Notice2022-07687
Crosby Pharmacy and Wellness; Decision and Order
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Published
April 11, 2022
Issuing agencies
Justice DepartmentDrug Enforcement Administration
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<title>Federal Register, Volume 87 Issue 69 (Monday, April 11, 2022)</title>
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[Federal Register Volume 87, Number 69 (Monday, April 11, 2022)]
[Notices]
[Pages 21212-21215]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07687]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Crosby Pharmacy and Wellness; Decision and Order
I. Introduction
On October 23, 2021, the Assistant Administrator, Diversion Control
Division, Drug Enforcement Administration (hereinafter, DEA or
Government), issued an Order to Show Cause (hereinafter, OSC) to Crosby
Pharmacy and Wellness (hereinafter, Applicant) of Montgomery, Texas.
OSC, at 1. The OSC proposes the denial of Applicant's registration
application, Control No. W20008908A (hereinafter, registration
application). It alleges that Applicant materially falsified its
registration application and that Applicant's registration would be
``inconsistent with the public interest, as that term is defined in 21
U.S.C. 823(f).'' Id.
Specifically, the OSC alleges that, during an onsite visit when
Applicant was a registrant, the Government discovered ``serious
recordkeeping violations,'' including not maintaining an initial
inventory, not maintaining a biennial inventory, and not maintaining
accurate records of all controlled substances received and sold. Id. at
1-2 (citing 21 CFR 1304.11(b), 1304.11(c), 1304.21(a)). The OSC also
alleges that Applicant materially falsified its registration
application by answering ``no'' to the question of whether it had
``ever surrendered (for cause) or had a federal controlled substance
registration revoked, suspended, restricted, or denied, or is any such
action pending.'' Id. at 2.
The OSC notifies Applicant of the right to request a hearing on the
allegations or to submit a written statement, while waiving the right
to a hearing; the procedures for electing each option; and the
consequences for failing to elect either option. Id. at 3 (citing 21
CFR 1301.43). The OSC also notifies
[[Page 21213]]
Applicant of the opportunity to submit a corrective action plan. Id. at
3-4 (citing 21 U.S.C. 824(c)(2)(C)).
II. Adequacy of Service
In a sworn Declaration dated August 20, 2021 (hereinafter,
Declaration), a Diversion Investigator (hereinafter, DI) assigned to
the Houston Division Office in Houston, Texas, stated that she ``caused
a copy of the . . . [OSC] to be sent to . . . [Applicant] at . . .
[its] proposed registered address via First Class Mail and Certified
Mail.'' DI Declaration, at 3. She stated that ``[b]oth of these
mailings were returned to DEA.'' Id. The DI also stated that, on
November 12, 2020, she ``caused a copy of the . . . [OSC] to be
emailed'' to Applicant at the ``email address . . . given to DEA by . .
. [Applicant] in . . . [its registration a]pplication.'' Id. According
to the DI's sworn Declaration, she ``did not receive any notification
that the message was not delivered.'' Id.
The Government forwarded its Request for Final Agency Action
(hereinafter, RFAA), along with the evidentiary record, to this office
on August 24, 2021. In its RFAA, the Government represented that
``Applicant did not request a hearing'' and requested that I ``enter an
order denying Applicant's application.'' RFAA, at 1.
Based on the DI's Declaration, the Government's written
representations, and my review of the record, I find that the
Government accomplished service of the OSC on Applicant on or about
November 12, 2020. I also find that more than thirty days have now
passed since the Government accomplished service of the OSC. Further,
based on the Government's written representations, I find that neither
Applicant, nor anyone purporting to represent Applicant, requested a
hearing, submitted a written statement while waiving Applicant's right
to a hearing, or submitted a corrective action plan. Accordingly, I
find that Applicant has waived the right to a hearing and the right to
submit a written statement and corrective action plan. 21 CFR
1301.43(d); 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision
and Order based on the record submitted by the Government, which
constitutes the entire record before me. 21 CFR 1301.43(e).
III. Findings of Fact
A. Applicant's Registration History
I find there is substantial uncontroverted record evidence that
Applicant previously held registration No. FC7640623. RFAA Exhibit
(hereinafter, RFAAX) 3, at 1. I find there is substantial
uncontroverted record evidence that Applicant surrendered that
registration for cause by signing a DEA-104, ``Surrender for Cause of
DEA Certificate of Registration'' on January 8, 2020. RFAAX 4, at 1.
Further, I find there is substantial uncontroverted record evidence
that, on or around January 29, 2020, Applicant submitted the
registration application. DI Declaration, at 2; RFAAX 2, at 1-3. I find
clear, unequivocal, convincing, and unrebutted record evidence that, on
the registration application, Applicant certified that it had never
``surrendered (for cause) . . . a federal controlled substance
registration.'' RFAAX 2, at 1. I find there is substantial
uncontroverted record evidence that DEA issued this OSC about the
registration application. OSC, at 1; RFAAX 4, at 2.
