[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Notices]
[Pages 62316-62346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25047]



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Vol. 77

Friday,

No. 198

October 12, 2012

Part II





Department of Justice





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Drug Enforcement Administration





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Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195; Decision and 
Order and Denial of Request for Redactions; Notices

  Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / 
Notices  

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket Nos. 12-37 and 12-38]


Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195; 
Decision and Order

    On June 8, 2012, Chief Administrative Law Judge (ALJ) John J. 
Mulrooney II, issued the attached Recommended Decision. Both parties 
filed Exceptions to the ALJ's decision.
    Having considered the record in its entirety, including the 
parties' Exceptions, I have decided to adopt the ALJ's recommended 
rulings, findings of fact (except as discussed below), conclusions of 
law, and proposed sanction. A discussion of Respondents' Exceptions 
follows.\1\
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    \1\ All citations to the ALJ's Recommended Decision are to the 
slip opinion as issued by him.
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Respondents' Exceptions

    Respondents raise numerous exceptions to the ALJ's Recommended 
Decision. Of their contentions, the most substantial, but ultimately 
still unpersuasive, are the following:
    (1) That their conduct in dispensing controlled substance 
prescriptions issued by two physicians, whose DEA Registrations were 
``expired'' and therefore invalid, ``cannot serve as a basis for 
revocation,'' Resp. Exceptions at 2-9;
    (2) that the ALJ's findings that Respondents dispensed controlled 
substances pursuant to prescriptions, which raised red flags that a 
pharmacist could not resolve, and thus violated their corresponding 
responsibility under federal law, are not supported by substantial 
evidence, id. at 9-22; and
    (3) that the ALJ failed to consider evidence of their acceptance of 
responsibility, id. at 22-25.

Exception One--Respondents' Dispensings of Controlled Substance 
Prescriptions Issued by Physicians Whose Registrations Were ``Expired'' 
Does Not Support the Revocation of Their Registrations

    The evidence showed that both Respondents dispensed numerous 
prescriptions which were issued by two physicians, Dr. Anthony Wicks 
and Dr. Ronald Lynch, who no longer held their DEA registrations and 
thus could not lawfully prescribe controlled substances under federal 
law. See 21 CFR 1306.03(a) (``A prescription for a controlled substance 
may be issued only by an individual practitioner who is * * * [e]ither 
registered or exempted from registration pursuant to Sec. Sec.  
1301.22(c) and 1301.23 of this chapter.''). More specifically, with 
respect to Dr. Wicks, the evidence showed that his registration expired 
on May 31, 2011. Yet, between June 6 and July 15, 2011, Respondent CVS 
219 dispensed thirty-eight prescriptions issued by Dr. Wicks 
for oxycodone 30 mg. Likewise, between June 7 and July 14, 2011, 
Respondent CVS 5195 dispensed seventeen prescriptions issued 
by Wicks for oxycodone 30 mg.
    While Respondent also characterizes Dr. Lynch's registration as 
``expired,'' the record shows that Lynch's registration had, in fact, 
been revoked following a hearing under 21 U.S.C. 824(a). More 
specifically, on December 3, 2010, the Agency issued a Decision and 
Final Order, which revoked Dr. Lynch's registration with an effective 
date of January 18, 2011, based, inter alia, on findings that he 
violated 21 CFR 1306.04(a) by issuing controlled substance 
prescriptions outside of the usual course of professional practice and 
which lacked a legitimate medical purpose; this decision was published 
in the Federal Register on December 16, 2010. GX 31; see also Ronald 
Lynch, M.D.; Revocation of Registration, 75 FR 78,745, 78,752-54 
(2010). Pursuant to Agency practice, the decision was also published on 
the DEA Office of Diversion Control's public Web site.
    Nonetheless, Respondent CVS 219 dispensed forty controlled 
substance prescriptions and Respondent CVS 5195 dispensed five 
controlled substance prescriptions, which Lynch issued after his 
registration had been revoked.\2\ GX 32. The evidence further shows 
that CVS 219 dispensed fifteen controlled substance 
prescriptions issued by Lynch during or later than June 2011, and that 
it did so as late as September 2011. Id.
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    \2\ Having reviewed the spreadsheet, I arrive at a different 
number of prescriptions for each pharmacy than the ALJ did.
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    Respondents argue that their dispensings of the prescriptions 
issued by Drs. Wick and Lynch cannot support the revocation of their 
registration because there is ``no evidence that the allegedly expired 
status of any prescriber's DEA registration was known or should have 
been known to Respondents or their pharmacists prior to dispensing.'' 
Resp. Exceptions, at 2. In support of their contention, Respondents 
maintain that the evidence shows ``that every CVS pharmacist relies on 
the company-wide pharmacy information management system to notify the 
pharmacist of the status of a physician's DEA registration.'' Id. 
Respondents also argue that the database they used may have contained 
inaccuracies, because at the time of the dispensings, the stores were 
allowed to input prescriber information into the dispensing software 
and this information may have been inaccurate; alternatively, they 
argue that there was a time lag between the date on which a 
practitioner's registration expired and the date this information, 
which is collected by a third-party data aggregator, was downloaded 
into the company-wide pharmacy information management system.
    As the ALJ noted, the argument only takes Respondents so far 
because the evidence shows that the third-party vendor from whom CVS 
receives registration data obtains its data from the Government on a 
weekly basis and then transmits the data to CVS on a weekly basis.\3\ 
ALJ at 60-61. Thus, while this delay might justify Respondents' having 
filled some of Dr. Wicks' prescriptions, it does not justify 
Respondents' having filled a substantial portion of them.\4\
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    \3\ The evidence also showed that a number would appear in the 
Government's database as expired on the day its registration 
expires.
    \4\ As for the contention that the data may have been inaccurate 
because of information inputted at the local stores, it is not clear 
why personnel at local stores would be entering into the database 
information as to the expiration date of a practitioner's 
registration. While a DEA registrant is required to include his/her 
registration number on a controlled substance prescription, he/she 
is not required to include the expiration date of his/her 
registration on a prescription, and in the Agency's experience, it 
is not a customary practice among physicians to include the 
expiration date of their registrations on a prescription. As 
Respondents' witness, who serves as Vice President of Pharmacy 
Operations of CVS Caremark, the holding company which owns 
Respondents, testified, CVS has a contract with a company (HMS) 
which aggregates prescriber information and that it is important to 
aggregate prescriber data ``for consistency purposes'' because 
``[i]t allows us to have one record for each prescriber and prevents 
to the greatest degree possible having incorrect information tied 
together.'' Tr. 1241-42.
     While this official testified that prior to April 2012, the 
pharmacy teams would also enter prescriber information, his 
testimony was to the effect that ``when a pharmacy team would look 
up a prescriber as they were entering a prescription, it would 
display both the HMS records, as well as some of the historical 
store-entered records from the past.'' Id. at 1246. Moreover, the 
official testified that on doing a prescriber search prior to April 
2012, the information management system ``would display both the HMS 
records as well as any historical store-entered records that were 
still in the system.'' Id. at 1250-51. Unexplained is why the 
prescriptions could nonetheless be filled if the HMS records 
displayed that a physician's DEA number was invalid.
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    Even if I accepted Respondents' contention that the time lag in 
their obtaining of updated information regarding the expiration of Dr. 
Wicks' registration explains why they continued to dispense his 
prescriptions,

[[Page 62317]]

the argument is totally unpersuasive when applied to the prescriptions 
of Dr. Lynch.\5\ As explained above, the Agency published its Decision 
and Order revoking Dr. Lynch's registration on December 3, 2010, and 
the Order was effective on January 18, 2011. Yet, Respondents dispensed 
Dr. Lynch's controlled substance prescriptions after the effective date 
of the Order and did so for months thereafter. Indeed, Respondents were 
still dispensing his prescriptions more than six months after the date 
of the Order's publication.
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    \5\ Respondents contend that the Agency did not rely on their 
filling of the prescriptions issued by Drs. Wicks and Lynch in the 
Immediate Suspension Orders, stating that ``this conduct did not 
figure prominently in the Government's Prehearing Statement,'' and 
that even then the Government ``only raised this issue with respect 
to prescriptions allegedly filled for one prescriber, Dr. Wicks, and 
then only tangentially.'' Resp. Exceptions, at 9 n.5.
    As for the allegations pertaining to the filling of Dr. Wicks' 
prescriptions, the Government's disclosure of its intent to litigate 
the issue can hardly be described as tangential. See Gov. Pre-
Hearing Statement at 18 (ALJ Ex. 14). In addition, in its Pre-
Hearing Statement, the Government provided notice that it intended 
to elicit testimony as to the actions that DEA had taken against 
various practitioners including Dr. Lynch, id. at 15-16, and 
provided further notice that it intended to introduce a spreadsheet 
showing Dr. Lynch's prescriptions. Id. at 27. Moreover, in its 
Supplemental Pre-Hearing Statement, the Government provided notice 
that it would be introducing into evidence the Agency's Final Order 
revoking Dr. Lynch's registration; it also again provided notice 
that it would introduce a spreadsheet showing the prescriptions of 
Lynch, which were filled at Respondents. Gov. Supplemental Pre-
Hearing Statement, at 5. Pursuant to the ALJ's Pre-Hearing Ruling, 
each party was required to serve opposing counsel with copies of 
their respective exhibits in advance of the hearing and Respondents 
make no claim that the Government failed to do so. Thus, Respondents 
had adequate notice of the Government's intent to litigate the issue 
of Respondents' filling prescriptions, which Dr. Lynch issued after 
his registration had been revoked, and raised no such objection when 
the Government elicited testimony and introduced various documents 
regarding this allegation. See CBS Wholesale Distributors, 74 FR 
36746, 36749-50 (2009).
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    In enacting the Controlled Substances Act, Congress created a 
comprehensive and closed system for regulating the distribution of 
those controlled substances, which have legitimate medical uses, to 
prevent the diversion of these substances to those who would either 
abuse them or sell them to those who do. See Gonzales v. Oregon, 546 
U.S. 243, 250 (2006). One of the fundamental features of this scheme is 
the requirement that all persons who seek to engage in the legitimate 
manufacture, distribution, or dispensing of a controlled substance must 
first obtain a registration from the Attorney General authorizing them 
to do so. See 21 U.S.C. 822(a). And to protect the public from those 
practitioners who engage in the diversion of controlled substances, 
Congress authorized the Attorney General to revoke the registration of 
a practitioner upon finding, inter alia, that the practitioner ``has 
committed such acts as would render his registration * * * inconsistent 
with the public interest.'' Id. sec. 824(a)(4).
    It is manifest that Respondents' conduct in filling prescriptions 
issued by a practitioner whose registration had been revoked undermines 
the Congressional scheme. Nor, given that the Order revoking Dr. 
Lynch's registration was published in the Federal Register (as well as 
on the Agency's Web site), can Respondents reasonably claim ignorance 
of it. Cf. Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947) 
(``Just as everyone is charged with knowledge of the United States 
Statutes at Large, Congress has provided that the appearance of rules 
and regulations in the Federal Register gives legal notice of their 
contents.'') (citations omitted); see also California v. FERC, 329 F.3d 
700, 707 (9th Cir. 2003) (``Publication in the Federal Register is 
legally sufficient notice to all interested or affected persons 
regardless of actual knowledge or hardship resulting from ignorance, 
except those who are legally entitled to personal notice.'').\6\
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    \6\ In response to the testimony of an Agency's Investigator 
that at a December 2010 meeting with various CVS representatives 
regarding the diversion problem, she discussed how the pharmacies 
could check the status of DEA registrations through the Agency's Web 
site, Respondents elicited testimony from the Investigator that 
CVS's representatives told her that its pharmacies do not have 
internet access. See Tr. 73. However, surely someone in the CVS 
corporate hierarchy has internet access and the ability to check 
either the Agency's Web site (or that of the Federal Register) to 
determine whether the Agency has issued any recent Decisions and 
Orders revoking a practitioner's registration. That Respondents 
continued to fill Dr. Lynch's prescriptions for months after the 
revocation order became final also begs the question of what 
information the CVS Pharmacy Management Information System displayed 
regarding his registration.
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    So too, those who engage in a highly regulated industry are 
expected to keep informed of regulatory developments which affect their 
industry. See United States v. Southern Union Co., 630 F.3d 17, 31 (1st 
Cir. 2010) (``[T]hose who manage companies in highly regulated 
industries are not unsophisticated * * *. It is part of [a company's] 
business to keep abreast of government regulation.''). Here, the 
Agency's publication of the revocation order in Lynch's case thus 
provided Respondents with reason to know that, effective January 18, 
2011, Lynch would no longer be authorized to issue controlled substance 
prescriptions. See Ralph J. Bertolino, d/b/a Ralph J. Bertolino 
Pharmacy, 55 FR 4729, 4730 (1990).
    Accordingly, Respondents' contention that the evidence does not 
establish that they (or their pharmacists) had actual knowledge of the 
revocation of Dr. Lynch's registration is wholly unavailing. Given that 
Respondents continued filling Lynch's unlawful prescriptions for more 
than six months after the Order became effective, and in the case of 
CVS 219 did so repeatedly, this conduct is sufficiently 
egregious to support the conclusion that Respondents committed acts 
which render their continued registrations ``inconsistent with the 
public interest.'' 21 U.S.C. 824(a)(4); cf. United Prescription 
Services, Inc., 72 FR 50397, 50408-09 (2007) (``While filling a 
prescription issued by a practitioner whose registration had recently 
expired might be excusable, [pharmacy's] repeated filling of numerous 
prescriptions long after the expiration of [physician's] registration 
clearly was not appropriate and was unlawful.'').\7\ By itself, this 
conduct is sufficient to conclude that the Government has made out a 
prima facie case for revocation. I therefore reject this exception.
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    \7\ That Dr. Lynch's registration had been revoked and had not 
simply expired, renders Respondents' conduct in filling the 
prescriptions even more egregious.
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Exception Two--The ALJ's Findings That Respondents Dispensed Controlled 
Substances Pursuant to Prescriptions Which Raised Red Flags That Could 
Not Be Resolved and Thus Violated Their Corresponding Responsibility 
Under Federal Law Are Not Supported by Substantial Evidence

    Respondents also contend that the record does not support the ALJ's 
findings that they violated their corresponding responsibility under 
federal law to dispense only those prescriptions, which have been 
``issued for a legitimate medical purpose by an individual practitioner 
acting in the usual course of his professional practice.'' 21 CFR 
1306.04(a). Respondents take exception to the ALJ findings because they 
``are based solely on the testimony of the Government's Expert * * * 
who stated that he found certain red flags on approximately fifty of 
the more than 25,000 prescriptions filled by Respondents to be 
`unresolvable.' '' Resp. Exceptions, at 9. Respondents contend that 
``[n]o other witness, no case law, no Administrator decision, and no 
published DEA guidance supports [the Government Expert's] claims that 
certain red flags are `unresolvable' on their face.'' Id. at 9-10. 
Respondents further argue that the testimony of the Government's Expert

[[Page 62318]]

``is unreliable and biased and cannot by itself provide sufficient 
evidence to satisfy the Government's burden of proof.'' Id. at 10. 
Finally, Respondents contend that ``the Government's `unresolvable' red 
flag argument--adopted in full in the ALJ recommendation--improperly 
shifts the burden of proof to Respondents.'' Id.
    At the hearing, the Government presented extensive evidence showing 
that numerous persons, including persons who were not Florida 
residents, obtained prescriptions for both oxycodone 30 mg and 
alprazolam 2 mg from various South Florida physicians, whose offices 
were typically located 200 miles or more from Respondents (see GX 62), 
which they then presented to Respondents' pharmacists and which 
Respondents filled, notwithstanding that there are numerous pharmacies 
between South Florida and Sanford (where Respondents are located). The 
evidence included multiple spreadsheets showing each Respondent's 
dispensings of the oxycodone (and in some cases alprazolam) 
prescriptions issued by various physicians.
    A principal component of the Government's evidence was the 
testimony of its expert witness, Professor Paul Doering, who reviewed 
various dispensings made by the Respondents and opined as to whether 
the Respondents had complied with their corresponding responsibility to 
dispense only lawful prescriptions. Professor Doering, who has been a 
registered pharmacist in the State of Florida since 1973, currently 
holds the title of Distinguished Service Professor of Pharmacy 
Practice, Emeritus, of the College of Pharmacy at the University of 
Florida, and has been on its faculty since 1976. GX 6, at 1-2. He has 
also published extensively and presented numerous papers at 
professional meetings. See id. at 4-29.
    The ALJ found credible Professor Doering's testimony that 
controlled substances are ``high alert drugs'' and that among 
controlled substances, drugs such as ``opioids, benzodiazepines, [and] 
other central nervous system depressant drugs'' require ``the highest 
level scrutiny'' on the part of a pharmacist who is presented with 
prescriptions for these drugs. Tr. 692; ALJ at 28. Professor Doering 
testified that in pharmacy practice, there are various red flags, which 
create ``a level of concern that might cause a pharmacist to either 
choose not to fill a prescription or take some other kind of actions,'' 
and that ``the more red flags there are, the stronger that suspicion 
is.'' Tr. 694. Professor Doering testified that while some red flags 
might be resolvable by checking a patient's identification or calling 
the prescriber, there are also circumstances in which calling the 
prescriber will not resolve the red flags because the red flags 
indicate that the prescriber is collaborating with the patient to 
divert drugs. Id. at 697-700.
    Professor Doering specifically identified such red flags as 
including that the patient is paying for controlled substance 
prescriptions with cash, id. at 703; the respective locations of the 
patient and the prescriber, id. at 701-02; that a prescriber writes for 
certain combinations or patterns of drugs, id. at 708; and multiple 
patients presenting ``prescriptions for the same drugs, the same 
quantities * * * from the same doctor without any kind of variability 
or change considering the different patients that come into the 
pharmacy,'' thus suggesting that the physician prescribes in a 
``factory like manner.'' Id.
    Professor Doering reviewed the various spreadsheets of the 
prescriptions dispensed by Respondents and testified regarding whether 
Respondents could have lawfully dispensed various prescriptions given 
the red flags they presented. For example, when questioned about 
Respondent CVS 219's dispensing of oxycodone 30 mg 
prescriptions,\8\ which were issued by a Fort Lauderdale-based 
physician (P.G.) for persons whose addresses were in Kentucky and 
Tennessee and who paid cash, Professor Doering opined that the multiple 
red flags these prescriptions presented could not be resolved so that a 
reasonable pharmacist could dispense them consistent with his 
corresponding responsibility under federal law.\9\ Tr. 722-23.
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    \8\ Professor Doering acknowledged that ``the doses of these 
medications (oxycodone 30 mg) are within therapeutic guidelines or 
limits, but, number one, it's just extremely suspicious to me that 
these are always 30 milligram tablets, always in large quantities. * 
* * [P]eople come in all shapes, sizes and degrees of infirmity, and 
it just is an attention getter when I see the same drugs from the 
same doctors from similar places coming through in a nonstop sort of 
way.'' Tr. 776.
    \9\ The specific prescriptions were either for 180 or 210 
tablets of oxycodone 30 mg. The evidence showed that on August 13, 
2010, Respondent CVS 219 dispensed such prescriptions to a 
resident of Harrogate, Tennessee and a resident of Ingram, Kentucky; 
that on August 16, 2010, Respondent CVS 219 dispensed such 
prescriptions to another resident of Harrogate, Tennessee, as well 
as three residents of Middlesboro, Kentucky (one of whom received 56 
tablets of OxyContin 80 mg), and a resident of Dayhoit, Kentucky; 
and that on September 24, 2010, it dispensed more oxycodone 30 mg 
prescriptions to three Kentucky residents, including two who had the 
same last name and town of residence (Middlesboro), as well as three 
residents of Tennessee. See GX 57, at 33. Each of these persons paid 
cash. Id.
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    As the ALJ found, the Government elicited additional testimony from 
its Expert regarding the prescriptions issued by other doctors which 
was to similar effect. For example, the Government noted that on August 
29 and 30, 2010, Respondent CVS 219 filled prescriptions for 
either 210 or 240 tablets of oxycodone 30 mg for four Kentucky 
residents, all of whom paid cash, which were issued by a physician 
(L.A.) whose office address was listed as either in Miami or Fort 
Lauderdale. GX 57, at 15. Two of these individuals were from Clay City; 
the other two were from Stanton. Id.
    Regarding these prescriptions, Professor Doering testified that he 
could not ``foresee any explanation for this set of red flags that 
would satisfy my professional obligation not to fill the scripts.'' Tr. 
754. When further questioned as to whether anything ``could have been 
done to resolve the[] red flags'' presented by these prescriptions, 
Professor Doering explained that ``it's a conflagration or a 
combination of things that suggests to me that these prescriptions were 
not issued in the usual course of medical practice'' and that nothing 
on the hard copy of the prescriptions ``would change [his] opinion.'' 
Id. at 757-58. And when asked by the ALJ if he was imposing a more 
stringent standard than the standard of a Florida pharmacist, Professor 
Doering testified that the standard he applied was ``what they're 
taught in school,'' and that in his ``many conversations with similar 
pharmacies operating under similar circumstances * * * the feedback I 
get is universally consistent with my point of view.'' Id. at 758.
    The Government also noted that on August 19, 2010, Respondent CVS 
219 filled four prescriptions for 180 tablets of oxycodone 30 
mg for four Kentucky residents, which were issued by a physician (C.N.) 
whose address was listed as either being in Delray Beach or Deerfield 
Beach, two cities located in Palm Beach County. Tr. 759-64; GX 57, at 
38. Here again, Professor Doering testified that the red flags could 
not be resolved and that no information on the hard copy of the 
prescriptions would lead him to change his opinion. Tr. 764.
    Professor Doering likewise testified regarding dispensings that 
occurred at Respondent CVS 5195. More specifically, he 
addressed Respondent's dispensings on August 26, 2010, of several 
prescriptions for 180 tablets of oxycodone 30 mg written by a Dr. Jack

[[Page 62319]]

Danton \10\ of Pompano Beach for three residents of Tennessee, two of 
whom shared the same last name and address in Knoxville, with the other 
being from the town of Mascot. GX 57, at 29. Professor Doering 
testified that the red flags associated with these prescriptions 
included that they were paid for with cash, the prescriptions were for 
``a high alert drug,'' that the patients were ``from out-of-state who 
apparently traveled a great distance to be seen in Pompano Beach,'' and 
that the assigned prescription numbers were very close sequentially, 
suggesting that it was ``most likely they were presented to the 
pharmacy within a very short time span.'' Tr. 751.\11\ While Professor 
Doering was not specifically asked whether the combination of red flags 
presented by the Danton prescriptions was resolvable, based on his 
earlier testimony that other prescriptions, which were issued for the 
same drug and in similar quantities to persons who had travelled from 
out-of-state to South Florida to obtain the prescriptions and then on 
to Sanford to fill them presented red flags which were not resolvable, 
I conclude that the red flags presented by these prescriptions were 
also not resolvable.
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    \10\ Dr. Danton's registration was subsequently revoked by the 
Agency following a hearing. See Jack A. Danton, 76 FR 60,900, 60,922 
(2011).
    \11\ While the spreadsheet indicates that the prescriptions were 
subject to a ``cash discount,'' which apparently means that the 
patients were entitled to some type of group discount, I adopt the 
ALJ's finding that even if this red flag is eliminated from the 
factors which a pharmacist must consider, ``the remaining red flags 
[we]re still unresolvable.'' ALJ at 30-31n.54. So too, I adopt the 
ALJ's findings that while Professor Doering conceded that he did not 
know at what point the prescription numbers were assigned, the 
prescriptions at issue ``were presented in proximity to one 
another.'' See id at 31 n.55 (quoting Tr. 926-27). 
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    Professor Doering further testified regarding Respondent CVS 
5195's dispensings on August 11, 2010 of six oxycodone 30 mg 
prescriptions (all but one of which were for 180 tablets \12\), issued 
by a Dr. Carlos Gonzales of West Palm Beach to six Kentucky residents, 
all of whom paid cash.\13\ GX 57, at 35. The evidence further showed 
that three of these persons lived in the same town (Stanton) and that 
two of them had the same last name and street address; another two were 
also from the same town (Danville). Id. When asked whether a reasonable 
and prudent pharmacist in Sanford would want to resolve the red flags 
presented by these prescriptions before dispensing them, Professor 
Doering answered: ``If it's resolvable. I think I've testified already 
that there's no explanation that's going to resolve that in my mind.'' 
Tr. 916.\14\
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    \12\ The other prescription was for 150 tablets. GX 57, at 35.
    \13\ Respondents argue that the ALJ improperly relied on three 
of the six controlled substance prescriptions that were issued by 
Dr. Gonzales and dispensed by Respondent CVS 5195 on August 
11, 2010, because Professor Doering did not specifically address all 
six of them in his testimony. Resp. Exceptions, at 27. However, 
having identified those circumstances presenting red flags, which 
according Professor Doering could not be resolved, the ALJ could 
reasonably apply this testimony in assessing the lawfulness of 
Respondents' dispensings of other prescriptions that presented 
similar unresolvable red flags.
    \14\ Professor Doering further testified that ``Interstate 95 
has been renamed the Oxycodone Express because of the brisk travel 
of people from Kentucky, Tennessee, [and] Ohio to South Florida to 
obtain medications.'' Tr. 775. He also testified with respect to 
these dispensings that:
     Well, once again this is a clinic that's at a distant site from 
someone living in Kentucky, and I don't think it's any secret that--
I haven't used the term yet, I won't use the term--I'll call them 
pain management clinics that are known to be--what should I say--
fairly easy to get controlled substance prescriptions from.
    Id.
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    The Government also introduced an eighty-one page spreadsheet of 
the controlled substance prescriptions which were written by a 
Longwood, Florida physician and filled by both Respondents.\15\ The 
spreadsheet documents numerous instances in which both Respondents 
filled two or more controlled substance prescriptions that the 
physician typically wrote for 168 tablets of oxycodone 30 mg and 56 
tablets of alprazolam 2 mg; moreover, in many instances, the patients 
received a third prescription for 56 tablets of oxycodone 15 mg. See GX 
55.
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    \15\ The spreadsheet was provided by CVS to a DEA Group 
Supervisor, who then provided it to an Agency Investigator. Tr. 485. 
While the Investigator subsequently removed the title of the 
original document, she did not change the substantive information. 
Id.
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    The Government then asked Professor Doering for his opinion 
regarding the red flags that were presented by this doctor's 
prescriptions and directed his attention to several prescriptions that 
each Respondent filled on December 23, 2010. More specifically, the 
Government noted the prescriptions that Respondent CVS 219 
filled for patients T.F. and A.T., each of whom received 168 tablets of 
oxycodone 30 mg, 56 tablets of oxycodone 15 mg, and 56 tablets of 
alprazolam 2 mg; see GX 55, at 15, 47; as well as the prescriptions 
that Respondent CVS 5195 filled for patients C.H. and J.R., 
each of whom also received 168 tablets of oxycodone 30 mg, 56 tablets 
of oxycodone 15 mg, and 56 tablets of alprazolam 2 mg. See id. at 62, 
74.\16\
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    \16\ Nor were these the only patients who, on the same date, 
filled at Respondents, prescriptions for the same combination of 
drugs which they obtained from this physician. See Tr. 787-91 
(discussing patients B.D., A.H., R.M., J.W., each of whom, on 
January 6, 2011, filled prescriptions at CVS 219 for 168 
tablets of oxycodone 30 mg, 56 tablets of oxycodone 15 mg, and 56 
tablets of alprazolam 2 mg).
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    Regarding these prescriptions, Professor Doering Expert testified 
that from the perspective of ``a clinical pharmacist * * * that 
combination of drugs is * * * a red flag because [a]lprazolam and 
oxycodone are commonly diverted to nonmedical use.'' Tr. 784. As for 
the two oxycodone prescriptions each person obtained, Professor Doering 
explained that while ``one might speculate that the reason for that is 
that pain can vary throughout the day and it may be that the individual 
is suggested to take the 15 [mg tablets] when the pain is not so great 
and 30 [mg tablets] when it is so great,'' the ``30 milligram tablets 
are scored right down the middle, and it's quite easy to break them in 
half.'' Id. Professor Doering thus explained that prescribing both 
fifteen and thirty milligram strengths of the drug ``just doesn't make 
any sense.'' Id. He also testified that pill cutters are widely 
available in pharmacies and that it is common for doctors to prescribe 
a stronger strength of a drug to save money and instruct their patients 
to cut the drug in half. Id. at 786.
    Professor Doering further testified that the prescribing patterns 
of this physician ``would suggest that the one size fits all concept 
was in the'' physician's mind, and that this was ``highly suspicious'' 
because ``you see the same drugs, the same quantities, the same 
patterns over and over again.'' Id. at 784-85. Indeed, while the 
Government questioned Professor Doering about only a few of the 
prescriptions, the eighty-plus page spreadsheet manifests that this 
physician repeatedly engaged in the pattern prescribing of oxycodone 
with alprazolam and frequently provided these persons with 
prescriptions for both oxycodone 30 mg and 15 mg.\17\ Moreover, this 
was not the only physician who engaged in the pattern prescribing of 
oxycodone and alprazolam and whose prescriptions

[[Page 62320]]

were filled by Respondents. See, e.g., GX 35.
---------------------------------------------------------------------------

    \17\ To counter the testimony of the Government's Expert, 
Respondent called one of their own, Professor Brushwood, who is also 
a member of the faculty at the University of Florida College of 
Pharmacy. The ALJ carefully reviewed Professor Brushwood's testimony 
and thoroughly explained why he did not find his testimony to be 
more persuasive than that of Professor Doering on the material 
issues of whether certain red flags presented by the prescriptions 
were unresolvable and whether Respondents' pharmacists dispensed 
controlled substance prescriptions when they had reason to know that 
the prescriptions lacked a legitimate medical purpose and were not 
issued in the usual course of professional practice. See ALJ at 42. 
Having reviewed the record and the ALJ's reasoning, I agree with the 
ALJ's discussion of the weight he gave the testimony of each party's 
expert.
---------------------------------------------------------------------------

    Respondents take exception to the ALJ's reliance on Professor 
Doering's testimony. Resp. Exceptions, at 18-22. More specifically, 
they assert that Professor Doering's testimony is unreliable because he 
did not use a reliable methodology in formulating his opinions. Id. at 
18-21. They also assert that Professor Doering's testimony is biased 
because he acknowledged having testified for the Government in 
``virtually all'' of the cases in which he has testified as an expert. 
Id. at 21-22.
    As for the claim of bias, Respondents' argument provides no reason 
to reject the ALJ's credibility determination. The mere fact that 
Professor Doering has consistently testified for the Government is not 
sufficient to prove bias.
    As for the claim that Professor Doering's testimony was unreliable, 
Respondents contend this is so because he ``spent insufficient time 
reviewing the dispensing data,'' ``failed to review (or to request) any 
hard-copy prescriptions,'' ``relied on data pre-selected by the 
Government instead of conducting an independent evaluation of all of 
the data available,'' and that he ``fundamentally misunderstood the 
data he reviewed.'' Resp. Exceptions, at 20. Respondents' contentions 
are not persuasive.
    As for the first assertion, Respondents note that ``Professor 
Doering spent fewer than ten hours reviewing'' the dispensing data. Id. 
at n.9. However, Respondents offer no explanation as to why this was 
insufficient to review the data.
    With respect to the second assertion, given that much of Professor 
Doering's testimony centered on certain prescriptions that presented a 
collection of red flags that no reasonable and prudent pharmacist could 
resolve so as to lawfully fill the prescriptions, his failure to review 
the hard-copy prescriptions is of no consequence. As Professor Doering 
testified with respect to several of the prescriptions, the fact that 
he was not provided with the hard copy prescriptions did not affect his 
opinion because ``[t]here's nothing that I could gain from that review 
that would change my opinion.'' Tr. 758.
    As for Respondents' claim that Professor Doering relied on data 
which was pre-selected by the Government rather than conduct an 
independent evaluation of all of the available data, Respondents cite 
to his testimony that the Government provided him with a spreadsheet 
that listed the cash-only transactions. Resp. Exceptions, at 20 n.11 
(citing Tr. 849:8-852:18). Respondents' counsel then asked Professor 
Doering whether ``when the Government provided that information to 
[him] they also consider[ed] cash discount to be the same thing as 
cash?'' Tr. 851. Professor Doering answered that he could not 
``remember'' and added that he did not do anything to look at the 
individual prescriptions and determine which ones were actually paid 
for with cash.\18\ Id.
---------------------------------------------------------------------------

    \18\ The evidence showed that the term ``Cash Discount'' 
referred to those transactions in which a patient presented a 
discount card such as from the AARP. It is not clear why a person's 
presentation of such a card would make the transaction any less 
suspicious if other red flags were present.
---------------------------------------------------------------------------

    Respondents' argument gains no traction because Professor Doering 
subsequently explained that even if a patient presented a card 
entitling him to a cash discount, this would not address the other red 
flags which may have been present. Tr. 924. As Professor Doering 
further testified, ``you have to look at it in totality of the issues 
that give you reason for concern.'' Id. at 924-25. And with respect to 
the prescriptions that he discussed during his direct examination, 
Professor Doering explained that even after eliminating the red flag of 
cash payments, there were still other red flags present which could not 
have been resolved so as to lawfully dispense the prescriptions.\19\ 
Id. at 925.
---------------------------------------------------------------------------

