[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Notices]
[Pages 51412-51415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21061]


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 DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Joe C. Fermo, M.D.; Revocation of Registration

    On September 30, 2009, the Deputy Assistant Administrator, Office 
of Diversion Control, Drug Enforcement Administration, issued an Order 
to Show Cause to Joe C. Fermo, M.D. (Registrant), of Tulsa, Oklahoma. 
The Show Cause Order proposed the revocation of Registrant's DEA 
Certificate of Registration, BF7430781, as well as the denial of any 
pending applications to renew or modify his registration, on the ground 
that his ``continued registration would be inconsistent with the public 
interest.'' Show Cause Order at 1 (citing 21 U.S.C. 823(f) and 
824(a)(4)).
    The Show Cause Order specifically alleged that on February 23, 
1990, Registrant was convicted in the District Court for Oklahoma 
County, State of Oklahoma, of ten counts of submitting false claims to 
the Oklahoma Department of Human Services in violation of Oklahoma law, 
and that on June 20, 1990, the United States Department of Health and 
Human Services excluded him from participating in federal health care 
programs under 42 U.S.C. 1320a-7(a). Id. at 1-2. The Order further 
alleged that based on his convictions, on June 21, 1990, the Oklahoma 
State Board of Medical Licensure placed his medical license on 
probation and that Registrant materially falsified three separate 
applications (in 1991, 1994, and 1997) to renew his DEA registration by 
failing to disclose the state board's action. Id. at 2 (citing 21 
U.S.C. 824(a)(1)).\1\
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    \1\ The Show Cause Order alleged that in March 2001, Registrant 
and DEA entered into a Memorandum of Agreement (MOA) which settled a 
Show Cause Proceeding filed in April 2000 based on the allegations 
described above. Show Cause Order at 2. The Show Cause Order also 
alleged that under the MOA, Registrant surrendered his registration 
and was allowed to reapply no earlier than March 2004, and that in 
October 2004, DEA issued him a new registration. Id.
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    Finally, the Show Cause Order alleged that on August 27, September 
24, and September 26, 2007, an undercover officer had obtained 
prescriptions from Registrant for alprazolam (at all three visits) and 
propoxyphene (at the first two visits), both of which are schedule IV 
controlled substances. Id. The Order further alleged that these 
prescriptions lacked a legitimate medical purpose and were issued 
outside of the usual course of professional practice in violation of 
Federal and State laws. Id. (citing 21 CFR 1306.04 and Okla. Admin. 
Code 475.30-1-3(a)).
    On or about October 5, 2009, the Show Cause Order, which also 
notified Registrant of his right to either request a hearing on the 
allegations or to submit a written statement in lieu of a hearing, the 
procedures for doing so, and the consequence if he failed to do so, was 
served on Registrant by certified mail addressed to him at the address 
of his registered location. Id. at 2-3 (citing 21 CFR 1301.43). Since 
service of the Show Cause Order, more than thirty days have now passed 
and neither Registrant, nor anyone purporting to represent him, has 
either requested a hearing or submitted a written statement in lieu of 
a hearing. See 21 CFR 1301.43(b)-(d). Accordingly, I find that 
Registrant has waived his rights to a hearing or to submit a written 
statement. Id. 1301.43(d). I therefore issue this Decision and Final 
Order without a hearing based on relevant evidence contained in the 
investigative record submitted by the Government.