B. Investigation of Applicant
I find there is substantial uncontroverted record evidence that DI
and other DEA employees ``conducted an onsite visit'' of Applicant on
January 8, 2020. DI Declaration, at 1. I find there is substantial
uncontroverted record evidence that, during this visit, the DEA team
``discovered a number of problems with . . . [Applicant's controlled-
substance-related] recordkeeping.'' Id. I further find there is
substantial uncontroverted record evidence that DI ``confronted'' a
representative of Applicant about ``some'' of the recordkeeping
problems. Id. at 2. I find there is substantial uncontroverted record
evidence that, ``[i]n response,'' a representative of Applicant
``agreed to surrender'' Applicant's registration and signed a DEA-104
stating that Applicant was ``surrender[ing its registration] for
cause.'' Id.; RFAAX 4, at 1. I find there is substantial uncontroverted
record evidence that DEA sent Applicant a letter, dated January 24,
2020, ``confirming the surrender of . . . [its] registration privileges
in Schedules II through V on January 8, 2020,'' and stating that,
``[c]oncurrent with the surrender,'' Applicant is ``no longer
authorized to order, distribute, possess, dispense, administer,
prescribe, or engage in any activities with controlled substances under
DEA Registration Number FC7640623.'' RFAAX 7, at 1. I find there is
substantial uncontroverted record evidence that DEA directed the
January 24, 2020 letter to Applicant at the physical address Applicant
submitted in the registration application. RFAAX 7, at 1; RFAAX 2, at
1.
I find there is substantial uncontroverted record evidence that DI
continued the investigation of Applicant after its voluntary
registration surrender for cause by issuing an administrative subpoena
to Applicant's distributor. RFAAX 5, at 1; DI Declaration, at 2. I find
there is substantial uncontroverted record evidence that, pursuant to
the administrative subpoena, Applicant's distributor provided DI with
DEA Form 222s and invoices. DI Declaration, at 2. I find there is
substantial uncontroverted record evidence that these distributor
documents show that the distributor provided Applicant with more than
18,000 tablets of oxycodone 30 mg, more than 16,000 tablets of
hydrocodone/acetaminophen 10/325 mg, more than 13,000 tablets of
alprazolam 2 mg, more than 20,000 tablets of carisoprodol 350 mg, and
120 bottles of 473 ml promethazine with codeine. Id.; see also RFAAX 6.
I find there is substantial uncontroverted record evidence that the
distributor shipped controlled substances to Applicant. DI Declaration,
at 2; RFAAX 6. I find there is substantial uncontroverted record
evidence that Applicant did not produce for the DEA team an initial
inventory of the controlled substances, ``any records of dispensing any
controlled substances,'' and ``any controlled substances.'' DI
Declaration, at 1.
III. Discussion
A. The Controlled Substances Act and the Public Interest Factors
Pursuant to the Controlled Substances Act (hereinafter, CSA),
``[t]he Attorney General shall register practitioners . . . to dispense
. . . controlled substances . . . if the applicant is authorized to
dispense . . . controlled substances under the laws of the State in
which he practices.'' 21 U.S.C. 823(f). The CSA further provides that
an application for a practitioner's registration may be denied upon a
determination that ``the issuance of such registration . . . would be
inconsistent with the public interest.'' Id. In making the public
interest determination, the CSA requires consideration of the following
factors:
(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.
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These factors are considered in the disjunctive. Robert A. Leslie,
M.D., 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 . . . an application for
registration [should be] denied.'' Id. Moreover, while I am required to
consider each factor, I ``need not make explicit findings as to each
one,'' and I ``can give each factor the weight . . . [I] determine[ ]
is appropriate.'' Jones Total Health Care Pharmacy, LLC v. Drug Enf't
Admin., 881 F.3d 823, 830 (11th Cir. 2018) (quoting Akhtar-Zaidi v.
Drug Enf't Admin., 841 F.3d 707, 711 (6th Cir. 2016)); see also MacKay
v. Drug Enf't Admin., 664 F.3d 808, 816 (10th Cir. 2011) (quoting
Volkman v. Drug Enf't Admin., 567 F.3d 215, 222 (6th Cir. 2009)
(quoting Hoxie v. Drug Enf't Admin., 419 F.3d 477, 482 (6th Cir.
2005))). In other words, the public interest determination ``is not a
contest in which score is kept; the Agency is not required to
mechanically count up the factors and determine how many favor the
Government and how many favor the registrant. Rather, it is an inquiry
which focuses on protecting the public interest; what matters is the
seriousness of the registrant's misconduct.'' Peter A. Ahles, M.D., 71
FR 50097, 50098-99 (2006).
