[Federal Register Volume 77, Number 110 (Thursday, June 7, 2012)]
[Notices]
[Pages 33770-33772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13805]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Pharmboy Ventures Unlimited, Inc., Decision and Order
On August 26, 2011, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Pharmboy Ventures Unlimited, Inc., d/b/a Brent's Pharmacy
and Diabetes Care (Applicant), of St. George, Utah. The Show Cause
Order proposed the denial of Applicant's application for a DEA
Certificate of Registration as a retail pharmacy, on the ground that
its ``registration would be inconsistent with the public interest.''
Show Cause Order, at 1 (citing 21 U.S.C. 823(f)).
The Show Cause Order alleged that on February 28, 2011, Applicant
submitted an application for a DEA Registration as a retail pharmacy
and that while applicant is owned by Caroline McFadden, her husband
Brent McFadden is Applicant's pharmacist-in-charge and sole pharmacist.
The Show Cause Order then alleged that in 2010, Brent McFadden, while
working as a pharmacist at Lin's Pharmacy, had unlawfully taken
phentermine, a schedule IV controlled substance, from the pharmacy's
stock and ingested it; the Order also alleged that Brent McFadden had
failed to document the disposition of the phentermine he had taken. Id.
at 1-2 (citing 21 U.S.C. 844; 827; 21 CFR 1304.22(c); 1306.06;
1306.21). The Order also alleged that while working as a pharmacist at
Lin Pharmacy, Mr. McFadden had, on four or more occasions when it was
open to the public, left the pharmacy unattended by a pharmacist, in
violation of Utah Admin. Code R156-1-102a. Id. at 2.
Next, the Show Cause Order alleged that based on the various acts
set forth above, on October 27, 2010, the Utah Division of Occupational
and Professional Licensing (DOPL) issued a consent order to Mr.
McFadden placing his pharmacist's license on probation for three years.
Id. The Order also alleged that on January 20, 2011, Mr. McFadden had
pled no contest to seven state law counts of making or altering a false
prescription based on his conduct in taking phentermine from Lin's
Pharmacy, and that he had been sentenced to eighteen-months' probation,
fined, and ordered to undergo a substance abuse evaluation. Id. (citing
Utah Code Ch. 58, Sec. 37(3)(a)(iii)). Finally, the Order alleged that
Mr. McFadden had engaged in such other conduct which may threaten
public health and safety because he ``took and consumed legend drugs
and food items'' from his former employer without paying for them, and
that because of the aforementioned acts, he was terminated from his
employment. Id. (citing 21 U.S.C. 823(f)(5)).
The Show Cause Order, which also notified Applicant of its right to
request a hearing on the allegations or to submit a written statement
in lieu of a hearing, the procedures for electing either option, and
the consequences for failing to do either, id. at 2-3 (citing 21 CFR
1301.43); was served on Applicant by certified mail, return receipt
requested, addressed to it at the address of its proposed registered
location. GX C. As evidenced by the signed return receipt card, service
was accomplished on September 2, 2011. Since that date, more than
thirty days have now passed, and neither Applicant, nor anyone
purporting to represent it, has either requested a hearing or submitted
a written statement in lieu of a hearing. Accordingly, I find that
Applicant has waived its right to a hearing and issue this Decision and
Order based on relevant evidence contained in the investigative record
submitted by the Government. I make the following findings of fact.
Findings
On February 28, 2011, Applicant filed an application for a DEA
Certificate of Registration as a retail pharmacy. GX A. Applicant's
application was signed by Ms. Caroline McFadden. Id. In response to one
of the application's liability questions, Applicant noted that ``Brent
McFadden, corporate owner, charges of unprofessional conduct and
unlawful conduct for leaving the pharmacy unattended for thirty minutes
and for taking 7 phentermine tablets from pharmacy stock and injesting
[sic] them.'' GX A.
Upon reviewing the application, a DEA Diversion Investigator (DI)
noticed Applicant's statement regarding the action taken by the State
of Utah against Brent McFadden. GX D, at 1. The DI learned that
Applicant has a state pharmacy license and that Caroline McFadden was
listed as the applicant and owner of the pharmacy. Id. at 1-2. The DI
also obtained a report by a DOPL Investigator regarding an August 17,
2010 interview she did of Mr. McFadden, who had previously worked at
the pharmacy in Lin's Supermarket, a grocery store located in St.
George, Utah. Id.; GX F, at 1.
