[Federal Register Volume 90, Number 14 (Thursday, January 23, 2025)]
[Notices]
[Pages 8039-8048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01536]
[[Page 8039]]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 24-1]
Neumann's Pharmacy, LLC; Decision and Order
On September 12, 2023, the Drug Enforcement Administration (DEA or
Government) issued an Order to Show Cause (OSC) to Neumann's Pharmacy,
LLC, of Tallulah, Louisana (Respondent). OSC, at 1. The OSC proposed
the revocation of Respondent's DEA Certificate of Registration Number
FN4373293, alleging that Respondent's continued registration is
inconsistent with the public interest. Id. (citing 21 U.S.C. 824(a)(4),
823(g)(1)).
A hearing was held before DEA Administrative Law Judge Teresa A.
Wallbaum (the ALJ), who, on June 18, 2024, issued her Recommended
Rulings, Findings of Fact, Conclusions of Law, and Decision
(Recommended Decision or RD), recommending that Respondent's
registration be revoked. RD, at 41. Respondent filed exceptions to the
RD.\1\ Having reviewed the entire record, the Agency adopts and hereby
incorporates by reference the entirety of the ALJ's rulings,
credibility findings,\2\ findings of fact, conclusions of law,
sanctions analysis, and recommended sanction as found in the RD and
summarizes and clarifies portions thereof herein.
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\1\ The Agency has reviewed and considered Respondent's
exceptions and addresses them herein, but ultimately agrees with the
ALJ's recommendation.
\2\ The Agency adopts the ALJ's summary of each witness's
testimony, as well as the ALJ's assessment of each witness's
credibility. See RD, at 3-19.
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I. Louisiana Standard of Care
Dr. DiGi Graham testified as the Government's expert regarding the
standard of care for pharmacy practice in the State of Louisiana. Id.
at 5; Tr. 96-97. Dr. Graham has been licensed as a pharmacist in
Oklahoma \3\ for approximately thirty years and has extensive
experience dispensing medications in retail pharmacies. RD, at 6; Tr.
90-91. Dr. Graham has worked for several independent pharmacies,
including opening her own compounding and retail pharmacy in 2002, and
she currently works as a consultant. Id. The Agency agrees with the ALJ
that Dr. Graham was a reliable and persuasive witness who drew on her
own experience in retail pharmacy, clearly articulated the standard of
care in Louisiana,\4\ and ``clearly identified each source [that] she
consulted to form her opinion on the standard of care for pharmacies in
Louisiana.'' Id. at 7; Tr. 7. Thus, the Agency agrees with the ALJ that
Dr. Graham's testimony was fully credible and reliable. RD, at 7.
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\3\ Although Dr. Graham is not licensed as a pharmacist in
Louisiana, she familiarized herself with the standard of care for
dispensing controlled substances in Louisiana by reviewing
provisions of the Louisiana Administrative Code. RD, at 6; Tr. 96-
98. She testified that the law governing the practice of pharmacy in
Louisiana is substantially similar to the law governing the practice
of pharmacy in Oklahoma, the State in which she is licensed, and
that she has consulted on other cases in Louisiana. RD, at 6; Tr.
97, 99, 101-02.
\4\ For Dr. Graham's full qualifications, see RD, at 5-6; GX 10.
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Dr. Julie Akers, a Washington-licensed pharmacist,\5\ and Laura
Neumann, Respondent's owner and Pharmacist-in-Charge (PIC), testified
on Respondent's behalf. Dr. Akers has been working as a pharmacist for
approximately twenty-five years. Id. at 8; Tr. 275. Dr. Akers started
her career as a retail pharmacist, eventually progressing to a
management position where she oversaw compliance of thirty pharmacies,
before transitioning to academia in 2013.\6\ RD, at 8; Tr. 274-75. The
Agency agrees with the ALJ that Dr. Akers ``has limited reliability as
an expert'' because her testimony regarding the standard of care ``was,
at times, unclear and contradictory.'' RD, at 9. For example, as
discussed in more detail below, Dr. Akers offered contradictory
testimony about whether the standard of care requires pharmacists to
document the resolution of red flags.\7\ Id. Thus, the Agency agrees
with the ALJ that Dr. Akers's testimony is ``diminished relative to Dr.
Graham's,'' and credits Dr. Graham's testimony where the two experts
disagree.\8\ Id.
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\5\ Dr. Akers is not licensed as a pharmacist in Louisiana. RD,
at 8; Tr. 278-79. However, Dr. Akers reviewed the statutes and
regulations pertaining to pharmacy practice in Louisiana, including
the portions of the Louisiana Administrative Code cited by the
Government in this case, and performed her own individual research
on Louisiana pharmacy practice to determine where Louisiana law
overlapped with Federal law. RD, at 8; Tr. 278.
\6\ For Dr. Akers's full qualifications, see RD, at 8-9; RX 1.
\7\ Respondent argues in its Exceptions that Dr. Akers's
testimony regarding the standard of care for documenting red flags
was not contradictory, and that the ALJ erred in finding that Dr.
Akers had only ``limited reliability'' as an expert. Exceptions, at
7. As discussed in more detail herein, the Agency agrees with the
ALJ's assessment of Dr. Akers's testimony regarding documentation,
and with the ALJ's credibility assessment. RD, at 9.
\8\ The ALJ also found that Dr. Akers's testimony was diminished
relative to Dr. Graham's because ``Dr. Akers did not actually
articulate many portions of the standard of care until she was
testifying about a specific patient.'' RD, at 9 (citing, e.g., Tr.
325-26). Respondent takes exception to this finding, arguing that it
is not necessarily helpful or relevant for an expert to opine on the
standard of care in the abstract, because ``[w]hat is required in a
given situation depends on what is known to the pharmacist and the
unique circumstances peculiar to a patient.'' Exceptions, at 19-20.
While the Agency agrees that it is important for an expert witness
to testify about the specific circumstances surrounding each
patient, it is also important for an expert witness to summarize
certain fundamental principles of the standard of care to help the
Agency assess whether the expert's opinions are consistent with
State and Federal law and to help the Agency adjudicate any
disagreements among experts regarding the standard of care. As
discussed in the RD and throughout this Decision, Dr. Akers's
testimony on the standard of care was often vague and amorphous,
which allowed her to draw opportunistic conclusions about each
patient based on curated information from patient files. Thus, the
Agency agrees with the ALJ's assessment of Dr. Akers's credibility
and reliability and with the amount of weight that she afforded Dr.
Akers's testimony. RD, at 8-9.
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Ms. Neumann, Respondent's owner and PIC, has been licensed as a
pharmacist in Louisiana since 1995. Ms. Neumann worked for several
independent pharmacies until she bought Respondent in 2014. Id. at 9-
10; Tr. 398-400. The Agency agrees with the ALJ that Ms. Neumann had
diminished credibility because she was generally guarded and not
forthcoming, and her testimony regarding the standard of care was
internally inconsistent and confusing. RD, at 13. For example, Ms.
Neumann offered contradictory testimony about whether the standard of
care requires pharmacists to document the resolution of red flags. RD,
at 14; compare Tr. 457 (agreeing that the standard of care requires
documenting conversations with prescribers and resolution of red
flags), with Tr. 458 (testifying that there was no obligation to
document red flags until 2023). Additionally, Ms. Neumann's testimony
primarily consisted of providing post hoc justifications for
Respondent's dispensing decisions, which are not documented in any of
Respondent's records. The Agency does not credit these justifications.
See infra Section I, Resolving and Documenting Red Flags. Accordingly,
the Agency agrees with the ALJ that Ms. Neumann's testimony is entitled
to little weight. RD, at 14.
The Corresponding Responsibility
Dr. Graham testified that the Louisiana standard of care requires
knowledge of, and compliance with, all applicable Federal and State
laws. Id.; Tr. 105 (Graham). As relevant here, the Louisiana standard
of care is informed by several provisions of the Louisiana
Administrative Code. Dr. Graham and Dr. Akers testified that while a
prescribing practitioner has the primary responsibility for the proper
prescribing of controlled substances, the pharmacist who dispenses the
prescription has a
[[Page 8040]]
``corresponding responsibility'' to ensure that each prescription was
issued for a legitimate medical purpose in the usual course of
professional practice. RD, at 14-15; Tr. 107-09 (Graham), 284 (Akers);
La. Admin. Code tit. 46, part LIII, sections 2745(B)(1), 2747(E)(2)
(2023).\9\
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\9\ There were no substantive changes to the relevant portions
of the Louisiana Administrative Code cited herein during the time
period of the allegations in this case.
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Identifying Red Flags of Abuse or Diversion
To determine whether a prescription was issued for a legitimate
medical purpose in the usual course of professional practice, a
pharmacist must examine each prescription for ``red flags'' of abuse or
diversion of controlled substances. RD, at 15; Tr. 110 (Graham), 285
(Akers). A red flag is ``any little alert that requires [a pharmacist]
to dig a little deeper and clarify information prior to dispensing.''