    \19\ Respondents also note that Professor Doering acknowledged 
on cross-examination that he did not know how CVS assigns 
prescription numbers. Resp. Exceptions, at 20 & n.12. However, this 
does not provide reason to reject his testimony, because there were 
ample other red flags presented by the prescriptions, especially by 
those which were presented by persons who gave out-of-state 
addresses as their residences and yet had obtained their 
prescriptions from a doctor located in South Florida.
---------------------------------------------------------------------------

    Thus, contrary to Respondents' contention, Professor Doering's 
testimony, coupled with the evidence he reviewed, is more than enough 
to satisfy the Government's burden of proof. Moreover, the Government 
elicited additional testimony that, while it did not address any 
specific prescriptions, provides further support for the conclusion 
that Respondents' pharmacists repeatedly dispensed prescriptions when 
they had reason to know that the prescriptions lacked a legitimate 
medical purpose and were issued outside of the usual course of 
professional practice. 21 CFR 1306.04(a).
    More specifically, on October 18, 2011, DEA Investigators served 
Administrative Inspection Warrants at both Respondents and interviewed 
various employees of each store's pharmacy departments including their 
pharmacists-in-charge. At CVS 5195, a DEA Investigator (DI) 
interviewed Ms. Jessica Merrill, its pharmacist-in-charge. Tr. 227. Ms. 
Merrill stated that ``she could fill oxycodone * * * prescriptions all 
day long, but rather than doing that, she had decided to set a limit * 
* * each morning'' on the number of prescriptions the store would fill 
for oxycodone (as well as alprazolam), which was based on the available 
inventory of oxycodone and the amount of staff on hand. Id. at 229-30. 
Ms. Merrill stated that ``once the limit [wa]s reached,'' customers who 
then presented oxycodone prescriptions were told the store was out-of-
stock even when it still had stock on hand.\20\ Id. at 230. Ms. Merrill 
further stated that ``the limit [was] basically based upon a first-
come, first-served system'' and that as a result, ``customers would 
start staggering in at 8:02 a.m. to present their prescriptions.'' Id. 
at 230-31.
---------------------------------------------------------------------------

    \20\ At approximately 10:30 a.m. on the day the IAW was served, 
the DI encountered a person in a massage chair, who related that he 
had come to the store to fill an oxycodone prescription only to be 
told by a pharmacy technician that the pharmacy was out of stock. 
Tr. 221. However, because the Investigators had counted the stock of 
oxycodone, the DI knew this was not true. Id. at 222-23. Upon asking 
the pharmacy technician why she had told the person this, the 
technician explained that the store placed a limit each morning on 
the number of oxycodone prescriptions it would fill that day. Id. at 
223-24.
---------------------------------------------------------------------------

    When asked by the DI why she was limiting the number of 
prescriptions the store would fill as the store still had oxycodone in 
inventory, Ms. Merrill replied that ``she had to keep a certain amount 
of oxycodone on hand to fill prescriptions * * * for her real pain 
patients.'' Id. at 231-32. According to the DI, she then asked Ms. 
Merrill why she would fill prescriptions ``from these not-real pain 
patients.'' Id. at 233-34. Ms. Merrill replied that ``as a pharmacist 
she was stuck between a rock and a hard place, and that basically * * * 
she had not been trained to diagnose,'' and that if she or her staff 
were ``able to confirm that a prescription had been issued by a 
physician who was licensed by the state, and had a DEA license, then . 
. . [the pharmacy] should be able to trust that that prescription--or 
that physician is legitimate, and that the doctor * * * ha[d] given the 
correct diagnosis.'' Id. at 234.
    Ms. Merrill further acknowledged that patients were presenting 
patterns of prescriptions that included oxycodone, an anti-anxiety 
medication, and a muscle relaxant; she also admitted that ``a lot of 
these customers were paying for their prescriptions in cash.'' Id. at 
238. When questioned by the DI as to why the patients were using cash

[[Page 62321]]

instead of insurance, Ms. Merrill stated ``most of them are 
unemployed.'' Id. When the DI then asked how the patients could afford 
to pay for hundreds of dollars-worth of prescriptions if they were 
unemployed, Ms. Merrill stated that she did not know. Id. However, when 
the DI suggested that the patients might be selling their pills, Ms. 
Merrill said: ``I know.'' Id.
    The DI further testified that she had obtained the prescriptions 
that the pharmacy had accepted for filling that day, id. at 226, and 
that upon reviewing them, observed that ``[t]he prescriptions from one 
particular physician's office basically appeared to be all for the same 
quantity and the same combination of drugs.'' Id. at 239. However, when 
she discussed this with Ms. Merrill, the latter ``basically stated that 
* * * as a pharmacist, she is not trained to diagnose, and it's up to 
the doctor to determine whether or not they need a prescription.'' Id.
    The DI also observed that some of the prescriptions were issued by 
a physician located near or in Orlando for a patient from Daytona 
Beach. Id. at 240. The DI then asked Ms. Merrill whether she found it 
``a little odd'' that the patients had presented their prescriptions in 
Sanford,\21\ given that there are CVSs all over central Florida and 
that the patients ``obviously passed multiple CVSs coming from the 
doctor.'' Id. Ms. Merrill, however, did not ``know why they did that.'' 
Id.
---------------------------------------------------------------------------

    \21\ The DI testified that the distance between Orlando and 
Sanford was ``a little less'' than 30 miles. She further testified 
that in her experience patients fill their prescription at 
pharmacies located either near their doctor's office or near their 
residence.
---------------------------------------------------------------------------

    On October 28, 2011, the DI also participated in an interview of 
other employees of the Respondents at the local DEA field office, 
including Mr. Paras Priyadarshi, the pharmacist-in-charge at Respondent 
CVS 219. Id. at 244-45. According to the DI, the prescription 
records for CVS 219 showed that it was ``basically filling 
prescriptions for the same type of cocktail prescribing pattern that 
CVS 5195 had been dispensing,'' namely combinations of 
oxycodone, alprazolam, and carisoprodol.\22\ Id. at 247. When asked 
whether he found it ``odd that all of these practitioners in the area'' 
that the pharmacy was ``filling for,'' were writing prescriptions for 
the same combination of drugs ``to all these different patients,'' Mr. 
Priyadarshi answered that he did not find it odd and that this was the 
combination of drugs these doctors prescribed. Id. at 248. Nor did Mr. 
Priyadarshi find it odd that when ``prescriptions came from a specific 
doctor, every single patient had the same ailment.'' \23\ Id. at 250. 
And when asked whether the patients asked for a certain brand of drugs, 
Mr. Priyadarshi stated that the patients ``would come in and ask for 
the `Ms' or the `blues','' which are street slang references to the 
thirty milligram oxycodone tablets manufactured by Mallinckrodt. Id.; 
see also id. at 254 (testimony regarding statements of Susan Masso, 
another pharmacist who worked at Store 219). However, Mr. 
Priyadarshi did not find it suspicious that patients would use street 
slang to ask for thirty milligram oxycodone.\24\ Id. at 256, 264.
---------------------------------------------------------------------------

    \22\ At the time of the interview carisoprodol was not a 
controlled substance under federal law. On December 12, 2011, DEA 
issued a final rule placing carisoprodol in schedule IV of the 
Controlled Substances Act, effective January 11, 2012. See Schedules 
of Controlled Substances: Placement of Carisoprodol Into Schedule 
IV, 76 FR 77,330 (2011). However, during the relevant period, 
carisoprodol was a controlled substance under Florida law. See Fla. 
Stat. Sec.  893.03(4)(jjj) (2010). Moreover, several Agency 
decisions had discussed the abuse of carisoprodol when taken as part 
of a drug cocktail which includes oxycodone and alprazolam. See East 
Main Street Pharmacy, 75 FR 66,149, 66,158 (2010) (noting expert's 
testimony that ``[i]t is well known in the pharmacy profession 
[that] the combination of a benzodiazepine, narcotic pain killer, 
and Soma [the branded version of carisoprodol] [is] being used by 
patients abusing prescriptions drugs''); Paul J. Volkman, 73 FR 
30,630, 30,637-38 (2008)(discussing expert's testimony regarding 
abuse of drug cocktails of oxycodone, alprazolam, and carisoprodol).
    \23\ On direct examination, the DI did not identify the specific 
doctor she was referring to. However, on cross-examination, the DI 
identified by name a Longwood, Florida physician who ``writes the 
same prescriptions, the same combinations of drugs, to all of his 
patients.'' Tr. 274. This is the same physician whose prescriptions 
are listed in the eighty-one page spreadsheet which is GX 55.
    The DI further noted that while this physician ``may vary the 
quantity'' of oxycodone from patient to patient, ``the majority of 
the prescriptions are for the combination of oxycodone, alprazolam, 
and carisoprodol or Soma.'' Id. The record also contains a number of 
oxycodone prescriptions which were written by this physician, most 
of which contain the same DX Code. See GX 67 (of nine prescriptions 
issued by physician on April 26, 2011, eight list DX code of 724.2); 
GX 68 (of eighteen prescriptions issued by physician on May 19, 
2011, sixteen list DX Code of 724.2).
    \24\ Here too, the ALJ found the testimony of the Agency's 
Investigators regarding the statements made by these employees to be 
credible. See ALJ at 24, 66-68. And while the statements are 
hearsay, they are inherently reliable as statements against 
interest. Cf. Fed. R. Evid. R. 804(b)(3).
---------------------------------------------------------------------------

    The statements of Respondents' employees thus manifest a complete 
abdication of their responsibility ``to exercise professional 
judgment'' before dispensing prescriptions for highly abused controlled 
substances. Ralph J. Bertolino, d/b/a/Ralph J. Bertolino Pharmacy, 55 
FR 4,729, 4,730 (1990). This evidence provides further support for the 
conclusions that each Respondent dispensed numerous prescriptions when 
their pharmacists either knew or had reason to know that the 
prescriptions lacked a legitimate medical purpose and were issued 
outside of the usual course of professional practice and thus violated 
the CSA. See 21 CFR 1306.04(a).
    Respondents nonetheless contend that the ALJ improperly shifted the 
burden of proof from the Government to them. Resp. Exceptions, 15-18. 
More specifically, Respondents note that in a pre-hearing order, the 
ALJ held that to prove a violation of 21 CFR 1306.04(a), the Government 
was required to prove the following elements: (1) That ``the Respondent 
dispensed a controlled substance''; (2) that ``a red flag was or should 
have been recognized at or before the time the controlled substances 
was dispensed''; and (3) that ``the red flag was not resolved 
conclusively prior to the dispensing of the controlled substance.'' ALJ 
Ex. 28, at 11-12; see also Resp. Exceptions, at 15-16.
    Respondents argue that the ALJ improperly required them ``to 
present evidence that the red flags discussed by the Government were, 
in fact, resolved, in lieu of holding the Government to its obligation 
to prove that these red flags were not resolved.'' Resp. Exceptions, at 
16 (emphasis in original). According to Respondents, the Government 
``did not identify any of these prescriptions, which it selected for 
Professor Doering from a pool of 25,000, until Professor Doering 
testified at the hearing.'' Id. Respondents note that the Government 
did not introduce the hard-copy prescriptions and that its case 
``relied on an analysis of spreadsheets of Respondents' dispensing data 
and its expert's conclusory assertion that all the red flags on the 
prescriptions [which] he identified from the spreadsheets were simply 
`unresolvable.''' Id. at 17. Respondents thus contend that the 
Government ``failed to meet the burden of proof to demonstrate that the 
identified red flags were or were not resolved'' and that the ALJ 
improperly shifted the burden of production to them. Id.
    As discussed above, with respect to multiple prescriptions, 
particularly those which were presented by non-Florida residents, who 
had obtained the prescriptions from doctors in South Florida located 
more than 200 miles from Respondents, and yet filled them at 
Respondents, the ALJ found credible Professor Doering's testimony that 
the red flags were not resolvable and that nothing on the particular 
prescription (such as a notation by the pharmacist of having verified 
the prescription or the

[[Page 62322]]

diagnosis) would lead him to change his conclusion. While the ALJ's 
pre-hearing order did not explicitly contemplate the scenario that 
certain red flags could not be resolved conclusively so as to permit a 
lawful dispensing, it is clear that if the red flags presented by a 
prescription could not be revolved, then the Government satisfied the 
third element of its prima facie burden. The ALJ thus did not 
improperly shift the burden of proof to Respondents.\25\ Accordingly, I 
reject the contention.\26\
---------------------------------------------------------------------------

    \25\ As discussed above, the Government did introduce the 
prescriptions issued by the Longwood, Florida physician which were 
filled on two separate dates. While these prescriptions contained a 
diagnosis code, and nearly all of the prescriptions on each date 
contained the same code, it is not clear who wrote the code on the 
prescription. However, even if Respondents' pharmacists or pharmacy 
technicians had called the physician, the dispensing pharmacists 
clearly were aware that this prescriber was prescribing the same 
combination of controlled substances to nearly all of his patients 
and nearly all of the patients had the same diagnosis. The 
pharmacists thus clearly had reason to know that these prescriptions 
were unlawful and chose to ignore that information.
    \26\ Respondents also contend that there is no legal authority 
to support the Expert's testimony ``that certain red flags are 
unresolvable on their face.'' Resp. Exceptions, at 9-10. Contrary to 
Respondents' contention, for more than thirty years (if not longer), 
it has been settled law that a pharmacist can be held liable for 
violating 21 CFR 1306.04(a) even if he calls the prescriber and 
verifies the prescription. See, e.g., East Main St. Pharmacy, 75 FR 
66,149, 66,164 (2010) (quoting United States v. Hayes, 595 F.2d 258, 
261 (5th Cir. 1979)). As the Fifth Circuit explained in Hayes, 
``[v]erification by the issuing practitioner on request of the 
pharmacist is evidence that the pharmacist lacks knowledge that the 
prescription was issued outside the scope of professional practice. 
But it is not an insurance policy against a fact finder's concluding 
that the pharmacist had the requisite knowledge despite a purported 
but false verification.'' 595 F.2d at 261. See also United States v. 
Seelig, 622 F.2d 207, 213 (6th Cir. 1980) (upholding jury 
instruction that knowledge may be inferred from evidence that 
pharmacists ``deliberately closed their eyes to what would otherwise 
be obvious to them''); see also Bertolino, 55 FR at 4,730.
---------------------------------------------------------------------------

    While not discussed in their brief under this exception, 
Respondents raise several other arguments, which are closely related to 
their main contention that the Government has not shown that they 
violated 21 CFR 1306.04(a). First, with respect to the dispensings that 
occurred in 2010, they argue that ``the Government failed to establish 
that the red flag would have been known to a reasonable pharmacist at 
the time the prescription was presented.'' Resp. Exceptions, at 27. 
Respondents further argue that ``pharmacists and pharmacies in Florida 
were just beginning to see significant increases in prescriptions for 
oxycodone and to experience the effects of Florida's pill mill 
legislation.'' Id. Respondents thus contend that there is no evidence 
``that any of the alleged red flags of diversion about which Professor 
Doering testified would or should have been recognized as red flags 
during the early stage of the oxycodone epidemic.'' Id.
    As discussed by an Agency Investigator, the Florida pill mill 
crisis was ``no secret,'' Tr. 43, and was the subject of ``a lot of 
publicity in the press.'' Id. at 52. Thus, in response to the societal 
harms \27\ caused by the diversion and abuse of prescription drugs 
including oxycodone and alprazolam, in 2010, the Florida legislature 
enacted legislation which, inter alia, restricted the amount of 
schedule II narcotics, such as oxycodone, which a prescriber could 
dispense directly to a patient who paid for the medication with cash, 
check, or credit card, to no more than a 72-hour supply. Tr. 44-45; see 
Fla. Stat. Ann. Sec.  465.0276(1)(b)(2011). As a consequence of the 
law, for those patients who lacked a third-party payer, prescribers 
were required to write paper prescriptions, which a patient was 
required to fill at a pharmacy. Id.
---------------------------------------------------------------------------

    \27\ Among the harms identified by the DI identified were an 
increase of 345 percent in oxycodone overdose deaths between 2005 
and 2010, and an increase, during the same time period, in the 
number of babies born who were addicted to oxycodone from 258 to 
1,374 per year. Tr. 44.
---------------------------------------------------------------------------

    Respondents and their supervisory management cannot reasonably 
claim ignorance of the Florida pill mill problem or the legislation 
enacted by the State. Likewise, Respondents' protestation of ignorance 
begs the question of what they expected would occur upon the enactment 
of the State's pill mill legislation.
    In any event, even before many of the dispensings which are at 
issue here, this Agency had published several decisions which discussed 
the diversion and abuse of oxycodone, as well as drug cocktails which 
included oxycodone, alprazolam, and carisoprodol. See Paul J. Volkman, 
73 FR 30,630 (2008) (discussing drug cocktails issued by physician for 
oxycodone, benzodiazepines and carisoprodol, expert testimony of abuse 
potential of these drugs, and red flag of patient travelling long 
distance to fill prescriptions); see also East Main Street Pharmacy, 75 
FR 66,149 (Oct. 27, 2010) (discussing abuse of oxycodone, alprazolam, 
and carisoprodol and red flag of patients traveling long distances to 
fill prescriptions); Your Druggist Pharmacy, 73 FR 75,774, 75,775 n.1. 
(2008) (noting that ``[w]hile carisoprodol [was] not controlled under 
Federal law, it is controlled under various state laws and is highly 
popular with drug abusers, especially when taken as part of a drug 
cocktail that includes an opiate and a benzodiazepine''). Beyond this, 
the red flags presented by the circumstances of patients travelling 
from Kentucky or Tennessee to South Florida to obtain prescriptions, 
including for a schedule II narcotic, which by definition has the 
highest potential for abuse of any drug that may be prescribed 
lawfully, see 21 U.S.C. 812(b)(2), and then travelling to Respondents 
to fill them, are so obvious that only those who are deliberately 
ignorant would fill these prescriptions. I thus reject this contention 
as well.
    I therefore conclude that the ALJ's finding that both Respondents 
repeatedly dispensed controlled substances in violation of 21 CFR 
1306.04(a) is supported by substantial evidence.\28\ ALJ at 69-70. I 
further adopt the ALJ's finding that ``the Government has established 
that the Respondents have committed acts that are inconsistent with the 
public interest'' and that ``the record evidence under the Fourth and 
Second Factors weighs in favor of revocation.'' Id.
---------------------------------------------------------------------------

    \28\ Respondents also take exception to the ALJ's exclusion of 
testimony of their proposed pain management experts. Resp. 
Exceptions, at 36-37. Respondents assert that they have been 
prejudiced by the ALJ's ruling, and that their experts would have 
provided testimony to the effect ``that certain quantities and 
combinations [of controlled substances] would not be considered 
`large' or `unusual' for the treatment of pain'' and that ``[i]t is 
difficult to see how such practices could-or should-`raise a 
suspicion regarding the validity of a prescription,' when qualified 
experts on the `usual course of professional practice in the 
relevant field would testify that there is nothing suspicious about 
what was prescribed.''' Resp. Mot. for Reconsideration, at 4 (ALJ 
Ex. 30) (quoting Order on Hearing Scope and Government Motion 
Regarding the Respondents' Experts at 11) (ALJ Ex. 28).
     In support of their motion, Respondents proffered the reports 
of two pain management physicians. See Resp. Mot. to File Expert 
Reports (ALJ Ex. 25). Yet in their reports, neither physician 
specifically addressed whether the prescriptions for the combination 
of controlled substances (i.e., oxycodone and alprazolam) filled by 
Respondents were issued for a legitimate medical purpose. Moreover, 
even Professor Brushwood acknowledged that while prescriptions for 
this combination of controlled substances could be prescribed for 
legitimate medical purposes, ``it is also sought after by people who 
would divert and abuse drugs.'' Tr. 1082. He also testified that 
both drugs present a high risk for abuse or diversion and also 
agreed that a pharmacist must be ``particularly conscious of 
potential diversion issues'' when dispensing these drugs. Id. at 
1086.
     Accordingly, even assuming that there are patients to whom a 
physician can legitimately prescribe these controlled substances 
simultaneously, as the Government's Expert testified, it is the 
totality of the red flags which renders them unresolvable and thus 
made the dispensings unlawful.
---------------------------------------------------------------------------

Exception Three--The ALJ Failed To Consider Evidence of Respondents' 
Acceptance of Responsibility

    Respondents also argue that the ALJ erred in holding that ``they 
`have not accepted responsibility for the actions

[[Page 62323]]

that form the basis of the Government's prima facie case.''' Resp. 
Exceptions, at 22 (quoting ALJ at 72). According to Respondents, the 
ALJ failed to ``credit the unequivocal statements of CVS's Vice 
President of Pharmacy Operations explaining that CVS accepted 
responsibility on behalf of Respondents and fails entirely to consider 
the significant evidence of the swift and targeted actions taken by CVS 
in the wake of the [Administrative Inspection] Warrants to address and 
resolve the precise concerns identified by DEA at Stores 219 and 
5195.'' Id. at 23. They further contend that ``CVS's actions speak 
volumes to its acceptance of responsibility for Respondents' dispensing 
practices and for assuring that its pharmacies and employees meet their 
legal obligations.'' Id. However, having reviewed the record, I agree 
with the ALJ's conclusion that ``Respondents have not accepted 
responsibility for the actions that form the basis of the Government's 
prima facie case.'' ALJ at 72.
    This Agency has repeatedly held that where the Government has 
proved that a registrant has committed acts inconsistent with the 
public interest, a registrant must `````present[] sufficient mitigating 
evidence to assure the Administrator that [it] can be entrusted with 
the responsibility carried by such a registration.''''' Medicine 
Shoppe-Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 
72 FR 23,848, 23,853 (2007) (quoting Leo R. Miller, 53 FR 21,931, 
21,932 (1988))). Moreover, because ``past performance is the best 
predictor of future performance,'' ALRA Labs., Inc., v. DEA, 54 F.3d 
450, 452 (7th Cir. 1995), this Agency has repeatedly held that where a 
registrant has committed acts inconsistent with the public interest, 
the registrant must both accept responsibility for its actions and 
demonstrate that it will not engage in future misconduct. Medicine 
Shoppe-Jonesborough, 73 FR at 387; see also Jackson, 72 FR at 23,853; 
John H. Kennedy, 71 FR 35,705, 35,709 (2006); Prince George Daniels, 60 
FR 62,884, 62,887 (1995).
    DEA cases make clear that admitting fault for past misconduct is an 
important factor in determining whether a registrant has rebutted the 
Government's prima facie showing that its continued registration would 
be ``inconsistent with the public interest.'' 21 U.S.C. 824(a)(4). As 
the Tenth Circuit recently held in rejecting a physician's contention 
that the Agency exceeded its statutory authority in considering whether 
he had admitted fault for his prescribing violations:

    The DEA may properly consider whether a physician admits fault 
in determining if the physician's registration should be revoked. 
When faced with evidence that a doctor has a history of distributing 
controlled substances unlawfully, it is reasonable for the . . . 
Administrator to consider whether that doctor will change his or her 
behavior in the future. And that consideration is vital to whether 
the continued registration is in the public interest. . . . [T]he . 
. . Administrator had no evidence that Dr. Mackay recognized the 
extent of his misconduct and was prepared to remedy his prescribing 
practices.

    MacKay v. DEA, 664 F.3d 808, 820 (2011) (citing Hoxie v. DEA, 419 
F.3d 477, 483 (6th Cir. 2005)). See also Chein v. DEA, 533 F.3d 828, 
837 (D.C. Cir. 2007) (upholding revocation order, noting in part that 
physician had not ``accepted responsibility for his misconduct''); 
Hoxie, 419 F.3d at 483 (DEA properly considers admission of fault in 
determining whether a registration should be revoked).
    As noted above, Respondents contend that the ALJ failed to give 
proper weight to what they characterize as ``the unequivocal statements 
of CVS's Vice President of Pharmacy Operations explaining that CVS 
accepted responsibility on behalf of Respondents.'' Resp. Exceptions, 
at 23. However, at the hearing, the evidence offered to rebut the 
Government's prima facie case focused entirely on various measures CVS 
implemented following the execution of the Administrative Inspection 
Warrants in October 2011. Contrary to Respondents' assertion, the only 
testimony of the company's official that even mentioned the word 
``responsibility,'' occurred in response to the question posed by their 
counsel as to why CVS had taken various actions since October 2011. Tr. 
1296. In response, the official testified:

    CVS takes its responsibility seriously, and given the drug 
abuse, the elevated level of drug abuse, that's being observed 
broadly in Florida, we don't want to contribute to that, and to the 
extent that any of our stores could contribute to that, we wanted to 
take these steps to help ensure that no stores do in the future. We 
understand that it's our responsibility to provide our stores the 
tools and information that they need to do their jobs on a day-to-
day basis and in compliance with state, federal and local 
legislation and requirements, and we felt these actions helped us do 
so.

    Id. at 1296-97.

    As the ALJ found, at no point did this official acknowledge that 
Respondents had engaged in any misconduct. Indeed, in their post-
hearing brief, Respondents all but concede as much, arguing that the 
Agency ``cannot point to another instance where a revocation of a chain 
pharmacy's license has occurred in similar circumstances.'' Resp. 
Proposed Findings of Fact and Conclusions of Law (Post-Hearing Br.), at 
123. Respondents further contend that ``other DEA revocation cases bear 
a crucial distinction from this case: in virtually all of those cases, 
the individual doctor or independent pharmacy owner/pharmacist was both 
the one accused of wrongdoing and the registrant. As such, these 
individuals were in a position to apologize for their own misconduct or 
that of the retail pharmacy they owned or operated.'' Id.
    Be that as it may, the Agency's rule is clear and the fact that CVS 
is a large corporation provides no reason to excuse it from explicitly 
acknowledging the misconduct of Respondents and their pharmacists. 
Therefore, I decline to create one rule for chain pharmacies and 
another rule for closely held or sole-proprietor owned pharmacies. 
Because Respondents have failed to satisfy this requirement, the ALJ 
properly held that they have not accepted responsibility for their 
misconduct.
    Nor, even with respect to whether CVS has successfully demonstrated 
that it will not engage in future misconduct, is its evidence 
convincing. It is acknowledged that CVS made changes to its pharmacy 
software, issued new dispensing guidelines, and is requiring its 
pharmacy personnel to undergo additional training. However, other 
evidence still raises serious questions as to how seriously CVS takes 
its responsibility to comply with federal law.
    For example, Respondents point to the fact that at the time of the 
Administrative Inspection Warrants, they became aware of the 
Government's concerns that they were dispensing oxycodone prescriptions 
issued by certain ``high-volume prescribers'' and ceased dispensing 
schedule II narcotic prescriptions issued by these physicians. Id. at 
23-24; see also GX 29 (November 15, 2011 email from Respondent's 
counsel to DI noting that CVS would be suspending various physicians). 
Yet, among these physicians was the same Longwood, Florida physician, 
who repeatedly prescribed combinations of oxycodone and alprazolam 
based on nearly uniform diagnoses, which both Respondents repeatedly 
filled (and had been doing so for at least six months), notwithstanding 
that it was clear that he was engaged in pattern prescribing. See GX 55 
(eighty-one page spreadsheet of each Respondent's dispensings of 
physician's prescriptions); GXs 67 & 68. Respondents offer no 
explanation for why they could not figure out on their

[[Page 62324]]

own that this physician was issuing unlawful prescriptions.\29\
---------------------------------------------------------------------------

    \29\ Indeed, in a December 2010 meeting, DEA Investigators 
explained to CVS officials various red flags to look for including 
the prescribing of the combination of oxycodone and alprazolam. Tr. 
52. The DI further testified that ``We brought up examples again of 
people coming in from the same doctors with the same prescriptions 
for Oxycodone, 15 milligrams, 30 milligrams[,] [a]lprazolam, two 
milligrams, a lot of people wanting to pay cash, a lot of people 
wanting to drive distances to the pharmacy or to the doctor.'' Id. 
at 55. In addition, the Investigators told CVS's representatives 
that it was a red flag when ``individuals * * * come in with the 
same prescriptions, also the same diagnosis.'' Id. at 56. The 
Investigators also explained that calling a doctor to verify whether 
he wrote a prescription would not be sufficient to determine whether 
a prescription complied with federal law, and CVS's representatives 
agreed. Id. at 57.
---------------------------------------------------------------------------

    Respondents also argue that CVS has appointed new pharmacists-in-
charge at each store. Resp. Post-Hearing Br. 126. According to 
Respondents, ``[t]his employment decision was made `in the best 
interest of the stores' and was designed to provide new leadership for 
the pharmacies.'' Id.; see also Tr. 1294 (testimony of CVS Vice 
President; decision ``was based on the additional scrutiny within the 
stores related to these hearings, the company felt it was in the best 
interest of those pharmacies to bring in new leadership that would not 
be distracted by these events'').\30\ However, CVS's Vice President did 
not know what further personnel actions were being taken with respect 
to these individuals. Tr. 1295. Given the egregiousness of their 
misconduct, it is stunning that CVS offered no assurance that these 
individuals had been discharged from employment. See 21 CFR 1301.92. 
Accordingly, I agree with the ALJ that Respondents have not rebutted 
the Governments' prima facie case.\31\
---------------------------------------------------------------------------

    \30\ The Vice President did not know when CVS had replaced the 
two pharmacists-in-charge and did not even know generally when it 
had occurred. Tr. 1294.
    \31\ I have also considered Respondents' various arguments 
regarding a proposed settlement of allegations based on CVS's 
pharmacies having filled prescriptions issued by various prescribers 
who did not have current or valid DEA registrations. Suffice it to 
say, the settlement has not been agreed to by the Department of 
Justice. Moreover, even were I to consider the settlement as 
evidence of CVS's acceptance of responsibility for filling the 
prescriptions issued by Dr. Lynch, the settlement does not address 
Respondents' misconduct in dispensing numerous prescriptions in 
violation of 21 CFR 1306.04(a).
     I have also considered the rest of Respondents' exceptions and 
conclude that they are either without merit or fail to establish 
prejudicial error. Cf. 5 U.S.C. 706 (``due account shall be taken of 
the rule of prejudicial error''). For example, Respondents argue 
that the ALJ made a factual finding that at Store 5195, an Agency 
Investigator had observed a person who had dilated pupils and that 
this evidence was not admissible pursuant to the ALJ's Scope Order. 
Resp. Exceptions, at 26. Be that as it may, the ALJ did not cite 
this testimony as support for his legal conclusions and thus 
Respondents cannot show prejudice. See also Resp. Exceptions, at 29 
(arguing that ALJ inserted ``irrelevant and prejudicial facts into 
his findings of fact'' but not showing any prejudice).
---------------------------------------------------------------------------

    Respondents further argue that the ALJ's recommended sanction is 
overly broad and that any sanction should be limited to oxycodone or 
schedule II controlled substances. Resp. Exceptions, at 25-26. 
According to Respondents, this is so because ``the Government's 
evidence focused almost exclusively on Respondents' dispensing of 
oxycodone'' and ``the only evidence regarding other controlled 
substances related to substances commonly dispensed in conjunction with 
oxycodone.'' Id. at 25.
    I acknowledge that DEA possesses the discretion to limit an order 
of revocation to a particular controlled substance. See 21 U.S.C. 
824(b). However, I conclude that to exercise that discretion here would 
be particularly inappropriate and ill-serve the public interest.
    The Agency has previously held that ``[t]he Government is not 
required to prove that multiple categories of [controlled substances] 
were diverted in order to sustain the revocation of [a registrant's] 
entire registration.'' Southwood Pharmaceuticals, Inc., 72 FR 36,487, 
36,503 (2007). Rather, proof that a registrant has diverted any 
category of a controlled substance is sufficiently egregious misconduct 
to warrant the revocation of a registrant's entire registration. See 
id. (rejecting ALJ's recommendation to limit revocation to a single 
drug and revoking distributor's registration based solely on evidence 
registrant diverted hydrocodone, a schedule III drug).
    In any event, Respondents diverted not only schedule II drugs, 
which have been placed in this schedule because they have the highest 
potential for abuse and the abuse of them ``may lead to severe 
psychological or physical dependence,'' see 21 U.S.C. 812(b)(2), but 
also schedule IV benzodiazepines.\32\ Moreover, Respondents' misconduct 
was both egregious and of extensive duration and undoubtedly caused 
extensive harm to the public interest, notwithstanding the assertion of 
CVS's Vice President that CVS does not want to contribute to the 
prescription drug abuse problem. This is more than enough to conclude 
that the revocation of the entirety of each Respondents' controlled 
substance dispensing authority is necessary to protect the public 
interest. I therefore reject Respondents' contention that the ALJ's 
recommendation is overly broad and adopt the ALJ's recommended 
sanction.\33\
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    \32\ Moreover, with respect to Dr. Lynch's unlawful 
prescriptions, the evidence shows that Respondents' dispensed 
controlled substances in schedules II, III, and IV. See GX 32, at 2 
(alprazolam, schedule IV), 5 (zolpidem, schedule IV), 6 (OxyContin, 
schedule II), 9 (Endocet (oxycodone)), 10 (oxycodone).
    \33\ The Government takes exception to the ALJ's exclusion of 
evidence showing the oxycodone purchases of each Respondent. Gov. 
Exceptions, at 1. The Government contends that ``[s]urely these 
figures would have (and, in fact, should have) caused someone at CVS 
219 and CVS 5195 to inquire as to why their stores 
. . . were purchasing increasingly large quantities of oxycodone in 
order to fill the huge volume of oxycodone prescriptions being 
presented by their customers.'' Id. at 2-3. The Government further 
asserts that ``the volume of oxycodone purchased by CVS 219 
and CVS 5195 eclipsed the amount of oxycodone purchased by 
other stores located in more densely populated cities within the 
State of Florida.'' Id. at 3.
     The rejected exhibits are, however, simply a compilation of the 
purchases of the Respondents. The Government made no proffer that it 
had performed a statistically valid study of the oxycodone purchases 
by CVS pharmacies (as well as other pharmacies) in the State of 
Florida, or even within the central Florida area, and that even 
after controlling for the relevant variables which might 
legitimately affect purchasing patterns, the Respondents' increased 
purchases could not be explained by an increase in legitimate 
prescriptions. Nor is it clear what the evidence adds as the 
testimony establishes that following the enactment of the 2010 
Florida pill mill bill, CVS's officials requested a meeting with DEA 
because ``they had seen an increase in the numbers of prescriptions 
for oxycodone,'' and at the meeting, the purchases of both 
Respondents were specifically discussed. Tr. 52, 58, 80-81. Thus, 
there is ample evidence that CVS officials were on notice that 
something was amiss at both pharmacies.
    Finally, as the ALJ properly held, Respondents' purchases do not 
establish a violation of 21 CFR 1306.04(a). Rather, such a violation 
must be established by reference to a specific prescription and 
evidence indicating that Respondents' pharmacists dispensed the 
prescription notwithstanding that they either knew or had reason to 
know that the prescription lacked a legitimate medical and was 
issued outside of the usual course of professional practice. See 
Order on Hearing Scope, at 7-12 (ALJ Ex. 28). I thus reject the 
Government's contention.
---------------------------------------------------------------------------

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a)(4), as well as 28 CFR 0.100(b), I order that DEA Certificate of 
Registration Number BC5289055, issued to Holiday C.V.S., L.L.C., d/b/a 
CVS Pharmacy 00219, and DEA Certificate of Registration Number 
BC6988298, issued to Holiday C.V.S., L.L.C., d/b/a CVS Pharmacy 
5195, be, and they hereby are, revoked. I further order that 
any pending applications of Holiday C.V.S., L.L.C., d/b/a CVS Pharmacy 
00219 or 5195, be, and they hereby are, denied. This 
Order is effective November 13, 2012.