During the interview, Mr. McFadden admitted that he had taken both
phentermine, a schedule IV stimulant, and Maxzide (Triamterene-HCTZ), a
non-controlled legend drug used as a diuretic, from the store's
pharmacy, where he had been employed for sixteen years. GX D, at 2.
With respect to his use of phentermine, Mr. McFadden initially claimed
that the drug had been prescribed to him by J.R.M., a physician's
assistant and neighbor of his. Id. However, Mr. McFadden later admitted
that J.R.M. had not treated him
[[Page 33771]]
and that he had taken the phentermine on his own. Id. Mr. McFadden
admitted that he had taken a total of thirty phentermine pills over the
preceding two to three months. Id. In a written statement he made on
August 17, 2010, Mr. McFadden asserted that he had taken the 30-35
phentermine tablets ``over a [two] month period'' based ``upon a verbal
recommendation from a doctor.'' GX G, at 2. Mr. McFadden further stated
that he paid for the drugs ``but an RX was never written.'' Id.
Finally, McFadden claimed that he had repaid the twelve to fifteen
tablets of Maxzide by taking them out of his subsequent prescription.
Id. at 1.
In addition, Mr. McFadden admitted that he had left the pharmacy
unattended ``for a few minutes,'' on three or four occasions ``during
the past two to four years,'' to get lunch or take a break because
store policy did not allow for the pharmacy to close for lunch. GX F,
at 2. However, upon being told by the State Investigator that it was
reported that he had recently left the pharmacy for about 45 minutes,
Mr. McFadden admitted that the week before, he had left the pharmacy,
when no other pharmacist was in attendance, for 30 to 45 minutes to get
lunch and run an errand. Id. Mr. McFadden denied, however, tampering
with, or altering, the pharmacy's records when he removed tablets from
the dispensing machine. Id.
On October 20, 2010, Mr. McFadden entered into a Stipulation and
Order with the DOPL; the Order was subsequently approved by the DOPL's
Director. GX M, at 10-11. Among the Order's findings were that ``[o]n
or about August 17, 2010[,] [Mr. McFadden] admitted to a Division
investigator that [he] had, on multiple occasions, taken Maxide [sic],
a prescription only medication, and [p]hentermine, a Schedule IV
controlled substance, from pharmacy stock for Respondent's own use.
Respondent did not possess a valid prescription for the
[p]hentermine.'' Id. at 3. Of note, the DOPL did not find that Mr.
McFadden lacked a prescription for the Maxzide.
Mr. McFadden further stipulated that he ``recently left the
pharmacy unattended for 30 to 45 minutes to run an errand and pick up
lunch. [He] also admitted to the Division investigator that the
practice of leaving the pharmacy unattended had occurred on three or
four occasions in the past four years.'' Id. Mr. McFadden agreed that
these (and other findings) constituted unprofessional conduct under
Utah law and regulations, as well as unlawful conduct under Utah
criminal law. Id. at 3-4.
The DI also developed evidence that Mr. McFadden was observed on
the store's security cameras occasionally taking various food items,
including bagels and fountain drinks, without paying for them. GX D, 3-
4. Subsequently, based on his expropriation of drugs, the bagels, and
fountain drinks, as well as his having left the pharmacy unattended,
Lin's terminated Mr. McFadden. GX J.
In addition, Mr. McFadden was charged with seven felony counts of
violating Utah Code Sec. 58-37-8(3)(A)(III), which prohibits
``mak[ing] any false or forged prescription or written order for a
controlled substance, or * * * utter[ing] the same, or * * * alter[ing]
any prescription or written order'' for a controlled substance. GX H,
at 5. However, Mr. McFadden was allowed to plead no contest, with his
plea being held in abeyance, to seven misdemeanor counts of Utah Code
Sec. 58-37-8(3)(A)(III), as well as a single count of retail theft
(also a misdemeanor), in violation of Utah Code Sec. 76-6-602. Id. The
court ordered that his pleas be held in abeyance for eighteen months,
fined him $1,000, and ordered him to both undergo a substance abuse
evaluation and to successfully complete any treatment program and
provide proof of completion to the court. Id. at 6.
Discussion
Section 303(f) of the Controlled Substances Act (CSA) provides that
an application for a practitioner's registration may be denied upon a
determination ``that the issuance of such registration would be
inconsistent with the public interest.'' 21 U.S.C. 823(f). In making
the public interest determination in the case of a practitioner, which
includes a retail pharmacy, see id. Sec. 802(21), 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.
Id.
``[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, while I ``must consider each
of these factors, [I] `need not make explicit findings as to each one.'
'' MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011) (quoting Volkman
v. DEA, 567 F.3d 215, 222 (6th Cir. 2009)); see also 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)).
