[Federal Register Volume 90, Number 208 (Thursday, October 30, 2025)]
[Notices]
[Pages 48892-48897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19708]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Pharmacy Place, Llc; Decision and Order
I. Introduction
On November 17, 2021, the United States Department of Justice, Drug
Enforcement Administration (Agency) issued an Order to Show Cause and
Immediate Suspension of Registration (collectively, OSC/ISO) to
Pharmacy Place, LLC, of Houston, Texas (Respondent).\1\ OSC/ISO, at 1,
10-11. The OSC/ISO immediately suspended, and proposed the revocation
of, Respondent's Drug Enforcement Administration (DEA or Government)
certificate of registration, No. FP8885785 (registration), pursuant to
21 U.S.C. 824(d) and (a)(4), respectively, ``because . . .
[Respondent's] continued registration constitutes `an imminent danger
to the public health or safety''' and ``because . . . [Respondent's]
continued registration is inconsistent with the public interest, as
that term is defined in 21 U.S.C. . . . [823(g)(1)].'' \2\ Id. at 1.
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\1\ According to GX 3, Attachment B, DEA-82, Notice of
Inspection of Controlled Premises, ``Rita Okafor'' is the
Pharmacist-in-Charge (PIC) and Chief Executive Officer (CEO) of
Respondent, and she signed the DEA-82. See also GX 3 (Declaration of
First Houston Diversion Investigator (DI)), at 2-3, GX 4
(Declaration of Second Houston DI), at 1-2.
\2\ 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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The OSC/ISO more specifically alleges that, according to an
``independent pharmacy expert retained by the DEA'' who ``reviewed
patient profile data, Texas Prescription Monitoring Program data, and
prescriptions reported as filled by Respondent,'' Respondent ``filled
many controlled substance prescriptions outside the usual course of
pharmacy practice'' and ``in contravention of . . . [its]
`corresponding responsibility' under 21 CFR 1306.04(a)'' from March 16,
2020, through August 19, 2021. Id. at 2. The OSC/ISO also alleges that
Respondent violated recordkeeping requirements.\3\
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\3\ The OSC/ISO's recordkeeping violation allegations are:
a. Failure to provide complete and accurate records as required
by 21 CFR 1304.21(a);
b. Failure to maintain dispensing records for controlled
substances as required by 21 CFR 1304.22(c);
c. Failure to maintain records readily retrievable as required
by 21 CFR 1304.04(f)(2);
d. Failure to separate DEA-222 order forms from all other
records as required [by] 21 CFR 1305.17(c); and
e. Failure to affix to the package a label showing the date the
prescription was filled, the pharmacy name and address, the serial
number of the prescription, the name of the patient, the name of the
prescribing practitioner, and directions for use and cautionary
statements, if any, contained in such prescription or required by
law as required by 21 CFR 1306.14(a).
OSC/ISO, at 10.
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A DEA Administrative Law Judge (ALJ) determined that Respondent
filed a written statement, dated January 20, 2022 (Written Statement),
in lieu of requesting a hearing and, accordingly, issued an Order
Terminating the Proceedings on January 25, 2022.\4\ 21 CFR 1316.49
(2022) (replaced by current rule in effect Nov. 2022).\5\ The
Government filed its RFAA on September 20, 2023.\6\
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\4\ Respondent's thirteen-page Written Statement is not included
in the Request for Final Agency Action (RFAA), although the Agency
accessed it and considered it during this adjudication. Infra
section III. The Agency obtained the Written Statement from the
Office of ALJs' file.
The ALJ's Order Terminating the Proceedings was served on two
lawyers for Respondent. Order Terminating the Proceedings, at 3.
\5\ The version of 21 CFR 1316.49 in effect during the relevant
time period stated: ``Any person entitled to a hearing may, within
the period permitted for filing a request for hearing or notice of
appearance, [file a] waiver of an opportunity for a hearing,
together with a written statement regarding his position on the
matters of fact and law involved in such hearing. Such statement, if
admissible, shall be made a part of the record and shall be
considered in light of the lack of opportunity for cross-examination
in determining the weight to be attached to matters of fact asserted
therein.''
The Rule contemplated that a person who did not want to request
a hearing could submit in writing his position on the ``matters of
fact and law'' that would be involved in a hearing. An admissible
written statement is made a part of the record and the weight
attached to its asserted facts is to be determined in light of the
lack of opportunity for cross-examination.
The Agency notes that the Written Statement is signed by
Respondent's counsels, and that it does not attach any documentary
evidence or declaration, let alone a declaration sworn to by a
competent fact witness. In other words, the Written Statement is
counsel argument untethered to evidence. As such, while the Written
Statement provides the Agency with insight into Respondent's
position concerning the OSC/ISO, it does not include any facts that
the Agency may weigh against the evidence the Government submitted
with its RFAA. Infra sections III, IV, and V.
