Notice2022-07719
OakmontScript Limited Partnership; 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 21516-21546]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07719]
[[Page 21515]]
Vol. 87
Monday,
No. 69
April 11, 2022
Part V
Department of Justice
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Drug Enforcement Administration
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OakmontScript Limited Partnership; Decision and Order; Notice
Federal Register / Vol. 87 , No. 69 / Monday, April 11, 2022 /
Notices
[[Page 21516]]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 21-03]
OakmontScript Limited Partnership; Decision and Order
On October 20, 2020, a former Assistant Administrator, Diversion
Control Division, of the Drug Enforcement Administration (hereinafter,
DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to
OakmontScript Limited Partnership (hereinafter, Respondent).
Administrative Law Judge Exhibit (hereinafter, ALJ Ex.) 1, (OSC) at 1.
The OSC proposed the revocation of Respondent's DEA Certificates of
Registration Nos. RO0504680 and RO0527082 (hereinafter, CORs or
registrations) and the denial of any pending application to modify or
renew the registrations and any applications for any other DEA
registrations pursuant to 21 U.S.C. 823, 824, 958, and other federal
laws, because Respondent's ``registration[s are] inconsistent with the
public interest,'' as that term is defined in 21 U.S.C. 823(b), (d),
and (e); 824(a); and 958(c). Id.
In response to the OSC, Respondent timely requested a hearing
before an Administrative Law Judge. ALJ Ex. 2. The hearing in this
matter was conducted from March 8-12, 2021, at the DEA Hearing Facility
in Arlington, Virginia, with the parties and their witnesses
participating through video-teleconference.*\A\ On June 11, 2021,
Administrative Law Judge Paul E. Soeffing (hereinafter, ALJ) issued his
Recommended Rulings, Findings of Fact, Conclusions of Law and Decision
(hereinafter, Recommended Decision or RD). Neither party filed
exceptions to the RD.
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*\A\ [This footnote has been relocated from RD n.1.]
OakmontScript filed its Request for Hearing pro se, represented by
Jufang (``Shirley'') Shi, its President and Chief Pharmacist. In the
Order for Prehearing Statements issued by the tribunal on November
19, 2020, the tribunal advised the Respondent of its right under 21
CFR 1316.50 to seek representation by a qualified attorney at the
Respondent's own expense. ALJ Ex. 3 at 1. At the Prehearing
Conference held on January 5, 2021, this tribunal reiterated to the
Respondent's representative the Respondent's right to obtain
counsel. The Prehearing Ruling also discussed the Respondent's right
to obtain counsel. ALJ Ex. 7 at 1 n.1.
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Having reviewed the entire record, I agree with the ALJ's
Recommended Decision and I adopt it with minor modifications, as noted
herein.*\B\
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*\B\ I have made minor, nonsubstantive, grammatical changes to
the RD and nonsubstantive conforming edits. Where I have made
substantive changes, omitted language for brevity or relevance, or
where I have added to or modified the ALJ's opinion, I have noted
the edits in brackets, and I have included specific descriptions of
the modifications in brackets or in footnotes marked with an
asterisk and a letter. Within those brackets and footnotes, the use
of the personal pronoun ``I'' refers to myself--the Administrator.
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Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision
of the Administrative Law Judge *<SUP>C</SUP> <SUP>1</SUP>
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*\C\ I have omitted the RD's discussion of the procedural
history to avoid repetition with my introduction.
\1\ [Footnote relocated, see supra n.*A.]
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After carefully considering the testimony elicited at the hearing,
the admitted exhibits, the arguments of counsel, and the record as a
whole, I have set forth my recommended findings of fact and conclusions
of law below.
The Allegations
The Government alleges that the Respondent's CORs should be revoked
because OakmontScript exported controlled substances prior to obtaining
its exporter COR, exported controlled substances it was not approved to
export, demonstrated a lack of candor about controlled substances it
was exporting, falsified a copy of its distributor DEA registration,
distributed controlled substances to an individual not registered with
the DEA, exported controlled substances to fulfill prescriptions for
underage patients, and failed to keep complete and accurate records.
The Evidence
Stipulations of Fact
The Government and the Respondent have agreed to the below
stipulations, which I recommend be accepted as fact in these
proceedings: \2\
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\2\ The parties agreed to the following stipulations at the
Prehearing Conference held on January 5, 2021. ALJ Ex. 7 at 2-3. The
parties did not file any further Joint Stipulations.
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(1) OakmontScript Limited Partnership (``OakmontScript'') [was]
registered with the DEA as a distributor licensed to handle controlled
substances within Schedules II-V under DEA COR No. RO0504680
(``Distributor COR'') at 1500 District Ave., Burlington, MA 01803-5069.
DEA COR No. RO0504680 was first issued on October 7, 2016. [Respondent
surrendered both registrations on December 22, 2021, therefore
terminating these registrations.\*D\ Omitted.]
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\*D\ On January 3, 2022, I was notified by the Office of
Administrative Law Judges that Respondent had surrendered its
distributor and exporter registrations by submitting two DEA-104
surrender forms signed by Respondent's representative, Jufang Shi.
Pursuant to DEA regulations, Respondent's registrations terminated
on the day of the surrender, and Respondent is no longer authorized
to distribute or export controlled substances under federal law. 21
CFR 1301.52 (``[T]he registration of any person . . . shall
terminate, without any further action by the Administration, if and
when such person . . . surrenders a registration.'') On January 20,
2021, the Government filed a letter informing me of Respondent's
surrender. However, notably the Government did not request that I
dismiss this matter.
Although Respondent's registrations have terminated, the Agency
has discretion to adjudicate this Order to Show Cause to Finality.
See Jeffrey D. Olsen, M.D., 84 FR 68,474, 68,479 (2019) (declining
to dismiss an immediate suspension order as moot when the registrant
allowed the subject registration to expire before final
adjudication); Steven M. Kotsonis, M.D., 85 FR 85,667, 85,668-69
(2020) (concluding that termination of a DEA registration under 21
CFR 1301.52 does not preclude DEA from issuing a final decision on
an order to show cause against that registration and stating that
the Agency would assess such matters on a case-by-case basis to
determine if a final adjudication is warranted or if the matter
should be dismissed); The Pharmacy Place, 86 FR 21,008, 21,008-09
(2021) (adjudicating to finality a registration terminated under 21
CFR 1301.52 in order to create a final record of allegations and
evidence related to the matter); Creekbend Community Pharmacy, 86 FR
40,627, 40,628 n.4 (2021) (same).
As in The Pharmacy Place and Creekbend, I have evaluated the
particular circumstances of this matter and determined that the
matter should be adjudicated to finality. 86 FR at 21,008-09; 86 FR
40,627, 40,628 n.4. As my predecessor identified in Olsen,
``[b]ecause nothing in the CSA prohibits an individual or an entity
from applying for a registration even when there is . . . a history
of having a registration suspended or revoked. . . . having a final,
official record of allegations, evidence, and the Administrator's
decisions regarding those allegations and evidence, assists and
supports future interactions between the Agency and the registrant
or applicant.'' 84 FR at 68,479. Here, absent a final adjudication,
there would be no final record of the allegations and evidence from
this matter. (Contrast with Kotsonis in which the plea agreement and
judgment from the respondent's concurrent criminal case provided a
final record on which the Agency could rely in any future
interactions with the respondent. 85 FR at 85,667). Adjudicating
this matter to finality will create an official record the Agency
can use in any future interactions with Respondent's owners,
employees, or other persons who were associated with Respondent.
Moreover, as in The Pharmacy Place and Creekbend, ``adjudicating
this matter to finality will create a public record to educate
current and prospective registrants about the Agency's expectations
regarding the responsibilities of registrant pharmacies under the
CSA and allow stakeholders to provide feedback regarding the
Agency's enforcement priorities and practices.'' 86 FR 21,008-09
(applying Olsen, 84 FR 68,479); 86 FR 40,627, 40,628 n.4 (same).
It is noted that I recognize the importance of the parties'
ability to request dismissal of a case, even after it has been
forwarded to me for final adjudication. However, because surrenders
are unilaterally submitted by the Respondent, without explicit
instructions from both parties, I cannot assume the intent of a
surrender is to dismiss the case. In this case, I assume that the
Government has determined that a final decision on the merits will
further DEA's adjudicatory efforts and law enforcement goals,
because its letter to me regarding the surrender significantly omits
any indication otherwise.
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(2) OakmontScript is registered with the DEA as an exporter
licensed to handle controlled substances within Schedules II-V under
DEA COR No. RO0527082 (``Exporter COR'') at 1500 District Ave.,
Burlington, MA 01803-
[[Page 21517]]
5069. DEA COR No. RO0527082 was first issued on December 5, 2017. It
will expire by its terms on December 31, 2021.\3\
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\3\ The parties agreed during the Prehearing Conference that
since the filing of the Government's Prehearing Statement, DEA COR
No. RO0527082 was renewed and [was] due to expire [again] on
December 31, 2021.
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(3) OakmontScript has a Controlled Substance Registration,
#MA0092875, as a Drug Distributor for Schedules II-V with the
Commonwealth of Massachusetts, Department of Public Health, Drug
Control Program.
(4) Dr. Jufang ``Shirley'' Shi is OakmontScript's general partner,
owner, and Resident Agent. She also serves as its Managing Director,
President, and Chief Pharmacy Officer.
(5) Dr. Shi is New England Executive Care Limited Partnership's
(``NEEC'') Resident Agent.
(6) Dr. L.W. is NEEC's General Partner. Dr. L.W. also has served as
a consultant with OakmontScript. He has acted as OakmontScript's
supervisory physician. He was employed by OakmontScript on an as-needed
basis.
(7) On or about September 16, 2016, DEA conducted a pre-
registration investigation of OakmontScript's then application for a
distributor registration.
(8) On or about June 22, 2017, DEA conducted a pre-registration
investigation of OakmontScript's then application for an exporter
registration.
(9) On or about July 26, 2018, DEA conducted an on-site inspection
for OakmontScript's Distributor COR at OakmontScript's registered
location pursuant to a Notice of Inspection.
(10) In or around January, 2017, OakmontScript falsified a print
out of its DEA Distributor COR in order to set up a customer account
with another company, Pharmacy Buying Association (``PBA'').
Specifically, OakmontScript's DEA registration was altered so that the
word ``Distributor'' was replaced with the word ``Pharmacy'' under the
Business Activity section of the registration.
(11) OakmontScript employed an intern from January 1, 2017, to
February 2018.
(12) Diazepam (brand name ``Valium'') is a Schedule IV controlled
substance benzodiazepine class drug, commonly used to treat anxiety,
muscle spasms, and seizures.
(13) Briviact is the brand name for brivaracetam, a Schedule V
controlled substance commonly used to treat seizures.
(14) Belviq is the brand name for lorcaserin, a Schedule IV
controlled substance commonly used to control appetite.
(15) Lyrica is the brand name for pregabalin, a Schedule V
controlled substance commonly used to treat nerve and muscle pain and
seizures.
(16) Clobazam (brand names include ``Sympazan'' and ``Onfi'') is a
Schedule IV controlled substance benzodiazepine class drug that is
commonly used to control seizures.
(17) Lunesta is the brand name of eszopiclone, a Schedule IV
controlled substance that is commonly used as a sedative.
The Government's Case
The Government's case consisted of testimony from three witnesses:
(1) Diversion Investigator (``DI'') 1, (2) DI 2, and (3) DI 3. Below is
a summary of the testimony of these witnesses.\4\
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\4\ I do not make any findings of fact in these summaries. Any
facts necessary for a disposition of this case are set forth in the
Analysis section of this Recommended Decision.
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DI 1
DI 1 has been employed with the DEA for eighteen years. Tr. 35. For
ten years, until 2010, she worked as a Registration Program Specialist
in the New York Field Division where she reviewed applications and
conducted background checks regarding registrants who applied for DEA
registrations. Tr. 36-37. She currently serves as a DI in Boston where
she does on-site inspections and educates applicants on the guidelines
required by the Controlled Substances Act (``CSA''). Tr. 35, 37. She
received a three-month training in Quantico and has worked on over
eighty cases as a DI. Tr. 35, 37-38. She is familiar with DEA
regulations and the CSA. Tr. 38.
In August 2016, DI 1 was assigned as the lead investigator to the
Respondent's first DEA application as a distributor, which was
ultimately assigned COR No. RO504680. Tr. 38-39, 43. On September 16,
2016, DI 1 coordinated with the Massachusetts Department of Health,
through a Senior Investigator, to conduct an on-site inspection of
OakmontScript. Tr. 44-45. During the inspection, DI 1 met with
OakmontScript's Dr. Shi and L.W. Tr. 44-45. Dr. Shi informed DI 1 of
her intention to potentially distribute controlled substances to
international customers. Tr. 45-46. DI 1 explained to Dr. Shi that she
would need to apply for a second DEA registration as an exporter, and
to fill out a Form DEA-161, Application for Permit to Export Controlled
Substances (``DEA Form 161''), and a Form DEA-236, Declaration of
Exportation (``DEA Form 236''), which both apply to Schedule II-V
controlled substances. Tr. 46-47. But see Tr. 94-95 (When questioned by
the Respondent what schedule of controlled substances apply to a DEA
Form 161, DI 1 stated ``I don't recall'' and when questioned regarding
what controlled substances apply to a DEA Form 236 stated ``Schedule
III through V.'').\5\
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\5\ The tribunal admitted a blank DEA Form 236 with instructions
as Government Exhibit 47. For ``Type of Declaration'' the form
includes a check box for export of ``Non-narcotic substances in
Schedules III or IV and all substances in Schedule V,'' but does not
have a check box for Schedules I or II. Gov't Ex. 47 at 1. The
instruction page for the form states that its purpose is ``[t]o
obtain information regarding the importation of nonnarcotic
substances in Schedules III, IV, and V and the exportation of
nonnarcotic substances in Schedules III and IV and all substances in
Schedule V.'' Gov't Ex. 47 at 2.
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DI 1 had conversations with Dr. Shi explaining the term ``end-use
statement,'' which is a statement that is provided by a pharmaceutical
company or researcher stating the use of the drug. Tr. 47-49. DI 1
explained that an ``ultimate user'' is an individual that would use
controlled substances for his or her own personal medical use and that
some people use the term ``end user'' and ``ultimate user''
interchangeably. Tr. 49-50. DI 1 further explained that ``ultimate
user'' and ``end user'' are different from the ``end-use statement,''
which is something that is ``more for a business . . . a company for
research purposes'' and is documented in writing. Tr. 50.
DI 1 also discussed record-keeping requirements with Dr. Shi,
including the requirement to create an initial inventory of controlled
substances she has on site after her application is approved. Tr. 50.
She explained that Dr. Shi needed to create a biennial inventory every
two years, not to commingle records from her distributor registration
and any future exporter registration, and to maintain records for two
years. Tr. 50-51. As of April 28, 2017, DI 1's understanding was that
OakmontScript had not exported any controlled substances, which was
based on an email from OakmontScript stating ``we do not have any
executed controlled items to report during last two quarters.'' Tr. 61;
Gov't Ex. 4.
OakmontScript first applied for an exporter registration with the
DEA in April of 2017. Tr. 60. At some point, OakmontScript submitted a
second exporter application.\6\ Tr. 62. Because the first exporter
application was still pending action by DEA, DI 1 contacted Dr. Shi to
inquire why she had filed a second exporter application, to which Dr.
Shi responded that she wanted to import, not export. Tr. 62. Therefore,
DI
[[Page 21518]]
1 contacted DEA Headquarters and had the second exporter application
converted into an importer application. Tr. 62-63. The second exporter
application, which was converted to an importer application, was
ultimately withdrawn. Tr. 63.
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\6\ OakmontScript first applied for an exporter registration for
Schedules III, IV, and V in April 2017 and then later requested
Schedule II. Tr. 114, 115, 117.
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On June 22, 2017, Mr. L.U. sent DI 1 an email requesting that
Schedule II be added to the existing exporter application and DI 1
added this request for Schedule II to the exporter application on
OakmontScript's behalf. Tr. 74-76; Gov't Ex. 50. DI 1 and the Senior
Investigator from the Department of Health conducted a pre-registration
inspection of OakmontScript for its exporter application on June 22,
2017. Tr. 69-71. They discussed with Dr. Shi security and record-
keeping requirements including creating an initial inventory and
maintaining records for at least two years. Tr. 71-72. DI 1 also
discussed the importance of maintaining the DEA Form 161s and DEA Form
236s as well as the enduse statements. Tr. 72-73. DI 1 also instructed
Dr. Shi that records must be kept separate for separate registrations.
Tr. 73. It was DI 1's understanding that OakmontScript had not exported
or distributed any controlled substances. Tr. 70-71. At this
inspection, DI 1 also noted that OakmontScript's safe was not connected
to an alarm system, which was a security concern because OakmontScript
was storing Schedule II drugs, which have a higher security standard.
Tr. 77, 78.
On September 1, 2017, DI 1 went back to OakmontScript for a return
visit to test the safe's alarm after being notified by OakmontScript
that the alarm would be professionally installed on August 30th. Tr.
80-81, 83. On this visit, DI 1 found no issues with the alarm. Tr. 83.
However, at this time, DI 1 noted that OakmontScript should obtain a
larger-sized safe pending the approval of its exporter application,
which she communicated to OakmontScript on September 6, 2017. Tr. 84-
85. DI 1 had a third visit on September 22, 2017, when she observed
that OakmontScript purchased a larger safe and DI 1 tested the security
system. Tr. 85-86.
Sometime in October 2017, DI 1's supervisor informed her that
OakmontScript added over 170 drug codes to its exporter application,
which DI 1 thought to be an excessive amount of drug codes because
OakmontScript had previously stated that it was only intending to
export small amounts of Oxycodone. Tr. 86-87, 96-97, 100. DI 1
testified that a drug code ``is a code that's assigned . . . to a
controlled substance for identification purposes for individuals or
pharmaceutical companies who are engaging in manufacturing, exporting,
importing or distributing controlled substances.'' Tr. 86. DI 1 brought
this issue to Dr. Shi's attention on November 17, 2017, and Dr. Shi
stated that she had to select the drug code for each controlled
substance on the web page in order to move to the next screen in the
application process. Tr. 87-88. DI 1 worked with Dr. Shi, walked her
through modifying the application, and eventually Dr. Shi applied for
five drug codes. Tr. 88-89.
On December 5, 2017, DEA COR No. RO0527082, an exporter
registration, was assigned to OakmontScript. Tr. 90-91; Gov't Ex. 1B.
DI 1 had no indication that OakmontScript had exported any controlled
substances prior to this approval date. Tr. 91-92.
DI 1's testimony included a discussion of the investigation of
OakmontScript's first DEA application as a distributor, COR No.
RO0504680, OakmontScript's two applications for exporter registrations,
OakmontScript's request to add Schedule II to its exporter application,
and OakmontScript's withdrawn importer application.
Throughout her testimony, DI 1 was generally consistent, genuine,
and credible.\7\ As a public servant, DI 1 has no personal stake in the
revocation of the Respondent's registrations. There was no indication
during her testimony that she had any animus against OakmontScript or
any of its employees. I therefore find her testimony to be entirely
credible and it will be afforded considerable weight.
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\7\ DI 1 explained to Dr. Shi that she would need to apply for a
second DEA Registration as an exporter, and to fill out a DEA Form
161 and a DEA Form 236, which both apply to drug schedules II-V. Tr.
46-47; but see Tr. 94-95 (When questioned by the Respondent what
schedule of controlled substances apply to a DEA Form 161, DI 1
stated, ``I don't recall,'' and when questioned regarding what
controlled substances apply to a DEA Form 236, she stated,
``Schedule III through V.'') [I find these statements to be
confusing and inconsistent, but not to detract from the overall
credibility of DI 1].
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DI 2
DI 2 received a bachelor's degree in political science from the
College of Charleston and worked as a paralegal for several years prior
to joining the DEA. Tr. 124. She received a twelve-week training in
Quantico when she became an investigator. Tr. 125.
She has been employed as a DI for the DEA for approximately three
years and works in the Boston Field Office. Tr. 124. As a DI, she
ensures that DEA registrants are abiding by the DEA rules and
regulations and the CSA to ensure there is no diversion of controlled
substances from the point of manufacture to the end user. Tr. 125, 126.
She has worked as a lead investigator on approximately twenty to thirty
investigations. Tr. 125-26.
DI 2 first became familiar with OakmontScript on July 26, 2018,
when she met Dr. Shi to conduct an inspection regarding OakmontScript's
distributor registration.\8\ Tr. 126-27, 128. DI 2 conducted an alarm
test, performed a closing inventory, and reviewed OakmontScript's
records. Tr. 130. DI 2 noted two issues with OakmontScript's record-
keeping: (1) Commingling records by keeping some of its distributor
records with its exporter records \9\ and (2) a lack of any transfer
documents showing the transfer of controlled substances between the
distributor and exporter registrations. Tr. 131-33, 136. After she
identified these issues, she discussed them with Dr. Shi and Dr. Shi
stated that she understood and would not commingle records in the
future. Tr. 133.\10\ As to the transfer documents, Dr. Shi created a
template form that she stated she would use in the future. Tr. 133. DI
2 was not aware that OakmontScript had any inconsistencies with its
records relating to exports and did not receive any documents
indicating that OakmontScript had exported controlled substances before
receiving its exporter registration. Tr. 134.
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\8\ Dr. Shi consented to this inspection. Tr. 128-29; See Gov't
Ex. 6.