RD, at 15; Tr. 110 (Graham); see also Tr. 285 (Akers) (red flags are
``things that are deemed cautionary to where a pharmacist should take
pause and use their clinical judgment to review that patient's file and
make a determination if it's appropriate, if it meets that legitimate
purpose or if it does not''). The Louisiana Administrative Code
requires pharmacists to review ``the patient record and each
prescription'' for seven ``potential situations,'' including ``drug
over-utilization or under-utilization; therapeutic duplication; drug-
disease contradictions; drug-drug interactions; inappropriate drug
dosage or treatment duration, drug-allergy interactions; or clinical
abuse/misuse.'' \10\ La. Admin. Code tit. 46, part LIII, section 515(a)
(2024); RD, at 15; Tr. 109 (Graham). Dr. Graham and Dr. Akers testified
about additional red flags that pharmacists must address and resolve
before dispensing a controlled substance.
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\10\ Respondent argues that Dr. Graham's articulation of a red
flag as ``any little alert that requires [a pharmacist] to dig a
little deeper and clarify information prior to dispensing'' is
inherently vague and ``contradicts with the clear and express
requirements of La. Admin. Code tit. 46, part LIII, section
515(a).'' Exceptions, at 22. While Dr. Graham's articulation of a
red flag is certainly broader than the Louisiana statute in that it
requires pharmacists to investigate suspicious circumstances beyond
those enumerated, Respondent has not offered any explanation for why
it believes that Dr. Graham's articulation ``contradicts'' the
statute. Both Dr. Graham and Dr. Akers (who articulated a similarly
broad definition of red flags) testified that the concept of a red
flag derives from the pharmacist's corresponding responsibility
under State and Federal law to review each prescription to ensure
that it was issued for a legitimate medical purpose prior to
dispensing. Tr. 109-11 (Graham), 284 (Akers). The experts' testimony
suggests that the corresponding responsibility imposes more
expansive prescription review requirements on pharmacists than
Louisiana Administrative Code title 46, part LIII, section 515(a).
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Dr. Graham testified that drug cocktails are combinations of
controlled substances that are known to be diverted and may cause
significant patient harm. RD, at 15; Tr. 118-20 (Graham), 288 (Akers).
For example, opioids and benzodiazepines are both respiratory
depressants that can result in a drug-drug interaction causing
significant sedation, respiratory depression, coma, or death when taken
together. RD, at 15; Tr. 119-20 (Graham). Thus, Dr. Graham testified
that concurrent prescriptions for opioids and benzodiazepines are a red
flag in Louisiana. Id. Therapeutic duplication is when two or more
drugs are prescribed together that ``essentially do the same thing in
the body.'' RD, at 15; Tr. 120 (Graham). Dr. Graham testified that this
is a red flag because it can cause patient harm. RD, at 15; Tr. 119-20
(Graham).
Dr. Graham further testified that making a ``cash payment'' for a
controlled substance, rather than billing insurance, is a red flag,
because a patient may pay in cash to evade the insurance company's
attempts to monitor for abuse and diversion. RD, at 15; Tr. 81, 121-22,
137-38, 145-46 (Graham). A ``cash payment''--also known as ``private
pay''--refers to any type of payment that is made without billing
insurance, and can include actual cash, or payments with a debit or
credit card. Id.
Resolving and Documenting Red Flags of Abuse or Diversion
Two points on which Dr. Graham and Dr. Akers disagreed were the
methods of resolving a red flag and the methods of documenting that
resolution. RD, at 16. According to Dr. Graham, a pharmacist can
resolve a red flag by speaking to the prescriber or the patient,
depending on the type of red flag, to obtain more information about
whether the prescription was issued for a legitimate medical purpose.
Id.; Tr. 113. The pharmacist must then document the resolution of the
red flag on the hard copy prescription, in the pharmacy's computer
system, or in a logbook. RD, at 16; Tr. 112; see also La. Admin. Code
tit. 46, part LIII, section 1123(L) (2021) (setting forth the
recordkeeping requirements for patient profiles, including documenting
``any other comments that are relevant to that patient or a specific
drug'').\11\ Dr. Graham testified that in the practice of pharmacy,
``we document, or it doesn't happen.'' RD, at 16; Tr. 112, 118.
Consistent with Dr. Graham's testimony, Louisiana law requires
pharmacists to maintain a patient record system that documents the
resolution of red flags, including a pharmacist's comments ``relevant
to the individual patient's drug therapy, including any other necessary
information unique to the specific patient or drug.'' La. Admin Code
tit. 46, pt. LIII, section 1123(L).
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\11\ Dr. Graham testified that if a pharmacist identifies,
resolves, and documents the resolution of a red flag on an initial
fill of a medication, that resolution may carry forward to future
refills. RD, at 16; Tr. 113. The resolution of red flags on refills
may be documented by pulling the hard copy of the prescription and
signing and dating a note that the pharmacist referenced the
resolution. Tr. 114-15.
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According to Dr. Akers, a pharmacist may resolve a red flag by
examining ``the totality of the patient's file'' with the pharmacy,
including the fill history, the diagnosis code on the prescription, and
the type of provider who issued the prescription. RD, at 16; see Tr.
290-99. Essentially, the pharmacist can look to see whether the
patient's file ``tells a clinically appropriate story'' to determine if
a prescription was issued for a legitimate medical purpose, without
contacting the doctor or speaking to the patient. See, e.g., Tr. 290-
92, 295-97, 306-13, 315, 325-26, 335, 359. Although Dr. Akers testified
that the standard of care in Louisiana requires pharmacists to identify
and document the resolution of red flags, Tr. 361, she implied that the
patient profile itself could serve as the requisite documentation of
the resolution of a red flag as long as the patient profile contained
facts that justify the prescription. Id. at 361-62. Under Dr. Akers's
view, a pharmacist's documentation can be adequate even if the patient
profile does not contain any documentation indicating that the
pharmacist actually identified and resolved the red flags, as long as
the patient's file ``tells a clinically appropriate story.'' Id.
On both points, the ALJ found, and the Agency agrees, that Dr.
Graham's testimony is more credible than Dr. Akers's. RD, at 16. Dr.
Akers's testimony on resolving and documenting red flags is
inconsistent with the pharmacist's independent corresponding
responsibility, because it allows the pharmacist to make assumptions
about the patient's treatment based on the prescriptions issued rather
than investigating the actual purpose of the prescription by speaking
to the prescriber or patient. Id. at 17. It also allows pharmacists to
fabricate any undocumented, post hoc explanation that may seem
plausible, which would make it impossible for DEA or any other
[[Page 8041]]
regulatory body to determine whether the pharmacist actually exercised
its corresponding responsibility before filling the prescription.\12\
Id. As the Eleventh Circuit stated, a respondent pharmacy ``fail[s] to
comply with its corresponding responsibility not to fill prescriptions
written for illegitimate purposes'' when it fails to ``tak[e] and
document[ ] steps to resolve . . . red flags or refusing to fill
prescriptions with unresolvable red flags.'' Pharmacy Doctors
Enterprises Inc., d.b.a. Zion Clinic Pharmacy, 789 F. App'x 724, 731
(11th Cir. 2020). The Eleventh Circuit also categorically labeled
``false'' respondent's suggestion that ``DEA itself has held that the
lack of documentation of resolution of a red flag is `not evidence that
a pharmacist failed to resolve a red flag.' '' Id.
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\12\ DEA has made clear that ``it is unwilling to credit post
hoc written or oral justifications for actions taken as a registrant
that were not documented,'' AARRIC, Inc. d/b/a at Cost RX, 87 FR
2905, 2916 (2022).
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Dr. Graham's testimony was consistent with the longstanding
principle that documentation is a critical step in resolving red flags
and dispensing a lawful prescription. When asked whether a failure to
document the resolution of a red flag invalidates any efforts to
resolve the red flag, Dr. Graham replied, ``Correct. Because if it's
not documented, it wasn't done.'' Tr. 191. Thus, the Agency credits Dr.
Graham's formulation of the standard of care regarding the resolution
of red flags, and finds that if a pharmacist identifies a red flag when
presented with a prescription, the Louisiana standard of care requires
the pharmacist to: (1) speak to the prescriber or patient to obtain
more information about whether the prescription was issued for a
legitimate medical purpose; and (2) document the resolution of the red
flag on the hard copy prescription, in the pharmacy's computer system,
or in a logbook prior to dispensing. RD, at 16, 19; Tr. 112-13.
II. Findings of Fact
Respondent's Improper Dispensing to C.E.
Respondent filled prescriptions for C.E. in July 2021, October
2021, and December 2021 for hydrocodone-acetaminophen (a Schedule II
opioid) and clonazepam (a Schedule IV benzodiazepine).\13\ RD, at 19;
ALJX 11, at 2-3, stips. 11-12, 18; GX 5, at 2; Tr. 127. Dr. Graham
testified that this drug cocktail raised a red flag due to the drug-
drug interaction. RD, at 19; Tr. 127. Dr. Graham testified that the
standard of care required Respondent to resolve this red flag, usually
by speaking to the prescriber, and to document the resolution on the
hard copy of the prescription, in the pharmacy's computer system, or in
a logbook. RD, at 19; Tr. 131.