Findings

    Registrant is the holder of DEA Certificate of Registration, 
BF7430781, which authorizes him to dispense controlled substances in 
schedules II through V as a practitioner at the registered location of 
5970 E. 31 St., Suite O, Tulsa, Oklahoma. While his registration was to 
expire on September 30, 2010, on August 13, 2010, Registrant filed a 
renewal application. In accordance with the Administrative Procedure 
Act and DEA regulations, I find that Registrant's registration remains 
in effect pending the issuance

[[Page 51413]]

of this Final Order. See 5 U.S.C. 558(c); 21 CFR 1301.36(i).
    On August 27, 2007, an Agent with the Oklahoma Bureau of Narcotics 
went to Registrant's office to perform an undercover visit with Merli 
Fermo, M.D., Registrant's wife, who was also a DEA registrant.\2\ Upon 
meeting the receptionist, to whom she paid $65, the Agent was told that 
she would have to wait one hour to see Merli Fermo and was asked if she 
wanted to see Registrant, who was available immediately. The Agent 
agreed and was taken to his office.
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    \2\ Merli Fermo has since passed away.
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    After the Agent and Registrant discussed the former's having spent 
some time in Minnesota and why she had returned to Oklahoma, who she 
lived with, how she was supporting herself, and her address, Registrant 
asked the Agent: ``So what do you want me to put you on?'' The Agent 
replied: ``I've been on Xanax. Two milligrams.'' Registrant then asked 
the Agent if she had ``been on it for a while?'' The Agent replied that 
she had been, that she had ``continued it when'' she had gone to 
Minnesota, and had gotten it ``from a doctor up there.''
    Registrant then asked: ``You're taking Xanax three times a day?''; 
the Agent replied ``four times a day.'' Registrant responded: ``It says 
three times a day,'' to which the Agent said, ``I know but it was 
increased up there.'' Registrant then told the Agent to ``take it two 
times a day. Two milligrams.'' The Agent asked: ``So I'm only get[ing] 
it two times a day?'' Registrant replied affirmatively and asked, 
``What else are you taking?'' The Agent answered: ``I was taking 
Darvocet too.''
    Registrant then asked ``are you having some pain?'' The Agent 
replied: ``Oh, every once in a while.'' Registrant told the Agent to 
``[t]ake it two times a day and I'll give you a hundred''; the Agent 
replied: ``Okay. I wish you'd give me the four on this Xanax though.'' 
After several comments which were unintelligible, Registrant and the 
Agent discussed how far the latter had lived from Minneapolis, whether 
the Agent went there much when she lived in Minnesota, and Registrant's 
having previously lived in the Minneapolis area. Before the visit 
ended, Registrant gave the Agent prescriptions for 100 Xanax 
(alprazolam) 2 mg and 100 Darvocet-N (propoxyphene) 100 mg, both of 
which are schedule IV controlled substances, see 21 CFR 1308.14(b), 
(c), as well as Celera, a non-controlled anti-depressant.
    On September 24, 2007, the Agent returned to Registrant's office 
and paid the receptionist $65. While the Agent was scheduled to see 
Registrant's wife, when informed that the latter was not available, she 
agreed to see Registrant, and after a short wait, was taken to his 
office.
    Registrant asked the Agent how she was doing; she replied 
``great.'' Registrant then asked ``what's going on with you?'' The 
Agent answered: ``Not a thing. I wonder if I could get a hundred and 
twenty of the Xanax instead of a hundred?'' Registrant asked why she 
wanted one hundred twenty; the Agent answered: ``I ran out.'' \3\ 
Registrant then said: ``No, not if you take it down * * * the way it is 
prescribed for you, you wouldn't run out.'' After the Agent said ``I 
know,'' Registrant stated--in contrast to his instruction at the 
previous visit to take the Xanax twice a day--``Just take it three 
times a day, that's precisely why it's controlled because people have a 
tendency to (Inaudible) take it more than what's prescribed.'' 
Registrant then apparently warned the Agent that she could have 
seizures if she took more than what he prescribed ``and then if you 
don't take it for some reason or another'' and added ``it's not good to 
be doing that.''
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    \3\ Based on the dosing instruction he gave the Agent at the 
initial visit, the Xanax should have lasted 50 days; the Agent was 
thus seeking the drug approximately three weeks early.
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    After telling the Agent that she could take the Xanax ``three times 
a day,'' Registrant asked her: ``Do you still need the Darvocet?''; the 
Agent answered: ``Yes.'' After a conversation about such subjects as 
how much social security the Agent was getting, what type of work she 
had previously done, her shopping habits, and whether she had a 
boyfriend, Registrant told the Agent to take the Celexa because it is 
an anti-depressant that works with Xanax and would help her to get 
going in the morning. After still more conversation about the Agent's 
social life, Registrant gave her new prescriptions for 100 Xanax 2 mg, 
100 Darvocet-N 100 mg, and Celexa. Shortly thereafter, the visit 
ended.\4\
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    \4\ The Government also submitted a copy of the Information 
filed by the State of Oklahoma charging Registrant with ten counts 
of submitting false claims to the Oklahoma Department of Human 
Services; a ``Deferred Sentence, Plea of Guilty, Summary of Facts'' 
filed in the state court proceedings; a June 20, 1990, letter from 
the Office of Inspector General, U.S. Department of Health & Human 
Services, which excluded Registrant ``from participation in the 
Medicare program and any State health program'' for a period of 
fifteen years based on his state court convictions; and a Final 
Order of the Oklahoma State Board of Medical Licensure and 
Supervision (issued on June 21, 1990) which placed him on probation 
for four years and nine months based on his guilty plea in the state 
criminal proceeding.
    The Government did not, however, submit either the MOA, which 
Registrant entered into with DEA, or any of the applications which 
it alleged he had materially falsified. Instead, it submitted the 
MOA that DEA entered into with his wife and an affidavit of an 
Agency Investigator stating that he had ``received information 
from'' an Investigator in another office that Registrant's MOA ``was 
identical'' to his wife's. Affidavit of Diversion Investigator, at 
1.
    Even accepting this would establish that Registrant settled the 
Show Cause Proceeding on the same terms as his wife did, his wife's 
MOA merely stated that an April 21, 2000 Order to Show Cause 
``further alleged that on August 13, 1991, September 22, 1994, and 
again on August 28, 1997, the Respondent materially falsified her 
renewal applications by failing to disclose that the Board placed 
her medical license on probation in June 1990.'' MOA, at 2. 
Continuing, the MOA states: ``The above matters, if proven at an 
administrative hearing, constitute grounds for revocation of the 
Respondent's DEA Certificate of Registration, and denial of her 
pending application for renewal of that registration.'' Id. Nowhere 
in the MOA did Registrant's wife admit to the material falsification 
allegation. Thus, even if Registrant's MOA imposed the same terms, 
it is clear that the Government has not proved the allegation that 
he materially falsified his 1991, 1994, and 1997 applications.
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Discussion