    Dated: August 31, 2012.
Michele M. Leonhart,
Administrator.
Paul Soeffing, Esq., Jason Hadges, Esq., Christine Menendez, Esq., 
for the Government

[[Page 62325]]

Catherine O'Neil, Esq., John A. Gilbert, Esq., Colleen P. Schoch, 
Esq., Karla L. Palmer, Esq., Barbara Rowland, Esq., for the 
Respondents

RECOMMENDED RULINGS, FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECISION 
OF THE ADMINISTRATIVE LAW JUDGE

    John J. Mulrooney, II, Chief Administrative Law Judge. On 
February 2, 2012, the Administrator of the Drug Enforcement 
Administration (DEA or Government), issued an Order to Show Cause 
and Immediate Suspension of Registration (OSC/ISO) immediately 
suspending and proposing to revoke the DEA Certificate of 
Registration (COR), Number BC5289055, of Holiday C.V.S. L.L.C., d/b/
a CVS/Pharmacy 00219 (``Respondent 219'') pursuant to 21 
U.S.C. 824(a), and to deny any pending applications for 
registration, renewal or modification pursuant to 21 U.S.C. 823(f) 
and 824(a). The same day, a similar OSC/ISO was issued against the 
DEA COR, Number BC6988298, of Holiday C.V.S. L.L.C., d/b/a CVS/
Pharmacy 05195 (``Respondent 5195'').
    On March 2, 2012, the Respondents, through counsel, timely filed 
requests for hearing. On March 7, 2012, the two cases were 
consolidated. A consolidated hearing was held from April 25, 2012, 
through April 30, 212, in Arlington, Virginia.
    The issue ultimately to be adjudicated by the Administrator, 
with the assistance of this recommended decision, is whether the 
record as a whole establishes, by substantial evidence, that either 
(or both) of the Respondents' CORs should be revoked as inconsistent 
with the public interest, as that term is used in 21 U.S.C. 823(f) 
and 824(a).
    After carefully considering the testimony elicited at the 
hearing, the admitted exhibits, the arguments of counsel, and the 
record as a whole, I have set forth my recommended findings of fact 
and conclusions of law below.

The Allegations

    The OSC/ISOs issued by the Government against the Respondents 
contend that revocation of the Respondents' CORs is appropriate 
because ``[s]ince at least 2010, [the Respondents] ha[ve] dispensed 
controlled substances to customers under circumstances indicating 
that the drugs are diverted from legitimate channels, misused or 
abused.'' ALJ Ex. 1, at 2; ALJ Ex. 2, at 2. The respective OSC/ISOs 
cite aggregate controlled substance purchase amounts and proffer 
that these numbers have been subject to increases, and allege that 
the Respondents ``failed to exercise [their] corresponding 
responsibility regarding the proper prescribing and dispensing of 
controlled substances in violation of 21 C.F.R. Sec.  1306.04(a) * * 
* failed to maintain effective controls against diversion of 
controlled substances in violation of 21 C.F.R. Sec.  1301.76.'' \1\ 
ALJ Ex. 1, at 2; ALJ Ex. 2, at 2.
---------------------------------------------------------------------------

    \1\ On April 13, 2012, based on the factual proffers set forth 
in the respective prehearing statements, this tribunal issued an 
order (``Scope Order'') which, inter alia, precluded the Government 
from introducing evidence of aggregate amounts of purchased 
controlled substances to establish that the Respondents continued 
registrations would be inconsistent with the public interest. ALJ 
Ex. 23. The Scope Order precluded the Government from introducing 
any evidence for a violation of 21 CFR Sec.  1301.76 based on its 
failure to allege any factual basis in its OSC/ISO or initial or 
supplemental prehearing statements. Id.; ALJ Exs. 9, 16. The Scope 
Order also limited evidence the Respondents had noticed to meet the 
aggregate amount evidence and granted the Government's motion to 
limit expert testimony that related to the practice of medicine. ALJ 
Ex. 23.
---------------------------------------------------------------------------

The Stipulations of Fact

    1) Respondents 219 and 5195, are retail pharmacies located in 
Sanford, Florida. Respondents 219 and 5195 are operated by CVS 
Pharmacy, Inc., (``CVS''), the division of CVS Caremark Corporation 
which operates the retail pharmacy business.
    2) Respondent 219, is registered with DEA as a chain pharmacy in 
Schedules II-V under DEA registration number BC5289055 at 3798 
Orlando Drive, Sanford, Florida 32773. Respondent 219's registration 
expires by its terms on December 31, 2013.
    3) Respondent 5195, is registered with DEA as a chain pharmacy 
in Schedules II-V under DEA registration number BC6988298 at 4639 W 
1st Street, Sanford, Florida 32771. Respondent 5195's registration 
expires by its terms on December 31, 2013.
    4) DEA served Administrative Inspection Warrants (AIWs) at 
Respondents 219 and 5195 on October 18, 2011.
    5) An evaluation by DEA of aggregate controlled substance 
dispensing data from the Respondents' pharmacies resulted in DEA's 
decision to initiate the investigations that culminated in these 
proceedings. Tr. 130.

The Evidence

The Government's Evidence

    The Government elicited factual testimony from six DEA Diversion 
Investigators (DI) and expert testimony from a retired professor 
from the College of Pharmacy at the University of Florida.

The Government's Fact Witnesses

    DI Susan Langston, the Acting Diversion Program Manager for the 
Miami Field Division, testified that she has been a DI since 1996, 
and has held various supervisory positions prior to her current 
assignment as the Diversion Program Manager in Miami where she 
oversees the supervisors who manage six diversion investigator 
offices. Tr. 40-42.
    Langston testified that ``it's no secret that we have an 
incredible pill problem in the State of Florida. It's a national 
problem, but Florida is the epicenter.'' Tr. 43. According to DI 
Langston, the ``pill problem is fueled by unscrupulous doctors and 
pill mill pain clinics * * * [that were] originally situated 
primarily in Broward County, and now [have] spread all over the 
state.'' Tr. 43. In Florida, ``[t]he two most commonly abused drugs 
and the drugs that are a part of this pill mill problem * * * are 
oxycodone \2\ and alprazolam.\3\ '' Tr. 44.
---------------------------------------------------------------------------

    \2\ ``A medicinal substance used as a narcotic and analgesic.'' 
4-O Attorneys' Dictionary of Medicine O-85581. Oxycodone is a 
Schedule II controlled substance. 21 CFR Sec.  1308.12(b)(1).
    \3\ ``A drug used in the treatment of anxiety and panic 
disorders usually associated with depression.'' 1-A Attorneys' 
Dictionary of Medicine A-5091.'' Alprazolam is a Schedule IV 
controlled substance. 21 CFR Sec.  1308.14(c).
---------------------------------------------------------------------------

    Langston's testimony also included some background information 
related to recent changes in Florida law, and certain effects that 
those changes have had on the diversion enforcement landscape. In 
2010, the State of Florida passed a law prohibiting doctors from 
dispensing Schedule II controlled substances from their offices to 
patients who paid with cash, check or credit card. Tr. 44-45. In 
July of 2011, the law was changed again to ``virtually eliminate[] 
all dispensing of Schedule II and III controlled substances from 
doctors' offices.'' Tr. 45. DI Langston explained that in 2010, ``98 
of the top 100 doctors who dispensed oxycodone in the United States 
were in Florida [and that] there is more oxycodone that goes to the 
State of Florida than all of the other states combined.'' Tr. 45. DI 
Langston further testified that ``as a result of the law change 
we've seen an incredible increase in the amount of pharmacies that 
are opening in the State of Florida and the amount of pharmacies 
that are now involved in the pill mill problem. All the 
[prescriptions for] drugs that the pill mill doctors write now in 
Florida have to be filled at a pharmacy.'' Tr. 46. This change is 
reflected in that fact that ``[s]ome pharmacies that purchased 
hardly any oxycodone * * * now purchase three, four, five times the 
national average.'' Tr. 46.
    In response to the increase in oxycodone sales, DIs in Florida 
have ``visited hundreds of pharmacies over the past * * * two years 
[and have] talked to thousands of pharmacists.'' Tr. 47-47. The DEA 
has also sponsored a Pharmacy Awareness Conference in West Palm 
Beach, Florida. Tr. 47. Langston explained that, when interacting 
with pharmacists, DEA representatives go over the rules and 
regulations that pharmacies must follow * * *. We talk about what 
we're seeing in Florida * * * We talk about trends. We talk about 
what we're seeing doctors doing, what we're seeing happening at the 
patient level.\4\ We talk about the red flags of diversion, types of 
things to look out for whenever they're filling prescriptions.
---------------------------------------------------------------------------

    \4\ When conducting these outreach activities, Ms. Langston has 
observed that ``virtually every pharmacist'' knows about the pill 
mill problem. Tr. 47.

Tr. 47-48. As an example of a red flag of diversion which would have 
been discussed during these DEA outreach programs, DI Langston 
identified ``a lot of prescriptions coming in for oxycodone, 30 
milligrams (mg), oxycodone, 15 [mg]; Xanax \5\ [alprazolam] two 
[mg].'' Tr. 48.
---------------------------------------------------------------------------

    \5\ Xanax is ``[t]he brand name of a preparation containing 
alprazolam, used in the treatment of anxiety.'' 6-X Attorneys' 
Dictionary of Medicine X-125138.
---------------------------------------------------------------------------

    As a part of its outreach activities, the DEA, at the request of 
CVS counsel John

[[Page 62326]]

Gilbert, Esq.,\6\ conducted a meeting with CVS representatives on 
December 8, 2010 (``December 2010 CVS Meeting). Tr. 48-49. DI 
Langston explained that prior to the meeting Mr. Gilbert contacted 
her by telephone ``and said that CVS was aware of the pill mill 
problem in South Florida, and he would like to meet with us and 
bring a couple of the supervisors along that worked for local CVS 
stores and talk about the pill mill problem, oxycodone diversion 
problem, and what types of things we're seeing.'' Tr. 49. In 
preparation for the meeting, DI Langston ran an ARCOS \7\ report for 
the oxycodone purchases of Respondent 219 from 2006 through 2010. 
Tr. 58.
---------------------------------------------------------------------------

    \6\ An attorney of record for the Respondents in this matter.
    \7\ The Automation of Reports and Consolidated Orders System 
(ARCOS) is a DEA database which monitors the flow of controlled 
substances.
---------------------------------------------------------------------------

    The December 2010 meeting was attended by: Mr. Gilbert; Jennifer 
Lalani, a supervisor for CVS stores 219 and 5195; Ms. Tankut, an 
official from CVS's corporate headquarters in Rhode Island; DI 
Langston; DEA Diversion Group Supervisor (GS) Gayle Lane; DI Phyllis 
Garret; Robert Difiore, a pharmacist from the Florida Department of 
Health; and Michele Miller, a supervisor from the West Palm Beach 
Department of Health. Tr. 49-51, 69.
    At the meeting, the parties discussed a pharmacist's 
corresponding responsibility ``at length.'' Tr. 54. The discussion 
topics included the pill mill problem in Florida; some recent 
arrests and other DEA enforcement activity; increased publicity; the 
oxycodone crisis; and the combination of prescriptions for oxycodone 
30 mg, oxycodone 15 mg, Alprazolam 2 mg, and a fourth ``filler'' \8\ 
drug, which DEA identified as an indicator of diversion.\9\ Tr. 51-
52.
---------------------------------------------------------------------------

    \8\ Soma, ibuprofen, Flexeril and blood pressure medication were 
identified by DI Langston as possible ``filler' drugs. Tr. 51-52. 
Langston explained that ``filler drugs [are] medication[s] that 
doctors will prescribe so it won't look like they're prescribing too 
many controlled substances.'' Tr. 51-52.
    \9\ Also during the meeting, Ms. Lalani stated that CVS ``had 
seen an increase in the numbers of prescriptions for oxycodone * * * 
and that's why they wanted the meeting.'' Tr. 52.
---------------------------------------------------------------------------

    The DEA representatives identified some indicators of possible 
diversion to be aware of, such as ``patients driving distances to 
see their doctors, patients driving distances to go to particular 
pharmacies, some people going from out of state * * *.'' and 
monitoring for ``suspicious behavior.'' Tr. 52. ``Suspicious 
behavior'' was defined as ``[p]eople coming and appearing like they 
may not need the medication, appearing like they may be high, things 
like that.'' Tr. 53. Other red flags discussed were: (1) large 
quantities of people paying cash; (2) large quantities of people 
traveling distances to see the prescribing physician; (3) people 
coming in with the same prescriptions and same diagnoses 
(particularly lower lumbar pain); and (4) an ``influx'' of 
prescriptions from board certified pediatricians or 
gynecologists.\10\ Tr. 54-57.\11\
---------------------------------------------------------------------------

    \10\ Ms. Langston estimated that ``90 percent of the pill mill 
doctors use lower lumbar pain'' as a diagnosis code. Tr. 56.
    \11\ On cross-examination Ms. Langston agreed that, standing 
alone, none of the red flags she listed were dispositive on the 
issue of the legitimacy of a prescription. Tr. 90-94.
---------------------------------------------------------------------------

    In addition to red flags, the meeting participants discussed 
methods to verify a prescription. Tr. 57. Specifically, the DEA 
representatives stated that ``[s]imply calling a doctor's office to 
verify that he or she wrote a prescription does not meet the 
requirement [of verification].'' Tr. 57. The representatives for CVS 
agreed with this assessment. Tr. 57. After the CVS representatives 
were shown the oxycodone ordering of Respondent 219, they appeared 
``a little bit surprised at quite how high it was, and they said 
they didn't know why it was so high.'' Tr. 59. Ms. Lalani speculated 
that the high numbers could have been caused by the fact that 
Respondent 219 was a 24-hour store and assured those present that 
she would look into Respondent 219 to ensure that everything was 
being done legitimately.\12\ Tr. 59.
---------------------------------------------------------------------------

    \12\ On cross-examination Ms. Langston testified that she 
addressed the oxycodone ordering at Respondent 5195 at the December 
2010 CVS Meeting, but did not provide the underlying data. Tr. 81-
82. However, in a January 25, 2012, summary of the December 2010 CVS 
Meeting sent to DEA's Chief Counsel Office, Ms. Langston did not 
state that she addressed Respondent 5195's oxycodone ordering. Tr. 
82.
---------------------------------------------------------------------------

    DI Langston testified that over the past year, ``at least'' 
thirty doctors and three pharmacists had been arrested ``for their 
part in oxycodone diversion.'' Tr. 59-60. Simultaneously, ``[t]he 
State of Florida * * * picked up their efforts [by] issu[ing] 
emergency suspensions on several doctors' medical licenses over the 
past year.'' Tr. 60. When a Florida State license is subject to an 
immediate suspension order, a notification of the suspension is 
placed on the Florida Department of Health's Web site ``within ten 
minutes.'' Tr. 61. Similarly, the DEA Web site for DEA registrants 
updates a registrant's profile the same day a DEA immediate 
suspension order is served on the effected registrant.\13\ Tr. 62.
---------------------------------------------------------------------------

    \13\ The DEA registrant Web site referenced by Ms. Langston is a 
system which a DEA registrant can log in to verify that another 
registrant has a valid DEA registration. Tr. 63-64.
---------------------------------------------------------------------------

    The Government elicited information from DI Langston about the 
prescription privileges of a physician named Dr. Ronald Lynch. Tr. 
66. Langston testified that Dr. Lynch's DEA COR was revoked, 
effective January 18, 2011, and that as of the effective date of 
that revocation order, he no longer enjoyed the authority to 
prescribe, administer or dispense any controlled substances. Tr. 66; 
see also, Gov't Ex. 32 at 3-12. Although Dr. Lynch's COR was 
revoked, DI Langston explained that the DEA Web site would reflect 
that his registration was ``expired.'' Tr. 74-75.
    On cross-examination DI Langston testified that, unlike the case 
of a revocation, in situations where a COR expires by its own terms, 
there is a thirty-day window between the expiration date and the 
date the number associated with the COR is retired. Tr. 78-79. This 
grace period is designed to address inadvertent lapses or other 
unintentional delays. If a registrant submits an application for 
renewal after the expiration date, but during the grace period, then 
the registrant will maintain his or her dispensing privileges. Tr. 
78-79. A pharmacist who encounters an ``expired'' signal may resolve 
the red flag by calling the DEA and inquiring about the status of 
the application or registration. Tr. 102-03.
    The testimony presented by DI Langston was sufficiently 
detailed, consistent, and plausible to be fully credited in this 
recommended decision.
    The Government also presented the testimony of DI Stephanie Orr. 
DI Orr testified that she has been employed by the DEA since July of 
2009, and that she currently is stationed in the DEA's Boston 
Office. Tr. 335-36.
    DI Orr testified that she participated in the execution of an 
administrative inspection warrant on Respondent 219 on October 18, 
2011, and that her role in that evolution was ``to gather the 
records of inventories and prescription records and dispensing 
records.'' Tr. 337-38. Upon entering the store, DI Orr enlisted the 
assistance of CVS lead technician Keyla Perry in gathering records 
at the pharmacy Tr. 337-40. Through Ms. Perry, DI Orr collected an 
inventory taken in September of 2011, and another taken in October 
of 2010.\14\ Tr. 339. Orr also requested and received hard copy 
``prescriptions for the controlled substances for Schedule 2s * * * 
for that time period.'' Tr. 339-40. The prescription records, which 
were produced in small boxes, were photocopied by the DEA, and then 
returned Respondent 219. Tr. 340-41. DI Orr also obtained the 
dispensing binders \15\ for oxycodone 30 mg for the relevant time 
period. Tr. 341-42. As with the hard copies of the prescriptions, 
the dispensing labels were taken into DEA evidence, scanned, and 
returned. Tr. 342.
---------------------------------------------------------------------------

    \14\ DI Orr explained that she ``gathered two sets of 
inventories because [she] wanted to make sure that it went over at 
least a year.'' Tr. 339.
    \15\ DI Orr explained that ``when a prescription is printed out 
[Respondent 219] put a sticker on the back of the prescription and 
then that [sticker] has like a label and they put that in a 
binder.'' Tr. 341.
---------------------------------------------------------------------------

    While Ms. Perry assisted with the collection of records, she and 
DI Orr discussed Perry's employment at CVS. Tr. 343. Orr described 
Perry's demeanor during this conversation as ``normal'' and 
``relaxed.'' Tr. 343. Ms. Perry stated that she had worked for CVS 
for seven years, and Respondent 219 for the past three years. Tr. 
343. Ms. Perry also told DI Orr that Respondent 219 filled 
approximately a thousand prescriptions per day, the majority of 
which were for controlled substances. Tr. 344.
    As to the filling of oxycodone 30 mg prescriptions, Ms. Perry 
indicated that Drs. Pyko, Namone, Moyer, Pizza, Scolaro, Namone, 
Moyer and Zelkowitz ``were some of the top prescribing doctors'' for 
oxycodone 30 mg at Respondent 219. Tr. 344. Ms. Perry also set forth 
Respondent 219's procedure for verifying Schedule II controlled 
substances presented to the pharmacy. Tr. 345. Specifically, Ms. 
Perry ``stated that when a prescription was presented she'll get an 
ID from the patient, write down their driver's license number on the 
prescription, and then call the doctor to verify and write down who 
they spoke to, the date, along with * * * the diagnosis code.'' Tr. 
345.

[[Page 62327]]

    After the AIW inspection, DI Orr received a CD that contained a 
Microsoft Excel spreadsheet (CVS Dispensing Data) \16\ that was 
provided by CVS and contained the dispensing records for the 
Respondent pharmacies from January 1, 2010, up until October 16, 
2010.\17\ Tr. 347. DI Orr also received ``one scrip that was labeled 
10/17/11.'' Tr. 348. Orr narrated her understanding of the 
information provided in the spreadsheet provided by CVS. In addition 
to the drug type and strength, the CVS Dispensing Data set forth 
culled information regarding individual controlled substance 
dispensing events. The document included the method of payment 
(listed under ``agency type''), the National Drug Code and schedule 
classification for each drug, the pharmacy number (219 or 5195), the 
prescription number assigned by the Respondents to specific 
dispesnsings, the dispensing date and quantity, as well as the name 
and address of each patient and prescriber. Tr. 353-56; Gov't Ex. 
30. DI Orr invested considerable testimony into detailed 
explanations of her efforts to process the data provided by CVS into 
multiple spreadsheets to facilitate an analysis of the Respondents' 
dispensing.
---------------------------------------------------------------------------

    \16\ The spreadsheet from CVS was admitted into evidence as 
Government Exhibit 30.
    \17\ Though the data on the spreadsheet came from CVS, DI Orr 
testified that it was her understanding that the data was sent via 
email to another DI who burned the data onto a CD. Tr. 348. Although 
the DEA had only requested the dispensing records for only oxycodone 
30 mg, the spreadsheet provided by CVS also contained other 
controlled substances, such as Oxycontin 80 mg and Oxycontin 20 mg. 
Tr. 350.
---------------------------------------------------------------------------

    Sometime after receiving the CVS Dispensing Data, DI Orr ``was 
sent an email from [Group Supervisor] Carter [containing] about 22 
different spreadsheets for different doctors that [were] provided to 
her from CVS.'' Tr. 365. These individual spreadsheets showed the 
controlled substances dispensed pursuant to prescriptions of certain 
practitioners. Id. DI Orr was asked ``to analyze [all the 
spreadsheets], look through [them], and create several spreadsheets 
for different physicians and addresses, and then sort it by drugs.'' 
Tr. 350. In this regard, Orr explained that she utilized specialized 
training she had received at DEA regarding the handling and 
preparing of spreadsheets. Tr. 535.
    Though the spreadsheets purport to reflect the dispensing 
records of the Respondents, DI Orr conceded that the ``actual'' \18\ 
dispensing records are the hard copies of the prescriptions, and 
that the overall reliability of the spreadsheets provided was 
dependent on the reliability of the pharmacy technicians entering 
the dispensing data. Tr. 542-43. To ensure the accuracy of the data 
provided, DI Orr compared the hard copies of ``more than one-
hundred'' prescriptions to the corresponding data reflected in the 
CVS Dispensing Data. Tr. 537-38. Of the hard copy prescriptions she 
checked against the CVS Dispensing Data, DI Orr identified 
``several'' errors. Tr. 544. When queried why she would check only 
one-hundred prescriptions in a document with approximately 25,000 
records of dispensing, DI Orr testified that she did not have time 
to perform a more thorough analysis. Tr. 555.
---------------------------------------------------------------------------

    \18\ DI Orr explained that ``they typically have three kind[s of 
dispensing records], the hard copies, the electronic copy, and then 
also the binder that has the other stickers.'' Tr. 544. DI Orr 
``found missing prescriptions,'' where a copy or record would not 
have a corresponding entry in another location. Tr. 544.
---------------------------------------------------------------------------

    A spreadsheet of common addresses (Common Address Spreadsheet) 
was created by DI Orr by culling address information from the CVS 
Dispensing Data Tr. 358-60; Gov't Ex. 22. Orr explained that the 
filtering process utilized to create the Common Address Spreadsheet 
involved a manual survey of only approximately one-fourth of the CVS 
Dispensing Data. Tr. 360-61. From this manual view, DI Orr 
identified dispensing events for ``multiple people living at the 
[same] address, the same household * * *.'' Tr. 362. The dispensing 
events for common addresses were then populated into the Common 
Address Spreadsheet, which was received into evidence. Gov't Ex. 22.
    DI Orr also created a spreadsheet from the CVS Dispensing Data 
wherein she culled out oxycodone 30 mg dispensing events grouped by 
thirteen individual Florida prescribers. Tr. 367-68. From the 
prescriber-culled data, DI Orr created ``pivot tables'' \19\ for 
each practitioner, showing the sum of oxycodone 30 mg prescribing, 
and in some cases the sum of Roxicodone 30 mg prescribing. See Tr. 
368. The combined by-prescriber data and pivot tables (By-Prescriber 
Chart A) were received into evidence. Gov't Ex. 57.
---------------------------------------------------------------------------

    \19\ A pivot table is ``a tool through Excel that ``breaks * * * 
up [data] more specifically.'' Tr. 368.
---------------------------------------------------------------------------

    The By-Prescriber Spreadsheet was, in turn, used by DI Orr to 
create a pivot table setting forth the total oxycodone 30 mg 
dispensed by the Respondent pharmacies pursuant to prescriptions 
written by the thirteen South Florida doctors organized by patients 
residing in specific cities and states (Prescriber & Patient Address 
Chart). Tr. 381; Gov't Ex. 58. When creating the categories for the 
locations, DI Orr aggregated addresses she believed to be the same, 
explaining that ``[a]n example might be Altamonte Springs and they 
might put ALT Springs but you know it was Altamonte Springs.'' Tr. 
383. As with the By-Prescriber Spreadsheet,\20\ the source of the 
data used in Prescriber & Patient Address Chart was the individual 
prescriber spreadsheets provided to the DEA by CVS. Tr. 384.
---------------------------------------------------------------------------

    \20\ Gov't Ex. 57.
---------------------------------------------------------------------------

    Orr also created a document which combined spreadsheets and 
pivot tables to demonstrate the dispensing of oxycodone 30 mgs by 
Respondent pharmacies pursuant to prescriptions written by four 
specific South Florida practitioners (By-Prescriber Chart B). Tr. 
439-40; Gov't Ex. 59. To create By-Prescriber Chart B, DI Orr 
extracted from the CVS Dispensing Data, dispensing events for 
oxycodone 30 mg, Roxycodone 30 mg, and Oxycontin 30 dispensed 
pursuant to prescriptions written by the four South Florida doctors. 
Tr. 440, 445. The extracted data was then separated into four 
spreadsheets, with each spreadsheet representing the oxycodone 30 
mg, Roxycodone 30 mg, and Oxycontin 30 mg dispensing for a 
particular doctor. Tr. 440-41. DI Orr then created pivot tables for 
each spreadsheet representing the total amount of oxycodone 30 mg 
dispensed, and the total amount of oxycodone 30 mg dispensed to 
specific United States cities. Tr. 439-444.
    In response to a request from DEA, CVS generated and provided to 
the DEA a spreadsheet that culled out controlled substance 
dispensing events by the Respondent pharmacies pursuant to 
prescriptions written by Dr. Ronald Lynch.\21\ Gov't Ex. 32. Orr 
removed the header from the CVS spreadsheet, but otherwise did 
nothing to change the document, which was received into evidence 
(Lynch Dispensing Chart). Tr. 454; Gov't Ex. 32.
---------------------------------------------------------------------------

    \21\ The information was provided to another DI and forwarded to 
Orr. Tr. 453.
---------------------------------------------------------------------------

    Orr generated two pivot tables from the Lynch Dispensing Chart: 
one table showing the total amount of specific controlled substances 
dispensed by the Respondent pharmacies pursuant to prescriptions 
written by Dr. Lynch (Lynch By-Medication Table) and the other table 
showing the total amount of controlled substances prescribed by Dr. 
Lynch and dispensed by Respondent pharmacies to patients, organized 
by the address cities of the patients (Lynch By-Patient City Table). 
Tr. 457-58; Gov't Ex. 33 at 1-3.
    DI Orr explained that she was aware that Dr. Lynch's DEA 
registration was revoked on January 18, 2011,\22\ and that she 
searched the Lynch Dispensing Chart \23\ for controlled substance 
dispensing events occurring after the January 18, 2011, revocation 
date. Tr. 460-61. DI Orr found three instances where Schedule II 
controlled substances were dispensed for a patient named T.N. after 
January 18, 2011, and obtained the corresponding hard copies and 
dispensing labels. Tr. 461-62; Gov't Ex 33 at 4-9; Gov't Ex. 32 at 
9. The three prescriptions were written for T.N. for sixty tablets 
of 10/650 mg Percocet. For all three prescriptions, the prescribing 
physician is listed as Ronald Lynch, M.D., of Lake Mary, Florida. 
Gov't Ex. 33, at 4, 6, 8. The earliest of these bares the issuance 
date of February 2, 2011. Gov't Ex. 33, at 4. The corresponding 
dispensing label for that prescription reflects that on February 2, 
2011, at 7:04 p.m., sixty tablets of 10-650 mg Endocet were 
dispensed for patient T.N. Id. at 5. Another prescription written by 
Dr. Lynch for T.N. is dated February 25, 2011. Gov't Ex. 33, at 6. 
The corresponding dispensing label indicates that on February 25, 
2011, at 2:02 p.m., sixty tablets of oxycodone-Acetaminophen 10-650 
were dispensed. Id. at 7. A third prescription is dated March 24, 
2011. Id. at 8. The

[[Page 62328]]

corresponding dispensing label for this prescription reflects that 
on March 24, 2011, at 12:42 p.m., sixty tablets of oxycodone-
Acetaminophen 10-650 were dispensed. Id. at 9. All three controlled 
substance dispensing events occurred after Dr. Lynch's January 18, 
2011, revocation date, when Lynch had no authority to prescribe 
controlled substances. All three dispensing events occurred at 
Respondent 219. Gov't Ex. 32 at 9. Further, the Lynch Dispensing 
Chart reflects that Respondent 219 dispensed controlled substances 
pursuant to prescriptions written by Dr. Lynch no fewer than twenty-
seven (27) times after Dr. Lynch's COR was revoked. Gov't Ex. 32. Of 
these twenty-seven prescriptions, seven were dispensed later than 
June of 2011. Gov't Ex. 32, at 5, 7. Similarly, Respondent 5195 
filled four prescriptions after the January 18, 2011, revocation, 
one of which fell in June. Gov't Ex. 32, at 12. Thus, the Respondent 
pharmacies were dispensing controlled substances on Dr. Lynch's 
prescriptions approximately six months after he had lost his 
authority to prescribe them.
---------------------------------------------------------------------------

    \22\ As set forth above, the record evidence establishes that on 
December 3, 2010, DEA issued a revocation order, effective January 
18, 2011. Gov't Ex. 31 at 3-12; Ronald Lynch M.D., 75 FR 78745 
(2010). In the order revoking the COR, the Agency found that Dr. 
Lynch had engaged in the unauthorized practice of medicine and had 
issued prescriptions which ``lacked a legitimate medical purpose.'' 
Lynch, 75 FR at 78753.
    \23\ DI Orr limited her search to Schedule II controlled 
substances because she ``had only requested Schedule II hard copy 
prescriptions * * * so anything else I wasn't able to verify hard 
copies.'' Tr. 462.
---------------------------------------------------------------------------

