[Federal Register Volume 76, Number 153 (Tuesday, August 9, 2011)]
[Notices]
[Pages 48887-48897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20055]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 09-1]
Liddy's Pharmacy, L.L.C. Denial of Application
On September 15, 2008, the Deputy Assistant Administrator, Office
of Diversion Control, Drug Enforcement Administration (DEA or
``Government''), issued an Order to Show Cause to
[[Page 48888]]
Liddy's Pharmacy, L.L.C. (Respondent), of Lakeland, Florida. The Show
Cause Order proposed the revocation of Respondent's DEA Certificate of
Registration, BD8523335, as a retail pharmacy, and the denial of any
pending applications for renewal or modification of its registration,
on the ground that Respondent's continued registration ``is
inconsistent with the public interest, as that term is defined in 21
U.S.C. 823(f).'' Show Cause Order at 1.
More specifically, the Show Cause Order alleged that Respondent
``knowingly engaged in a scheme to distribute controlled substances
based on purported prescriptions that were issued for other than
legitimate medical purposes and by physicians acting outside the usual
course of professional practice, in violation of Federal and State
law.'' Id. The Order further alleged that Respondent ``aided physicians
in the unauthorized practice of medicine in those states that require
physicians to be licensed by the state before prescribing controlled
substances to state residents and in those states that require a
physical examination by the physician prior to prescribing controlled
substances.'' Id. at 1-2.
By letter of September 29, 2008, Respondent, through its attorney,
requested a hearing on the allegations and the matter was placed on the
docket of the Agency's Administrative Law Judges (ALJs). Thereafter, on
January 13, 2009, an ALJ conducted a hearing in Orlando, Florida at
which only the Government presented evidence. Following the hearing,
both parties filed briefs containing their proposed findings of fact,
conclusions of law, and argument.
On October 6, 2009, the ALJ issued her recommended decision (also
ALJ). Therein, the ALJ began by noting that under Federal law ``[a]
prescription for a controlled substance . . . must be issued for a
legitimate medical purpose by an individual practitioner acting in the
usual course of his practice'' and that a pharmacist has ``a
corresponding responsibility'' not to fill an unlawful prescription.
ALJ at 19 (quoting 21 CFR 1306.04(a)). The ALJ then found that ``the
evidence shows that the Respondent filled over 42,000 prescriptions
written by doctors for patients in states where those doctors were not
licensed.'' Id. at 20. Having found that ``these physicians were * * *
engaged in the unauthorized practice of medicine in at least nine
states,'' the ALJ concluded that the ``prescriptions issued by such
practitioners * * * are therefore invalid under the Controlled
Substances Act [(CSA)]'' and that ``Respondent violated the CSA by
filling them.'' Id. at 22.
The ALJ also found that while Respondent ``is only licensed to
practice pharmacy in Florida, Texas, and Illinois,'' it ``nevertheless
dispensed medication to patients in Arkansas, Connecticut, New
Hampshire, California, and Louisiana'' and thus ``engaged in the
unlicensed practice of pharmacy in violation of the laws of these
states.'' Id. The ALJ further found that Respondent violated Florida
law when, despite being ``on notice by the [Florida] Board [of
Pharmacy] that prescriptions for controlled substances must be manually
signed,'' it ``continued to fill controlled-substance prescriptions
containing electronic signatures.'' Id. at 23.
Finally, the ALJ found that Respondent ``knowingly filled
prescriptions issued in the name of a doctor whose DEA registration was
suspended.'' Id. Describing such conduct as ``a blatant violation of
the pharmacy's corresponding responsibility under the [CSA] and DEA
regulations,'' the ALJ found that this conduct ``demonstrate[d] a
disturbing lack of appreciation for the responsibilities of a DEA
registrant'' and ``threatens the public health and safety by creating a
substantial risk of diversion of controlled substances.'' Id. at 24.
The ALJ thus concluded that ``in total, the Government has proven by a
preponderance of the evidence its prima facie case.'' Id.
The ALJ then turned to whether Respondent had rebutted the
Government's prima facie case. Noting that ``both Mr. Liddy and Mrs.
Liddy,'' who are Respondent's owners, ``invoked their Fifth Amendment
privilege against self-incrimination'' and refused to testify, the ALJ
further found that ``Respondent presented no evidence or testimony
whatsoever to rebut any of the Government's evidence.'' Id.
Accordingly, the ALJ ``conclude[d] that it would be inconsistent with
the public interest to allow * * * Respondent to maintain its DEA
registration.'' Id. at 25. Citing Respondent's ``extensive record of
unlawful conduct,'' its ``callous disregard for the serious
responsibilities of a DEA registrant,'' as well as its ``failure to
present any evidence to show that it has corrected'' its unlawful
practices, the ALJ recommended that Respondent's registration be
revoked. Id. at 25-26.
On October 27, 2009, Respondent filed Exceptions to the ALJ's
decision, and on November 9, 2009, the record was forwarded to me for
final agency action. On April 14, 2010, Respondent's owner executed a
voluntary surrender of its registration. Notice of Surrender and Motion
To Terminate Proceedings, at 1. Thereafter, the Government moved to
terminate the proceeding on the ground that it is now moot. Id. at 2.
Having reviewed the voluntary surrender form (DEA-104), I conclude
that this case is not moot because that form contains no language
manifesting that Respondent has withdrawn its pending application.
Moreover, even if Respondent had withdrawn its application, under the
Agency's regulation, once an applicant is served with an order to show
cause, an application may only be ``withdrawn with permission of the
Administrator * * * where good cause is shown by the applicant or where
the * * * withdrawal is in the public interest.'' 21 CFR 1301.16(a). In
light of the extensive resources that have been expended in both the
litigation and review of this case, the egregious misconduct
established by this record, and that neither the voluntary surrender
form nor Agency regulations bar Respondent from immediately re-applying
for a new registration or impose any time-bar on its reapplying, I
conclude that allowing Respondent to withdraw its application would be
contrary to the public interest.\1\ Accordingly, I conclude that the
case is not moot. The Government's motion to terminate the proceeding
is therefore denied.
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\1\ I further note that there is no evidence that Respondent and
its owners intend to permanently cease the practice of pharmacy.
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Having considered the entire record in this matter, including
Respondent's exceptions, I adopt the ALJ's recommended decision in its
entirety except as noted herein. Accordingly, Respondent's pending
application will be denied. I make the following findings.
Findings
At the time of the hearing, Respondent held DEA Certificate of
Registration BD8523335, which authorized it to dispense controlled
substances in schedules II through V as a retail pharmacy at its
Lakeland, Florida location. GX 1; ALJ Ex. 5, at 1. While Respondent's
registration was initially to expire on March 31, 2009, on February 2,
2009, it timely filed a renewal application. GX 1; ALJ Ex. 5, at 1.
Accordingly, Respondent's registration remained valid until April 14,
2010, when Respondent's owner surrendered it. See 5 U.S.C. 557(c).
However, as explained above, the Voluntary Surrender form contains no
language manifesting Respondent's intent to withdraw its application. I
[[Page 48889]]
therefore find that Respondent's application remains pending before the
Agency.
Respondent, which is licensed as a pharmacy in the states of
Florida, Texas, and Illinois, Tr. 42, is owned by Mr. Robert Bruce
Liddy, Sr., and Mrs. Melinda Carol Liddy. GX 5. Respondent is also
known by the name ``Discount Mail Meds.'' Tr. 19; see also GX 9.
At the hearing, the Government called both Mr. and Mrs. Liddy to
testify. Id. at 12, 15. However, both Mr. and Mrs. Liddy asserted their
Fifth Amendment right against self-incrimination and thus did not
answer questions on various subjects including on whether Respondent
was also known as ``Discount Mail Meds,'' on ``all matters regarding
[Respondent's] operations,'' and on Respondent's ``association'' with
Internet Web sites, doctors, or Web site operators regarding the
filling of prescriptions for those Web sites. Id. at 12-13, 15-16.
At some point not established by the record, multiple law
enforcement agencies including DEA commenced an investigation into
Respondent's practices, specifically focusing on its filling of
prescriptions for hydrocodone (a Schedule III controlled substance),
alprazolam (a Schedule IV controlled substance), and Soma or
carisoprodol (a drug controlled under Florida law), which were issued
by doctors who did not appear to have valid physician-patient
relationships with the recipients of the prescriptions because the
latter were located throughout the country. Id. at 20-21.