    Section 304(a) of the Controlled Substances Act (CSA) provides that 
``[a] registration pursuant to section 823 of this title 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 his 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 in the case of a practitioner, Congress directed 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).

    ``[T]hese factors are considered in the disjunctive.'' Robert A. 
Leslie, 68 FR 15227, 15230 (2003). I may rely on any one or a 
combination of factors and may give each factor the weight I deem 
appropriate in determining whether to revoke an existing registration 
or to deny an application. Id. Moreover, I am ``not required to make 
findings as to all of the factors.'' Hoxie v. DEA, 419 F.3d 477, 482 
(6th Cir. 2005); (citing Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 
2005)).

[[Page 51414]]

    In this matter, while I have considered all of the factors, I 
conclude that it is not necessary to make findings with respect to 
factors one (the recommendation of the state licensing board), three 
(registrant's conviction record) and five (such other conduct which may 
threaten public health and safety). I find that the Government's 
evidence with respect to Registrant's experience in dispensing 
controlled substances (factor two) and his compliance with applicable 
Federal and State laws related to the distribution and dispensing of 
controlled substances (factor four) makes out a prima facie case that 
Registrant has committed acts which render his registration 
``inconsistent with the public interest.'' 21 U.S.C. 823(f), 824(a)(4). 
I will therefore order that his registration be revoked and that his 
pending application to renew his registration be denied.