    DI Orr also queried the CVS Dispensing Data for prescriptions 
for controlled substances dispensed pursuant to prescriptions 
written by Dr. Anthony Wicks, a physician with offices located in 
Winter Springs, Florida. These prescriptions were targeted because 
Orr was aware that Dr. Wicks' DEA COR expired on May 11, 2011. Tr. 
468. DI Orr created a chart setting forth oxycodone 30 mg dispensing 
events from Respondent 219 (Wicks 219 Dispensing Chart) and 
Respondent 5195 (Wicks 5195 Dispensing Chart), as well as a chart 
reflecting combined dispensing events from both pharmacies regarding 
those prescriptions from Dr. Wicks. (Wicks Combined Dispensing 
Chart). Tr. 464-70; Gov't Exs. 10, 27 at 1-8, 28 at 1-7. DI Orr also 
compared the Wicks dispensing events reflected in the two charts 
with hard-copy prescription scrips of the medications dispensed at 
those pharmacies. Gov't Exs. 27 at 9-58, 28 at 8-37. An analysis of 
the data revealed thirty-eight (38) dispensing events where 
Respondent 219 dispensed controlled substances for Wicks 
prescriptions after his DEA COR expired on May 31, 2011. Tr. 468. 
Respondent 5195 dispensed controlled substances seventeen (17) times 
pursuant to Wicks' prescriptions after Wicks' COR expired. Tr. 469. 
Thus, the two Respondent pharmacies filled a total of fifty-five 
(55) oxycodone prescriptions written by Dr. Wicks after his COR was 
expired and he was without authority to write controlled substance 
prescriptions. Respondent 5195 filled Dr. Wicks' oxycodone 
prescriptions as late as July 14, 2011, and Respondent 219 dispensed 
Wicks' oxycodone prescriptions as late as July 15, 2011. Gov't Ex. 
10 at 6.
    The record also establishes that even prior to the expiration of 
his COR, Dr. Wicks had a COR-registered address, not in Florida, but 
in California. Gov't Ex. 26; Tr. 580. Notwithstanding that reality, 
and the legal requirement to have a COR-registered address in the 
state where a prescriber is prescribing,\24\ from December 17, 2010, 
through May 31, 2011, Respondent 219 dispensed 117 controlled 
substance prescriptions on prescriptions issued by Wicks. Gov't Ex. 
27. Respondent 5195 dispensed 125 controlled substance prescriptions 
on Wicks' California-address COR during the same period. Gov't Ex. 
28.
---------------------------------------------------------------------------

    \24\ 21 CFR 1301.12.
---------------------------------------------------------------------------

    At DEA's request, CVS supplied dispensing data on an Orlando, 
Florida prescribing physician, named Dr. Riyaz Jummani (Jumamani 
Dispensing Chart).\25\ Gov't Ex. 35; Tr. 472-74. Using the data in 
the Jummani Dispensing Chart, DI Orr created two pivot tables: a 
table showing the total amount of specific types of drugs dispensed 
by the Respondent Pharmacies pursuant to prescriptions written by 
Dr. Jummanni (Jummani By-Medication Table); \26\ and a table 
organizing Dr. Jummani dispensing events at the Respondent 
pharmacies by patient address city/state (Jummani By-Patient 
Location Table). Gov't Ex. 36 at 2-4.\27\
---------------------------------------------------------------------------

    \25\ This data was provided to another DI and forwarded to Orr. 
Tr. 473.
    \26\ Gov't Ex. 36 at 1.
    \27\ On cross-examination DI Orr admitted that two pages that 
the Government had initially included as part of Government Exhibit 
36 actually depicted prescription scrips from a different prescriber 
which were not problematic. Tr. 476. The Government withdrew these 
two pages and the Respondents offered it to show a lack of 
Government infallibility, and handwritten markings on the scrip to 
establish that their pharmacists were conducting some measure of due 
diligence in an effort to resolve potential red flags. Tr. 549; 
Resp't Ex. 94.
---------------------------------------------------------------------------

    At DEA's request, CVS supplied dispensing data from the 
Respondent pharmacies on a Palm Coast, Florida, prescriber named Dr. 
Ralph Chambers (Chambers Dispensing Chart).\28\ Gov't Ex. 44; Tr. 
478-79. Using the data from the Chambers Dispensing Chart, DI Orr 
created two pivot tables. The first table shows ``the [types of] 
drugs that [Dr. Chambers] prescribed that were dispensed at CVS 5195 
and 219'' (Chambers By-Medication Table). Gov't Ex. 45 at 1. The 
second table shows ``Dr. Chambers' dispensing records per city and 
state and quantity'' (Chambers By-Patient Location Table). Gov't Ex. 
45 at 2-3; Tr. 481.
---------------------------------------------------------------------------

    \28\ This data was provided to another DI and forwarded to Orr. 
Tr. 478-79.
---------------------------------------------------------------------------

    At DEA's request, CVS supplied dispensing data from the 
Respondent pharmacies on a Winter Park, Florida, prescriber named 
Dr. Michael Moyer (Moyer Dispensing Chart). Gov't Ex. 48. The 
spreadsheet was sent by CVS to Investigator Carter, who then 
forwarded it to DI Orr. Tr. 482-84. Using data from the Moyer 
Dispensing Chart, DI Orr created a pivot table showing total amount 
of specific types of drugs dispensed by the Respondent pharmacies 
pursuant to prescriptions written by Dr. Moyer (Moyer By-Medication 
Table).\29\ Gov't Ex. 49; Tr. 482.
---------------------------------------------------------------------------

    \29\ This data was provided to another DI and forwarded to Orr. 
Tr. 482-83.
---------------------------------------------------------------------------

    At DEA's request, CVS supplied dispensing data from the 
Respondent pharmacies on a Longwood, Florida, prescriber named Dr. 
James Pizza (Pizza Dispensing Chart).\30\ Gov't Ex. 55; Tr. 485-88. 
From the Pizza Dispensing Chart, DI Orr generated a pivot table and 
pie chart setting forth aggregate numbers of three oxycodone 
medications (oxycodone HCL 15 MG, oxycodone HCL 40 mg, Roxicodone 15 
mg or Roxicodone 30 mg) reflected in dispensing events from the 
Respondent pharmacies from July 19, 2010, through October 17, 2011 
(Pizza Pie Chart and Table). Gov't Ex. 56 at 1. Orr also used the 
Pizza Dispensing Chart to generate a table organizing Dr. Pizza 
dispensing events at the Respondent pharmacies by patient address 
city/state (Pizza By-Patient Location Table). Gov't Ex. 56 at 2-4; 
Tr. 487-89.\31\
---------------------------------------------------------------------------

    \30\ This data was provided to another DI and forwarded to Orr. 
Tr. 485.
    \31\ The dispensing records contained in the CVS Dispensing Data 
only went through October 16, 2011. Tr. 502. At some point after the 
October 18, 2011, AIW, CVS provided the dispensing data for October 
17, 2011, to a DI who forwarded the data to DI Orr. Tr. 502-03.
---------------------------------------------------------------------------

    The testimony presented by DI Orr was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.
    The Government also presented the testimony of GS Kyle Wright. 
Tr. 309. GS Wright testified that he began his employment with the 
DEA in 1995, and served as a DI, and held various supervisory 
positions in the agency prior to his current assignment as the Unit 
Chief of DEA's Targeting and Analysis section, also known as ARCOS. 
Tr. 309-11.
    GS Wright explained that distributors and manufacturers of 
Schedule I through III controlled substances are required by law to 
report ``[a]ny transaction involving those controlled substances.'' 
Tr. 311. The ARCOS section compiles the reports of the distributors 
and manufacturers and uses this data to fulfill internal requests 
from the DEA and internal requests from organizations like the 
United Nations, newspapers, and State attorney general offices. Tr. 
312.
    In his capacity as Unit Chief of ARCOS, Mr. Wright was asked to 
provide an overhead map of the Respondents' pharmacy locations and 
``other pharmacies within the immediate area.'' Tr. 313. Mr. Wright 
testified that Government Exhibit 19, which shows the location of 
the Respondent Pharmacies, as well as other pharmacies in the area, 
was created using Google Maps. Tr. 313. Also using Google maps, Mr. 
Wright's unit produced a ``clean'' map of Central Florida. Tr. 316-
17. The clean map was admitted as Government Exhibit 63.
    Mr. Wright testified to the creation of Government Exhibit 62. 
Tr. 317-18. Government Exhibit 62 is a map which marks the city of 
Sanford, and ``the other townships or cities located in southern 
Florida, in which prescribing doctors resided or operated their 
offices at,\32\ but whose prescriptions were being filled in 
Sanford.'' Tr. 318. The map shows the ``relative distance'' between 
the cities of the prescribing physicians and the city of Sanford, 
where the Respondent pharmacies are located. Tr. 317-18. Government 
Exhibit 62 does not differentiate between the number of 
prescriptions filled, the dates prescriptions were filled, or 
whether the prescriptions

[[Page 62329]]

were filled at Respondent 219 or Respondent 5195. Tr. 329.
---------------------------------------------------------------------------

    \32\ The locations of the prescribing physicians were provided 
to Mr. Wright by another component of DEA. Tr. 319.
---------------------------------------------------------------------------

    ARCOS personnel also used Google Maps to create a map of central 
Florida, showing the CVS pharmacies located ``within the Orlando and 
Daytona Beach, Florida area.'' Tr. 321. The map of the other CVS 
pharmacies, which was admitted as Government Exhibit 17, contains a 
key which matches the marks on the map to specific CVS pharmacies. 
Tr. 321. ARCOS personnel obtained the locations of the CVS 
pharmacies marked in Government Exhibit 17 from the DEA's CSA 
database, which is a database of information provided to the DEA by 
DEA registrants. Tr. 322. Specifically, ARCOS personnel queried the 
CSA database for all pharmacies in Florida, and then selected 
pharmacies named ``CVS'' with specific zip codes. Tr. 322-24. The 
key associated with Government Exhibit 17 was downloaded directly 
from the CSA database. Tr. 324.
    Government Exhibit 64 was created by the ARCOS section to show 
the locations of the Respondent Pharmacies ``relative'' to the 
locations of other CVS pharmacies and to the ``practitioners * * * 
identified as having prescriptions filled at one of [the Respondent] 
pharmacies.'' Tr. 325-26. Put differently, Government Exhibit 64 
shows three classes of information: (1) the location of the 
Respondent Pharmacies (marked in green); (2) the location of other 
CVS pharmacies in the Sanford area (marked in blue); and (3) the 
location of practitioners whose prescriptions were filled at the 
Respondent Pharmacies (marked in red). Id. As with Government 
Exhibit 17, the locations of the CVS pharmacies were taken from the 
CSA database. Tr. 327. The locations of the prescribing 
practitioners were provided by DEA's Chief Counsel's Office. Tr. 
327. As with Government Exhibit 62, Government Exhibit 64 does not 
differentiate between the number of prescriptions filled, the dates 
prescriptions were filled, or whether the prescriptions were filled 
at Respondent 219 or Respondent 5195. Tr. 329-30.
    The testimony presented by GS Wright was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.
    The Government also presented the testimony of Heather Wehrle, a 
DI with the Nashville District Office. Tr. 163. DI Wehrle has been 
employed by the DEA for over eight years, and has attended various 
in-house DEA training evolutions. Tr. 164-65.
    DI Wehrle was a part of the group that served the AIW on 
Respondent 5195 on October 18, 2011. Tr. 165-66. According to 
Wehrle, she arrived at Respondent 5195 in support of the AIW at 
approximately 10:30 a.m., and two hours thereafter, conducted an 
interview with Marcus Badley, a pharmacy technician who was on duty. 
Tr. 166-68. At some point during the interview, Badley walked ``in 
the direction of the drive-through window'' and retrieved a 3\1/2\ 
by 5 inch handwritten piece of paper. Tr. 174-75. The paper had the 
words ``do not fill'' written across the top, and the names of four 
doctors written (in different handwriting) below.\33\ Tr. 174-75. 
The four names listed on the document were: (1) Dr. Pizza; (2) Dr. 
Moyer; (3) Dr. Mammone; and (4) Dr. Jummani. Tr. 174. Mr. Badley 
stated that the names on the list were doctors that the pharmacy 
``look[ed] out for that have been in trouble.'' Tr. 204. DI Wehrle 
did not learn when the list was created. Tr. 198. Also during the 
interview Mr. Badley stated that Respondent 5195 only would fill 
prescriptions in the ``Central Florida area.'' Tr. 175.
---------------------------------------------------------------------------

    \33\ DI Wehrle wrote the names of the doctors on the ``dot not 
fill'' list down in her notes; but she did not take the list itself. 
Tr. 196-97.
---------------------------------------------------------------------------

    DI Wehrle also interviewed five or six customers present at the 
store at the time of the AIW. Tr. 176. Two of the customers had 
prescriptions written by Dr. Pizza. Tr. 177-78. One customer had 
dilated pupils and difficulty concentrating. Tr. 177-78. However, 
there is no evidence that any of the customers DI Wehrle interviewed 
had prescriptions filled at Respondent 5195 that day. Tr. 178.
    Ten days after the AIW inspection, on October 28, 2011, DI 
Wehrle interviewed a Respondent 5195 pharmacist named Mark 
Mascitelli. Tr. 178-80. The interview was conducted at the DEA 
Office in Orlando, and was attended by DEA GS Ruth Carter, and CVS 
attorneys John Gilbert, Esq. and Meredith Young, Esq. Tr. 178-79. 
Pharmacist Mascitelli stated that he had been employed by CVS since 
of August of 2009, and that he had been employed as a full time 
employee at Respondent 5195 since May of 2010. Tr. 180.
    Pharmacist Mascitelli told DI Wehrle that, although the pharmacy 
opens at 8:00 a.m., customers ``start showing up early.'' Tr. 180-
81. He also told the DEA investigators that ``he could fill 
oxycodone prescriptions all day long if he had the manpower and the 
inventory.'' Tr. 181. However, Mascitelli stated that ``whoever 
opens in the morning * * * has to set limits on how many oxycodone 
prescriptions are filled for the day due to inventory. Tr. 182. 
Pharmacist Mascitelli said that Respondent 5195 would not fill 
prescriptions for Dr. Pizza, Dr. Mammone, Dr. Chambers or Dr. 
Scolero because of actions taken against the doctors' licenses. Tr. 
183. DI Wehrle did not inquire what steps were taken when a 
prescription from one of these doctors was presented; or when 
Mascitelli developed his concerns about the physicians. Tr. 199.
    Mr. Mascitelli explained that approximately two weeks prior to 
the serving of the AIW, CVS supervisor Jennifer Lalani told him and 
Jessica Merrill--the Pharmacist in Charge (``PIC'') at Respondent 
5195--that they ``were to identify more filters \34\ to put in place 
for oxycodone prescriptions.'' Tr. 185. In response to this 
directive, Pharmacist Mascitelli and PIC Merrill, ``decided [to] no 
longer accept new customers of oxycodone prescriptions * * * that 
they needed to look for signs of abuse or impairment [and that t]hey 
needed to do more verifications on the customers.'' Tr. 186. The 
pharmacy also decided to limit filling prescriptions for only those 
patients within the Deland to Orlando, Florida, area. Tr. 201.
---------------------------------------------------------------------------

    \34\ DI Wehrle testified that she understood ``filters'' to mean 
procedures ``[t]o catch bad stuff, bad things going through the 
pharmacy.'' Tr. 186.
---------------------------------------------------------------------------

    That same day, DI Wehrle conducted an interview with Marie 
Morrell, the lead pharmacy technician at Respondent 5195. Tr. 186-
87. Like the interview with Pharmacist Mascitelli, GS Carter, and 
CVS attorneys John Gilbert Esq. and Meredith Young, Esq. were also 
present during the discussion. Tr. 187. Ms. Morrell testified it was 
part of her responsibility to receive prescription scrips from 
Respondent 5195's pharmacy customers. Tr. 187. All Schedule II 
controlled substance scrips would be taken directly to the 
pharmacist. Tr. 187-88. If the pharmacist determined that the 
medication would be dispensed, ``then the customer [was] told * * * 
that it would be five to six hours before their prescription [was] 
filled.'' \35\ Tr. 188. Based ``on inventory and man hours'' limits 
would be placed on the number of oxycodone prescriptions which could 
be filled for one day.'' Tr. 188-89. The limit would be satisfied 
``on a first-come, first-served basis.'' Tr. 189. According to 
Morrell, the limit was sometimes reached between 10:00 a.m. and 
noon; but the limit could be reached as early as 8:30 a.m. (i.e., 30 
minutes after the pharmacy opens). Tr. 189. In addition to the 
foregoing duties, Ms. Morrell also engaged in ``customer 
verifications.'' Tr. 187-88. In this regard, Morrell related that:
---------------------------------------------------------------------------

    \35\ If the prescription was for a Schedule III through Schedule 
V drug, then Ms. Morrell would prepare the bottles and labels for 
the prescription to be filled. Tr. 187-88.

``she normally * * * w[ould] call the doctor's office [and] verif[y] 
the diagnosis code if there is one on the prescription. If there is 
not one, she w[ould] get one from the doctor and put it on there. If 
the customer has seen multiple doctors, she may call [the] other 
doctors' offices * * * She w[ould also] establish from the doctor 
---------------------------------------------------------------------------
how long that person has been a patient of the doctor's.''

Tr. 188. As to the behavior of the customers, Morrell told Wehrle 
that she looked ``for any signs of rude behavior, rude language, 
inconsistencies in stories [and] hat and sunglasses.'' Tr. 190.
    On November 3, 2011, DI Wehrle interviewed a CVS pharmacist 
named Randy Dwight. Tr. 190. Mr. Dwight told DI Wehrle that he was a 
``floater pharmacist'' for CVS and that he covered twenty stores in 
two districts. Tr. 191. He worked at Respondent 5195 once, and 
worked at Respondent 219 ``every other weekend.'' Tr. 191-92. Mr. 
Dwight explained that these two pharmacies did not fill controlled 
substances on nights or weekends ``because they cannot contact the 
doctor's office.'' Tr. 191-92.
    The testimony presented by DI Wehrle was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.
    The Government also presented the testimony of GS Ruth Carter. 
Tr. 213-14. GS Carter, a 23-year veteran of DEA, currently serves as 
the Group Supervisor for DEA's Seattle Field Division. Tr. 214.
    Carter testified that she became involved with the investigation 
into the Respondent Pharmacies in October of 2011, when she was 
assigned as the case agent in a case involving Cardinal Health, a 
distributor of controlled substances to CVS. Tr. 216. In connection 
with the Cardinal Health investigation, GS Carter reviewed the

[[Page 62330]]

controlled substance ordering data for CVS stores supplied by 
Cardinal. Tr. 217. Carter testified that, while reviewing the data, 
she became ``very concern[ed]'' about the quantity of oxycodone 
ordered by the Respondent Pharmacies. Tr. 217. It was based on 
Carter's discomfiture that DEA prepared administrative inspection 
warrants for the Respondent Pharmacies. Tr. 217. The AIWs were 
executed at both Respondent pharmacies on October 18, 2011, and GS 
Carter participated on scene at Respondent 5195. Tr. 218.
    During the execution of the AIW at Respondent 5195, GS Carter 
interviewed employees and examined records. Tr. 218. GS Carter 
testified that she arrived at Respondent 5195 sometime between 10:00 
a.m. and 10:30 a.m. Tr. 219. Upon arriving at Respondent 5195, a 
special agent presented the AIW to PIC Jessica Merrill. Tr. 219. 
While the AIW was presented to PIC Merill, GS Carter observed two 
individuals sitting in the waiting area next to the pharmacy 
counter. Tr. 219. One of the individuals volunteered that he had 
driven ``far'' to get his prescription for oxycodone filled, but 
that he had been told by pharmacy technician Arlene Picccerilli that 
the store was out of stock. Tr. 220-21.
    GS Carter then interviewed Ms. Piccerilli, who said that she had 
been employed at Respondent 5195 for approximately thirty months. 
Tr. 222. She also admitted that the pharmacy was not out of 
oxycodone. Tr. 224-25. When GS Carter inquired why Ms. Piccerrilli 
had just told a customer that the store was out of oxycodone,\36\ 
Piccerilli replied that ``the pharmacist on duty sets a limit of how 
many oxycodone prescriptions can be filled each day.'' Tr. 223. On 
October 18, 2011, Ms. Piccerilli had been ``told how many 
prescriptions she could accept to be filled that day for the 
oxycodone and the other prescriptions. The combination [of] the 
[a]lprazolam and the Soma, those prescriptions.'' Tr. 223-24. Ms. 
Piccerilli explained to Carter that, on that day, the limit had been 
reached by the time the customers in the waiting area had presented 
their prescriptions. Tr. 224.
---------------------------------------------------------------------------

    \36\ GS Carter knew that this was untrue because she had 
observed DEA agents counting oxycodone tablets at the time of the 
AIW and knew that the store was not out of stock. Tr. 221-22.
---------------------------------------------------------------------------

    GS Carter also asked Ms. Piccerilli to show her the 
prescriptions that had been accepted for filling for that day. Tr. 
226. When Ms. Piccerilli showed GS Carter the prescriptions, GS 
Carter asked her ``What is your opinion as a pharmacy technician of 
these prescriptions? They're all for the same drugs, pretty much the 
same amounts.'' Tr. 226. Ms. Piccerilli responded that ``as a 
pharmacy, we cannot judge whether a prescription is valid. That's up 
for the doctor to decide.'' Tr. 226. In response to a question about 
whether the pharmacy filled prescriptions for out-of-state 
customers, Piccerilli stated that when she had started at Respondent 
5195 they had ``accepted prescriptions from other states, but that 
sometime in the last year or so, the policy had changed, and now 
they only accepted prescriptions for oxycodone for local customers 
and local doctors.'' Tr. 226. Ms. Piccerilli explained that 
``local'' meant ``somewhere around Daytona Beach or Deltona Beach to 
Orlando.'' Tr. 226-27. It was GS Carter's recollection that Ms. 
Piccerilli was cooperative throughout their encounter. Tr. 225.
    Approximately an hour after her conversation with Ms. 
Piccerrili, GS Carter conversed with PIC Merrill behind the shelves 
of the pharmacy. Tr. 227. During this conversation, DI Wehrle and 
another DI were ``in and out.'' Tr. 227-28. It was Carter's 
impression that Merrill was cooperative throughout the conversation. 
Tr. 228. In her conversation with GS Carter, PIC Merrill made the 
following representations:

    (1) She was hired by CVS in 2009, and a few months later she was 
promoted to the Respondent 5195 PIC position. Tr. 228.
    (2) She could fill ``these oxycodone prescriptions * * * all day 
long, but that rather than doing that,'' she, or the pharmacist on 
duty, sets the limit. The daily limit is determined based on ``the 
inventory that they had on hand that morning, and also the amount of 
staff that they had on hand because * * * it was very time consuming 
* * * to call the doctors' offices and verify each prescription.'' 
Tr. 229-30. If a prescription could not be verified, it would not be 
filled. Tr. 279.
    (3) When the limit fixed by the PIC was reached, subsequent 
customers were told that the pharmacy is out of stock.
    (4) The customers were aware that the limit system is first-
come-first-served, so customers would start to ``stagger'' in at 
8:02 a.m. Tr. 230-231.
    (5) If a prescription for oxycodone, alprazolam and a muscle 
relaxant was accepted for filling, the customer would be told to 
return in five hours. Tr. 230, 232.
    (6) When setting the daily limit of oxycodone prescriptions, she 
would make sure to keep some oxycodone on hand to fill prescriptions 
for her ``real pain patients.'' Tr. 231, 232. She would dispense the 
prescriptions to customers she classified as other than ``real pain 
patients'' because ``if she or her staff was able to confirm that a 
prescription had been issued by a physician who was licensed by the 
state, and had a DEA license, then as a pharmacy, they should be 
able to trust that prescription * * * is legitimate.'' Tr. 234.
    (7) Before filling prescriptions for oxycodone, the employees at 
Respondent 5195 would conduct ``very stringent due diligence.'' The 
steps taken to verify a prescription were: (i) obtain a Florida ID 
or a Florida driver's license and record the number on the front of 
the prescription; (ii) call the prescribing physician to confirm the 
physician had written the prescription, whether any additional 
prescriptions had been issued and whether a urinalysis test had been 
performed; (iii) ``sometimes'' call other pharmacies in the area to 
determine whether the patient was engaging in doctor shopping; (iv) 
``sometimes'' call a prior practitioner, if the patient's profile 
\37\ showed that a prior practitioner had prescribed ``anything'' to 
the patient; and (v) confirm the diagnosis code, if one was absent; 
(vi) ``sometimes'' check with the state licensing boards regarding 
the status of the prescribing physician's license; and (vii) use 
their computer system to verify the prescriber's DEA registration. 
Tr. 235-36.
---------------------------------------------------------------------------

    \37\ GS Carter explained that ``at pharmacies that * * * use[] 
electronic systems, there usually is a profile [that] will have the 
patient name and address, and it will show the prior prescriptions 
that they have had filled at that pharmacy. And in the case of 
chains, most of them show the prescriptions filled at all the other 
chains as well.'' Tr. 237.

    When looking through the prescriptions which the store had 
accepted for filling, GS Carter noticed that ``generally'' the 
prescriptions accepted for filling would be an oxycodone 30 mg 
prescription for 180 tablets, paired with a prescription for 
alprazolam and a prescription for Ibuprofen or carisoprodol.\38\ Tr. 
237-38. GS Carter also observed that for a particular physician, the 
prescriptions ``appeared to be all for the same quantity and the 
same combination of drugs.'' Tr. 239. In this regard, PIC Merrill 
admitted to GS Carter that she saw the patterns of prescribing in 
the three drugs, that she noticed that ``a lot'' of the customers 
with the cocktail were paying for their prescriptions with cash \39\ 
and that ``most of them'' were unemployed. Tr. 238. GS Carter 
testified that when she suggested to Merrill that the customers may 
be selling their pills, Merrill simply replied ``I know.'' Tr. 238.
---------------------------------------------------------------------------

    \38\ ``The generic name of a medicinal substance used as a 
muscle relaxant.'' 1-C Attorneys' Dictionary of Medicine C-20783.
    \39\ GS Carter testified that, while cash would be paid at the 
time of pickup, and thus after a determination of validity had been 
made, she felt that CVS's computer system would have notified the 
pharmacist that previous prescriptions had been paid for with cash. 
Tr. 303-04.
---------------------------------------------------------------------------

    GS Carter also observed that ``some'' of the prescriptions which 
had been accepted for filling were for customers with IDs from other 
states but with prescriptions doctors with offices in Florida, far 
away from Sanford. Tr. 240. Carter recalled that this struck her as 
odd because ``my experience has been that normally a patient will 
either fill a prescription by the doctor's office or by their 
residence. They don't usually stop somewhere in between.'' Tr. 240. 
PIC Merrill had no explanation for the distances traveled by the 
patients to fill their prescriptions. Tr. 240.
    Carter testified that following her interactions with PIC 
Merrill and the other members of the Respondent 5195 pharmacy team, 
she concluded that

the general attitude was that [the Respondent 5195 pharmacy staff 
are] not going to question whether the prescription is valid. If the 
doctor says it's valid, and they do the other verifications, then 
they fill it. It doesn't matter if they all come in from the same 
doctor, the same way, or if they suspect that the prescription is 
not valid. They are going to fill it because the doctor said it was 
valid.

Tr. 299-300.

    As GS Carter was preparing to leave the store, PIC Merrill asked 
her whether she should fill the prescriptions which had already been 
accepted that day. Tr. 242-43. When GS Carter asked Merrill whether 
she felt that the scrips should be filled, Merrill

[[Page 62331]]

responded that she felt she should fill them because they had been 
filled before. Tr. 242-43. When GS Carter pressed PIC Merrill on 
this issue, Ms. Lalani, who was also present, stated that none of 
the prescriptions would be filled. Tr. 243.
    On October 28, 2011, GS Carter interviewed Paras Priyadarshi--
the PIC at Respondent 219--at the DEA facility in Westland, Florida. 
Tr. 244-45. Also present were GS Carter, DI Wehrle, John Gilbert, 
Esq., and Meredith Young, Esq. Tr. 244-45. It was Carter's 
impression that PIC Priyadarshi appeared cooperative during the 
interview. Tr. 245. During their conversation, PIC Priyadarshi made 
the following statements:
    (1) He had been employed by CVS for approximately thirteen 
years, and had been the PIC at Respondent 219 for approximately five 
years. Tr. 246.
    (2) For oxycodone, alprazolam, carisoprodol prescriptions,\40\ 
Respondent 219 would take the following verification steps: (i) 
examine the prescriptions for alterations; (ii) if there was no 
diagnosis code on a prescription, then the store would call the 
physician to verify the prescription. Tr. 246.
---------------------------------------------------------------------------

    \40\ DEA inquired about these three drugs ``[b]ecause in looking 
at the prescribing records that we had obtained from CVS, we * * * 
observe[d] that the CVS 219 was basically filling prescriptions for 
the same type of cocktail prescribing pattern that CVS 5195 had been 
dispensing.'' Tr. 247.
---------------------------------------------------------------------------

    (3) If a prescription was presented with a diagnosis code by a 
patient who had filled at Respondent 219 before, then the store 
would not call the physician. Tr. 246. Similarly, if a person came 
in with a patient who had filled at Respondent 219 before, he would 
not feel the need to verify the prescription. Tr. 251.
    (4) Sometime in the previous year, CVS corporate had put out 
guidelines that the stores should only fill prescriptions for 
``local'' doctors and customers, and that the stores should obtain 
ID for all controlled substance prescriptions. Tr. 246-47. In 
response to this directive, Respondent 219 had stopped filling out-
of-state prescriptions sometimes toward the end of 2010. Tr. 270.
    (5) He found nothing odd about the fact that Respondent 219 was 
filling a like combination of three controlled substances 
(oxycodone, alprazolam, and carisoprodol), for a high number of 
prescribing physicians. Tr. 247-48.
    (6) For Schedule II controlled substances Respondent 219 
dispensed more oxycodone than any other controlled substance. For 
Schedule III controlled substances Respondent 219 dispensed more 
hydrocodone than any other substance. For Schedule IVs, Respondent 
219 dispensed more alprazolam than any other controlled substance. 
And for non-controlled substances, Respondent 219 dispensed more 
Soma or carisoprodol than any other substance. Tr. 248-49.
    (7) The oxycodone prescriptions would only be filled by 
Respondent 219 during the day shift on weekdays. Tr. 249. This was 
so the store could verify the prescriptions. Tr. 277.
    (8) He found nothing odd about a high number of like-ailment 
diagnosis codes \41\ emanating from individual prescribers. Tr. 249-
50.
---------------------------------------------------------------------------

    \41\ DEA had observed ``that a lot of the prescriptions [had] 
the same diagnosis code.'' GS Carter specifically mentioned the 
``L4, L5'' code. Tr. 250.
---------------------------------------------------------------------------

    (9) Customers would ask for ``the Ms'' or ``the blues,'' which 
were slang terms for the Mallinckrodt brand of oxycodone 30 mg 
tablets; but that he would not find such requests suspicious. Tr. 
250, 256, 264.
    (10) If a customer asked for a particular brand name, he would 
fill the prescription with that brand name if the pharmacy had the 
brand in stock. Tr. 263-64.
    (11) Respondent 219 would see ``a lot'' of oxycodone 
prescriptions from Drs. Zelkowitz, Mammone, Salinas, Hannah and 
Pizza. Tr. 251.
    (12) He would not fill prescriptions written by Dr. Pyko or Dr. 
Chambers because ``they had prior action taken against them.'' Tr. 
252, 933.

    That same day (October 28, 2011), GS Carter also conducted an 
interview with Respondent 219 Pharmacist Susan Masso. Tr. 253. As 
with the interview with Mr. Priyadarshi, the interview with Ms. 
Masso was conducted at the Westland field office, with DI Wehrle, 
attorneys Gilbert, and Young also present. Tr. 253. During the 
interview Ms. Masso made the following representations:

    (1) She had been employed by Respondent 219 since June of 2011, 
and that for the year before that she had worked as a floater 
pharmacist for CVS stores in Florida. Tr. 253. Before moving to 
Florida she had worked as a pharmacist in New York. Tr. 253-54.
    (2) Respondent 219 would verify oxycodone prescriptions by 
calling the physician's office and verifying the diagnosis codes. 
Tr. 254.
    (3) She did not know why a customer who lived in one location, 
would travel to a second location to see a physician, and then a 
third location to fill the prescription. Tr. 254.
    (4) Customers would request ``blues.'' Tr. 254.
    (5) She understood that oxycodone 30 mg was for pain, oxycodone 
15 mg was for ``breakthrough'' pain, alprazolam was for anxiety, and 
Soma was for muscle aches. Tr. 255.
    (6) She would see oxycodone prescriptions from Dr. Pizza and Dr. 
Mammone. Tr. 257.