According to the DEA's lead investigator, Respondent was associated
with four to five internet prescribing Web sites, including
ExpressReliefServices.com and NationwidePills.com. Id. at 22; see also
GXs 7 & 8. Generally, the Web sites offered a person the ability to
purchase prescription medication, including controlled substances,
based on a person's completion of an online questionnaire and without
the prescribing physician's having performed a physical exam of him/
her. Tr. at 22; see also GX 7, at 3 (terms and conditions for
Nationwidepills.com) (``You understand that an on-line medical
consultation will not include a physical examination. You hereby waive
a physical exam at this time and agree to obtain a timely medical
follow-up examination with a physician before you take treatments
prescribed by Nationwidepills.com.''). Moreover, while some of the Web
sites required medical records and/or identification, others did not.
Tr. 22. Physicians who held DEA registrations ``lent their DEA numbers
for the filling of * * * prescriptions.'' Id. However, the actual
creation of the prescriptions ``appear[ed] to have been done by a
physician's assistant frequently without the knowledge of the
physician.'' Id.
Between June and August 2006, DEA Investigators from the Cleveland
District Office made four undercover purchases of 10 mg. strength
hydrocodone drugs by accessing several unidentified Web sites,
completing questionnaires, providing medical records, and speaking with
a physician's assistant. Id. at 23. The shipments of hydrocodone
medication arrived via either UPS or FedEx and had been filled by
Respondent. Id. at 23-24. Moreover, at some unspecified date in either
2005 or 2006, a DEA Diversion Investigator went to Respondent and
interviewed its owners. Tr. 82.
Approximately one year later, on July 30, 2007, a search warrant
was executed at Respondent and five other locations. Id. at 34; GX 5,
at 1. During the search, another DI interviewed Robert Bruce Liddy,
Sr.; the DI subsequently provided an affidavit about that interview.
According to the affidavit, Mr. Liddy was first approached by the
owner of Express Relief Services (ERS) in December 2004. GX 5, at 1.
The owner of ERS was ``seeking a pharmacy to fill prescriptions
generated from his `network of physicians' in the telemedicine field.''
Id. At a dinner meeting, ERS's owner explained that Respondent would
``receive prescriptions via facsimile directly from the doctor's [sic]
office'' and be paid a ``'dispensing fee of $28-$30 for each''
prescription it filled. Id. Respondent received ``approximately 500-750
new prescriptions per week'' from ERS's Web site and also filled
requests for refills. Id. According to the affidavit, ``Mr. Liddy
stated that at one point his pharmacy would fill more than 180
prescriptions a [sic] day for Express Relief Services'' for such drugs
as hydrocodone, alprazolam and carisoprodol, with the vast majority of
the prescriptions being for hydrocodone products. Id.
Mr. Liddy told the DI that Respondent received the prescriptions
directly from the prescribing physicians, among them one Dr. Jorge
Alsina. Id. at 2. Mr. Liddy further told the DI that the owner of ERS,
whom Mr. Liddy believed to be ``addicted to hydrocodone,'' would ``pick
up hydrocodone prescriptions for himself and `his friends,' '' and that
these prescriptions were also written by the doctors who worked for
ERS. Id.
During the interview, Mr. Liddy stated that, while he worked for
ERS, he also contracted with other Internet Web sites to fill
prescriptions for them. Id. Also at the interview, Mrs. Liddy
``revealed that [Respondent] was also working with Opti Health, First
Priority, Nationwide Pills, Pharmanet, U.S. Meds, and CDR.'' Id.
Mr. Liddy asserted that he had a pharmacy license ``in each state
where he had out-of-state customers.'' Id. He also claimed that he was
not breaking the law ``because he believed there were safeguards in
place against the wrong people getting the drugs.'' Id. He further
stated his belief that ```people will get the drugs''' anyway and that
he ```was not the prescription police.''' Id.
During the execution of the search warrant, Respondent's dispensing
records were seized by downloading them from the hard drives of its
computer system. Tr. 53, 55, 97. The Government introduced into
evidence both summaries of data seized at the execution of the search
warrant prepared by the National Drug Intelligence Center (NDIC) and
DEA's forensic digital laboratory in Lorton, Virginia, as well as data
from DEA's Automated Reports and Consummated Order System (ARCOS) which
showed the monthly amounts of hydrocodone (in dosage units) which
Respondent purchased between January 1, 2004 and September 16, 2008.
Id. at 91 & 95; GX 3. The latter showed that Respondent's purchases of
hydrocodone increased from a total of 47,900 dosage units in calendar
year 2004, to 3,688,500 dosage units in 2005, and to 4,557,840 in 2006.
GX 3.
Dr. Jorge Alsina was listed as a prescribing physician in records
seized from Respondent. Id. at 42-43; GXs 13, 14 & 19. Dr. Alsina was
licensed to practice medicine only in the State of Florida. Tr. 43.
Initially, he received $1,000 per week for writing prescriptions for
Respondent; subsequently, according to the DI, he received $2,000 per
week. Id. at 58-59.
The DI further testified as to manner in which ERS operated.
According to the DI, an ERS clerk would request medical records and a
copy of a driver's license from a customer; the records were then faxed
to either Dr. Alsina or to Mr. Folder, who was a physician's assistant.
However, in an interview, Dr. Alsina stated that he did not have a
registered supervisory relationship with Folder as required by Florida
law. Id. at 60-63.
Dr. Alsina also ``did not necessarily review'' the medical records
which he would fax to the physician's assistant; Alsina would also e-
mail the prescription to Folder as well. Id. at 64-65; 67. However,
according to Dr. Alsina, sometimes his part in the e-mail
[[Page 48890]]
chain was skipped and the prescription was sent directly from the
physician's assistant to Respondent. Id. Alsina indicated that ERS had
a template with his signature so that with the ``hit[ing] of a
button,'' his signature could be generated by either himself or Folder.
Id. at 69, 70.
The Government introduced into evidence eight prescriptions for
controlled substances that were sent as e-mail attachments from
``Matthew and Gayle Folder'' to ``Bruce Liddy.'' GX 4, at 2, 4, 8, 10,
12, 14, 18, and 20. All of the prescriptions were dated March 19, 2005
and bore Dr. Alsina's electronic signature. See id. The DI testified
that these prescriptions were ``representative of the vast majority of
the prescriptions that were seized from [Respondent's] computers.'' Id.
at 85.
The Government also entered into evidence an e-mail dated September
10, 2004, from Danna E. Droz, Executive Director, Board of Pharmacy,
State of Florida, to Mr. Liddy at the e-mail address:
[email protected]. GX 11. The e-mail specifically explained
that ``[e]lectronic prescriptions such as would come from a PDA or a
computer to a pharmacy's fax machine or to a pharmacy's computer may be
used only for prescriptions for non-controlled substances.'' GX 11.
Continuing, Ms. Droz explained that ``[a] prescription for a controlled
substance must be manually signed at this time.'' Id.; Tr. 87. While
the e-mail further noted that DEA is in the process of developing
regulations to permit the electronic transfer of a prescription,'' GX
11, the requirement that a controlled substance prescription be
manually signed remained in effect as of the date of the hearing under
the regulations of both DEA and the State of Florida. Tr. 88.
The DI testified that the ``vast majority'' of the seized
prescriptions did not comply with the manual signature requirement. Id.
Moreover, the eight prescriptions contained in Government Exhibit 4
were issued subsequent to the date on which Mr. Liddy received notice
that controlled substance prescriptions must be manually signed.
Based on the records seized from Respondent, the NDIC prepared a
chart compiling the number of prescriptions dispensed by Respondent by
each prescriber for hydrocodone, alprazolam and other drugs. GX 14.
According to the chart, Respondent filled 19,447 prescriptions which
were written by Dr. Alsina; 12,796 of the prescriptions were for
hydrocodone products and 5,860 were for alprazolam. GX 14, at 1; GX 15.
Only 791 prescriptions were for other drugs, some of which may have
also been controlled substances.\2\ GX 14, at 1.
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\2\ The Government's evidence lists the prescriptions as being
in one of three categories: hydrocodone, alprazolam, or ``other''
medications. GX 14. The evidence does not, however, further identify
the drugs listed under ``other'' medications and whether this
category includes any controlled substances. See GXs 14-20.
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Moreover, between October 2004 and the end of December 2005,
Respondent dispensed prescriptions written by Dr. Alsina to patients in
such states as West Virginia (4,308 prescriptions), Tennessee (4,307
prescriptions), Ohio (2,455 prescriptions), Kentucky (2,346
prescriptions),\3\ Virginia (2,345 prescriptions), Alabama (633
prescriptions), Florida (425 prescriptions), California (311
prescriptions), Indiana (275 prescriptions), and North Carolina (177
prescriptions). GX 19, at 1; GX 20, at 1-68.\4\ Even if all of the
remaining 791 prescriptions which were not specifically identified as
being for controlled substances were for non-controlled drugs and are
subtracted from the various state figures, the evidence still shows
that Dr. Alsina prescribed large quantities of controlled substances to
individuals in West Virginia, Tennessee, Ohio, Kentucky, and Virginia,
if not the other States as well.