\9\ DI 2 noted that OakmontScript was required to do an
inventory for its distributor registration and its exporter
registration and keep separate records for each registration. Tr.
138-39.
\10\ DI 2 did not ``believe [Dr. Shi] knew about the commingling
but once corrected, she understood.'' DI 2 further believed that Dr.
Shi thought that transfer documents were only required for Schedule
II drugs. Tr. 133-34.
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DI 2's testimony was limited to a one-time inspection of
OakmontScript's distributor registration. As a public servant, DI 2 has
no personal stake in the revocation of the Respondent's registrations.
There was no indication during her testimony that she had any animus
against OakmontScript or any of its employees. I therefore find her
testimony to be entirely credible and it will be afforded considerable
weight.
DI 3
Background
DI 3 received her bachelor's degree in business administration in
2015. Tr. 143. Prior to working with the DEA, she was working with the
Department of the Army in California, where she mainly conducted
background investigations. Tr. 143. She was then promoted to a
headquarters position in Detroit, Michigan, where she worked until
2017,
[[Page 21519]]
when she was hired by the DEA. Tr. 143. She received a twelve-week
training in Quantico at the DEA Academy and had six months of on-the-
job training with a field investigator. Tr. 144-45. She received her
master's degree in public policy in February 2021. Tr. 143.
DI 3 currently works as a DI for the DEA in the New England Field
Division, in Boston, Massachusetts. Tr. 141-42. She has been a DI for
three years. Tr. 142. As a DI, she investigates the diversion of
controlled substances from licit channels to illicit channels by
conducting investigations including completing accountability audits,
reviewing records, testing security, and conducting on-site
inspections. Tr. 143-44. She has led approximately seventy
investigations and assisted on thirty. Tr. 145. She is familiar with
the CSA and her job is to ensure public safety. Tr. 145, 766.
OakmontScript Assignment
DI 3 became familiar with OakmontScript in fiscal year 2019 when
she was assigned to conduct an in-depth cyclical investigation of
OakmontScript's exporter registration. Tr. 145-46. DI 3 reviewed
OakmontScript's articles of limited partnership, with a date of
organization of May 27, 2016, which indicate that Dr. Shi is the
general partner and resident agent of OakmontScript. Tr. 146-49. Dr.
Shi had explained to DI 3 that OakmontScript's business model was to
procure controlled substances to export to foreign pharmaceutical
companies for reverse engineering, so the companies can break down the
controlled substance to recreate it. Tr. 150, 151, 760.
New England Executive Care (``NEEC'') is an entity with a date of
organization of May 10, 2018, with Dr. Shi listed as its resident agent
and Dr. L.W. and Dr. Donghui Yu listed as the general partners and it
has some type of relationship with OakmontScript. Tr. 152-54. DI 3 is
still unclear what NEEC's business model is and its full connection to
OakmontScript. Tr. 155. Dr. L.W. is a consulting physician for
OakmontScript and reviews patients' medical records and possibly
prescriptions to determine if the drug being exported is appropriate
for the patients' treatment. Tr. 155, 620-21.
February 19, 2019 Inspection
DI 3, DI 1, and DI 4, conducted an inspection of OakmontScript on
February 19, 2019, and began their investigation by showing Dr. Shi
their credentials and presenting a Notice of Inspection, which Dr. Shi
signed. Tr. 156-58; Gov't Ex. 7. They discussed recordkeeping and the
DIs explained that they would be conducting a controlled substance
accountability audit.\11\ Tr. 159.
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\11\ The accountability audit is a fixed moment in time when the
registrant has conducted a physical hand count of any controlled
substances it has on hand and the DIs include anything the
registrant has purchased or transferred. Tr. 165-66. The DIs then
take a closing inventory based on what has been distributed,
dispensed, etc. Tr. 166.
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The initial inventory date was February 19, 2018, and based on
OakmontScript's self-reporting that it did not have any substances on
hand, the initial count was a zero balance. Tr. 167, 763. According to
the closing inventory dated February 19, 2019, which was signed by DI
3, DI 4, and a representative from OakmontScript, OakmontScript did not
have any of the eight controlled substances the DIs chose to audit on
that date. Tr. 159-60; Gov't Exs. 8, 9.
DI 3 also discussed drug codes \12\ with Dr. Shi and it is standard
practice for her to discuss what drug codes a registrant is authorized
to handle and whether the registrant is handling any other drug codes.
Tr. 175-76, 597.\13\ DI 3 had accessed the DEA registration system and
made a list of drug codes that OakmontScript was authorized to handle,
and asked OakmontScript what drugs codes it was handling.\14\ Tr. 183;
Gov't Ex. 11. Dr. Shi reported there were no other drug codes that
OakmontScript was exporting or handling other than what DI 3 listed and
that there were two drug codes OakmontScript was no longer handling.
Tr. 189, 598, 889. Although the closing inventory was good because ``it
tied out to zero,'' there were issues with OakmontScript's
recordkeeping, including a failure to take an initial inventory, and
there were also issues with the alarm system. Tr. 190, 192. DI 3
discussed these issues with her group supervisor and her group
supervisor asked her to return to OakmontScript to conduct an alarm
test and conduct an expanded controlled substance accountability audit
going back to December 5, 2017, which is when OakmontScript first
received its DEA exporter registration. Tr. 192-93.
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\12\ A drug code, or Administrative Controlled Substance Code
Number, is a four-digit code that is assigned to each controlled
substance and certain DEA registrants are allowed to handle only
specific drug codes for which they have been approved. Tr. 169, 868.
For example, a DEA registrant who is an exporter is only able to
purchase and export controlled substances for which it has an
authorized drug code and cannot engage in exporting drugs for which
it does not have the necessary drug code. Tr. 176-77. When exporting
drugs, the registrant needs to report the drug codes in an export
declaration, such as a DEA Form 236, to include the drug code,
strength, quantity, shipping destination, shipping origin location,
the anticipated date it is being released, the anticipated date it
should arrive, and the drug's intended use. Tr. 178.
\13\ Dr. Shi asked DI 3 questions during her direct examination
that led to a discussion about drug codes OakmontScript had
requested in December 2020. Tr. 880-88. These discussions are not
part of the Order to Show Cause that is the subject of the
proceedings before this tribunal.
\14\ If a registrant wants to make a change to its registration,
including adding or removing drug codes, it may request a
modification of registration online or contact the local DEA office
by email or phone, and adding drug codes can be approved at the
field level, but may require further inspection. Tr. 273-74, 800,
874-75, 876. There is no uniform guidance on how the DEA handles a
request for adding or removing a drug code. Tr. 879.
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March 29, 2019 Inspection
On March 29, 2019, DI 3 completed another inspection with DI 5 and
the audit did not show any discrepancies. Tr. 195-97. Dr. Shi provided
a pack of additional documents to DI 3 and stated that she was having
problems filing the DEA Form 236 for OakmontScript's exports. Tr. 198-
201; Gov't Ex. 12. After reviewing these documents, DI 3 determined
that OakmontScript was having issues with the DEA Form 236 because
OakmontScript did not have the authority to export the controlled
substances as it did not have the appropriate drug codes in its
registration for most of the drugs. Tr. 201. Therefore, OakmontScript
was unable to select the drug codes from the online drop-down box in
the DEA Form 236. Tr. 201-02, 613. Despite being unable to fill out the
DEA Form 236, Dr. Shi ``exported them anyways'' and she did not think
``it was a big deal.'' Tr. 204. Ultimately, DI 3 found that
OakmontScript had violated the CSA by not filling out the DEA Form
236s, by exporting drugs prior to holding its exporter
registration,\15\ and exporting drugs it did not have authorization to
handle. Tr. 205.
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\15\ DEA registrants are required to provide the proximate date
of export and to provide return information within thirty days. Tr.
759-60; See Gov't Ex. 47; 21 CFR 1304.22(d).
---------------------------------------------------------------------------
Follow-Up to March 29, 2019 Inspection
On April 23, 2019, DI 3 had a phone call with Dr. Shi and requested
a detailed list of exports OakmontScript had conducted because it was
apparent that OakmontScript had exported a lot more than what Dr. Shi
had previously stated. Tr. 206. DI 3 also discussed a fraudulent DEA
registration. Tr. 206. During this discussion, Dr. Shi stated that
OakmontScript had conducted its first export in May or June of 2017.
Tr. 206.
After the April 23, 2019 phone call, DI 3 and Dr. Shi had an email
exchange in which Dr. Shi continued to provide conflicting information,
so DI 3 asked
[[Page 21520]]
for further clarifying information. Tr. 208-21. See Gov't Exs. 16, 17,
18, 19, 20. After reviewing the several documents Dr. Shi emailed, DI 3
noted several issues, including that OakmontScript was not keeping
complete and accurate records related to its controlled substance
transactions, was unable to complete the DEA Form 236s, and was
creating shipping labels well in advance of dropping off the controlled
substances with the common carrier for shipment. Tr. 222-24; Gov't Exs.
16, 17, 18, 19, 20 at 9 (Dr. Shi responded to an email from DI 3 and
indicated that the shipping label for an export of Belviq was ``created
on date of 10/13/2017, but drop-off on later date while waiting for
receiving party get ready for custom clearance.'').
May 8, 2019 Inspection
DI 3 served two administrative subpoenas on OakmontScript with DI 5
on May 8, 2019, that were issued based on the serious violations that
DI 3 discovered since conducting her initial inspection on February 19,
2019.\16\ Tr. 235-40; Gov't Ex. 24.\17\
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\16\ At the May 8, 2019, meeting, DI 3 also discussed the Letter
of No Objection (``LONO'') and that she had learned from someone at
DEA Headquarters that a LONO must come from a foreign national
government and not from a provincial or state-level government. Tr.
889-91, 893, 895-96, 910-11, 1432-33. A LONO is provided by the
importing country stating that it has no objection to a controlled
substance being imported into that country. Tr. 910, 1431-32.
\17\ The tribunal questioned DI 3 regarding markings on the
administrative subpoenas. Tr. 790-91; Gov't Ex. 24. DI 3 stated that
the various check and dash marks made on the front pages of the
subpoenas were made by OakmontScript. Tr. 790. DI 3 further
explained that when she had served the subpoenas, she had not made
scanned copies that were hand-signed by the diversion program
manager and these were copies that were provided by OakmontScript.
Tr. 790-91.
---------------------------------------------------------------------------
OakmontScript kept track of each controlled substance it exported
or distributed by assigning a purchase order number, usually starting
with ``OKS-'' and followed by a series of numbers. Tr. 242. At the
inspection, Dr. Shi provided DI 3 a large packet that was divided into
smaller bundles by invoice, that DI 3 later may have reordered
chronologically, but she did not remove or add any pages to the stack.
Tr. 243-48, 709, 794-95; See Gov't Ex. 26. DI 3 discussed with Dr. Shi
OakmontScript's exports for direct patient use, including a shipment of
clobazam that was potentially sent to an underage patient, a fraudulent
DEA registration, and OakmontScript's relationship with NEEC. Tr. 256.
May 13, 2019 Inspection
On May 13, 2019, DI 3 and DI 5 performed another inspection. Tr.
268. DI 3 discussed various topics with Dr. Shi, including a detailed
discussion of all the violations DI 3 uncovered. Tr. 268-69. Prior to
this visit, DI 3 had also reached out to DEA Headquarters to verify
whether OakmontScript had properly completed DEA Form 236s for its
exports. Tr. 269-70; Gov't Ex. 48.
Alteration of Distributor Certificate of Registration
A registrant receives a hard-copy certificate of registration,
which is an official government document, based on DEA approval to hold
a registration, which includes the company's or individual's name, the
registered location address, the registrant's DEA registration number,
the business activity for which the entity is approved, and--for
exporters, importers, and bulk manufacturers--the drug codes that they
are approved to handle. Tr. 272-73.
DI 3 had been reviewing OakmontScript's case files and discovered
that there was a report filed by the Kansas City District Office of the
DEA, naming OakmontScript as fraudulently creating a DEA registration.
Tr. 275. OakmontScript had altered its distributor registration to
indicate that it was a pharmacy and submitted it to Pharmacy Buying
Association (``PBA'').\18\ Tr. 275. PBA has a DEA registration and DI 3
spoke to one of PBA's Regulatory Compliance Team Leaders, B.W., and
received email correspondence from B.W. that noted PBA ``only sell[s]
to pharmacies'' and it does not ``sell to other distributors.'' Tr.
275-78; Gov't Ex. 55. PBA also requires customers to send a copy of
their state pharmacy license and a copy of their DEA registration when
they send in their account application. Tr. 278; Gov't Ex. 55. B.W.
further noted that OakmontScript sent PBA a DEA registration indicating
it was a pharmacy and after PBA performed its due diligence, PBA
discovered that the document was altered. Tr. 278; Gov't Ex. 55. PBA
reported OakmontScript and denied OakmontScript's account. Tr. 278;
Gov't Ex. 55.
---------------------------------------------------------------------------
\18\ PBA is a distributor of controlled substances and non-
controlled substances that only sells to pharmacies. Tr. 275, 1444;
See Gov't Ex. 55.
---------------------------------------------------------------------------
The DEA registration OakmontScript provided to PBA listed its
business activity as ``pharmacy,'' even though the COR of RO0504680
corresponded to OakmontScript's distributor registration. Tr. 286;
Gov't Exs. 14, 55. Dr. Shi took responsibility for the falsified
registration. Tr. 290-93.
On April 23, 2019, DI 3 discussed the falsified registration with
Dr. Shi on the phone. Tr. 293. Dr. Shi stated that she had hired an
intern and Dr. Shi instructed the intern to establish relationships
with OakmontScript's competitors to determine how they conduct
business. Tr. 293-94. After PBA refused to establish a relationship
with OakmontScript, the intern altered the DEA registration to list
OakmontScript as a pharmacy. Tr. 294; Gov't Ex. 14. During this phone
call, Dr. Shi indicated to DI 3 that she had fired the intern as a
result of this incident. Tr. 294. However, in an email dated April 24,
2019, Dr. Shi indicated that the intern moved back to China and her
employment dates were January 1, 2017, to February 2018. Tr. 297; Gov't
Ex. 20 at 13. The phone conversation and email were therefore in
``direct conflict'' and it appeared that the intern had not been fired
for falsifying the registration. Tr. 297-98. Dr. Shi also texted
information regarding this incident in May 2019 where she said if the
incident regarding the falsified registration ``constitutes any
offensive sort, `I' should take responsibility. If any actions taken
toward, please address to me directly.'' Tr. 300-01; Gov't Ex. 29.
DI 3 had a follow-up inspection on May 13, 2019, and asked Dr. Shi
why the intern's employment dates seemed to span an additional year
after the date of the fraudulent DEA registration. Tr. 301-02. Dr. Shi
stated that she had ties with the intern's family, who she felt had
pressured her to keep the intern employed. Tr. 302. Dr. Shi also
explained that the intern had come to her and explained that PBA would
not ``do business with them because they viewed OakmontScript as a
competitor'' and Dr. Shi had told the intern to ``do whatever is
needed'' and to ``[g]ive them basically whatever they want in order to
establish this . . . client relationship with them.'' Tr. 303. DI 3 was
never able to contact the intern to discuss this violation with her.
Tr. 304. OakmontScript was not able to obtain controlled substances
from PBA. Tr. 304.
In this instance, DI 3 found that Dr. Shi had exhibited a lack of
candor \19\ because Dr. Shi initially stated that the intern had been
fired and later stated the intern had not been fired, but maintained a
position at OakmontScript and actually left the country and her
[[Page 21521]]
position with OakmontScript because her visa had expired. Tr. 307, 788.
---------------------------------------------------------------------------
\19\ Upon direct questioning by the tribunal, DI 3 testified
that Dr. Shi exhibited a lack of candor when she ``led me to believe
that [the intern] had been fired for her actions related to that
forged DEA registration'' and that in their conversation Dr. Shi did
use the exact word ``fired.'' Tr. 792-93. DI 3 did not believe this
was a simple mistake by Dr. Shi. Tr. 793.
---------------------------------------------------------------------------
February 2020 Subpoena
DI 3 served another administrative subpoena on OakmontScript on
February 28, 2020, and issued an administrative subpoena to NEEC after
learning that Dr. L.W. was writing prescriptions for direct patient
care at Dr. Shi's request.\20\ Tr. 389-95; Gov't Exs. 37, 38.
---------------------------------------------------------------------------
\20\ As discussed supra, Dr. L.W. was listed as a general
partner of NEEC. Tr. 154. Furthermore, based on Dr. Shi's
statements, it was unclear to DI 3 as to what role NEEC was playing
in OakmontScript's exports. Tr. 393-94.
---------------------------------------------------------------------------
In response to the subpoenas, David Schumacher sent a letter dated
March 26, 2020, indicating he was an attorney representing
OakmontScript and NEEC and that neither OakmontScript nor NEEC had any
records that were responsive to the subpoena, but he did re-produce
certain documentation to DI 3 and addressed certain questions DI 3
posed in a March 10, 2020 email. Tr. 397-98; Gov't Ex. 42. DI 3
followed up with questions to Mr. Schumacher in an April 14, 2020
email, and he subsequently sent an email to DI 3 on April 17, 2020,
which responded to some of these questions. Tr. 402-03; Gov't Ex. 44.
DI 3 sent her April 14, 2020, email to seek clarification regarding two
identical prescriptions she identified for clobazam and what role they
played in the export of this controlled substance. Tr. 405; Gov't Ex.
44.
Invoice OKS-00243 (Diazepam)
OakmontScript received diazepam, 10 milligram gel on May 16, 2017,
from McKesson that appears to have been shipped by OakmontScript on
June 10, 2017. Tr. 352-53, 366, 432; Gov't Exs. 12 at 14, 26 at 20.\21\
However on other documentation, the shipping date is listed as May 18,
2017, and the client's name is listed as Par Pharmaceutical, an Endo
International Company. Tr. 356, 1448; Gov't Ex. 17 at 3. In other
documentation, the shipping date is listed as May 18, 2017, and the
client is listed as Cangzhou People's Hospital. Tr. 357, 1449; Gov't
Ex. 18 at 3. Furthermore, Dr. Shi sent an email to DI 3 on April 23,
2019, indicating that she was unsure of the exact date of export
because the ``shipping label was not retrievable due to USPS system
update'' and Ms. Liu has ``made edit in the date multiple times and she
thought the proper date is on the date of payment. . . .'' Tr. 358-59,
386, 1449; Gov't Exs. 20 at 8, 28 at 22.\22\ The ``ship to name'' is
listed as H.H.\23\ at Cangzhou People's Hospital in China and Dr. Shi's
guess of the ``best possible date'' of shipment was the date of payment
on May 18, 2017. Tr. 361-63, 1449-50; Gov't Ex. 21 at 9. The use was
listed as ``for research'' and the ``bill to'' party was H.X.Z. at Par
Pharmaceutical and the ship to party was Dr. H.H. at Cangzhou People's
Hospital in China. Tr. 365, 435; Gov't Ex. 26 at 19.
---------------------------------------------------------------------------
\21\ This McKesson invoice listed OakmontScript's address as 15
New England Executive Park. Gov't Ex. 26 at 20. Dr. Shi explained
that this address and the 1500 District Avenue address
(OakmontScript's current address) are the same address. Tr. 367. Dr.
Shi stated that the whole area where OakmontScript is located got
``reorganized'' and OakmontScript's address changed, but
OakmontScript never changed its physical location. Tr. 368.
\22\ This was concerning for DI 3 because a registrant is
required to know when it has conducted a transaction with a
controlled substance and OakmontScript was unable to provide this
information. Tr. 360.
\23\ In the translated prescription, H.H. appears to be a doctor
in China. Tr. 413; Gov't Ex. 45 at 4. DI 3 conducted a search within
the DEA database and determined that Dr. H.H. did not have a DEA
registration. Tr. 413-14.
---------------------------------------------------------------------------
One of the license transfer documents for this export indicates
that the diazepam was transferred from OakmontScript's distributor
registration to its exporter registration on May 7, 2018. Tr. 371-72,
435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer
document indicates that the date of transfer was May 20, 2017. Tr. 371,
436; Gov't Ex. 26 at 22.\24\ Other documentation provided by
OakmontScript states that the diazepam prescription was made based on a
request from a family in China for Patient S.Z. and was shipped
sometime in May 2019. Tr. 407-09; Gov't Ex. 44 at 1-2. OakmontScript
was unable to complete a DEA Form 236 for this export.\25\ Tr. 352-53;
Gov't Exs. 12 at 14, 16 at 2.
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\24\ DI 3 indicated that ``it seems more likely . . . that this
license transfer document from May 20, 2017, is the more likely of
the two to be accurate,'' based on comparing the McKesson invoice
that was dated in 2017. Tr. 436.
\25\ This is noted as ``no XFER'' in the Excel spreadsheets in
the documents provided by OakmontScript, which indicates that
OakmontScript was not able to fill out a DEA Form 236 for a
particular drug. Tr. 202.
---------------------------------------------------------------------------
DI 3 confronted Dr. Shi regarding this conflicting information at
the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that
this diazepam had been shipped for direct patient use in China. Tr.
363-64. Dr. Shi stated that OakmontScript had to label the reason for
export as ``research'' in order to get the shipment past Chinese Custom
Officials and that the actual intended use of the diazepam was for
direct patient use. Tr. 366, 1446.
