[Federal Register Volume 89, Number 197 (Thursday, October 10, 2024)]
[Notices]
[Pages 82261-82267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23482]



[[Page 82261]]

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 23-22]


Midtown Specialty RX; Decision and Order

    On January 25, 2023, the Drug Enforcement Administration (DEA or 
Government) issued an Order to Show Cause and Immediate Suspension of 
Registration (OSC/ISO) to Midtown Specialty RX (Respondent) of Houston, 
Texas. OSC/ISO, at 1. The OSC/ISO informed Respondent of the immediate 
suspension of its DEA Certificate of Registration, Control No. 
FM2396427, pursuant to 21 U.S.C. 824(d), alleging that Respondent's 
continued registration constitutes `` `an imminent danger to the public 
health or safety.' '' Id. (quoting 21 U.S.C. 824(d)). The OSC/ISO also 
proposed the revocation of Respondent's registration, alleging that 
Respondent's continued registration is inconsistent with the public 
interest because, among other reasons, Respondent repeatedly dispensed 
controlled substance prescriptions to over sixty patients without 
resolving red flags of drug abuse and diversion. Id. (citing 21 U.S.C. 
823(g)(1),\1\ 824(a)(4)).
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    \1\ Effective December 2, 2022, the Medical Marijuana and 
Cannabidiol Research Expansion Act, Public Law 117-215, 136 Stat. 
2257 (2022) (Marijuana Research Amendments or MRA), amended the 
Controlled Substances Act (CSA) and other statutes. Relevant to this 
matter, the MRA redesignated 21 U.S.C. 823(f), cited in the OSC/ISO, 
as 21 U.S.C. 823(g)(1). Accordingly, this Decision cites to the 
current designation, 21 U.S.C. 823(g)(1), and to the MRA-amended CSA 
throughout.
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    A hearing was held before DEA Administrative Law Judge Paul E. 
Soeffing (the ALJ) who, on July 13, 2023, issued his Recommended 
Rulings, Findings of Fact, Conclusions of Law, and Decision 
(Recommended Decision or RD), which recommended revocation of 
Respondent's registration. RD, at 67. Respondent did not file 
exceptions to the RD. Having reviewed the entire record, the Agency 
adopts and hereby incorporates by reference the entirety of the ALJ's 
rulings,\2\ credibility findings,\3\ findings of fact, conclusions of 
law, sanctions analysis, and recommended sanction as found in the RD 
and summarizes and expands upon portions thereof herein.
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    \2\ The only exception is with regards to allegations concerning 
the cash payment red flag, which this Decision and Order does not 
address due to the number and egregiousness of the rest of the 
allegations.
    \3\ The Agency adopts the ALJ's summary of each of the 
witnesses' testimonies as well as the ALJ's assessment of each of 
the witnesses' credibility. See RD, at 4-28. The Agency agrees with 
the ALJ that the testimony from the Government's expert witness, Ms. 
Katherine Salinas, R.Ph., which was focused on the Texas standard of 
care and Respondent's dispensing to the patients listed in the OSC/
ISO, was credible in that it was internally consistent, logically 
persuasive, and presented an objective analysis. RD, at 21. The ALJ 
found that Ms. Salinas's testimony was credible and reliable, but 
ultimately gave her testimony less weight than he otherwise would 
have due to her prior interactions with Respondent during the course 
of her duties as a Compliance Officer. Id. at 21-22. Regarding the 
Respondent's case, the Agency agrees with the ALJ that the testimony 
from Respondent's former pharmacist-in-charge, E.W., which was 
focused on describing her process for filling prescriptions at 
Respondent, was generally credible and internally consistent, 
though, as noted by the ALJ, E.W.'s testimony was not specific to 
the prescriptions at issue and minimal evidence was offered in 
corroboration. Id. at 23. Finally, the Agency agrees with the ALJ 
that the testimony from Respondent's owner, S.M., which addressed 
Respondent's procedures for filling prescriptions, addressing red 
flags, keeping inventories, and securing controlled substances, was 
generally credible; however, minimal evidence was offered to 
corroborate her testimony and, as the ALJ noted, S.M. has a 
significant personal interest in the outcome of the proceedings. Id. 
at 28.
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I. Findings of Fact

Standard of Care--Dispensing

    Katherine Salinas, R.Ph., who is currently employed full-time as a 
Compliance Officer for the Texas State Board of Pharmacy, credibly 
testified for the Government as an expert in the standard of care and 
the professional responsibility required of a Texas pharmacy in its 
dispensing practices. RD, at 7-8, 21; Tr. 128, 131, 133-134; Government 
Exhibit (GX) 4, at 8.\4\ According to Ms. Salinas, prior to dispensing 
a prescription for a controlled substance, Texas pharmacists are 
required to determine whether the prescription was issued in the usual 
course of professional practice and to make every reasonable effort to 
ensure that the prescription was issued for a legitimate medical 
purpose. RD, at 8, 9; Tr. 134, 135. Further, in making that 
determination, Texas pharmacists are required to exercise sound 
professional judgment, meaning that they must evaluate the prescription 
in its entirety and must contact the prescriber if the authenticity of 
the prescription is in question. RD, at 8-9; Tr. 134-135.
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    \4\ For Ms. Salinas's full qualifications, see GX 43; RD, at 7-
8.
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    Ms. Salinas's testimony is consistent with Texas law which states 
that ``[a] pharmacist may not . . . dispense or deliver a controlled 
substance . . . except under a valid prescription and in the course of 
professional practice.'' Tex. Health & Safety Code section 
481.074(a)(1). Texas law notes that ``[a] pharmacist may not . . . 
dispense a controlled substance if the pharmacist knows or should have 
known that the prescription was issued without a valid patient-
practitioner relationship.'' Id. section 481.074(a)(2). Texas 
regulations require that a Texas pharmacist ``shall exercise sound 
professional judgment with respect to the accuracy and authenticity of 
any prescription drug order'' and ``shall make every reasonable effort 
to ensure that any prescription drug order . . . has been issued for a 
legitimate medical purpose by a practitioner in the course of medical 
practice.'' 22 Tex. Admin. Code sections 291.29(a)-(b), 291.34(b)(1).
    Ms. Salinas also testified that Texas pharmacists must check the 
Prescription Drug Monitoring Program (PDMP) and must attempt to resolve 
and document the resolution of any ``red flags''--warning signs or 
problematic patterns that indicate a potential for diversion--prior to 
dispensing controlled substances. RD, at 9-10; Tr. 135-136, 270.
    In discussing red flags, Ms. Salinas testified that some of the 
known red flags include: the same doctor or group of doctors repeatedly 
prescribing the same strength and dosage of medication over a long 
period of time and/or for multiple patients (also called ``pattern 
prescribing''); prescriptions from a small group of doctors; patients 
traveling long distances to the pharmacy; multiple patients sharing the 
same address and receiving prescriptions for the same controlled 
substances from the same prescribers; \5\ and ``non-therapeutic 
prescribing and dispensing'' where controlled substances are 
illegitimately prescribed or dispensed with other controlled and/or 
noncontrolled (including over-the-counter) substances.\6\ RD, at 9, 10, 
11, 14, 19; Tr. 136, 144, 146, 147, 159-160, 171, 173-174, 233-234, 
281. Ms. Salinas testified that one red flag is sufficient to ``raise 
concern'' and that pharmacists have an ongoing responsibility to 
resolve red