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\3\ As the ALJ noted in her recommended decision, there is a
slight discrepancy between the raw data in Government Exhibit 13 and
the NDIC-prepared data in Government Exhibit 19, the source cited
here. See ALJ at 9 n.8. The count in Government Exhibit 13 for
Kentucky is 2,345 and not 2,346. Other discrepancies are as follows:
Alabama, 632, not 633; Florida, 424, not 425; and California, 310,
not 311. See id. I concur in the ALJ's determination that, while
``the Government's calculated exhibits may be slightly inaccurate,''
they nevertheless ``are sufficiently close to the actual numbers''
for the purposes of this decision. See id.
\4\ The ALJ treated all of the prescriptions as if they were for
controlled substances including those listed as ``other'' drugs and
which were not specifically identified as being for controlled
substances. See ALJ at 9 (FOF 19 and 20) (discussion of ``Unlicensed
Practice of Medicine''). However, even after subtracting out all of
the ``other'' prescriptions, it is still clear that the physicians
wrote numerous controlled substance prescriptions for residents of
States where they were not licensed. The ALJ's error is therefore
inconsequential. See ALJ at 20-21.
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As an example of Dr. Alsina's prescribing of controlled substances
across state lines, on July 6, 2005, he issued 351 prescriptions \5\ to
residents of various States and in the following quantities: West
Virginia (98), Tennessee (98), Virginia (65), Ohio (58), Alabama (6),
North Carolina (5), Arizona (4), Michigan (4), Indiana (3), Georgia
(2), Arizona (1), Connecticut (1), Maryland (1), New Hampshire (1), and
Utah (1). GX 20, at 48. Obviously, Dr. Alsina did not fly or drive all
over the country on a single day to conduct physical exams on these
patients. Nor does it seem likely that any of these patients travelled
from all over the country to see him (this was, after all, an internet-
based operation). In any event, seeing 351 patients in a single day
would be a remarkable achievement for any physician. I therefore find
that Respondent either had to have known, or willfully closed its eyes
to the fact, that Dr. Alsina could not possibly have issued all of
these prescriptions pursuant to a legitimate doctor-patient
relationship.
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\5\ He also issued eight prescriptions to individuals in
Florida, for a total of 359 prescriptions on that date. GX 20, at
48.
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DEA suspended Dr. Alsina's Certificate of Registration on September
26, 2005. Tr. 44-45; GX 10. Dr. Alsina notified Respondent of this fact
by an e-mail of October 5, 2005, which Respondent acknowledged with
another e-mail of the same date. Tr. 47-48; GX 12. However,
Respondent's records reflect that through December 2005, Respondent
continued to fill prescriptions issued using Dr. Alsina's registration.
GX 20, at 66-68. More specifically, it appears that Respondent filled
67 prescriptions from the time of the suspension through the end of
December 2005. GX 20; GX 13; see also ALJ at 9 n.10.\6\ However, the
Government's evidence does not identify what drugs these prescriptions
were for.
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\6\ The ALJ did not count the prescriptions listed under
February 1, 2006 and July 26, 2006, noting that the ``date filled''
for those prescriptions is one year earlier in 2005, when Dr.
Alsina's license was still valid. Like the ALJ, I conclude that the
dates of February 1 and July 26, 2006 are typographical errors. See
ALJ at 10 n.12.
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Respondent's pharmacy records also listed Dr. Dora Fernandez as a
prescribing physician. Tr. 43; GXs 13-14, 19 & 20. Dr. Fernandez is
only licensed to practice medicine in the State of Florida. Tr. 43.
The NDIC data indicate that Dr. Fernandez wrote a total of 13,603
prescriptions which were filled by Respondent. Of these, 3,242 were for
hydrocodone, 60 were for alprazolam, and 301 were for other
medications. GX 14, at 1; GX 15. Between February 2006 and the end of
April 2007, Respondent dispensed prescriptions written by Dr. Fernandez
to individuals in numerous States, in the following quantities: Florida
(1,448 prescriptions), Texas (1,387 prescriptions), Alabama (856
prescriptions), Virginia (837 prescriptions), New York (702
prescriptions), Washington (690 prescriptions), Michigan (652
prescriptions), Pennsylvania (497 prescriptions), Ohio (476
prescriptions)
[[Page 48891]]
and Georgia (467 prescriptions). See GXs 19, at 1, & GX 20, at 68-195.
Even if all of the remaining 301 prescriptions which were not
specifically identified as being for controlled substances were for
non-controlled drugs, Dr. Fernandez prescribed controlled substances to
residents of each of these ten States. Moreover, she also prescribed
controlled substances to residents of at least nine States where she
did not possess licensure and could not practice medicine.
As an example of her prescribing across state lines, on November
13, 2006, Dr. Fernandez issued 91 prescriptions.\7\ GX 20, at 152-53.
The States and number of prescriptions are as follows: New York (11),
Michigan (8), Arizona (7), Georgia (7), Alabama (6), Texas (6),
Virginia (5), Washington (5), Connecticut (4), Ohio (3), Wisconsin (3),
Arkansas (2), Colorado (2), Indiana (2), Kansas (2), Pennsylvania (2),
Alaska (1), California (1), Iowa (1), Idaho (1), Minnesota (1), Montana
(1), New Mexico (1), Oklahoma (1), Oregon (1), Rhode Island (1), and
South Carolina (1).
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\7\ She additionally issued seven prescriptions to individuals
in the State of Florida. GX 20, at 152.
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Given the respective locations of Dr. Fernandez and those she
prescribed to, it is implausible that Dr. Fernandez conducted physical
examinations of these persons and established bona fide doctor-patient
relationships with them. Here again, Respondent clearly had reason to
know that Dr. Fernandez could not have established a bona fide doctor-
patient relationship with these persons. Tr. 43-44.
Respondent's records also listed Dr. Jose Mercado Francis as a
prescribing physician. Tr. 43; GXs 13-15, 19 & 20. Dr. Francis is only
licensed to practice medicine in the State of Michigan.
The NDIC data indicates that Dr. Francis wrote 7,319 prescriptions
which were filled by Respondent, including 5,135 for hydrocodone
products, 1,135 for alprazolam, and 1,049 for other medications. GX 14,
at 1. Between February 2006 and the end of April 2007, Respondent
dispensed prescriptions written by Dr. Francis to individuals in a
number of States, the top ten being as follows: Alabama (1,294
prescriptions), California (568 prescriptions), Louisiana (518
prescriptions), Texas (486 prescriptions), Washington (456
prescriptions), Ohio (404 prescriptions), Florida (386 prescriptions),
Georgia (337 prescriptions), Virginia (272 prescriptions), and Maine
(268 prescriptions). GXs 19, at 1; GX 20, at 195-270. Again, even
assuming that all of the non-specified prescriptions were for non-
controlled drugs and subtracting them out, Dr. Francis still clearly
issued numerous controlled substance prescriptions to residents of
Alabama.
As an example of his prescribing across state lines, on March 3,
2006, Dr. Francis issued thirty prescriptions to residents of the
following States: Georgia (7), South Carolina (4), Florida (3),
Maryland (3), Ohio (3), California (2), Indiana (2), Louisiana (2),
Colorado (1), Maine (1), North Carolina (1), and Texas (1). GX 20, at
196. Clearly, Dr. Francis could not have established bona fide doctor-
patient relationships with these patients or performed physical
examinations on them. Here again, Respondent, when it filled these
prescriptions, had reason to know this.
Respondent's records list Dr. Edward Cheslow as a prescribing
physician. Tr. 44; GXs 13-14, 19-20. Dr. Cheslow is only licensed to
practice in the State of New York. Tr. 44.
NDIC data show that Dr. Cheslow wrote 6,577 prescriptions which
were filled by Respondent; of these, 6,362 were for hydrocodone
products, 36 were for alprazolam, and 179 were for other medications.
GX 14, at 1. From February 2006 through May 1, 2007, Dr. Cheslow wrote
prescriptions for medications which were filled by Respondent for
residents of numerous States, the top ten being California (2,831
prescriptions), Texas (349 prescriptions), Florida (299 prescriptions),
Georgia (232 prescriptions), New York (206 prescriptions), New Jersey
(185 prescriptions), Ohio (177 prescriptions), Washington (168
prescriptions), Virginia (162 prescriptions), and Alabama (140
prescriptions). GX 19, at 1-2; GX 20, at 270-343. Subtracting out the
179 prescriptions for ``other'' medication, the evidence still shows
that Dr. Cheslow wrote controlled substance prescriptions for
individuals in California, Texas, Florida, Georgia, and New Jersey.