DI 3 was also confused by documents provided by Dr. Shi because
although they appeared to be the exact same documents--a prescription
written in Chinese, a hospital's government licenses, and a doctor's
medical license--these documents were provided in stacks for two
different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on
a translation that DI 3 ultimately obtained for these documents, DI 3
learned that both prescriptions were for diazepam. Tr. 383.
OakmontScript also failed to include a DEA Form 236 for this
invoice, which it was required to do. Tr. 416-19. Furthermore,
OakmontScript's distributor registration and exporter registration do
not allow for OakmontScript to fill prescriptions, as such
prescriptions may only be filled by a pharmacist. Tr. 420-23, 429; 21
U.S.C. 1306.06. OakmontScript also did not provide the information
required under Section 3a or Section 3b of the DEA Form 236.\26\ Tr.
418-19; Gov't Ex. 48. Based on the records, OakmontScript appears to
have exported 10 milligrams of diazepam under invoice number OKS-00243
prior to obtaining its DEA exporter registration on December 5, 2017.
Tr. 423-25, 1433, 1452.
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\26\ Section 3a of DEA Form 236 requires that, for exports, the
exporter ``list the U.S. port of export (port name, city, state)
from where the shipment departs the United States and the
anticipated date it will depart.'' Gov't Ex. 47 at 1, 2. Section 3b
of DEA Form 236 requires that, for exports, the exporter ``list the
foreign port of import (port name, city, country) and the
anticipated date it will arrive.'' Gov't Ex. 47 at 1, 2.
---------------------------------------------------------------------------
Furthermore, invoice OKS-00243 did not provide the DEA registration
of the doctor prescribing the controlled substance and the patient's
home address. Tr. 430-31. See 21 CFR 1306.05(a).\27\ DI 3 stated that
this failure to provide the required information is a danger to the
public because the information is needed to ensure registered
practitioners are prescribing appropriately. Tr. 431.
---------------------------------------------------------------------------
\27\ The personal use exemption allows someone who is traveling
across international boundaries to take a controlled substance with
them and a third-party shipping a controlled substance overseas
would not fall within a personal use exemption. Tr. 437-38.
---------------------------------------------------------------------------
Invoice OKS-00301 (Briviact) \28\
---------------------------------------------------------------------------
\28\ Throughout her testimony, DI 3 mentioned that there were
several handwritten notes or post-it notes with writing on the
certain documents, and that these notes were in the documents when
they were presented to her by OakmontScript. Tr. 373. There was one
instance, however, where DI 3 acknowledged that she had made a
handwritten note. Tr. 375-76; Gov't 26 at 25. Specifically, she had
written the word ``Par'' next to the ``Bill To'' line of this
invoice. She also made handwritten notes in Government Exhibit 26
noting that the scanned documents were a ``Hospital's Central Gov.
License,'' ``Doctor's Medical License,'' and a ``Prescription.'' Tr.
380-81; See Gov't Ex. 26 at 12, 14.
---------------------------------------------------------------------------
OakmontScript received 10 milligrams and 100 milligrams of
[[Page 21522]]
Briviact on July 12, 2017, that were shipped in August 2017--four
months prior to OakmontScript receiving its exporter registration. Tr.
440-57, 1433; Gov't Exs. 12 at 7, 20 at 8, 26 at 35-36, 27 at 2, 28 at
27.\29\ However, in other documentation provided by OakmontScript, this
OKS-00301 invoice is not included in what is supposed to be a list of
all controlled substances OakmontScript has exported. See Gov't Ex. 18
at 3-4. In other documentation, the commercial invoice for invoice OKS-
00301 indicates that this shipment occurred May 8, 2019, and the
indicated use was listed as ``research.'' \30\ Gov't Ex. 26 at 33, 34.
---------------------------------------------------------------------------
\29\ This exhibit is titled as ``Customer End-Use
Certification.'' Gov't Ex. 28 at 27; Tr. 453. An exporter is
expected to know what the controlled substances it is exporting are
being used for and this form includes questions regarding this use.
Tr. 453-54. This is not a form created by the DEA, but rather a form
``the industry has come up with'' in order to meet the standards set
forth in the Code of Federal Regulations. Tr. 454.
\30\ DI 3 discussed the fact that the Respondent asserted in its
prehearing statement that there was an Excel macro that affected
some of the dates on OakmontScript's documents. Tr. 574. In this
instance, the document is dated May 8, 2019, which was the date of
one of DI 3's inspections. Tr. 575. Therefore, this could account
for the incorrect date listed in this invoice. DI 3 stated that she
became aware of the macro issue after the May 8, 2019 inspection,
but OakmontScript never specifically brought this to her attention
during her investigation. Tr. 1439-40. If DI 3 had been made aware
of this issue at the time, she would have worked with OakmontScript
to obtain the most accurate records. Tr. 1440-41.
---------------------------------------------------------------------------
OakmontScript did not file a DEA Form 236 for this invoice because
it was unable to do so. Tr. 443, 456-57; Gov't Exs. 20 at 8, 48. Dr.
Shi claimed that OakmontScript did not need to make a declaration to
Customs and Border Control as the value of the shipment was less than
$2500. Tr. 443; Gov't Ex. 20 at 8.\31\
---------------------------------------------------------------------------
\31\ An ultimate user is the individual who will be ingesting
the controlled substance or providing it for a pet's use, while an
end-use certification addresses what the controlled substance is
being used for and if it is going to be re-exported. Tr. 454-55.
---------------------------------------------------------------------------
Invoice OKS-00315-1 (Belviq)
OakmontScript received 10 milligrams of Belviq on September 18,
2017, which was shipped on November 1, 2017, and OakmontScript was not
able to file a DEA Form 236 for this prescription. Tr. 457-70; Gov't
Exs. 12 at 3, 20 at 8,\32\ 26 at 38-39, 27 at 2, 28 at 6. However,
Belviq is omitted from two Excel spreadsheets that were provided to DI
3 by Dr. Shi, which were supposed to include all of OakmontScript's
exports. Gov't Ex. 17 at 2-3, 18 at 3-4. Also, a different invoice
provided by OakmontScript is dated September 18, 2017. Gov't Ex. 26 at
37. Another commercial invoice is dated May 8, 2019. Gov't Ex. 26 at
40. Based on the November 1, 2017, shipping date, OakmontScript
exported this Belviq product approximately one month before it obtained
its exporter registration. Tr. 470, 1433.
---------------------------------------------------------------------------
\32\ In response to DI 3's email, Dr. Shi sent a reply email
stating that per the DHL shipping label, the shipment was made by a
custom broker, Hangzhou Junyuan Meditech, LLC and the end-user is
Changzhou Pharmaceuticals with an address in China, but no export
date was provided. Tr. 461-62.
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Invoice OKS-00315-2 (Lyrica)
This invoice included several strengths of Lyrica: 25 milligram, 50
milligram, 75 milligram, 100 milligram, 150 milligram, 200 milligram,
225 milligram, and 300 milligram tablets. Tr. 470.
OakmontScript purchased Lyrica on September 12, 2017, from American
Pharma Wholesale and it was shipped sometime between November 17
through 21 of 2017 to Changzhou Pharmaceuticals in China and
OakmontScript did not file a DEA Form 236 because it was unable to do
so.\33\ Tr. 470-83, 895; Gov't Exs. 12 at 9-10, 26 at 41-43, 27 at 2,
28 at 8, 78, 48. However, in other documentation provided by
OakmontScript, Lyrica is not listed as an export. Gov't Exs. 17 at 2-3,
18 at 3-4. Furthermore, in other documentation, the invoice is dated
August 2017. Gov't Exs. 26 at 44, 28 at 31. This shipment of Lyrica was
shipped approximately one month prior to OakmontScript receiving its
exporter registration. Tr. 483, 1433.
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\33\ DI 3 later testified that OakmontScript did submit a DEA
Form 236, but it was subsequently cancelled. Tr. 909.
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Invoice OKS-00108 (Belviq XR)
OakmontScript received Belviq on July 20, 2017, and shipped the
same quantity of Belviq XR 20 milligrams on December 1, 2017. Tr. 483-
95; Gov't Exs. 12 at 3; 26 at 45, 47, 27 at 2, 28 at 5, 19 (the
shipping date is listed as December 1, 2017), 76 (the date
OakmontScript transferred the Belviq from its distributor to exporter
registration is listed as November 29, 2017). However, in other
documentation provided by OakmontScript, Belviq is not listed as an
export. Gov't Exs. 17 at 2-3, 18 at 3-4. In other documentation
provided by OakmontScript, the shipping label for this invoice was
created on October 13, 2017, and the customer was listed as Jiangsu
Alicorn Pharmaceutical Co. Ltd in China. Gov't Ex. 20 at 9. There are
also various dates included in the ``Import Drugs Approval Notice''
including February 16, 2017 and February 15, 2018. Gov't Ex. 26 at 46;
Tr. 489. The packing list that OakmontScript provided is dated May 8,
2019. Gov't Ex. 28 at 19. OakmontScript did not file a DEA Form 236 for
this export. Tr. 494. Regardless of whether the shipment was exported
on December 1, 2017 or October 13, 2017, this shipment would have been
exported prior to OakmontScript obtaining its exporter registration.
Tr. 495, 1433.
Invoice OKS-00650 (Lunesta)
OakmontScript received Lunesta in May 2018 and shipped the Lunesta
to Disha Pharmaceutical Group on May 21, 2018. Tr. 499-535; Gov't Exs.
12 at 17, 17 at 3, 18 at 3, 28 at 94. The Lunesta was shipped to Mr.
Z.Y. at an address in the United States in Kearny, New Jersey. Tr.
1455; Gov't Ex. 22 at 10-11. Another document for this export that is
dated May 3, 2017, states that this shipment was shipped to P.Z. in New
Jersey. Tr. 515, 522-23; Gov't Ex. 26 at 87.
Upon further investigation, DI 3 realized that this was a domestic
distribution or distributing to a registrant in the United States, as
opposed to an export. Tr. 508, 510, 529, 533, 904-05; Gov't Exs. 22 at
10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68. OakmontScript did
not fill out a DEA Form 236 for this export. Tr. 500-01.
A distributor is not permitted to distribute controlled substances
to an ultimate user and there is no coincidental activity that permits
a distributor to provide controlled substances to non-DEA individuals
or persons or companies. Tr. 511-12, 723. Distribution occurs between
registrants while dispensing would take place through a prescription
being filled by a pharmacy after a practitioner prescribes a controlled
substance. Tr. 513.
DI 3 discussed this invoice with Dr. Shi. Tr. 513-14. Dr. Shi
stated that she was provided a business card showing that Mr. Z.Y. was
an employee of Disha Pharmaceutical Group, a pharmaceutical company in
China, and that he was getting ready to move to China and asked that
the Lunesta be shipped to his home address in New Jersey, and paid via
personal payment. Tr. 514, 516, 531, 534-35. This invoice indicates
that the ``bill to'' party was Disha Pharmaceutical Group. Tr. 530-31;
Gov't Ex. 28 at 44. Dr. Shi had explained that Larry Yu, a colleague
she had met at a conference, had requested the Lunesta for RefDrug and
asked Dr. Shi to send the Lunesta to Mr. Z.Y. to
[[Page 21523]]
have him provide it in China as Dr. Yu was not able to acquire it. Tr.
515-16.
Dr. Shi confirmed for DI 3 that OakmontScript had purchased this
Lunesta with its distributor registration and then distributed it to
Mr. Z.Y. at his home address in New Jersey, which DI 3 testified was
improper. Tr. 517-18. Dr. Shi did not believe that this incident was a
violation and stated that because Disha Pharmaceutical Group was the
end-user of this controlled substance that it did not have to be
licensed or registered with the DEA to obtain this controlled
substance. Tr. 518. In contrast, DI 3 believed that Disha was not the
end-user or ultimate user \34\ because it was seeking the Lunesta in
order to conduct research as opposed to using it for personal medical
use. Tr. 518-19, 772-73.
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\34\ 21 U.S.C. 802(27) defines ``ultimate user'' as ``a person
who has lawfully obtained, and who possesses, a controlled substance
for his own use or for the use of a member of his household or for
an animal owned by him or by a member of his household.''
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DI 3 conducted searches to see whether certain parties in this
transaction had a DEA registration. Tr. 545. She conducted a search for
Mr. Z.Y., RefDrug, Inc., L.Y., P.Z., Disha Pharmaceutical Group, and
the address in Kearny, New Jersey, and found no results for any active
or inactive DEA registrations for any of these searches. Tr. 545-54. DI
3 also conducted a Google search of the Kearny, New Jersey, address and
was not provided any information from OakmontScript that this was a
freight forwarding facility. Tr. 555-56, 558.
Invoice OKS-00715 (Lyrica)
A variety of Lyrica strengths were shipped on November 21, 2018, to
J.F. at YaoPharma. Tr. 558-72; Gov't Ex. 31 at 1-4, 27 at 3, 31 at 1,
3-4. However, other documentation provided by Dr. Shi indicates that
the date is November 21, 2019. Gov't Ex. 12 at 12.\35\ Dr. Shi also
sent an email stating that the label for the Lyrica was created on
November 21, 2018, and the drop-off date was December 4, 2018. Gov't
Ex. 20 at 10. Other documents list the date as March 29, 2019. Gov't
Ex. 31 at 3. Other documents list an invoice date of May 8, 2019. Gov't
Ex. 26 at 102.\36\ The date of the invoice was also listed as August 8,
2018. Gov't Ex. 28 at 48. OakmontScript did not file a DEA Form 236 for
this export. Tr. 572-73; Gov't Ex. 48.
---------------------------------------------------------------------------
\35\ DI 3 discussed these issues with Dr. Shi on April 23, 2019,
and Dr. Shi indicated that this was an incorrect date and the date
should be listed as November 21, 2018. Tr. 564.
\36\ This incorrect date could be related to the macro issue,
but regardless, having these incorrect dates caused confusion for DI
3. Tr. 576-77.
---------------------------------------------------------------------------
Invoice OKS-00753 (Briviact)
Briviact 50 milligram and 100 milligram, a Schedule V drug, was
received on October 22, 2018, the shipping label was created on October
25, 2018, and it was shipped on November 2, 2018. Tr. 579-96; Gov't
Exs. 12 at 8, 20 at 10. Other documentation provided by OakmontScript
states that this was shipped on October 26, 2018. Gov't Exs. 17 at 2,
18 at 4. The commercial invoice is dated September 26, 2018 and the
``bill to'' and ``ship to parties'' are Y.P. at Zhejiang Le Pu
Technology Limited Company in China. Gov't Exs. 26 at 106, 28 at
53.\37\ In other documentation provided by OakmontScript, no shipping
date is provided. Gov't Ex. 27 at 3-4. OakmontScript did not have the
authority to export Briviact. Tr. 580-81, 599, 1434-35; Gov't Ex. 11.
OakmontScript did not fill out a DEA Form 236 for this controlled
substance. Tr. 596, 1435-36; Gov't Ex. 48.
---------------------------------------------------------------------------
\37\ While this exhibit was being discussed, Dr. Shi objected
and explained that this ``page of the shipping label is different.
So it's our mistake to put the shipping label of 715 in here. So
this shipping label should not be discussed with this, it's our
fault to misplace this page.'' Tr. 591. This issue is discussed
infra, during Dr. Shi's testimony.
---------------------------------------------------------------------------
DI 3 found Dr. Shi's statement regarding drug codes to demonstrate
a lack of candor because she had specifically asked Dr. Shi if
OakmontScript was handling other controlled substances outside those
listed and Dr. Shi reported that she had not. Tr. 600, 724, 788.
Invoice OKS-00902 (Belviq)
Belviq, 10 milligrams was received by OakmontScript on January 30,
2019, transferred from its distributor license to its export license on
February 14, 2019, and shipped on February 15, 2019, to Beijing
HeMingTang Pharmaceutical Company Limited. Tr. 602-13; Gov't. Exs. 12
at 5, 18 at 4, 26 at 121, 27 at 4, 28 at 60, 82. However, other
documentation provided by Dr. Shi listed a packing slip date of January
16, 2019. Gov't Ex. 26 at 119. Other documentation listed an invoice
date of May 8, 2019. Gov't Ex. 26 at 122.\38\ Other documentation lists
the billing date from McKesson as January 16, 2019. Gov't Ex. 28 at 18.
OakmontScript did not file a DEA Form 236 for the Belviq. Tr. 609,
1435-36; Gov't Ex. 48. OakmontScript did not have the authority to
export Belviq at this time. Tr. 612, 1435; Gov't Ex. 11.
---------------------------------------------------------------------------
\38\ This could have also been related to the macro issue as the
invoice was dated May 8, 2019, one of the dates DI 3 was present for
an inspection.
---------------------------------------------------------------------------
DI 3 believed Dr. Shi's previous statement regarding drug codes
demonstrated a lack of candor because she had specifically asked Dr.
Shi if OakmontScript was handling other controlled substances outside
those listed and Dr. Shi failed to report that OakmontScript had
recently exported Belviq. Tr. 613, 724, 788.
Invoice DIW-0019 and NEEC-0019 (Clobazam)
Clobazam is a Schedule IV controlled substance. Tr. 614; Gov't Ex.
10 at 4. OakmontScript received a shipment of clobazam on February 28,
2019, and shipped it on March 5, 2019, to Patient J.L.'s home address
in China. Tr. 613-41, 673-723, 727-33, 907, 912; Gov't Exs. 12 at 21,
26 at 15-16, 27 at 4, 28 at 65.
However, in other documentation provided by OakmontScript, there is
no indication that clobazam was shipped or it is not listed on the
invoice. Gov't Exs. 17 at 2-3, 18 at 3-4. OakmontScript did not have
the authority to export clobazam and DI 3 was unable to confirm that it
was used for a legitimate scientific, research, or medical purpose. Tr.
612-13; Gov't Ex. 11. OakmontScript also did not fill out a DEA Form
236 for this invoice. Tr. 615, 1435-36; Gov't Exs. 26 at 16, 28 at 76,
48 at 1.
At the May 8, 2019 visit, DI 3 asked why there was a discrepancy
and Dr. Shi stated that the request had come to export the clobazam for
direct patient use. Tr. 617-18. During this conversation, Dr. Shi
stated that she had ``begged'' Dr. L.W. for about a week to write a
prescription to legitimize this export of controlled substances and
although he initially said no, he ``eventually relented'' and wrote the
prescription, but asked that Dr. Shi not ask him to write a
prescription like that again. Tr. 619-20, 621, 673, 769, 912, 1456.
It was DI 3's understanding that Patient J.L. was treated at Boston
Children's Hospital, had returned to China, and was now seeking an
export of clobazam to China. Tr. 620. Dr. Shi never provided this
prescription to DI 3. Tr. 621-22.\39\
---------------------------------------------------------------------------
\39\ Other documentation provided by OakmontScript indicates
that the prescription was transferred to a doctor's office in the
United States, which would appear to be a domestic distribution, but
during the May 8, 2019 conversation, Dr. Shi indicated that the
controlled substance was directly exported to Patient J.L. in China,
which she asserted a distributor is able to do. Tr. 624, 633, 641,
726, 915; Gov't Ex. 20 at 11.
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[[Page 21524]]
Administrative Subpoenas
DI 3 and DI 6 met with Dr. L.W. in January or February of 2020. Tr.
674. Upon arriving, both DIs explained the reason for the visit,
identified themselves, and showed their credentials. Tr. 674. Dr. L.W.
indicated he would be fine to answer questions. Tr. 674. During the
interview, Dr. L.W. indicated that he was a consulting physician for
OakmontScript, was paid a monthly stipend, and received extra
compensation each time he wrote a prescription for OakmontScript. Tr.
675. It was unclear what his position was with NEEC. Tr. 675. Dr. L.W.
reviewed the material transfer document that indicated the clobazam,
invoice NEEC-019, was shipped directly to him and he stated that he had
never taken physical possession of the clobazam or any controlled
substances. Tr. 676, 677, 730. See Gov't Ex. 26 at 16. Dr. L.W. told DI
3 that he wrote prescriptions for OakmontScript after OakmontScript
provided him with medical records for foreign patients who were being
treated for illnesses in other counties and he would determine whether
the drug OakmontScript wanted to export was the appropriate drug for
the treatment of those patients. Tr. 677. He further stated that he had
never seen Patient J.L. and did not have any medical records for
Patient J.L. Tr. 678, 682. He stated that he did not have authority to
write prescriptions for patients located outside of the United States,
nor does he have foreign medical licenses or overseas privileges as a
practitioner. Tr. 678.
DI 3 served an administrative subpoena on Dr. L.W. that was dated
January 2, 2020. Tr. 678-79; Gov't Ex. 35. Dr. L.W. later called DI 3
to discuss the subpoena she had served on him. Tr. 681. Dr. L.W. stated
that he did not have a response to the subpoena and he had not written
prescriptions for controlled substances for OakmontScript. Tr. 681-82;
Gov't Ex. 36. DI 3 asked him to email her his official response and he
sent DI 3 an email stating this. Tr. 681-82; Gov't Ex. 36.
On March 6, 2020, DI 3 had an email exchange with Attorney
Schumacher, in response to the administrative subpoenas that were
served on OakmontScript and NEEC. Tr. 690; Gov't Ex. 40. See Gov't Exs.
37, 38. Mr. Shumacher indicated that he had no response to the
subpoenas. Tr. 687-706; Gov't Exs. 39, 40, 41, 42.