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\13\ The prescriptions for hydrocodone-acetaminophen and
clonazepam were filled on different days, but always within the same
week. RD, at 19 n.20; GX 4, at 2. Dr. Graham testified that the fact
that the prescriptions were filled on different days does not
eliminate the requirement to resolve the red flag because the
patient would still be taking the medications at the same time. RD,
at 19 n.20; Tr. 128-29.
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As for Respondent, Ms. Neumann testified that she resolved the red
flag based on the diagnosis codes on the prescriptions and having
ongoing conversations with C.E. regarding his medical conditions.\14\
RD, at 19; Tr. 443-45. According to Ms. Neumann, C.E. was receiving
prescriptions for hydrocodone for ``injuries or shoulder pain'' from
Dr. T.N., Ms. Neumann's father, while C.E. was between specialists. RD,
at 12; Tr. 443. Regarding the clonazepam, Ms. Neumann testified, ``I
think that on the prescription for the clonazepam, it indicates that he
was having some anxiety, which is natural when you're in pain.'' Id.
Ms. Neumann testified that she ``did not see that there was a risk of
overdose'' because C.E. only received a few prescriptions. Id. Ms.
Neumann also testified that C.E. informed her that he had some type of
cervical issue. RD, at 12-13; Tr. 444.
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\14\ The Agency does not credit Dr. Akers's testimony about C.E.
In order to resolve the red flags associated with the drug cocktail
prescribed to C.E., Dr. Akers reviewed C.E.'s patient profile and
made several assumptions about his treatment, including that the
prescriptions came from a surgical hospital and a neurosurgery
clinic, and that there was a ``very realistic probability'' that the
prescribing doctor (Dr. C.) was a neurosurgeon. RD, at 17-18 n.17;
Tr. 295-99, 306-13. Significantly, however, Dr. Akers's testimony
ignored that the majority of the controlled substances at issue, and
specifically those alleged in the OSC, were not issued by Dr. C., a
neurosurgeon, but by Dr. T.N., Ms. Neumann's father. RD, at 17-18
n.17; GX 4 at 2, 9-10, 23-26, 48-51; GX 5, at 2; see also Tr. 443.
Moreover, Ms. Neumann did not testify that she conducted the
analysis outlined by Dr. Akers to resolve the red flag. Thus, Dr.
Akers's testimony highlights that her holistic approach of reviewing
the record and making assumptions about the patient's treatment
allows a registrant to fabricate post hoc justifications that do not
necessarily align with the facts.
Furthermore, even assuming, arguendo, that Dr. Akers had been
able to ``tell[ ] a clinically appropriate story'' about C.E.'s
prescriptions that was not contradicted by the record or by Ms.
Neumann's testimony, that would not negate Respondent's
corresponding responsibility to address, resolve, and document red
flags prior to dispensing. Dr. Akers acknowledged that she does not
know whether Respondent conducted a red flag review, and she
testified that a red flag review was necessary in order for
Respondent's dispensing to fall within the standard of care in
Louisiana. Tr. 315, 364. The ALJ asked Dr. Akers whether
``dispensing the prescriptions for C.E. [would] fall within the
Louisiana standard of care,'' and Dr. Akers replied, ``Yes, it
would. If the pharmacist did their clinical review and made sure
that the medications were for a legitimate purpose and that red
flags were resolved.'' Id. at 315. She later testified that
``[t]here's nothing on the prescriptions that were provided . . .
that documents the review . . . . [T]here's nothing that would tell
me a pharmacist did or did not do a [drug utilization review] . . .
.'' Id. at 364. Thus, the Agency does not credit Dr. Akers's
testimony regarding C.E., and rejects Respondent's arguments in its
Exceptions that Respondent adequately addressed and resolved the red
flags for C.E. Exceptions 11-13.
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However, Ms. Neumann did not document any of these discussions, and
there was no documentation resolving the red flag in C.E.'s patient
profile or on the hard copy prescriptions. RD, at 19; GX 4, at 1-2, 9-
10, 23-26, 48-51; Tr. 130-31, 445. Thus, Dr. Graham opined, and the
Agency finds substantial evidence that, Respondent's failure to resolve
this red flag and document the resolution rendered Respondent's
dispensing to C.E. outside the usual course of professional practice
and beneath the Louisiana standard of care.\15\ RD, at 20; Tr. 132.
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\15\ At the hearing, Respondent's counsel argued that C.E.'s
billing of insurance for these prescriptions, the fact that the
insurance company did not reject the claims, and that there was no
evidence of early refills, ``lends further support to the legitimacy
of the prescriptions.'' RD, at 20 n.22; Tr. 300-03. The Agency
agrees with the ALJ that these inferences are attenuated and that
they do not absolve Respondent from exercising its corresponding
responsibility to ensure the legitimacy of the prescriptions prior
to dispensing. RD, at 20 n.22.
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Respondent's Improper Dispensing to J.H.R.
Respondent filled monthly prescriptions for J.H.R. between
September 2020 and January 2022 for hydrocodone-acetaminophen and
alprazolam (a Schedule IV benzodiazepine). RD, at 20; ALJX 11, at 2-3,
stips. 11, 13, 19; GX 7, at 1; Tr. 133-36. Dr. Graham, Dr. Akers, and
Ms. Neumann testified that this drug cocktail raised a red flag due to
drug-drug interaction. RD, at 20; Tr. 133-34 (Graham), 383 (Akers),
420, 434, 454 (Neumann). Additionally, from March 2021 through
September 2021, J.H.R. made cash payments for her controlled substance
prescriptions, while billing insurance for her non-controlled substance
prescriptions. RD, at 22-23; GX 6, at 2-3; GX 7, at 1-2; Tr. 137-38
(Dr. Graham testifying that the method of payment for non-controlled
substances was ``Copay Generic,'' which indicates that insurance was
billed, while the method of payment for controlled substances was ``RX
Generic,'' which indicates that insurance was not billed). Dr. Graham
testified that J.H.R.'s cash payments raised an additional red flag.
RD, at 23-
[[Page 8042]]
24; Tr. 112, 121-22, 138-39. Dr. Graham testified that the standard of
care required Respondent to resolve these red flags and document their
resolution on the hard copy of the prescription, in the pharmacy's
computer system, or in a logbook. RD, at 20, 24; Tr. 112, 136.
J.H.R.'s Cash Payments
Regarding the cash payments red flag, Ms. Neumann testified that
J.H.R. has been a patient at Respondent since 2015. RD, at 11; Tr. 422-
23, 426. Until March 2021, J.H.R. used insurance to pay for all
medications, including controlled substances and non-controlled
substances. See GX 6, at 2-3 (listing the method of payment for all
drugs as ``Copay Generic''). Ms. Neumann testified that, at some point
around March 2021, J.H.R.'s insurance company rejected coverage for one
of her prescriptions. RD, at 11; Tr. 408-09. Ms. Neumann recalled
asking J.H.R. whether she had a new insurance card, but J.H.R. reported
that she had lost her job and no longer had insurance. Id. Ms. Neumann
testified that from that point onward, J.H.R. paid for all of her
prescriptions out of pocket. RD, at 11; Tr. 410. However, J.H.R.'s
patient profile shows that from March 2021 through September 2021, the
method of payment for controlled substances was ``RX Generic,'' while
the method of paying for non-controlled substances was ``Copay
Generic,'' which suggests that J.H.R. still had insurance but chose not
to bill insurance for her controlled substances.\16\ GX 6, at 2-3.
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\16\ Respondent argues, based on Dr. Akers's testimony, that
from March 2021 through September 2021, the non-controlled substance
prescriptions were actually paid for using a discount prescription
card, rather than insurance. Exceptions, at 14-16; ALJX 27, at 4;
RD, at 23. Thus, according to Respondent, J.H.R.'s cash payments
were not a red flag, because J.H.R. did not have insurance. Id.
However, Respondent did not produce any evidence to corroborate Dr.
Akers's testimony that a discount prescription card was used, nor is
there any documentation in J.H.R.'s patient file indicating that
J.H.R. lost her insurance in March 2021. Notably, Ms. Neumann did
not testify that J.H.R. used a discount prescription card, nor did
she offer any explanation for why J.H.R.'s non-controlled
prescriptions continued to show up as ``Copay Generic'' after she
allegedly lost her insurance in March of 2021. See Tr. 407-10
(testifying that J.H.R.'s insurance card was rejected in March of
2021, and from that point onward, J.H.R. ``paid the total out-of-
pocket cost [of the prescriptions] herself.'') Thus, the Agency
credits Dr. Graham's testimony that the record indicates that the
non-controlled substance prescriptions were paid for using insurance
from March 2021 through September 2021, and that this is a red flag
that was not resolved. Id.; Tr. 137.
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Ms. Neumann testified that she did not document her conversations
with J.H.R., and there was no documentation resolving the cash payments
red flag in J.H.R.'s patient profile or on the hard copy prescriptions.