As an example of Dr. Cheslow's daily prescribing, on October 23,
2006, he issued thirty prescriptions to residents of States where he
was not licensed to practice as follows: California (16), Texas (3),
Florida (2), Mississippi (2), Alabama (1), Maine (1), Minnesota (1),
New Jersey (1), Ohio (1), Utah (1), and Virginia (1). GX 20, at 305.
Again, Respondent dispensed these prescriptions having reason to know
that Dr. Cheslow was prescribing to persons who resided in States where
he was not licensed to practice medicine and that he was prescribing to
persons he did not physically examine and with whom he did not
establish a bona fide doctor-patient relationship.
Respondent's records list Dr. Gerard Romain as a prescribing
physician. Tr. 44; GXs 13-14, 19-20. Dr. Romain is only licensed to
practice medicine in the State of Florida. Tr. 44.
The NDIC data indicate that Respondent filled 6,121 prescriptions
issued by Dr. Romain, of which 5,103 were for hydrocodone products, 681
were for alprazolam, and 337 were for other medications. GX 14, at 2.
Between May 2004 and June 18, 2007, Respondent dispensed prescriptions
issued by Dr. Romain to individuals in numerous States, the top ten
being as follows: Virginia (672 prescriptions), California (433
prescriptions), West Virginia (367 prescriptions), Ohio (354
prescriptions), Florida (339 prescriptions), Tennessee (321
prescriptions), Alabama (309 prescriptions), Texas (294 prescriptions),
Georgia (231 prescriptions), and Indiana (205). GXs 19, at 2, & 20, at
428-517. Again, even if the 337 prescriptions for other medications
were for non-controlled drugs, at a minimum, Dr. Romain prescribed
controlled substances to residents of Virginia, California, West
Virginia, and Ohio, and likely other States as well.
As an example of Dr. Romain's daily prescribing, on September 23,
2005, he issued twenty-two prescriptions to individuals in the
following States: West Virginia (6), Virginia (5), Ohio (3), California
(2), Washington (2), Alabama (1), Connecticut (1), Kansas (1), and
Texas (1). GX 20, at 435. Again, in filling these prescriptions,
Respondent had reason to know that Dr. Romain did not physically
examine the patients and could not have established bona fide doctor-
patient relationships with them.
Respondent's pharmacy records also list Dr. Felix Llamido as a
prescribing physician. Tr. 44; GXs 13-14; GXs 19-20, at 343-428. Dr.
Llamido is only licensed to practice in the State of Florida. Tr. 44.
According to the NDIC data, Respondent filled 6,481 prescriptions
written by Dr. Llamido, of which 6,290 were for hydrocodone products,
32 were for alprazolam, and 159 for other medications. GX 14, at 1.
Between February 2006 and the end of April 2007, Respondent dispensed
prescriptions written by Dr. Llamido to patients in numerous States,
the top ten being California (766 prescriptions), New Jersey (582
prescriptions), Georgia (550 prescriptions), Massachusetts (518
prescriptions), Maryland (470 prescriptions), Texas (363
prescriptions), Illinois (350
[[Page 48892]]
prescriptions), Florida (302 prescriptions), New Hampshire (215
prescriptions), and Washington (175 prescriptions). GX 14, at 2; GX 20
at 343-428. Thus, at a minimum, Dr. Llamido issued controlled substance
prescriptions to individuals in California, New Jersey, Georgia,
Massachusetts, Maryland, Texas, Illinois, New Hampshire and Washington.
As an example of his daily prescribing, on March 27, 2006, Dr.
Llamido issued thirty-nine prescriptions to residents of the following
states: California (6), Maryland (5), New Hampshire (3), Ohio (3),
Pennsylvania (3), New Jersey (2), Texas (2), Virginia (2), Washington
(2), West Virginia (2), Connecticut (1), Georgia (1), Hawaii (1),
Indiana (1), Minnesota (1), Mississippi (1), Oklahoma (1), Utah (1),
and Wisconsin (1). GX 20, at 350. Again, Respondent had reason to know
that Dr. Llamido could not have performed physical examinations on
these patients and did not have bona fide doctor-patient relationships
with them.
Finally, Respondent's pharmacy records listed Dr. Caroline Moore as
a prescribing physician. Tr. 44; GXs 13-14, 19-20, at 517-35. Dr. Moore
is licensed only in the State of Florida. Tr. 44.
The NDIC data shows that Respondent filled 2,687 prescriptions
written by Dr. Moore, including 1,884 for hydrocodone products, 659 for
alprazolam, and 144 for other medications. GX 14, at 1-2. From January
2, 2005 through the end of December 2006,\8\ Dr. Moore issued
prescriptions to individuals in numerous States, the top ten including
West Virginia (790), Ohio (463), Virginia (422), Alabama (106),
California (94), Florida (89), Tennessee (70), Texas (57), Georgia
(53), and Indiana (44). GXs 19, at 2, & 20, at 517-35. Again, even
subtracting out the 144 prescriptions for other medications, Dr. Moore
clearly issued controlled substance prescriptions to individuals in
West Virginia, Ohio, and Virginia.
---------------------------------------------------------------------------
\8\ There appear to be some typographical errors in GX 20, page
535. The page lists a prescription on December 30, 2006 and then
jumps to three prescriptions supposedly written in November 2008 and
one prescription in December 2008. GX 20, at 535. Obviously, that
would be impossible, as the four prescriptions in 2008 would
postdate the execution of the search warrant of July 30, 2007.
---------------------------------------------------------------------------
As an example of Dr. Moore's out-of-state prescribing practices, on
November 21, 2005, she issued seventy-two prescriptions to residents in
States other than Florida, as follows: West Virginia (22), Ohio (14),
California (10), Virginia (3), Georgia (2), Indiana (2), Massachusetts
(2), Missouri (2), North Carolina (2), New Jersey (2), New York (2),
Pennsylvania (2), Texas (2), Arkansas (1), Arizona (1), Illinois (1),
Oklahoma (1), and Washington (1). GX 20, at 524. Given the
geographically diverse locations of Dr. Moore's ``patients,'' in
filling these prescriptions, Respondent clearly had reason to know that
Dr. Moore did not physically examine them and did not establish bona
fide doctor-patient relationships with them.
The Government also entered into evidence a letter from Robert
Bruce Liddy, Sr., to Peter A. Grasso, Chief Compliance Investigator,
New Hampshire Board of Pharmacy, dated November 18, 2005. GX 9. In the
letter, Mr. Liddy wrote that Respondent did not ``solicit prescription
sales [from] the State of New Hampshire or any other state outside of
Florida.'' Id. He also indicated that Respondent had ``three customers
who winter in Florida and reside in New Hampshire during the summer
months.'' Id. According to Mr. Liddy, Respondent's records showed that
Respondent had ``mailed 3 packages to New Hampshire in the past two
years'' of its operation. Id. Mr. Liddy added that ``[i]f in the future
I increase or determine it beneficial for my business to advertise or
solicit for prescription sales in your state I will certainly abide by
the guidelines set forth by the New Hampshire Board of Pharmacy for
Non-Resident Pharmacy licensure.'' Id.
The Government submitted into evidence data showing that between
May 25, 2004 and May 14, 2007, Respondent dispensed a total of 472
prescriptions to New Hampshire residents; the evidence also shows that
Respondent dispensed twenty-four prescriptions prior to the date of the
above-referenced letter. GX 18, at 1, 11. Moreover, prior to Mr.
Liddy's letter, Respondent had dispensed seven prescriptions for
controlled substances (as well as refills for several of the
prescriptions) for drugs which included alprazolam, temazepam,
hydrocodone, and oxycodone. See GX 13 (spreadsheet lines
10930 (alprazolam), 25397 (oxycodone/acetaminophen),
45243-45, 46893-95, 53407-09, and 68484-86 (all for hydrocodone/
acetaminophen and including two refills) and 55611 (temazepam)).
Moreover, subsequent to Liddy's letter, Respondent continued to
dispense controlled substance prescriptions (typically for hydrocodone)
to New Hampshire residents. See, e.g. id. (spreadsheet lines
lines 109622-23, 110538-39, 112493, 112502, 115778).
Respondent rested without calling any witnesses or introducing any
other evidence. Moreover, as noted above, when called to testify by the
Government, Respondent's owners invoked their privilege under the Fifth
Amendment and refused to answer any questions regarding their ownership
of Respondent, the pharmacy's operations and its association with
various Web sites. Tr. 12-13 (testimony of Robert Bruce Liddy, Sr.);
id. at 15-16 (testimony of Melinda Carol Liddy).