    The testimony presented by GS Carter was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.
    The Government also presented the testimony of DI Gayle Lane. 
Tr. 108-09. GS Lane testified that she has been with DEA for thirty-
five years, and currently serves as a Group Supervisor at the Miami-
Weston field division. Tr. 108-09.
    GS Lane testified about two meetings she attended with CVS 
officials. She testified that she was present at the December 2010 
CVS Meeting with DI Langston and CVS representative. Tr. 110. Lane 
also recalled that investigators from the Florida Department of 
Health were also present, and that ``there was a discussion about 
the oxycodone situation in south Florida, especially in light of the 
new Florida state law that doctors were limited in their 
dispensing.'' Tr. 110-11.\42\
---------------------------------------------------------------------------

    \42\ The substance of this meeting has been set forth at length 
above.
---------------------------------------------------------------------------

    On August 12, 2011, GS Lane organized a second meeting between 
DEA and CVS officials (August 2011 CVS Meeting). Tr. 111-12. GS Lane 
explained that in 2005 the Weston DEA Office ``decided to interview 
all new pharmacy applicants and also treat all new pharmacy 
applications the same, and alert the chains. So when there was a new 
pharmacy opening up, I would contact them and they would come in for 
a discussion of the situation.'' Tr. 111. The August 2011 CVS 
Meeting was conducted in response to a CVS application for a new 
pharmacy in Hollywood, Florida. Tr. 133. The meeting was attended by 
DI Lenny Levin and twenty-four CVS pharmacy supervisors, including 
Jennifer Lalani.\43\ Tr. 112-13. The purpose of the meeting was to 
share indicators of diversion (i.e., red flags) ``to help [the 
stores] make decisions about whether a prescription was legitimate 
or not, and [to address] the continued high purchases of [the 
Respondent Pharmacies].'' Tr. 139.
---------------------------------------------------------------------------

    \43\ Ms. Lalani attended the meeting even though she was not 
required to because the Hollywood pharmacy was not within her area 
of supervision. Tr. 149-50.
---------------------------------------------------------------------------

    Prior to the meeting, GS Lane created an outline of discussion 
points.\44\ Tr. 113. During the meeting, she told the CVS 
representatives that ``in the environment that we're in it's not 
enough to call the doctor to verify and also to get a picture ID.'' 
Tr. 113. GS Lane also ``cautioned * * * to be leery of Florida ID 
cards because they are fairly easy to get.'' Tr. 113. As to the red 
flags \45\ of diversion, GS Lane mentioned: (1) ``doctors * * * 
writing * * * the same cocktail of drugs which was oxycodone 30 
milligrams, oxycodone 15 [mg], generic Xanax 2 [mg], Soma, and * * * 
lately * * * a noncontrolled substance like flexural,'' Tr. 114, 
116.; (2) doctors without a specialty in pain management writing 
``large quantities'' of prescriptions, Tr. 115; (3) doctors giving 
the same diagnosis code, ``usually L-4, L-5 lower back pain,'' Tr. 
115; (4) patients between the ages of 25 and 40 with cash, Tr. 117; 
and (5) evidence of doctor shopping,\46\ Tr. 118. GS Lane also 
identified ``sponsor'' arrangements in which ``people from * * * 
mostly * * * the mountain states * * * come down in buses and vans * 
* * and drive to the pharmacy'' to fill oxycodone prescriptions. Tr. 
117-18. Under this arrangement, the driver of the van would be

[[Page 62332]]

the ``sponsor.'' Tr. 118. The sponsor would normally be paid in 
drugs.\47\ Tr. 118.
---------------------------------------------------------------------------

    \44\ GS Lane did not provide a copy of the talking points to the 
CVS Representatives. Tr. 160.
    \45\ GS Lane's outline referred to ``suspicious activity.'' 
However, she testified that she would have used the term ``red 
flag'' during the meeting. Tr. 137.
    \46\ GS Lane explained ``doctor shopping'' as customers 
``spend[ing] their entire day trying to find doctors to write 
[oxycodone] prescriptions.'' Tr. 118. The customers will collect 
multiple prescriptions at once, and then fill the prescriptions at 
various pharmacies. Tr. 138. During the August 2011CVS Meeting, GS 
Lane told the CVS representatives that the State of Florida planned 
to implement a prescription drug monitoring program to combat doctor 
shopping. Tr. 118.
    \47\ GS Lane was not aware of any instances where either of the 
Respondent Pharmacies filled prescriptions for these ``sponsor'' 
groups. Tr. 139.
---------------------------------------------------------------------------

    A summary Lane prepared at the request of the DEA Chief 
Counsel's Office sometime after the October 2011 meeting did not 
contain references to the red flags that she described in her 
testimony. Tr. 154-156; Resp'ts Ex. 91. Also during her testimony, 
GS Lane explained that the red flags discussed at the meeting were 
``just a snapshot of what [was] going on at that time.'' Tr. 161. By 
Lane's account, it was her intention to provide red flag guidance to 
CVS ``in general terms.'' Tr. 161. No written list of red flags was 
provided to CVS by Lane at the meeting. Id.
    Distance traveled by the customer was also identified by GS Lane 
as a potential red flag of diversion. Tr. 119. In particular, Lane 
told the CVS officials that either the doctor or the patient should 
be ``nearby'' the pharmacy. Tr. 119. GS Lane suggested that, if a 
pharmacist has a question regarding the distance traveled by a 
customer, the pharmacist should ``ask why [the patient is] coming to 
my pharmacy.'' Tr. 119. GS Lane also demonstrated how to use the Web 
sites of the DEA and the Florida Department of Health. Tr. 119. In 
this regard, she showed the CVS representatives the proper login 
procedures \48\ for the DEA Web site, as well as the manner in which 
to check a doctor's DEA registration. Tr. 121. GS Lane testified 
that if a registration was invalid, the DEA Web site would show the 
registration to be ``expired.'' Tr. 122-23. ``If it's a valid DEA 
number, [the Web site] shows the expiration date, the DEA registered 
location, and the schedules.'' Tr. 124. She also informed the CVS 
representatives that the Web site was available free of charge and 
provided real time data.\49\ Tr. 120.
---------------------------------------------------------------------------

    \48\ To log into the DEA Web site, a registrant needs their 
registration and tax ID information associated with their DEA 
registration. Tr. 123.
    \49\ Though GS Lane recommended that CVS use the DEA Web site, 
she conceded that it was ``not uncommon'' for large chains to use 
third-party systems for checking registrations. Tr. 147.
---------------------------------------------------------------------------

    When demonstrating the Florida Department of Health Web site, GS 
Lane ``explained * * * you can click on [the] link to discipline and 
get all the details of what happened.'' Tr. 122. GS Lane testified 
that she believed the Department of Health Web site was updated in 
real time. Tr. 122.
    At the end of the August 12, 2011, meeting, GS Lane gave the CVS 
representatives a list of the top thirty-four CVS pharmacies that 
ordered oxycodone in 2010. Tr. 125-26. On the list, GS Lane 
specifically noted that Respondents 219 and 5195 ranked 
approximately 23rd and 37th, respectively, in the nation for 
oxycodone ordering in 2010. Tr. 127. GS Lane inquired what steps had 
been taken in the wake of the December meeting to address the 
concerns raised in that meeting regarding Respondents 219 and 5195. 
Tr. 128. However, since the stores were not within Lane's area of 
jurisdiction, she ``just asked some questions at the meeting, and 
that was it.'' Tr. 128. At the close of the October 2011 meeting, 
Ms. Lalani stated that she had looked into the stores and discovered 
that ``one was [a] 24 hour store, and they were both very busy 
stores off of the I-4 corridor.'' Tr. 130.
    The testimony presented by GS Lane was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.

The Government's Expert

    The Government presented the testimony of Professor Paul L. 
Doering, a retired professor of Pharmacy \50\ at the University of 
Florida's College of Pharmacy, who was accepted as an expert in the 
practice of pharmacy and the filling and dispensing of controlled 
substances, as it relates to the practice of pharmacy. Tr. 685. Over 
the course of his thirty-five-year career, Professor Doering has 
published many scholarly articles, and although his experience has 
been largely invested in research and academia, he also testified 
that he is a certified consulting pharmacist,\51\ has served as co-
director of the Florida Drug Information and Pharmacy Resource 
Center, and that he had some limited, part-time experience as a 
practicing pharmacist while in graduate school at the nascent stages 
of his career.\52\ Tr. 667, 673, 678, 682. He testified that he has 
presented expert testimony approximately seventy-five times; having 
been presented as a witness for the Government on every occasion. 
Tr. 794.
---------------------------------------------------------------------------

    \50\ Professor Doering testified that he is a ``distinguished 
service professor emeritus.'' Tr. 662.
    \51\ Professor Doering testified that he has served as a 
consultant pharmacist at a penal institution. Tr. 684.
    \52\ Professor Doering's CV was received into the record without 
objection. Gov't Ex. 6; Tr. 666.
---------------------------------------------------------------------------

    Professor Doering testified that, when presented with a 
prescription for a medication, a pharmacist's

[p]rofessional responsibilities include reviewing that prescription 
to see whether or not the doses are appropriate for that patient, 
looking at other medications that individual may be taking to see 
whether there's interactions. If there are problems, phoning the 
prescriber or other individual to resolve those problems, [] in a 
nutshell, certifying that that prescription is ready for transfer 
from the possession of the pharmacist to the ultimate end user [and 
counseling] the ultimate end user . . . about any information that 
might be necessary for the safe and effective use of that drug.

Tr. 690. Doering further explained that controlled substances fall 
within a category of what he terms ``high alert drugs,'' where there 
is an enhanced potential for problems stemming from incorrect use. 
Tr. 691. Special care, in Doering's view, must be exercised by a 
pharmacist dispensing high alert drugs, and particular scrutiny must 
by leveled at opioids, benzodiazepines, and barbiturates. Tr. 690-
92. Although Professor Doering consistently presented his testimony 
in terms of how he would exercise his professional judgment, he made 
it clear that in his opinion, he was presenting the standard for 
pharmacy registrants in Florida, in his words, ``[i]t's what they're 
taught in school.'' Tr. 758.
    Professor Doering testified that there are there are 
circumstances surrounding the presentation of a prescription to a 
pharmacist, i.e., ``red flags,'' that can create an obligation on 
the part of a reasonable pharmacist to decline to fill, or to take 
other action in the exercise of the pharmacist's professional 
judgment. Tr. 693-97. According to Professor Doering, red flags 
create in a pharmacist the obligation to assure him or herself that 
the presented prescription may be filled properly. Tr. 843. In 
Doering's view, the steps taken to address a red flag necessarily 
are dependent upon the nature of the concern raised by that flag, 
and are not amenable to the mechanical application of a fixed 
checklist. Tr. 697-98. For example, requiring identification from 
the presenter of the scrip can be utilized to ensure that the 
presenter of the scrip is who he or she claims to be, and can also 
facilitate the re-contacting of the person if necessary. Id. In a 
similar fashion, contacting the prescriber who drafted the scrip can 
be helpful in resolving some red flags, but where the red flag (or 
flags) suggests that the prescriber is ``working collaboratively 
with patients to divert drugs,'' contacting that physician provides 
no real assurance of the bona fides of the prescription. Tr. 699. 
Professor Doering indicated that a practice has developed among 
pharmacists to contact the prescriber in an attempt by some in the 
profession to create a form of contrived, unfounded absolution for 
inadequate controlled substance dispensing. In Doering's words, 
``over the years there has been a perceived value to the pharmacist 
that [`]it's out of my hands because I called and I got some voice 
on the other end that said yeah, that's a good scrip.['] But it's my 
firm opinion * * * that's inadequate to verify the authenticity or 
appropriateness of that prescription.'' Tr. 699-701. Professor 
Doering acknowledged that Section 64B of the Florida Administrative 
Code contains some applicable standards, but testified that this 
provision is not an exhaustive compilation, and that ``[t]he 
standards of care . . . are not always determined by law, by 
statute, by rule. They're determined, in fact, by what pharmacists 
do under like, or similar circumstances.'' Tr. 921.
    Doering also testified that in exercising independent dispensing 
judgment, the pharmacist will consider and compare the address of 
the patient on the scrip and the address of the prescriber who 
drafted it. Tr. 702.
    The method of payment is also, in Doering's opinion, a potential 
red flag of diversion. According to Doering, ``typically, people who 
may be diverting or otherwise misusing their drugs will pay cash.'' 
Tr. 703. However, Professor Doering conceded that standing alone, 
the fact that a controlled substance prescription was purchased in 
cash would have ``very little'' impact on the decision by a 
reasonable pharmacist to dispense or decline to dispense. Tr. 705.
    Another red flag proposed by Professor Doering is the 
observation, by a pharmacist, that a particular prescriber is 
writing ``in a factory-like manner, prescriptions for the same 
drugs, the same quantities . . . without any kind of variability or 
change considering the different patients that come into that 
pharmacy.'' Tr. 708.

[[Page 62333]]

    Over the course of his testimony, Professor Doering was asked 
about individual and groups of dispensing events presented on 
spreadsheets \53\ that were derived from dispensing data furnished 
to the DEA by the Respondents. For example, Professor Doering 
discussed eight controlled substance dispensing events that took 
place on August 16, 2010, at Respondent 219. Gov't Ex. 57 at 33; Tr. 
710-23. Doering testified that the data reflected numerous shared 
red flags for the eight events, to include that cash was the method 
of payment, like varieties and strengths of medications were 
dispensed for all but one patient, all medications were dispensed to 
patients where an out-of-Florida address was provided, and the 
common prescriber for all eight patients had a listed practice 
address in Fort Lauderdale, Florida. Tr. 722-23. In Professor 
Doering's expert opinion, the combination of these red flags in 
these prescriptions would not be resolvable to a point where a 
reasonable pharmacist, exercising his or her corresponding 
responsibility, could dispense the prescribed controlled substances. 
Id. In explaining his conclusion, Doering reiterated his misgivings 
regarding the efficacy of a pharmacist limiting the inquiry to 
checking patient identification and telephonic communication with 
the prescriber (common to all eight patients), who, by his 
estimation, in view of the nature of the transactions, were likely 
complicit in diversion. Id.
---------------------------------------------------------------------------

    \53\ On January 9, 2012, Professor Doering received the 
spreadsheets from the DEA Investigator Hamilton. Tr. 799. At this 
time, Investigator Hamilton explained to Professor Doering how to 
access each file and what the data in the file represented. Tr. 800. 
Professor Doering spent approximately twelve to fourteen hours with 
the spreadsheets. Tr. 812. One spreadsheet, Government Exhibit 22, 
was sent to Professor Doering with the highlights reflected in the 
exhibit. Tr. 809-10.
---------------------------------------------------------------------------

    Professor Doering made like observations and a like conclusion 
regarding the resolvability of four similar controlled substance 
dispensing events which occurred on September 24, 2010, at 
Respondent 219. Gov't Ex. 57 at 33; Tr. 723-25. Doering concluded 
that the confluence of these out-of-Florida patients on a single day 
receiving the same medications in the same quantities from the same 
in-Florida prescriber, was ``highly, highly unlikely.'' Tr. 725. 
Based on this conclusion, Professor Doering testified that, he is 
``simply not going to fill those prescriptions,'' and that nothing 
could be presented in a hard copy of the prescription scrips that 
could alter his opinion on the matter with respect to either the 
August 16 or September 24 dispensing events. Tr. 739-41.
    According to Professor Doering, four dispensing events at 
Respondent 219 which occurred between August 29-30, 2010, presented 
similarly unresolvable red flags. Gov't Ex. 57 at 15; Tr. 752-58. 
Doering testified that ``it's the conflagration or a combination of 
things that suggest to me that these prescriptions were not issued 
in the usual course of medical practice.'' Tr. 757-58. Similar 
testimony was elicited regarding four controlled dispensing events 
regarding the same Respondent (219) on August 19, 2010. Gov't Ex. 57 
at 38; Tr. 759-64. Again, these red flags, in Doering's view, were 
not resolvable when examined collectively. Tr. 763-64.
    Additional dispensing events which occurred at Respondent 219 on 
August 16, 2010, were also addressed by Professor Doering. Tr. 917-
20; Gov't Ex 57 at 33. Of eight oxycodone 30 mg prescriptions 
dispensed that date issued by a particular Fort Lauderdale 
physician, only two had patient addresses in Florida. Tr. 919-20. 
Doering testified that a reasonable and prudent pharmacist would 
need to resolve this anomaly prior to filling the prescriptions. Tr. 
920.
    In similar fashion, Professor Doering addressed four controlled 
substance dispensing events that occurred at Respondent 5195 on 
August 26, 2010. Gov't Ex. 57 at 29; Tr. 741-51. Doering found 
unresolvable red flags based upon the combination of the cash-
discount \54\ method of payments, the out-of-Florida addresses of 
the presenting patients, the distance between the patients' home 
addresses and the Pompano Beach, Florida prescriber, the ``high 
alert'' nature of the dispensed controlled substances, and the close 
sequential nature of the transaction numbers, which suggested to him 
that the medications were dispensed in close temporal proximity.\55\ 
Tr. 751. Like red flags, which according to Professor Doering, 
presented unresolvable impediments to dispensing within the 
standard, were identified regarding six (6) controlled-substance 
dispensing events which occurred at Respondent 5195 on August 11, 
2010, regarding prescriptions emanating from the same West Palm 
Beach, Florida prescriber. Gov't Ex. 57 at 35; Tr. 764-76. Doering 
testified that the West Palm Beach provider is ``roughly'' 200 miles 
from Respondent 5195. Tr. 915. Among that group, Professor Doering 
testified that two of the patients, who had the same last name, 
lived in the same out-of-Florida address,\56\ and received the same 
quantity of the same controlled substances from the same Pompano 
Beach physician, were sufficiently questionable that he 
characterized the confluence of red flags as ``an attention 
getter.'' Tr. 776. Doering characterized the aggregate of the red 
flags present as not amenable to sufficient resolution to warrant 
dispensing. Tr. 916.
---------------------------------------------------------------------------

    \54\ As discussed, infra, Joseph Abbott, CVS Vice President of 
Pharmacy Operations, testified that ``cash discount'' on the CVS-
furnished spreadsheets denotes that, although, like the ``cash'' 
designation, full payment was made at the time of the transaction, 
some manner of group discount (e.g., AARP) was utilized at the time 
of payment and these transactions may include both cash and credit 
card payments. Tr. 1234-35. It seems clear from the record that 
these are transactions where the customers did not have the benefit 
of health insurance assistance. Professor Doering conceded that if 
``cash discount'' merely denoted that the patients utilized an AAA 
discount at the time of purchase that this aspect would lose its 
potency as a red flag. Tr. 847. However, according to Professor 
Doering, even if the ``cash discount'' red flag aspect were 
eliminated from the equation, the remaining red flags are still 
unresolvable. Tr. 924-25.
    \55\ Professor Doering did concede, however, that he was not 
aware at what point a prescription number is assigned to a 
dispensing event at CVS stores, Tr. 832-33, 876, but testified that 
he ``would bet a dime to a Dunkin' Donut that [the events with close 
prescription numbers] were presented in proximity to one another * * 
*.'' Id. at 926-27.
    \56\ Professor Doering testified that the single in-Florida 
oxycodone dispensing event entry on that day reflected a patient 
address in Pompano Beach, Florida, over 200 miles from Respondent 
5195. Tr. 915-16.
---------------------------------------------------------------------------

    Professor Doering also highlighted prescribing red flags 
relative to medications dispensed to four patients on prescriptions 
issued by one Longwood, Florida physician on December 23, 2010. On 
that date, at each of the two Respondent pharmacies, two patients 
were provided identical quantities of oxycodone 30 mg, oxycodone 15 
mg, and alprazolam 2 mg. Stated differently, all four patients 
received exactly the same quantities of the same medications in the 
same strength. Gov't Ex. 55 at 15, 47 (Respondent 219) and 62, 74 
(Respondent 5195); Tr. 784-86. Professor Doering explained the red 
flags he identified as follows:

    Well, from a clinical pharmacist perspective that combination of 
drugs is what I would call a red flag because alprazolam and 
oxycodone are commonly diverted to nonmedical use. It also, from my 
perspective, makes no sense at all that there would be two 
prescriptions for oxycodone, one in a 15 milligram strength and the 
other in a 30 milligram. Now one might speculate that the reason for 
that is that pain can vary throughout the day and it may be that the 
individual is suggested to take the 15 [mg] when the pain is not so 
great and the 30 [mg] when it is so great. But 30 milligram tablets 
are scored right down the middle, and it's quite easy to break them 
in half. It just doesn't make any sense to me why there would be two 
prescriptions.

Tr. 784. According to Doering, pill cutters are now commonly sold at 
pharmacies. Tr. 786-87. Professor Doering testified that the 
similarity in quantity and combination of medications ``would 
suggest that the one size fits all concept was in the mind of [the 
prescriber] when he was prescribing. It's just highly suspicious 
when you see the same drugs, the same quantities, the same patterns 
over and over again.'' Tr. 784-85. Professor Doering referred to 
this phenomenon as ``pattern prescribing,'' which he defined as the 
presence of an ``unwavering combination of the same drugs in the 
same strengths in the same quantities across numerous patients.'' 
Tr. 923. Doering classified pattern prescribing as an unresolvable 
red flag. Id. According to Professor Doering, a pharmacist would not 
need a print-out for such patterns to become apparent. Tr. 927. 
Regarding the simultaneous prescribing of two strengths of oxycodone 
(30 mg and 15 mg), Doering explained:

    [T]he sale of drugs on the street doesn't follow supply-side 
economics. It's sort of get what you can when you can. It's quite 
common for people to obtain as much of the types of drugs that they 
might intend to use themselves or sell to other people[]. It just 
doesn't make sense to me, these combinations.

Tr. 890.
    Professor Doering was also asked to evaluate the same three 
controlled substance

[[Page 62334]]

medications (oxycodone, oxycodone, and alprazolam) that were 
dispensed in the same quantities (30 mg, 15, mg, and 2 mg) to four 
out-of-area patients on January 6, 2011 at Respondent 219. Tr. 787-
792; Gov't Ex. 55 at 13, 22, 31, 51. Doering provided the following 
evaluation of the red flags these dispensing events presented to 
him:

    Well, in several instances here there is a great distance 
between the prescriber and the patient, and the pharmacy is sort of 
in what I would call an illogical place. I don't think it's a secret 
[that] there are CVS/Pharmacies all over this nation, and one of the 
things I did in analyzing this was to look using Google Maps where 
these people lived, where the doctors were, and where the pharmacies 
are. It just didn't make sense to me. People are traveling all over 
creation with gas at nearly $4 a gallon to get a prescription filled 
in a place that's not near their home [and] it suggests to me that 
people are driving to these specific pharmacies because they know 
that they can get these prescriptions filled.

Tr. 791-92. Doering explained that a pharmacist examines multiple 
red flags collectively,\57\ and testified that, in his opinion, 
contacting the prescribing physician and/or obtaining a diagnosis 
code would not resolve these red flags to a degree where the 
medications should have been dispensed. Tr. 792-93. Doering agreed 
that he did not know what measures, if any, the Respondents' 
pharmacists took to resolve any conflicts, or whether a patient 
history screen was consulted prior to the dispensing event. Tr. 868, 
873. When pressed on whether the distance red flags were potentially 
explainable under various hypothetical scenarios involving vacation 
and travel, Doering had this to say:
---------------------------------------------------------------------------

    \57\ Tr. 924.

    The kinds of medications that we're talking about here are for 
chronic health problems and not acute health problems. So, it would 
be unlikely that someone comes to Florida on vacation, breaks a leg, 
and has to get oxycodone in these quantities and in these strengths. 
---------------------------------------------------------------------------
So it just doesn't add up.

Tr. 854.

    With regard to the resolution of red flags, Professor Doering 
testified that ``it's customary that pharmacists make a notation'' 
when resolving red flags. Tr. 773. However, Doering allowed that 
``in today's computer age I do not know whether CVS' system allows 
for memorialization of that type of thing, but historically it's 
been written by hand, usually on the back of the prescription.'' Tr. 
773.
    The Respondents contend that Professor Doering's expert 
testimony should be excluded or, in the alternative, given little or 
no weight. In support of these arguments, the Respondents contend 
that Professor Doering's opinions are not based on a reliable 
methodology, as defined by Daubert v. Merrell Dow Pharms., Inc., 509 
U.S. 579, 592-93 (1993), and are the product of bias. Resp'ts Brief, 
at 92-96.
    As an initial matter, Courts of Appeals are split on the 
application of Daubert to administrative proceedings such as these. 
The Third and Ninth Circuit Court of Appeals have held that, insofar 
as Daubert ``rests on an interpretation of Federal Rule of Evidence 
702,'' where an agency has not adopted the Federal Rules of 
Evidence, the rules of Daubert will not apply. See Bayliss v. 
Barnhart, 427 F.3d 1211, 1218 n.4 (9th Cir. 2005); see also National 
Taxpayers Union v. U.S. Social Sec. Admin., 302 Fed. Appx. 115, 121 
(3rd Cir. 2008). In contrast, the Seventh and Federal Circuits have 
applied variations of the Daubert inquiry to administrative 
hearings. See Pasha v. Gonzales, 433 F.3d 530, 535 (7th Cir. 2005) 
(applying ``spirit of Daubert'' to administrative hearing) ; see 
also Libas, Ltd. V. U.S., 193 F.3d 1361, 1366 (Fed. Cir. 1999) 
(Daubert factors should be used to determine the reliability and 
proper weight to be assigned to expert testimony at administrative 
hearings.).
    While the Federal Rules of Evidence ``do not apply directly to 
these proceedings'' they ``may be used for guidance where they do 
not conflict with agency regulations.'' Rosalind A. Cropper, M.D., 
66 FR 41040, 41041 (2001) (citing Sinatra v. Heckler, 566 F.Supp. 
1354, 1358 (E.D.N.Y. 1983)). In this vein, the Agency has held that 
unreliable expert testimony cannot constitute substantial evidence. 
Hilmes Distributing, Inc., 75 FR 49951, 49954 (2010). Because the 
reliability of expert testimony is a relevant consideration under 
Agency precedent, id., and because the Daubert test is used to 
determine the reliability of expert testimony, the Daubert test 
provides appropriate guidance for evaluating the reliability of 
Professor Doering's testimony. Id.
    Under Daubert, ``expert testimony is admissible if (1) the 
expert is qualified to testify competently, (2) the expert has used 
sufficiently reliable methodology in reaching a conclusion, and (3) 
the testimony will assist the trier of fact.'' Toole v. Baxter 
Healthcare Corp., 235 F.3d 1307, 1312 (11th Cir. 2000). The first 
and third prongs of the test are not at issue here: Professor 
Doering was correctly received as an expert without objection at the 
hearing, and his testimony addresses the heart of what must be 
determined in this recommended decision. With regard to the 
reliability prong, the Supreme Court has provided a list of non-
exhaustive factors which a tribunal may consider when evaluating an 
expert's methodology. Daubert, 509 U.S. at 593-94. However, 
``district courts need not adhere to those enumerated factors, as 
the inquiry is a flexible one.'' Surles ex rel. Johnson v. Greyhound 
Lines, Inc., 474 F.3d 288, 295 (6th Cir. 2007) (internal punctuation 
omitted). Indeed, ``where non-scientific expert testimony is 
involved the Daubert factors may be pertinent or the relevant 
reliability concerns may focus upon personal knowledge or 
experience.'' Id. (internal punctuation omitted) (emphasis 
supplied).
    Here, Professor Doering's testimony concerned the application of 
the standard of care regarding the filling of controlled substance 
prescriptions in the face of red flags. Such testimony is more akin 
to ``technical or other specialized'' knowledge than it is to the 
``scientific'' testimony which was the subject of Daubert. Surles ex 
rel. Johnson, 474 F.3d at 296. Accordingly, Professor Doering's 
knowledge and experience, rather than the specific Daubert factors, 
provide the appropriate analytical framework for evaluating the 
reliability of his opinion. Id.
    Professor Doering testified that he has been a professor of 
pharmacy for thirty-five years and that, in this capacity, he has 
taught classes on controlled substance diversion within the practice 
of pharmacy. Tr. 662-71. Simply put, Professor Doering has 
sufficient knowledge and experience to render sufficiently reliable 
his opinion on the subject of the existence and resolvability of red 
flags of diversion.
    The Respondents also contend that Professor Doering's history of 
testifying for the Government and ``long standing relationship with 
the DEA \58\ and willingness to be its on-call expert undermine[] 
his claim to be an expert.'' Resp'ts Brief, at 94-95. Interestingly, 
as discussed, infra, the Respondents' expert (who they propound as 
the superior source of impartial expert assistance) testified that 
he has only testified as a witness on behalf of the defense. While 
Professor Doering's relationship with the DEA and his history of 
Government testifying were extensively explored by counsel during 
voir dire at the hearing, and are certainly relevant considerations 
in evaluating the weight to be assigned to his testimony, he 
credibly testified that it is his practice to conduct an independent 
review of records, to ``formulate opinions and if those opinions 
were favorable to the DEA's position'' to serve as a witness. Tr. 
797. Under these circumstances, Professor Doering's testimony was 
sufficiently credible and persuasive to constitute substantial 
evidence in these proceedings.
---------------------------------------------------------------------------

    \58\ Professor Doering testified that he has an arrangement with 
the DEA under which he is ``willing to review records and formulate 
opinions and if those opinions [are] favorable to the DEA's position 
tha[n] I would be available [to serve as an expert].'' Tr. 797.
---------------------------------------------------------------------------

The Respondents' Evidence

    The Respondent's presented the testimony of their own expert 
witness, a statistician, as well as the testimony of the CVS vice 
president of pharmacy operations.

The Respondents' Expert Witness

    The Respondents presented the testimony of Professor David 
Brushwood. Like the Government's expert, Professor Brushwood is 
employed \59\ at the University of Florida as a Professor in the 
College of Pharmacy.\60\ Tr. 1003. Also like the Government's 
expert, Professor Brushwood is widely published, and has 
concentrated the majority of his professional pharmacy experience in 
academia and research, with an early stint as a part-time 
pharmacist.\61\ Tr. 1003-06. He also holds a law degree and has 
taught numerous classes on the intersection of law and pharmacy. Tr. 
1003-04, 1008. Professor

[[Page 62335]]

Brushwood testified that he has testified as an expert witness on 
five occasions, always for the defense. Tr. 1009-10. He was received 
without objection as an expert in pharmacy and the pharmacist's 
responsibilities for the dispensing of controlled substances. Tr. 
1010-11.
---------------------------------------------------------------------------

    \59\ Professor Brushwood testified that he is currently on a 
sabbatical leave.
    \60\ Professor Brushwood's CV was received into evidence. Resp't 
Ex. 1.
    \61\ Although he no longer practices as a pharmacist, Professor 
Brushwood holds an active pharmacy license in the State of Kansas. 
Tr. 1004.
---------------------------------------------------------------------------

    Professor Brushwood acknowledged that prescription drug abuse in 
Florida has reached epidemic proportions. Tr. 1014-16. To address 
this problem, a pharmacist must ``ensure that controlled substances 
continue to be available for legitimate medical and scientific 
purposes while preventing diversion into the elicit market.'' Tr. 
1053. Citing Appendix D of the of the DEA Pharmacist's Manual,\62\ 
Brushwood refers to this concept as the principle of balance. Tr. 
1053. Professor Brushwood interprets the pharmacist's corresponding 
responsibility in this way:
---------------------------------------------------------------------------

    \62\ A copy of which was received into evidence. Resp't Ex. 19.

    [O]ur corresponding responsibility is not the same as the 
prescriber's responsibility. As pharmacists, we have certain 
knowledge and skill and abilities that are very important and we are 
to exercise all of that that we have, but it's not the same as what 
prescribers have. It's their responsibility not to issue a 
prescription that isn't for a legitimate medical purpose and isn't 
in the usual course of professional practice. It's our corresponding 
responsibility to, based on the knowledge of drugs that we have, 
apply our expertise. If we recognize or have a concern then we stop 
and say wait a minute. I need to think this through. Maybe I need 
some additional information, and until I am satisfied that I can 
fill this prescription and meet my responsibility I'm not going to 
---------------------------------------------------------------------------
do it.

Tr. 1024-25. Brushwood clarified that pharmacists ``don't see 
ourselves as the police of the medical profession [but rather] 
people who evaluate prescriptions and apply our expertise.'' Tr. 
1106. When asked to define a controlled substance red flag, 
Professor Brushwood testified that:

    A red flag means stop. This is the way I define it. A red flag 
means stop, think, look, examine the circumstances, use what you 
have available to you--it doesn't take long necessarily--and make a 
decision. Go forward only after you have had this opportunity for 
information gathering and reflection and do it only when it's safe. 
The result of analysis of a red flag will either be to fill a 
prescription or to not fill a prescription. Those are the only two 
possible results, and you don't do that if there is a red flag 
without this introspective activity.