Having considered all of the factors,\1\ I conclude that the
Government's evidence with respect to Applicant's (more specifically,
its pharmacist-in charge's) experience in dispensing controlled
substances (factor two), his conviction record under laws relating to
the distribution or dispensing of controlled substances (factor three),
his compliance with applicable laws related to controlled substances
(factor four), and his having engaged in other conduct which may
threaten public health and safety (factor five), makes out a prima
facie case to conclude that granting Applicant's application would be
``inconsistent with the public interest.'' 21 U.S.C. 823(f). Because
Applicant has waived its right to a hearing and present evidence
refuting this conclusion, its application will be denied.
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\1\ It is acknowledged that Applicant holds a state pharmacy
license. However, the Agency has repeatedly held that while the
possession of a state license is an essential condition for
obtaining (and maintaining) a registration issued under 21 U.S.C.
823(f), it is not dispositive of the public interest inquiry. Sun &
Lake Pharmacy, Inc., 76 FR 24523, 24530 n.15 (2011).
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Factors Two--The Applicant's Experience in Dispensing Controlled
Substances, Factor Three--The Applicant's Conviction Record Under
Federal or State Laws Relating to the Distribution or Dispensing of
Controlled Substances, Factor Four--Applicant's Compliance With
Applicable Laws Related to Controlled Substances, and Factor Five--Such
Other Conduct Which May Threaten Public Health and Safety
As found above, the Utah DOPL found that Mr. Brent McFadden,
Applicant's pharmacist-in-charge,\2\ expropriated
[[Page 33772]]
phentermine, a schedule IV controlled substance, from the stock of his
former employer, which he ingested. The DOPL further found that Mr.
McFadden did not have a prescription for the phentermine. These
findings are entitled to preclusive effect in this proceeding. See
Robert L. Dougherty, 76 FR 16823, 16830 (2011) (collecting cases).
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\2\ DEA has long held that it can look behind a pharmacy's
ownership structure ``to determine who makes the decisions
concerning the controlled substance business of a pharmacy.''
Carriage Apothecary, 52 FR 27599, 27599 (1987) (citing cases); cf.
Unarex of Plymouth Road, et al., 50 FR 6077, 6079-80 (1985)
(revoking registration of pharmacy, whose pharmacist, transferred
his ownership interest to his wife following his conviction for
conspiracy to unlawfully distribute controlled substances;
``Pharmacists do not operate by themselves. They require human
intervention to operate''); Big-T Pharmacy, Inc. 47 FR 51830, 51831
(1982) (``Pharmacies must operate through the agency of natural
persons, owners or stockholders, pharmacists or other key employees.
When such persons misuse the pharmacy's registration by diverting
controlled substances obtained thereunder, and when those
individuals are convicted as a result of that diversion, the
pharmacy's registration becomes subject to revocation under section
824, just as if the pharmacy itself had been convicted.''); S & S
Pharmacy, Inc., 46 FR 13051, 13052 (1981) (``In a retail pharmacy, *
* * the registered pharmacist in charge of the pharmacy is
responsible for ordering controlled substances; for keeping and
maintaining the required records and inventories; for taking all
necessary measures to prevent the loss and diversion of controlled
substances; and for dispensing such substances only in accordance
with applicable State and Federal laws. The corporate pharmacy acts
through the agency of its * * * pharmacist in charge.'').
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Under the CSA, a controlled substance may only be dispensed
``pursuant to the lawful order [such as a prescription] of, a
practitioner.'' 21 U.S.C. 802(21).\3\ Mr. McFadden did not, however,
have a prescription for phentermine. Thus, he unlawfully distributed
phentermine to himself, which he then ingested. See id. Sec. 829(b)
(``Except when dispensed directly by a practitioner, other than a
pharmacist, to an ultimate user, no controlled substance in schedule
III or IV, which is a prescription drug as determined under the Federal
Food, Drug, and Cosmetic Act * * * may be dispensed without a written
or oral prescription * * *.''); id. Sec. 841(a)(1) (prohibiting the
knowing distribution or dispensing of a controlled substance ``[e]xcept
as authorized by'' the CSA). See also Utah Code Sec. 58-17b-501(12)
(prohibiting pharmacist from ``using a prescription drug or controlled
substance for himself that was not lawfully prescribed for him by a
practitioner''); id. Sec. 58-37-6(7)(c)(i) (``A controlled substance
may not be dispensed without the written prescription of a
practitioner, if the written prescription is required by the federal
Controlled Substances Act.'').
