydrocodone drugs and 83,000 dosage units of alprazolam (96% of the 
amount purchased) were purchased by Registrant and could not be 
accounted for. In addition, 1.6 million mls of promethazine with 
codeine (99% of the amount purchased), another highly-abused controlled 
substance, was purchased by Registrant and could not be accounted for.
    Pursuant to DEA regulations, all ``registrants shall provide 
effective controls and procedures to guard against theft and diversion 
of controlled substances.'' 21 CFR 1301.71(a). Among the factors DEA 
considers in assessing whether a registrant maintains effective 
controls against theft and diversion, is ``[t]he adequacy of the 
registrant's * * * system for monitoring the receipt * * * 
distribution, and disposition of controlled substances in its 
operations.'' Id. 1301.71(b)(14).
    Moreover, under Federal law and DEA regulations, ``every registrant 
under this subchapter * * * distributing, or dispensing a controlled 
substance or substances shall maintain, on a current basis, a complete 
and accurate record of each such substance * * * received, sold, 
delivered, or otherwise disposed of by [it].'' 21 U.S.C. 827(a)(3). See 
also 21 CFR 1304.03; 1304.04, 1304.21, 1304.22(c). A registrant is 
required to maintain these records for at least two years. Id. Sec.  
827(b) (``every inventory or other record required under this section * 
* * shall be kept and be available, for at least two years, for 
inspection and copying''). See also 21 CFR 1304.03 (``Each registrant 
shall maintain the records and inventories and shall file the reports 
required by this part, except as exempted by this section.''); id. 
Sec.  1304.04 (mandating that records be maintained for at least two 
years and be available for inspection and copying). See also Paul H. 
Volkman, 73 FR 30630, 30644 (2008) (``Recordkeeping is one of the CSA's 
central features; a registrant's accurate and diligent adherence to 
this obligation is absolutely essential to protect against the 
diversion of controlled substances.'').
    Whether the shortages are attributable to outright diversion by 
either pharmacy or store employees, theft, or the failure to maintain 
accurate records, does not matter. What is clear is that Registrant 
purchased several hundred thousand dosage units of highly abused 
controlled substances which cannot be accounted for and that it has 
committed acts which render its registration ``inconsistent with the 
public interest.'' 21 U.S.C. 824(a)(4). Accordingly, I will order that 
Registrant's registration be revoked and that any pending application 
be denied.\1\
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    \1\ On November 17, 2010, the Louisiana Board of Pharmacy issued 
an Active Suspension Notice to Registrant, which placed its 
Louisiana Pharmacy Permit in active suspension pending further 
proceedings. Thus, Registrant also no longer meets the CSA's 
requirement for holding a registration that it be ``authorized to 
dispense * * * controlled substances under the laws of the State in 
which [it] practices.'' 21 U.S.C. 823(f); see also id. Sec.  
824(a)(3) (authorizing revocation where registrant's ``[s]tate 
license or registration [has been] suspended * * * by competent 
State authority and [registrant] is no longer authorized by State 
law to engage in the * * * dispensing of controlled substances''); 
id. Sec.   802(21) (defining ``[t]he term `practitioner' [to] mean[] 
a * * * pharmacy * * * licensed, registered, or otherwise permitted, 
by the United States or the jurisdiction in which [it] practices * * 
* to dispense * * * a controlled substance in the course of 
professional practice'').
     Registrant's loss of state authority thus provides an 
additional ground to revoke its registration. See Bourne Pharmacy, 
Inc., 72 FR 18273, 18274 (2007). However, the State's suspension was 
not cited as a basis for Agency action in the Order to Show Cause 
(as it occurred five days after the latter was issued) and there are 
no pleadings establishing that the Agency subsequently gave notice 
of its intent to rely on the State's suspension. See 5 U.S.C. 
554(b). I therefore do not rely on it.

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[[Page 51417]]

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 
824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of 
Registration FI1125651, issued to Ideal Pharmacy Care, Inc., d/b/a/
Esplanade Pharmacy, be, and it hereby is, revoked.
    I further order that any pending application to renew or modify 
this registration, be, and it hereby is, denied.

    Dated: August 5, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-21060 Filed 8-17-11; 8:45 am]
BILLING CODE 4410-09-P