Tr. 1034. Professor Brushwood refers to a red flag that is correctly 
resolved by a pharmacist in favor of dispensing as a ``red 
herring.'' Tr. 1035. He testified that, in addition to discussions 
with patients and prescribers, pharmacists may consider past history 
with the patients as customers, visual cues (e.g., crutches), and 
patient profiles maintained at the pharmacy. Tr. 1034-36, 1073-74.
    Professor Brushwood testified that he has created a pneumonic, 
``VIGIL,'' that he uses to teach a standardized approach to 
executing the pharmacist's corresponding responsibility. Tr. 1021. 
The ``V'' in the pneumonic is for ``verification.'' This is to 
remind the pharmacist to contact the prescriber's office to the 
extent needed to ``at least assure yourself that the prescription 
was issued by the prescriber and, if necessary, engage in additional 
discussion with them.'' Tr. 1027. It is Brushwood's view that this 
step should always be taken with a certain level of circumspection. 
He explained his basis for this level of circumspection in this way:

    We want to be very economical with our contacts with 
prescribers' offices because they become irritated when we call them 
for no good reason. We want them to understand that we're important 
and we're not bothering them with trivia, so if we don't need to 
contact them because we've previously verified we don't do it again.

Tr. 1028. Elaborating on the point, Professor Brushwood explained:

    Well, we don't want to cry wolf, and I think annoyance is a 
factor. We want them to take us very seriously, and when they get a 
call from us they know that we really need them so they pay 
attention to us. If [the prescribers] become accustomed to the idea 
that we're calling simply to reconfirm something we already know 
their perspective is we need to use our professional judgment, not 
simply defer to them and their professional judgment.

Id.

    The ``I'' in Brushwood's VIGIL model stands for 
``identification.'' Tr. 1021, 1030. This reminds the pharmacist to 
seek a government-issued identification from the individual 
presenting the prescription scrip. Tr. 1030. The ``G'' refers to 
``generalization,'' which suggests to the pharmacist that he and the 
dispensing patients ``reach an agreement'' regarding their mutual 
responsibilities as pharmacist and patient.\63\ Tr. 1031. The second 
``I'' in VIGIL stands for ``interpretation,'' which is the process 
of tallying a set of points assigned to the other aspects of the 
VIGIL model in analyzing a dispensing decision. Tr. 1031-32. The 
details of the ``I'' point system or how they are assigned were 
never explained during the hearing. The ``L'' stands for 
``legalization,'' which, according to Professor Brushwood, is a 
caution against pharmacists' historical ``well-intended tradition to 
occasionally bend a rule or two * * *'' Tr. 1032.
---------------------------------------------------------------------------

    \63\ Professor Brushwood testified that no pharmacy utilizes 
this aspect of his VIGIL model. Tr. 1031.
---------------------------------------------------------------------------

    Reduced to its essence, Professor Brushwood's VIGIL model really 
contains only two steps to resolve a red flag presented at the time 
of a scrip presentation: contacting the prescriber (``V'' or 
``verification''), and checking the identity of the presenter (``I'' 
or ``identification). The three remaining parts of the model, 
including the point or ``interpretation'' (``I'') aspect of the 
model that was never explained, the ``generalization'' (``G'') 
portion, which is (even by Brushwood's own estimation) never used by 
pharmacists, and the ``legalization'' (``L'') part which is a 
reminder to abide the law, all relate to policy approaches, not red 
flag resolution.
    Regarding red flag resolution, like the Government's expert, 
Professor Brushwood acknowledged the requirements of Section 64B in 
the Florida Administrative Code, provided his opinion that the 
Respondents' policies and dispensing protocols meet the requirements 
therein,\64\ but (like Professor Doering) conceded that the text of 
Section 64B did not provide an exhaustive list of red flags. Tr. 
1091. In this regard, Professor Brushwood testified that ``much of 
[the Florida standards of pharmacy] simply reiterates language from 
Federal law.'' Tr. 1208. By Professor Brushwood's estimation:

    \64\ Tr. 1084.
---------------------------------------------------------------------------

    Pharmacists have to use their best professional judgment at all 
times, and although not formally stated here * * * pharmacists still 
have to use their professional judgment, which may go beyond these 
five [64B] factors.

Tr. 1049-50.

    Consistent with the DEA Pharmacist's Manual (as well as the view 
of the Government's expert), Professor Brushwood agreed that the 
quantity of drugs prescribed and the frequency of prescriptions 
filled may be non-dispositive indications of fraud or improper 
prescribing. Tr. 1056-58, 1062-65. Brushwood stated:

    I would never teach that a ridiculous outlier high is of no 
significance in and of itself. I would teach that it is. You better 
investigate when you see that I would teach a pharmacist.

    Tr. 1058. It is Professor Brushwood's opinion, however, that a 
pharmacist would only be able to see trends in dispensing for a 
particular patient, rather than for a particular prescriber or 
multiple patients. Tr. 1069.
    An evaluation of Professor Brushwood's testimony demonstrates 
that he shares many of the views expressed by the Government's 
expert in many respects. He agreed that a combination of 56 dosage 
units of oxycodone 15mg, 168 dosage units of oxycodone 30 mg, and 56 
dosage units of alprazolam 2 mg did, presented a red flag,\65\ but 
(unlike the Government expert) felt the red flag could be resolved. 
Tr. 1081-82, 1203-04, 1212. Although opining that physicians are 
often creatures of habit who frequently stick with historically 
successful combinations of medications,\66\ he concurred that 
multiple patients from a single prescriber on a single day with the 
same combination would also be a red flag. Tr. 1093, 1098, 1119, 
1168, 1170. He also agreed that oxycodone and alprazolam are 
medications with a high risk of abuse and diversion. Tr. 1086. 
Furthermore, he agreed that prescriptions written by local 
prescribers for out-of-state patients constitute a red flag 
requiring resolution, that contacting the prescriber will not always 
be sufficient to resolve every red flag, and that there can be a 
point where a pharmacist should cease to fill scrips emanating from 
a particular prescriber based on diversion concerns. Tr. 1119-20, 
1124,

[[Page 62336]]

1148. He concurred in the principle that distance can be a red 
flag,\67\ and testified that the Sanford area was a ``reasonable 
geographic area'' for the Respondents' pharmacies (but added the 
proviso that travelers in need of medication should not go without 
when in the Sanford area), and conceded that he did not come across 
a handwritten scrip note addressing any distance red flag in the 
materials he reviewed for the Respondents. Tr. 1139, 1145, 1166. 
Brushwood agreed that the prescription events presented to the 
Government's expert contained multiple cognizable red flags in need 
of pre-dispensing resolution. Gov't Ex. 57; Tr. 1142-50, 1155-60, 
1189.
---------------------------------------------------------------------------

    \65\ Tr. 1081.
    \66\ Tr. 1174, 1205-06
    \67\ Tr. 1181, 1194.
---------------------------------------------------------------------------

    Areas of mutual accord notwithstanding, Professor Brushwood did 
not agree with the ultimate conclusion of the Government's expert 
that the dispensing patterns evident in the reviewed data 
demonstrate that the controlled substance prescriptions were not 
issued for a legitimate medical purpose in the usual course of a 
professional practice, or that the red flags present were 
unresolvable.
Tr. 1068, 1199. Employing a number of double negatives, Brushwood 
explained his opinion in the following way:

    Based on the information I've reviewed, I am not able to 
conclude that [the Respondents' pharmacists] didn't meet their 
corresponding responsibility. [This is based upon examination of] 
their policies and procedures, which in my opinion accurately 
describe the pharmacist's corresponding responsibility. I have 
looked at the declaration of [Pharmacists Masso and Merrill] * * * 
which under oath indicate that they have followed those policies. I 
have looked at some information that shows me that contact was made 
with the prescriber's office for verification of prescriptions, that 
identification was obtained for patients for prescriptions. What I 
don't know is the relationship that the pharmacists had with the 
patients. I don't know the patient profile that was available to the 
pharmacists at the time these prescriptions were filled. I don't 
know what history they had had with the patients or really what the 
nature of the conversation they had with the prescribers was, if 
there was a conversation, or the conversation they had with the 
patients. There's a lot of aspects of the investigation or the 
consideration of responsibility that is unavailable to me.

Tr. 1067.

    In other words, Professor Brushwood opined that, without the 
patient profiles and other information, it is impossible to know 
whether the pharmacies violated their corresponding 
responsibilities. Tr. 1075, 1199-1200. As a preliminary matter, the 
affidavits of Masso and Merrill that were referenced among the items 
which formed his expert opinion were not offered or received into 
evidence. While an expert is entitled to rely on facts not in 
evidence when developing his opinion, such reliance does not relieve 
the proponent of the expert's testimony from establishing the facts 
on which the expert relied. See TK-7 Corp. v. Estate of Barbouti, 
993 F.2d 722, 732 (10th Cir. 1993) (``The fact that [the expert] 
relied upon [a] report in performing his calculation of lost profits 
did not relieve the plaintiffs from their burden of proving the 
underlying assumptions contained in the report.'').
    Furthermore, although Professor Brushwood went on to explain 
that he could not draw a conclusion about whether the Respondents' 
pharmacists had met their obligations absent the additional types of 
information he listed, which he characterized as ``pretty rich,'' 
\68\ the only information his VIGIL model requires the pharmacist to 
gather and evaluate is verification (``V'') and identification 
(``I'').
---------------------------------------------------------------------------

    \68\ Tr. 1067-68.
---------------------------------------------------------------------------

    Paradoxically, although Professor Brushwood placed so much 
emphasis on the extent to which his evaluation was hobbled by his 
inability to examine items such as any entries in the patient 
profile maintained by the Respondents, he revealed that he believed 
the information would have been available upon request, but that he 
did not ask to see it. Tr. 1073-74.\69\ The record contains no 
reason to question Brushwood's belief that he could have had access 
to the patient profiles upon request. If the profile was accessible 
to him and as vital as he claimed, it would make little sense for 
him not to have asked to review it. Yet he testified that he never 
asked. In view of his impressive credentials and experience, and the 
fervor in which he presented his view that the profile information 
is key, it is unlikely that his failure to request the profile 
information is based upon a blunder or an oversight. To be clear, 
the operative fact is not that the Respondents elected not to 
provide the information at the hearing, but rather, that Brushwood 
emphatically declared how vital it was, and conceded that he never 
even asked the Respondents for it--but could have had it upon a mere 
request. Here it is not imperative to determine whether the 
information in the profile would have been unhelpful to the 
Respondents or whether a review of the information is truly a 
condition precedent to an accurate assessment of the pharmacists' 
actions. On the present record, that portion of Brushwood's 
testimony that urges the crucial impact of patient profiles and what 
they might have demonstrated has been sufficiently neutralized that 
it neither favors nor disfavors any material issue to be decided in 
the case.
---------------------------------------------------------------------------

    \69\ When asked if he could have seen the profile, Brushwood 
declared ``I'm sure I could have.'' Tr. 1073.
---------------------------------------------------------------------------

    The only documented actions aimed at red flag resolution that 
Professor Brushwood described seeing in the materials he reviewed on 
behalf of the Respondents were notations on numerous prescription 
scrips he examined in the course of his review. Tr. 1069-70. 
Brushwood testified that, although the practice among the profession 
has been uneven, handwritten notes by a pharmacist on a scrip 
indicate that there has been communication between the pharmacist 
and/or the prescriber. Tr. 1070-71, 1160-61. Further, with respect 
to Schedule II prescriptions (such as those examined in the data in 
this case), Professor Brushwood testified that a handwritten note on 
the scrip ``is certainly one place where you would expect to see 
[such notes].'' \70\ Tr. 1072.
---------------------------------------------------------------------------

    \70\ Indeed, Respondent 219 Pharmacist Technician Keyla Perry 
indicated that such was the practice, Tr. 345, and the Respondents' 
own dispensing guidelines for pain management that were in effect no 
later than December of 2010 required the pharmacist to ``[d]ocument 
communications with prescriber or agent on the back of the 
prescription to include date, time, outcome and name of person.'' 
Resp't Ex. 23 at 2. Thus, there is no question that after December 
of 2010, Respondents' pharmacists were under a duty to document such 
communications on the back of the prescription scrips.
---------------------------------------------------------------------------

    Professor Brushwood disagreed with the Government expert's 
conclusion that a 210 dose prescription for oxycodone 30 mg was a 
red flag because of the dosage. Tr. 1076-77. However, the probative 
value of this inquiry was profoundly undermined by form of the 
question, which omitted the other red flags identified by the 
Government expert that were factored into his answer. The Government 
expert testified that the nature and doses of the medication 
dispensed to remotely located patients and prescribers were 
unresolvable because the combinations were consistent with chronic 
pain, and not acute pain symptoms resulting from accidents while on 
vacation. Tr. 854. Thus, it was not the dose alone that the 
Government's expert declared unresolvable, but the confluence of 
elements attendant on the schedule II dispensing event.
    Professor Brushwood presented as a knowledgeable, prepared, and 
helpful witness. That said, the persuasiveness of his testimony was 
undermined appreciably by his repeated assurances that the 
identified red flags could have been resolved by reviewing the 
entries in the patient profiles that the Respondents maintained and 
that Brushwood never asked to see. Although Professor Brushwood 
suggested that there were other areas that could have been explored 
to resolve conflicts, his VIGIL model only identified checking the 
identity of the patient and contacting the prescriber and/or the 
presenter, avenues which he ultimately agreed would not have 
resolved red flags associated with prescribers who were complicit in 
diversion No alternative route beyond the patient profile 
information, prescriber/patient communication, and/or identification 
verification were proposed by Professor Brushwood. Accordingly, 
notwithstanding his sincere efforts and credible testimony, his 
presentation was less helpful than the testimony presented by the 
Government's expert witness.

The Respondents' Fact Witnesses

    The Respondents presented the testimony of Paul Greenberg, the 
Director of the Health Economics Practice at Analysis Group,\71\ 
``an economic research and consulting firm in Boston.'' Tr. 948, 
948. Mr. Greenberg holds an undergraduate degree in economics from 
Vassar College, a master's degree in Economics from the University 
of Western Ontario, and an MBA from the Sloan School

[[Page 62337]]

of Management at the Massachusetts Institute of Technology.\72\ Tr. 
945-46; Resp'ts Ex. 2.
---------------------------------------------------------------------------

    \71\ Mr. Greenberg explained that Analysis Group Inc., (``AGI'') 
``is a consulting firm headquartered in Boston, with 10 offices 
around the country, and one in Montreal, Canada.'' Tr. 949.
    \72\ Mr. Greenberg's CV was received into evidence. Resp't Ex. 
2.
---------------------------------------------------------------------------

    Mr. Greenberg testified that he is often involved in litigation 
``involving the use of data in one form or another.'' Tr. 948. In 
this regard, Mr. Greenberg explained that his ``work is really 
applied economics and statistics in a consulting capacity. We get 
hired by a variety of clients in the healthcare sector [to perform] 
analysis of large data sets in which we apply our economics and 
statistics training to study, examine, and glean insights from those 
data.'' Tr. 947-48.
    Greenberg testified that he was asked by CVS to ``study * * * 
some of the data surrounding some prescribers who had * * * recently 
been suspended by CVS, specifically with an eye to the dispensing 
patterns that were occurring at [Respondents] 219 and 5195.'' Tr. 
950. Though the dispensing data was the ``core'' data used in Mr. 
Greenberg's analysis, he also looked at information provided 
regarding CVS Extra Care Cards. Tr. 952. Mr. Greenberg testified 
that his work on the case could be grouped in the following manner: 
(1) ``proximity analysis,'' which looked at the proximity of 
prescribers and patients to the Respondent Pharmacies; (2) ``the 
nature of the transactions and the methods of payment for those 
transactions;'' and (3) ``patterns of dispensing at [the two 
pharmacies] based on the kinds of drugs that were dispensed.'' Tr. 
952-53.
    When looking at the geographic proximity of the prescribers, Mr. 
Greenberg testified that he looked at the CVS dispensing data and 
focused on the top 100 prescribers of oxycodone for the Respondent 
pharmacies. Tr. 954. Based on this data, Greenberg created a map 
which shows the location of Respondent 5195--marked with a red dot--
relative to the locations of the top 100 oxycodone prescribers for 
the period of March 2010 to February 2012--marked with blue dots. 
Tr. 955-56. The map was admitted into evidence as Respondents' 
Exhibit 88. Tr. 961. Mr. Greenberg testified that he created a 
similar map showing the location of Respondent 5195 relative to the 
top 100 oxycodone prescribers for the period of January 2011 to 
February 2012. Tr. 964; Resp'ts Ex. 89. When comparing the two maps, 
Mr. Greenberg noted that the top 100 prescribers for the March 2010 
to February 2012 time period were not the same top 100 prescribers 
for the time period from January 2011 to February 2012. Tr. 967-68. 
Mr. Greenberg also created equivalent maps for Respondent 219 for 
the March 2010 to February 2012 (Respondents' Exhibit 86) and for 
the January 2011 to February 2012 timeframe (Respondents' Exhibit 
87). Tr. 969-73. The maps indicate that a large number of out-of-
area prescribers for each pharmacy in the first time frame is 
apparently reduced to a somewhat smaller number of out-of-area 
prescribers for each pharmacy in the second time frame.
    Mr. Greenberg also testified to an analysis he conducted 
regarding a specific address in Deland, Florida. Tr. 986-87. In his 
analysis, Mr. Greenberg found that fifteen ``unique'' individuals 
had filled prescriptions for oxycodone 30 mg at one or both of the 
Respondent Pharmacies during the two year time period from March 
2010 through February 2012. Tr. 987. All told, the fifteen 
individuals filled sixty-six prescriptions for oxycodone 30 mg at 
the Respondent pharmacies. Tr. 989. However, the address field 
contained ``specific apartment numbers * * * that clearly identified 
it as an apartment building with different units.'' Tr. 987. 
Internet research revealed that the address was ``an apartment 
complex with about 160 or so individual residential units in that 
complex.'' Tr. 989.
    There is no question that Mr. Greenberg presented as a sincere 
witness essaying to candidly and thoroughly answer questions asked 
of him. That said, other than highlighting the Respondents' 
dispensing of controlled substances written by prescribers who were 
located at some distance from both pharmacies in contracting 
numbers, he did not offer testimony that shed any appreciable level 
of light on any issue to be resolved in this recommended decision.
    The Respondents also presented the testimony of Joseph Abbott, 
the Vice President of Pharmacy Operations for CVS.\73\ Tr. 1229. Mr. 
Abbott testified that he holds an undergraduate degree in electric 
engineering from Duke University and recently completed his 
coursework for an M.B.A. from the Wharton School at the University 
of Pennsylvania. Tr. 1229. Though he has been employed by CVS since 
2006, Mr. Abbott testified that he assumed his role as Vice 
President of Pharmacy Operations in March of 2012. Tr. 1230. Prior 
to becoming the Pharmacy Operations V.P., Mr. Abbott was Senior 
Director of Pharmacy Operations Services, a position he held since 
January of 2011. Tr. 1302.
---------------------------------------------------------------------------

    \73\ Holiday CVS LLC, the owner of the Respondent Pharmacies, is 
a wholly owned subsidiary of CVS Pharmacy Inc., which is, in turn, a 
wholly owned subsidiary of CVS/Caremark. Tr. 1231-32. Mr. Abbott 
testified that although he was not sure of the precise corporate 
structure under which he is employed by CVS, to the best of his 
understanding, he believed that he was employed by CVS/Caremark. Tr. 
1232. The fact that the Vice President of Pharmacy Operations at CVS 
(who is about to receive an M.B.A. from the Wharton School) lacks an 
understanding over which aspect of CVS actually employs him is 
puzzling to say the least, but does not impact on any issue to be 
decided in this recommended decision.
---------------------------------------------------------------------------

    According to Mr. Abbott, the Pharmacy Operations Group is 
staffed by ``about 50 people'' and ``provide[s] support to [CVS] 
pharmacy teams and * * * field management teams as it relates to 
policies and procedures. This includes communications of the 
policies and procedures as well as a definition of tools and 
training to support those policies and procedures.'' Tr. 1230. As 
the Vice President of Pharmacy Operations, Mr. Abbott's ``primary 
responsibilities are to oversee the team that defines the 
procedures, defines the supporting tools, and [provide support to] 
the pharmacy teams and the field management teams.'' Tr. 1230.
    Abbott presented some testimony relative to the organization of 
prescribing data within the CVS computer systems that produced the 
data supplied to the Government and so widely used in its case-in-
chief. Mr. Abbott explained that the ``agency type'' field is a 
designation employed by CVS ``to classify how the prescription is 
paid for.'' Tr. 1234. When ``cash'' appears in the ``agency type'' 
field, that denotes a ``general definition [that] refers to the fact 
that * * * the full retail price of the prescription would be paid 
for by the patient or an agent of the patient at the time the 
prescription is picked up. It can be paid through any means of 
tender--cash, credit card, check, debit card.'' Tr. 1234. The term 
``cash discount'' means that the full payment owed was paid for by 
the patient, but that ``the patient [was] eligible for some form of 
discount due to their affiliation with some entity.'' Tr. 1234-35.
    Mr. Abbott also testified regarding a computer system called 
RxConnect, which is ``[t]he primary pharmacy system'' used by CVS 
pharmacists for the dispensing of controlled substances and other 
drugs. Tr. 1236. The RxConnect system ``supports clinical checks as 
well as billing of third party claims.'' Tr. 1236. To assist in the 
filling of prescriptions, the system displays ``patient information, 
prescriber information, drug information [and] third party 
information related to the third party coverage.'' \74\ The 
term``[p]atient information'' includes ``the name, the date of 
birth, the address, the phone number, allergies that the patient has 
reported, medical conditions the patient has reported [and] history 
of prescription fills.'' Tr. 1237. While identifying information of 
a patient may be edited by the pharmacy teams, the history of 
prescription fills is a product of the system. Tr. 1237-39.
---------------------------------------------------------------------------

    \74\ ``Third party'' information refers to a patient's insurance 
plan. Tr. 1237.
---------------------------------------------------------------------------

    Mr. Abbott explained that the CVS practice has been that when a 
patient dropped off a prescription at a pharmacy, the pharmacy team 
would search the system--by last name, date of birth or phone 
number--to ascertain whether the customer is already in the system. 
``If the patient's record is already there, they would select the 
patient and have the opportunity to edit any of the key information 
about the patient.'' Tr. 1239. If the patient is not in the system, 
``the pharmacy team would choose to add a patient [and] would enter 
in name, date of birth [and] address based on the information 
provided on the prescription or by the patient themselves.'' Tr. 
1240.
    The RxConnect system also includes drug information. Tr. 1242. 
The drug information includes the drug name, the generic name (if 
applicable), the strength, the dosage form and the manufacturer. Tr. 
1242-43. The system is accompanied by an industry standard automated 
drug utilization review system, which ``look[s] at the patient's 
prescription profile and identif[ies] potential drug interactions 
and so forth.'' Tr. 1243.
    Abbott explained that the prescriber information in the 
RxConnect system currently is supplied by a vendor of prescriber 
information (data aggregator) called Health Market Science (HMS). 
Tr. 1241-42. Though Mr. Abbott could not remember the exact datum 
RxConnect displays for each prescriber, he testified that

[[Page 62338]]

the prescriber profile includes the physician's DEA number and 
address.\75\ Tr. 1266. Other information would be available on 
other, ``more detailed screens.'' Tr. 1267.
---------------------------------------------------------------------------

    \75\ A doctor may have multiple addresses. Tr. 1267-698.
---------------------------------------------------------------------------

    According to Mr. Abbott, HMS ``aggregate[s] \76\ prescriber data 
from various sources and then suppl[ies] it to companies in a 
variety of industries.'' Tr. 1241. HMS obtains its prescriber 
information data from an entity called NTIS. Tr. 1247. NTIS, in 
turn, is a service provided by the Government which supplies 
prescriber information, including DEA registration data, to non-
governmental entities. Tr. 1247. It is further his understanding 
that once HMS receives data from NTIS, they load it into their 
system, and then update the records in CVS's system. Tr. 1247. 
Abbott testified that HMS receives data from NTIS approximately once 
per week, and updates CVS's data once per week. Tr. 1247-48. HMS 
became the sole source of the prescriber information in April of 
2012 (i.e., the month prior to the hearing in this matter). Tr. 
1245.
---------------------------------------------------------------------------

    \76\ Mr. Abbott testified that it is important to have one 
source of aggregated data because ``[i]t allows us to have one 
record for each prescriber and prevents to the greatest degree 
possible having incorrect information tied together.'' Tr. 1242.
---------------------------------------------------------------------------

    Mr. Abbott testified that whenever a pharmacy team member 
attempts to fill a prescription, they must associate a prescriber to 
the prescription. Tr. 1248. In this regard, they must search 
for,\77\ and select, the appropriate prescribing physician. Tr. 
1248-49. Once the prescribing physician has been selected, the 
system checks the prescription against the physician's prescribing 
status. Tr. 1249. If the physician does not have authority to 
prescribe the drug called for by the prescription, then the system 
will display an error message and prevent the filling of the 
prescription. Tr. 1249, 1270. A pharmacy employee cannot override 
the system to fill a prescription for a practitioner who appears 
unregistered in RxConnect. Tr. 1270.
---------------------------------------------------------------------------

    \77\ The search may be conducted through some combination of the 
prescriber's: (1) last name; (2) NPI number; (3) DEA number; or (4) 
phone number. Tr. 1248.
---------------------------------------------------------------------------

    Prior to April of 2012, prescriber information was provided by 
HMS, but was also managed by the pharmacy teams at individual 
stores. Tr. 1245-46. Thus, if a pharmacy technician queried the 
system for a particular prescriber, RxConnect ``would display both 
the HMS records as well as some of the historical store entered 
records from the past.'' Tr. 1246.
    Mr. Abbott also addressed an anomaly in the way that CVS 
produced the historical records which made up the CVS Dispensing 
Data utilized during these proceedings. Tr. 1254-55. According to 
Abbott, when the warehouse pulls the data from RxConnect, it will 
reflect its current status as of the time the report is run. Tr. 
1254-55. Put differently, because patient and prescriber information 
is subject to change, the patient and/or prescriber information 
reflected on the spreadsheets generated from the CVS Dispensing Data 
and introduced by the Government could well have been different from 
the information which appeared to the Respondents' pharmacy staff at 
the time the controlled substances were actually dispensed. Tr. 
1255-56. With this in mind, Mr. Abbott checked CVS's records and 
ascertained that the ``do not fill'' notations in the address field 
for Government Exhibit 35 were not associated with the Dr. Jumanni 
profile at the time the corresponding prescriptions were dispensed. 
Tr. 1256-59; 1262-63. Mr. Abbott indicated that he was able to 
divine this reached this conclusion by checking the ``back tag 
sticker'' \78\ associated with the relevant prescriptions. Tr. 1262-
63.
---------------------------------------------------------------------------

    \78\ ``Since that sticker prints out at the time of filling, all 
of the information on that sticker reflects what was on the patient 
record.'' Tr. 1263.
---------------------------------------------------------------------------

    Mr. Abbott was also asked about the training that CVS provides 
to its ``pharmacy team,'' which ``includes the pharmacist * * * the 
pharmacy technicians [and the] pharmacy supervisors.'' Tr. 1263-64. 
The pharmacy team members receive new-hiring training, as well as 
``twice-a-year compliance and regulatory training, which includes 
controlled substance defense in training.'' Tr. 1264. The bi-annual 
compliance and regulatory training is made available to employees 
via an online management system. Tr. 1264. CVS is ``able to track 
completion of [the biannual] training,'' and will identify 
individual employees who have not completed the required outlines. 
Tr. 1279-80. Dispensing guidelines with regard to controlled 
substances are sent the pharmacy teams through a program called 
Workload Manager, and are sent to the field management teams via 
email. Tr. 1274-75.
    Abbott explained that in March and October of 2011, CVS 
disseminated its bi-annual training outlines (``October 2011 
Guidelines'').\79\ Tr. 1275-76. Further, in late June of 2011, in 
response to the Florida Pill Legislation of July 1, 2011, CVS 
Corporate issued guidelines ``for handling fraudulent or altered 
prescriptions'' (``June 2011 Guidelines'').\80\ Tr. 1275; Resp'ts 
Ex. 27. Additionally, according to Mr. Abbott, in January of 2012, 
CVS ``issued an enhanced set of guidelines for dispensing controlled 
substances'' (``January 2012 Guidelines''). Tr. 1275; Resp'ts Ex. 
34. The January 2012 Guidelines replaced a set of guidelines which 
had been submitted to the field pharmacies in December of 2010 
(``December 2010 Guidelines'').\81\ Tr. 1284; Resp'ts Ex. 23.
---------------------------------------------------------------------------

    \79\ Though the March 2011 outline was not introduced into 
evidence, excerpts from the October 2011 Outline were. Resp'ts Ex. 
32.
    \80\ The June 2011 Guidelines were not associated with training. 
Tr. 1301. Rather, they ``[were] an updated set of policies that 
[were] communicated to the stores and the field management teams.'' 
Tr. 1301. CVS sought to ensure understanding of the revised 
guidelines by organizing a conference call led by pharmacists at 
CVS. Tr. 1301.
    \81\ Mr. Abbott explained that it was his ``understanding'' that 
the January 2012 Guidelines were produced in response to ``feedback 
and guidance'' CVS had received from DEA in the wake of the 
execution of the AIWs on the Respondent pharmacies. Tr. 1285.
---------------------------------------------------------------------------

    The December 2010 Guidelines, which were sent to CVS pharmacies 
on December 10, 2010, direct CVS PICs ``to ensure [that] all 
Pharmacists and support staff understand[] their responsibilities as 
[they] relate[] to these Dispensing Guidelines.'' Resp'ts Ex. 23. 
The December 2010 Guidelines state that:

    (1) When considering the legitimacy of a prescription, a 
pharmacy team member should obtain a photo identification and record 
the patient's name, address and date of birth on the back of the 
prescription. Resp'ts Ex. 23, at 1-2.
    (2) The team member should ``[c]ontact the prescriber with any 
concerns about the type, dosage, frequent or amount of medication 
prescribed [and] document communications with [the] prescriber or 
agent on the back of the prescription to include date, time, outcome 
and name of person.'' Resp'ts Ex. 23, at 2.
    (3) The pharmacy team members should ``[e]xercise heightened 
scrutiny for prescriptions written by out-of-area doctors or 
presented by out-of-area patients for certain controlled substances 
(e.g., oxycodone or hydrocodone) especially new patients from the 
same prescriber.'' Id. The document directs the team member to 
``[v]erify out-of-area prescriptions with the prescriber and notify 
your Pharmacy Supervisor.'' Id.

    Also, of relevance to these proceedings, the December 2010 
Guidelines identify the following ``warning signs [which] can assist 
in identifying inappropriate prescription-seeking behavior:'' (1) 
``[p]atient insists on paying cash for a controlled substance 
prescription;'' (2) ``[p]atient insists on getting brand name 
controlled substances only;'' and (3) ``[p]rescribers consistently 
prescribe the same combination of drugs for most or all patients.'' 
Id.
    The June 2011 Guidelines, define the pharmacist's corresponding 
responsibility, and provide that ``[i]f a pharmacist believes a 
prescription is suspect, the pharmacist should investigate and/or 
verify the prescription to ensure the legitimate of the order and to 
establish the identity of the prescriber and patient.'' Resp'ts Ex. 
27. Beyond stating that pharmacists should exercise ``heightened 
scrutiny'' for ``out-of-area'' \82\ oxycodone prescriptions, the 
June 2011 Guidelines provided four non-exhaustive steps for 
verifying prescriptions: (1) verifying the identity of the patient 
by obtaining a photo id; (2) reviewing the patient's profile for 
prior medication history; (3) contacting the prescriber; and (4) 
checking the state PMP. Id. The document further provides that 
``[a]ll communications with the prescriber's office should be 
documented on the back of the prescription, including the time, 
date, outcome and name of person with whom the pharmacist spoke at 
the prescriber's office.'' Id.
---------------------------------------------------------------------------

    \82\ The phrase ``out-of-area'' appears throughout the 
Respondents' training documents. Mr. Abbott explained that the 
application of this term is store specific. Tr. 1300.
---------------------------------------------------------------------------

    The October 2011 Guidelines and January 2012 Guidelines include 
minor changes to CVS's dispensing procedures which, for the reasons 
discussed below, played no part in these proceedings.
    With regard to the issues underlying these proceedings, Mr. 
Abbott testified that ``the company saw [the execution of the AIWs] 
as a significant event, and based on the

[[Page 62339]]

feedback, we thought it was prudent to take a number of actions in 
response.'' Tr. 1285. In particular, Mr. Abbott testified that in 
the wake of the AIWs, CVS:

    (1) Mandated 100-percent completion of bi-annual training. Tr. 
1280.
    (2) Created and distributed the January 2012 Guidelines. Tr. 
1284.
    (3) Ceased dispensing Schedule II controlled substances for 
prescriptions written by twenty-two \83\ Florida prescribers. Tr. 
1286. In this regard, the list of banned prescribers was posted in 
all 700 CVS pharmacies in the State of Florida. Tr. 1288.
---------------------------------------------------------------------------

    \83\ Mr. Abbott did not know why any of the doctors had been 
banned. Tr. 1298. Mr. Abbott further testified that he believed at 
least one of these prescribers was removed from the do not fill 
list. Tr. 1304-05.
---------------------------------------------------------------------------

    (4) Developed a ``comprehensive * * * training around dispensing 
of controlled substances as well as DEA record keeping'' to serve as 
a ``supplement to the bi-annual training.'' Tr. 1286.
    (5) Provided access to the Florida PDMP Web site, eForce, a 
prescription drug monitoring program. Tr. 1291-92.
    (6) Began to develop a system for placing ordering limits for 
Florida pharmacies. Tr. 1291. Conducted a live training with field 
managers in the State of Florida regarding controlled substance 
dispensing. Tr. 1295; Resp'ts Ex. 35.
    (7) Replaced the PICs at the Respondent pharmacies. Tr. 1294.