\6\ The Agency conducted a ``mootness'' analysis. The OSC/ISO
was issued on November 17, 2021. The expiration date assigned to
Respondent's registration is March 31, 2022. The RFAA is dated
September 20, 2023. Respondent's Written Statement contests the OSC/
ISO allegations and suggests that they are borne of a misperceived
relationship between Respondent and Dr. Rita's Pharmacy and
``whatever shortcomings (if any) remained unaddressed in that
matter.'' Respondent's Written Statement, at 12-13 (``Respondent
consistently engaged in measures to resolve red flags, acted in the
usual course of professional practice prior to dispensing, and
continued to fill prescriptions under Respondent's thorough
prescription verification and practice measures''), id. at 3
(``Disconcertedly, . . . [Respondent] received an email from the DEA
Registration Authority (@deaecom.gov) purporting to indicate that
Rita Okafor had requested revocation of all CSOS certificates
asserting DEA Registration number:FP8885785 [sic]. Such a request
was never made.''
The Agency notes that Respondent's Written Statement does not
explicitly address Rita Okafor's relationship to itself. That
relationship, according to the record before the Agency, is 60%
owner (with her husband owning the remaining 40%), CEO, and PIC. GX
3, at 2-3, GX 4, at 1-2; supra n.1. Further, Respondent's Written
Statement does not state that Respondent or its owner/PIC intends to
stop dispensing controlled substances; it implicitly indicates its
intention to continue dispensing controlled substances. E.g. Written
Statement, at 6 (stating, regarding a closed-matter letter from the
Texas State Board of Pharmacy that ``also served as a reminder of
guidelines and expectations it was to follow,'' that Respondent
``has been following those exact guidelines''), id. at 9 (stating,
regarding a February 2021 interaction with DEA when DEA ``brought
[to its] attention'' an incident of its dispensing controlled
substances to individuals sharing the same residential address, that
Respondent ``took it to heart and thereby immediately implemented an
additional policy that no other prescriptions were to be dispensed
to patients who share the same residential addresses and also
implemented additional measures to identify patients from [the] same
address . . . [and Respondent] has held to that policy since''
[emphasis in original]). Under these circumstances, the Agency
affords Respondent a full adjudication of the OSC/ISO allegations
and its Written Statement, as well as the opportunity to seek
Circuit Court review of that final adjudication. See, e.g., id. at
2-6. The Agency, based on its prior decisions, such as Jeffrey D.
Olsen, M.D., 84 FR 68474, 68475-79 (2019), adjudicates this matter
and issues its final Decision. See also Abdul Naushad, M.D., 89 FR
54059, 54059-60 (2024); Steven Kotsonis, M.D., 85 FR 85667, 85668-69
(2020).
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[[Page 48893]]
Having thoroughly analyzed the record and applicable law, the
Agency summarizes its findings and conclusions. First, the OSC/ISO
includes specific and detailed factual allegations that Respondent
violated Texas law and the CSA. Infra section III. Second, Respondent
timely filed its Written Statement, and its Written Statement
explicitly and implicitly acknowledges its receipt of the OSC/ISO.
Supra. Third, Respondent's Written Statement, other than explicitly and
unambiguously admitting the statement, not the allegation, portion of
OSC/ISO paragraph 28 about ``shared addresses'' red flags, is ambiguous
about whether Respondent admits unlawfully filling controlled substance
prescriptions for individuals sharing the same address, does not
respond directly or specifically to any of the OSC/ISO's factual
allegations, does not include documentary evidence disproving, or even
disputing, any of the OSC/ISO's factual allegations, and does not take
responsibility, let alone unequivocal responsibility, for any violation
alleged in the OSC/ISO. Infra sections III and V; supra n.5. Fourth,
the RFAA presents a prima facie case of the OSC/ISO's general
allegations, except for the third through fifth recordkeeping
allegations. Infra section III. Fifth, the record includes substantial
evidence, indeed unequivocal and uncontroverted evidence, that
Respondent's controlled substance fills during the period covered by
the OSC/ISO violated Texas law and, thus, its CSA corresponding
responsibility, and that Respondent violated two recordkeeping rules.
21 CFR 1304.21(a), 1304.22(c); infra section III; infra n.11. Finally,
the Agency concludes that Respondent's continued registration would be
inconsistent with the public interest and that it did not unequivocally
accept responsibility for its legal violations. 21 U.S.C. 824(a)(4);
infra sections IV and V. Accordingly, the Agency will revoke
Respondent's registration.
II. The CSA and Texas Pharmacists' Professional Responsibility
The main objectives of the CSA, according to the Supreme Court, are
to ``conquer drug abuse and to control the legitimate and illegitimate
traffic in controlled substances.'' Gonzales v. Raich, 545 U.S. 1, at
12 (2005). Given these objectives, the Supreme Court states, particular
congressional concerns included ``the need to prevent the diversion of
drugs from legitimate to illicit channels.'' Id. at 12-13. Further,
according to the Supreme Court, to accomplish the CSA's objectives,
``Congress devised a closed regulatory system making it unlawful to . .