Regarding the clobazam prescription,\40\ Mr. Schumacher indicated
that the prescription had been initiated or authorized by Dr. G.T. from
a hospital in China and that this physician did not have a relationship
with OakmontScript or NEEC. Tr. 710-11; Gov't Ex. 44 at 1. DI 3
conducted a search for Dr. G.T. in the DEA registration database known
as RICS or CSA2 to determine whether Dr. G.T. or his hospital ever had
a DEA registration associated with them and the search turned up no
results. Tr. 715-17, 722.
---------------------------------------------------------------------------
\40\ DI 3 obtained a translation of the clobazam prescription.
Tr. 713-16; Gov't Ex. 46.
---------------------------------------------------------------------------
Regarding the clobazam, 019 invoice, DI 3 found that Dr. Shi
demonstrated a lack of candor because she initially provided documents
indicating the clobazam had been exported, but then later provided
information that it was actually transferred domestically to a doctor's
office in Massachusetts and Dr. Shi continued to provide conflicting
information. Tr. 730-31. This lack of candor made it difficult for DI 3
to understand what had actually been exported. Tr. 731, 788-89.
OakmontScript did not provide return information or a DEA Form 236
for the exports discussed at the hearing including, invoice OKS-00243
(Diazepam), invoice OKS-00301 (Briviact), invoice OKS-00315/OKS-00315-1
(Belviq), invoice OKS-00315/OKS-00315-2 (Lyrica), invoice OKS-00108
(Belviq XR), invoice OKS-00715 (Lyrica), invoice OKS-00753 (Briviact),
invoice OKS-00902 (Belviq), and invoice DIW-0019/NEEC-0019 (clobazam).
Tr. 732-35.
Overall, DI 3's investigation of OakmontScript identified record-
keeping issues including, not having an initial inventory,\41\
exporting before receiving its exporter registration,\42\ and
commingling records.\43\ During her investigation in 2019, DI 3
requested that Dr. Shi provide specific dates of export, which is the
actual date the controlled substance left the registrant's registered
location and the date that the controlled substance was released by a
customs official, which must be recorded within thirty days after the
registrant learns of the export or within ten days if the Administrator
asks for it earlier. Tr. 759-60, 807. The manner in which OakmontScript
was conducting business violated the CSA and DEA regulations, which
made it a potential threat to public safety. Tr. 762, 786. Although Dr.
Shi and OakmontScript provided information upon request, the
information was consistently conflicting and not necessarily helpful to
DI 3. Tr. 765. Even if part of the exportation process occurred after
OakmontScript obtained its exporter registration on December 5, 2017,
this would not have legitimized the export because OakmontScript's
intent to export the controlled substances was there once it
transferred them to the common carrier. Tr. 1442-44.
---------------------------------------------------------------------------
\41\ Tr. 735-41; Gov't Exs. 9, 13.
\42\ DI 3 learned that OakmontScript had exported thirteen
controlled substances prior to being granted its export license on
December 5, 2017, which was counted based on each drug and strength.
Tr. 864. DI 3 offered an example for the Briviact shipment, which
was 10 milligrams and 100 milligrams, which would count as two
separate controlled substances. Tr. 864-68.
\43\ There were issues with recordkeeping as OakmontScript had
commingled records. Tr. 739. For instance, OakmontScript was keeping
inventories for both its distributor registration and its exporter
registration on the same document and it was difficult to discern
under which registration each transaction had occurred. Tr. 743-48,
782; Gov't Ex. 12. DEA registrants are also required to take a
physical hand count of all controlled substances that they have on
hand under that DEA registration and document the results, which
OakmontScript failed to do prior to the March 29, 2019 inspection
date. Tr. 749, 778; Gov't Ex. 12.
---------------------------------------------------------------------------
DI 3 effectively explained her interactions with OakmontScript
employees, including Dr. Shi and Dr. L.W. As a public servant, DI 2 has
no personal stake in the outcome of the instant investigation or in the
revocation of the Respondent's registration. There was no indication
during her testimony that she had any animus against OakmontScript or
any of its employees. I therefore find her testimony to be credible and
it will be afforded considerable weight.
The Respondent's Case
The Respondent's case-in-chief consisted of the testimony of four
witnesses: (1) Yujing Liu, (2) DI 3,\44\ (3) Donghui Yu, Ph.D., and (4)
Jufang Shirley Shi. Below is a summary of the testimony of these
witnesses.\45\
---------------------------------------------------------------------------
\44\ The Respondent called DI 3 as a witness for its case-in-
chief. Tr. 862-63. The testimony elicited from DI 3 by the
Respondent is incorporated into the summary of DI 3's testimony
discussed above.
\45\ I do not make any findings of fact in these summaries. Any
facts necessary for a disposition of this case are set forth in the
Analysis section of this Recommended Decision.
---------------------------------------------------------------------------
Yujing Liu
Yujing Liu graduated from Northeastern University in 2015 with a
major in project management. Tr. 814-15. Ms. Liu has been working for
OakmontScript since February 2018 and coordinates logistics for
OakmontScript including monitoring and tracking shipments, and
preparing documents to support the exporting process. Tr. 815-16, 844.
Ms. Liu also maintains OakmontScript's records on exports in a computer
system that she reviews for accuracy, but all OakmontScript employees
have access to these records. Tr. 849-50. A commercial invoice is part
of the documents that are required to show the sale price of the drug.
Tr.
[[Page 21525]]
834. A commercial invoice's ``Bill to Address'' and ``Shipping to
Address'' are not always the same. Tr. 834-35. After creating the
commercial invoice, Ms. Liu will save the document as a PDF because the
Excel formula \46\ of OakmontScript's working documents does not
capture the accurate date. Tr. 854-58. When Ms. Liu provided export
records to DI 3, she provided OakmontScript's internal documents from
the Dropbox, which are the working templates, rather than the PDF
versions. Tr. 831-32.
---------------------------------------------------------------------------
\46\ The Excel formula is a macro that populates the current
date that the document is open. Tr. 857-58.
---------------------------------------------------------------------------
Ms. Liu knows how to fill out a DEA Form 236 and DEA Form 161,
which is not difficult to do if the drug code is available or assigned
to OakmontScript and the national level import permit is available. Tr.
817, 830, 859-61.
The exporting process includes many events, including tracking when
the shipment passes Customs. Tr. 816, 844. It is difficult for Ms. Liu
to track when Customs clears a shipment and she cannot record that
date. Tr. 844-45. Instead of providing that exact date, OakmontScript
records ``every step we did,'' which includes when Customs clears a
controlled substance to leave the United States, but not when the
controlled substance is released by the country it is being shipped to.
Tr. 845-48. OakmontScript uses the date on the customer's import
permit, which is the customer's deadline to receive the export and
finish the customer clearance date. Tr. 848. OakmontScript uses the
common carrier DHL, but can only track DHL shipments for three months
because the DHL system only provides three months of history. Tr. 848-
49. Therefore, if the shipment arrives with the client outside this
three-month window, OakmontScript is not able to track the exact date
the shipment arrives and although a client will tell OakmontScript when
it receives a shipment, OakmontScript does not record this information.
Tr. 849.
On cross-examination, Ms. Liu agreed with Government counsel that
the dates of shipment for invoice OKS-00715, as recorded in the
Respondent's documentation admitted as Government Exhibits 26 (showing
a shipment date of May 8, 2019) and 31 (showing a shipment date of
March 29, 2019) are incorrect, based on the Respondent's documentation
admitted as Government Exhibit 27 (showing a shipment date of November
21, 2018). Tr. 856-58.
Throughout her testimony, Ms. Liu was generally consistent and
credible. As an employee of OakmontScript, she has a personal stake in
the outcome of the instant investigation as well as the revocation of
the Respondent's registrations. Her testimony generally involved her
job duties with OakmontScript. At one point, she also agreed with
Government counsel that the dates of shipment for invoice OKS-00715
were incorrect, based on different documents providing conflicting
dates. Overall, I found Ms. Liu's testimony credible.
Donghui Yu, Ph.D.
Donghui Yu has a Ph.D. in Pharmacology and her post-doctoral
training was at Dana-Farber Cancer Institute and Harvard Medical
School. Tr. 918. Her research focus was in oncology research and cancer
drug development. Tr. 918. She was a teaching assistant at the School
of Medicine in Beijing University, a Research Scientist at the Cubist
Pharmaceutical, and an Investigator at Infectious Diseases at Novartis
in Cambridge, Massachusetts. Tr. 918. During 2011 and 2015, she
volunteered at Boston Children's Hospital by hosting weekly craft
activities and saw children who had diseases that were still not
cured.\47\ Tr. 919. She worked in a health-related facility in Needham,
Massachusetts, helping her husband, from 2012 through 2017. Tr. 1015-
16.
---------------------------------------------------------------------------
\47\ Dr. Yu was connected to Patient J.L.'s parents when he had
surgery at Boston Children's Hospital. Tr. 920.
---------------------------------------------------------------------------
Dr. Yu started working at OakmontScript in June 2017 and she enjoys
working for OakmontScript because it gives her the opportunity to serve
people in need in the medical and science field. Tr. 919, 930, 1015.
She is the Executive Director and helps Dr. Shi train new employees by
using OakmontScript's Standard Operating Procedure (``SOP''), and
ensures that the Drug Supply Chain Security Act is implemented in the
SOP and that OakmontScript is complying with the FDA and following the
rules of other countries.\48\ Tr. 921, 925, 932. She also ensures that
the SOP is timely updated, the employees are trained properly, and all
the procedures are followed in the SOP. Tr. 921, 923, 930. Client
validation is a very important part of compliance and OakmontScript
considers customer verification a top priority as the drug abuse
epidemic was caused by controlled substances being distributed for a
non-legitimate use. Tr. 922. OakmontScript invested in security
including having a security system, a safe box, a door lock, an alarm,
and temperature control in the warehouse where pharmaceutical products
are being stored. Tr. 925-26.
---------------------------------------------------------------------------
\48\ This includes working with a Chinese client and needing to
comply with the Chinese National Medical Product Administration. Tr.
933.
---------------------------------------------------------------------------
In order to export controlled substances legally in the United
States, the person conducting the export of the controlled substance
must have a DEA registration. Tr. 1029-30. Dr. Yu agreed with
Government counsel's statement that applying for a DEA registration is
not the same thing as having a DEA registration. Tr. 1030. Furthermore,
a registrant can only export controlled substances for which it has
authorization to do so. Tr. 1030-34.
OakmontScript obtained its DEA export registration on December 5,
2017. Tr. 1030. Dr. Yu stated that before DI 2 performed her on-site
inspection,\49\ OakmontScript was not aware that to do an export, it
needed to transfer the controlled substances from its distributor
registration to its exporter registration. Tr. 1011. As a result, after
DI 2's inspection, OakmontScript updated its export process SOP to
include the ``license transfer document.'' Tr. 1011. When a new
customer comes to OakmontScript, OakmontScript checks the customer's
business card, makes sure it belongs to the company it claims, ensures
that person is the company's legal representative, obtains the
company's business registration, and checks the company's website. Tr.
923. If there is an export of controlled substances to a Chinese
client, OakmontScript asks the client to provide its business
authorization for controlled substance usage, development, or
manufacture. Tr. 923. OakmontScript also requires clients to fill out a
form that ``covers all the business, and the history, and their
financial situation, so on, so on.'' Tr. 923. In cases where clients
need a clinical trial registration, OakmontScript will ask them to
provide their clinical registration in order to go through its clinical
trial protocol and once OakmontScript makes sure it is for a legitimate
use, OakmontScript enters this information in a specific Dropbox
database. Tr. 924.
---------------------------------------------------------------------------
\49\ DI 2 performed her on-site inspection on July 26, 2018. Tr.
126-27.
---------------------------------------------------------------------------
OakmontScript's company goal is to serve the clients and the public
and to make sure every step of its SOP is executed properly. Tr. 926-
27. Otherwise, it can impact public safety and OakmontScript always
discusses and modifies the SOP when it finds a problem that is not
perfectly described in the SOP. Tr. 927.
Dr. Yu is familiar with the CSA and DEA regulations and it would be
wrong for a DEA registrant to fail to comply with these. Tr. 1023-25.
However, what
[[Page 21526]]
is wrong or correct is defined by the DEA and not everything can be
defined as black and white. Tr. 1024. For instance, some substances
that are controlled substances in the United States are not controlled
substances in China including Lyrica, Belviq, Briviact, and clobazam,
while substances like caffeine, are not controlled in the United
States, but are considered controlled substances in China. Tr. 936.
It is difficult for OakmontScript to obtain the LONO *\E\ from
other countries, particularly China, and instead the clients present
the permits from the local province. Tr. 937. Dr. Yu noted that one
example occurred with Belviq, OKS Invoice 00902. Tr. 1048-49. Because
Belviq was not a controlled substance in China, OakmontScript was
unable to obtain a LONO letter for the Belviq. Tr. 1049. In addition,
OakmontScript did not complete a DEA Form 236 for this shipment of
Belviq. Tr. 1049. Further, on the date that OakmontScript shipped
clobazam, invoice number NEEC-019, it did not have a drug code for
clobazam and did not submit a DEA-236. Tr. 1049-51. Finally, on the
date that OakmontScript shipped Briviact, invoice number 753, it did
not have a drug code for Briviact and did not file a DEA-236. Tr. 1051-
53.
---------------------------------------------------------------------------
*\E\ Although LONO was not defined in the RD, it is believed to
reference a Letter of No Objection.
---------------------------------------------------------------------------
Dr. Yu's understanding of a drug code is that it is used for a
controlled substance export only and is for controlled substance
identification purposes as different dosage forms or formulations of
drug substances could be assigned different drug codes. Tr. 970-71.
This does not apply to Schedule V controlled substances, where only one
drug code is assigned for different doses and populations. Tr. 971. The
DEA field agents told OakmontScript that there were several ways to
obtain new drug codes, including filling out an online application,
emailing the local DI agent, and adding new drug codes when it renews
its license. Tr. 972. OakmontScript is not a manufacturer and does not
deal with controlled substance manufacturers in the United States. Tr.
982.
Dr. Yu discussed the macro issue that Ms. Liu had previously
mentioned in her testimony, and noted that once OakmontScript realized
this caused a potential problem, Dr. Yu corrected the template. Tr.
984, 1053-60. Dr. Yu would also create separate PDFs that list the
correct date, and save them to the same folder. Tr. 1055-57.
OakmontScript's SOP does not contain the ``concept of date of export''
as OakmontScript feels it ``is unable to define'' it. Tr. 986. Instead,
OakmontScript ``just document[s] every step we handled'' because an
``export is really a process.'' Tr. 986. Therefore OakmontScript ``had
nothing to present'' when DI 3 asked about a ``specific export time.''
Tr. 987. Although DI 3 used the shipping labels, OakmontScript did not
believe the shipping label was proper to use as the export date. Tr.
987. Dr. Yu was ``frightened'' when DI 3 asked about the date of export
at the February 19, 2019, inspection because she did not know the exact
document to show her. Tr. 991-92. However, Dr. Yu later went on to
confirm that the date of shipment is the date the controlled substance
departed from the registered location. Tr. 1046.
There is a date of EEI \50\ and all shipments need to claim EEI for
the customs declaration for export. Tr. 988. The shipping label is
created and OakmontScript prints out the label, but the package is not
necessarily ready to be shipped. Tr. 988. OakmontScript then needs to
send the shipping label to its clients to let them start the import
process. Tr. 988. The most important part is ``custom clearance ticket
obtaining'' and that process depends on how the country handles that
and different city customs handle the speed differently, which could be
a couple weeks to several months. Tr. 988-89, 990.
---------------------------------------------------------------------------
\50\ Dr. Yu did not provide the full term for this acronym,
however, DI 3 defined this during her testimony as ``Electronic
Export Information.'' Tr. 480.
---------------------------------------------------------------------------
There is a date of custom clearance, which is a cutoff date in
which OakmontScript has an obligation to help the customer finish
before the due date, or the whole purchase becomes invalid. Tr. 989. If
the DEA Form 236 is available, OakmontScript records that transaction
date. Tr. 989, 1039-41. At the end of the transaction, OakmontScript
receives verbal confirmation from the client that it received the
product. Tr. 989. Ms. Liu generates the shipping labels and takes care
of the customs clearance and EEI. Tr. 989-90.
It would be ideal to use the DHL database to record the export
date, but this was not part of OakmontScript's SOP. Tr. 990. Doing this
is not always practical because the DHL online system only displays the
last ninety days and if the package is dropped off several weeks after
the shipping label was created, then it may fall out of this ninety-day
window and OakmontScript cannot track this package. Tr. 991. Other
issues occur when a client picks its own private carrier to pick up the
package and OakmontScript can only get verbal confirmation from the
client that it received the package. Tr. 991. OakmontScript records the
date the client verbally tells it the package was received. Tr. 989,
991.
Physicians can order medications from distributors without a
prescription, which includes foreign physicians who, in the name of the
patient, order medication from an exporter or distributor. Tr. 993.
Distributors or exporters need to verify the doctor's medical license.
Tr. 993. As a DEA-registered distributor and exporter, OakmontScript is
able to fill medical orders to serve hospitals, physicians, and other
entities domestically and foreign research organizations. Tr. 993-94.
Specifically, as it relates to the clobazam prescription,
OakmontScript's client included the Chinese medical doctor, the
hospital, and also pharmacists who ``have the medical history based on
Boston Children's Hospital.'' Tr. 994. Without a legal prescription
from a local hospital or physician, the controlled substance would not
be permitted to enter the receiving country. Tr. 994. The foreign
prescription has two functions: (1) Showing the medical necessity of
the patient and (2) providing evidence to show when the controlled
substance is imported at the Chinese border, acting as an import
permit. Tr. 994-95.
For Patient J.L., the doctor's instruction is required to show that
the patient was not hospitalized and instead had a chronic condition.
Tr. 995. Per the doctor's instruction, OakmontScript contacted the
patient and learned from his family that he was no longer in the
hospital. Tr. 995-96, 1071. It is OakmontScript's practice to send
controlled substances directly to patients if it receives a doctor's
order to do so. Tr. 1066-67, 1070.
During the February 19, 2019, inspection, DI 3 told OakmontScript
that it needed to fill out a DEA Form 236 for controlled substances
Schedules III, IV, and V prior to shipping, and after receiving the
approved DEA Form 236, it needed to wait for fourteen days to start
shipping, which was new information to Dr. Yu. Tr. 996, 1025-26, 1028.
Dr. Yu was not sure if this is what the regulation stated and was
unable to confirm this is what the regulation actually required. Tr.
996-97, 1025-28. See 21 CFR 1312.27(a).\51\
---------------------------------------------------------------------------
\51\ The regulation states that DEA Form 236 must be filed with
DEA ``not less than 15 calendar days prior to the anticipated date
of release by a customs officer at the port of export.'' 21 CFR
1312.27(a).
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[[Page 21527]]
As a scientist, Dr. Yu believes it is important to keep complete
and accurate records, and even though mistakes are possible, failing to
keep accurate records can lead to further mistakes. Tr. 1017-18. Dr. Yu
feels lucky to work at OakmontScript and finds it to be a good
opportunity and the work OakmontScript does is meaningful to the whole
pharmaceutical industry. Tr. 997-98. She and her colleagues work
together every day to learn and grow, but sometimes they make mistakes
and Dr. Shi takes full responsibility and never blames them. Tr. 998.
Overall, Dr. Yu provided consistent testimony. She testified
regarding her employment and noted that client verification is a top
priority for OakmontScript. As the Executive Director of OakmontScript,
she has a direct stake in the outcome of this case and whether
OakmontScript loses either of its registrations. It was evident
throughout her testimony that Dr. Yu had a strong allegiance to Dr. Shi
and that she had been thoroughly coached on her direct examination. Dr.
Yu had nothing but positive things to say about Dr. Shi and even
refused to provide a specific answer to a question because the answer
was not ``black and white.'' Tr. 1024. At one point Dr. Yu testified
that she was ``frightened'' when DI 3 asked about the date of export at
the February 19, 2019, inspection because she did not know the exact
document to show her. Tr. 991-92. However, Dr. Yu later went on to
confirm on cross examination that the date of shipment is the date the
controlled substance departed from the registered location. Tr. 1046.
Such inconsistencies in her testimony, coupled with Dr. Yu's evident
allegiance to Dr. Shi, does not allow me to fully credit Dr. Yu's
testimony.
Jufang ``Shirley'' Shi
Background
Dr. Shi came to the United States to study as a graduate student in
1988. Tr. 1075. She received her Ph.D. in Pharmaceutical Sciences from
Duquesne University in Pittsburgh, Pennsylvania, and a Pharm.D., and
then worked in various industries as a scientist. Tr. 1076, 1280. She
also taught pharmacodynamics and pharmacokinetics to pharmacy students
at Northeastern University during 2005 and 2007. Tr. 1277-78. After
fifteen years, she dedicated herself to becoming a clinical pharmacist
and has been registered as a pharmacist in Massachusetts since 2008.
Tr. 1076, 1276-77. She has contributed to technology that led to eight
patents. Tr. 1076-77. She became a fellow in the American Society of
Consultant Pharmacists (``FASCP'') after passing a pharmacist exam and
the Certificate of Geriatric Pharmacotherapy (``CGP'') for which she
needed to know how to apply a safe protocol to her client. Tr. 1278-79.