The OSC in this matter, as already discussed, alleges that
Applicant's registration application should be denied because it would
be inconsistent with the public interest for Applicant to have a
registration and because Applicant's registration application contains
a materially false response to a liability question. OSC, at 1-3; 21
U.S.C. 823(f), 824(a)(1); supra section II. A determination that the
issuance of a registration ``would be inconsistent with the public
interest'' is a basis for the denial of a registration application. 21
U.S.C. 823(f). The CSA, however, places the provision addressing the
ramification of a material falsification with the bases for revocation
or suspension of a registration. 21 U.S.C. 824(a).
Prior Agency decisions have addressed whether it is appropriate to
consider a material falsification and other bases for revocation or
suspension described in 21 U.S.C. 824(a) when determining whether or
not to grant a practitioner registration application.\1\ For over
forty-five years, and as recently as late last year, Agency decisions
have concluded that it is. See, e.g., Lisa M. Jones, N.P., 86 FR 52196
(2021); Robert Wayne Locklear, 86 FR 33738 (2021) (collecting Agency
decisions). These decisions offer multiple bases and analyses for that
conclusion. 86 FR at 33744-45. For example, a prior decision noted that
``[t]o hold otherwise would mean that applications would have to be
granted [under 21 U.S.C. 823(f)] only to be revoked the next day''
under 21 U.S.C. 824(a). Id. at 33744 (quoting John R. Amato, M.D., 40
FR 22852 (1975)). I reaffirm my decision in Lisa M. Jones, N.P. that a
basis for revocation or suspension described in a provision of 21
U.S.C. 824(a) may be the basis for the denial of a practitioner
registration application.
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\1\ A pharmacy is a ``practitioner.'' 21 U.S.C. 802(21).
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B. Allegation That Applicant Submitted a Materially False Registration
Application
Having read and analyzed all of the record evidence, I find from
clear, unequivocal, convincing, and unrebutted record evidence that
Applicant surrendered (for cause) its DEA registration on January 8,
2020. Supra section II.A, section II.B; RFAAX 4. Having read and
analyzed all of the record evidence, I find from clear, unequivocal,
convincing, and unrebutted record evidence that Applicant answered
``no'' to the second liability question in the registration
application--whether Applicant ``ever surrendered (for cause) . . . a
federal controlled substance registration.'' Supra section II.A.
Applicant's false answer to the second liability question in the
registration application implicates two of the public interest factors
that the CSA requires me to consider: Applicant's experience in
dispensing controlled substances, and Applicant's compliance with
applicable federal laws relating to controlled substances. 21 U.S.C.
823(f)(2), (4); Frank Joseph Stirlacci, M.D., 85 FR 45229, 45234
(2020). As such, Applicant's false response to the second liability
question in the registration application was ``predictably capable of
affecting, i.e., had a natural tendency to affect'' my official
decision on its registration application. Frank Joseph Stirlacci, M.D.,
85 FR at 45238. Accordingly, I find from clear, unequivocal,
convincing, and unrebutted record evidence that the registration
application contains a material falsification, an independent basis for
the denial of the registration application.
C. Allegation That Issuing a Registration to Applicant Would Be
Inconsistent With the Public Interest
As already discussed, the OSC includes three allegations that
Applicant failed to maintain required ``controlled substances
records.'' OSC, at 2. First, the OSC alleges that Applicant ``failed to
maintain an initial inventory, in violation of 21 CFR 1304.11(b).'' Id.
As already discussed, based on substantial uncontroverted record
evidence that the distributor shipped controlled substances to
Applicant, I find there is substantial uncontroverted record evidence
that Applicant did not produce for the DEA team an initial inventory of
the controlled substances, ``any records of dispensing any controlled
substances,'' and ``any controlled substances.'' Supra section II.B.
Accordingly, I find that Applicant violated the CSA by failing to
maintain an initial inventory, implicating 21 U.S.C. 823(f)(2) and (4).
21 CFR 1304.11(b).
Second, the OSC alleges that Applicant ``failed to maintain a
biennial inventory, in violation of 21 CFR 1304.11(c).'' OSC, at 2.
There is no evidence in the record that supports this allegation.
Accordingly, I find that this OSC allegation is not founded.
Third, the OSC alleges that Applicant ``failed to maintain accurate
records of all controlled substances received and sold, in violation of
21 CFR 1304.21(a).'' Id. As already discussed, based on substantial
uncontroverted record evidence that the distributor shipped controlled
substances to Applicant, I find there is substantial uncontroverted
record evidence that Applicant did not produce for the DEA team ``any
records of dispensing any controlled substances'' and ``any controlled
substances.'' Supra section II.B. Accordingly, I find that Applicant
violated the CSA by failing to maintain accurate records of all
controlled substances received and sold, implicating 21 U.S.C.