. dispense[ ] or possess any controlled substance except in a manner
authorized by'' the statute.\7\ Id. at 13.
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\7\ 21 U.S.C. 841(a)(1) (``[I]t shall be unlawful for any person
knowingly or intentionally . . . to . . . distribute[ ] or dispense,
or possess with intent to . . . distribute[ ] or dispense, a
controlled substance . . . [e]xcept as authorized by'' the CSA.).
The CSA defines ``dispense'' to include ``deliver[ing] a controlled
substance to an ultimate user.'' 21 U.S.C. 802(10).
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According to the CSA's implementing rules, a lawful controlled
substance order or prescription 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). As the
Supreme Court explained in the context of the Act's requirement that
Schedule II controlled substances may be dispensed only by written
prescription, ``the prescription requirement . . . ensures patients use
controlled substances under the supervision of a doctor so as to
prevent addiction and recreational abuse . . . [and] also bars doctors
from peddling to patients who crave the drugs for those prohibited
uses.'' Gonzales v. Oregon, 546 U.S. 243, 274 (2006), see also United
States v. Hayes, 595 F.2d 258 (5th Cir. 1979), cert. denied, 444 U.S.
866 (1979) (pharmacist's failed challenge to his federal corresponding
responsibility).
While the ``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).
An order purporting to be a prescription issued not in the usual
course of professional treatment . . . is not a prescription within the
meaning and intent of section 309 of the Act (21 U.S.C. [Sec. ] 829)
and the person knowingly filling such a purported prescription, as well
as the person issuing it, shall be subject to the penalties provided
for violations of the provisions of law relating to controlled
substances.
Id. Accordingly, a pharmacy's registration authorizes it to
``dispense,'' or ``deliver a controlled substance to an ultimate user .
. . by, or pursuant to the lawful order of, . . . a practitioner.'' 21
U.S.C. 802(10).
The OSC/ISO is addressed to Respondent at its registered address in
Texas. Therefore, the Agency also evaluates Respondent's actions
according to Texas law, including the applicable Texas pharmacist
professional responsibilities. Gonzales v. Oregon, 546 U.S. at 269-71.
During the period alleged in the OSC/ISO, Texas law specifically
addressed pharmacists' professional responsibilities. First, according
to Texas law, ``[a] pharmacist may not dispense . . . a controlled
substance . . . except under a valid prescription and in the course of
professional practice).'' Tex. Health & Safety Code Sec. 481.074(a)
(2019). Second, pharmacists ``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 Sec. 291.29(b) (2018). Further,
according to Texas law, a ``pharmacist shall make every reasonable
effort to prevent inappropriate dispensing due to fraudulent, forged,
invalid, or medically inappropriate prescriptions in violation of a
pharmacist's corresponding responsibility.'' Id. Sec. 291.29(f). Texas
specifically identifies ``red flag factors'' that are ``relevant to
preventing the non-therapeutic dispensing of controlled substances''
that ``shall be considered by evaluating the totality of the
[[Page 48894]]
circumstances rather than any single factor.'' Id. Several of those red
flag factors are relevant to the adjudication of the OSC/ISO.
According to Texas law, a ``reasonably discernible pattern of
substantially identical prescriptions for the same controlled
substances, potentially paired with other drugs, for numerous persons,
indicating a lack of individual drug therapy in prescriptions issued by
the practitioner'' is a red flag factor. Id. Sec. 291.29(f)(1).
Likewise, under Texas law, ``prescriptions by a prescriber . . . [that]
are routinely for controlled substances commonly known to be abused
drugs, including opioids, benzodiazepines, muscle relaxants,
psychostimulants containing codeine, or any combination of these
drugs'' is a red flag factor. Id. Sec. 291.29(f)(3). Another red flag
factor is ``prescriptions for controlled substances . . . [that] are
commonly for the highest strength of the drug and/or for large
quantities (e.g., monthly supply), indicating a lack of individual drug
therapy in prescriptions issued by the practitioner.'' Id. Sec.
291.29(f)(5). Two other red flag factors are ``multiple persons with
the same address [who] present substantially similar controlled
substance prescriptions from the same practitioner,'' and ``persons
[who] consistently pay for controlled substance prescriptions with cash
or cash equivalents more often than through insurance.'' Id. Sec. Sec.
291.29(f)(11) and (12).
Texas law clearly sets out the operational standard for a pharmacy
to follow when it is presented with a controlled substance prescription
exhibiting a ``red flag factor'': ``Prior to dispensing, any questions
regarding a prescription drug order must be resolved with the
prescriber and written documentation of these discussions made and
maintained as specified in subparagraph (C) of this paragraph.'' \8\
Id. Sec. 291.33(c)(2)(A)(iv) (2019-2020). This Texas documentation
requirement preludes a post hoc oral statement that identification and
resolution of a ``red flag factor'' actually took place absent the
existence of documentation compliant with Section 291.33(c)(2)(C).