[[Page 82262]]

flags--even if they are resolving the same red flags repeatedly--and to 
document their resolution. RD, at 9; Tr. 137-138, 143. Ms. Salinas also 
stated that if a pharmacist is unable to resolve a red flag, then he or 
she should not dispense the prescription. RD, at 9; Tr. 137, 247-248.
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    \5\ Ms. Salinas clarified that prescriptions issued within a 
month or two of each other that list the same address for the same 
controlled substance and written by the same prescriber would create 
a shared address red flag, whereas prescriptions issued and filled 
at a longer period apart with those same characteristics may not be 
caught or noticed by a pharmacist; a red flag determination would be 
``diminished'' beyond the one-month timeframe. RD, at 11; Tr. 277-
278.
    \6\ Ms. Salinas testified that receiving prescriptions for two 
opioids is uncommon and indicative of potential diversion; 
illegitimate prescriptions for schedule II controlled substances are 
commonly prescribed with other controlled and noncontrolled 
substances to give the illusion of legitimacy. RD, at 19; Tr. 233-
234, 236. According to Ms. Salinas, the Texas State Board of 
Pharmacy rules and regulations warn pharmacists that a 1:1 ratio of 
controlled substances to noncontrolled or over-the-counter 
substances could indicate nontherapeutic dispensing and diversion. 
RD, at 19; Tr. 235. Ms. Salinas noted that these kinds of 
prescriptions are also referred to as ``cocktail'' or ``cocktail-
like'' prescriptions. RD, at 19; Tr. 237.
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    Similarly, the Texas Board of Pharmacy sets forth numerous 
operational standards for pharmacists filling prescriptions, requiring, 
firstly, that '' [f]or the purpose of promoting therapeutic 
appropriateness, a pharmacist shall, prior to or at the time of 
dispensing a prescription drug order, review the patient's medication 
record. Such review shall at a minimum identify clinically significant 
. . . (III) reasonable dose and route of administration; . . . (VI) 
drug-drug interactions; . . . and (X) proper utilization, including 
overutilization or underutilization.'' Id. section 291.33(c)(2)(A)(i). 
Further, ``[u]pon identifying any clinically significant conditions . . 
. the pharmacist shall take appropriate steps to avoid or resolve the 
problem including consultation with the prescribing practitioner.'' Id. 
section 291.33(c)(2)(A)(ii).
    A Texas pharmacist must ensure that ``[p]rior to dispensing, any 
questions regarding a prescription drug order [] be resolved with the 
prescriber and written documentation of these discussions [be] made and 
maintained.'' Id. section 291.33(c)(2)(A)(iv). Such documentation must 
be made ``on the prescription or in the pharmacy's data processing 
system associated with the prescription . . . and shall include . . . 
(i) [the] date the prescriber was consulted; (ii) [the] name of the 
person communicating the prescriber's instructions; (iii) any 
applicable information pertaining to the consultation; and (iv) [the] 
initials or identification code of the pharmacist performing the 
consultation clearly recorded for the purpose of identifying the 
pharmacist who performed the consultation.'' Id. section 
291.33(c)(2)(C).
    Finally, a Texas pharmacist must consider the various ``red flag 
factors'' in ``preventing the non-therapeutic dispensing of controlled 
substances,'' including, among others: pattern prescribing; 
prescriptions for controlled substances commonly known to be abused; 
prescriptions for controlled substances at the highest strength and/or 
in large quantities, indicating lack of individual drug therapy; 
multiple patients sharing the same address and obtaining similar 
controlled substance prescriptions from the same practitioner; and 
patients consistently paying for controlled substance prescriptions 
with cash rather than through insurance. Id. section 291.29(f).