RD, at 11; Tr. 412. Thus, Dr. Graham opined, and the Agency finds
substantial evidence that, Respondent's failure to resolve this red
flag and document the resolution rendered Respondent's dispensing to
J.H.R outside the usual course of professional practice and in
violation of the Louisiana standard of care. RD, at 22-24; Tr. 139-40.
J.H.R.'s Drug Cocktails
Regarding the drug cocktails, Ms. Neumann acknowledged that the
combination of hydrocodone-acetaminophen and alprazolam raised a red
flag. RD, at 11; Tr. 420, 434. Ms. Neumann testified that when J.H.R.
first became a patient in 2015, she contacted the prescriber, Dr. T.N.
(Ms. Neumann's father), and resolved this red flag. RD, at 11; Tr. 420.
She testified that she documented the resolution of the red flag on the
back of prescriptions issued on August 17, 2015, November 16, 2015, and
December 19, 2015, using the notations ``DD,'' ``M0,'' and ``1G.'' RD,
at 11; Tr. 420, 422; RX 6 at 2, 4, 6. Dr. Akers testified that ``DD''
indicates a drug duplication, ``M0'' indicates a consultation with the
prescriber, and ``1G'' indicates the prescription was filled after
consultation with the prescriber. RD, at 11; Tr. 316-318.
The Agency rejects Respondent's arguments that her documentation in
2015 regarding the drug cocktails resolved the red flag for
prescriptions issued between 2020 and 2022.\17\ There was no
documentation resolving the red flag for the prescriptions issued from
2020 through 2022 in J.H.R.'s patient profile or on the hard copy
prescriptions. RD, at 21; GX 6, at 1-3, 24-27, 42-45; Tr. 136. Thus,
Dr. Graham opined, and the Agency finds substantial evidence that,
Respondent's failure to resolve this red flag and document the
resolution rendered Respondent's dispensing to J.H.R outside the usual
course of professional practice and in violation of the Louisiana
standard of care. RD, at 20-22; Tr. 139.
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\17\ Dr. Akers testified that the prescriptions issued from 2020
through 2022 were a ``continuation of therapy'' from the
prescriptions in 2015, and that Respondent's notations on the 2015
prescriptions were sufficient to resolve the red flags for the later
prescriptions. RD 20-21; Tr. 325-26; Exceptions, at 14-16. On the
other hand, Dr. Graham testified that a pharmacist may only carry
over a red flag resolution for a refill of a prescription, and
refills are not permitted for hydrocodone, a Schedule II controlled
substance. RD, at 21; Tr. 113-15; La. Admin. Code tit. 46, part
LIII, section 2745(F)(3)(a) (``The refilling of a prescription for a
controlled substance listed in Schedule II is prohibited.'').
The ALJ found, and the Agency agrees, that Dr. Graham's
testimony on this issue was more credible than Dr. Akers's. RD, at
21-22, 21 n.23. Neither Dr. Akers nor Respondent produced convincing
evidence, supported by concurrent documentation, to establish that
the 2020 prescriptions were a ``continuation of therapy'' from 2015.
RD, at 21-22 n.23. As the ALJ noted, there is a significant gap
between the 2015 prescriptions and the first prescription charged in
the OSC dated September 2020. Id. It is entirely possible that the
prescriptions did change between 2015 and 2020. Id. Respondent's
failure to produce relevant documents for that time period showing
that the prescriptions did not change gives rise to an inference
that those documents do not exist. Huthnance v. DC, 722 F.3d 371,
378 (D.C. Cir. 2013) (``Respondent's decision not to provide records
gives rise to an inference that any such evidence is unfavorable to
Respondent.'')), Int'l Union, United Auto., Aerospace & Agric.
Implement Workers of Am. (UAW) v. Nat'l Labor Relations Bd., 459
F.2d 1329, 1336 (D.C. Cir. 1972); see also RD, at 21-22 n.23. Id.
Thus, without documentation confirming that the prescriptions were a
``continuation of therapy,'' Respondent cannot substantiate its
argument. RD, at 21-22 n.23 (citing Coconut Grove Pharmacy, 89 FR
50372, 50374 (2024)). Moreover, Dr. Akers acknowledged that she
asked Respondent's counsel for J.H.R.'s records for the intervening
years, but did not receive them. RD, at 21-22 n.23; Tr. 381-82. Dr.
Akers conceded that the missing documents undermined the weight of
her opinion. RD, at 21-22 n.23; Tr. 382, 385.
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Respondent's Improper Dispensing to S.W.
On six occasions between May 2020 and December 2021, Respondent
dispensed diazepam (a Schedule IV benzodiazepine) along with three
forms of butalbital (a Schedule III sedative) \18\ to S.W. on the same
day. RD, at 24; ALJX 11 at 3-4, stips. 9, 10, 14, 20; GX 9; Tr. 140-42.
One of the butalbital products contained codeine (a Schedule III
controlled opioid). ALJX 11 at 3-4, stips. 9-10. Combining diazepam
with codeine and butalbital can increase the risk of respiratory
depression, coma, and death, and both Dr. Graham and Dr. Akers
testified that this drug cocktail raised a red flag due to the drug-
drug interaction. RD, at 24; Tr. 141 (Graham), 335 (Akers). Dr. Graham
testified that these prescriptions also raised the red flag of
therapeutic duplication. RD, at 25; ALJX 11, at 4, stip. 20; GX 9; Tr.
143-44. Dr. Graham testified that ``there[ is] no rationale to use
three different [butalbital] products like this together.'' Tr.
143.\19\ Dr. Graham
[[Page 8043]]
testified that the standard of care required Respondent to resolve
these red flags and document their resolution on the hard copy of the
prescription, in the pharmacy's computer system, or in a logbook prior
to dispensing. RD, at 24-25; Tr. 142, 145.
---------------------------------------------------------------------------
\18\ The three butalbital prescriptions included the following
combinations: butalbital-aspirin-caffeine, butalbital-acetaminophen-
caffeine, and butalbital-aspirin-caffeine with codeine. GX 9.
\19\ S.W. paid for all of her controlled substance and non-
controlled substance prescriptions using cash, which Dr. Graham
testified raised another red flag of abuse or diversion. RD, at 24;
Tr. 145; GX 8 at 1-2; GX 9. Respondent argues, based on Dr. Akers's
testimony, that cash payments are only a red flag if a patient has
insurance, but chooses to pay for controlled substances with cash.
RD, at 22 n.25; ALJX 27 at 14; Exceptions, at 5-7. The ALJ found,
based on Dr. Graham's testimony, that cash payments are a red flag
even if the patient does not have insurance, and concluded that
Respondent failed to address and resolve the cash payments red flag
for S.W. RD, at 22 n.25, 33; Tr. 121-22, 145. Based on the
overwhelming nature of the evidence establishing Respondent's other
misconduct in its dispensing of controlled substances, the Agency
need not reach a factual finding with regard to the cash payment red
flag for S.W.
---------------------------------------------------------------------------
S.W.'s Drug Cocktails
As for Respondent, Ms. Neumann testified that she resolved the drug
cocktail red flag through conversations with the prescriber, Dr. T.N.
(Ms. Neumann's father), who told her that diazepam was indicated for
muscle relaxation. RD, at 12; Tr. 436-37. However, there was no
documentation of Ms. Neumann's discussions with Dr. T.N., nor was there
any documentation resolving the drug-drug interaction red flag in
S.W.'s patient profile or on the hard copy prescriptions. RD, at 24-25;
Tr. 142, 414, 419; GX 8. Thus, Dr. Graham opined, and the Agency finds
substantial evidence that, Respondent's failure to resolve this red
flag and document the resolution rendered Respondent's dispensing to
S.W. outside the usual course of professional practice and in violation
of the Louisiana standard of care. RD, at 24-26; Tr. 147.
S.W.'s Therapeutic Duplication
Ms. Neumann testified that Dr. T.N. informed her that S.W. was
taking each medication for a specific type of headache, and S.W. knew
when to take each medication. RD, at 12; Tr. 419. Ms. Neumann testified
that she spoke to S.W., and S.W. reported that she was alternating the
butalbital products.\20\ RD, at 12; Tr. 465. Ms. Neumann testified that
S.W. is ``highly intelligent and very focused,'' and she counseled S.W.
to avoid exceeding acetaminophen dosage limits. Id. Ms. Neumann
testified that she would not have filled these prescriptions if she had
not spoken to Dr. T.N. and S.W., and that these conversations allowed
her to resolve this red flag. Tr. 419.
---------------------------------------------------------------------------
\20\ Dr. Akers testified that she deduced from looking at S.W.'s
records that S.W. was alternating between the medications rather
than taking them at the same time because there was a three-to-four-
month gap between the prescriptions. RD, at 17 n.17, 25 n.28; Tr.