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\8\ Subparagraph (C) states: ``Documentation of consultation.
When a pharmacist consults a prescriber as described in subparagraph
(A) of this paragraph, the pharmacist shall document on the
prescription or in the pharmacy's data processing system associated
with the prescription such occurrences and shall include the
following information: (i) date the prescriber was consulted; (ii)
name of the person communicating the prescriber's instructions;
(iii) any applicable information pertaining to the consultation; and
(iv) initials or identification code of the pharmacist performing
the consultation clearly recorded for the purpose of identifying the
pharmacist who performed the consultation.'' Id. Sec.
291.33(c)(2)(C).
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III. Findings of Fact
A. The Government's Case
The RFAA includes three sworn, under penalty of perjury,
Declarations, one each by two Houston DIs and one by the Government's
proposed expert, Registered Pharmacist Katherine Salinas. GX 3, GX 4,
and GX 5, respectively.
The content of the DIs' sworn Declarations is internally consistent
and consistent with each other. Accordingly, the Agency affords both
DIs' Declarations full credibility.
The sworn Declaration of the Government's proposed expert states
that she is a former Compliance Officer with the Texas State Board of
Pharmacy.\9\ The content of the Government's proposed expert's
Declaration, setting out the standard of practice of Texas pharmacies
and of Texas pharmacists' professional responsibilities, is accurate.
Supra section II. The Agency, therefore, finds that the Government's
proposed expert qualifies as an expert in pharmacy compliance with
Texas laws and rules, and accepts her as such in this adjudication.
Accordingly, the Agency affords the Government's expert's Declaration
full credibility. As such, the Agency affords full credibility to the
Government's expert's analyses of the record evidence, including her
Declaration statements that (1) ``between at least March 5, 2020[,] to
September 23, 2021, the . . . Respondent repeatedly filled
prescriptions for controlled substances without addressing or resolving
red flags of abuse or diversion, in violation of the minimum standard
of care that governs the practice of pharmacy in the State of Texas,''
(2) these, Respondent's repeated fills in violation of the minimum
standard of care in Texas, are a violation of Respondent's
``corresponding responsibility to only dispense legitimate
prescriptions,'' and (3) Respondent ``filled prescriptions for L.N.W.,
R.B., J.P., M.F., T.J.P., J.F., M.R., L.H., L.D.W., A.H.G., P.A.T.,
M.L.P., N.J., J.W.W., J.J.W., J.W., [and] C.R.M. . . . outside the
usual course of professional practice.'' \10\ GX 5, at 6, 25; infra.
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\9\ Ms. Salinas's curriculum vitae states that her
responsibilities during her more than nine years serving as a Texas
Board of Pharmacy Compliance Officer included performing ``advanced,
complex inspections of all classes of pharmacies to ensure
compliance with laws and rules.'' GX 5, Attachment A, at 1.
\10\ The Government's expert found these red flags of abuse or
diversion exhibited among the prescriptions that Respondent filled,
and the expert found no evidence either on the prescriptions or in
the patient profiles that Respondent identified, addressed, and
resolved the red flags: pattern prescribing (the same controlled
substances in identical or substantially similar quantities to
multiple patients, thus indicating a lack of individualized care),
controlled substances known to be abused (such as oxycodone),
combinations of controlled substances (such as hydrocodone-
acetaminophen 10/325 mg and carisoprodol 350 mg), controlled
substances prescribed in the highest strength and/or large
quantities, multiple persons with the same address, and cash
payments. GX 5, at 6-25.
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Regarding service of the OSC/ISO, the second Houston DI's
Declaration states that ``[o]n or about November 22, 2021, . . . [she]
personally served the . . . [Respondent] with a copy of the signed
OTSC/ISO.'' GX 4, at 3; see also Written Statement, at 1, 6, 8, 9, 12,
13, 14 (explicit and implicit references to the OSC/ISO and its content
in the Written Statement). Accordingly, the Agency finds unequivocal
and uncontroverted record evidence that Respondent received the OSC/ISO
before it submitted its Written Statement dated January 20, 2022.\11\
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\11\ According to the CSA, ``[f]indings of fact by the [DEA
Administrator], if supported by substantial evidence, shall be
conclusive.'' 21 U.S.C. 877. Here, Respondent's Written Statement is
not evidence, nor does it attach evidence, such as documents or
sworn declarations, that the Agency may consider along with the
evidence the Government submitted with its RFAA. Throughout this
Decision, therefore, when the Agency finds evidence to be
unequivocal and uncontroverted record evidence, the Agency is
finding the evidence to be more than the ``substantial evidence''
required by 21 U.S.C. 877; it is unrebutted evidence.