Respondent's Inappropriate Dispensing

Pattern Prescribing
    In reviewing the relevant PDMP data and patient profiles in the 
current matter, Ms. Salinas identified numerous instances and types of 
pattern prescribing. RD, at 10; Tr. 144-145. Specifically, Ms. Salinas 
noted that Respondent's most frequently dispensed controlled substances 
were oxycodone,\7\ hydrocodone,\8\ and promethazine with codeine.\9\ 
RD, at 10; Tr. 144-145. Ms. Salinas explained that the opioids 
oxycodone and hydrocodone, the muscle relaxant carisoprodol, and 
promethazine cough syrup with codeine generate greater concern for 
diversion in instances of potential pattern prescribing because these 
drugs are commonly abused and diverted in the Houston area. RD, at 10-
11; Tr. 141-142. Ms. Salinas also noted that prescriptions for ``strong 
opioids'' were written for and dispensed in ``at least'' a month's 
supply (over 100 tablets).\10\ RD, at 10, 46; Tr. 144-145. Further, Ms. 
Salinas testified that 80 percent of the oxycodone prescriptions were 
written by the same three physicians, with a majority of these written 
by the same single physician, Dr. L.S.\11\ RD, at 10; Tr. 144-145. Ms. 
Salinas testified that she reviewed the patient profiles, physician 
profiles, and the numerous prescriptions for oxycodone 30 mg, 
hydrocodone-acetaminophen 10-325 mg, and promethazine with codeine, and 
found no notations resolving any of the red flags, let alone the 
pattern prescribing red flag. RD, at 46; Tr. 147-230.
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    \7\ See Tr. 148-159, 163-170, 195, 201-203, 219-220; GX 19, 26-
28, 44 (Patients E.D., R.H., B.Y., D.S., J.J., S.B., G.V., J.L., 
B.G., D.G., B.J., K.M., M.B., D.O., C.P., T.P., Y.Y., C.B., L.N., 
B.B., D.P., J.C., M.H., L.M., R.T., T.M., D.A., R.P., S.S., T.C., 
C.H., E.H., L.S., R.J., W.J., and R.B.).
    \8\ See Tr. 170-171, 207; GX 31, 44 (Patients V.R., H.L., T.H., 
and B.B.).
    \9\ See Tr. 199; GX 22. (Patient J.A.).
    \10\ See Tr. 235-236; GX 31 (Patient B.B.).
    \11\ See Tr. 148-159; GX 44 (Patients E.D., R.H., B.Y., D.S., 
J.J., S.B., G.V., J.L., B.G., D.G., B.J., K.M., M.B., D.O., C.P., 
T.P., Y.Y., C.B., and L.N.).
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    Moreover, Ms. Salinas testified regarding several examples of 
Respondent's dispensing that suggested a lack of individualization, 
another indicator of the pattern prescribing red flag. RD, at 47-48. 
For example, Patient M.B. always received a prescription for oxycodone 
along with a rotation of noncontrolled and over-the-counter substances 
such as a stool softener, ibuprofen, a muscle relaxant, vitamin D, and 
folic acid; meanwhile, Patient W.J. received prescriptions of oxycodone 
paired with a 300-day supply \12\ of stool softener, which Ms. Salinas 
opined was particularly odd based on the number of tablets prescribed. 
RD, at 47; Tr. 234-239; see also GX 28, at 2, 7-8; GX 30, at 2-20.
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    \12\ Without a documented explanation, Respondent filled only 
100 of the tablets. RD, at 47 n. 84; Tr. 238-239.
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    In Ms. Salinas's unrebutted expert opinion, the red flag of pattern 
prescribing present in these prescriptions needed to be resolved before 
they were dispensed and such resolution needed to be documented; 
because there was no documented resolution of these red flags, Ms. 
Salinas found that Respondent failed to meet its corresponding 
responsibility. RD, at 11, 48; Tr. 146-147, 234, 239, 241-242. As such, 
the Agency agrees with the ALJ and finds that Respondent dispensed 
controlled substance prescriptions that presented the red flag of 
pattern prescribing and failed to properly document and resolve this 
red flag prior to dispensing; accordingly, Respondent filled these 
controlled substance prescriptions outside the usual course of 
professional practice in violation of the Texas standard of care. RD, 
at 49.
Shared Addresses
    One of Texas' red flag factors is ``multiple persons with the same 
address present[ing] substantially similar controlled substance 
prescriptions from the same practitioner.'' 22 Tex. Admin. Code section 
291.29(f)(11). Regarding the issue of shared addresses, Ms. Salinas 
provided many examples of Respondent's dispensing that raised the 
shared address red flag. RD, at 51-52. For example, Patients J.J. and 
S.B., who share an address, were both prescribed oxycodone 30 mg from 
Dr. L.S.; Respondent dispensed these prescriptions on January 6, 2022, 
and January 7, 2022, respectively. RD, at 51-52 n. 89; GX 44, at 
20.\13\ Dr. L.S. also issued prescriptions for 30 mg of oxycodone, all 
of which Respondent dispensed, to all of the following groups of 
patients with shared addresses: (1) G.V. on March 2, 2022, J.L. on 
March 10, 2022, and B.G. on April 21, 2022; (2) K.M. on August 4, 2021, 
and M.B. on August 20, 2021; (3) D.O. on August 18, 2021, and C.P. on 
August 19, 2021; and (4) C.B. and L.N. both on December 22, 2021. RD, 
at 52 n. 90, 92-95. Moreover, Respondent dispensed substantially

[[Page 82263]]

similar prescriptions for oxycodone 30 mg and other opioids issued by 
Drs. D.A., W.K., B.R., and M.Q. that were also prescribed to patients 
who shared the same address.\14\ RD, at 12-13; Tr. 147-172; GX 44.
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    \13\ See also Tr. 148-159; GX 44 (Patients E.D., and B.Y.; 
Patients J.J. and S.B.; Patients G.V., J.L., and B.G.; Patients K.M. 
and M.B.; Patients D.O. and C.P.; and Patients C.B. and L.N.).
    \14\ See Tr. 163-171; GX 44 (Patients B.B. and D.P.; Patients 
L.M. and R.T.; Patients T.C. and R.P.; Patients H.L. and T.H.).
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    In Ms. Salinas's credible and unrebutted expert opinion, the red 
flag of shared addresses present in these prescriptions needed to be 
resolved before they were dispensed and such resolution needed to be 
documented; because there was no documented resolution of this red 
flag, Ms. Salinas found that Respondent failed to meet its 
corresponding responsibility. RD, at 14, 53; Tr. 162, 171-72, 279-280. 
As such, the Agency agrees with the ALJ and finds that Respondent 
dispensed controlled substances, issued less than two months apart, to 
patients who shared addresses and received prescriptions for the same 
controlled substances from the same prescriber. RD, at 54. Moreover, 
Respondent failed to properly resolve and document resolution of the 
shared address red flag prior to dispensing and, accordingly, filled 
these controlled substance prescriptions outside the usual course of 
professional practice in violation of the Texas standard of care. Id.
Long Distances
    One of Texas' red flag factors is ``the geographical distance 
between the practitioner and the patient or between the pharmacy and 
the patient.'' 22 Tex. Admin. Code section 291.29(c)(4) (emphasis 
added). Ms. Salinas testified that Houston pharmacies generally use 30 
miles as a guideline for when a distance traveled by a patient becomes 
a red flag. RD, at 16-17; Tr. 214. Ms. Salinas noted that the long-
distance red flag can be resolved, but a pharmacist should have a 
conversation with the patient, document the specific issue or concern 
on the prescription, and document any reasonable explanation that 
resolves the red flag before dispensing the prescription. RD, at 17; 
Tr. 212-213, 229-230.
    Regarding the red flag of long distances, Ms. Salinas testified 
that she calculated the distances traveled in the current matter based 
on the home addresses listed on the patients' prescriptions filled at 
Respondent. RD, at 18; Tr. 216-218. Based on her calculations, Ms. 
Salinas found that multiple patients traveled far beyond the guideline 
of 30 miles of their home addresses to fill prescriptions at 
Respondent.\15\ For example, the following patients all traveled the 
following miles one way to fill prescriptions for oxycodone 30 mg at 
Respondent: E.H., 84.1 miles one way (Tr. 215-218); R.J., 92.5 miles 
one way (Tr. 220-221); R.B., 88.5 miles one way (Tr. 219-220); L.S., 74 
miles one way (Tr. 222-223); W.J., 79.5 miles one way (Tr. 223-224); 
J.A., 167.5 miles one way (Tr. 224-225). RD, at 56-57. Ms. Salinas 
further testified that there was no documentation providing alternate 
addresses, distances, or explanations that documented a resolution of 
these red flags. RD, at 18, 57; Tr. 216-218, 225-229.
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    \15\ See Tr. 215-225; RD, at 3-4, Stip. 12-17; GX 19, 22, 24, 
26-28 (Patients E.H., R.B., R.J., L.S., W.J., and J.A.).
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    In Ms. Salinas's unrebutted expert opinion, the red flag of long 
distances present in these prescriptions needed to be resolved before 
they were dispensed and such resolution needed to be documented; 
because there was no documented resolution of this red flag, Ms. 
Salinas found that Respondent failed to meet its corresponding 
responsibility. RD, at 17, 20. Tr. 212-213, 241-242. As such, the 
Agency agrees with the ALJ and finds that Respondent dispensed 
controlled substances to patients who traveled long distances and 
failed to properly resolve and document resolution of the long-distance 
red flag prior to dispensing; accordingly, Respondent filled these 
controlled substance prescriptions outside the usual course of 
professional practice and in violation of the Texas standard of care. 
RD, at 59.