Discussion
Section 303(f) of the Controlled Substances Act (CSA) provides that
``[t]he Attorney General may deny an application for [a practitioner's]
registration if he determines that the issuance of such registration
would be inconsistent with the public interest.'' 21 U.S.C. 823(f). In
determining the public interest, section 303(f) directs that the
following factors be considered:
(1) The recommendation of the appropriate State licensing board
or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled
substances.
(3) The applicant's conviction record under Federal or State
laws relating to the manufacture, distribution, or dispensing of
controlled substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health and
safety.
Id.
``[T]hese factors are * * * considered in the disjunctive.'' Robert
A. Leslie, 68 FR 15227, 15230 (2003). I ``may rely on any one or a
combination of factors, and may give each factor the weight [I] deem[]
appropriate in determining whether a registration should be revoked or
an application should be denied.'' Id. Moreover, I am ``not required to
make findings as to all of the factors.'' Hoxie v. DEA, 419 F.3d 477,
482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173-74 (DC
Cir. 2005).
Having considered all of the factors, I conclude that the evidence
pertaining to factors two and four is dispositive and establishes that
Respondent has committed acts which render the issuance of a
registration to it ``inconsistent with the public interest.'' \9\
[[Page 48893]]
21 U.S.C. 823(f). I also find that Respondent has not rebutted the
Government's prima facie showing. Accordingly, Respondent's pending
application to renew its registration will be denied.
---------------------------------------------------------------------------
\9\ This Agency has repeatedly held that the possession of a
valid state license is not dispositive of the public interest
inquiry. See Patrick W. Stodola, 74 FR 20727, 20730 n.16 (2009);
Robert A. Leslie, 68 FR at 15230. DEA has long held that ``the
Controlled Substances Act requires that the Administrator * * * make
an independent determination as to whether the granting of
controlled substances privileges would be in the public interest.''
Mortimer Levin, 57 FR 8680, 8681 (1992). Nor is the lack of any
criminal convictions related to controlled substances dispositive.
Edmund Chein, 72 FR 6580, 6593 n.22 (2007). Thus, the fact that
Respondent may still hold its Florida pharmacy license and that
neither it, nor its owners, have been convicted of a criminal
offense is not dispositive.
---------------------------------------------------------------------------
Factors Two and Four--Respondent's Experience in Dispensing Controlled
Substances and Its Compliance With Applicable Federal, State and Local
Laws Relating to Controlled Substances
Under a longstanding DEA regulation, a prescription for a
controlled substance is unlawful unless it has been ``issued for a
legitimate medical purpose by an individual practitioner acting in the
usual course of his professional practice.'' 21 CFR 1306.04(a).
Moreover, while ``[t]he responsibility for the proper prescribing and
dispensing of controlled substances is upon the prescribing
practitioner * * * a corresponding responsibility rests with the
pharmacist who fills the prescription.'' Id. Accordingly, the ``person
knowingly filling such a purported prescription, as well as the person
issuing it, [is] subject to the penalties provided for violations of
the provisions of laws relating to controlled substances.'' \10\ Id.
---------------------------------------------------------------------------
\10\ As the Supreme Court has explained, ``the prescription
requirement * * * ensures patients use controlled substances under
the supervision of a doctor so as to prevent addiction and
recreational abuse. As a corollary, [it] also bars doctors from
peddling to patients who crave the drugs for those prohibited
uses.'' Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United
States v. Moore, 423 U.S. 122, 135, 143 (1975)).
---------------------------------------------------------------------------
The Agency has interpreted this regulation as ``prohibiting a
pharmacist from filling a prescription for controlled substances when
he either `knows or has reason to know that the prescription was not
written for a legitimate medical purpose.' '' Trinity Healthcare Corp.,
72 FR 30849, 30854 (2007) (quoting Medic-Aid Pharmacy, 55 FR 30043,
30044 (1990)); see also United Prescription Services, Inc., 72 FR
50397, 50407 (2007); Frank's Corner Pharmacy, 60 FR 17574, 17576
(1995); Ralph J. Bertolino, 55 FR 4729, 4730 (1990); see also United
States v. Seelig, 622 F.2d 207, 213 (6th Cir. 1980). The Agency has
further held that ``[w]hen prescriptions are clearly not issued for
legitimate medical purposes, a pharmacist may not intentionally close
his eyes and thereby avoid [actual] knowledge of the real purpose of
the prescription.'' Bertolino, 55 FR at 4730 (citations omitted); see
also United Prescription Services, 72 FR at 50407.
As I explained in United Prescription Services, ``when a pharmacy
receives a prescription which indicates that the prescriber and patient
are located nowhere near each other, it should be obvious that further
inquiry is warranted to determine whether the prescription was issued
pursuant to a valid doctor-patient relationship.'' 72 FR at 50409.
``Determining whether a physician has acted in accordance with this
standard necessarily requires that the pharmacist have knowledge of the
applicable State's law.'' 72 FR at 50405 n.19 (citing United States v.
Smith, 2006 WL 3702656 (D. Minn. 2006)).
Moreover, ``[a] physician who engages in the unauthorized practice
of medicine is not a `practitioner acting in the usual course of * * *
professional practice.' '' United, 72 FR at 50407 (quoting 21 CFR
1306.04(a)). Under the CSA, the ``term `practitioner' means a physician
* * * licensed, registered, or otherwise permitted, by the United
States or the jurisdiction in which he practices * * * to * * *
dispense * * * a controlled substance.'' 21 U.S.C. 802(21); see also 21
U.S.C. 823(f) (``The Attorney General shall register practitioners * *
* to dispense * * * if the applicant is authorized to dispense * * *
controlled substances under the laws of the State in which he
practices'').
Consistent with the statutory text, shortly after the CSA's
enactment, the Supreme Court explained that ``[i]n the case of a
physician, [the Act] contemplates that he is authorized by the State to
practice medicine and to dispense drugs in connection with his
professional practice.'' United States v. Moore, 423 U.S. 122, 140-41
(1975). Accordingly, a controlled substance prescription issued by a
physician who lacks the license necessary to practice medicine within a
State is therefore unlawful under the CSA. Cf. 21 CFR 1306.03(a)(1)
(``A prescription for a controlled substance may be issued only by an
individual practitioner who is * * * [a]uthorized to prescribe
controlled substances by the jurisdiction in which he is licensed to
practice his profession''); see also United Prescription Services, 72
FR at 50407.
As found above, Respondent dispensed millions of dosage units of
hydrocodone (a schedule III controlled substance, see 21 CFR
1308.13(e)) and alprazolam (a schedule IV controlled substance, see 21
CFR 1308.14(c)), based on prescriptions issued by physicians who were
prescribing to persons who resided in States where the physicians were
not licensed to practice medicine (although they were required to be)
and were thus engaged in the unauthorized practice of medicine. The
prescriptions violated both the CSA and the laws of the respective
States including, inter alia, Alabama, California, Georgia, Indiana,
North Carolina, Ohio, Texas, and Virginia. See Ala. Code Sec. Sec. 34-
24-50 (defining practice of medicine to include prescribing), 34-24-51
(requiring a license for the practice of medicine), 34-24-502
(requiring special license for practice of medicine across state
lines); Cal. Bus. & Prof. Code Sec. Sec. 2052 (criminalizing the
practice of medicine without state license); Ga. Code Ann. Sec. Sec.
43-34-26(a) (requiring license), 43-34-31 (requiring state license for
medical treatment of individual in state by physician in another
state); Ind. Code Ann. Sec. Sec. 25-22.5-8-1 (prohibiting the practice
of medicine without a state license) & 25-22.5-1-1.1(a) (defining
practice of medicine); N.C. Gen. Stat. Ann. Sec. 90-18 (prohibiting
practice of medicine across state lines unless licensed in state); Ohio
Rev. Code Ann. Sec. Sec. 4731.296 (prohibiting out-of-state practice
of telemedicine without a special permit), 4731.41 (prohibiting
practice of medicine without state license); Tex. Occup. Code Ann.
Sec. Sec. 155.001 (requiring license to practice medicine), 151.056(a)
(making out-of-state treatment of individual in state the practice of
medicine in state); Va. Code Ann. Sec. Sec. 54.1-2902 (prohibiting
practice of medicine without state licensure), 54.1-2903 (making
prescribing the practice of medicine), 54.1-2929 (requiring license for
the practice of medicine).\11\
---------------------------------------------------------------------------
\11\ All cited statutes were enacted and in effect at the time
of the conduct in question.