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Moreover, the documentary evidence submitted with the RFAA
concerning the alleged illegal controlled substance fills corresponds
precisely with the unlawful dispensing allegations in the OSC/ISO.
Among other things, this means, and the Agency finds unequivocal and
uncontroverted record evidence, that Respondent had notice of every
dispensing allegation, and data points supporting each allegation,
before it submitted its Written Statement. Regardless, Respondent did
not include evidence in its Written Statement countering the
Government's evidence of specific dispensing violations.
The Agency finds substantial record evidence that the documentation
submitted with the RFAA does not fully support OSC/ISO paragraph
allegations 31.c, 31.d, and 31.e., but that it does support the rest of
the OSC/ISO's recordkeeping allegations. OSC/ISO, at 10.
In sum, the Agency finds substantial record evidence that the RFAA
presents a prima facie case for the OSC/ISO's dispensing allegations as
to Drs. A.N., G.K., and M.K., and for the first two
[[Page 48895]]
OSC/ISO recordkeeping allegations (paragraphs 31.a and 31.b.). RFAA, at
44-229.
B. Respondent's Case
As already discussed, the only input from Respondent in the Agency
record is the Written Statement signed by Respondent's Counsel. Supra,
section I. Nothing, whether documentary evidence or a sworn-to
declaration, is attached to the Written Statement. Id., infra section
III.C. While the Written Statement does not include evidence, it
provides the Agency with insight into Respondent's position concerning
the OSC/ISO. Supra n.5. In this case, the Written Statement disputes
most, and possibly all, of the OSC/ISO's allegations.\12\ Written
Statement, at 4-13. Yet, had Respondent complied fully with applicable
federal and Texas law, it would possess documentary evidence disputing
the OSC/ISO's dispensing allegations and the first two recordkeeping
allegations. Infra, sections III.C and III.D. For example, this
documentary evidence would include the legally required, under Texas
law, documentation that it identified and resolved red flags before
filling the associated controlled substance and, under the CSA, the
required records that it avers it provided to the DIs and that the DIs
returned to it ``two weeks later.'' Written Statement, at 10 (``The DEA
found everything to be in order, and two weeks later, returned all the
records and information they requested.''); see also, e.g., id. at 4-5;
supra section II. Accordingly, the Agency concludes that no weight may
be attached to the matters asserted in the Written Statement because
the matters asserted in it are argument, not admissible evidence. Supra
n.5.
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\12\ The Written Statement contains ambiguous statements about
whether Respondent disputes the OSC/ISO allegations that it filled
prescriptions for the same or substantially similar controlled
substances, based on prescriptions written by the same practitioner,
to individuals at the ``same address.'' Written Statement, at 8-9.
The Agency finds no evidence that Respondent takes responsibility,
let alone unequivocal responsibility, for committing the ``same
address'' violation, or for committing any violation, whether
dispensing or recordkeeping, alleged in the OSC/ISO. Id. at 1-13.
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C. The Unlawful Dispensing Allegations: Dispensing Controlled
Substances Without Identifying and Resolving the Red Flag Factors of
Pattern Prescribing, Prescribing Controlled Substances Commonly Known
To Be Abused, Prescribing the Highest Strength and/or Large Quantities
of Controlled Substances, a Practitioner's Prescribing the Same or
Similar Controlled Substances to Individuals Who Share the Same
Address, and Payment by Cash or Cash Equivalents
The Agency finds that the evidence the Government submitted with
the RFAA, in conjunction with Respondent's not having submitted any
evidence, is unequivocal and uncontroverted record evidence that
Respondent filled controlled substance prescriptions issued by Drs.
A.N., G.K., and M.K. without identifying, resolving, and documenting
the resolution of red flag factors, as alleged in the OSC/ISO, and in
violation of the CSA and Texas law. GX 5, at 1-25, GX 3E-3U. The red
flag factors that, according to the unequivocal and uncontroverted
record evidence, Respondent failed to identify, resolve, and create and
maintain written red flag resolution documentation for are pattern
prescribing, prescribing of controlled substances commonly known to be
abused, prescribing the highest strengths and/or large quantities of
controlled substances indicating a lack of individual drug therapy,
multiple persons with the same address presenting substantially similar
controlled substance prescriptions from the same practitioner, and
consistently paying for the controlled substances with cash more often
than through insurance. GX 5, at 1-4. The unequivocal and
uncontroverted record evidence also includes that ``All State of Texas
pharmacists have access to these [Texas dispensing legal] requirements,
and are required to pass a jurisprudence examination in order to become
a licensed pharmacist,'' and that ``All State of Texas licensed
pharmacists know he/she is required to exercise reasonable caution in
practice to prevent diversion by following common sense and proper
dispensing practices.'' Id. at 3. Accordingly, there is unequivocal and
uncontroverted record evidence that Respondent ``knowingly'' filled
controlled substance prescriptions that were not issued for a
legitimate medical purpose by an individual practitioner acting in the
usual course of professional practice.\13\ 21 CFR 1306.04(a), Tex.