823(f)(2) and (4). 21 CFR 1304.21(a).
The Government has the burden of proof in this proceeding. 21 CFR
1301.44(d). I carefully considered all of the record evidence relevant
to the material falsification allegation, the recordkeeping
allegations, and the public interest factors of 21 U.S.C. 823(f)(2) and
(4). For the above-stated reasons, I find that the Government met its
burden on the OSC's material falsification allegation and on two of the
OSC's three recordkeeping violation allegations. I further find that
Applicant did not submit any evidence, let alone evidence that rebuts
the Government's prima facie case, on these founded OSC allegations.
Accordingly, I conclude that it would be ``inconsistent with the public
interest'' for me to grant the registration application. 21 U.S.C.
823(f).
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IV. Sanction
Where, as here, the Government presented a prima facie case that it
would be ``inconsistent with the public interest'' to grant the
registration application, and Applicant did not rebut the Government's
prima facie case, the ``burden of proof shifts'' to Applicant ``to show
why it can be trusted with a registration.'' Jones Total Health Care
Pharmacy, LLC v. Drug Enf't Admin., 881 F.3d at 830; see also Samuel
Mintlow, M.D., 80 FR 3630, 3652 (2015) (``[S]ufficient mitigating
evidence'' must be presented ``to assure the Administrator that [he]
can be entrusted with the responsibility carried by such a
registration.''); Cleveland J. Enmon Jr., M.D., 77 FR 57116, 57126
(2012) (same); Robert M. Golden, M.D., 61 FR 24808, 24812 (1996)
(same). Further, past performance is the best predictor of future
performance and, when an applicant has ``failed to comply with its
responsibilities in the past, it makes sense for the agency to consider
whether the pharmacy will change its behavior in the future.'' Pharmacy
Doctors Enterprises, Inc. v. Drug Enf't Admin., 789 F. App'x at 733
(citing Jones Total Health Care Pharmacy, LLC v. Drug Enf't Admin., 881
F.3d at 831 (citing MacKay v. Drug Enf't Admin., 664 F.3d at 820
(``[T]hat consideration is vital to whether continued registration is
in the public interest.'') and 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.''))).
Additionally, in evaluating whether a practitioner should be
entrusted with a registration, the Agency considers whether the
practitioner has accepted responsibility for any misconduct; circuit
courts have approved the Agency's acceptance of responsibility
requirement. Pharmacy Doctors Enterprises, Inc. v. Drug Enf't Admin.,
789 F. App'x at 732; Jones Total Health Care Pharmacy, LLC v. Drug
Enf't Admin., 881 F.3d at 830 (citing MacKay v. Drug Enf't Admin., 664
F.3d at 820 (``The DEA may properly consider whether a physician admits
fault in determining if the physician's registration should be
revoked.'')); see also Jeffrey Stein, M.D., 84 FR 46968, 46972-73
(2019) (unequivocal acceptance of responsibility); Jayam Krishna-Iyer,
M.D., 74 FR 459, 463 (2009) (collecting cases).
The Agency also has decided that the egregiousness and extent of
the misconduct are significant factors in determining the appropriate
sanction. Garrett Howard Smith, M.D., 83 FR 18882, 18910 (2018)
(collecting cases); Samuel Mintlow, M.D., 80 FR at 3652 (``Obviously,
the egregiousness and extent of a registrant's misconduct are
significant factors in determining the appropriate sanction.''). The
Agency has also considered the need to deter similar acts by Applicant
and by the community of registrants and potential registrants. Id.
In terms of egregiousness, the violations that the record evidence
shows Applicant committed go to the heart of the CSA--not complying
with required controlled substance recordkeeping and submitting a
registration application that includes a material falsification.
Applicant did not take responsibility for the founded violations.
Accordingly, it is not reasonable to believe that Applicant's future
controlled substance dispensing will comply with legal requirements.\2\
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\2\ I do not consider remedial measures when an applicant does
not unequivocally accept responsibility. In this matter, Applicant
did not accept responsibility or propose remedial measures.
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For all of these reasons, I find that it would be inconsistent with
the public interest for me to entrust Applicant with a registration.
Accordingly, I shall order the denial of Applicant's registration
application, Control No. W20008908A.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 823(f), I hereby deny the registration application submitted by
Crosby Pharmacy and Wellness, Control No. W20008908A, seeking
registration in Texas as a practitioner, and I hereby deny any other
pending application submitted by Crosby Pharmacy and Wellness for a DEA
registration in the State of Texas. This Order is effective May 11,
2022.
Anne Milgram,
Administrator.
[FR Doc. 2022-07687 Filed 4-8-22; 8:45 am]
BILLING CODE 4410-09-P
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</html>Indexed from Federal Register on April 11, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.