Respondent's Arguments Regarding Inappropriate Dispensing

    Regarding Respondent's case, E.W. was the pharmacist-in-charge at 
Respondent at the time of the relevant events. RD, at 22; Tr. 304, 307. 
E.W. testified credibly, but with little corroborating evidence, 
regarding Respondent's general dispensing practices; however, she did 
not testify specifically regarding the prescriptions at issue in this 
case. RD, at 23. With regard to Respondent's general practice, E.W. 
testified that before dispensing prescriptions, she would get a phone 
number from the patient, discuss insurance with the patient, and then 
make a copy of the patient's driver's license. RD, at 22; Tr. 304. 
Next, after reviewing the full PDMP drug history of the patient, if 
``everything check[ed] out,'' E.W. would enter the prescription, pull 
the medication, and ``go through the process.'' RD, at 22; Tr. 304-305. 
E.W. explained that she would check to make sure that prescribers were 
``proper by law'' and Houston-based, adding that the pharmacy only 
filled prescriptions from Houston doctors ``in good standing.'' \16\ 
RD, at 22; Tr. 305-307. E.W. testified that she never documented what 
she discovered through the verification process. RD, at 22 n.58, 23; 
Tr. 308, 310. Then, E.W. would fill the prescription, counsel the 
patient, and have him or her sign documentation affirming that he or 
she had been counseled. RD, at 22; Tr. 305. E.W. noted that the 
pharmacy has refused to fill prescriptions in the past, but admitted 
that she would not document her concerns or reasons for refusing to 
fill the prescription. RD, at 22-23; Tr. 308, 310-311. Again, E.W. did 
not testify specifically regarding the procedures followed with regard 
to the prescriptions at issue, but she did acknowledge that she knew 
that the PDMP data would have indicated that the same group of doctors 
was prescribing the same strength and quantity of medication to 
multiple patients. RD, at 22-23; Tr. 310.
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    \16\ E.W. testified that to verify ``good standing'' ``offices 
were called[,] . . . someone went out to check the doctors,'' or she 
would check the Texas Medical Board's website. RD, at 22 n.58, 23; 
Tr. 308, 310.
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    As for Respondent's owner, S.M., she testified that though she is 
not a licensed pharmacist, she works as a pharmacy technician at 
Respondent. RD, at 23; Tr. 313-314. S.M.'s testimony was generally 
credible, but there was little corroborating evidence and the ALJ noted 
that she has a significant personal interest in the outcome of the 
proceedings. RD, at 28. S.M. testified generally regarding Respondent's 
process, stating that the pharmacy only fills prescriptions written by 
doctors in the Houston area. RD, at 23; Tr. 315. When asked whether 
Respondent ``check[ed] to make sure the prescriptions were 
legitimate,'' S.M. testified that Respondent ``hired a third party to 
go out to the doctors' offices to verify the doctors, check their 
licenses, [and] check to make sure that they were abiding by the red 
flag checklist.'' \17\ Tr. 318; see also RD, at 23-24; Tr. 315-316, 
321.\18\ S.M. testified that when a patient

[[Page 82264]]