---------------------------------------------------------------------------
As found above, five of the doctors whose prescriptions Respondent
filled were licensed to practice medicine only in Florida and yet wrote
controlled substance prescriptions to residents of States where they
were unlicensed and thus engaged in the unauthorized practice of
medicine. More specifically, the evidence clearly establishes that Dr.
Alsina wrote controlled substance prescriptions for residents of
Virginia, Ohio, California, Alabama, and Georgia; that Dr. Fernandez
wrote controlled substance prescriptions for residents of Texas, Ohio,
and Georgia; that Dr. Romain wrote controlled substance prescriptions
to residents of Virginia, California, and Ohio; that Dr. Llamido wrote
controlled substance prescriptions for residents of California,
Georgia, Texas; and that Dr. Moore wrote controlled substance
[[Page 48894]]
prescriptions for residents of Ohio and Virginia, as well as other
States.
The record also establishes that while Dr. Francis was licensed to
practice medicine only in Michigan, he wrote controlled substance
prescriptions to residents of Alabama and other States. Finally, while
Dr. Cheslow was licensed to practice medicine only in New York, he
wrote controlled substance prescriptions in California, Texas, and
Georgia as well as other States.
As found above, Respondent filled prescriptions written by each of
the above doctors on a regular basis for a lengthy period of time, and
in each case, Respondent received prescriptions (which it filled) which
were written by a physician on a single day for persons located in
numerous States in which the physicians were not licensed. As explained
above, ``[a] physician who engages in the unauthorized practice of
medicine is not a `practitioner acting in the usual course of * * *
professional practice.' '' United, 72 FR at 50407 (quoting 21 CFR
1306.04(a)). The prescriptions were therefore unlawful under the CSA
and Respondent had ample reason to know that these physicians were
engaged in the unauthorized practice of medicine and that the
prescriptions they issued were unlawful under both Federal and state
laws.
In its Exceptions, Respondent invokes an Agency rulemaking which
clarified the registration requirements for practitioners to argue that
prior to January 2, 2007 (when the regulation became effective), ``a
physician could prescribe in any state provided the physician held a
[DEA] registration in a single state.'' Exceptions at 4 (discussing
DEA, Final Rule, Clarification of Registration Requirements for
Individual Practitioners, 71 FR 69478 (Dec. 1, 2006)). Respondent
further maintains that ``there was no evidence produced that [it] was
aware that the physician may have been acting outside the scope of
their certificate or aided in any way the unlicensed practice of
medicine by filling prescriptions for patients in other states.'' Id.
Beyond the fact that Respondent simply misstates the Agency's
published interpretation of the authority conveyed by a DEA
registration (and which had been published before much of the conduct
at issue here had occurred), its argument conflates two separate
issues: (1) The requirements for holding a DEA registration for a
particular location, and (2) the licensure requirements for prescribing
under state law. As the Agency explained in its Notice of Proposed
Rulemaking, ``[t]o be valid in a particular jurisdiction, a controlled
substance prescription must be written by a practitioner who possesses
valid state authority in that jurisdiction and, equally important, the
practitioner must possess a DEA registration predicated upon valid
state authority in that jurisdiction.'' DEA, Notice of Proposed
Rulemaking, Clarification of Registration Requirements for Individual
Practitioners, 69 FR 70576 (Dec. 7, 2004) (emphasis added).
Contrary to Respondent's contention that there is no evidence that
it aided the unlicensed practice of medicine, the evidence exists in
the thousands of prescriptions it filled which indicated that the
patients resided in one State and the prescribing physician practiced
in another. See, e.g., GX 4. Moreover, as the California Court of
Appeals has noted, the ``proscription of the unlicensed practice of
medicine is neither an obscure nor an unusual state prohibition of
which ignorance can reasonably be claimed, and certainly not by persons
* * * who are licensed health care providers. Nor can such persons
reasonably claim ignorance of the fact that authorization of a
prescription pharmaceutical constitutes the practice of medicine.''
Hageseth v. Superior Court, 59 Cal.Rptr.3d 385, 403 (Ct. App. 2007). As
a state-licensed pharmacy and participant in the health care industry,
Respondent (and its owners) cannot reasonably claim ignorance of the
fact that prescribing a drug constitutes the practice of medicine and
that a physician must be licensed to do so.
The controlled substance prescriptions Respondent filled were
unlawful for a further reason. Under the CSA, it is fundamental that
``a practitioner must establish a bona fide doctor-patient relationship
in order to act `in the usual course of * * * professional practice'
and to issue a prescription for a `legitimate medical purpose.' ''
Patrick W. Stodola, 74 FR 20727, 20731 (2009) (citing Moore, 423 U.S.
at 141-43). At the time of the events at issue here, the CSA generally
looked to state law to determine whether a doctor has established a
bona fide doctor-patient relationship with an individual.\12\ Stodola,
74 FR at 20731; see also Kamir Garces-Mejias, 72 FR 54931, 54935
(2007); United Prescription Services, 72 FR at 50407. As explained
below, prior to the dispensings at issue here, numerous States had
either enacted legislation or promulgated administrative rules which
generally prohibited (except for in narrow circumstances not relevant
here) a physician from prescribing a controlled substance to a person
without first performing a physical examination.
---------------------------------------------------------------------------
\12\ On October 15, 2008, the President signed into law the Ryan
Haight Online Pharmacy Consumer Protection Act of 2008, Public Law
110-425, 122 Stat. 4820 (2008). Section 2 of the Act prohibits the
dispensing of a prescription controlled substance ``by means of the
Internet without a valid prescription'' and defines, in relevant
part, the ``[t]he term `valid prescription' [to] mean[] a
prescription that is issued for a legitimate medical purpose in the
usual course of professional practice by * * * a practitioner who
has conducted at least 1 in-person medical evaluation of the
patient.'' 122 Stat. 4820 (codified at 21 U.S.C. 829(e)(1) & (2)).
Section 2 further defines ``[t]he term `in-person medical
evaluation' [to] mean[] a medical evaluation that is conducted with
the patient in the physical presence of the practitioner, without
regard to whether portions of the evaluation are conducted by other
health professionals.'' Id. (codified at 21 U.S.C. 829(e)(2)(B)).
These provisions do not, however, apply to Respondent's conduct.
---------------------------------------------------------------------------
Since January 2001, California has prohibited the prescribing or
dispensing of a dangerous drug ``on the Internet for delivery to any
person in this state, without an appropriate prior examination and
medical indication therefore, except as authorized by Section 2242.''
Cal. Bus. & Prof. Code Sec. 2242.1. In 2003, the Medical Board of
California made clear that ``[b]efore prescribing a dangerous drug, a
physical examination must be performed'' by the prescribing physician.
In re Steven Opsahl, M.D., Decision and Order, at 3 (Med. Bd. Cal.
2003) (available by query at http://publicdocs.medbd.ca.gov/pdl/mbc.aspx). Furthermore, the Medical Board of California determined that
``[a] physician cannot do a good faith prior examination based on a
history, a review of medical records, responses to a questionnaire and
a telephone conversation with the patient, without a physical
examination of the patient.'' Id.
Moreover, well before Respondent commenced to dispense the
prescriptions at issue here, the Medical Board of California had issued
numerous Citation Orders to out-of-state physicians for prescribing
over the Internet to California residents. These Orders invariably
cited not only the physicians' failure to perform a ``good faith prior
examination,'' but also their lack of a ``valid California Physician
and Surgeon's License to practice medicine in California.'' Citation
Order, Martin P. Feldman (August 15, 2003); see also Citation Order,
Harry Hoff (June 17, 2003); Citation Order, Carlos Gustavo Levy (Jan.
28, 2003); Citation Order, Carlos Gustavo Levy (November 30, 2001).
Doctors Cheslow, Romain, and Llamido all wrote a substantial number
of controlled substance prescriptions based on internet consultations
with
[[Page 48895]]
California residents which Respondent then dispensed. Given the
respective locations of the physicians (New York for Dr. Cheslow and
Florida for Drs. Romain and Llamido) and the California residents, it
was obvious that doctors Cheslow, Romain and Llamido were not
performing physical examinations and did not establish bona fide
doctor-patient relationships with the Californians. Respondent and its
owners had ample reason to know that these prescriptions lacked a
legitimate medical purpose and were issued outside of the usual course
of professional practice and therefore violated both state and Federal
law. See, e.g., Cal. Bus. & Prof. Code Sec. 2242.1; 21 CFR 1306.04(a).
By dispensing the prescriptions, Respondent violated its corresponding
responsibility under Federal law. 21 CFR 1306.04(a).