She also worked in retail pharmacies and an institutional pharmacy, as
well as hospitals. Tr. 1077-78. This included working for PharmMerica
and Lahey Hospital. Tr. 1280-81. Based on these experiences, she
``decided to take some risk and to start a company'' to aid in the
support of the ``global research need.'' Tr. 1078.
Dr. Shi started OakmontScript in May 2016 as the owner, chief
pharmacist, and president. Tr. 1078-79, 1283-85. She is familiar with
the CSA and DEA regulations including 21 CFR 1306.04, 1306.05(a). Tr.
1079, 1280-82. Dr. Shi needed to obtain a license from the state prior
to receiving OakmontScript's ``federal license.'' Tr. 1080-81; Resp't
Ex. 4. After receiving OakmontScript's DEA registration for Schedule
III, IV, and V controlled substances, Dr. Shi requested to add Schedule
II controlled substances and had updated its security system by adding
a monitor and camera, updated the safe, and worked on updating the
alarm system. Tr. 1082-84. Dr. Shi's thought process was to first
obtain access to Schedule III, IV, and V controlled substances and
later request the Schedule II drugs. Tr. 1084-91; Resp't Ex. 5, 6, 7.
Dr. Shi received the first state license as a distributor for
Schedules III, IV, and V within a couple of months. Tr. 1086. After
receiving the state license, it took less than a month for Dr. Shi to
obtain the Federal distributor COR, on October 7, 2016. Tr. 1086-87.
Dr. Shi then applied for the Schedule II DEA registration, for which
the approval process took about eight months. Tr. 1088-89. During this
time, Dr. Shi made sure OakmontScript was in compliance and she spent
more time training her employees. Tr. 1088-89.
Exporter Registration
OakmontScript applied for its first exporter COR on April 26, 2017
and applied for its second exporter COR on May 10, 2017. Tr. 1091,
1286, 1289-91, 1308; Gov't Ex. 4 at 6-8. At the time OakmontScript
submitted the second exporter application on May 2017, the first
application filed in April 2017 was still pending. Tr. 1291. At some
point in May 2017, DI 1 informed Dr. Shi that the applications were
duplicates and Mr. L.U. and DI 1 discussed OakmontScript getting an
importer COR. Tr. 1291-92. Dr. Shi recalls discussions regarding
converting an exporter application to an importer application, but did
not recall if it was ever done. Tr. 1293-95.\52\ Regardless, Dr. Shi
recalled withdrawing the May 2017 application in October 2017 and
OakmontScript never obtained an importer registration. Tr. 1295-97. Dr.
Shi felt that the April application was ``neglected'' by the DEA and
the May 10 application was ``mistreated.'' Tr. 1093, 1493.\53\ Although
Dr. Shi has a ``great appreciation for'' DI 1, she ``feel very bad''
because her application had ``been mistreated.'' Tr. 1094. In an email
to DI 1 dated April 28, 2017, Dr. Shi indicated that OakmontScript had
not exported any controlled substances as of that date. Tr. 1287-88;
Gov't Ex. 4 at 1.
---------------------------------------------------------------------------
\52\ After several unsuccessful attempts by Government counsel
to elicit a response regarding whether Dr. Shi was aware whether
OakmontScript had converted one of its exporter applications to an
importer application, the tribunal intervened and asked Dr. Shi to
directly answer the Government's question and--even then--the
tribunal needed to ask the question four times. Tr. 1294-95.
\53\ This is not the first or only time Dr. Shi blamed the DEA
or made disparaging comments about the DEA. Most notably, Dr. Shi
made the following comments about the DEA in her closing statement:
``Despite all evidence showed to their face, I'm very concerned
about DEA's manner of how to treat the public, how to treat a small
business, and how to treat the people who have a bundle of knowledge
while they obviously lack it.'' Tr. at 1497.
---------------------------------------------------------------------------
An inspection took place on June 22, 2017, with DI 1 and a Senior
Investigator from the Massachusetts Department of Health. Tr. 1297-
98.\54\ At that time, Dr. Shi stated that she had not distributed or
exported controlled substances as of that date. Tr. 1298. DI 1 also
told Dr. Shi ``everything that's required'' including the requirement
to maintain initial and biennial inventories, DEA Form 161s, DEA Form
236s, and foreign documents or invoices. Tr. 1298-99. DI 1 also
explained that records must be maintained for at least two years,
records for the DEA registrations must be maintained separately
according to business activity, and theft or loss of controlled
substances must be reported immediately. Tr. 1299. Overall, DI 1 was
able to help OakmontScript address issues and problems. Tr. 1353-54.
---------------------------------------------------------------------------
\54\ Based on Dr. Shi's testimony on cross-examination, it
appears that Dr. Shi was under the impression that DI 1's June 22,
2017, inspection was based on OakmontScript's request to add
Schedule II drugs to its exporter application. Tr. 1308-10. However,
Mr. L.U. had not yet made a request to add Schedule II to
OakmontScript's exporter application when DI 1 scheduled the
inspection. Tr. 1309-10.
---------------------------------------------------------------------------
As of July 26, 2017, Dr. Shi was aware that OakmontScript's
exporter application was still being reviewed by the DEA, but that it
was ``coming any
[[Page 21528]]
time.'' Tr. 1300-01.\55\ As of July 26, 2017, Dr. Shi did not recall
receiving a DEA communication about OakmontScript's April 2017 exporter
application being approved. Tr. 1305. While waiting for OakmontScript's
exporter registration, Dr. Shi assured her staff the exporter
registration ``should be coming any time, should be coming any minute.
But it didn't come. And I thought it's coming any minute,'' because it
was her experience with the DEA that it only took about a month for the
DEA to process an application for registration. Tr. 1095. She continued
to tell her staff that the registration ``should be coming any time''
and that they should ``start preparing'' because ``[i]t should come in
any minute.'' Tr. 1096.
---------------------------------------------------------------------------
\55\ Again, Government counsel made several attempts to get Dr.
Shi to answer a specific question, in this case whether as of June
26, 2017, Dr. Shi was aware that OakmontScript's exporter
application was still being reviewed. Tr. 1300-05. And again, the
tribunal needed to interject and direct Dr. Shi to ``listen to this
question very carefully and give a direct response.'' Tr. 1304.
---------------------------------------------------------------------------
Dr. Shi put too much trust in Mr. L.U., her chief pharmacist, who
was her previous boss, but she also shares in the responsibility for
not following up regarding the exporter application and leading her
``people to believe the license coming any day.'' Tr. 1096-97, 1305.
Dr. Shi ``made [the] assumption it should come in any minute'' and
``misled [her] people'' by saying the exporter registration was on the
way and thus OakmontScript started taking orders for Schedules III, IV,
and V controlled substances. Tr. 1097-98. Dr. Shi began instructing her
employees in June 2017 to start working on preparing controlled
substances to be exported. Tr. 1311. OakmontScript ultimately received
its exporter registration on December 5, 2017, in the mail.\56\ Tr.
1099; Gov't Ex. 4 at 6-8.
---------------------------------------------------------------------------
\56\ According to the Government's Certification of Registration
History, the Respondent was assigned an exporter Certificate of
Registration number on December 5, 2017. Gov't Ex. 1B.
---------------------------------------------------------------------------
OakmontScript's Export Process
Based on DI 3's request for an exact export date, Dr. Shi created a
document to track various parts of the export process. Tr. 1126-27.
First, OakmontScript verifies the clients and records their import
permit and sometimes their research proposal. Tr. 1126. The next step
is to go through the contract to make sure everybody agrees on fees and
that all parties are satisfied with the arrangement. Tr. 1127. The
third step is to go through the ``contract process'' which is needed to
finish the exporting process so the customer does not have to go back
and reapply. Tr. 1127. OakmontScript also checks with Customs and
Border Protection to see what type of license it needs to file. Tr.
1127-28. The U.S. Custom and Border Protection (``CBP'') also has
updates that OakmontScript cannot ``log into the process'' if the value
of the reported drugs are less than $2500, and this number is currently
even lower. Tr. 1128. Dr. Shi updates the SOP based on the rules and
regulations from the CBP, FDA, and the local government regarding the
exporting process. Tr. 1128-29.
OakmontScript then prepares the shipping label and the customer
ticket, which usually takes about two to four weeks. Tr. 1129-30. Dr.
Shi instructs her staff to record what things happen, as opposed to
providing the ``right date'' and she does not ``want her people to have
any concept about what is the right date'' as this is not how this
industry operates. Tr. 1130, 1366-67, 1495, 1498-99. Dr. Shi noted that
``because we lack of the drug code . . . our export process foundation
didn't lay out perfectly for my people'' as it relates to the DEA Form
236. Tr. 1130-31. Dr. Shi does not ``want to blame the government[ ]
who didn't give'' her a drug code. Tr. 1132. OakmontScript was not able
to fill out DEA Form 236s for the diazepam 243 invoice, the Briviact
301 invoice, the Belviq 315 or 315-1 invoice, the Lyrica 315 or 315-2
invoice, or the Belviq 108 invoice. Tr. 1355.
OakmontScript did not export controlled substances prior to
receiving its exporter registration on December 5, 2017, because the
exporting process is not based around a specific date, but rather a
customer's need. Tr. 1133. Dr. Shi started telling her employees that
by May 2017, they ``could start the business'' because ``the license
[was] on the way.'' Tr. 1134. The ``right'' date does not apply to
OakmontScript because sometimes projects get cancelled and then
reinstated. Tr. 1135. It takes about six to twelve months for
OakmontScript to ``work[ ] out each detail'' to complete an export. Tr.
1136. The customer gives OakmontScript a due date and states when it
wants OakmontScript to finish it. Tr. 1136-37. The exact date of export
is not when the shipping label is created and the export is not defined
by the exact date of export. Tr. 1138, 1495.
Dr. Shi discussed using a ``buy and bill'' model and how
OakmontScript has collaborated with other companies including
Biologics, Accredo, McKesson, and Specialty Biologics. Tr. 1209. If the
buy and bill model has problems, then OakmontScript will establish
another channel by using its ``doctors to provide another channel to
support'' patients. Tr. 1209-10.
OakmontScript must submit the DEA Form 236 about two weeks before
the planned export, so OakmontScript needs to have the anticipated date
of departure from the port of export. Tr. 1371-72. For its exports,
OakmontScript has the information required by section 3b of the DEA
Form 236, but the information is ``recorded differently.'' Tr. 1375;
See Gov't Ex. 47. The foreign client provides a custom clearance ticket
that is issued by the country, which provides a window of time in which
the export must occur and can be as far as a year into the future. Tr.
1376-77. OakmontScript records the required DEA Form 236 section 3a
information in the app because if OakmontScript does not record, then
things ``cannot move forward'' and the logistical team uses ``that app
to record everything.'' Tr. 1379. After ``things done,'' OakmontScript
then downloads the information to the Dropbox. Tr. 1379-80. If the
foreign clients do not call OakmontScript or report any problems,
OakmontScript reports the due date for section 3b. Tr. 1380. Otherwise,
OakmontScript's record will show any issues. Tr. 1380. OakmontScript
records the anticipated arrival date in the app and will save a copy to
the Dropbox ``once things finish.'' Tr. 1381. OakmontScript only
provided ``a portion'' of the information to DI 3 based on her subpoena
because ``it's Chinese so she cannot read anyway, then. And so I
stopped our oversharing with her, right.'' Tr. 1381. DI 3, from the
app, ``should see that . . . all [OakmontScript's] process is being
recorded in the app.'' Tr. 1381. Dr. Shi did not tell DI 3 that
OakmontScript was using the app, but ``screenshotted a portion of the .
. . app.'' Tr. 1381-82.
Dr. Shi reviewed DEA regulations and conducted her own research to
learn about drug codes because OakmontScript had ``no guidelines . . .
no laws, no rules'' and was ``left without being able to support our
community of the research.'' Tr. 1149-50. She reviewed the DEA's
website and 21 CFR 1308.03. Tr. 1156-61. The DEA has a lot of resources
and Dr. Shi wishes she was ``led to a better source'' regarding drug
codes. Tr. 1161. Dr. Shi continues to study the law, rules, and
regulations in order to understand and ``better to learn how to help
the people in this situation.'' Tr. 1194.
OakmontScript's Interactions With DI 3
DI 3 initially told Dr. Shi that she wanted to help OakmontScript,
but through this hearing, Dr. Shi learned that DI 3's duty was not to
help her. Tr.
[[Page 21529]]
1147. Dr. Shi disagrees with the Government's accusation that she
lacked candor. Tr. 1167-71. During the inspection in ``the beginning,''
OakmontScript showed DI 3 two lists and when DI 3 asked if
OakmontScript was handling any other drugs, Dr. Shi said ``thank you
for asking,'' ``praised'' DI 3 for asking this question, and stated
that she was having trouble with another list of drugs for which
OakmontScript did not have drug codes. Tr. 1172.
Dr. Shi provided two lists to DI 3 for clobazam with one list
listing the clobazam and the other not listing the clobazam because DI
3 had repeatedly told her ``I come in to help your business'' and Dr.
Shi did not know what DI 3's ``true agenda'' was. Tr. 1172-73. Dr. Shi
did not ``keep complete and accurate records'' based on DI 3's
standards, ``so that should not be basis for lack of candor.'' Tr.
1173. Dr. Shi ``shared more than'' she should have and believed that DI
3 would take all of the information they had discussed and ``dialogue
with'' her. Tr. 1174-76, 1351. Dr. Shi never provided updated records
to DI 3 after Dr. Shi found errors in the spreadsheets Dr. Shi had
previously provided. Tr. 1321-23.\57\
---------------------------------------------------------------------------
\57\ Again, Government counsel made several attempts to get Dr.
Shi to answer a specific question, in this instance, whether Dr. Shi
provided updated spreadsheets to DI 3. Tr. 1321-22. And again, the
tribunal interjected and instructed that Dr. Shi answer the question
posed by Government counsel, noting that the Government ``is asking
you very direct questions and we need direct answers for clarity of
the record on this. Please answer . . . and please respond directly
to the question that's asked.'' Tr. 1322.
---------------------------------------------------------------------------
OakmontScript's Use of the WeChat App
OakmontScript uses an app \58\ to communicate with foreign
customers and uses this app to explain what is needed for an export.
Tr. 1196-98. OakmontScript is not able to export to a hospital in bulk,
such as tens of thousands of bottles. Tr. 1197. OakmontScript can only
export if it has the name of a patient. Tr. 1197.
---------------------------------------------------------------------------
\58\ This app is called ``WeChat.'' Tr. 1382.
---------------------------------------------------------------------------
Dr. L.W. is part of the app and does not write prescriptions, but
is there as a physician consultant and ``check'' for Dr. Shi as he
``know[s] the medical record,'' that a medication is being used for a
legitimate purpose, and ensures that OakmontScript is delivering the
treatment to the right patient. Tr. 1197-99.
OakmontScript will exchange documents with foreign clients through
this app and will respond to clients with urgent issues. Tr. 1382-
83.\59\
---------------------------------------------------------------------------
\59\ Dr. Shi reviewed an example of her use of the WeChat app.
Tr. 1383-90; Gov't Ex. 26 at 23. Dr. Shi translated this
conversation, which was predominantly in Chinese. Tr. 1384-85. Part
of this included a woman explaining that there was a child in her
family that had seizures and she wanted to help that child. Tr.
1384. Dr. Shi explained that this person needed to send her the
patient record, doctor's information, doctor's prescription, and the
doctor's and hospital's registration so Dr. Shi could establish an
account with her. Tr. 1385. Dr. Shi then obtained more information
from a doctor in China. Tr. 1386. This document was then ``dumped''
to the Dropbox once this Order was done. Tr. 1385-86.
---------------------------------------------------------------------------
OakmontScript's Record-Keeping System <SUP>60</SUP>
---------------------------------------------------------------------------
\60\ Dr. Shi noted that Government Exhibit 28, page 54, was
misplaced and should actually be page 51 and with the other
documents for invoice OKS-00715. Tr. 1391-92.
---------------------------------------------------------------------------
OakmontScript keeps accurate and complete records for controlled
substances in a database system so all records are readily retrievable
as required by the DEA based on OakmontScript's SOP. Tr. 1248-49, 1250.
These folders contain subfolders and capture any changes that are made
to an order. Tr. 1249-50. Each file has a name with a label and a
number and these numbers are then assigned to a specific team to
complete that order. Tr. 1250-52. Dr. Shi also created a link that a
party can access if she gives that person authority to open a file. Tr.
1260. On the date of DI 3's March 29, 2019, inspection, Dr. Shi's
printer had ink problems, so she wanted to be able to electronically
download files and give access to DI 3, but DI 3 stated that she would
only accept paper copies. Tr. 1260-61.
OakmontScript maintains separate inventory records for Schedule II,
III, IV, and V controlled substances. Tr. 1268. There are separate
folders for Schedule II and then Schedules III through V, for the
initial inventory, for the biennial inventory, for exports, and for the
distributions. Tr. 1268-69.
Corrective Measures
At the June 22, 2017 meeting, DI 1 told Dr. Shi there was an issue
with OakmontScript's alarm system and OakmontScript then took steps to
fix the alarm issue. Tr. 1313-14. DI 1 came back at some point to check
the alarm. Tr. 1315-16. During DI 1's return visit to check the alarm,
she also informed Dr. Shi that OakmontScript would need to get a
different safe. Tr. 1316. In mid-September 2017, OakmontScript notified
DI 1 that it was going to install a new safe. Tr. 1316-17. The new safe
was installed in late September or early October 2017. Tr. 1317. At
some point, DI 1 came back to OakmontScript to check the new safe and
DI 1 stated that it ``was okay.'' Tr. 1317-18.
In approximately November 2017, Dr. Shi recalls having a
conversation with DI 1 regarding requesting excessive drug codes. Tr.
1324-25. DI 1 walked Dr. Shi through how to delete the excess codes,
and Dr. Shi deleted the codes. Tr. 1324-28.
Dr. Shi did not review 21 CFR 1301.26 when shipping the diazepam
invoice number 243 and clobazam invoice number 0019 overseas because it
is ``a U.S. law'' and ``of course, I cannot base[ ] on that'' and if
the DEA is able to provide ``such a law'' that shows this regulation is
applied globally, she ``will be happy.'' Tr. 1365. Before a controlled
substance leaves the United States, OakmontScript complies with United
States law and then ``after border, [OakmontScript] comply[ ] whatever
the law required upon'' OakmontScript by the recipient country. Tr.
1366.
Alteration of Distributor Certificate of Registration
Dr. Shi met the intern through the intern's grandmother who was
also Dr. Shi's teacher. Tr. 1395. Around Christmastime of 2016, the
intern started working for OakmontScript as Dr. Shi's intern. Tr. 1395.
The intern altered OakmontScript's distributor Certificate of
Registration by using Adobe Shop on her personal laptop. Tr. 1405-06.
Once Dr. Shi learned that the intern had changed OakmontScript's
registration to state it was a pharmacy, Dr. Shi immediately analyzed
the situation, realized the intern made a mistake and was still only
learning so it was ``not all her fault.'' Tr. 1397. See Gov't Ex. 14.
Therefore, Dr. Shi did not fire the intern and instead moved her to a
different position with OakmontScript making shipping labels, which is
a ``more straightforward job.'' Tr. 1397.
When Dr. Shi did business with other partners, including PBA and
its staff, they would say they wanted OakmontScript to submit a
pharmacy license. Tr. 1409. Dr. Shi believed that the intern made a
change to the registration based on lack of experience. Tr. 1410-
11.\61\ Dr. Shi hoped to create an account with PBA so OakmontScript
could purchase drugs from PBA. Tr. 1411-12. Dr. Shi believes that PBA
[[Page 21530]]
distributes to other distributors. Tr. 1412-13. Essentially, PBA told
the intern that it needed some information about a pharmacy license
associated with OakmontScript and the intern then used her laptop to
edit the distributor registration to indicate it was a pharmacy
registration, without specific instruction from an OakmontScript
employee to do so. Tr. 1414-15.
---------------------------------------------------------------------------
\61\ Dr. Shi mentioned that OakmontScript has an ``all-in-one
license'' from the state. Tr. 1396-97; 1409; ALJ Ex. 26 at 3-4. It
is unclear what Dr. Shi believes the effect of this ``all-in-one-
license'' is on its DEA registration. Regardless, it is clear that
the intern altered OakmontScript's DEA distributor registration to
state ``Pharmacy'' after B.W. indicated that PBA would only conduct
business with pharmacies. Gov't Exs. 14, 55.
---------------------------------------------------------------------------
The intern left OakmontScript in February 2018 for multiple
reasons, including that her visa expired. Tr. 1398. Dr. Shi explained
to DI 3 that she ``could have fired'' the intern, but thought this
would be ``a little too much'' because it was only the intern's ``first
week she ever entered the job.'' Tr. 1399-1400.
Dr. Shi testified that it is a serious issue to falsify a DEA
registration based on the consequences, but this issue did not get
``somebody killed'' or cause ``some pandemic'' and the intern was
allowed to bring her laptop and continue to access OakmontScript files
after this issue, but was limited to the ``non-vendor'' part. Tr. 1417-
18. Furthermore, in her closing statement, Dr. Shi stated ``this is not
a controlled-substance-related issue,'' yet the DEA ``continued to
maintain their limited understanding about controlled substances.'' Tr.
1496. Dr. Shi went on in her closing to state that OakmontScript ``did
more than the minimum, we did 500 times more than what's required to
address this incident.'' Tr. 1496.