entered the pharmacy, either a pharmacist or herself would ask the 
patient for identification, take down the patient's allergy information 
and phone number, check the PDMP for ``anything that might stand out,'' 
and ``verify'' the prescription with the prescriber by calling the 
prescriber. RD, at 24; Tr. 330-331.\19\ S.M. testified that if 
``everything check[ed] out,'' Respondent would fill the prescription, 
at which time the pharmacist would ``counsel the patient about [the] 
medication'' and answer any questions. RD, at 24; Tr. 331.\20\
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    \17\ The Agency notes that pharmacies have a ``corresponding 
responsibility'' to ensure proper dispensing of controlled 
substances that exists independent of a prescriber's responsibility. 
21 CFR 1306.04(a). Nothing in Ms. Salinas's testimony suggests that 
making sure that prescribers are abiding by the red flag checklist 
is part of a pharmacy's corresponding responsibility. See supra 
Standard of Care--Dispensing.
    \18\ As evidence that Respondent generally took steps to 
identify red flags prior to dispensing, S.M. testified that she had 
sent at least one letter to the Texas Medical Board reporting 
physicians who were writing questionable prescriptions. RD, at 24 
n.60; Tr. 318-20; Respondent Exhibit (RX) 7, at 1-2. Even so, there 
is no evidence that respondent identified and resolved the relevant 
red flags prior to dispensing the controlled substances at issue in 
this case.
    \19\ S.M. agreed that PDMP data would show information 
pertaining to prescribers who write prescriptions for oxycodone 30 
mg to multiple patients for multiple months. RD, at 25; Tr. 361-362.
    \20\ S.M. testified that if Respondent needed information on a 
patient's diagnosis or condition or any other additional 
information, someone working at Respondent would call the 
prescriber, who ``would let [Respondent] know at length about [the 
patient's] medical records, if [the patient was] in an accident or 
if [the patient] had some kind of other ailment going on,''; whoever 
called the prescriber would document the information by ``[writing] 
it down sometimes in the patient's profile and sometimes on the back 
of the prescription.'' RD, at 24; Tr. 328. S.M. testified that on 
the back of prescriptions, she would note ``if something changed 
with the prescription, if the quantity was incorrect or the doctor 
wrote the SIG wrong, things like that.'' RD, at 24; Tr. 329. 
However, there is no evidence of such documentation for the relevant 
prescriptions.
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    Regarding Respondent's procedure for addressing and resolving red 
flags, S.M. agreed that Texas pharmacies are to determine the 
legitimacy of prescriptions by resolving red flags and that resolution 
of red flags must be properly documented. RD, at 25; Tr. 370. S.M. 
testified that Respondent would ``check the patient, contact the 
doctor, verify the prescription[,] . . . [and] verify any information 
that [it] could from the patient.'' RD, at 24; Tr. 321. S.M. also 
testified that Respondent has refused to fill prescriptions in the past 
if, upon review of PDMP data, the pharmacist found that the patient was 
presenting for an early refill, the prescription was fraudulent, or the 
pharmacist did not think the prescription was legitimate. RD, at 24-25; 
Tr. 314. S.M. testified that if the pharmacist refuses to fill a 
prescription, the pharmacy keeps no record of that refusal and shreds 
the unfilled prescription; S.M. also asserted that ``[the pharmacy does 
not] have to document that [it] didn't fill the prescription.'' RD, at 
25; Tr. 314-315.
    S.M. testified that ``patient counseled'' written on prescriptions 
\21\ reflects that the prescription was ``resolved to the pharmacist's 
satisfaction'' through the steps that S.M. testified Respondent takes 
prior to dispensing. RD, at 25; Tr. 363, 365. Notably, E.W. testified 
that she had written ``consult,'' not ``patient counseled,'' on the 
prescriptions at issue in this case to indicate that she had looked at 
the PDMP. RD, at 22; Tr. 306, 363. However, review of the prescription 
records at issue indicates that only ``counseled'' or ``patient 
counsel'' (and not ``consult'') were ever written on the prescriptions 
at issue, and review of both E.W. and S.M.'s full testimony suggests 
there is no distinction between the use of the words ``consult'' and 
``counsel.'' This suggests an imprecise word choice by E.W. All that is 
relevant to this matter is that the prescriptions said ``counseled'' or 
``patient counsel'' and S.M. testified that more detailed patient notes 
were unnecessary because Respondent conducts the same process for all 
patients and all prescriptions, including refill prescriptions. RD, at 
25; Tr. 363-364.
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    \21\ When S.M. was first asked what ``counseled patient'' 
written on the back of a prescription meant, she testified that that 
it meant that the pharmacist had counseled the patient ``at length 
about [the] prescription.'' Tr. 329. This testimony is consistent 
with Ms. Salinas's testimony regarding the typical meaning of the 
notation. See infra; RD, at 16; Tr. 187-88; 209-10.
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    Contrary to S.M.'s testimony, Ms. Salinas opined that the 
handwritten note to the effect of ``patient counsel'' present on the 
majority of the prescriptions at issue in the current matter does not 
constitute red flag resolution. First, she testified, patient 
counseling is a separate requirement under the Texas State Board of 
Pharmacy regulations, and ``counseling usually entails talking about 
what the medication is, how to take it, what to do if you miss a dose, 
side effects to watch out for . . . that sort of thing.'' RD, at 16, 
18; Tr. 187-188, 209-210, 229-230. Second, even if Respondent writing 
``patient counsel'' was meant to show red flag resolution, the 
notations in the current matter do not satisfy the requirement of 
documentation of red flag resolution because they ``[do not] tell the 
story.'' RD, at 16, 18; Tr. 187-188, 209-210, 229-230. The Agency 
credits Ms. Salinas's expert opinion that Respondent failed to 
adequately document resolution of the relevant red flags prior to 
dispensing each of the prescriptions at issue in this case. See supra, 
at Respondent's Inappropriate Dispensing; see also RD, at 28.
    Regarding the various red flags at issue in the current matter, 
S.M. testified that the patients who traveled to Respondent from non-
Houston addresses did so because the pharmacies near their homes do not 
carry controlled substances prescribed to treat pain. RD, at 26; Tr. 
325.\22\ Respondent did not present evidence to support this claim nor 
evidence that this information was documented in either patient 
profiles or on patients' prescriptions.\23\
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    \22\ S.M. testified that Respondent was ``never instructed to 
write . . . if the patient's address was far away'' and that 
``[Respondent has] been inspected several times by Ms. Salinas, and 
. . . [has] never been directed by her to do that.'' RD, at 25; Tr. 
364. Even if true, this does not relieve Respondent of its 
obligations under Texas law.
    \23\ See, e.g., George Pursley, M.D., 85 FR 80162, 80171 n.28 
(2020) (``Post hoc written or oral justifications . . . are not 
controlling.'').
---------------------------------------------------------------------------

Standard of Care--Inventory, Recordkeeping, and Storage

    The CSA requires pharmacies to keep accurate and timely records of 
inventory and dispensing, including initial and biennial inventories. 
21 CFR 1304.11(a)-(c). Texas law also requires pharmacies to keep and 
maintain records, including ``a perpetual inventory of any controlled 
substance listed in Schedule II.'' 22 Tex. Admin. Code section 
291.75(a)(1), (c)(4)-(5).
    Ms. Salinas testified that Texas pharmacies are required to keep 
and maintain accurate records of all prescriptions, invoices, signature 
logs for individuals participating in prescription processing, 
counseling documentation, and controlled substance inventories for at 
least two years. RD, at 10, 60; Tr. 138-139. Ms. Salinas also testified 
that Texas pharmacies are required by law to have inventories of all 
controlled substances available for inspection. RD, at 20-21; Tr. 243. 
Ms. Salinas noted that under the Texas standard of care, in the case of 
a disaster such as a flood, a pharmacy must notify the Texas State 
Board of Pharmacy within ten days and should immediately re-conduct an 
inventory. RD, at 21; Tr. 243-244.
    The CSA requires that ``[c]ontrolled substances listed in Schedules 
II, III, IV, and V . . . be stored in a securely locked, substantially 
constructed cabinet.'' 21 CFR 1301.75(b); RD, at 60. Regarding storage, 
Ms. Salinas testified that Texas pharmacies must keep their controlled 
substances stored, locked, and secured at their registered location as 
well as have written security policies and procedures, motion sensors, 
and an alarm system with offsite monitoring. RD, at 10, 21, 61; Tr. 
139, 245. Ms. Salinas testified that she was not aware

[[Page 82265]]

of any exceptions to these requirements and that it would be concerning 
to her if a registrant was storing controlled substances at a personal 
residence; further, Ms. Salinas opined that there is no justification 
for removing controlled substances from the registered location and if 
drugs are ever moved, registrants are required to document the move. 
RD, at 21; Tr. 245-246.