Health & Safety Code Sec. 481.074(a) (2019), 22 Tex. Admin. Code Sec.
291.29 (2018), 22 Tex. Admin. Code Sec. 291.33 (2019-2020); GX 3E-3U,
GX 5, at 1-25; supra sections II, III.A., and III.B.\14\
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\13\ Agency decisions have consistently found that prescriptions
with the same red flags at issue here were so suspicious as to
support a finding that the pharmacists who filled them violated the
Agency's corresponding responsibility rule due to actual knowledge
of, or willful blindness to, the prescriptions' illegitimacy. 21 CFR
1306.04(a); see, e.g., Morning Star Pharmacy and Medical Supply 1,
85 FR 51045, 51061 (2020) (pattern prescribing; distance; cash
payments; high doses/quantities of high-alert controlled
substances); Pharmacy Doctors Enterprises d/b/a Zion Clinic
Pharmacy, 83 FR 10876, 10898 (2018), pet. for rev. denied, 789 F.
App'x 724 (11th Cir. 2019) (long distances; pattern prescribing;
cash payments); Hills Pharmacy, 81 FR 49816, 49836-39 (2016)
(multiple customers presenting prescriptions written by the same
prescriber for the same drugs in the same quantities; customers with
the same last name and street address presenting similar
prescriptions on the same day; long distances); The Medicine Shoppe,
79 FR 59504, 59507, 59512-13 (2014) (unusually large quantity of a
controlled substance; pattern prescribing).
\14\ GX 3AA appears immediately after GX 3A in the RFAA.
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For example, the Agency finds unequivocal and uncontroverted record
evidence that, during the approximate thirteen-month period between
June 12, 2020, and July 13, 2021, Respondent unlawfully released into
the community about 5,463 tablets of hydrocodone-acetaminophen 10-325
mg and carisoprodol 350 mg for nine individuals based on controlled
substance prescriptions issued by the same practitioner. GX 5, at 9-17
and GX 3H, 3I, 3K, 3L, 3M, 3N, 3O, 3P, and 3Q. Each of the nine
individuals paid cash for all of these Schedule II and Schedule IV
controlled substance tablets. GX 5, at 9-10, 12-16 and GX 3H, at 1, GX
3I, at 1, GX 3J, at 1, GX 3K, at 1, GX 3L, at 1, GX 3M, at 1, GX 3N, at
1, GX 3O, at 1, GX 3P, at 1, and GX 3Q, at 1. All of these
prescriptions were written for large quantities and the highest
available dosages of hydrocodone-acetaminophen 10-325 mg and
carisoprodol 350, controlled substances commonly known to be abused. GX
5, at 9-10, 12-16.
By way of further example, the Agency finds unequivocal and
uncontroverted record evidence that, during the approximate eleven-
month period between March 16, 2020, and February 19, 2021, Respondent
unlawfully released into the community a total of about 4,642 tablets
of hydrocodone-acetaminophen 10-325 mg and carisoprodol 350 mg for
three individuals who share the same address and based on prescriptions
issued by the same practitioner. GX 5, at 17-19 and GX 3R, 3S, and 3T.
In sum, the Agency finds unequivocal and uncontroverted record
evidence that the Government presented a prima
[[Page 48896]]
facie case that Respondent filled controlled substance prescriptions
outside the usual course of pharmacy practice and in violation of its
corresponding responsibility. 21 CFR 1306.04(a), Tex. Health & Safety
Code Sec. 481.074(a) (2019), 22 Tex. Admin. Code Sec. 291.29 (2018),
22 Tex. Admin. Code Sec. 291.33 (2019-2020).\15\
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\15\ Any one of these distribution violations is sufficient to
deny an application for a registration or revoke a registration. 21
U.S.C. 823(g)(1), 824(a)(4).
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D. The Recordkeeping Allegations
The Agency finds that the evidence the Government submitted is
unequivocal and uncontroverted record evidence that Respondent violated
recordkeeping requirements.\16\ OSC/ISO, at 10 (paragraphs 31.a. and
31.b.), supra sections III.A. and III.B. Specifically, the two DIs'
credible, sworn Declarations state that Respondent did not have the
dispensing records, biennial inventory, and most recent inventory
records that the DIs requested, constituting substantial record
evidence of Respondent's recordkeeping violations. GX 3, at 2, GX 4, at
2.
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\16\ As already discussed, the Agency finds that the Government
did not submit sufficient evidence to prove the recordkeeping
allegations in OSC/ISO paragraphs 31.c, 31.d, and 31.e. OSC/ISO, at
10.