Factors Two and Four--Registrant's Experience in Dispensing Controlled 
Substances and Compliance With Applicable Laws Related to Controlled 
Substances

    Under a longstanding DEA regulation, a prescription for a 
controlled substance is not ``effective'' unless it is ``issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his professional practice.'' 21 CFR 1306.04(a). This 
regulation further provides that ``an order purporting to be a 
prescription issued not in the usual course of professional treatment * 
* * is not a prescription within the meaning and intent of [21 U.S.C. 
829] and * * * the person issuing it, shall be subject to the penalties 
provided for violations of the provisions of law related to controlled 
substances.'' Id.; see also 21 U.S.C. 802(10) (defining the term 
``dispense'' as meaning ``to deliver a controlled substance to an 
ultimate user by, or pursuant to the lawful order of, a practitioner, 
including the prescribing and administering of a controlled 
substance'') (emphasis added); Okla. Admin. Code 475:30-1-3(a) (``A 
prescription for a controlled dangerous substance to be effective must 
be issued for a legitimate medical purpose by a registered or otherwise 
authorized individual practitioner acting in the usual course of his/
her professional practice.'').
    As the Supreme Court recently explained, ``the [CSA's] prescription 
requirement * * * ensures patients use controlled substances under the 
supervision of a doctor so as to prevent addiction and recreational 
abuse. As a corollary, [it] also bars doctors from peddling to patients 
who crave the drugs for those prohibited uses.'' Gonzales v. Oregon, 
546 U.S. 243, 274 (2006) (citing United States v. Moore, 423 U.S. 122, 
135, 143 (1975)).
    Under the CSA, it is fundamental that a practitioner must establish 
and maintain a bonafide doctor-patient relationship in order to act 
``in the usual course of * * * professional practice'' and to issue a 
prescription for a ``legitimate medical purpose.'' Laurence T. 
McKinney, 73 FR 43260, 43265 n.22 (2008); see also Moore, 423 U.S. at 
142-43 (noting that evidence established that physician ``exceeded the 
bounds of `professional practice,' '' when ``he gave inadequate 
physical examinations or none at all,'' ``ignored the results of the 
tests he did make,'' and ``took no precautions against * * * misuse and 
diversion''). The CSA generally looks to state law to determine whether 
a doctor and patient have established a bonafide doctor-patient 
relationship. See Kamir Garces-Mejias, 72 FR 54931, 54935 (2007); 
United Prescription Services, Inc., 72 FR 50397, 50407 (2007).\5\
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    \5\ However, on October 15, 2008, the President signed into law 
the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, 
Public Law. 110-425, 122 Stat. 4820 (2008). Section 2 of the Act 
prohibits the dispensing of a prescription controlled substance ``by 
means of the Internet without a valid prescription,'' and defines, 
in relevant part, the ``[t]he term `valid prescription' [to] mean[] 
a prescription that is issued for a legitimate medical purpose in 
the usual course of professional practice by * * * a practitioner 
who has conducted at least 1 in-person medical evaluation of the 
patient.'' 122 Stat. 4820 (codified at 21 U.S.C. 829(e)(1) & (2)). 
Section 2 further defines ``[t]he term `in-person medical 
evaluation' [to] mean[] a medical evaluation that is conducted with 
the patient in the physical presence of the practitioner, without 
regard to whether portions of the evaluation are conducted by other 
health professionals.'' Id. (codified at 21 U.S.C. 829(e)(2)(B)). 
These provisions do not, however, apply to Respondent's conduct.