Respondent's Case

    S.M. admitted that Respondent did not have initial, ending, or 
biennial inventories at the time of DEA's June 1, 2022 inspection and 
that the last annual inventory that Respondent had on file was for 
2020. RD, at 26, 60; Tr. 339, 344, 352-353. S.M. testified that in late 
2021, a pipe burst in a neighboring business causing a flood that 
damaged Respondent's inventories. RD, at 26; Tr. 340-341, 344, 351. 
S.M. admitted that she ``should have immediately recreated'' the 
inventory and that not doing so was a mistake in judgment. RD, at 26-
27; Tr. 348-349. S.M. testified that she has since taken remedial 
action by updating Respondent's perpetual inventory on a daily basis. 
RD, at 27; Tr. 349. S.M. acknowledged that Respondent's current 
inventory was initially generated on June 1, 2022, during the DEA 
inspection when Respondent's pharmacist-in-charge and DEA Diversion 
Investigators conducted a pill count upon return of the controlled 
substances from S.M.'s residence to Respondent's registered location. 
RD, at 27; Tr. 353. S.M. also acknowledged that at least six months had 
passed between the date that she asserts Respondent's inventories were 
damaged by flooding and the June 1, 2022 inspection, with S.M. 
testifying that she tried to recreate the inventory during that time 
but that it ``takes a lot to recreate an inventory.'' RD, at 27; Tr. 
353-354. S.M. asserted that Respondent has since corrected the 
situation and that on the date that the OSC/ISO was issued in the 
current matter, Respondent had current inventories. RD, at 26; Tr. 345.
    S.M. also admitted that without permission from DEA or the Texas 
State Board of Pharmacy, she removed controlled substances from 
Respondent's registered location and transported them to her personal 
residence on a daily basis. RD, at 27, 61; Tr. 111, 338. S.M. 
acknowledged that while she was transporting drugs to and from her 
home, there was a working safe at the pharmacy. RD, at 28; Tr. 360.\24\ 
S.M. testified that she took the controlled substances home ``to ensure 
the safety of the drugs'' after there were burglaries and robberies in 
the neighborhood where Respondent is located, including two instances 
of attempted burglary at Respondent itself. RD, at 27, 61; Tr. 336-338, 
355-358; RX 4-5.\25\ S.M. also testified that she removed the 
controlled substances from Respondent because ``[w]hen the pandemic 
started, it was chaos[,] . . . [there was] no clear direction on what 
to do with anything[,] . . . [e]verybody was working from home . . . 
[and] [n]obody knew what to do . . . [because] [nobody could] get in 
contact with anyone.'' RD, at 27-28; Tr. 338-339. S.M. testified that 
she has since taken remedial action by keeping Respondent's controlled 
substances locked in the safe at the registered location and she has 
stopped transporting controlled substances to and from Respondent on a 
daily basis following the June 2022 inspection. RD, at 28; Tr. 349, 
338-339.
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    \24\ A DEA Diversion Investigator testified that during the June 
2022 inspection, she retrieved controlled substances from S.M.'s 
home that were being kept in an unlocked suitcase in the closet. RD, 
at 61; Tr. 41-45; GX 41, at 1-2.
    \25\ S.M. testified that she had called both DEA and the Texas 
State Board of Pharmacy regarding the attempted burglaries but that 
neither entity ``did anything.'' RD, at 27 n.63; Tr. 338. S.M. 
testified that ``[she] thought [she] was doing the correct thing by 
taking the drugs and taking them away from an environment where 
[people] were breaking in and trying to rob[,] . . . [b]ut [she] 
[does] know now that [she] was not doing the right thing, and [she] 
would not do it again.'' RD, at 28; Tr. 348.
---------------------------------------------------------------------------

    Based on Respondent's admissions, the Agency agrees with the ALJ 
that Respondent did not take and/or keep initial or biennial 
inventories as of the date of DEA's June 2022 inspection and did not 
store its controlled substances in a securely locked and substantially 
constructed cabinet. RD, at 60, 61; ALJ Exhibit 7 (Respondent's 
Answer), at 2.

II. Discussion

A. The Five Public Interest Factors

    Under the CSA, ``[a] registration . . . to . . . dispense a 
controlled substance . . . may be suspended or revoked by the Attorney 
General upon a finding that the registrant . . . has committed such 
acts as would render [its] registration under section 823 of this title 
inconsistent with the public interest as determined under such 
section.'' 21 U.S.C. 824(a). In making the public interest 
determination, the CSA requires consideration of the following factors:

    (A) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (B) The [registrant's] experience in dispensing, or conducting 
research with respect to controlled substances.
    (C) The [registrant's] conviction record under Federal or State 
laws relating to the manufacture, distribution, or dispensing of 
controlled substances.
    (D) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (E) Such other conduct which may threaten the public health and 
safety.

21 U.S.C. 823(g)(1).

    The Agency considers these public interest factors in the 
disjunctive. Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). Each 
factor is weighed on a case-by-case basis. Morall v. Drug Enf't Admin., 
412 F.3d 165, 173-74 (D.C. Cir. 2005). Any one factor, or combination 
of factors, may be decisive. David H. Gillis, M.D., 58 FR 37507, 37508 
(1993).
    The Government has the burden of proof in this proceeding. 21 CFR 
1301.44. While the Agency has considered all of the public interest 
factors in 21 U.S.C. 823(g)(1), the Government's evidence in support of 
its prima facie case for revocation of Respondent's registration is 
confined to Factors B and D. RD, at 31-32; see also id. at 31 n.66 
(finding that Factors A, C, and E do not weigh for or against 
revocation).
    Having reviewed the record and the RD, the Agency agrees with the 
ALJ, adopts the ALJ's analysis, and finds that the Government's 
evidence satisfies its prima facie burden of showing that Respondent's 
continued registration would be ``inconsistent with the public 
interest.'' 21 U.S.C. 824(a)(4); RD, at 31-62.

B. Factors B and D

    Evidence is considered under Public Interest Factors B and D when 
it reflects compliance (or non-compliance) with laws related to 
controlled substances and experience dispensing controlled substances. 
See Sualeh Ashraf, M.D., 88 FR 1095, 1097 (2023); Kareem Hubbard, M.D., 
87 FR 21156, 21162 (2022). In the current matter, the Government has 
alleged that Respondent violated numerous Federal and State laws 
regulating controlled substances. OSC/ISO, at 2-10.\26\ Specifically, 
Federal law requires that ``[a] prescription for a controlled substance 
may only be filled by a pharmacist, acting in the usual course of his 
professional practice,'' and that ``[a] prescription for a controlled 
substance to be effective must be issued for a legitimate medical 
purpose by an individual practitioner acting in the usual course of his 
professional practice.'' 21 CFR 1306.04(a), 1306.06;

[[Page 82266]]

see also 21 U.S.C. 829. Federal law also emphasizes that although 
``[t]he responsibility for the proper prescribing and dispensing of 
controlled substances is upon the prescribing practitioner . . . a 
corresponding responsibility rests with the pharmacist who fills the 
prescription.'' 21 CFR 1306.04(a).\27\ Regarding recordkeeping, 
inventory, and storage, Federal law requires that ``[c]ontrolled 
substances listed in Schedules II, III, IV, and V shall be stored in a 
securely locked, substantially constructed cabinet.'' Id. Sec.  
1301.75(b). In addition, pharmacies are required to keep and maintain 
accurate and timely records of dispensing and inventory, including 
initial and biennial inventories. Id. Sec.  1304.11(a)-(c).\28\
---------------------------------------------------------------------------

    \26\ The Agency need not adjudicate the criminal violations 
alleged in the instant OSC/ISO. Ruan v. United States, 142 S. Ct. 
2,370 (2022) (decided in the context of criminal proceedings).
    \27\ Further, Federal law ``prohibit[s] 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.'' Id.
    \28\ Registrants are required to take an ``initial inventory,'' 
meaning an ``inventory of all stocks of controlled substances on 
hand on the date [they] first engage[ ] in the manufacture, 
distribution, or dispensing of controlled substances . . . ''; 
``[a]fter the initial inventory is taken, the registrant shall take 
a new inventory of all stocks of controlled substances on hand at 
least every two years'' and this ``biennial inventory may be taken 
on any date which is within two years of the previous biennial 
inventory date.'' Id. Sec.  1304.11(b)-(c).
---------------------------------------------------------------------------