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According to the Written Statement, Respondent ``denies'' the
recordkeeping allegations, and claims that it ``willingly provided the
DEA with all the documentation they requested.'' Written Statement, at
2, 10. Respondent further states that ``DEA found everything to be in
order, and two weeks later, returned all the records and information
they requested.'' Id. at 2, 10. If, as the Written Statement states,
Respondent received back the records and information that DEA found to
be in order, then Respondent could have attached those records and
information to the Written Statement to prove its unsworn claims that
it complied with the DIs' records request. In fact, Respondent did not
submit any evidence, let alone this specific evidence, to support its
claims of its compliance with recordkeeping requirements.
Under such circumstances, this Agency has applied, and it also
applies here, the ``adverse inference rule.'' As the D.C. Circuit
explained, ``[s]imply stated, the rule provides that when a party has
relevant evidence within his control which he fails to produce, that
failure gives rise to an inference that the evidence is unfavorable to
him.'' 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). The Court reiterated this rule in Huthnance v. District of
Columbia, 722 F.3d 371, 378 (D.C. Cir. 2013). According to this legal
principle, Respondent's decision not to provide records gives rise to
an inference that any such evidence is unfavorable to Respondent.
In sum, Respondent's unsworn and unsupported claims that it
provided the requested records to the DIs are insufficient to rebut the
prima facie recordkeeping violation case that the Government presented
as to OSC/ISO subparagraphs 31.a. and 31.b. Supra. Accordingly, the
Agency finds substantial record evidence that Respondent violated
federal recordkeeping requirements.\17\ 21 CFR 1304.21(a) and
1304.22(c).\18\
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\17\ Any one of these recordkeeping violations is sufficient to
deny an application for a registration. 21 U.S.C. 823(g)(1).
\18\ As for the unproven recordkeeping allegation in OSC/ISO
paragraph 31.c., regarding 21 CFR 1304.04(f)(2), the Agency notes
that neither the OSC/ISO or the RFAA alleges, let alone proves, that
Respondent is one of the entities to which 21 CFR 1304.04(f)(2)
applies. The Agency also notes, however, that the Written Statement
does not claim that 21 CFR 1304.04(f)(2) does not apply to
Respondent. As the Government has the burden of proof in these
proceedings, this recordkeeping allegation is not sustained.
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IV. Discussion
A. The CSA and the Public Interest Factors
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).\19\
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\19\ 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.
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The five factors are considered in the disjunctive. Gonzales v.
Oregon, 546 U.S. at 292-93 (Scalia, J., dissenting) (``It is well
established that these factors are to be considered in the
disjunctive'' (quoting In re Arora, 60 FR 4447, 4448 (1995))); Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). The Agency may give each
factor the weight it deems appropriate. Gonzales v. Oregon, 546 U.S. at
293 (Scalia, J., dissenting) (quoting In re Arora, 60 FR 4447, 4448
(1995)), e.g., Penick Corp. v. Drug Enf't Admin., 491 F.3d 483, 490
(D.C. Cir. 2007) (importer); Morall v. Drug Enf't Admin., 412 F.3d 165,
174 (D.C. Cir. 2005) (practitioner), quoting Henry J. Schwarz, Jr.,
Denial of Application, 54 FR 16422, 16424 (1989).
The Agency ``may properly rely on any one or a combination of
factors.'' Gonzales v. Oregon, 546 U.S. at 293 (Scalia, J. dissenting)
(quoting In re Arora, 60 FR 4447, 4448 (1995)); Morall, 412 F.3d at 185
n.2 (Henderson, J. concurring and referring to pages 173-74 of the
majority opinion); see also Jones Total Health Care Pharmacy, LLC v.
Drug Enf't Admin., 881 F.3d 823, 830 (11th Cir. 2018) (citing Akhtar-
Zaidi v. Drug Enf't Admin., 841 F.3d 707, 711 (6th Cir. 2016)); Volkman
v. U.S. Drug Enf't Admin., 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v.
Drug Enf't Admin., 419 F.3d 477, 482 (6th Cir. 2005). Moreover, while
the Agency is required to consider each of the factors, it ``need not
make explicit findings as to each one.'' MacKay v. Drug Enf't Admin.,
664 F.3d 808, 816 (10th Cir. 2011) (the Agency ``must consider each of
these factors'' but ``need not make explicit findings as to each one'')
(quoting Volkman, quoting Hoxie, and citing Morall). ``In short, . . .
the Agency is not required to mechanically count up the factors and
determine how many favor the Government and how many favor the
registrant. Rather, it is an inquiry which focuses on protecting the
public interest; what matters is the seriousness of the registrant's
misconduct.'' Jayam Krishna-Iyer, M.D., 74 FR 459, 462 (2009) (on
remand). Accordingly, as the Tenth Circuit has recognized, findings
under a single factor can support the revocation of a registration.
MacKay, 664 F.3d at 821.
The Government has the burden of proof in this proceeding. 21 CFR
1301.44(e); see also Morall, 412 F.3d at 174.