Similar to California, regulations adopted by the States of Ohio
and Indiana require that a physician perform a physical examination of
his/her patient prior to prescribing a controlled substance, except in
limited circumstances not applicable here. Ind. Admin. Code Sec. 5-4-
1(a); Ohio Admin Code Sec. 4731-11-09(A). Doctors Llamido and Moore
issued a substantial number of prescriptions for controlled substances
to individuals in Indiana; Doctors Alsina, Fernandez, Romain, and Moore
issued a substantial number of controlled substance prescriptions to
individuals in Ohio. These doctors violated Indiana and Ohio law
respectively, as it is inconceivable that they went to Indiana or Ohio
to perform physical examinations on the patients when they were not
licensed to practice in those States (or that the patients travelled to
see them) and were also issuing numerous prescriptions to the residents
of multiple States on the same day. And as explained above, given the
respective locations of the patients and the physicians, Respondent had
reason to know that the prescriptions were issued outside of the usual
course of professional practice and lacked a legitimate medical
purpose. 21 CFR 1306.04(a). By dispensing the prescriptions, Respondent
further violated the CSA.
Under Virginia law, a doctor must establish a bona fide
practitioner-patient relationship prior to prescribing a controlled
substance. Va. Code Ann. Sec. 54.1-3303(A).\13\ Moreover, Virginia law
expressly requires that a practitioner ``perform or have performed an
appropriate examination of the patient, either physically or by use of
instrumentation and diagnostic equipment through which images and
medical records may be transmitted electronically'' and that ``except
for [in] medical emergencies, the examination shall have been performed
by the practitioner himself, within the group in which he practices, or
by a consulting practitioner prior to issuing a prescription.'' Id.
---------------------------------------------------------------------------
\13\ This statute was enacted and in effect at the time of the
conduct in question.
---------------------------------------------------------------------------
Doctors Alsina, Fernandez, Romain, and Moore, all of whom were
licensed to practice only in Florida, issued controlled substance
prescriptions to residents of Virginia. Here again, these physicians
issued prescriptions to Virginia residents under circumstances which
render it inconceivable that they met the requirements of Virginia for
establishing a bona fide doctor-patient relationship prior to
prescribing the controlled substances. These physicians thus violated
Virginia law. Here again, given the respective locations of the
physicians and the patients, Respondent (and its owners) had reason to
know that these physicians did not establish bona fide doctor-patient
relationships with the individuals to whom they prescribed controlled
substances and that the prescriptions were issued outside of the usual
course of professional practice and lacked a legitimate medical purpose
as required by Federal law. 21 CFR 1306.04(a). By filling these
prescriptions, Respondent again failed to comply with its
``corresponding responsibility'' under Federal law to dispense only
lawful prescriptions. Id.
Respondent simply ignores these various state medical practice
standards. Instead, in its Exceptions, Respondent argues that Florida's
telemedicine rule ``does not require that the physician issuing the
prescription have a face to face consultation with the patient or that
the physician issuing the prescription conduct a physical examination,
rather that their [sic] be a `documented patient evaluation.''
Exceptions at 3 (quoting Fla. Admin. Code Ann. r. 64B8-9.003). However,
even if it is the case that the State of Florida interprets its
regulation as authorizing a physician to prescribe without having
personally performed a physical examination of a patient, Florida has
no authority to promulgate the standards of medical practice applicable
in other States for prescribing a controlled substance to those States'
residents. Thus, even if the prescriptions issued by the Florida-based
physicians would have been lawful if they had been issued to residents
of Florida, they were still illegal under the laws of California, Ohio,
Indiana and Virginia.
Finally, Respondent cites to a recommended order of a state ALJ in
a proceeding before the Florida Board of Pharmacy to argue ``that it
would be `problematic' to require a pharmacist to `independently
determine the validity of the patient/physician relationship' because
the standards used to determine the validity of such a relationship
`differ from state to state.''' Exceptions at 3-4 (quoting Florida
Dept. of Health v. RX Network of South Florida, 2003 WL 124675, at *32
(Fla. Div. Admin. Hrgs. 2003) (Conclusion of Law 192).
Continuing, the state ALJ reasoned that if Florida law ``were construed
to require [the pharmacist] to exercise her own judgment on this issue,
it is unclear whether [she] would apply Florida law to determine the
validity of the professional relationship of a physician licensed
outside of Florida or would apply the law of the state where the
physician is licensed.'' Rx Network at *32.
To the extent the Florida Board adopted the state ALJ's
reasoning,\14\ its holding as to the scope of a pharmacist's duty under
Florida law is not binding on this Agency's interpretation of Federal
law and regulations. Moreover, the state ALJ's reasoning is wholly
unpersuasive as ``an entity which voluntarily engages in commerce by
shipping controlled substances to persons located in other States is
properly charged with knowledge of the laws regarding the practice of
medicine in those States.'' United Prescription Services, 72 FR at
50407. Just as licensed health care providers cannot ``reasonably claim
ignorance'' of state laws prohibiting the unlicensed practice of
medicine, so too they cannot reasonably claim ignorance of various
States' laws and rules which establish the standards of medical
practice for prescribing a drug.
---------------------------------------------------------------------------
\14\ In its Final Order, the Board expressly noted that it was
responding to the ALJ's conclusions of law in which this reasoning
is found. See Final Order at 9-10, Department of Health v. RX
Networks of South Florida, LLC. (Fla. Bd. of Pharm. 2003). While the
Board did not specifically address the ALJ's reasoning that it is
``problematic'' to require a pharmacist to ``determine the validity
of the patient-physician relationship'' because standards ``differ
from state to state,'' it did note that ``pharmacists must be aware
of the regulations governing those health care practitioners who
prescribe drugs so that a pharmacist can make a reasoned decision as
to whether the professional standards for legitimate dispensing have
been met.'' Id. at 10.
---------------------------------------------------------------------------
Finally, Respondent violated the laws of numerous States by
engaging in the unauthorized practice of pharmacy.\15\
[[Page 48896]]
For example, New Hampshire law requires a pharmacy to obtain a license
and provides for the licensing of out-of-state pharmacies licensed
elsewhere upon the passing of an examination. N.H. Rev. Stat.
Sec. Sec. 318:1 (defining ``pharmacy''), 318:21 (licensure of out-of-
state pharmacies), 318:37 (requiring license to operate a pharmacy),
and 318:42 (prohibiting the sale of prescription drugs by any other
than a licensed pharmacist in a registered pharmacy).\16\ Nevertheless,
even after consulting with the state's Chief Compliance Officer,
Respondent, through Mr. Liddy, continued to dispense prescriptions to
individuals in New Hampshire. Moreover, Liddy's statement that his
records showed that in the prior two years, his pharmacy had only
shipped three packages to New Hampshire residents, was a bald-faced
lie. I therefore find that Respondent violated New Hampshire law.
Indeed, Liddy's continued violation of the law, even after being placed
on notice, and his willingness to lie about his misconduct, makes clear
that Respondent cannot be entrusted with a registration.
---------------------------------------------------------------------------
\15\ In its Exceptions, Respondent contends that its failure to
obtain pharmacy licenses for those States (other than Florida) which
it dispensed into is outside of the scope of the proceeding.
However, ```[p]leadings in administrative proceedings are not judged
by the standards applied to an indictment at common law.''' Citizens
State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984)
(quoting Aloha Airlines v. Civil Aeronautics Bd., 598 F.2d 250, 262
(DC Cir. 1979)). See also Boston Carrier, Inc. v. ICC, 746 F.2d
1555, 1560 (DC Cir. 1984) (quoted in Edmund Chein, 72 FR 6580, 6592
n.21 (2007) (``an agency is not required `to give every [Respondent]
a complete bill of particulars as to every allegation that [he] will
confront'')). Thus, the failure of the Government to disclose an
allegation in the Order to Show Cause is not dispositive, and an
issue can be litigated if the Government otherwise timely notifies a
respondent of its intent to litigate the issue.
The Agency has thus recognized that ``the parameters of the
hearing are determined by the prehearing statements.'' Darrell
Risner, D.M.D., 61 FR 728, 730 (1996). Accordingly, in Risner, the
Agency held that where the Government has failed to disclose ``in
its prehearing statements or indicate at any time prior to the
hearing'' that an issue will be litigated, the issue cannot be the
basis for a sanction. 61 FR at 730. See also Nicholas A. Sychak, d/
b/a Medicap Pharmacy, 65 FR 75959, 75961 (2000) (noting that the
function of pre-hearing statements is to provide Due Process through
``adequate * * * disclosure of the issues and evidence to be
submitted in * * * proceedings''); cf. John Stafford Noell, 59 FR
47359, 47361 (1994) (holding that notice was adequate where
allegations were not included in Order to Show Cause but ``were set
forth in the Government's Prehearing Statement'').