    As for State law, Texas regulations require that ``[a] pharmacist 
may not . . . dispense or deliver a controlled substance . . . except 
under a valid prescription and in the course of professional 
practice.'' Tex. Health & Safety Code section 481.074(a)(1).\29\ The 
Texas Board of Pharmacy also sets forth numerous operational standards 
for pharmacists filling prescriptions, requiring, firstly, that 
pharmacists ``shall, prior to or at the time of dispensing a 
prescription drug order, review the patient's medication record. Such 
review shall at a minimum identify clinically significant . . . (III) 
reasonable dose and route of administration; . . . (VI) drug-drug 
interactions; . . . and (X) proper utilization, including 
overutilization or underutilization.'' Id. section 291.33(c)(2)(A)(i). 
Further, ``[u]pon identifying any clinically significant conditions . . 
. the pharmacist shall take appropriate steps to avoid or resolve the 
problem including consultation with the prescribing practitioner.'' Id. 
section 291.33(c)(2)(A)(ii). A Texas pharmacist must also ensure that 
``[p]rior to dispensing, any questions regarding a prescription drug 
order [ ] be resolved with the prescriber and written documentation of 
these discussions [be] made and maintained.'' Id. section 
291.33(c)(2)(A)(iv).\30\ Finally, a Texas pharmacist must consider the 
various ``red flag factors'' in preventing the non-therapeutic 
dispensing of controlled substances, including, among others: pattern 
prescribing; prescriptions for controlled substances commonly known to 
be abused; prescriptions for controlled substances at the highest 
strength and/or in large quantities, indicating lack of individual drug 
therapy; multiple patients sharing the same address and obtaining 
similar controlled substance prescriptions from the same practitioner; 
and patients consistently paying for controlled substance prescriptions 
with cash rather than through insurance. Id. section 291.29(f). ``The 
geographical distance between the practitioner and the patient or 
between the pharmacy and the patient,'' can present as an additional 
red flag factor under Texas regulations. 22 Tex. Admin. Code section 
291.29(c)(4) (emphasis added). Regarding recordkeeping, inventory, and 
storage, Texas pharmacies are required to keep and maintain accurate 
and timely records of the inventory and distribution of controlled 
substances--including ``a perpetual inventory of any controlled 
substance listed in Schedule II''--and such documentation must be 
readily available upon request or inspection. Id. section 291.75(a)(1), 
(c)(4)-(5).
---------------------------------------------------------------------------

    \29\ Texas law states that ``[a] pharmacist may not . . . 
dispense a controlled substance if the pharmacist knows or should 
have known that the prescription was issued without a valid patient-
practitioner relationship.'' Id. section 481.074(a)(2). Further, it 
is unlawful in Texas for any ``registrant or dispenser'' to 
knowingly deliver a controlled substance in violation of sections 
481.070-481.075 of the Texas Health and Safety Code. Id. section 
481.128. Texas regulations require that a Texas pharmacist ``shall 
exercise sound professional judgment with respect to the accuracy 
and authenticity of any prescription drug order'' and ``shall make 
every reasonable effort to ensure that any prescription drug order . 
. . has been issued for a legitimate medical purpose by a 
practitioner in the course of medical practice.'' 22 Tex. Admin. 
Code sections 291.29(a)-(b), 291.34(b)(1).
    \30\ Such documentation must be ``on the prescription or in the 
pharmacy's data processing system associated with the prescription . 
. . and shall include . . . (i) [the] date the prescriber was 
consulted; (ii) [the] name of the person communicating the 
prescriber's instructions; (iii) any applicable information 
pertaining to the consultation; and (iv) [the] initials or 
identification code of the pharmacist performing the consultation 
clearly recorded for the purpose of identifying the pharmacist who 
performed the consultation.'' Id. section 291.33(c)(2)(C).
---------------------------------------------------------------------------

    In the current matter, the Agency agrees with the ALJ's analysis 
that Respondent's dispensing fell below the Texas standard of care--and 
thus was outside the usual course of professional practice--because, as 
detailed above, Respondent repeatedly filled prescriptions for 
controlled substances for multiple patients without adhering to Texas' 
operational standards for pharmacists filling prescriptions and without 
addressing or resolving numerous and blatant red flags of abuse and/or 
diversion; \31\ in addition, Respondent repeatedly failed in its 
obligations regarding recordkeeping, inventory, and storage.\32\ Id. at 
42-44, 49-50, 53-55, 59-62. As Respondent's conduct displays clear 
violations of the Federal and State regulations described above, the 
Agency agrees with the ALJ and hereby finds that Respondent repeatedly 
violated Federal and State law relating to controlled substances. Id. 
Accordingly, the Agency agrees with the ALJ and finds that Factors B 
and D weigh in favor of revocation of Respondent's registration and 
thus finds Respondent's continued registration to be inconsistent with 
the public interest in balancing the factors of 21 U.S.C. 823(g)(1). 
Id. at 61-62.
---------------------------------------------------------------------------

    \31\ Although Ms. Salinas opined that different apartment or 
unit numbers at the same address would be considered a shared 
address red flag under the Texas standard of care, see supra, the 
ALJ found that ``[w]hile different apartments in the same building 
or complex may share the same street number, the unit or apartment 
number that completes the address makes them unique addresses.'' RD, 
at 54. However, the Agency has previously agreed with Ms. Salinas 
and found that different apartment or unit numbers at the same 
address constituted the shared address red flag under the Texas 
standard of care when the patients in question were receiving 
prescriptions for the same controlled substances from the same 
prescribers. Blue Mint Pharmacy, 88 FR 75326, 75327-75328 (2023).
    \32\ The Agency also agrees with the ALJ's conclusions that none 
of Respondent's arguments to the contrary, as detailed above, refute 
this analysis. RD, at 42-44, 48-50, 57-60.
---------------------------------------------------------------------------

III. Sanction

    Where, as here, the Government has established sufficient grounds 
to revoke Respondent's registration, the burden shifts to the 
registrant to show why it can be entrusted with the responsibility 
carried by a registration. Garret Howard Smith, M.D., 83 FR 18882, 
18910 (2018). When a registrant has committed acts inconsistent with 
the public interest, it must both accept responsibility and demonstrate 
that it has undertaken corrective measures. Holiday CVS, L.L.C., dba 
CVS Pharmacy Nos 219 and 5195, 77FR 62316, 62339 (2012) (internal 
quotations omitted). Trust is necessarily a fact-dependent 
determination based on individual circumstances; therefore, the Agency 
looks at factors such as the acceptance of responsibility, the 
credibility of that acceptance as it relates to the probability of 
repeat violations or behavior, the nature of the misconduct that forms 
the basis for sanction, and the