[[Page 48897]]
B. Factors B and/or D--Respondent's Experience in Dispensing Controlled
Substances and Compliance With Applicable Laws Relating to Controlled
Substances
Allegation That Respondent's Continued Registration Would Be
Inconsistent With the Public Interest
While the Agency considered all of the 21 U.S.C. 823(g)(1) factors
in this matter, the Agency finds that the Government's prima facie case
is confined to factors B and D. The Agency finds that the Agency-found
facts regarding Respondent's conduct with respect to factors B and D,
its unlawful conduct under applicable federal and Texas law, constitute
a prima facie showing that Respondent's continued registration would be
inconsistent with the public interest. 21 CFR 1306.04(a), 1304.21(a),
1304.22(c); Tex. Health & Safety Code Sec. 481.074(a) (2019); 22 Tex.
Admin. Code Sec. 291.29 (2018), Sec. 291.33 (2019-2020); supra
sections III.C. and III.D.
Accordingly, the Government has satisfied its prima facie burden of
showing that Registrant's continued registration would be
``inconsistent with the public interest.'' 21 U.S.C. 824(a)(4) in
conjunction with 823(g)(1); supra sections III.C. and III.D.
Respondent, who chose not to submit any evidence for the Agency's
consideration, also did not attempt to rebut the Government's prima
facie case.
V. Sanction
Where, as here, the Government has met its prima facie burden of
showing that Respondent's continued registration would be inconsistent
with the public interest due to its experience dispensing controlled
substances and its failure to comply with applicable laws relating to
controlled substances, the burden shifts to Respondent to show why the
Agency should continue to entrust it with a registration. Morall, 412
F.3d at 174; Jones Total Health Care Pharmacy, 881 F.3d at 830; 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
(citing authority including Alra Labs., Inc. v. Drug Enf't Admin., 54
F.3d 450, 452 (7th Cir. 1995) (``An agency rationally may conclude that
past performance is the best predictor of future performance.'').
``[T]hat consideration is vital to whether continued registration is in
the public interest.'' MacKay, 664 F.3d at 820. A registrant's
acceptance of responsibility must be unequivocal. Jones Total Health
Care Pharmacy, 881 F.3d at 830-31.
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 at 46972-73.
Here, Respondent chose to submit a written statement in lieu of
requesting a hearing. As already discussed, the Written Statement is
signed by Respondent's counsels and, as such, is not evidence. Supra
section I, n.5. Nor does it attach evidence. Id. Instead, it denies,
without offering proof, the existence of any legal violation. As such,
the Written Statement does not offer evidence to refute the
Government's prima facie case. Respondent has not convinced the Agency
that it understands that its filling of controlled substance
prescriptions fell short of the applicable legal standards and that
this substandard controlled substance prescription filling has serious
negative ramifications for the health, safety, and medical care of
individuals who come to it with controlled substance prescriptions to
be filled. E.g., Jones Total Health Care Pharmacy, 881 F.3d at 834 and
n.4; Garrett Howard Smith, M.D., 83 FR at 18910 (collecting cases)
(``The egregiousness and extent of the misconduct are significant
factors in determining the appropriate sanction.''). As such, it is not
reasonable to believe that Respondent's future controlled substance
prescription filling or recordkeeping will comply with legal
requirements.
The unequivocal and uncontroverted record evidence is that
Respondent's founded violations resulted in the unlawful release of
over 10,000 controlled substance tablets over a sixteen-month period.
Supra section III.C. The tablets unlawfully released into the community
were hydrocodone-acetaminophen and carisoprodol, controlled substances
known to be abused and diverted. Id.
The Written Statement does not evidence that Respondent takes
responsibility, let alone unequivocal responsibility, for the founded
violations. There is no record evidence from which the Agency may
reasonably conclude that Respondent's future controlled substance-
related actions will comply with legal requirements. Accordingly,
Respondent did not convince the Agency that it should continue to
entrust Respondent with a registration.
The interests of specific and general deterrence weigh in favor of
revocation. Further, given the foundational nature and vast number of
Respondent's violations, a sanction less than revocation would send a
message to the existing and prospective registrant community that
compliance with the law is not essential to maintaining a registration.
Accordingly, I shall order the sanction the Government requested,
as contained in the Order below.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 824(a)(4) and 21 U.S.C. 823(g)(1), I hereby revoke DEA
Certificate of Registration No. FP8885785 issued to Pharmacy Place,
LLC. Further, pursuant to 28 CFR 0.100(b) and the authority vested in
me by 21 U.S.C. 824(a) and 21 U.S.C. 823(g)(1), I hereby deny any
pending application of Pharmacy Place, LLC, to renew or modify this
registration, as well as any other pending application of Pharmacy
Place, LLC, for registration in Texas. This Order is effective December
1, 2025.
Signing Authority
This document of the Drug Enforcement Administration was signed on
October 9, 2025, by Administrator Terrance Cole. 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. 2025-19708 Filed 10-29-25; 8:45 am]
BILLING CODE 4410-09-P