335. This alleviated Dr. Akers's concerns about the therapeutic
duplication red flag. Tr. 335. However, Dr. Akers acknowledged that
there were no instructions on the prescriptions telling the patient
to alternate the medications, and there was no documentation in the
record indicating that the patient was doing so. Id. at 369-71.
---------------------------------------------------------------------------
However, there was no documentation of Ms. Neumann's discussions
with Dr. T.N. or S.W., nor was there any documentation resolving the
therapeutic duplication red flag in S.W.'s patient profile or on the
hard copy prescriptions. RD, at 24-25; Tr. 142, 414, 419; GX 8. Thus,
Dr. Graham opined, and the Agency finds substantial evidence that,
Respondent's failure to resolve this red flag and document the
resolution rendered Respondent's dispensing to S.W. outside the usual
course of professional practice and in violation of the Louisiana
standard of care. RD, at 24-26; Tr. 147.
Respondent's Improper Dispensing to L.N.
On February 7, 2020 and March 6, 2021, Respondent filled controlled
substance prescriptions for Ms. Neumann that were issued by Dr. T.N.,
Ms. Neumann's father.\21\ RD, at 26; ALJX 11, at 3, stip. 16; GX 3; Tr.
347-48, 403. Louisiana law prohibits physicians from prescribing
controlled substances to certain relatives, including children, except
in cases of emergency. RD, at 26; La. Admin. Code, tit. 46, part XLV,
section 7603(A)(11) (2024). Ms. Neumann acknowledged that these
prescriptions were not lawful and that the Louisiana Administrative
Code prohibits providers from issuing prescriptions to family members.
RD, at 26; Tr. 405, 347-48. Thus, the Agency finds substantial evidence
that Respondent did not dispense these prescriptions in accordance with
the standard of care in Louisiana, and that these prescriptions were
not dispensed in the usual course of professional practice. RD, at 26.
---------------------------------------------------------------------------
\21\ These prescriptions were for guaifenesin-codeine, a
Schedule V controlled substance (February 7, 2020), butalbital-
aspirin-caffeine with codeine (March 6, 2021), and butalbital-
aspirin-caffeine (March 6, 2021). ALJX 11 at 3, stips. 8, 16, 17; GX
3; Tr. 347-48, 403.
---------------------------------------------------------------------------
II. Discussion
A. The Controlled Substances Act (CSA)
Under Section 304 of the CSA, ``[a] registration . . . to . . .
distribute[ ] or dispense a controlled substance . . . may be suspended
or revoked by the Attorney General upon a finding that the registrant .
. . has committed such acts as would render his registration under . .
. [21 U.S.C. 823] inconsistent with the public interest as determined
by such section.'' 21 U.S.C. 824(a)(4). In the case of a
``practitioner,'' which is defined in 21 U.S.C. 802(21) to include a
``pharmacy,'' Congress directed the Attorney General to consider five
factors in making the public interest determination. 21 U.S.C.
823(g)(1)(A-E).\22\ The five factors are considered in the disjunctive.
Gonzales v. Oregon, 546 U.S. 243, 292-93 (2006) (Scalia, J.,
dissenting) (``It is well established that these factors are to be
considered in the disjunctive,'' citing In re Arora, 60 FR 4447, 4448
(1995)); Robert A. Leslie, M.D., 68 FR 15,227, 15,230 (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. Penick Corp. v. Drug Enf't Admin., 491
F.3d 483, 490 (D.C. Cir. 2007); Morall, 412 F.3d. at n.2; David H.
Gillis, M.D., 58 FR 37507, 37508 (1993).
---------------------------------------------------------------------------
\22\ The five factors of 21 U.S.C. 823(g)(1)(A-E) are:
(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.
---------------------------------------------------------------------------
According to DEA regulations, ``[a]t any hearing for the revocation
. . . of a registration, the . . . [Government] shall have the burden
of proving that the requirements for such revocation . . . pursuant to
. . . 21 U.S.C. 824(a) . . . are satisfied.'' 21 CFR 1301.44(e); see
also Morall, 412 F.3d. at 174.
In this matter, while all of the 21 U.S.C. 823(g)(1) factors have
been considered, the Agency finds that the Government's evidence in
support of its prima facie case is confined to factors B and D. RD, at
26-28; see also id. at 28 n.30 (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 substantial record evidence
that the Government satisfies its prima facie burden of showing that
Respondent's continued registration is ``inconsistent with the public
interest.'' 21 U.S.C. 824(a)(4); RD, at 26-34.
B. Allegation That Respondent's Registration Is Inconsistent With the
Public Interest
Factors B and/or D--Respondent's Experience in Dispensing Controlled
Substances and Compliance With Applicable Laws Related to Controlled
Substances
According to the CSA's implementing regulations, a lawful
prescription for
[[Page 8044]]
controlled substances is one that is ``issued for a legitimate medical
purpose by an individual practitioner acting in the usual course of his
professional practice.'' 21 CFR 1306.04(a); see Gonzales v. Oregon,
supra, 546 U.S. at 274, United States v. Hayes, 595 F.2d 258 (5th Cir.
1979), rehearing den., 598 F.2d 620 (5th Cir. 1979), cert. denied, 444
U.S. 866 (1979); see also La. Admin. Code tit. 46, part LIII, sections
2745(B)(1), 2747(E)(2); GX 11, at 2; supra section I. Additionally,
Louisiana law prohibits physicians from prescribing controlled
substances to certain relatives, including children, except in cases of
emergency. RD, at 26; La. Admin. Code, tit. 46, part XLV, section
7603(A)(11).
The Agency agrees with the Government expert's opinion and the
ALJ's analysis, and finds that there is substantial record evidence
that Respondent's dispensing fell below the Louisiana standard of care,
and thus was outside the usual course of professional practice. This is
because, as detailed above, the Agency finds that there is substantial
record evidence that Respondent: (1) repeatedly dispensed controlled
substances to three patients without properly addressing and resolving
clear red flags of abuse and diversion, including dangerous drug
cocktails with drug-drug interactions, therapeutic duplication, and
cash payments for controlled substances; (2) failed to maintain
appropriate records that documented the resolution of these red flags;
and (3) filled several prescriptions for Ms. Neumann that were issued
by Ms. Neumann's father, in violation of State law. See RD, at 19-34.
In sum, the Agency finds substantial record evidence that the
Government established a prima facie case that Respondent violated
Federal and State law. Accordingly, the Agency finds that the
Government established a prima facie case, that Respondent did not
successfully rebut that prima facie case, and that there is substantial
record evidence supporting the revocation of Respondent's registration.
21 U.S.C. 824(a)(4).
III. Sanction
Where, as here, the Government has met its prima facie burden of
showing that Respondent's continued registration is inconsistent with
the public interest due to its numerous violations pertaining to
controlled substances, the burden shifts to Respondent to show why it
can be entrusted with a registration. Morall, 412 F.3d. at 174; Jones
Total Health Care Pharmacy, 881 F.3d 823, 830 (11th Cir. 2018); Garrett
Howard Smith, M.D., 83 FR 18882 (2018). The issue of trust is
necessarily a fact-dependent determination based on the circumstances
presented by the individual respondent. Jeffrey Stein, M.D., 84 FR
46968, 46972 (2019); see also Jones Total Health Care Pharmacy, 881
F.3d at 833. Moreover, as past performance is the best predictor of
future performance, DEA Administrators have required that a registrant
who has committed acts inconsistent with the public interest must
accept responsibility for those acts and demonstrate that it will not
engage in future misconduct. Jones Total Health Care Pharmacy, 881 F.3d
at 833. A registrant's acceptance of responsibility must be
unequivocal. Id. at 830-31. In addition, a registrant's candor during
the investigation and hearing has been an important factor in
determining acceptance of responsibility and the appropriate sanction.
Id. Further, DEA Administrators have found that the egregiousness and
extent of the misconduct are significant factors in determining the
appropriate sanction. Id. at 834 and n.4. DEA Administrators have also
considered the need to deter similar acts by the respondent and by the
community of registrants. Jeffrey Stein, M.D., 84 FR 46972 and 46973.
A. Acceptance of Responsibility
Here, the ALJ found, and the Agency agrees, that there is
substantial record evidence that Respondent failed to unequivocally
accept responsibility for its repeated violations of Federal and State
law. RD, at 35-37. Ms. Neumann explicitly denied responsibility for
failing to address and resolve red flags. See, e.g., Tr. 410, 420
(testifying that she resolved the red flags for J.H.R), 412-13, 418-19,
435-37 (testifying that she resolved the red flags for SW), 443-45
(testifying that she resolved the red flags for C.E.).\23\ Although Ms.
Neumann acknowledged that she failed to document the resolution of red
flags, she denied that this failure rendered Respondent's dispensing
beneath the standard of care. Id. at 395-96. She testified that until
2023, it was ``best practice'' to document the resolution of red flags,
but it was not required by the standard of care. RD, at 12, 36; Tr.