    The rationale provided by Mr. Abbott as to why the Respondents 
replaced their PICs is particularly significant. Abbott explained 
the decision in this way:

    [B]ased on the additional scrutiny within the stores related to 
these hearings, the company felt it was in the best interest of 
those pharmacies to bring in new leadership that would not be 
distracted by these events.

Tr. 1294 (emphasis supplied). He went on to explain that CVS took 
these actions because ``it takes its responsibility seriously, and 
given the * * * elevated level of drug abuse * * * that's * * * in 
Florida, we don't want to contribute to that, and to the extent that 
any of our stores could contribute to that, we wanted to take * * * 
steps to help ensure that no stores do [so] in the future.'' Tr. 
1296-97.
    The testimony presented by Mr. Abbott was sufficiently detailed, 
consistent, and plausible to be fully credited in this recommended 
decision.
    Additional facts required for a disposition of this matter are 
set forth in the Analysis.

The Analysis

    Pursuant to 21 U.S.C. 824(a)(4) (2006), the Administrator \84\ 
is permitted to revoke a COR if persuaded that the registrant ``has 
committed such acts as would render * * * registration under section 
823 * * * inconsistent with the public interest * * *.'' The 
following factors have been provided by Congress in determining 
``the public interest'':
---------------------------------------------------------------------------

    \84\ This authority has been delegated pursuant to 28 CFR 
0.100(b) and 0.104 (2010).

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The [registrant's] experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The [registrant'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) (2006 & Supp. III 2010).

    ``[T]hese factors are considered in the disjunctive.'' Robert A. 
Leslie, M.D., 68 FR 15227, 15230 (2003). Any one or a combination of 
factors may be relied upon, and when exercising authority as an 
impartial adjudicator, the Administrator may properly give each 
factor whatever weight she deems appropriate in determining whether 
a registration should be rejected. Morall v. DEA, 412 F.3d 165, 173-
74 (D.C. Cir. 2005); JLB, Inc., d/b/a Boyd Drugs, 53 FR 43945, 43947 
(1988); David E. Trawick, D.D.S., 53 FR 5326, 5327 (1988); see also 
Joy's Ideas, 70 FR 33195, 33197 (2005); David H. Gillis, M.D., 58 FR 
37507, 37508 (1993); Henry J. Schwarz, Jr., M.D., 54 FR 16422, 16424 
(1989). Moreover, the Administrator is ``not required to make 
findings as to all of the factors * * *.'' Hoxie v. DEA, 419 F.3d 
477, 482 (6th Cir. 2005); see also Morall, 412 F.3d at 173-74. The 
Administrator is not required to discuss consideration of each 
factor in equal detail, or even every factor in any given level of 
detail. Trawick v. DEA, 861 F.2d 72, 76 (4th Cir. 1988) (the 
Administrator's obligation to explain the decision rationale may be 
satisfied even if only minimal consideration is given to the 
relevant factors and remand is required only when it is unclear 
whether the relevant factors were considered at all). The balancing 
of the public interest factors ``is not a contest in which score is 
kept; the Agency is not required to mechanically count up the 
factors and determine how many favor the Government and how many 
favor the registrant. Rather, it is an inquiry which focuses on 
protecting the public interest * * *.'' Jayam Krishna-Iyer, M.D., 74 
FR 459, 462 (2009).
    In an action to revoke a registrant's COR, the DEA has the 
burden of proving that the requirements for revocation are 
satisfied. 21 CFR 1301.44(e) (2011). The Government may sustain its 
burden by showing that the Respondent has committed acts 
inconsistent with the public interest. Jeri Hassman, M.D., 75 FR 
8194, 8235-36 (2010). Once DEA has made its prima facie case for 
revocation of the registrant's COR, the burden of production then 
shifts to the respondent to present sufficient mitigating evidence 
to assure the Administrator that he or she can be entrusted with the 
responsibility commensurate with such a registration. Steven M. 
Abbadessa, D.O., 74 FR 10077, 10078, 10081 (2009); Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008); Samuel S. Jackson, D.D.S., 72 
FR 23848, 23853 (2007);. Morall, 412 F.3d at 174; Humphreys v. DEA, 
96 F.3d 658, 661 (3d Cir. 1996); Shatz v. U.S. Dept. of Justice, 873 
F.2d 1089, 1091 (8th Cir. 1989); Thomas E. Johnston, 45 FR 72311, 
72312 (1980). ``[T]o rebut the Government's prima facie case, [the 
respondent] is required not only to accept responsibility for [the 
established] misconduct, but also to demonstrate what corrective 
measures [have been] undertaken to prevent the reoccurrence of 
similar acts.'' Jeri Hassman, M.D., 75 FR at 8236. Normal hardships 
to the practitioner and even to the surrounding community that are 
attendant upon the lack of registration are not relevant 
considerations. Linda Sue Cheek, M.D., 76 FR 66972, 66973 (2011); 
Abbadessa, 74 FR at 10078; see also Gregory D. Owens, D.D.S., 74 FR 
36751, 36757 (2009).
    The Agency's conclusion that past performance is the best 
predictor of future performance has been sustained on review in the 
courts, Alra Labs. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), as has 
the Agency's consistent policy of strongly weighing whether a 
registrant who has committed acts inconsistent with the public 
interest has accepted responsibility and demonstrated that he or she 
will not engage in future misconduct. Hoxie, 419 F.3d at 483; Ronald 
Lynch, M.D., 75 FR 78745, 78749 (2010) (Respondent's attempts to 
minimize misconduct held to undermine acceptance of responsibility); 
George Mathew, M.D., 75 FR 66138, 66140, 66145, 66148 (2010); East 
Main Street Pharmacy, 75 FR 66149, 66165 (2010); George C. Aycock, 
M.D., 74 FR 17529, 17543 (2009); Abbadessa, 74 FR at 10078; Krishna-
Iyer, 74 FR at 463; Medicine Shoppe, 73 FR at 387.
    While the burden of proof at this administrative level is a 
preponderance-of-the-evidence standard, see Steadman v. SEC, 450 
U.S. 91, 100-01 (1981), the Administrator's factual findings will be 
sustained on review so long as they are supported by ``substantial 
evidence.'' Hoxie, 419 F.3d at 481. Thus, ``the possibility of 
drawing two inconsistent conclusions from the evidence'' does not 
limit the Administrator's ability to find facts on either side of 
the contested issues in the case. Shatz, 873 F.2d at 1092; Trawick, 
861 F.2d at 77. However, in rendering a decision, the Administrator 
must consider all ``important aspect[s] of the problem,'' such as a 
Respondent's defense or explanation that runs counter to the 
Government's evidence. Wedgewood Vill. Pharmacy v. DEA, 509 F.3d 
541, 549 (D.C. Cir. 2007); Humphreys, 96 F.3d at 663. The ultimate 
disposition of the case must be in accordance with the weight of the 
evidence, not simply supported by enough evidence to justify, if the 
trial were to a jury, a refusal to direct a verdict when the 
conclusion sought to be drawn from it is one of fact for the jury. 
Steadman, 450 U.S. at 99 (internal quotation marks omitted).
    Regarding the exercise of discretionary authority, the courts 
have recognized that gross deviations from past agency precedent 
must be adequately supported. Morall, 412 F.3d at 183. Mere 
unevenness in application standing alone does not, however, render a 
particular discretionary action unwarranted. Chein v. DEA, 533 F.3d 
828, 835 (D.C. Cir. 2008) (citing Butz v. Glover Livestock Comm.

[[Page 62340]]

Co., 411 U.S. 182, 188 (1973)), cert. denied, ---- U.S. ----, 129 S. 
Ct. 1033, 1033 (2009). It is well-settled that since the 
Administrative Law Judge has had the opportunity to observe the 
demeanor and conduct of hearing witnesses, the factual findings set 
forth in a recommended decision are entitled to significant 
deference. Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 (1951). 
Thus, a recommended decision constitutes an important part of the 
record that must be considered in the Administrator's decision. 
Morall, 412 F.3d at 179. However, any recommendations set forth 
herein regarding the exercise of discretion are not binding on the 
Administrator and do not limit the exercise of that discretion. 5 
U.S.C. 557(b) (2006); River Forest Pharmacy, Inc. v. DEA, 501 F.2d 
1202, 1206 (7th Cir. 1974); Attorney General's Manual on the 
Administrative Procedure Act 8 (1947).

Factors 1 and 3: The Recommendation of the Appropriate State Licensing 
Board or Professional Disciplinary Authority, and Conviction Record 
Under Federal or State Laws Relating to the Manufacture, Distribution, 
or Dispensing of Controlled Substances

    Regarding Factor 1, the record contains no evidence of a 
recommendation regarding the Respondents' privileges to operate as a 
pharmacy by any cognizant state licensing board or professional 
disciplinary authority. However, the fact that a state has not acted 
against a registrant's license is not dispositive in this 
administrative determination as to whether continuation of a 
registration is consistent with the public interest. Patrick W. 
Stodola, M.D., 74 FR 20727, 20730 (2009); Jayam Krishna-Iyer, 74 FR 
at 461. It is well-established Agency precedent that a ``state 
license is a necessary, but not a sufficient condition for 
registration.'' Leslie, 68 FR at 15230; John H. Kennedy, M.D., 71 FR 
35705, 35708 (2006). Even the reinstatement of a state license does 
not affect the DEA's independent responsibility to determine whether 
a registration is in the public interest. Mortimer B. Levin, D.O., 
55 FR 9209, 8210 (1990). The ultimate responsibility to determine 
whether a registration is consistent with the public interest has 
been delegated exclusively to the DEA, not to entities within state 
government. Edmund Chein, M.D., 72 FR 6580, 6590 (2007), aff'd, 
Chein v. DEA, 533 F.3d 828 (D.C. Cir. 2008), cert. denied, ---- U.S. 
----, 129 S.Ct. 1033 (2009). Congress vested authority to enforce 
the CSA in the Attorney General and not state officials. Stodola, 74 
FR at 20375. Thus, on these facts, the fact that the record contains 
no evidence of a recommendation by a state licensing board does not 
weigh for or against a determination as to whether the Respondents' 
continued registrations with DEA would be consistent with the public 
interest.
    Regarding the third factor (convictions relating to the 
manufacture, distribution, or dispensing of controlled substances), 
the record in this case does not contain evidence that the 
Respondents have been convicted of (or charged with) a crime related 
to the manufacture, distribution, or dispensing of controlled 
substances. DEA administrative proceedings are non-punitive and ``a 
remedial measure, based upon the public interest and the necessity 
to protect the public from those individuals who have misused 
controlled substances or their DEA COR, and who have not presented 
sufficient mitigating evidence to assure the [Administrator] that 
they can be trusted with the responsibility carried by such a 
registration.'' Jackson, 72 FR at 23853; Leo R. Miller, M.D., 53 FR 
21931, 21932 (1988). Where evidence in a particular case reflects 
that the Respondent has acquired convictions relating to the 
manufacture, distribution, or dispensing of controlled substances, 
those convictions must be carefully examined and weighed in the 
adjudication of whether the issuance of a registration is in the 
public interest. 21 U.S.C. 823(f).
    Although the standard of proof in a criminal case is more 
stringent than the standard required at an administrative 
proceeding, and the elements of both federal and state crimes 
relating to controlled substances are not always co-extensive with 
conduct that is relevant to a determination of whether registration 
is within the public interest, evidence that a registrant has been 
convicted of crimes related to controlled substances is a factor to 
be evaluated in reaching a determination as to whether he or she 
should be entrusted with a DEA certificate. The probative value of 
an absence of any evidence of criminal prosecution is somewhat 
diminished by the myriad of considerations that are factored into a 
decision to initiate, pursue, and dispose of criminal proceedings by 
federal, state, and local prosecution authorities. See Robert L. 
Dougherty, M.D., 76 FR 16823, 16833 n.13 (2011); Dewey C. Mackay, 
M.D., 75 FR 49956, 49973 (2010) (``[W]hile a history of criminal 
convictions for offenses involving the distribution or dispensing of 
controlled substances is a highly relevant consideration, there are 
any number of reasons why a registrant may not have been convicted 
of such an offense, and thus, the absence of such a conviction is of 
considerably less consequence in the public interest inquiry''), 
aff'd, Mackay v. DEA, 664 F.3d 808 (10th Cir. 2011); Ladapo O. 
Shyngle, M.D., 74 FR 6056, 6057 n.2 (2009).
    Accordingly, consideration of the evidence of record under the 
first and third factors neither supports the Government's argument 
for revocation nor militates against it.

Factors 2 and 4: The Respondent's Experience in Dispensing Controlled 
Substances, and Compliance With Applicable State, Federal or Local Laws 
Relating to Controlled Substances

    Agency precedent 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. EZRX, LLC, 69 FR 63178, 63181 
(1988); Plaza Pharmacy, 53 FR 36910 (1988). The gravamen of the 
Government's allegations and evidence in this case focuses on the 
manner in which the Respondent, through its agents, dispensed 
controlled substances. Factors two and four are most relevant to 
this analysis.
    Regarding Factor Two, in requiring an examination of a 
registrant's experience in dispensing controlled substances, 
Congress manifested an acknowledgement that the qualitative manner 
and the quantitative volume in which a registrant has engaged in the 
dispensing of controlled substances may be significant factors to be 
evaluated in reaching a determination as to whether a registrant 
should be (or continue to be) entrusted with a DEA COR. In some (but 
not all) cases, viewing a registrant's actions against a backdrop of 
how she has performed activity within the scope of the certificate 
can provide a contextual lens to assist in a fair adjudication of 
whether continued registration is in the public interest. In this 
regard, however, the Agency has applied principles of reason, 
coupled with its own expertise in the application of this factor. 
For example, the Agency has taken the reasonable position that this 
factor can be outweighed by acts held to be inconsistent with the 
public interest. Jayam Krishna-Iyer, 74 FR at 463; see also Jeri 
Hassman, M.D., 75 FR 8194, 8235 (2010) (acknowledging Agency 
precedential rejection of the concept that conduct which is 
inconsistent with the public interest is rendered less so by 
comparing it with a respondent's legitimate activities which 
occurred in substantially higher numbers); Paul J. Cargine, Jr., 63 
FR 51592, 51560 (1998) (``[E]ven though the patients at issue are 
only a small portion of Respondent's patient population, his 
prescribing of controlled substances to these individuals raises 
serious concerns regarding [his] ability to responsibly handle 
controlled substances in the future.''). Similarly, in Cynthia M. 
Cadet, M.D., 76 FR 19450, 19450 n.1 (2011), the Agency determined 
that existing List I precedent \85\ holding that experience related 
to conduct within the scope of the COR sheds light on a 
practitioner's knowledge of applicable rules and regulations, would 
not be applied to cases where intentional diversion allegations were 
sustained. The Agency's approach in this regard has been sustained 
by on review. Mackay, 664 F.3d at 819.
---------------------------------------------------------------------------

    \85\ See, e.g., Volusia Wholesale, 69 FR 69409, 69410 (2004).
---------------------------------------------------------------------------

    Regarding Factor Four (compliance with laws related to 
controlled substances), to effectuate the dual goals of conquering 
drug abuse and controlling both legitimate and illegitimate traffic 
in controlled substances, ``Congress devised a closed regulatory 
system making it unlawful to manufacture, distribute, dispense, or 
possess any controlled substance except in a manner authorized by 
the CSA.'' Gonzales v. Raich, 545 U.S. 1, 13 (2005). Under the 
regulations, ``[t]he 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.'' 21 CFR 1306.04(a). Under 
this language, a pharmacist has a duty ``to fill only those 
prescriptions that conform in all respects with the requirements of 
the [CSA] and DEA regulations, including the requirement that the 
prescribing practitioner be properly registered.'' Electronic

[[Page 62341]]

Prescriptions for Controlled Substances, 75 FR 16236, 16266 (2010). 
In short, a pharmacist has a ``corresponding responsibility under 
Federal law to dispense only lawful prescriptions.'' Liddy's 
Pharmacy, L.L.C., 76 FR 48887, 48895 (2011). The corresponding 
responsibility to ensure the dispensing of valid prescriptions 
extends to the pharmacy itself. Medicine Shoppe-Jonesborough, 73 FR 
364, 384 (2008) (Finding that a respondent pharmacy was properly 
charged with violating corresponding responsibility); See also 
United Prescription Services, Inc., 72 FR 50397, 50407-08 (2007) 
(same). See Drug Enforcement Administration, Issuance of Multiple 
Prescriptions for Schedule II Controlled Substances, 72 FR 64921, 
69424 (2007) (referring to a pharmacy's corresponding 
responsibility); see also Drug Enforcement Administration, Role of 
Authorized Agents in Communicating Controlled Substance 
Prescriptions to Pharmacies, 75 FR 61613, 61617 (2010) (Referring to 
a pharmacies ``corresponding responsibility regarding the dispensing 
of controlled substances.''); EZRX, LLC, 69 FR at 63181 (``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.'') 
(emphasis added). Settled Agency precedent has interpreted this 
corresponding responsibility as prohibiting the filling of a 
prescription where the pharmacist or pharmacy ``knows or has reason 
to know'' that the prescription is invalid.\86\ Bob's Pharmacy & 
Diabetic Supplies, 74 FR 19599, 19601 (2009) (citing Medicine 
Shoppe-Jonesborough, 73 FR at 381 (quoting Medic-Aid Pharmacy, 55 FR 
30043, 30044 (1990))); See also United Prescription Services, Inc., 
72 FR 50397, 50407-08 (2007) (Finding violation of corresponding 
responsibility where pharmacy ``had ample reason to know'' that the 
practitioner was not acting in the usual course of professional 
practice).
---------------------------------------------------------------------------

    \86\ In addition to the foregoing, under Florida law a 
pharmacist will be subject to discipline if he or she ``dispens[es] 
any medicinal drug based upon a communication that purports to be a 
prescription * * *. When the pharmacist knows or has reason to 
believe that the purported prescription\1\ is not based upon a valid 
practitioner-patient relationship.'' Fla. Stat. Sec.  465.016(1)(s). 
In Trinity Health Care Corp., 72 FR at 30854, the Agency 
acknowledged that the Florida state standard reflects essentially 
the same standard present in the DEA regulations which makes it 
unlawful to for a pharmacy registrant to intentionally look the 
other way ``to avoid [actual] knowledge of the real purpose of [an 
illegitimate] prescription.'' Bertolino, 55 FR at 4730.
---------------------------------------------------------------------------

    DEA has interpreted the ``legitimate medical purpose'' feature 
of the corresponding responsibility duty ``as prohibiting a 
pharmacist from filling a prescription for a controlled substance 
when he either knows or has reason to know that the prescription was 
not written for a legitimate medical purpose,'' and has been equally 
consistent in its admonishment that ``[w]hen prescriptions are 
clearly not issued for legitimate medical purposes, a pharmacist may 
not intentionally close his eyes and thereby avoid [actual] 
knowledge of the real purpose of the prescription.'' Sun & Lake 
Pharmacy, Inc., 76 FR 24523, 24530 (2011); Liddy's Pharmacy, L.L.C., 
76 FR at 48895; East Main Street Pharmacy, 75 FR 66149, 66163 
(2010); Lincoln Pharmacy, 75 FR 65667, 65668 (2010); Bob's Pharmacy, 
74 FR at 19601. The Agency does not require omniscience. Carlos 
Gonzalez, 76 FR 63118, 63142 (2011) (citing Holloway Distrib., 72 FR 
42118, 42124 (2007)). However, when the circumstances surrounding 
the presentation of a prescription would give rise to suspicion in a 
``reasonable professional,'' there is a duty to ``question the 
prescription[].'' Bertolino, 55 FR at 4730. Though initially framed 
as a ``reasonable professional'' standard, the Agency has considered 
the duty to discharge the corresponding responsibility by evaluating 
the circumstances in light of what would be considered suspicious by 
a ``reasonable pharmacist.'' East Main Street Pharmacy, 75 FR at 
66165; see also Winn's Pharmacy, 56 FR 52559, 52561 (1991). 
Accordingly, a pharmacist or pharmacy may not dispense a 
prescription in the face of a red flag (i.e., a circumstance that 
does or should raise a reasonable suspicion as to the validity of a 
prescription) unless he or it takes steps to resolve the red flag 
and ensure that the prescription is valid. Id. Because Agency 
precedent limits the corresponding responsibility to circumstances 
which are known or should have been known, Sun & Lake Pharmacy, 
Inc., 76 FR at 24530, it follows that, to show a violation of a 
corresponding responsibility, the Government must establish that: 
(1) the Respondent dispensed a controlled substance; (2) a red flag 
was or should have been recognized at or before the time the 
controlled substance was dispensed; and (3) the question created by 
the red flag was not resolved conclusively prior to the dispensing 
of the controlled substance. See Sun & Lake Pharmacy, 76 FR at 24532 
(Finding that pharmacy violated corresponding responsibility where 
it took no steps to resolve red flags prior to dispensing controlled 
substances.). The steps necessary to resolve the red flag 
conclusively will perforce be influenced by the nature of the 
circumstances giving rise to the red flag.
    When considering whether a pharmacy has violated its 
corresponding responsibility, the Agency considers whether the 
entity, not the pharmacist, can be charged with the requisite 
knowledge. See United Prescription Services, 72 FR 50397, 50407 
(Respondent pharmacy violated corresponding responsibility because 
``an entity which voluntarily engages in commerce [to] other States 
is properly charged with knowledge of the laws regarding the 
practice of medicine in those States.''). See also Pharmboy Ventures 
Unlimited, Inc., 77 FR 33770, 33772 n.2 (2012) (``DEA has long held 
that it can look behind a pharmacy's ownership structure `to 
determine who makes decisions concerning the controlled substance 
business of a pharmacy.'''); S&S Pharmacy, Inc., 46 FR 13051, 13052 
(1981) (the corporate pharmacy acts through the agency of its PIC). 
Knowledge obtained by the pharmacists and other employees acting 
within the scope of their employment may be imputed to the pharmacy 
itself. See U.S. v. One Parcel of Land, 965 F.2d 311, 316 (7th 
Cir.1992) (``Only knowledge obtained by corporate employees acting 
with the scope of their employment is imputed to the 
corporation.'').
    In support of its allegation that the Respondents have violated 
their corresponding responsibilities, the Government has introduced 
evidence that the Respondent pharmacies: (1) dispensed controlled 
substances issued by prescribing physicians who lacked authority to 
prescribe the controlled substances that were dispensed (Lack of 
Valid Prescriber Authority); and (2) dispensed controlled substances 
under circumstances that would lead a reasonable pharmacist to have 
sufficient doubt about whether the prescriptions were issued for 
legitimate medical purposes by practitioners acting in the usual 
course of a professional practice (Questionable Circumstances).

Lack of Valid Prescriber Authority.

    The uncontroverted evidence of record establishes that both 
Respondent pharmacies dispensed controlled substances on 
prescriptions issued by Dr. Wicks when he no longer possessed 
authority to issue such prescriptions. The Government's evidence 
demonstrates thirty-eight (38) dispensing events where Respondent 
219 dispensed controlled substances for Wicks prescriptions after 
his DEA COR expired on May 31, 2011. Tr. 468; Gov't Ex. 26. 
Respondent 5195 dispensed controlled substances seventeen (17) times 
after Wicks' COR expired. Tr. 469. Respondent 5195 filled Dr. Wicks' 
oxycodone prescriptions as late as July 14, 2011, and Respondent 
dispensed on Wicks' oxycodone prescriptions as late as July 15, 
2011. Gov't Ex. 10 at 6.
    Likewise uncontroverted record evidence establishes that the DEA 
revoked the COR of Dr. Lynch, effective January 18, 2011, thereby 
depriving him of the authority to prescribe, administer or dispense 
any controlled substances. Tr. 66; see also, Gov't Ex. 32 at 3-12. 
On that date, the DEA Web site maintained for registrants would have 
reflected that Lynch's registration was ``expired.'' Tr. 74-75. It 
is beyond argument that Respondent 219 dispensed controlled 
substances pursuant to prescriptions written by Dr. Lynch no fewer 
than twenty-seven (27) times after his COR was revoked by the 
Agency. Gov't Ex. 32. Of these twenty-seven prescriptions, seven 
were dispensed later than June of 2011. Gov't Ex. 32, at 5, 7. 
Respondent 5195 filled four prescriptions after the January 18, 
2011, revocation, one of which occurred in June. Gov't Ex. 32, at 
12. Thus, the Respondent pharmacies were dispensing controlled 
substances on Dr. Lynch's prescriptions approximately five months 
(and more) after he had lost his authority to prescribe them.
    It would be difficult to imagine a duty of a pharmacy registrant 
that is more fundamental to the law and spirit of the CSA than the 
obligation to ensure that controlled substance prescriptions are 
issued only on the authority of those empowered to prescribe by the 
DEA. See Liddy's Pharmacy, 76 FR at 48895 (defining ``corresponding 
responsibility under Federal law to dispense only lawful 
prescriptions.''). Absent

[[Page 62342]]

confirmation of a COR, a prescription written by one without COR 
authority would authorize the routine distribution of dangerous 
narcotics on the approval anyone from the uninformed to the 
malevolent. In this vein, the DEA Pharmacists Manual (a copy of 
which was introduced into the record at the Respondent's request) 
specifically provides that controlled substance prescriptions may 
only be issued by a practitioner who is, inter alia, ``[r]egistered 
with DEA or exempted from registration.'' DEA Pharm. Man. Sec.  IX. 
The terms of this requirement are replicated in 21 CFR 1306.03(a), 
which provides that, ``[a] prescription for a controlled substance 
may be issued only by an individual practitioner who is: (1) 
Authorized to prescribe controlled substances by the jurisdiction in 
which he is licensed to practice his profession and (2) Either 
registered or exempted from registration pursuant to Sec. Sec.  
1301.22(c) and 1301.23 of this chapter.'' (emphasis added).
    Because a prescription issued pursuant to an expired (or 
revoked) COR is invalid, 21 CFR 1306.03, it follows that the 
expiration of a COR is a clear red flag that a prescription issued 
pursuant to that COR is invalid. Liddy's Pharmacy, 76 FR at 48895; 
Electronic Prescriptions for Controlled Substances, 75 FR at 16266. 
Accordingly, the prescriptions issued pursuant to the invalid CORs 
of Drs. Wicks and Lynch, presented red flags. Having reached this 
conclusion, the question becomes whether the expirations of the CORs 
were recognized, or should have been recognized, by the Respondents.
    The Respondents argue that they should be shielded from 
accountability in this regard because the commercial software they 
employed had a lag time. Even if the accuracy of this position were 
conceded, arguendo, it would afford them no quarter here.\87\ The 
undisputed testimony in this matter establishes that CVS employs a 
third-party vender (HMS) for its registration verification and that 
HMS receives its data directly from NTIS, a government Web site. Tr. 
1247. HMS receives weekly updates from NTIS, and CVS receives weekly 
updates from HMS. Tr. 1247-48. Thus, notice of a registration action 
would reach CVS no later than two weeks from the date of the action. 
Id. Dr. Wicks's registration expired on May 31, 2011, while Dr. 
Lynch's registration was revoked on January 18, 2011. Accordingly, 
even under their own theory, the Respondents are accountable with 
notice of Dr. Wick's expiration on June 15, 2011,\88\ and notice of 
Dr. Lynch's revocation on February 2, 2011. In this regard, 
Respondent 5195 dispensed controlled substances pursuant to post-
expiration Wicks prescriptions twelve times on or after June 15, 
2011. Gov't Ex. 27. Respondent 219 dispensed controlled substances 
under similar circumstances twenty-seven times. Gov't Ex. 28. 
Similarly, all but one of the post-revocation Dr. Lynch dispensings 
occurred after February 2, 2011. Simply put, the Respondent 
pharmacies knew or should have known of the relevant registration 
statuses for the overwhelming majority of the post-expiration 
dispensings under either theory.
---------------------------------------------------------------------------

    \87\ If the law were as the Respondents urge, then only those 
registrants who engage reliable and current software systems could 
be held accountable for dispensing controlled substances on the 
authorization of the unregistered or improperly registered. Suffice 
it to say that such a structure would hardly encourage responsible 
purchasing decisions by DEA registrants (or even consistent and 
cogent legal counsel by those advising them).
    \88\ In their post-hearing brief, the Respondents claim that the 
date of notice of the Wicks Expiration was two weeks after July 1, 
2011, the date the registration was ``retired.'' Resp'ts Brief, at 
119 n. 116. This is contrary to the testimony. DI Langston testified 
that a number will appear as ``expired'' on the date of expiration. 
Tr. 79, 102-03.
---------------------------------------------------------------------------

    Turning to third prong of the inquiry--resolution--the record is 
clear that neither Dr. Wicks nor Dr. Lynch's \89\ registration 
statuses could have been resolved conclusively to warrant dispensing 
of a controlled substance. DI Langston testified that, if a 
pharmacist is confronted with an invalid DEA number, the red flag 
may be resolved by a phone call to the DEA. Tr. 103. Because neither 
Dr. Wicks nor Dr. Lych regained authority to prescribe after the 
dates of expiration/registration, a call to the DEA could not have 
resolved the red flag in favor of dispensing. Therefore, substantial 
evidence supports the conclusion that the red flags raised by the 
doctors' registration statuses were not resolved conclusively prior 
to dispensing.
---------------------------------------------------------------------------

    \89\ Admittedly, beyond the three scrips that were written on 
behalf of patient T.N. and dispensed by Respondent 219 (Gov't Ex. 
33), the Government did not introduce evidence regarding the dates 
that Dr. Lynch's prescriptions were actually issued by him. However, 
the Federal Register entry ordering revocation, which was published 
prior to dispensing, indicates that the Agency found that Dr. Lynch 
had engaged in the unauthorized practice of medicine and had issued 
prescriptions which ``lacked a legitimate medical purpose.'' Gov't 
Ex. 31 at 3-12; Ronald Lynch M.D., 75 FR 78745, 78753 (2010). Thus, 
at the time the controlled substances were dispensed, not only did 
Dr. Lynch lack authority, but the public notice announced that his 
privileges were revoked for issuing illegitimate controlled 
substance prescriptions. Significantly, Paras Priyadarshi, the 
Respondent 219 PIC, indicated to GS Carter that he did not fill 
prescriptions written by certain doctors because ``they had prior 
action taken against them.'' Tr. 252, 933.
---------------------------------------------------------------------------

    Accordingly, it is clear that, on numerous occasions, the 
Respondents dispensed controlled substances in the face of 
recognizable and unresolvable red flags (expired registration 
numbers) that put them on notice that the controlled substance 
prescriptions were not issued in the usual course of a professional 
practice. 21 CFR 1306.04(a). Such acts are sufficient for the 
Government to sustain its burden in establishing its prima facie 
case for revocation.\90\
---------------------------------------------------------------------------

    \90\ Having reached this conclusion, this opinion will not 
address whether the dispensing of prescriptions pursuant to Dr. 
Wicks's California registration could rise to the level of a 
violation of the corresponding responsibility.
---------------------------------------------------------------------------

Questionable Circumstances.