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\3\ Cf. 21 CFR 1306.03 (prescription may only be issued ``by an
individual practitioner * * * authorized to prescribe controlled
substances by the jurisdiction in which he is licensed to practice
his profession''); id. 1306.04(a) (``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
* * * professional practice.'').
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Mr. McFadden also violated 21 U.S.C. 844(a), which makes it
``unlawful for any person knowingly or intentionally to possess a
controlled substance unless such substance was obtained directly, or
pursuant to a valid prescription or order, from a practitioner, while
acting in the course of his professional practice,'' except as
otherwise authorized by the CSA. See also Utah Code Sec. 58-37-
8(2)(a)(i) (same).
In addition, the DOPL found that Mr. McFadden violated the Utah
Pharmacy Practice Act Rule, when he left the Lin's Pharmacy unattended
on various occasions. See Utah Admin Code R156-17b-614(7). GX M, at 3.
While this rule is applicable to pharmacy practice in general, given
the evidence that controlled substances were dispensed (and obviously
stored) at the pharmacy, the violations have a sufficient connection to
the CSA's core purpose of preventing the diversion of controlled
substances to be considered as ``such other conduct which may threaten
public health and safety,'' 21 U.S.C. 823(f)(5), and are thus within
the Agency's authority to consider under factor five.
Finally, the evidence also shows that Mr. McFadden pled no contest
to seven misdemeanor counts of making a false or forged prescription or
written order for a controlled substance or uttering the same, in
violation of state law. Notwithstanding that his pleas are being held
in abeyance, and thus the charges may eventually be dismissed, DEA has
repeatedly held that a plea of no contest which is subject to deferred
adjudication, nonetheless constitutes a conviction for purposes of the
CSA. See Kimberly Maloney, N.P., 76 FR 60922, 60922 (2011) (collecting
cases). Nor does the fact that the charges were reduced to misdemeanors
preclude consideration of his convictions under factor three, which, in
contrast to 21 U.S.C. 824(a)(2), is not limited to felony offenses. See
21 U.S.C. 823(f)(3).
I thus conclude that the evidence with respect to factors two,
three, four, and five \4\ establishes that granting Applicant's
application would be ``inconsistent with the public interest.'' 21
U.S.C. 823(f). And because Applicant waived its right to a hearing,
there is no evidence to the contrary. Accordingly, I will deny
Applicant's application.
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\4\ The Government seeks several additional findings that Mr.
McFadden engaged in ``such other conduct which may threaten public
health and safety.'' 21 U.S.C. 823(f)(5). More specifically, the
Government alleges that ``[w]hile working as a pharmacist for Lin's
Pharmacy, * * * Mr. McFadden took and consumed legend drugs and food
items from the pharmacy without compensating the store for the use
of such items,'' GX B, at 2, and that ``[i]n August 2010, Lin's
Pharmacy terminated Mr. McFadden from working as a pharmacist there
because he unlawfully took and consumed drugs and food items and
left the pharmacy unattended by a pharmacist.'' Gov. Req. for Final
Agency Action, at 10.
As for his former employer's termination of his employment, that
decision is not conduct on his part but rather a response to his
conduct. Moreover, his former employer's findings that he engaged in
misconduct are not entitled to preclusive effect in this matter.
Accordingly, an employer's termination decision clearly does not
fall within the scope of factor five.
As for his expropriation of store property, there is no evidence
refuting Mr. McFadden's claim that he paid for the phentermine or
that he ``reimbursed'' the pharmacy by taking the Maxzide out of his
subsequent refill, and the evidence regarding his plea to
misdemeanor retail theft does not identify what items were involved.
To be sure, Mr. McFadden admitted in a statement to having taken
bagels and fountain drinks from his employer without paying for
them. However, his acts have no apparent relationship to controlled
substances, and the Government offers no explanation as to why being
a bagel bandit constitutes a threat to public health and safety, let
alone one that is of such a degree as to ``create reason to conclude
that a person will not faithfully adhere to [his] responsibilities
under the CSA.'' Terese, Inc., d/b/a/ Peach Orchard Drugs, 76 FR
46843, 46848 n.11 (2011).
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Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well
as 28 CFR 0.100(b), I order that the application of Pharmboy Ventures
Unlimited, Inc., for a DEA Certificate of Registration as a retail
pharmacy, be, and it hereby is, denied. This order is effective
immediately.
Dated: May 4, 2012.
Michele M. Leonhart,
Administrator.
[FR Doc. 2012-13805 Filed 6-6-12; 8:45 am]
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