458. However, she offered no support for how she chose this arbitrary
date, which was conveniently outside the date of the allegations in the
OSC. As explained above, Ms. Neumann's testimony conflicted with the
testimony of Respondent's and the Government's expert, who both
testified that documentation was required as part of the standard of
care during the time period at issue here. RD, at 36. As the ALJ
observed, if Ms. Neumann cannot even acknowledge that Respondent's
failure to document fell below the standard of care, she cannot accept
responsibility for it. Id.\24\
---------------------------------------------------------------------------
\23\ Respondent argues in its Exceptions that the ALJ erred in
finding that Ms. Neumann failed to accept responsibility.
Exceptions, at 22-23. Respondent argues that the Government only
proved that Respondent failed to document the resolution of red
flags, but it did not prove that Respondent failed to address and
resolve red flags, so Ms. Neumann is only required to accept
responsibility for her failure to document. Id. The Agency rejects
this argument. As discussed throughout this Decision, documentation
is a critical component of addressing and resolving red flags. Dr.
Graham testified that in the practice of pharmacy, ``we document, or
it doesn't happen.'' RD, at 16; Tr. 112, 118 (Graham). See also La.
Admin. Code tit. 46, part LIII, section 1123(L) (2021) (setting
forth the recordkeeping requirements for patient profiles, including
documenting ``any other comments that are relevant to that patient
or a specific drug''). The Agency may infer from a registrant's
failure to document that the registrant failed to address and
resolve red flags. See supra Section I, Resolving and Documenting
Red Flags. The Agency makes that inference here, because
Respondent's documentation in this case does not reflect any attempt
to identify, address, or resolve red flags. Thus, in order to
unequivocally accept responsibility, Respondent must accept
responsibility for failing to address and resolve red flags, as well
as for failing to document the resolution. Respondent did not
unequivocally accept responsibility for either failure.
\24\ See Pharmacy Doctors Enterprises Inc., d.b.a. Zion Clinic
Pharmacy, 789 F. App'x at 732-33 (`` `Because the record supports
the Acting Administrator's findings that [the respondent's PIC] . .
. did not understand the scope of her responsibilities under the
CSA, we conclude that the [Acting Administrator's] determination
that [the respondent's PIC] did not fully accept responsibility for
[the respondent's] misconduct was rational and supported by
substantial evidence.' ''); Jones Total Health Care Pharmacy, 881
F.3d at 833 (``Because the record supports the Acting
Administrator's findings that [the respondent] did not acknowledge
the prior misconduct and still did not understand the scope of her
responsibilities under the CSA, we conclude that the determination
that [the respondent] did not fully accept responsibility for
[respondent's] misconduct was rational and supported by substantial
evidence.'').
---------------------------------------------------------------------------
Ms. Neumann also made statements that minimized Respondent's
misconduct. Id. The most glaring example was Ms. Neumann's
characterization of the prescriptions that Respondent filled for Ms.
Neumann that were written by Ms. Neumann's father, in violation of
Louisiana law. Id. Ms. Neumann argues that Respondent's mistakes were
``inadvertent,'' and that she believed ``in good faith'' that the
prescriptions were valid. Id.; ALJX 27, at 17. However, the law
prohibiting physicians from prescribing controlled substances to their
family members had been in effect for at least five years when
Respondent filled the prescriptions at issue in this case, which
indicates that Respondent's misconduct
[[Page 8045]]
was much more serious than inadvertent, good faith violations.\25\ See
41 La. Reg. 2146 (Oct. 20, 2015). Respondent's attempts to minimize
this egregious misconduct undermine any purported acceptance of
responsibility. Michael A. White v. Drug Enf't Admin., 626 F. App'x
493, 496-97 (5th Cir. 2015); RD, at 36 (citing Medical Pharmacy, 86 FFR
72030, 72054 (2021) (``[T]he agency has long considered statements that
are aimed at minimizing the egregiousness of its conduct to weigh
against a finding of acceptance of full responsibility.''); Ronald
Lynch, M.D., 75 FR 78745, 78754 (2010).
---------------------------------------------------------------------------
\25\ Ms. Neumann testified that she regularly filled her
prescriptions from her father at another local pharmacy, and that
the pharmacy was ``absolutely'' aware of her relationship with her
father. Tr. 405. The ALJ interpreted this testimony as an attempt to
shift blame for Respondent's misconduct on others, and stated that
``Ms. Neumann testified that she believed the prescriptions issued
to her by her father were valid because another pharmacy had been
filling the prescription.'' RD, at 37. Respondent argues in its
Exceptions that this testimony was not meant to shift blame, but was
``merely to show that [Ms. Neumann] was not acting in bad faith.''
Exceptions, at 23. The Agency appreciates the distinction that
Respondent is drawing between shifting blame and justifying her
conduct, but the Agency agrees with the ALJ that this testimony was
troubling because it implies that Ms. Neumann believes it is
reasonable to be unaware of the law if other pharmacists are also
unaware. In other words, it reflects an attempt to minimize the
egregious conduct of filling prescriptions that were clearly
unlawful in Louisiana, and suggests that the Agency cannot trust
Respondent to exercise her independent responsibility to ensure
compliance with all State, Federal, and local laws.
---------------------------------------------------------------------------
Respondent's counsel also attempted to shift blame for Respondent's
violations to DEA, which further detracts from Respondent's acceptance
of responsibility. RD, at 37 (citing Ester Mark, M.D., 86 FR 16760,
16762 (2021) (finding that the respondent did not accept responsibility
because she ``pass[ed] blame on DEA for not telling her how to comply
with recordkeeping requirements'')). For example, Respondent's counsel
blamed DEA for not providing records from outside the timeframe of the
OSC--which were likely in Respondent's control--and argued that these
records would support Respondent's assertion that it fulfilled its
corresponding responsibility. RD, at 37; see Tr. 385. Further, in its
Post Hearing Brief, Respondent argues that there is a ``profound dearth
of regulation or guidance clarifying the nature, scope and extent of a
pharmacy's `corresponding responsibility' and what it specifically
requires.'' ALJX 27, at 6. On the contrary, DEA regularly publishes
detailed decisions sanctioning pharmacies for violating their
corresponding responsibility, which summarize DEA's interpretation of
the relevant statutes, cite to relevant Federal court decisions and
prior Agency decisions, and apply the legal principles to the facts of
the case. These decisions provide ample notice to the registrant
community of DEA's expectations. Moreover, Respondent's violations do
not involve the application of complex or obscure statutes or
regulations. Rather, Respondent's deficiencies outlined in this
Decision--such as failure to resolve and document blatant red flags of
drug abuse--are core failures that violate bedrock principles of the
CSA and the Louisiana standard of care. Accordingly, the ALJ found, and
the Agency agrees, that Respondent has not fully and unequivocally
accepted responsibility for its misconduct. RD, at 35-37.
B. Remedial Measures
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 79202 and 79203);
Daniel A. Glick, D.D.S., 80 FR 74800, 74801, 74810 (2015). Even so, the
Agency agrees with the ALJ that Respondent's evidence of remedial
measures would not change the result of this case, even if Respondent
had unequivocally accepted responsibility. RD, at 38. The only
``remedial measures'' that Respondent offered at the hearing were Ms.
Neumann's testimony that she now takes continuing education courses
regarding Federal and Louisiana law and that she keeps current with
bulletins from Louisiana and the DEA. Id.; Tr. 407. As Ms. Neumann
herself acknowledged, she should have already known the Federal and
Louisiana law regarding controlled substance prescribing. Tr. 405.
Testifying that she is now doing what she should have done before these
proceedings is inadequate to demonstrate that Respondent can now be
entrusted with a DEA registration. See Mireille Lalanne, M.D., 78 FR
47750, 47777 (2013) (``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.'')
(internal quotation marks and citation omitted); see also Noah David,
P.A., 87 FR 21165, 21173 n.*G (2022) (``I do not find significant value
to the important question of whether [the respondent] can be entrusted
with a CSA registration in remedial measures that meet continuing
education requirements.'').\26\
---------------------------------------------------------------------------
\26\ Respondent discusses additional remedial measures in its
Post Hearing Brief and Exceptions that were not addressed at the
hearing, and argues that the ALJ erred in finding that its remedial
measures were insufficient. ALJX 27, at 20; Exceptions, at 24-26.
Respondent further asserts in its Exceptions that ``Respondent
wished to discuss remedial measures further at the hearing, but the
Government objected to such testimony.'' Exceptions, at 24 (citing
Tr. 395). The Agency rejects the implication that Respondent was not
given the opportunity to present its evidence of remedial measures
at the hearing. Although the Government did object to Ms. Neumann
offering testimony about remedial measures that was not disclosed in
its Prehearing Statement or Supplemental Prehearing Statement, RD,
at 38 n.26; ALJX 10, 16, the ALJ clearly stated that she would give
Respondent the opportunity to present that evidence: ``As you know,
I tend to let the respondent make her case and I'll weigh it
afterwards with that in mind.'' Tr. 295. The ALJ later reiterated
that she had ``given [Respondent's counsel] some latitude to have
any summary about acceptance of responsibility or remedial
measures'' that was not disclosed in the Prehearing Statements. Id.
at 416-17.