Invoice OKS-00243 (Diazepam) <SUP>62</SUP>
---------------------------------------------------------------------------
\62\ This invoice indicates that OakmontScript's address is 15
New England Executive Park, which is the same as the 1500 District
Avenue address, because after 2017, the District of Burlington was
acquired and updated by a development company, National Development
Corporation. Tr. 1393-94; Gov't Ex. 26 at 20.
---------------------------------------------------------------------------
Two of the documents provided by OakmontScript indicate that
diazepam was shipped on May 18, 2017. Tr. 1311-12; Gov't Exs. 17 at 3,
18 at 3. Another document indicates that the diazepam was shipped on
June 10, 2017. Tr. 1313; \63\ Gov't Ex. 12 at 14. Dr. Shi had indicated
that OakmontScript had not exported controlled substances at the June
22, 2017, meeting with DI 1, but both of these dates are prior to the
meeting date with DI 1. Tr. 1313. Dr. Shi was not able to provide the
date the diazepam was shipped because the USPS updated its online
system sometime in 2017 and ``erased all the information'' during the
upgrade. Tr. 1368-69.
---------------------------------------------------------------------------
\63\ During Dr. Shi's response on cross-examination regarding
the shipping date of this diazepam, the tribunal needed to interject
and instruct Dr. Shi to ``[j]ust respond to the question please.''
Tr. 1312.
---------------------------------------------------------------------------
Invoice OKS-00650 (Lunesta)
As it pertained to the Lunesta invoice, Dr. Shi testified that this
transaction was an export and not a domestic distribution as claimed by
the Government, because the address was the contact address for a
company representative, Z.Y., who was taking this prescription to China
and the company in China was the end-user. Tr. 1180-82, 1359. Dr. Shi
had used ``common sense'' when sending this prescription because the
representative of the company signed a contract with OakmontScript, the
address was named on the PO contact,\64\ it gave OakmontScript its
import permit, and it signed the end-user certification. Tr. 1182. An
``end-user is the person who signed the end-user statement to give
[OakmontScript] a certificate.'' Tr. 1183.
---------------------------------------------------------------------------
\64\ It is unclear what Dr. Shi meant by ``PO contact.''
---------------------------------------------------------------------------
Dr. Shi noted this was an ``informal channel'' and ``since this
incident and since DI 3 have point this out, [OakmontScript] no longer
accept[s] informal channel of delivery for any order.'' Tr. 1182, 1183.
Subpoena Served on May 8, 2019 <SUP>65</SUP>
---------------------------------------------------------------------------
\65\ The subpoena was admitted as Government Exhibit 24.
---------------------------------------------------------------------------
Dr. Shi acknowledged that dates entered on OakmontScript's shipping
labels are not actual shipping dates. Tr. 1342-43. Dr. Shi noted that
``[w]e have, we have of course, we have the date, we have all the
records.'' Tr. 1344. After receiving the May 8, 2019 subpoena, Dr. Shi
did not provide the specific information of the shipping date because
it was ``not required. [DI 3] didn't, she didn't ask for it'' and DI 3
was ``so confused about what is the shipping date, she don't know what
to ask.'' Tr. 1343-46. Furthermore, there is ``no such things as the
export date . . . [the regulations] do not require the export date to
be recorded. That's, that's actually pity . . . wrong information to
ask.'' Tr. 1347. However, Dr. Shi provided export dates when DI 3 asked
for them. Tr. 1347-48; Gov't Ex. 20 at 9.
Invoice OKS-00301 (Briviact)
Briviact was shipped on August 2, 2017. Tr. 1314; Gov't Exs. 12 at
7, 27 at 2.
Invoice OKS-00315-1 (Belviq)
OakmontScript shipped Belviq on November 1, 2017, based on the
shipping label. Tr. 1318-19; Gov't Exs. 12 at 3, 27 at 2. However, the
shipping label is an estimated time. Tr. 1319.
Invoice OKS-00315-2 (Lyrica)
Documentation provided by OakmontScript indicates that Lyrica was
shipped on November 20, 2017. Tr. 1328-35; \66\ Gov't Ex. 12 at 9-
10.\67\ However, other documentation provided by OakmontScript
indicated that the Lyrica was shipped a day later, on November 21,
2017. Tr. 1339; Gov't Ex. 27 at 2. Dr. Shi does not know which document
is incorrect and claims that regardless, it is ``one days apart. This
is not like somebody get killed or something.'' Tr. 1340. Dr. Shi went
on to say ``I know it's mistake. It's 20 or 21st.'' Tr. 1340. Moments
later, Dr. Shi stated ``I can say both [dates] are correct, or I mean,
both are incorrect . . . I also can say both are right. Because that's
just the date.'' Tr. 1341. Dr. Shi stated OakmontScript did the best it
could when entering these dates into the spreadsheets. Tr. 1341.
OakmontScript has the exact date because in ``the record, we have every
app, the people coming to pick up. And then, all those too.'' Tr. 1342.
Regarding dates that OakmontScript's products were provided to the
common carrier, Dr. Shi stated ``[w]e have the record. But I didn't
give it to DI 3'' and ``whatever cannot be exact, I cannot provide to
her because that complicated her understanding.'' Tr. 1349-50.
---------------------------------------------------------------------------
\66\ Again, Government counsel made several attempts to get Dr.
Shi to answer a specific question, in this instance, how Dr. Shi's
employees would have filled out documents. Tr. 1331. And again, the
tribunal interjected and instructed Dr. Shi to answer the
``straightforward question'' posed by Government counsel. Tr. 1331.
The tribunal needed to interject again during this cross-examination
regarding the Lyrica and instructed Dr. Shi that she needed ``to
answer the question'' and to ``[l]isten carefully to the question.''
Tr. 1334.
\67\ Dr. Shi was evasive in testifying that the ``ship to date''
was indeed the date the Lyrica was shipped. Dr. Shi continued to
claim that there were several steps in the export process and this
was likely the date the shipping label was created and this Lyrica
would have been shipped ``approximately around'' November 20, 2017.
Tr. 1338-39.
---------------------------------------------------------------------------
Invoice OKS-00108 (Belviq)
Some documentation indicates that the Belviq was shipped on
December 1, 2017. Tr. 1351; Gov't Exs. 12 at 3, 27 at 2.
Invoices DIW-0019 and NEEC-0019 (Clobazam)
Patient J.L.'s family came into contact with Dr. Yu, who learned
about Patient J.L.'s situation while doing community service at Boston
Children's Hospital. Tr. 1195. When the family returned to China, they
wanted to continue the therapy and they supplied
[[Page 21531]]
OakmontScript with the hospital discharge paper, the prescription from
China, and the prescription from the United States. Tr. 1194-96.
As the founder and President of OakmontScript, Dr. Shi has the most
at stake in this case involving the potential revocation of
OakmontScript's CORs. Throughout her testimony, she was often evasive
in answering the questions posed by opposing counsel to the point where
Government counsel had to repeat questions multiple times and the
tribunal even needed to intervene multiple times to instruct Dr. Shi to
answer direct questions posed by the Government.\68\ By her own
admission, Dr. Shi purposely withheld documents that OakmontScript had
in its possession and were requested in not one, but two administrative
subpoenas that were served on OakmontScript. During her testimony, she
condoned these actions and even when confronted with documents that
provided conflicting export dates, she continued to be evasive and
refused to admit there were errors. I therefore cannot make a wholly
positive credibility finding with respect to Dr. Shi's testimony.
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\68\ See supra at 36 n.52, 37 n.55, 40 n.57, 44 n.63, 45 n.66,
45 n.67.
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Analysis
The Government seeks revocation of the Respondent's distributor and
exporter CORs based on its contention that the Respondent, through its
employees, has committed acts that would render its registration
inconsistent with the public interest as that term is defined in 21
U.S.C. 823(b), (d), and (e), 824(a), and/or 958. ALJ Ex. 1 at 1. The
Government alleges that the Respondent's CORs should be revoked because
it exported controlled substances prior to obtaining its exporter COR,
exported controlled substances it was not approved to export,
demonstrated a lack of candor to DEA investigators regarding its
business activities, falsified a copy of its DEA distributor COR,
distributed controlled substances to a non-DEA registered individual,
exported controlled substances to fill prescriptions for underage
patients, and commingled the records for its two registrations and
otherwise failed to keep complete and accurate records.
Although the burden of proof at this administrative hearing is a
preponderance-of-the-evidence standard, see Steadman v. SEC, 450 U.S.
91, 100-01 (1981), the Acting Administrator's factual findings will be
sustained on review to the extent they are supported by ``substantial
evidence.'' Hoxie v. DEA, 419 F.3d 477, 481 (6th Cir. 2005). [Omitted
for brevity.] While ``the possibility of drawing two inconsistent
conclusions from the evidence'' does not limit the Acting
Administrator's ability to find facts on either side of the contested
issues in the case, Trawick v. DEA, 861 F.2d 72, 77 (4th Cir. 1988),
all ``important aspect[s] of the problem,'' such as a respondent's
defense or explanation that runs counter to the Government's evidence,
must be considered. Wedgewood Vill. Pharmacy v. DEA, 509 F.3d 541, 549
(D.C. Cir. 2007).
[Omitted for brevity.] It is well-settled that since the
Administrative Law Judge has had the opportunity to observe the
demeanor and conduct of hearing witnesses, the factual findings set
forth in this Recommended Decision are entitled to significant
deference, see Universal Camera Corp. v. NLRB, 340 U.S. 474, 496
(1951), and that this Recommended Decision constitutes an important
part of the record that must be considered in the Acting
Administrator's decision, see Morall, 412 F.3d at 179. However, any
recommendations set forth herein regarding the exercise of discretion
are by no means binding on the Acting Administrator and do not limit
the exercise of that discretion. 5 U.S.C. 557(b); River Forest
Pharmacy, Inc. v. DEA, 501 F.2d 1202, 1206 (7th Cir. 1974); Attorney
General's Manual on the Administrative Procedure Act 8 (1947).
Public Interest Determination: The Standard
The Government seeks revocation of the Respondent's DEA CORs based
on its allegations that continuation would be inconsistent with the
public interest as that term is defined in 21 U.S.C. 823(b), (d), and
(e). The CSA provides that the Agency may suspend or revoke a
registrant's COR ``upon a finding that the registrant . . . has
committed such acts as would render [its] registration under section
823 . . . inconsistent with the public interest.'' 21 U.S.C. 824(a)(4).
The Government specifically alleged that the Respondent violated the
law regarding its distributor registration by: (1) Falsifying its
distributor registration, (2) displaying a lack of candor regarding
this falsified registration, (3) domestically distributing Lunesta, a
controlled substance, to a non-registrant in May 2018, and (4)
commingling records. The Government further alleges that the Respondent
violated the law regarding its exporter registration by: (1) Exporting
controlled substances prior to obtaining its exporter COR, (2)
exporting controlled substances it was not approved to export, (3)
exporting controlled substances to fill foreign prescriptions for
underage patients, and (4) failing to keep complete and accurate
records of controlled substances it had exported.
The Government bears the burden of proving that the Respondent's
continued registration would be inconsistent with the public interest.
21 CFR 1301.44(e). Where the Government has met its burden by making a
prima facie case for revocation (or some other sanction), the burden of
production then shifts to the registrant to show that, given the
totality of the facts and circumstances in the record, revocation (or
any other sanction) would not be appropriate. Southwood Pharm., Inc.,
72 FR 36487, 36498, 36504 (2007) (citing Gregory D. Owens, D.D.S., 67
FR 50461, 50464 (2002)).
Any additional facts necessary for a disposition of this case are
set forth in the balance of this Recommended Decision.
Distributor Registration
As to its distributor COR, the Government alleges that the
Respondent violated the CSA and its implementing regulations by: (1)
Altering its distributor registration to state that it was a pharmacy
and then representing to another DEA registrant that it was a pharmacy
by presenting the altered DEA COR, (2) displaying a lack of candor
regarding this falsified registration, (3) domestically distributing
Lunesta (eszopiclone, a schedule IV controlled substance) to a non-
registrant in May 2018, and (4) commingling its distributor records
with records pertaining to its exporter registration. The Government
seeks the revocation of the Respondent's distributor COR based on its
allegations that the Respondent's continued registration would be
inconsistent with the public interest as that term is defined in 21
U.S.C. 823(b) and (e).
The CSA provides that ``[a] registration . . . to manufacture,
distribute, or dispense a controlled substance or a list I chemical may
be suspended or revoked by the Attorney General upon a finding that the
registrant . . . has committed such acts as would render [its]
registration under section 823 . . . inconsistent with the public
interest as determined under such section.'' 21 U.S.C. 824(a)(4).
Congress has provided the following factors to be considered in the
public interest analysis as it relates to
[[Page 21532]]
distributors of controlled substances, as set forth in 21 U.S.C. 823(b)
and (e): \69\
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\69\ Subsection (b) applies to distributors of controlled
substances in schedule I or II and subsection (e) applies to
distributors of controlled substances in schedule III, IV, or V.
(1) Maintenance of effective control(s) \70\ against diversion
of particular controlled substances into other than legitimate
medical, scientific, and industrial channels;
---------------------------------------------------------------------------
\70\ 21 U.S.C. 823(b) uses the term ``control,'' whereas 21
U.S.C. 823(e) uses the term ``controls.'' The origin of the variance
appears typographical, not substantive. The text of subsections (b)
and (e) is otherwise identical.
---------------------------------------------------------------------------
(2) compliance with applicable State and local law;
(3) prior conviction record of [the registrant] under Federal or
State laws relating to the manufacture, distribution, or dispensing
of such substances;
(4) past experience in the distribution of controlled
substances; and
(5) such other factors as may be relevant to and consistent with
the public health and safety.
21 U.S.C. 823(b), (e). The factors are considered in the
disjunctive, and the Agency may give each factor the weight it deems
appropriate in determining whether to revoke a registrant's
registration. Masters Pharm., Inc., 80 FR 55418, 55472-73 (2015)
(citing Green Acre Farms, Inc., 72 FR 24607, 24608 (2007); ALRA Labs.,
Inc., 59 FR 50620, 50621 (1994)). Moreover, the Agency is ``not
required to make findings as to all of the factors.'' Masters Pharm.,
Inc., 80 FR at 55473 (quoting Hoxie, 419 F.3d at 482).
Factor One: Maintenance of Effective Controls Against Diversion of
Particular Controlled Substances Into Other Than Legitimate Medical,
Scientific, and Industrial Channels
Evidence properly considered under Factor One of the public
interest analysis for a distributor registrant includes the adequacy of
the registrant's recordkeeping. CBS Wholesale Distrib., 74 FR 36746,
36749 (2009) (citing Holloway Distrib., Inc., 72 FR 42118, 42123
(2007); Rick's Picks, L.L.C., 72 FR 18275, 18278 (2007); John J.
Fotinopoulos, 72 FR 24602, 24605 (2007)). Although the Government
failed to allege a specific public interest factor for this allegation,
I find that the commingling of records allegation should be analyzed
under Factor One.
21 CFR 1304.21(c) requires that ``[s]eparate records shall be
maintained by a registrant for each independent activity and collection
activity for which he/she is registered or authorized, except as
provided in Sec. 1304.22(d).'' Therefore, as OakmontScript possesses
both an exporter and distributor registration, it must maintain
separate records for each registration. 21 CFR 1304.21(c).
``Recordkeeping, reporting and security requirements are also more
rigorous for those who manufacture and distribute controlled
substances.'' Wedgewood Vill. Pharmacy, 71 FR 16593, 16594 (2006).
On September 16, 2016, DI 1 conducted an on-site inspection of
OakmontScript with a Senior Investigator with the Massachusetts
Department of Health regarding OakmontScript's distributor
registration. Tr. 44-45. At this time, DI 1 instructed Dr. Shi that
OakmontScript needed to ensure it did not commingle records from its
distributor registration with any future exporter registration. Tr. 51.
On July 26, 2018, a second DI, DI 2, conducted an inspection of
OakmontScript's distributor registration and noted that OakmontScript
was commingling records by keeping some of its distributor records with
its exporter records. Tr. 129-33, 135-36. After she identified this
issue, she discussed it with Dr. Shi, who indicated that she understood
and stated that OakmontScript would not commingle records in the
future. Tr. 133. DI 2 did not ``believe [Dr. Shi] knew about the
commingling but once corrected, she understood.'' Tr. 133.
A third DI, DI 3 noted that there were issues with recordkeeping as
OakmontScript had commingled records. Tr. 739. For instance,
OakmontScript was keeping inventories for both its distributor
registration and its exporter registration on the same document and it
was difficult for DI 3 to discern under which registration each
transaction had occurred. Tr. 743-48, 782; Gov't Ex. 12. DI 3
specifically noted that it was difficult to discern if the Lunesta
invoice OKS-00650 was a distribution or export as the spreadsheet
provided by OakmontScript had both CORs listed on the spreadsheet. Tr.
746-47; Gov't Ex. 12 at 17.
As discussed, prior to DI 3's most recent inspections,
OakmontScript had been told by two DI investigators that it needed to
maintain separate inventories for its distributor and exporter
registrations. Tr. 51, 131-36. Despite this, when DI 3 performed her
initial inspection on March 29, 2019, the only records OakmontScript
provided for the biennial inventory included commingled records that
contained information for both its distributor and exporter
registrations. Tr. 351, 739, 744-49; Gov't Ex. 12. In fact, DI 3 was
only able to discern invoice OKS-00243 was an export after reviewing
the license transfer document for this export. Tr. 747-48; Gov't Ex. 26
at 21. However, another spreadsheet provided for this export at the
March 29, 2019, inspection did not indicate this was an export or that
the diazepam had been transferred from OakmontScript's distributor
license to its exporter license. Tr. 747; Gov't Ex. 12 at 14.
I therefore find that OakmontScript commingled records that were
provided to DI 3 at the March 29, 2019 inspection, after being put on
notice of this not once, but twice. This commingling of OakmontScript's
distributor and exporter records makes it difficult, if not at times
impossible, to discern whether a particular controlled substance was
distributed or exported.\71\
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\71\ Although it appears that OakmontScript attempted to rectify
this issue, any attempts to do so were made after the March 29, 2019
inspection. See Gov't Ex. 28 at 83-97 (several of these inventory
forms indicate that the forms were recreated on April 25, 2019). Dr.
Shi provided these documents to DI 3 via email on May 10, 2019. Tr.
781. See Gov't Ex. 28.
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Accordingly, in review of the evidence of record, including
stipulations of the parties, OSC Allegation 21.b is sustained. [Based
on Respondent's failure to maintain complete, accurate, and separate
records, in accordance with federal law, I find that Factor One weighs
against Respondent.]
Factor Five: Such Other Factors as May Be Relevant to and Consistent
With the Public Health and Safety
The Government has alleged that Factor Five is relevant to the
public interest analysis regarding the Respondent's distributor COR.
ALJ Ex. 1 at 4, 5 ] 13.\72\ Although the Government failed to explain
under which factor the lack of candor allegation falls, the tribunal
finds that the allegations regarding the Respondent's lack of candor
fall squarely within the purview of Factor Five. See John V. Scalera,
78 FR 12092, 12093, 12100 (2013) (considering under Factor Five, the
respondent's lack of candor based on lies made to DEA investigators and
false testimony under oath at the hearing). Further, the DEA has
consistently held that ``[c]andor during DEA investigations, regardless
of the severity of the violations alleged, is considered by the DEA to
be an important factor when assessing whether a . . . registration is
consistent with the public interest'' and that a registrant's ``lack of
candor and failure to take responsibility for his [or her] past legal
troubles . . . provide substantial evidence that his
[[Page 21533]]
registration is inconsistent with the public interest.'' Jeri Hassman,
M.D., 75 FR 8194, 8236 (2010) (quoting Hoxie, 419 F.3d at 483); see
also Mark P. Koch, D.O., 79 FR 18714, 18736 (2014) (assessing the
respondent's candor); Ronald Lynch, M.D., 75 FR 78745, 78754 (2010)
(same); Prince George Daniels, D.D.S., 60 FR 62884, 62887 (1995)
(same).
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\72\ The Government alleged that Factor Five applied to the
Respondent's violation of 21 U.S.C. 843(a)(3), but did not provide
its reasoning as to why this violation should be reviewed under
Factor Five. ALJ Ex. 1 at 4-5 ] 13.
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A lack of candor may properly be considered by the DEA as something
that threatens public health and safety. Annicol Marrocco, M.D., 80 FR
28695, 28705 (2015). ``Because of the authority conveyed by a
registration and the extraordinary potential for harm caused by those
who misuse their registrations, DEA places significant weight on an
applicant/registrant's candor in the proceeding.'' Alan H. Olefsky,
M.D., 76 FR 20025, 20031 (2011). A registrant's dishonesty under oath
downplays the registrant's acceptance of responsibility and shows that
the registrant ``cannot be entrusted with a registration.'' Rose Mary
Jacinta Lewis, M.D., 72 FR 4035, 4042 (2007). The degree of candor
displayed by a registrant during a hearing is ``an important factor to
be considered in determining . . . whether [the registrant] has
accepted responsibility'' and in formulating an appropriate sanction.
Hills Pharmacy, LLC, 81 FR 49815, 49845 (2016) (citing Michael S.
Moore, 76 FR 45867, 45868 (2011)).
Additionally, the Respondent's falsification of its COR should be
considered under Factor Five. For example, in another case where the
registrant was put on notice that her registration was being improperly
used to order controlled substances, her failure to take prompt and
reasonable action to investigate the misuse constituted additional
conduct that threatened public health and safety. Lewis, 72 FR at 4041-
42 (citing 21 CFR 1301.71(a)). Further, DEA can consider under Factor
Five evidence that a registrant was aware that his DEA registration was
being improperly used and took no action to stop its improper use.