[[Page 82267]]

Agency's interest in deterring similar acts. See, e.g., Robert Wayne 
Locklear, M.D., 86 FR 33738, 33746 (2021).
    Here, and as noted by the ALJ, Respondent, through its owner, 
admitted fault for its failure to maintain adequate inventories and 
failure to properly store controlled substances at its registered 
location.\33\ RD, at 63-64; Tr. 338-339, 348-349, 354. However, 
Respondent completely ``failed to acknowledge [its] errors in handling 
prescriptions with red flags'' and did not ``accept responsibility for 
failing to identify, resolve, and document red flags.'' RD, at 64-65. 
As such, the ALJ concluded, and the Agency agrees, that Respondent has 
not demonstrated unequivocal acceptance of responsibility for its 
actions. RD, at 64 (citing Jones Total Health Care Pharmacy, L.L.C. & 
SND Health Care, L.L.C., 81 FR 79188, 79201-202 (2016)).
---------------------------------------------------------------------------

    \33\ While Respondent clearly violated both Federal and State 
law by failing to have inventories on hand during the June 2022 
inspection, Respondent has accepted responsibility for and taken 
steps to remediate this particular violation. Respondent has also 
accepted responsibility, though perhaps not unequivocally, and 
attempted to remediate the improper storage of controlled substances 
at her home. However, acceptance of responsibility and remedial 
steps regarding these two violations does not lead the Agency to 
reduce the sanction here, because the evidence shows that Respondent 
has not unequivocally accepted responsibility nor taken any steps to 
remediate the egregious dispensing violations. See infra.
---------------------------------------------------------------------------

    When a registrant fails to make the threshold showing of acceptance 
of responsibility, the Agency need not address the registrant's 
remedial measures. Ajay S. Ahuja, M.D., 84 FR 5479, 5498 n.33 (2019) 
(citing Jones Total Health Care Pharmacy, 81 FR at 79202-303); Daniel 
A. Glick, D.D.S., 80 FR 74800, 74801, 74810 (2015). Even so, in the 
current matter, Respondent did not provide any evidence of remedial 
measures related to its improper dispensing that demonstrate that 
Respondent would be able to spot, resolve, and document resolution of 
red flags in the future. The ALJ noted, and the Agency has considered, 
that Respondent's owner testified, without documentary corroboration, 
that since the June 2022 inspection, Respondent has updated its 
``perpetual inventory'' on a daily basis and keeps its controlled 
substances locked in the registered location's safe. RD, at 65 n.120; 
Tr. 345, 349. However, ``remediation alone is not adequate to avoid a 
sanction and [ ] limited-to-no-weight is given to remedial measures 
when the effort is not made until after enforcement begins.'' Morris & 
Dickson Co., LLC, 88 FR 34523, 34540 (2023).\34\ Moreover, because the 
Respondent has not presented evidence of any remedial measures for its 
egregious dispensing failures, the Agency cannot entrust Respondent 
with a registration.
---------------------------------------------------------------------------

    \34\ Citing Mireille Lalanne, M.D., 78 47750, 47777 (2013) 
(quoting Liddy's Pharmacy, L.L.C., 76 FR 48887, 48897 (2011) (``The 
Agency has recognized that a cessation of illegal behavior only when 
`DEA comes knocking at one's door,' can be afforded a diminished 
weight borne of its own opportunistic timing.'')); Southwood 
Pharmaceuticals, Inc., 72 FR 36487, 36503 (2007) (giving no weight 
to respondent's ``stroke-of-midnight decision'' to cease supplying 
suspect pharmacies with controlled substances and to employ a 
compliance officer).
---------------------------------------------------------------------------

    In addition to acceptance of responsibility, the Agency considers 
both specific and general deterrence when determining an appropriate 
sanction. Daniel A. Glick, D.D.S., 80 FR at 74810. In this case, the 
Agency agrees with the ALJ that given that Respondent's pharmacist-in-
charge filled every single prescription at issue and that Respondent's 
owner testified that she was present for and involved in all filling of 
prescriptions, yet both individuals failed to acknowledge that any red 
flags existed or required resolution, ``the interests of specific 
deterrence, even standing alone, motivate powerfully in favor of 
revocation.'' RD, at 66-67; Tr. 321, 328-331. Further, the Agency 
agrees with the ALJ that the interests of general deterrence also 
support revocation, as a lack of sanction in the current matter would 
send a message to the registrant community that the failure to properly 
address and document resolution of red flags, the failure to keep 
adequate inventories, and/or the failure to securely store controlled 
substances can be excused. RD, at 67.
    Moreover, the Agency agrees with the ALJ that Respondent's actions 
were egregious. Id. at 66. As stated by the ALJ, ``Respondent dispensed 
many controlled substances over a one-and-a-half-year period without 
any regard for its obligations to identify, resolve, or document any 
blatant red flags of potential diversion'' and with awareness of both 
its obligations and the existence of numerous red flags in the 
prescriptions that it was filling and dispensing. Id.; Tr. 310, 364-
365, 367, 370. Further, regarding recordkeeping, inventory, and 
storage, Respondent not only failed to maintain proper inventories, 
thereby ``precluding the ability of DEA to conduct an accountability 
audit,'' but also failed to properly store controlled substances at its 
registered location, with Respondent's owner instead transporting and 
storing controlled substances at a personal residence in complete 
disregard of security requirements. RD, at 66.
    In sum, Respondent has not offered any credible evidence on the 
record that rebuts the Government's case for revocation of its 
registration and Respondent has not demonstrated that it can be 
entrusted with the responsibility of registration. Id. at 67. 
Accordingly, the Agency will order that Respondent's registration be 
revoked.
Order
    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. 
FM2396427 issued to Midtown Specialty RX. Further, pursuant to 28 CFR 
0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I 
hereby deny any pending applications of Midtown Specialty RX to renew 
or modify this registration, as well as any other pending application 
of Midtown Specialty RX for additional registration in Texas. This 
Order is effective November 12, 2024.
Signing Authority
    This document of the Drug Enforcement Administration was signed on 
October 4, 2024, by Administrator Anne Milgram. That document with the 
original signature and date is maintained by DEA. For administrative 
purposes only, and in compliance with requirements of the Office of the 
Federal Register, the undersigned DEA Federal Register Liaison Officer 
has been authorized to sign and submit the document in electronic 
format for publication, as an official document of DEA. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

Heather Achbach,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2024-23482 Filed 10-9-24; 8:45 am]
 BILLING CODE 4410-09-P