Even though the ALJ offered repeated assurances that she would
allow Respondent to present undisclosed testimony about remedial
measures, Respondent's counsel chose not to do so. Thus, the ALJ
correctly declined to consider evidence of remedial measures that
Respondent did not raise at the hearing, and the Agency declines to
consider that evidence in this Decision. See RD, at 38 n.26. As the
ALJ noted, the evidence of remedial measures that Respondent
summarizes in its Post Hearing Brief and Exceptions is unsworn and
filtered through Respondent's counsel, and the Government has not
had an opportunity to challenge this evidence. Id.; ALJX 27 at 20;
Exceptions, at 24-26. Thus, the Agency agrees with the ALJ that
Respondent's remedial measures are not sufficient to restore the
Agency's trust, especially in light of Respondent's failure to
accept responsibility.
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C. Deterrence and Egregiousness
In addition to unequivocally accepting responsibility, the Agency
considers both specific and general deterrence when determining an
appropriate sanction. Daniel A. Glick, 80 FR 74810. In this case, the
Agency agrees with the ALJ that the interests of specific deterrence
militate in favor of revocation given that Respondent's owner filled
many of the prescriptions at issue, yet failed to unequivocally accept
responsibility and minimized the egregiousness of Respondent's
violations. RD, at 40-41. Respondent also failed to demonstrate that it
has undertaken sufficient remedial measures to assure the Agency that a
sanction short of revocation would be sufficient to prevent future
misconduct. Id. at 40. 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 can be excused. Id.
[[Page 8046]]
Moreover, the Agency agrees with the ALJ that Respondent's actions
were egregious. Pharmacy Doctors Enterprises Inc., d.b.a. Zion Clinic
Pharmacy, 789 F. App'x at 732 (``In sum, given the plentiful instances
of [respondent] breaking federal and state law in filling prescriptions
with indicia that the drugs would be used for non-medical uses,
substantial evidence supports the Acting Administrator's findings that
[respondent's] conduct was ``egregious'' and that its ``experience in
dispensing'' and ``compliance with applicable State[ ] [and] Federal .
. . laws relating to controlled substances'' counseled against
registration.''); RD, at 39-40. As the ALJ noted, Respondent repeatedly
dispensed dangerous combinations of controlled substances to three
patients for several years without resolving multiple red flags
indicative of abuse and diversion. RD, at 39. Dr. Graham testified that
the opioid and benzodiazepine drug cocktail that Respondent repeatedly
dispensed is frequently abused and diverted and can result in
significant sedation, respiratory depression, coma, or death.\27\ Id.
at 15; Tr. 118-20 (Graham), 288. Adding to the egregiousness, many of
the prescriptions that Respondent filled were issued by Dr. T.N., Ms.
Neumann's father, and several were issued in clear violation of the
Louisiana law prohibiting prescribing controlled substances to family
members. The egregiousness of Respondent's conduct is also enhanced by
Ms. Neumann's failure to accept responsibility and her lack of
knowledge of the Louisiana standard of care and applicable State and
Federal laws.
---------------------------------------------------------------------------
\27\ Respondent argues that there was no evidence of actual
diversion, harm to patients, or gross negligence, and its misconduct
was not intentional. RD, at 39; ALJX 27, at 8, 21. However, it is
not necessary for the Agency to find harm to revoke a registration.
Melanie Baker, N.P., 86 FR 23998, 24009 (2021); Larry C. Daniels,
M.D., 86 FR 61630, 61660 and 61661 (2021); Jeanne E. Germeil, M.D.,
85 FR 73786, 73799 n.32 (2020). Nor is it necessary for the Agency
to prove that a registrant committed intentional violations of the
CSA to revoke a registration. The Agency has repeatedly held that
``just because misconduct is unintentional, innocent, or devoid of
improper motive, [it] does not preclude revocation or denial.
Careless or negligent handling of controlled substances creates the
opportunity for diversion and [can] justify the revocation of an
existing registration . . .'' Paul J. Caragine, Jr., 63 FR 51592,
51601 (1998).
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Respondent's Exceptions \28\
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\28\ Many of the arguments in Respondent's Exceptions were
previously raised in Post Hearing Briefs or at the hearing, and were
adequately addressed in the RD. To the extent that Respondent's
Exceptions have already been adequately addressed in the RD, or
throughout this Decision, they are not discussed again in this
section.
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Exceptions 1-2, 6
Dr. Graham testified that she was suspended by the Oklahoma Board
of Pharmacy for two years related to misconduct when she was an
employee at the Apothecary Shoppe from 2000 to 2002. Tr. 93-94. The ALJ
found that this testimony enhanced Dr. Graham's credibly and
reliability because she exhibited candor and took responsibility for
her misconduct. RD, at 7 n.9. Respondent takes Exception to this
finding, as well as to the ALJ's finding that Dr. Graham was a
``reliable and persuasive witness.'' Exceptions, at 1-3. Respondent
asserts that Dr. Graham's explanations of her misconduct were
``vague,'' that she ``mischaracterized her transgressions,'' and that
she ``minimized the severity of her wrongdoing.'' Id. Respondent
further argues that the ALJ's findings regarding this testimony reflect
a lack of impartiality, because the ALJ did not similarly find that Ms.
Neumann's credibility was enhanced by her testimony about her
disciplinary history. Id. at 7.
The Agency rejects Respondent's characterizations of the record and
adopts the ALJ's credibility findings with respect to Dr. Graham and
Ms. Neumann. Although the Agency agrees that Dr. Graham's initial
statements about her misconduct were vague, this is not surprising
because the misconduct occurred over 20 years ago, and the hearing was
about Respondent's misconduct, not Dr. Graham's. Dr. Graham's decision
to disclose her distant disciplinary history when testifying about her
professional history reflects candor. Respondent's counsel cross
examined Dr. Graham about the specifics of the disciplinary charges,
and she readily answered his questions, while acknowledging that she
did not recall all of the specifics. Tr. 151-52. The Agency does not
find that Dr. Graham mischaracterized her disciplinary history, because
Dr. Graham's statements about her misconduct were not meant to be an
exhaustive summary of the charges, and there is insufficient evidence
on the record about the charges to assess the accuracy of Dr. Graham's
characterizations.
Moreover, the record does not support Respondent's contention that
Dr. Graham attempted to minimize the severity of her misconduct. On the
contrary, Dr. Graham acknowledged that her behavior was wrong, Tr. 153,
that her conduct was intentional and knowing, Tr. 158, and that she
failed to exercise her corresponding responsibility. Id. She testified
that the owner asked her to do things that ``were in the dark shades of
[a] gray [area]'' that she knew were wrong, but she felt that she could
not stand up against the owner for fear of being fired. RD, at 7 n.9;
Tr. 93-94, 153. She testified that this was ``easily . . . the worst
time in [her] life,'' but ``she learned so much [from] it,'' and it
helped her gain confidence as a pharmacist and human being. Tr. 95. Dr.
Graham left her job at the Apothecary Shoppe in 2002 and started her
own pharmacy so she could ``do what [she] felt was the right thing to
do.'' RD, at 7 n.9; Tr. 94. Thus, the Agency rejects Respondent's
arguments, finds that this testimony did not detract from Dr. Graham's
credibility, and adopts the ALJ's finding that Dr. Graham's testimony
was fully credible and reliable. RD, at 7.
Finally, the Agency rejects Respondent's argument that the ALJ
exhibited a lack of impartiality when assessing Dr. Graham's and Ms.
Neumann's testimony. As the ALJ observed, Ms. Neumann's credibility was
diminished by her inconsistent statements about whether documentation
is required by the standard of care. RD, at 13-14. Additionally, much
of Ms. Neumann's testimony consisted of providing undocumented, post
hoc explanations for her conduct, which are entitled to little weight.
Moreover, the record reflects that Ms. Neumann's testimony about her
disciplinary history was not as forthcoming as Dr. Graham's, and
therefore detracted from her credibility. Ms. Neumann testified on
direct examination that she had not had any disciplinary issues with
the licensing board since 1997, but when prompted by Government counsel
on cross examination, she acknowledged that Respondent was sanctioned
in 2023 for missing narcotics. RD, at 10 n.12; Tr. 403, 461-63. In
contrast, Dr. Graham has had a clean record for 20 years, and she
affirmatively disclosed her past transgressions on direct examination.
Tr. 93-94
Exceptions 3, 15
Respondent argues that Dr. Graham's opinions were conclusory and
``without any factual support whatsoever to assert that certain
prescriptions were not issued for a legitimate medical purpose.'' ALJX
27, at 7; RD, at 7 n.10; Exceptions, at 3-5 (``Dr. Graham gave no
factual support for her entirely conclusory answers to these
questions.''). Respondent further asserts that ``the Government failed
to offer any evidence that [Ms. Neumann] knew or should have known that
any of the
[[Page 8047]]
prescriptions at issue were not written for a legitimate medical
purpose.'' Exceptions, at 24.