Kevin Dennis, M.D., 78 FR 52787, 52800 (2013). Even if the ``Respondent
did not obtain possession of the controlled substances . . . misconduct
can still be actionable as an attempt to obtain controlled substances
by fraud or misrepresentation.'' Jana Marjenhoff, D.O., 80 FR 29067,
29068, 29069. See 21 U.S.C. 843(a)(3), 846.
Finally, the Respondent's domestic distribution of Lunesta to a
non-registrant should be considered under Factor Five. In a similar
situation, a previous Acting Administrator examined a pharmacy's
distribution of a controlled substance to a non-registered location
under Factor Four of 21 U.S.C. 823(f). Sewanee Pharmacy, 55 FR 29279,
29281 (1990). Section 823(f)(4), defines Factor Four as ``[c]ompliance
with applicable State, Federal, or local laws relating to controlled
substances'' and roughly corresponds with section 823(e) Factor Two,
except that section 823(e)(2) omits ``Federal'' and only includes
``compliance with applicable State and local law.'' As distribution of
a controlled substance to a non-registered location is a violation of
Federal law, it does not fit within the parameters of Factor Two. Nor
does it fit within the definitions of Factors One, Three, or Four of
section 823(e). Thus, it is properly considered under Factor Five. See
Perry County Food & Drug, 80 FR 70083, 70112 (2015) (where DEA applied
the analogous Factor Five ``such other conduct'' in the context of a
pharmacy registrant where the violations at issue were ``not covered by
application of the other four public interest factors.'').
Falsified Registration Certificate
The Government alleges that the Respondent violated 21 U.S.C.
843(a)(3), which states that ``[i]t shall be unlawful for any person
knowingly or intentionally . . . to acquire or obtain possession of a
controlled substance by misrepresentation, fraud, forgery, deception,
or subterfuge.'' 21 U.S.C. 843(a)(3). The Government alleges that the
Respondent violated 21 U.S.C. 846 which states, ``[a]ny person who
attempts or conspires to commit any offense defined in this subchapter
shall be subject to the same penalties as those prescribed for the
offense, the commission of which was the object of the attempt or
conspiracy.'' The Government alleges that OakmontScript violated these
statutes and that such conduct constitutes conduct that is inconsistent
with the public health and safety, in violation of 21 U.S.C. 823(b)(5)
and (e)(5).\73\ ALJ Ex. 1 at 4-5 ] 13.
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\73\ Although the Government failed to provide why the Factor
Five, ``catch-all'' provision applies in this instance, I agree that
this allegation would fall under a Factor Five Analysis as the
Respondent has violated Federal law.
---------------------------------------------------------------------------
Dr. Shi met the intern through the intern's grandmother, who was
also Dr. Shi's former teacher. Tr. 1395. The intern started working for
OakmontScript as Dr. Shi's intern in January 2017 and her
responsibilities included establishing relationships with
OakmontScript's competitors to determine how they conduct business. Tr.
293-94, 1395. Dr. Shi hoped to create an account with PBA so
OakmontScript could purchase drugs from PBA. Tr. 1411-12. Dr. Shi told
the intern to ``do whatever is needed'' and to ``[g]ive [PBA],
basically, whatever they want in order to establish this . . . client
relationship with them.'' Tr. 303. When Dr. Shi conducted business with
companies, including PBA, these companies would sometimes request
OakmontScript to submit a copy of a pharmacy license as some
distributors will only work with pharmacies. Tr. 275, 1409. Dr. Shi was
``too busy'' to help the intern so she told the intern to ask Mr. L.U.
what letter to send to PBA. Tr. 1414.
After PBA requested that OakmontScript submit a pharmacy
registration, the intern altered OakmontScript's distributor COR No.
RO0504680 by using Adobe Shop on her personal laptop. Tr. 1405-06;
Gov't Ex. 14. Without being told to do so, she modified the business
activity of the distributor registration to indicate it was a pharmacy
registration. Tr. 1414-15. Even though Dr. Shi was ``on the email chain
being cc'ed'' regarding this application to PBA, she testified that she
did not notice the altered registration document which was an
attachment. Tr. 1415. During the tribunal's questioning of Dr. Shi, Dr.
Shi agreed that the intern had changed the business activity from
``distributor'' to ``pharmacy'' and this altered registration was sent
to PBA in order to open an account with PBA. Tr. 1396.
While DI 3 was reviewing OakmontScript's case files, she discovered
a report filed by the Kansas City District Office of the DEA, naming
OakmontScript as fraudulently creating a DEA registration. Tr. 275. PBA
holds its own DEA registration and DI 3 spoke to one of PBA's
Regulatory Compliance Team Leaders, B.W., via email correspondence that
noted PBA ``only sell[s] to pharmacies'' and it does not ``sell to
other distributors.'' Tr. 275-78; Gov't Ex. 55. PBA also requires
potential customers to send a copy of their State pharmacy licenses and
a copy of their DEA registrations when they submit their account
application. Tr. 278; Gov't Ex. 55. B.W. further noted that
OakmontScript sent PBA a DEA registration indicating it was a pharmacy
and after PBA performed its due diligence, PBA discovered that the
document had been altered. Tr. 278; Gov't Ex. 55. PBA reported
OakmontScript and denied OakmontScript's request to open an account.
Tr. 278; Gov't Ex. 55.
On April 23, 2019, DI 3 and Dr. Shi discussed this issue on the
phone. Tr. 293. DI 3 learned that after PBA initially refused to
establish a relationship with OakmontScript, the intern altered the
[[Page 21534]]
DEA registration to list OakmontScript as a pharmacy. Tr. 294; Gov't
Ex. 14. During this phone call, Dr. Shi indicated that she ``could have
fired'' the intern, but thought this would be ``a little bit too much''
because it was only the intnern's ``first week she ever entered the
job.'' Tr. 1399-1400. In an email that Dr. Shi sent to DI 3 on April
24, 2019, Dr. Shi indicated that the intern's employment dates were
January 1, 2017 to February 2018 and that the intern had moved back to
China. Tr. 297; Gov't Ex. 20 at 13. Dr. Shi also texted information
regarding this incident to DI 3 in May 2019 and she said if the
incident regarding the falsified registration ``constitutes any
offensive sort, `I' should take responsibility. If any actions taken
toward, please address to me directly.'' Tr. 300-01; Gov't Ex. 29 at 3.
OakmontScript ``does not contest that this incident occurred'' and, in
fact, the parties have stipulated to the basic facts. ALJ Ex. 26 at 2;
ALJ Ex. 7 at 3, Stipulation 10.
It was DI 3's understanding from the April 23, 2019, phone call
that the intern had been fired. Tr. 294-95. Therefore, when on the
following day DI 3 received the email from Dr. Shi that the intern had
indeed not been fired for falsifying the registration, she
understandably viewed her phone conversation with Dr. Shi on April 23
and the email from Dr. Shi on April 24 to be in ``direct conflict.''
Tr. 297-98.
Because Dr. Shi had ties with the intern's family, she felt
pressure to keep the intern employed. Tr. 302. The intern left
OakmontScript in February 2018 for multiple reasons, including that her
visa expired. Tr. 1398. DI 3 was never able to contact the intern to
discuss the registration falsification incident with her. Tr. 304.
As the Government noted in its post-hearing brief, although
OakmontScript was not able to establish a customer relationship with
PBA and therefore was unable to purchase any controlled substances,
``had [OakmontScript] been successful'' in opening an account, (ALJ Ex.
27 at 17), ``OakmontScript [would] have had the capacity to order
controlled substances'' from PBA. Tr. 304. In its post-hearing brief,
the Respondent asserts that ``[t]his concern . . . is misplaced''
because OakmontScript has established ``multiple accounts with other
trading partners'' and ``in its five years of operation, never suffered
any losses, theft, inventory discrepancies, or other incidents relating
to controlled substances'' and therefore OakmontScript ``has proven
itself to be a trustworthy DEA registrant and true to its professional
obligations.'' ALJ Ex. 26 at 2-3. To the contrary, OakmontScript's
falsification of a DEA registration displays the antithesis of
trustworthiness. As DI 3 testified, ``DEA registrants hold a public
trust position'' and because controlled substances that are used
improperly can be dangerous, ``DEA registrants have to be licensed and
registered with the proper authorities.'' Tr. 305. See 21 U.S.C.
822(a).
Furthermore, the fact that the ``Respondent did not obtain
possession of [any] controlled substances'' is irrelevant and her
misconduct is still ``actionable as an attempt to obtain controlled
substances by fraud or deception.'' Marjenhoff, 80 FR at 29069.
As both parties stipulated to the registration being falsified, and
based on Dr. Shi's own admission that she was aware that the intern had
altered OakmontScript's distributor registration to reflect that it was
a pharmacy, it is uncontroverted that OakmontScript falsified a copy of
its DEA registration. I therefore find that the intern working for
OakmontScript, altered OakmontScript's distributor COR by using a
computer program to change the registration so that the word
``Distributor'' was replaced with ``Pharmacy'' under the ``Business
Activity'' section of the registration. I further find that this
registration was altered in an attempt for OakmontScript to establish a
relationship with PBA to ultimately obtain controlled substances from
PBA, which is in violation of Federal law, specifically 21 U.S.C. 846.
Accordingly, in review of the evidence of record, including
stipulations of the parties,\74\ [I find that Respondent's submission
of a falsified registration to PBA represented an attempt to obtain
controlled substances outside of the CSA's closed regulatory system,
and as such, is conduct that is not ``consistent with the public health
and safety'' under Factor Five.] *\F\
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\74\ See Stips. 10 and 11.
*\F\ I agree with the ALJ that there was evidence on the record
to support the conclusion that Respondent violated 21 U.S.C. 846 by
attempting to establish a relationship with PBA in order to obtain
controlled substances by fraud. However, because there is
considerable other evidence on the record that demonstrates that
Respondent's registration is inconsistent with the public interest,
I do not find that it is necessary for me to determine whether
Respondent has violated 21 U.S.C. 846. I may consider this conduct
under Factor Five without finding a violation of this statute.
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Lack of Candor
The Government alleges that Dr. Shi exhibited a lack of candor as
it relates to this allegation. When Dr. Shi learned that the intern had
altered OakmontScript's registration to list its business activity as a
pharmacy, Dr. Shi ``analyzed the situation.'' Tr. 1397. Dr. Shi
believed that the intern made this error because she was ``a new
intern'' and due to her ``lack of experience.'' Tr. 1410-11. Because
this was ``not all her fault,'' Dr. Shi did not fire the intern and
instead ``changed her to a different position'' and moved her to a
``more straightforward job.'' Tr. 1397.
During her testimony, DI 3 indicated that during the April 23,
2019, phone call Dr. Shi had informed her that she had fired the
intern, but DI 3 later learned that the intern remained employed at
OakmontScript for an additional thirteen months after this incident.
ALJ Ex. 1 at 5 ] 14; Tr. 297-98, 307, 788. Dr. Shi sent an email the
next day, on April 24, 2021, to DI 3 indicating that the intern was
employed from January 1, 2017 through February 2018 and left the United
States because her work visa expired. Tr. 297.
Based on the testimony of the parties, I do not find that Dr. Shi
exhibited a lack of candor. I do not find that DI 3 was being
disingenuous regarding her testimony that ``it was [her] understanding
that [the intern] had been fired due to the fraudulent DEA
registration'' in January 2017 and that she had been ``led . . . to
believe that [the intern] had been fired'' based on this incident. Tr.
295, 297-98, 793. Rather, I find that it is more likely there was a
miscommunication between DI 3 and Dr. Shi as opposed to a lack of
candor.
As discussed supra, only one day after DI 3's and Dr. Shi's phone
conversation regarding this incident, Dr. Shi sent an email to DI 3
responding to DI 3's request for more information regarding the intern
and stating that the intern was employed until February 2018, when her
visa expired. It does not make sense that Dr. Shi would claim to have
fired the intern, and the very next day, put in writing that she
continued the intern's employment for over another year, until the
intern's visa expired. Moreover, DI 3's email does not reference any
conversation she had with Dr. Shi from the previous day that the intern
was fired. Dr. Shi was consistent in her testimony regarding this
allegation and admitted she may have stated that she ``could have
fired'' the intern while speaking with DI 3. Tr. 1399. Dr. Shi was also
adamant and consistent in her testimony that the intern had ``made that
mistake'' and instead of firing the intern, which Dr. Shi believed
would be ``a little bit too much,'' she was using this as a ``training
opportunity'' and despite this being a ``huge risk,'' Dr. Shi kept the
intern as a staff member and instead moved her
[[Page 21535]]
to a different part of OakmontScript. Tr. 1397, 1400-01. Based on these
circumstances, I do not find a lack of candor by Dr. Shi regarding
statements she made about how the intern's employment with
OakmontScript came to an end.
Accordingly, in review of the evidence of record, including
stipulations of the parties, OSC Allegation 14 is not sustained to the
extent that Dr. Shi exhibited a lack of candor in her statements made
to DI 3 on April 23, 2019.*\G\
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*\G\ The ALJ stated that OSC Allegation 14 was ``SUSTAINED IN
PART to the extent that Dr. Shi maintained the intern's employment
for an additional thirteen months after the falsification occurred
and the intern left OakmontScript because her work visa expired,
rather than being fired.'' RD, at 58. However, it is unclear what
allegation the ALJ is sustaining. Paragraph 14 of the OSC alleges
that Respondent exhibited a lack of candor during the investigation
by initially indicating that the intern was fired. The ALJ found
that there was no lack of candor related to this charge. Based on
the ALJ's interpretation of the evidence and testimony, I do not
find any additional allegations in paragraph 14 to sustain.
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Distribution of a Controlled Substance to a Non-Registrant
<SUP>75</SUP>
---------------------------------------------------------------------------
\75\ Although the Government failed to allege a specific public
interest factor, I find that this best fits under Factor Five as it
is a violation of Federal law.
---------------------------------------------------------------------------
The CSA's general criminal provision is contained in 21 U.S.C.
841(a), and in relevant part states: ``Except as authorized by this
subchapter, it shall be unlawful for any person knowingly or
intentionally . . . (1) to manufacture, distribute, or dispense, or
possess with intent to manufacture, distribute, or dispense, a
controlled substance . . . .'' 21 U.S.C. 841(a)(1). ``Congress devised
a closed regulatory system making it unlawful to manufacture,
distribute, dispense, or possess any controlled substance except in a
manner authorized by the CSA'' to prevent abuse and diversion of
controlled substances. Gonzales v. Raich, 545 U.S. 1, 13 (2005). A
vital component of the CSA's closed regulatory system requires that any
person who handles controlled substances must obtain a registration
from the DEA. Wedgewood Vill. Pharmacy, 71 FR at 16594 (citing 21
U.S.C. 822).
``Distribute'' is defined as ``to deliver (other than by
administering or dispensing) a controlled substance or a listed
chemical.'' 21 U.S.C. 802(11). ``The term `distributor' means a person
who so delivers a controlled substance or a listed chemical.'' 21
U.S.C. 802(11). A distributor can only distribute to another DEA
registrant who holds the appropriate authority to handle that
controlled substance. 21 U.S.C. 822(a). A distributor is not permitted
to distribute controlled substances to an ultimate user and there is no
coincidental activity that permits a distributor to provide controlled
substances to non-DEA individuals or persons or companies. See 21 CFR
1301.13(e)(1) (distributing to a non-registered person is not listed as
a coincident activity).
Although OakmontScript's records have inconsistent information
regarding the Lunesta invoice OKS-00650 shipment, I find that the most
likely scenario is that OakmontScript received Lunesta in May 2018 and
shipped the Lunesta to Mr. Z.Y. at an address in the United States of
[omitted for privacy], Kearny, New Jersey [ ] in May 2018. Tr. 499-535,
1455; Gov't Exs. 12 at 17, 17 at 3, 18 at 3, 22 at 10-11.
Dr. Shi also indicated the following in an email dated April 30,
2021:
Lunesta was shipped on May 21, 2018 to Mr. [Z.Y.] at his USA
address. Mr. [Z.Y.] is an executive member of the company. At the
time of this purchase request, he still in US division while he was
planning to move to China Disha Pharmaceutical group. The shipping
logistics was arranged such: OakmontScript shipped his US address,
and then his China Disha Pharma carried out the rest of shipping
from NJ to China. Disha pharma is a manufacturer, they are not
required to have DEA license, and they are the end user.
Lunesta is not controlled drug in China.
Mr. [Z.Y.] now in China Disha Pharma Group, as a director.
Gov't Ex. 22 at 10 (emphasis in original).
After reviewing OakmontScript's records, DI 3 initially believed
this transaction was an export, but upon further investigation,
realized that this was a domestic distribution or a distribution to a
registrant in the United States. Tr. 508, 510, 529, 533-34; Gov't Exs.
22 at 10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68.
DI 3 discussed this invoice with Dr. Shi on May 8, 2019, when she
conducted another inspection of OakmontScript. Tr. 513-14. Dr. Shi
stated that L.Y., a colleague Dr. Shi had met at a conference,
requested that Dr. Shi send the Lunesta to Mr. Z.Y. prior to Mr. Z.Y.
going to China as Dr. Yu was not able to acquire it. Tr. 515-16. Mr.
Z.Y. then provided her a business card showing that he was an employee
of Disha Pharmaceutical Group, a pharmaceutical company in China. Tr.
534. Mr. Z.Y. was planning to move to China, and asked that the Lunesta
be shipped to his home address in New Jersey, and paid via personal
payment. Tr. 514, 516, 531, 534-35. This invoice indicates that the
``bill to'' party was Disha Pharmaceutical Group. Tr. 530-31; Gov't Ex.
28 at 44. At some time in May 2019, DI 3 discussed with Dr. Shi that
this was improper. Tr. 518.
OakmontScript purchased this Lunesta with its distributor
registration and then mailed it to Mr. Z.Y. at his home address in New
Jersey. Tr. 517-18. Disha was not the end user or ultimate user because
it was seeking the Lunesta in order to conduct research as opposed to
using it for personal use. Tr. 518-19, 772-73. See 21 U.S.C. 802(27)
(defining ``ultimate user'' as ``a person who has lawfully obtained,
and who possesses, a controlled substance for his own use or for the
use of a member of his household or for an animal owned by him or by a
member of his household.'').
DI 3 conducted a search of the DEA registration database for Mr.
Z.Y., Disha Pharmaceutical Group, and the address in Kearny, New Jersey
and discovered that none of them have any active or inactive DEA
registrations. Tr. 545-54. There is also no indication that the Kearny,
New Jersey, address could be a freight forwarding facility.\76\ Tr.
555-56, 558.
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\76\ A freight forwarding facility is defined as:
A separate facility operated by a distributing registrant
through which sealed, packaged controlled substances in unmarked
shipping containers (i.e., the containers do not indicate that the
contents include controlled substances) are, in the course of
delivery to, or return from, customers, transferred in less than 24
hours. A distributing registrant who operates a freight forwarding
facility may use the facility to transfer controlled substances from
any location the distributing registrant operates that is registered
with the Administration to manufacture, distribute, or import
controlled substances, or, with respect to returns, registered to
dispense controlled substances, provided that the notice required by
Sec. 1301.12(b)(4) of Part 1301 of this chapter has been submitted
and approved. For purposes of this definition, a distributing
registrant is a person who is registered with the Administration as
a manufacturer, distributor (excluding reverse distributor), and/or
importer.
21 CFR 1300.01(b).
---------------------------------------------------------------------------
Dr. Shi testified that this transaction was an export and not a
domestic distribution as claimed by the Government, because Mr. Z.Y.
was taking this prescription to a company in China, Disha
Pharmaceutical, which was the end-user. Tr. 1180-82, 1359. Dr. Shi also
asserts that an end-user or ultimate user \77\ is the person who signed
the end-user statement to give OakmontScript a certificate. Tr. 1183.
In fact, OakmontScript created a license transfer document,
transferring the Lunesta from OakmontScript's distributor license to
its exporter license. Gov't Ex. 26 at 93.
[[Page 21536]]
OakmontScript did this even before it likely received the Lunesta
shipment. See Gov't Ex. 26 at 89, 90 (The packing slip from McKesson
for the distribution to OakmontScript is dated May 9, 2018, while the
license transfer document is dated May 7, 2018.)
---------------------------------------------------------------------------
\77\ DI 3 explained that these terms are synonymous. Tr. 773.
---------------------------------------------------------------------------
Although Dr. Shi indicates that OakmontScript no longer uses this
``informal logistical arrangement,'' Dr. Shi continues to believe this
was a proper way to export controlled substances. ALJ Ex. 26 at 12.
OakmontScript references 21 U.S.C. 822(c)(2) \78\ as an exception that
allowed Mr. Z.Y. to transport the Lunesta to China. Id. As Dr. Shi
noted in her testimony, Mr. Z.Y. is an employee of Disha, Tr. 1180-82,
not of a ``common or contract carrier or warehouse.'' 21 U.S.C.
822(c)(2). Therefore, OakmontScript would not meet this exception.
Furthermore, OakmontScript did not provide any documentation to DI 3
that indicated Mr. Z.Y. had actually delivered the Lunesta to Disha
Pharmaceutical in China. Tr. 1455-56.