    The record also contains evidence of many dispensing events that 
were attended by circumstances that raised red flags that required 
resolution. The Government's expert opined that, in many of these 
circumstances, the confluence of red flags were such that a 
reasonable pharmacist could not have dispensed pursuant to the 
prescription while complying with the requirements of his or her 
corresponding responsibility. See Tr. 764-765. The Respondents 
contend that this testimony must be rejected because: (1) 
``Professor Doering's testimony is not based on a reliable 
methodology,'' Resp'ts Brief, at 92; (2) Professor Doering's opinion 
is based on bias, Resp'ts Brief, at 95; (3) Professor Doering did 
not look at the hard copies of any prescriptions when rendering his 
opinion, Resp'ts Brief, at 98; and (4) the evidence does not support 
Professor Doering's opinions, Resp'ts Brief, at 104. The first two 
contentions have been considered, and rejected, above. The third 
argument, which invokes Professor Doering's methodology, must be 
rejected for the same reasons as the second. Thus, the question 
becomes whether Professor Doering's opinion that certain 
combinations of red flags could not have been conclusively resolved 
was supported by substantial evidence.
    As explained above, Professor Doering testified that, in some 
circumstances, resolution of red flags would be impossible 
``[b]ecause the methods that are available are flawed, and 
presenting identification simply identified the individual as the 
person presenting the prescription, and phoning the practitioner is 
so subject to fraud and deceit that even if a practitioner told me 
or his representative that, yes, the doctor wrote those that's not 
good enough for me.'' Tr. 764. The Respondents argue that this 
conclusion misstates the value of verification and contacting; and 
also that ``the evidence clearly shows that Respondents did much 
more to evaluate and verify the legitimacy of prescriptions 
presented.'' Resp'ts Brief, at 104.
    The Respondents have consistently and repeatedly urged that 
these two methods (verification and contacting) circumscribe the 
entire imposable duty upon a pharmacy registrant and defend this 
approach on multiple levels.\91\ The Respondent's expert, Professor 
Brushwood, distilled his understanding of pharmacy registrant 
obligations under his VIGIL protocol, which, as discussed at length, 
supra, essentially verifies only through ``verification'' (V), 
contacting the prescriber's office, and ``identification'' (I), 
seeking government-issued identification from the scrip presenter. 
Tr. 1021, 1030. The position of the Government's expert that these 
methods are of no avail when the scenario includes a complicit 
prescriber and/or a diverting presenter \92\ is logically more 
persuasive. In fact, the Respondents' expert ultimately conceded 
that checking ID and contacting a prescriber will not uniformly be 
sufficient to resolve every red flag. Tr. 1148. Thus, both experts 
who presented testimony at the hearing concurred that an ID check 
coupled with a prescriber contact (the only types of verification 
employed by the Respondent

[[Page 62343]]

pharmacies) will not always be sufficient to resolve red flags.
---------------------------------------------------------------------------

    \91\ Respondent 5195 PIC Merrill testified that some other 
measures were utilized ``sometimes.'' Tr. 235-36.
    \92\ Tr. 699.
---------------------------------------------------------------------------

    In further support of their assertion that verification and 
contact are valid means of resolution, the Respondents point to 
written guidance distributed by the DEA and the State of Florida. 
First, the Respondents cite to Florida Administrative Code Sec.  
64B16-27.823,\93\ which, in pertinent part, directs pharmacists to 
contact the prescribing physician and verify identification when a 
combination of any two of five enumerated red flags is 
encountered.\94\ The Respondents take the position that ``[t]here 
are no other formal standards in Florida that govern pharmacists for 
purposes of dispensing controlled substances.'' Resp't Brief at 11.
---------------------------------------------------------------------------

    \93\ A copy of which was received into evidence. Resp't Ex. 20.
    \94\ The specified red flags are (a) frequent loss of controlled 
substance medications; (b) only controlled substance medications are 
prescribed for a patient; (c) one person presents controlled 
substance prescriptions with different patient names; (d) same or 
similar controlled substance medication is prescribed by two or more 
prescribers at same time; (e) patient always pays cash and always 
insists on brand name product. Id.
---------------------------------------------------------------------------

    Employing similar logic, the Respondents point to Appendix D of 
the DEA Pharmacist's Manual,\95\ which provides, inter alia, that

    \95\ A copy of which was received into evidence at the 
Respondents' request. Resp't Ex. 19.
---------------------------------------------------------------------------

[w]hen there is a question about any aspect of the prescription 
order, the pharmacist should contact the prescriber for verification 
or clarification [and i]f at any time a pharmacist is in doubt, he/
she should require proper identification.

Id. The Respondents urge that ``[t]here is no other guidance from 
the DEA or any other federal entity with regard to the exercise of a 
pharmacist's corresponding responsibility.'' Resp't Brief at 15.
    Thus, the Respondents appear to argue that, because Florida and 
DEA have published sources that list prescriber contact and ID check 
procedures, that no other measures are required. The Respondents' 
posture in this regard is illusory, inconsistent with the testimony 
of its expert witness, and even internally inconsistent with its own 
arguments. While positing that isolated lines from Appendix D of the 
DEA Pharmacist's Manual and Florida Administrative Code Sec.  64B16-
27.823 comprise the entire universe of correct steps to resolve 
controlled substance prescribing red flags, the Respondents have 
simultaneously argued that

[t]he process of identifying and resolving red flags requires the 
exercise of individual professional judgment. Different pharmacists 
can have a different approach to dealing with red flags, and can 
reach different conclusion, but that does not mean they are not both 
exercising their corresponding responsibility.

Resp't Brief at 8 (internal record citations omitted). It would be 
difficult to reconcile the Respondents' argument that prescriber 
contact and ID check are the sole means of red flag resolution with 
their simultaneous position that the process of identifying and 
resolving red flags should be entrusted to multiple valid approaches 
by individual pharmacists.
    The Respondents' position that prescriber contact and ID check 
are the alpha and omega of red flag resolution also flies in the 
face of common sense. By adopting this argument the Agency would be 
endorsing an approach wherein a pharmacist who had even actual 
knowledge of intentional diversion on the part of prescriber and/or 
patient could completely discharge his duties to ensure a closed 
regulatory system by doing no more than ascertaining the true 
identity of the scrip presenter and procuring assurances from a 
complicit prescriber. While mindful of the established maxim that a 
specific provision controls over one of more general 
application,\96\ the proposed interpretation of a pharmacist's 
obligations based on the offered sources would present a ludicrous 
result that was obviously never intended by the drafters of the 
Florida Administrative Code or the DEA Pharmacist's Manual, and are 
not endorsed in this recommended decision. Chowdhury v. Ashcroft, 
241 F.3d 848, 853 (7th Cir. 2001) (``regulations * * * should not be 
so strictly interpreted as to provide unreasonable, unfair, and 
absurd results.''); see also State v. Iacovone, 660 So.2d 1371, 1373 
(Fla. 1995) (``[s]tatutes as a rule will not be interpreted so as to 
yield an absurd result.'') (internal punctuation omitted) Professor 
Doering credibly and persuasively testified that the provisions in 
the Florida Administrative Code do not provide an exhaustive 
compilation of a pharmacists obligation, and that ``[t]he standards 
of care * * * are not always determined by law, by statute, by rule 
[but are] determined, in fact, by what pharmacists do under like, or 
similar circumstances.'' Tr. 921. On this point, the Respondent's 
expert, Professor Brushwood, agreed. Tr. 1091. Professor Brushwood 
stated that the use of a pharmacist's professional judgment goes 
beyond the factors set forth in the Florida Administrative Code. Tr. 
1049-50. The pharmacy registrant's duty that ripens while acting as 
a reasonable professional to question a controlled substance 
prescription, based on the circumstances surrounding the 
presentation of the scrip,\97\ must be and is, much richer than the 
inexorable execution of a mechanical ID check and prescriber call. 
Merely effecting either or both of these steps will not, in all 
circumstances somehow magically absolve a DEA registrant of all 
responsibility stemming from dispensing a controlled substance 
pursuant to an illegitimate prescription. To be clear, verification 
and contact are useful for resolving specific types of red flags. 
See Tr. 764. However, the situational values of these two means of 
resolution do not undermine Professor Doering's conclusion 
(concurred in by Professor Brushwood) that their use will not 
discharge a corresponding responsibility in all circumstances.
---------------------------------------------------------------------------

    \96\ Cf. Gozion-Peretz v. United States, 498 U.S. 395, 407 
(1991).
    \97\ Bertolino, 55 FR at 4730.
---------------------------------------------------------------------------

    Turning to the Respondents' contention that their pharmacists 
performed checks beyond verification and contact--even assuming 
arguendo that the pharmacists performed all the checks alleged, the 
record stands uncontradicted that ``the methods that are available 
are flawed.'' Tr. 764. Indeed, no expert who testified actually 
presented any manner in which the presented combination of red flags 
actually could be resolved. Thus, the fact that the Respondents may 
have employed additional procedures when attempting to establish the 
validity of the prescriptions does not undermine Professor Doering's 
testimony that the particular combination of red flags were 
unresolvable and that the controlled substance prescriptions just 
should not have been dispensed. As discussed, supra, the credible 
and persuasive evidence of record establishes that in the credited 
opinion of the Government's expert, on various occasions, each of 
the Respondents dispensed controlled substances in the face of red 
flags that were or should have been recognized, and that could not 
have been resolved to the satisfaction of a reasonably prudent 
pharmacist.
    In its brief, the Government highlights many dispensing events 
that did not have the benefit of explanatory testimony from its 
expert witness. Given the number and strength of the instances that 
were the subject of Professor Doering's testimony, it is not 
necessary to determine whether his expert opinions should be 
extrapolated to events over which he was not queried and cross-
examined at the hearing.
    As discussed, supra, Professor Doering described multiple 
dispensing events on multiple dates from both Respondents that 
evidenced red flags that could not, in his expert opinion, have been 
sufficiently resolved to warrant filling the prescriptions. The 
testimony from Professor Brushwood, that there may be information 
set forth in a patient profile database that could theoretically 
resolve these red flags is simply not persuasive on this record.\98\ 
In any event, the only two forms of verification offered by 
Professor Brushwood in this VIGIL model and his review of 
Respondents' operating procedures were presenter ID check and 
practitioner contact. Professor Doering convincingly testified that 
these two avenues would provide little insight in scenarios where 
patient and/or physician were complicit in diversion; a condition 
that

[[Page 62344]]

Doering believed was likely based on the transactions he reviewed.
---------------------------------------------------------------------------

    \98\ In Int'l Union (UAW) v. NLRB, 459 F.2d 1329, 1336 (D.C. 
Cir. 1972), the United States Court of Appeals for the District of 
Columbia Circuit held that National Labor Relations Board committed 
reversible error by declining to apply the ``adverse inference 
rule'' where one of the parties had ``relevant evidence within his 
control which he fail[ed] to produce.'' The applicability of the 
adverse inference rule is not dependent upon the issuance of a 
subpoena seeking to compel production. Int'l Union v. NLRB, 459 F.2d 
at 1338. This precedent was embraced by the Eleventh Circuit in 
Callahan v. Schultz, 783 F.2d 1543, 1545 (11th Cir. 1986). The 
judicious utilization of the adverse inference rule allows an 
administrative tribunal to use the tools available to it and 
``permits vindication of the tribunal's authority in situations 
where vindication might, as a practical matter, be impossible 
otherwise.'' Int'l Union v. NLRB, 459 F.2d at 1339. While the 
present record provides more than ample basis for the application of 
an adverse inference that material in the Respondents' patient 
profile databases would not be helpful to their cases, this case can 
be decided without the need to apply such an inference.
---------------------------------------------------------------------------

    The statements and actions of the Respondents' employees speak 
volumes on the culture that existed in the two pharmacies whose 
conduct is the subject of these proceedings. The PICs and other 
employees from both Respondent pharmacies told DEA investigators 
that there was a practice that oxycodone prescriptions would be shut 
off at a given time each day.\99\ Respondent 5195 PIC Jessica 
Merrill stated that she could fill oxycodone prescriptions all day, 
but that the pharmacist on duty sets a time where pharmacy customers 
presenting oxycodone prescriptions would be falsely told that the 
pharmacy was out of stock. Merrill told investigators that, because 
the oxycodone customer are aware of the first-come-first served 
practice, they start to ``stagger'' in at 8:02 a.m. Tr. 230-31. PIC 
Merrill even offered the astonishing comment that that she makes a 
practice of keeping some oxycodone on hand in case it is needed to 
fill prescriptions for ``real pain patients.'' Tr. 231. The practice 
of shutting off the pharmacy at a given hour to oxycodone patients 
was corroborated in a separate interview of another Respondent 5195 
pharmacist, named Mark Mascitelli. Tr. 180-82. Lead pharmacist Marie 
Morrell told investigators that the first-come-first served 
oxycodone cut off time was sometimes reached between 10:00 a.m. and 
noon, but could be reached as early as 8:30 a.m. Tr. 188-89.
---------------------------------------------------------------------------

    \99\ PIC Merrill's explanation that this practice is based on 
workload considerations (Tr. 229-30) is wholly unpersuasive. No 
evidence was introduced that oxycodone prescriptions require or 
receive verification beyond the (minimal) steps afforded to all 
controlled substances dispensed from the Respondent 219 pharmacy. 
Yet there is no indication that all controlled substances are 
rendered unavailable by this policy of fabricating depleted stocks 
to the customers. The Respondents' reliance upon this yarn in its 
Brief did not render it more convincing in any respect. Resp't Brief 
at 35-36.
---------------------------------------------------------------------------

    During the course of the execution of an AIW, GS Carter actually 
heard one of the Respondent 5195 pharmacy technicians, Arlene 
Piccerilli falsely tell a customer that the pharmacy was out of 
stock. Piccerilli explained that she knew this was a lie, but that 
this was the practice at the store. Tr. 224-25. Tellingly, 
Piccerilli also related her understanding that pharmacy staff cannot 
judge whether a prescription is valid, and that such a determination 
is within the exclusive purview of the prescribing physician. Tr. 
226.
    Interestingly, PIC Merrill acknowledged that she had perceived 
patterns in prescribing related to oxycodone, that she did not 
understand why patients traveled distances of over thirty miles to 
have their oxycodone prescriptions filled at Respondent 5195, and 
that she was aware of occasions where her pharmacy dispensed 
medications to patients with identical addresses who presented 
identical controlled substance prescriptions issued by the same 
physician. Tr. 238, 240-41, 301-02. When it was suggested to PIC 
Merrill that the patients may be selling the oxycodone medications 
her pharmacy was dispensing, her response was not surprise, shock, 
or denial, but merely ``I know.'' Tr. 238. It was revealing that 
Pharmacist Mascitelli related that he and PIC Merrill had a 
conversation with CVS supervisor Jennifer Lalani wherein they were 
instructed to ``identify more filters to put in place for oxycodone 
prescriptions.'' Tr. 185. Whatever the verification checks that 
Respondent 5195 urges as sufficient, it seems that at least in the 
opinion of company supervisor Jennifer Lalani, there was more that 
could and should have been done.
    Interviews with personnel at Respondent 219 were similarly 
informative. Respondent 219 PIC Paras Priyadarshi and Pharmacist 
Susan Masso both told investigators that it was not uncommon for 
their pharmacy customers to request name-brand oxycodone by its 
slang monikers ``the Ms'' or ``the Blues.'' Tr. 250, 256, 264. PIC 
Priyadarshi told investigators that he found nothing remarkable 
about such requests, or that Respondent 219 was filling a like 
combination of three controlled substances (oxycodone, alprazolam, 
and carisoprodol), to the exclusion of other medications, for a high 
number prescribing physicians. Tr. 247-48. Priyardarshi also 
indicated that he found nothing unusual about a high number of 
common ailment diagnosis codes emanating from individual 
prescribers, or the high concentrations of oxycodone prescriptions 
emanating from five doctors. Tr. 249-51. Pharmacist Masso told 
investigators that she did not know why customers at her pharmacy 
would travel a distance from their residence to see a physician and 
then another distance to fill the prescription. Tr. 254. 
Significantly, Appendix D of the DEA Pharmacist's Manual, cited by 
the Respondents and admitted into evidence at their request,\100\ 
lists the following factors among criteria that may indicate that a 
prescription was not issued for a legitimate medical purpose:
---------------------------------------------------------------------------

    \100\ Resp't Ex. 19.

     The prescriber writes significantly more prescriptions 
(or in larger quantities) compared to other practitioners in the 
area;
     A number of people appear simultaneously, or within a 
short time, all bearing similar prescriptions from the same 
physician;
     People who are not regular patrons or residents of the 
community, show up with prescriptions from the same physician.

Id. at 66-67; Resp't Ex. 19 at 67. Professor Doering testified that 
pattern prescribing and distances could be red flags indicating 
diversion. Tr. 784-85, 791-92, 923. The Respondents' expert witness, 
Professor Brushwood, agreed that distance can present a red flag 
requiring resolution. Tr. 1145, 1181, 1194. Remarkably, when asked 
about the significance of pattern prescribing, Professor Brushwood 
replied that he ``just simply didn't see dispensing patterns * * *'' 
in the data he reviewed. Tr. 1068. Brushwood indicated he was 
dubious about the value of analyzing trends, as opposed to 
individual dispensing events. Id. However, Professor Brushwood 
concurred that multiple patients from a single prescriber on a 
single day with the same combination would be a red flag. Tr. 1093, 
1098, 1119, 1168. Here, however, PIC Priyardarshi's statements to 
investigators indicate that he had observed distance anomalies and 
actually accepted the presence of a cognizable prescribing pattern 
and yet attached no significance to the information.
    Notwithstanding the foregoing, the Respondents contend that the 
red flags identified by Professor Doering are either not red flags 
or were not red flags at the time the controlled substances were 
dispensed. Resp'ts Brief at 108-115. Despite the Respondents' 
arguments, substantial evidence supports the conclusion that the 
following circumstances presented red flags of diversion during the 
relevant time period: (1) ``pattern prescribing,'' defined as 
``prescriptions for the same drugs, the same quantities \101\ coming 
in from the same doctor;'' Tr. 708, 1119; (2) the prescribing of 
oxycodone and alprazolam to a patient,\102\ Tr. 784, 1170; (3) 
``prescriptions written by a local prescriber for out-of-state 
patients,'' or where the pharmacy is not near the patient or the 
prescriber,\103\ Tr. 791, 1119; (4) shared addresses by customers 
presenting on the same day, Tr. 749-50; and (5) the prescribing of 
controlled substances in general,\104\ Tr. 689. These red flags are 
consistent with Agency and circuit precedent. See East Main Street 
Pharmacy, 75 FR 66149, 66164 (2010) (relying on expert testimony to 
conclude that the distance traveled by a customer to a pharmacy was 
a red flag of diversion); U.S. v Hammond, 781 F.2d 1536, 1538 (11th 
Cir. 1986) (relying on expert testimony to conclude that ``the lack 
of individualized dosing should have * * * alerted [pharmacist] to 
diversion.''); U.S. v. Veal, 23 F.3d 985, 988 (6th Cir. 1994) 
(relying on expert testimony to conclude that prescribing of a 
``well known combination'' of controlled substance would have made 
``any reasonable pharmacist * * * suspicious.'').
---------------------------------------------------------------------------

    \101\ While there was conflicting testimony as to whether 
quantity alone (other than in exceptional circumstances) could 
constitute a red flag, Tr. 1054, it cannot be disputed that 
quantity, insofar as it implicates pattern prescribing, is a red 
flag. Tr. 708, 1119.
    \102\ The Respondents contend that the oxycodone-alprazolam 
combination was not a red flag in 2010, when most of the allegedly 
wrongful dispensing occurred. Respondent's Brief, at 115. Contrary 
to this contention, DI Langston testified that the combination of 
oxycodone and Xanax (the brand name for alprazolam) was a red flag 
of diversion for at least ``[a] couple of years ago.'' Tr. 90.
    \103\ The Respondents argue that, because the pill mill problem 
was not identified until 2010, a South Florida location could not be 
a red flag because ``it is not clear that a reasonable and prudent 
pharmacist would have appreciated the significance of a Broward 
County address in 2010.'' Resp'ts Brief, at 112-113. However, there 
is no indication that Professor Doering's conclusion that a South 
Florida physician constituted a red flag was based on the pill mill 
problem, and not the fact that South Florida is approximately 200 
miles from Sanford.
    \104\ Respondents object to this red flag on the basis that 
there is no evidence that the prescriptions for ``oxycodone or other 
drugs could not be prescribed legitimately. Respt's Brief, at 110. 
This argument must be rejected for the simple reason that a red 
flag's overall resolvability does not render it any less a red flag.
---------------------------------------------------------------------------

    Regarding the dispensing events reviewed by Professor Doering, 
the Government's

[[Page 62345]]

evidence demonstrated by a preponderance of the evidence that both 
Respondents dispensed controlled substances in the face of 
unresolvable and recognizable \105\ red flags and satisfied its 
prima facie burden.
---------------------------------------------------------------------------

    \105\ Insomuch as Professor Doering's conclusion as to the 
unresolvable nature of the foregoing prescriptions rested on a 
finding of a pattern prescribing red flag, it is clear that 
knowledge of the presentation of the similar prescriptions on that 
day must be able to be attributed to the pharmacy. While the 
knowledge of the prescriptions presented to the pharmacy technicians 
and pharmacists is attributable to the Respondents, One Parcel of 
Land, 965 F.2d at 316 (``Only knowledge obtained by corporate 
employees acting with the scope of their employment is imputed to 
the corporation.''), because Professor Doering's testimony addressed 
only the dispensing events as a whole, it is unclear at what point 
the aggregate of the red flags of the customers rendered the red 
flags unresolvable. That said, it is more than clear that, at the 
very minimum, the corresponding responsibility was conclusively 
violated by the time the final dispensing event in each scenario was 
completed.
---------------------------------------------------------------------------

    Accordingly, consideration of Factors 2 and 4 militate 
persuasively in favor of the revocation sought by the Government.

Factor Five: Such Other Conduct Which May Threaten the Public Health 
and Safety

    The fifth statutory public interest factor directs consideration 
of ``[s]uch other conduct which may threaten the public health and 
safety.'' 21 U.S.C. 823(f)(5) (emphasis supplied). Existing Agency 
precedent has long held that this factor encompasses ``conduct which 
creates a probable or possible threat (and not only an actual 
[threat]) to public health and safety.'' Dreszer, 76 FR at 19434 
n.3; Aruta, 76 FR at 19420 n.3; Boshers, 76 FR 19403 n.4; Dreszer, 
76 FR at 19386-87 n.3. Agency precedent has generally embraced the 
principle that any conduct that is properly the subject of Factor 
Five must have a nexus to controlled substances and the underlying 
purposes of the CSA. Terese, 76 FR at 46848; Tony T. Bui, M.D., 75 
FR 49979, 49989 (2010) (prescribing practices related to a non-
controlled substance such as human growth hormone may not provide an 
independent basis for concluding that a registrant has engaged in 
conduct which may threaten public health and safety); cf., Paul Weir 
Battershell, N.P., 76 FR 44359, 44368 n.27 (2011) (although a 
registrant's non-compliance with the Food, Drug, and Cosmetic Act is 
not relevant under Factor Five, consideration of such conduct may 
properly be considered on the narrow issue of assessing a 
respondent's future compliance with the CSA).
    Similar ``catch all'' language is employed by Congress in the 
CSA related to the Agency's authorization to regulate controlled 
substance manufacturing and List I chemical distribution, but the 
language is by no means identical. 21 U.S.C. 823(d)(6), (h)(5). 
Under the language utilized by Congress in those provisions, the 
Agency may consider ``such other factors as are relevant to and 
consistent with the public health and safety.'' Id. (emphasis 
supplied). In Holloway Distributors, 72 FR 42118, 42126 (2007), the 
Agency held this catch all language to be broader than the language 
directed at practitioners under ``other conduct which may threaten 
the public health and safety'' utilized in 21 U.S.C. 823(f)(5). In 
Holloway, the Administrator stated that regarding the List I catch 
all:

    [T]he Government is not required to prove that the 
[r]espondent's conduct poses a threat to public health and safety to 
obtain an adverse finding under factor five. See T. Young, 71 [FR] 
at 60572 n.13. Rather, the statutory text directs the consideration 
of ``such other factors as are relevant to and consistent with the 
public health and safety.'' 21 U.S.C. 823(h)(5). This standard thus 
grants the Attorney General broader discretion than that which 
applies in the case of other registrants such as practitioners. See 
id. sec. 823(f)(5) (directing consideration of ``[s]uch other 
conduct which may threaten the public health and safety'').

72 FR at 42126.\106\ Thus, the Agency has recognized that, while the 
fifth factor applicable to List I chemical distributors--21 U.S.C. 
823(h)(5)--encompasses all ``factors,'' the Factor Five applied to 
practitioners--21 U.S.C. 823(f)(5)--considers only ``conduct.'' 
However, because section 823(f)(5) only implicates ``such other 
conduct,'' it necessarily follows that conduct considered in Factors 
One through Four may not be considered at Factor Five.
---------------------------------------------------------------------------

    \106\ In Bui, the Agency clarified that ``an adverse finding 
under [Factor Five did not require a] showing that the relevant 
conduct actually constituted a threat to public safety.'' 75 FR 
49888 n.12.
---------------------------------------------------------------------------

    In this case, the Government has not alleged or argued reliance 
upon any conduct which may be properly considered under Factor 
Five.\107\ Accordingly, Factor Five does not weigh for or against 
revocation.
---------------------------------------------------------------------------

    \107\ In its Brief, the Government acknowledges that Factors 1 
and 3 have no application to the present litigation, but make no 
mention of whether any evidence of record should be evaluated under 
Factor 5. Gov't Brief at 58.
---------------------------------------------------------------------------

Recommendation

    Based on the foregoing, the Government has established that the 
Respondents have committed acts that are inconsistent with the 
public interest. Consideration of the record evidence under the 
Fourth and Second Factors weighs in favor of revocation. The 
Respondents dispensed controlled substances where the prescribers 
were without authorization to prescribe, and under circumstances 
where a reasonable pharmacist would have concluded that the 
prescriptions were not issued for a legitimate medical purpose and 
in the usual course of a professional practice. The red flags that 
existed were recognized, or should have been, and the convincing 
expert evidence of record establishes that the red flags were not 
resolvable by a reasonable and professional pharmacist.
    Because the Government has sustained its burden of showing that 
Respondents committed acts inconsistent with the public interest, 
the burden shifts to the Respondents to show that they can be 
entrusted with a DEA registration. A long line of consistent Agency 
precedent has established that ``to rebut the Government's prima 
facie case, [the Respondents are] required not only to accept 
responsibility for [the established] misconduct, but also to 
demonstrate what corrective measures [have been] undertaken to 
prevent the reoccurrence of similar acts.'' Jeri Hassman, M.D., 75 
FR at 8236; Hoxie v. DEA, 419 F.3d 477, 483 (6th Cir. 2005); Ronald 
Lynch, M.D., 75 FR 78745, 78749 (Respondent's attempts to minimize 
misconduct held to undermine acceptance of responsibility); George 
Mathew, M.D., 75 FR 66138, 66140, 66145, 66148 (2010); George C. 
Aycock, M.D., 74 FR 17529, 17543 (2009); Steven M. Abbadessa, D.O., 
74 FR 10077, 10078 (2009); Jayam Krishna-Iyer, M.D., 74 FR 459, 463 
(2009); Medicine Shoppe-Jonesborough, 73 FR 364, 387 (2008). The 
failure to accept responsibility is a condition precedent for the 
Respondent to prevail once the Government has established its prima 
facie case. Matthew, 75 FR at 66140. This feature of the Agency's 
interpretation of its statutory mandate on the exercise of its 
discretionary function under the CSA has been sustained on review. 
Mackay, 664 F.3d at 822.
    Notwithstanding ambiguous and nuanced representations to the 
contrary in the Respondents' consolidated brief, it is beyond 
argument that the Respondents' have not accepted responsibility for 
the actions that form the basis of the Government's prima facie 
case. When asked about personnel actions taken in the wake of the 
DEA investigation of the Respondents' prescribing practices, CVS 
Pharmacy Operations V.P. Joseph Abbott made it clear that these 
actions were not an acknowledgement of any degree fault or 
mismanagement on the part of the affected employees, but rather a 
device ``to bring in new leadership that would not be distracted by 
these events.'' Tr. 1294; see also Resp't Brief at 126. The message 
to the employees, the public, and the DEA regulators is clear: there 
were no missteps on the part of the Respondent pharmacies and their 
staff, and the personnel changes will reduce ``distraction'' and 
allow the enterprise to carry on without admitting fault. 
``Distraction'' in this context appears to be synonymous with 
``inconvenience,'' and inasmuch as the characterization and 
carefully-chosen explanation was offered by the V.P. of Pharmacy 
Operations, there can be no doubt that CVS has spoken 
authoritatively on the matter. Even those portions of the 
Respondents' brief that purport to accept responsibility merely set 
forth vague platitudes extolling the Respondents' ``responsibility 
to ensure that its pharmacies are compliant with state, federal, and 
local legislation and requirements and to provide the stores with 
the tools and information required for them to do so.'' Resp't Brief 
at 121 (internal quotation marks omitted). The Respondents' offer of 
an acknowledgement of their responsibility to adhere to their 
responsibility as registrants to comply with the law is a wholly 
inadequate substitute for an acceptance of responsibility under 
Agency precedent.
    The Respondents also assert that their ``acceptance of 
responsibility is demonstrated by their swift and decisive actions 
in response to the DEA's execution of the AIWs at the two 
pharmacies.'' Id. at 122. Purported remedial measures are, thus, 
offered as

[[Page 62346]]

acceptance of responsibility. This argument comingles two 
independent responsibilities under Agency precedent in an 
impermissible manner. The Agency has framed the dual prongs of the 
required rebuttal showing in this way:

    [T]o rebut the Government's prima facie case, [a registrant] is 
required not only to accept responsibility for [] misconduct, but 
also to demonstrate what corrective measures [have been] undertaken 
to prevent the re-occurrence of similar acts. Jayam Krishna-Iyer, 74 
[FR] 459, 464 & n.8 (2009). Both conditions are essential 
requirements for rebutting the Government's prima facie showing that 
* * * continuing an existing registration would be ``consistent with 
the public interest.'' 21 U.S.C. 823(f) (emphasis supplied).

Hassman, M.D., 75 FR at 8236 (emphasis supplied). By pointing to 
purported corrective measures, the Respondents have offered the 
second requirement in the place of both.
    The decision by the Respondents' to support their staffing 
decisions based on ``distraction'' reduction also tacitly accepts 
the actions of their employees as consistent with company policy. 
Thus, the value that can be attached here to testimony from 
Professor Brushwood that corporate guidance issued to CVS field 
components is consistent with their obligations \108\ is less 
probative than an examination of what the employees actually were 
doing as evidenced in the record. See Pharmboy Ventures Unlimited, 
Inc., 77 FR 33770, 33772 n.2 (2012) (``DEA has long held that it can 
look behind a pharmacy's ownership structure `to determine who makes 
decisions concerning the controlled substance business of a 
pharmacy.'''); S&S Pharmacy, Inc., 46 FR 13051, 13052 (1981) (the 
corporate pharmacy acts through the agency of its PIC).
---------------------------------------------------------------------------

    \108\ Tr. 1084.
---------------------------------------------------------------------------

    The Respondents have also tendered the peculiar concept that as 
registrants, they are somehow exempt from a demonstration of 
responsibility acceptance because they are entities, not individual 
practitioners, or that their corporate status renders the acceptance 
of responsibility requirement as elusive. The Respondents posit that

because [several Agency decisions cited by the Respondent] involve 
circumstances where a registrant acted through multiple agents and 
through a corporate structure as Respondents do here, none of [the 
cases cited by the Respondents] squarely address the sufficiency of 
a registrant's acceptance of responsibility, let alone provides a 
precedent for revoking the Respondents' registrations.

Resp't Brief at 123. Because there is a wealth of Agency precedent 
on point which directly contradicts the Respondents' suggestion that 
the rebuttal required of corporate registrants lessened by virtue of 
their status a corporation, it is unnecessary to address the merits 
of this position. See e.g., Sun & Lake Pharmacy, 76 FR at 24529 
(pharmacy registration revoked in the absence of acceptance of 
responsibility); Liddy's Pharmacy, L.L.C., 76 FR at 48897 
(application of pharmacy denied in absence of acceptance of 
responsibility); East Main Street Pharmacy, 75 FR at 66165 
(immediate suspension order of pharmacy affirmed in face of absence 
of acceptance of responsibility); Medicine Shoppe, 73 FR at 387 
(pharmacy registration revoked in the absence of acceptance of 
responsibility). Suffice it to say that the Respondents' argument 
that they unable to discern the nature of the required acceptance of 
responsibility because they function as corporations is without 
merit.
    Accordingly, in view of the fact that the Government has 
established its prima facie \109\ case by a preponderance of the 
evidence, and the Respondents have declined to accept 
responsibility,\110\ the Respondents' Certificates of Registration 
should be REVOKED \111\ and any pending applications for renewal 
should be DENIED.
---------------------------------------------------------------------------

    \109\ Accordingly, the Respondent's motion for a ``directed 
verdict'' made (and reserved upon) during the course of the hearing 
is herein denied.
    \110\ In view of the Respondents' election to avoid acceptance 
of responsibility, it is not necessary to analyze the adequacy of 
purported corrective measured offered to demonstrate that similar 
acts will not occur in the future. See Hassman, M.D., 75 FR at 8236.
    \111\ The Respondents have requested that any imposed sanction 
be limited to the controlled substances that were the subject of the 
Government's case. Resp'ts Brief at 127-28. In view of the strength 
of the evidence that shows a pervasive disregard for their duties as 
registrants, as well as their persistent denial of any measure of 
culpability, entrusting these registrants with the responsibilities 
of a DEA COR regarding other dangerous controlled substances would 
be illogical and unwise. Accordingly, after a considered review of 
the Respondents' position on the issue, revocation is the sanction 
that is most consistent with the evidence adduced at the hearing.

Dated: June 8, 2012
JOHN J. MULROONEY, II
Chief Administrative Law Judge
[FR Doc. 2012-25047 Filed 10-11-12; 8:45 am]
BILLING CODE 4410-09-P