While the Order to Show Cause did not allege that Respondent had
failed to obtain the necessary pharmacy licenses to dispense to
States other than Florida, in its supplemental prehearing statement,
the Government notified Respondent that it intended to litigate the
issue by eliciting the testimony of its owner as to its ``licensure
status * * * in those jurisdictions where [it] shipped controlled
substance prescriptions and whether [it] was licensed as an out-of-
state pharmacy in any jurisdiction that required such licensure.''
Gov. Supp. Prehearing Stmt. at 1. The Government also notified
Respondent that it intended to litigate the issue of Respondent's
communications with the New Hampshire Board of Pharmacy ``regarding
the licensure requirement to ship controlled substances into that
state.'' Id.
\16\ These statutes were enacted and in effect at the time of
the conduct in question.
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Most other States also prohibit an out-of-state pharmacy from
dispensing medication to state residents without being licensed to do
so. See, e.g., Ark. Code Ann. Sec. Sec. 17-92-301 (prohibiting
practice of pharmacy without a license) & 17-92-302 (prohibiting
filling of prescription by other than Arkansas-licensed pharmacist);
Conn. Gen. Stat. Ann. Sec. 20-627 (requiring registration of
nonresident pharmacies); Cal. Bus. & Prof. Code Sec. 4120 (requiring
special permit for nonresident pharmacies); La. Rev. Stat. Ann. Sec.
37:1221 (requiring special permit for out-of-state pharmacies to
provide pharmacy services to residents of the state).\17\ Respondent
dispensed prescriptions to residents of all of these States without
holding the pharmacy licenses required to do so. See GX 17. I therefore
find that Respondent violated these laws as well. Respondent's flagrant
disregard for the rules governing its profession manifests that it and
its owners cannot be trusted to properly comply with Federal law and
DEA regulations.
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\17\ These statutes were enacted and in effect at the time of
the conduct in question.
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Finally, the evidence shows that Respondent violated DEA
regulations by filling controlled substance prescriptions which were
unlawful because they were not manually signed by the prescribing
practitioner. Under 21 CFR 1306.05(a), ``prescriptions shall be written
with ink or indelible pencil and shall be manually signed by the
practitioner.'' Moreover, while ``the prescribing practitioner is
responsible in case the prescription does not conform in all essential
respects to the law and regulations[,] [a] corresponding liability
rests upon the pharmacist * * * who fills a prescription not prepared
in the form prescribed by DEA regulations.'' Id. As the DI testified,
the ``vast majority'' of the controlled substance prescriptions
Respondent filled did not comply with this requirement. Tr. 88.
Rendering these violations especially egregious is that Mr. Liddy had
been previously told by the Executive Director of the Florida Board of
Pharmacy that ``a control substance prescription must be manually
signed.'' GX 11. Once again, Mr. Liddy's flagrant disregard for the law
makes it clear that Respondent cannot be entrusted with a DEA
registration.\18\
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\18\ The evidence does not, however, establish that Respondent
dispensed controlled substance prescriptions issued under the
authority of the registration held by Dr. Alsina after he notified
Mr. Liddy (on October 5, 2005) that his registration had been
suspended. See GX 12. While GX 20 lists various dates after October
5, 2005 on which Respondent dispensed prescriptions presumably
authorized by Dr. Alsina, the exhibit does not identify what drugs
these prescriptions were for. Thus, the evidence does not establish
that these prescriptions were for controlled substances. However,
given the scope of the violations that have been proved, this
allegation is inconsequential.
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As the forgoing demonstrates, Respondent's experience in dispensing
controlled substances and its record of compliance with applicable
controlled substance laws is marked by its (and its owner's) repeated
and egregious violations in dispensing prescriptions that were unlawful
under both the CSA and numerous state laws. I therefore hold that the
Government has shown that Respondent has committed numerous acts which
render issuing it a new registration ``inconsistent with the public
interest.'' \19\ 21 U.S.C. 823(f).
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\19\ In numerous decisions, DEA has noted the serious risk of
diversion created by internet prescribing and dispensing of
controlled substances and the threat this poses to public health and
safety. See Trinity Health Care Corp., 72 FR 30849, 30855 (2007)
(internet pharmacy dispensed more than 43,000 illegal prescriptions
and two million dosage units of controlled substances; ``it is
manifest that diversion on this scale creates an extraordinary
threat to the public health and safety''); William R. Lockridge, 71
FR 77791, 77799 (2006) (noting that internet prescriber ``was a drug
dealer'' and that conduct created ``imminent danger to public health
and safety''); Mario Avello, 70 FR 11695, 11697 (2005); cf.
Southwood Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007)
(discussing increase in the rates of prescription drug abuse and the
Internet's ``role in facilitating the growth of prescription drug
abuse''); see also National Center on Addiction and Substance Abuse,
``You've Got Drugs!'' IV: Prescription Drug Pushers on the Internet
(2007), at 8 (``[T]he wide availability of dangerous and addictive
drugs on the Internet reveals a wide-open channel of distribution.
This easy availability has enormous implications for public health,
particularly the health of our children, since research has
documented the tight connection between availability of drugs to
young people and substance abuse and addiction.'').
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Sanction
Under Agency precedent, where, as here, ``the Government has proved
that a registrant has committed acts inconsistent with the public
interest, a registrant must ` ``present[] sufficient mitigating
evidence to assure the Administrator that it can be entrusted with the
responsibility carried by such a registration.'' ''' Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR
23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932
(1988))). ``Moreover, because `past performance is the best predictor
of future
[[Page 48897]]
performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995),
[DEA] has repeatedly held that where a registrant has committed acts
inconsistent with the public interest, the registrant must accept
responsibility for its actions and demonstrate that it will not engage
in future misconduct.'' Medicine Shoppe, 73 FR at 387; see also
Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006);
Cuong Trong Tran, 63 FR 64280, 62483 (1998); Prince George Daniels, 60
FR 62884, 62887 (1995). See also Hoxie v. DEA, 419 F.3d at 483
(``admitting fault'' is ``properly consider[ed]'' by DEA to be an
``important factor[]'' in the public interest determination).
As the ALJ observed, both of Respondent's owners invoked their
Fifth Amendment privilege when called to testify by the Government and
refused to answer any questions. ALJ at 24. I therefore find that
Respondent (and its owners) have failed to accept responsibility for
their misconduct. This alone provides reason to hold that Respondent
has not rebutted the Government's prima facie showing that issuing it a
new registration ``would be inconsistent with the public interest.'' 21
U.S.C. 823(f).
In its Exceptions, Respondent nonetheless contends that ``even
though the [Liddy's] invoked their Fifth Amendment Privilege, the
record * * * demonstrate[s] that the complained of conduct was no
longer present'' and that it had ceased the offending conduct prior to
the execution of the search warrant in July 2007. Exceptions at 1-2.
Respondent thus asserts that it has changed its practices and that its
then-existing registration should not be revoked. Id. at 2. However,
the evidence shows that at some time in either 2005 or 2006, a DEA
Investigator had visited Respondent and interviewed Respondent's
owners. Tr. 82.
While the record does not establish the precise subject matter that
was discussed, it is not everyday that the DEA comes knocking at one's
door, and it is reasonable to infer that the Investigator's visit had
something to do with the illegality of Respondent's activities in
dispensing the internet prescriptions. Accordingly, even were I to
ignore the failure of Respondent's owners to acknowledge their illegal
behavior (which I decline to do), the weight to be given Respondent's
cessation of its unlawful practices is substantially diminished by the
fact that this followed, rather than preceded, its owners becoming
aware that they were under investigation. Moreover, as the ALJ noted,
Respondent put on no evidence as to what steps it has undertaken to
reform its practices. ALJ at 24.
I therefore concur with the ALJ's conclusion that Respondent's
``extensive record of unlawful conduct * * *, its callous disregard for
the serious responsibility of a DEA registrant, and its failure to
present any evidence to show how it has corrected these practices
outweigh'' the fact that the State Pharmacy Board has taken no action
against its license (factor one) and the absence of any criminal
convictions (factor three). Id. at 25. I further adopt the ALJ's
conclusion that ``it would be inconsistent with the public interest to
allow * * * Respondent to maintain its registration.'' Id. at 24.
Accordingly, Respondent's pending renewal application will be denied.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28
CFR 0.100(b), I deny the Government's motion to terminate the
proceeding as moot. I further order that the application of Liddy's
Pharmacy, L.L.C., for a DEA Certificate of Registration be, and it
hereby is, denied. This Order is effective September 8, 2011.
Dated: August 2, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-20055 Filed 8-8-11; 8:45 am]
BILLING CODE 4410-09-P