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    Under the Oklahoma Board of Medical Licensure and Supervision's 
rule on the ``[u]se of controlled substances for the management of 
chronic pain,'' ``[a] medical history and physical examination must be 
obtained, evaluated and documented in the medical record.'' Okla. 
Admin. Code 435:10-7-11(1). Moreover, ``[t]he medical record should 
document the nature and intensity of the pain, current and past 
treatments for pain, underlying or coexisting diseases or conditions, 
the effect of the pain on physical and psychological function and 
history of substance abuse.'' Id. The Oklahoma rule also requires, 
inter alia, that a ``physician should discuss the risk and benefits of 
the use of controlled substances with the patient.'' Id. at 435:10-7-
11(3).
    As found above, on two occasions, Registrant prescribed Darvocet-N 
100 mg., a drug which includes propoxyphene, a schedule IV narcotic 
controlled substance, as well as Xanax (alprazolam) to an OBN Agent 
acting in an undercover capacity. Notably, during the first visit, 
Registrant did not ask the Agent whether she had any medical 
complaints. Rather, after engaging in small talk and asking for her 
address, Registrant asked the Agent: ``So what do you want me to put 
you on?'' While the Agent stated Xanax 2 mg, and told her she had been 
getting it from another doctor, Registrant did not even ask her if she 
had anxiety.
    Moreover, Registrant then asked the Agent: ``what else are you 
taking?'' After the Agent replied that she ``was taking Darvocet too,'' 
Registrant asked: ``I think, are you having some pain?'' While the 
Agent replied: ``[e]very once in a while,'' Registrant did not ask the 
Agent any questions regarding ``the nature and intensity of the pain,'' 
the ``effect of the pain on [the Agent's] physical and psychological 
function,'' whether the Agent had been previously treated for pain, or 
whether she had a ``history of substance abuse'' as required under the 
Oklahoma rule. See Okla. Admin. Code 435:10-7-11(1). Moreover, while 
under the Oklahoma rule a physical examination must ``be obtained,'' 
the transcript of the undercover visit contains no indication that 
Registrant performed a physical examination and developed a diagnosis. 
See id. I thus conclude that at the Agent's first visit, Registrant 
failed to establish a doctor-patient relationship with her. I further 
conclude that he lacked a legitimate medical purpose and acted outside 
of the usual course of professional practice in prescribing Xanax and 
Darvocet-N to her and thus violated Federal law. See 21 CFR 1306.04(a); 
21 U.S.C. 841(a)(1).
    The Xanax and Darvocet prescriptions Respondent gave the Agent at 
her second visit also violated Federal law. While at this visit, 
Registrant, after being told by the Agent (who was seeking an even 
larger quantity of the drug and was three weeks early in seeking the 
refill) that she had run out of Xanax, did discuss with her that she 
should not take more of the drug than he prescribed and explained that 
the drug is controlled ``because people have a tendency to'' take more 
than is prescribed, once again, he did not determine that the Agent had 
anxiety or another medical condition that might warrant a prescription 
for the drug.
    Likewise, after telling the Agent to only take the Xanax three 
times per day, he then asked her if she ``still need[ed]

[[Page 51415]]

the Darvocet?'' The Agent answered ``yes,'' but Registrant did not even 
ask her if she had pain, let alone ask her any questions regarding the 
nature and intensity of the pain, whether the Darvocet was helping to 
alleviate her pain, or how the pain was affecting her physical and 
psychological function. Accordingly, with respect to the Agent's second 
visit, I again conclude that Registrant failed to establish a doctor-
patient relationship with her. I also conclude that Registrant lacked a 
legitimate medical purpose and acted outside of the usual course of 
professional practice in prescribing Xanax and Darvocet-N to her and 
violated Federal law. See 21 CFR 1306.04(a); 21 U.S.C. 841(a)(1).
    As the forgoing demonstrates, Registrant has committed acts which 
``render his registration * * * inconsistent with the public 
interest.'' 21 U.S.C. 824(a)(4). I will therefore order that his 
registration be revoked and that any pending applications be denied.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a), as well as by 28 CFR 0.100(b), I hereby order that DEA 
Certificate of Registration, BF7430781, issued to Joe C. Fermo, M.D., 
be, and it hereby is, revoked. I further order that any pending 
application of Joe C. Fermo, M.D., to renew or modify his registration 
be, and it hereby is, denied. This Order is effective September 19, 
2011.

    Dated: August 5, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-21061 Filed 8-17-11; 8:45 am]
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