Importantly, the Government need not prove that the prescriptions
were not issued for a legitimate medical purpose, but rather that
Respondent failed to exercise its corresponding responsibility to
ensure that the prescriptions were issued for a legitimate medical
purpose. Suntree Pharmacy and Suntree Medical Equipment, LLC v. Drug
Enf't Admin, 2022 WL 444,357, *6 (11th Cir. Feb. 14, 2022) (``[T]he
Administration `has long interpreted [21 CFR 1306.04(a)] 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.'' JM Pharmacy Grp., Inc.,
d/b/a Farmacia Nueva & Best Pharma Corp., 80 FR 28667, 28670 (May 19,
2015) (citation omitted and emphasis added); see also [United States v.
] Hayes, 595 F.2d at 261 n.6 (`[A] pharmacist can know that
prescriptions are issued for no legitimate medical purpose without his
needing to know anything about medical science.' ''); RD, at 33-34. Dr.
Graham testified that an essential element of the corresponding
responsibility is that a pharmacist must identify any red flags present
with a prescription, resolve those red flags, and document their
resolution prior to dispensing. RD, at 15-16; Tr. 110-13. Dr. Graham
testified about the specific red flags that she identified for each
patient, and she testified that there was no documentation in
Respondent's files reflecting any attempt to address or resolve those
red flags. RD, at 7 n.10; Tr. 96-122. Dr. Graham thus concluded that
Respondent violated its corresponding responsibility and acted beneath
the standard of pharmacy practice in Louisiana when it dispensed
controlled substances to each patient. RD, at 7 n.10.; Tr. 132, 140,
146.\29\ The Agency finds that Dr. Graham provided sufficient factual
support for these conclusions.
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\29\ See also Holiday CVS, L.L.C., 77 FR 62341 (finding that the
Government can prove that a registrant violated its corresponding
responsibility by showing that: (1) the registrant 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).
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Respondent also asserts that Dr. Graham ``did not address the
detailed reasoning provided by [Ms.] Neumann regarding how she resolved
the red flags for the subject prescriptions, nor did she address the
data contained in the patient profiles that supported [Ms.] Neumann's
decision to resolve the red flags and dispense the prescriptions as
written.'' Exceptions, at 5-6. Dr. Graham did, in fact, address the
data contained within the patient profiles. She testified that she
reviewed the patient profiles and prescriptions for each patient and
identified red flags for each patient for which no resolution was
documented. Tr. 122. Respondent's contention that Dr. Graham should
have addressed all of Ms. Neumann's undocumented, post hoc
justifications reflects a misunderstanding of DEA's prior Agency
decisions, which highlight the importance of documentation. As
discussed throughout this decision, the Agency has long found that it
will not credit a Respondent's undocumented, post hoc justifications
for its prescribing or dispensing. Pharmacy Doctors Enterprises Inc.,
d.b.a. Zion Clinic Pharmacy, 789 F. App'x at 731 (A respondent pharmacy
``fail[s] to comply with its corresponding responsibility not to fill
prescriptions written for illegitimate purposes'' when it fails to
``tak[e] and document[ ] steps to resolve . . . red flags or refusing
to fill prescriptions with unresolvable red flags.''). This principle
is critical to the Agency's ability to enforce against violations of
the CSA, because enforcement would be impractical if the viability of
the Government's case hinged on the plausibility of a Respondent's
undocumented, post hoc justifications. Respondent's failure to document
any resolution of the red flags in this case rendered its dispensing
beneath the standard of care and outside the usual course of
professional practice.
Exceptions 7-8
Respondent asserts that the ALJ erred in inferring that Respondent
failed to resolve red flags from Respondent's failure to document their
resolution, because Ms. Neumann testified that she did take steps to
address and resolve each red flag. Exceptions, at 7-11. Respondent
cites to Superior Pharmacy, 81 FR 31310, at 31335 n.55, as support for
the assertion that ``a lack of documentation is not, on its own,
sufficient evidence to prove that a red flag was not resolved.''
Exceptions, at 8.
However, Superior Pharmacy does not support this assertion. In
Superior Pharmacy, the Agency found that the Government had not met its
burden of demonstrating that Respondent had failed to document the
resolution of red flags because the Government had only offered
prescriptions (and not patient profiles) into evidence, and the
Government's investigators had not asked respondent's pharmacists if
there were other places, aside from the prescriptions, where they might
have documented the resolution of the red flags. Superior Pharmacy, 81
FR 31335 n.55. Superior Pharmacy makes clear that in a case where the
Government has provided sufficient evidence to establish that the red
flags were not documented anywhere, ``it would be reasonable to draw an
adverse inference that a pharmacist failed to resolve a red flag (or
flags) from the failure to document the resolution . . . .'' \30\ Id.
at 31,335 (emphasis added); see also Hills Pharmacy, LLC, 81 FR 49816,
49836 (2016) (citing Superior Pharmacy, and finding that ``the absence
of documentation on the prescriptions [was] not conclusive proof'' of a
failure to document the resolution of the red flags because the
respondent's PIC testified that his practice was to document red flags
on a due diligence checklist, which was not admitted into evidence).
Here, the Government admitted prescriptions and patient profiles into
evidence, and Respondent has not asserted that there was any other
location where Respondent documented the resolution of red flags.
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\30\ Respondent argues that it ``excepts to any negative
inference drawn from any evidence which it did not introduce,''
because ``the Government has failed to meet its burden that the
prescriptions were not written for a legitimate medical purpose.''
Exceptions, at 18-19. Respondent asserts that it is ``under no
obligation to introduce evidence to strengthen its case'' because of
the Government's failure to meet its burden. Id. However, Respondent
does not cite to any particular findings in the RD that it objects
to, and instead refers generally back to Exception 7. Id. This
Exception lacks the level of specificity required under 21 CFR
1316.66, which provides that exceptions should be supported by
``specific and complete citations of the pages of the transcript and
exhibits.'' Moreover, the Agency found that the Government did meet
its prima facie burden of demonstrating that Respondent's
registration was inconsistent with the public interest, which
shifted the burden to Respondent to demonstrate that it could be
entrusted with a registration. Respondent did not make that showing.
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Respondent also cites to several prior Agency decisions, including
the Agency's recent decision in Coconut Grove, that purportedly show
that the Government may not meet its burden of proof simply by
demonstrating that a pharmacy failed to document the resolution of red
flags. Exceptions, at 9-11 (``The only evidence the Government has
offered in this matter is the absence of documentation. That alone is
not enough to satisfy the Government's burden of proof.''). Respondent
argues that these cases all involved ``additional evidence which
pointed to wrongdoing,'' beyond a failure to document, which Respondent
argues is further support that the Government did not meet its burden
of proof. Id. at 9.
[[Page 8048]]
The Agency rejects these arguments. First, as discussed throughout
this Decision, the Agency may infer from Respondent's failure to
document that Respondent failed to address and resolve red flags, and
the Agency has repeatedly held that it will not credit a registrant's
undocumented, post hoc justifications. Second, the Agency regularly
revokes registrations based on documentation failures. For example, in
Coconut Grove, the Agency revoked a pharmacy's registration based on
the pharmacy's failure to document resolutions of red flags in ways and
for reasons that are very similar to this case. The pharmacy's expert
in Coconut Grove argued that the pharmacy's PIC had resolved the
relevant red flags ``over time in continuing conversations with the
patients and the doctors,'' but the Agency rejected these arguments,
because the pharmacy's only notation on the prescription was
``verified,'' which was not sufficient to resolve the red flag. 89 FR
50374. Based on the pharmacy's failure to document the resolution of
the red flags, the Agency found that the pharmacy had failed to address
and resolve those red flags. Id. The Agency further concluded that the
pharmacy's dispensing was outside the usual course of professional
practice and beneath the standard of care. Id. The Agency drew similar
conclusions in Heavenly Care Pharmacy, 85 FR 53402 (2020), also cited
by Respondent. Respondent is correct in observing that the
prescriptions in Heavenly Care raised more red flags than the
prescriptions in this case, and that there was an additional ground for
revocation in that case. However, the Government need not identify
multiple grounds for revocation, and the Agency has never tallied a
registrant's legal violations and required the Government to meet a
certain numerical threshold.
Here, the Government proved that Respondent filled numerous
prescriptions without adequately addressing and resolving several red
flags, which rendered Respondent's dispensing beneath the standard of
care, outside the usual course of professional practice, and in
violation of Federal and State law. The Government also proved that
Respondent filled unlawful prescriptions that were written for Ms.
Neumann by Ms. Neumann's father. These violations are sufficient to
revoke a registration.
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. 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.
FN4373293 issued to Neumann's Pharmacy, LLC. 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 Neumann's Pharmacy, LLC, to
renew or modify this registration, as well as any other pending
application of Neumann's Pharmacy, LLC, for additional registration in
Louisiana. This Order is effective February 24, 2025.
Signing Authority
This document of the Drug Enforcement Administration was signed on
January 16, 2025, 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. 2025-01536 Filed 1-22-25; 8:45 am]
BILLING CODE 4410-09-P