---------------------------------------------------------------------------
\78\ 21 U.S.C. 822:
(c) Exceptions
The following persons shall not be required to register and may
lawfully possess any controlled substance or list I chemical under
this subchapter:
(2) A common or contract carrier or warehouseman, or an employee
thereof, whose possession of the controlled substance or list I
chemical is in the usual course of his business or employment.
---------------------------------------------------------------------------
I find that OakmontScript shipped Lunesta to an address in Kearny,
New Jersey, United States, which makes this a domestic distribution as
opposed to an export. I also find that the Lunesta was shipped to Mr.
Z.Y. at his home address in Kearny, New Jersey, Mr. Z.Y. did not
possess a DEA registration, and this transaction did not meet any
exceptions provided by the regulations.
Accordingly, in review of the evidence of record, including
stipulations of the parties, OSC Allegations 16 and 17 are sustained.
[Additionally, I consider this violation under Factor Five to weigh
against Respondent's continued distributor registration based on
Respondent's unlawful domestic distribution of a controlled substance.]
[Summary of the Public Interest Factors for Respondent's Distributor
Registration
I find that the Government has proven that Respondent failed to
maintain complete, accurate, and separate records for its distributor
registration; that Respondent submitted a falsified pharmacy
registration to PBA in an attempt to obtain controlled substances
outside of the CSA's closed regulatory system; and that Respondent
unlawfully distributed a controlled substance domestically.
Accordingly, I find that Factors One and Five weigh strongly in favor
of revoking Respondent's distributor registration.]
Exporter Registration
As to its exporter COR, the Government alleges that the Respondent
violated the CSA and its implementing regulations by: (1) Exporting
controlled substances prior to obtaining its exporter COR, (2)
exporting controlled substances it was not approved to export, (3)
exporting controlled substances to fill prescriptions for underage
patients, and (4) commingling its exporter records with records
pertaining to its distributor registration and otherwise failing to
keep complete and accurate records of controlled substances it
exported. The Government seeks the revocation of the Respondent's
exporter COR based on its allegations that the Respondent's continued
registration would be inconsistent with the public interest as that
term is defined in 21 U.S.C. 958.
The CSA, as codified at 21 U.S.C. 958, provides that ``[t]he
Attorney General may . . . revoke or suspend a registration under
subsection (a) or (c) of this section,\79\ if he determines that such
registration is inconsistent with the public interest . . . .'' 21
U.S.C. 958(d)(2).
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\79\ Subsection (c) applies to exporters of schedule III, IV, or
V controlled substances and states that ``[i]n determining the
public interest, the factors enumerated in paragraphs (1) through
(6) of section 823(d) of this title shall be considered.'' 21 U.S.C.
958(c)(1).
Subsection (a) applies to exporters of schedule I or II
controlled substances and states that ``[i]n determining the public
interest, the factors enumerated in paragraph (1) through (6) of
section 823(a) of this title shall be considered.'' Although the
Respondent is registered to export schedule II controlled
substances, the Government made no allegations regarding the
Respondent's exporter registration and schedule II controlled
substances, thus sections 958(a) and 823(a) are not relevant to the
instant proceedings.
---------------------------------------------------------------------------
Congress has provided the following factors to be considered in the
public interest analysis, as set forth in 21 U.S.C. 823(d), which
relates to exporters of schedule III, IV, and V controlled substances
pursuant to 21 U.S.C. 958(c)(1):
(1) Maintenance of effective controls against diversion of
particular controlled substances and any controlled substance in
schedule III, IV, or V compounded therefrom into other than
legitimate medical, scientific, or industrial channels;
(2) compliance with applicable State and local law;
(3) promotion of technical advances in the art of manufacturing
these substances and the development of new substances;
(4) prior conviction record of applicant under Federal or State
laws relating to the manufacture, distribution, or dispensing of
such substances;
(5) past experience in the manufacture, distribution, and
dispensing of controlled substances, and the existence in the
establishment of effective controls against diversion; and
(6) such other factors as may be relevant to and consistent with
the public health and safety.
21 U.S.C. 823(d).
As with the public interest factors applicable to the Respondent's
distributor registration, these factors are considered in the
disjunctive, and the Agency may give each factor the weight it deems
appropriate in determining whether to revoke a registrant's
registration. Edmund Chein, M.D., 72 FR 6580, 6593-94 (2007) (quoting
ALRA Labs., Inc., 59 FR at 50,621). Moreover, and also in alignment
with determinations applicable to other categories of registrants, the
Agency is ``not required to make findings as to all of the factors.''
Chein, 72 FR at 6594 (quoting Hoxie, 419 F.3d at 482).
Factors One and Five: Maintenance of Effective Controls Against
Diversion and the Existence in the Establishment of Effective Controls
Against Diversion
In engaging in the public interest analysis regarding an exporter,
the Deputy Administrator has noted that, ``[b]oth factors one and five
inquire into whether [a registrant] has effective controls against
diversion.'' Chein, 72 FR at 6594. At issue in Chein, and considered
under these factors, was the Respondent's failure to provide compliant
initial and biennial inventories, an essential recordkeeping
responsibility. Id. Likewise, other recordkeeping requirements are at
issue in the instant case, namely accurate recording of documentation
regarding dates of transfer, dates of export and the identity of
purchasers. Finally, as discussed in the portion of this Recommended
Decision dealing with the Respondent's distributor registration, the
commingling of records is a recordkeeping issue that falls within the
maintenance of effective controls factor. See supra at 50.
DEA registrants are required to keep complete and accurate records
related to controlled substances. 21 U.S.C. 827(a) and (b); 21 CFR
1304.21(a). The Deputy Administrator has stated, including in the
context of an exporter, that ``[a]ccurate inventories are essential to
conduct accountability audits and to determine whether diversion has
occurred.'' Chein at 72 FR at 6594. Registrants must ensure that
inventories
[[Page 21537]]
of controlled substances in Schedules III, IV, and V are ``readily
retrievable.'' 21 CFR 1304.04(f)(2). ``DEA regulations define the term
`readily retrievable' to mean `that certain records are kept by
automatic data processing systems or other electronic or mechanized
recordkeeping systems in such a manner that they can be separated out
from all other records in a reasonable time.' '' Chein, 72 FR at 6593
(emphasis in original)(citations omitted). ``While what constitutes `a
reasonable time' necessarily depends on the circumstances, under normal
circumstances if a practice is open for business, it should be capable
of producing a complete set of records within several hours of the
request.'' Id.
OakmontScript failed to keep complete and accurate records, did not
record an initial inventory for its exporter registration, and did not
keep separate records for its exporter and distributor license.\80\ [I
find that Factors One and Five weigh against Respondent's continued
exporter registration based on these recordkeeping violations.]
---------------------------------------------------------------------------
\80\ The analysis regarding the commingling of records is the
same as discussed above. See supra at 50-51.
---------------------------------------------------------------------------
Inaccurate Records <SUP>81</SUP>
---------------------------------------------------------------------------
\81\ On the last day of the hearing Dr. Shi indicated that she
``want[ed] to see if we can submit our record, which I'll look at in
the app.'' Tr. 1429. She further stated that she needed ``to check
back because some of the things that happened three or four years
ago, if I can retrieve it'' and that ``[a]t this point, I don't have
any evidence ready to present and I didn't prepare additional.'' Tr.
1429. To be clear, Dr. Shi had several opportunities to submit any
additional records that had not previously been provided to DI 3 at
the February 19, 2019 inspection, including the inspections DI 3
conducted in March 29, 2019, May 8, 2019, May 13, 2019, and February
28, 2020. OakmontScript also could have provided these records as an
exhibit with its Prehearing Statement, Amended Prehearing Statement,
Supplemental Prehearing Statement, Hearing Exhibits, or even offered
them during the hearing, if it could have demonstrated good cause.
As noted by Dr. Shi, she ``has the records'' but decided not to give
them to DI 3 and also did not prepare them for the hearing.
---------------------------------------------------------------------------
Invoice OKS-00243 (Diazepam)
OakmontScript received diazepam, 10 milligram gel on May 16, 2017
from McKesson. Tr. 356-57; Gov't Ex. 18 at 3. OakmontScript provided
documentation to DI 3 that indicates this diazepam was exported on both
May 18, 2017 and June 10, 2017. Tr. 352-53, 366. Tr. 356, 1448; Gov't
Exs. 17 at 3, 18 at 3.\82\ OakmontScript provided documentation to DI 3
that indicates Par Pharmaceutical, an Endo International Company, was
the recipient. Tr. 356, 1448; Gov't Ex. 17 at 3. In other
documentation, the recipient is listed as Cangzhou People's Hospital in
China. Tr. 357, 1449; Gov't Ex. 18 at 3.
---------------------------------------------------------------------------
\82\ As noted supra, this McKesson invoice listed
OakmontScript's address as 15 New England Executive Park. Dr. Shi
explained that this address and the 1500 District Avenue address
(OakmontScript's current address) are the same address. Tr. 367. Dr.
Shi stated that the area where OakmontScript is located got
``reorganized'' and although OakmontScript's address changed, its
physical location never changed.
---------------------------------------------------------------------------
When questioned regarding the exact export date of the diazepam,
Dr. Shi sent an email to DI 3 on April 23, 2019 indicating that she did
not know the exact date of export because the ``shipping label was not
retrievable due to USPS system update'' and Ms. Liu has ``made edit in
the date multiple times and she thought the proper date is on the date
of payment . . . .'' Tr. 358-59, 386, 1449; Gov't Exs. 20 at 8, 28 at
22. In this response email, the ``ship to name'' is listed as H.H. at
Cangzhou People's Hospital in China and Dr. Shi's guess of the ``best
possible date'' of shipment was the date of payment on May 18, 2017.
Tr. 361-63, 1449-50; Gov't Ex. 21 at 9. In other documentation provided
by Dr. Shi at the May 8, 2019 inspection, the use was listed as ``for
research'' and the ``bill to'' party was H.X.Z. at Par Pharmaceutical
and the ship to party was Dr. H.H. at Cangzhou People's Hospital in
China. Tr. 365; Gov't Ex. 26 at 19.
One of the license transfer documents for this export indicates
that the diazepam was transferred from OakmontScript's distributor
registration to its exporter registration on May 7, 2018. Tr. 371-72,
435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer
document indicates that the date of transfer was May 20, 2017. Tr. 371-
72, 436; Gov't Ex. 26 at 22. Other documentation provided by
OakmontScript states that the diazepam prescription was made based on a
request from a family in China for Patient S.Z. and was shipped
sometime in May 2019. Tr. 407-09; Gov't Ex. 44 at 1-2. OakmontScript
was unable to complete a DEA Form 236 for this export.\83\ Tr. 352-53;
Gov't Exs. 12 at 14, 16 at 2.\84\
---------------------------------------------------------------------------
\83\ This is noted as ``no XFER'' in the spreadsheets, which
indicates that OakmontScript was not able to fill out a DEA Form 236
for a particular drug. Tr. 202.
\84\ Although the OSC did not include any allegations regarding
the Respondent's failure to complete DEA Form 236 for controlled
substances that it exported, the Government did include these
allegations in its Prehearing Statement. See ALJ Ex. 5 at 43. Where
an allegation is not included in the OSC, but the Government
includes the allegation in its Prehearing Statements, adequate
notice is provided to a respondent. Jose G. Zavaleta, M.D., 78 FR
27431, 27439 (2013) (Where the Government did not allege material
falsification on the respondent's application in the OSC, but did
raise the issue in its Supplemental Prehearing Statement, the
respondent was on notice that the issue would be considered at the
hearing); Treasure Coast Specialty Pharmacy, 76 FR 66965, 66967
(2011) (The respondent's argument that it was denied due process
because the Government had not alleged lack of state authority in
the OSC was rejected, because the scope of the proceedings before
the Administrative Law Judge was not defined by the OSC ``but rather
by the Government's prehearing disclosures'' as well); John Stafford
Noell, 59 FR 47359, 47361 (1994) (Notice of allegations were
adequate where they were not included in the OSC, but they were
contained in the Government's Prehearing Statement).
---------------------------------------------------------------------------
DI 3 confronted Dr. Shi regarding this conflicting information at
the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that
this diazepam had been shipped for direct patient use in China. Tr.
363-64. Dr. Shi stated that OakmontScript had to label the reason for
export as ``research'' in order to get the shipment past Chinese Custom
Officials and that the actual intended use of the diazepam was for
direct patient use. Tr. 366, 1446.
DI 3 was also confused by documents provided by Dr. Shi because
although they appeared to be the exact same documents--a prescription
written in Chinese, a hospital's government licenses, and a doctor's
medical license--these documents were provided in stacks for two
different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on
a translation that DI 3 ultimately obtained for these documents, DI 3
learned that both prescriptions were for diazepam. Tr. 383.
Invoice OKS-00753 (Briviact)
OakmontScript provided DI 3 with documents that indicated that
Briviact 50 milligram and 100 milligram, was received on October 22,
2018, the shipping label was created on October 25, 2018, and was
shipped on November 2, 2018. Tr. 579-96; Gov't Exs. 12 at 8, 20 at 10,
26 at 103, 105, 28 at 16. Other documentation provided by OakmontScript
indicated that this Briviact was shipped on October 26, 2018. Gov't
Exs. 17 at 2, 18 at 4. In other documentation provided by
OakmontScript, no shipping date is provided. Gov't Ex. 27 at 3-4.
OakmontScript did not fill out a DEA Form 236 for this controlled
substance. Tr. 596, 1435-36; See Gov't Ex. 48.\85\
---------------------------------------------------------------------------
\85\ The allegation specific to this invoice was made on page 29
of the Government Prehearing Statement (``GPHS''). ALJ Ex. 5 at 29.
---------------------------------------------------------------------------
Invoice OKS-00315-2 (Lyrica)
OakmontScript provided documentation to DI 3 indicating that a
variety of Lyrica strengths were shipped on November 21, 2018, to J.F.
at YaoPharma. Tr. 558-72; Gov't Ex. 31 at
[[Page 21538]]
1-2, 27 at 3, 31 at 1, 4. However, other documentation provided by Dr.
Shi indicates that this Lyrica was exported on November 21, 2019. Gov't
Ex. 12 at 12.\86\ Dr. Shi also sent an email stating that the label for
the Lyrica was created on November 21, 2018, and the drop-off date was
December 4, 2018. Gov't Ex. 20 at 10. Other documents list the date as
March 29, 2019. Gov't Ex. 31 at 3. Other documents list an invoice date
of May 8, 2019. Gov't Ex. 26 at 102.\87\ The date of the invoice was
also listed as August 8, 2018. Gov't Ex. 28 at 48. OakmontScript did
not file a DEA Form 236 for this export. Tr. 572-73.\88\
---------------------------------------------------------------------------
\86\ DI 3 discussed these issues with Dr. Shi on April 23, 2019,
and Dr. Shi indicated that this was an incorrect date and the date
should be listed as November 21, 2018. Tr. 564.
\87\ This incorrect date could be related to the macro issue,
but regardless, having these incorrect dates caused confusion for DI
3. Tr. 576-77.
\88\ The allegation specific to this invoice was made on page 22
of the GPHS. ALJ Ex. 5 at 22.
---------------------------------------------------------------------------
Accordingly, in review of the evidence of record, including
stipulations of the parties, OSC Allegations 20.a.a, 20.a.b, 20.a.c,
20.a.d, 20.b, 20.c.e, and 20.c.f \89\ [related to Respondent's failure
to keep complete and accurate records] are sustained. [I find that
Factors One and Five weigh against Respondent's continued exporter
registration based on these recordkeeping violations.]
---------------------------------------------------------------------------
\89\ It appears that the Government had formatting issues when
identifying various paragraphs of the OSC.
---------------------------------------------------------------------------
Lack of Initial Inventory
Pursuant to 21 CFR 1304.11, ``[e]very person required to keep
records shall take an inventory of all stocks of controlled substances
on hand on the date he/she first engages in the manufacture,
distribution, or dispensing of controlled substances, in accordance
with paragraph (e) of this section as applicable'' and ``[i]n the event
a person commences business with no controlled substances on hand, he/
she shall record this fact as the initial inventory.'' 21 CFR
1304.11(b).
On September 16, 2016, DI 1 conducted an on-site inspection of
OakmontScript with a Senior Investigator with the Massachusetts
Department of Health. Tr. 44-45. DI 1 explained that OakmontScript was
required to create an initial inventory of controlled substances
OakmontScript has on site. Tr. 50. DI 1 and the Senior Investigator
conducted a pre-registration inspection of OakmontScript for its
exporter application on June 22, 2017. Tr. 69-71. They discussed with
Dr. Shi that OakmontScript was required to create an initial inventory
and maintain records for at least two years. Tr. 71-72.
DI 3, DI 4, and DI 1 conducted an inspection of OakmontScript on
February 19, 2019. Tr. 156-58. They discussed recordkeeping and the DIs
explained that they would be conducting a controlled substance
accountability audit. Tr. 159. Although the closing inventory for the
accountability audit was good because ``it tied out to zero,'' there
were issues with OakmontScript's recordkeeping, including a failure to
take an initial inventory, which OakmontScript was unable to produce.
Tr. 190, 736, 763. Specifically, during the February 19, 2019
inspection, OakmontScript informed DI 3 ``that they had forgotten to
take the initial inventory when they received the export
registration.'' Tr. 735-36. DI 3 discussed these issues with her group
supervisor and her group supervisor asked her to return to conduct an
expanded controlled substance accountability audit going back to
December 5, 2017, when OakmontScript first received its DEA exporter
registration. Tr. 192-93.
I find that OakmontScript failed to record an initial inventory for
its exporter registration, which is a violation of 21 CFR 1304.11(b).
This is also particularly concerning because OakmontScript has a
distributor license and was aware of these requirements. Furthermore,
both DI 1 and DI 2 had explained to Dr. Shi that an initial inventory
was required once OakmontScript's exporter application was approved.
Accordingly, in review of the evidence of record, including
stipulations of the parties, OSC Allegation 21.a is sustained. [I find
that Factors One and Five weigh against Respondent's continued exporter
registration based on Respondent's failure to conduct an initial
inventory.]
Factor Six: Such Other Factors as May Be Relevant to and Consistent
With the Public Health and Safety
The Government alleges that Factor Six is relevant to the public
interest analysis regarding the Respondent's exporter COR. ALJ Ex. 1 at
7.\90\
---------------------------------------------------------------------------
\90\ The Government failed to state why Factor Six is applicable
and only specifically stated that Factor Six applied to the
allegation that OakmontScript filled prescriptions for underage
patients in China.
---------------------------------------------------------------------------
The Respondent's exporting of controlled substances prior to having
an exporter COR, its exporting of controlled substances for which it
did not have approved drug codes and its exporting to fill individual
prescriptions do not fall under any of the first five factors that are
to be considered in determining the public interest for an exporter and
thus are appropriately addressed under Factor Six. See Perry County
Food & Drug, 80 FR at 70,112 (DEA applied the analogous Factor Five
``such other conduct'' in the context of a pharmacy registrant where
the violations at issue were ``not covered by application of the other
four public interest factors.'').
Additionally, as discussed in the portion of this Recommended
Decision dealing with the Respondent's distributor registration, the
lack of candor is an issue that falls within the category of ``such
other factors as may be relevant to and consistent with the public
health and safety.'' \91\ See supra at 52-53.
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\91\ For other categories of registrants, the ``such other
factors'' or ``such other conduct'' is listed as Factor Five. See,
e.g., 21 U.S.C. 823(b) & (e) (applicable to distributors) and 21
U.S.C. 823(f) (applicable to practitioners).
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Pre-Registration Exports
The CSA requires that in order to export a controlled substance a
person must be properly registered to do so. 21 U.S.C. 957(a)
specifically states: ``No person may . . . export from the United
States any controlled substance . . . unless there is in effect with
respect to such person a registration issued by the Attorney General
under section 958 of this title . . .'' Further, DEA regulations state
that ``[n]o person required to be registered shall engage in any
activity for which registration is required until the application for
registration is granted and a Certificate of Registration is issued by
the Administrator to such person.'' 21 CFR 1301.13(a). These
requirements have been applied in DEA decisions. Chein, 72 FR at 6592
(citing 21 U.S.C. 957(b), and 21 CFR 1301.13(a)). Additionally, another
regulation applying specifically to exports states that ``[n]o person
shall in any manner export, or cause to be exported from the United
States any controlled substance . . . unless and until such person is
properly registered under the Act . . .'' 21 CFR 1312.21(a).
The parties stipulated that the Respondent's exporter COR was first
issued on December 5, 2017. Stipulation 2. Moreover, it is established
by the Certification of Registration History for the Respondent's
exporter registration that the COR number was assigned on December 5,
2017. Gov't Ex. 1B. Therefore, there is no dispute that the Respondent
first had DEA authority to export controlled substances on December 5,
2017.
Invoice OKS-00243 (Diazepam)
The testimony by both DI 3 and Dr. Shi, as well as the
documentation
[[Page 21539]]
admitted at the hearing, provided conflicting dates for the export of
this diazepam. The dates in the documentation and discussed by both
witnesses are May 18, 2017 and June 10, 2017. Tr. 352-53, 356, 357,
366, 424-25, 432, 1311-12, 1313, 1448, 1449; Gov't Exs. 12 at 14, 17 at
3; 18 at 3; 26 at 20. Dr. Shi admitted she did not know the date of
export because of a USPS system update that resulted in the loss of
shipment information for this invoice. Tr. 358-59, 386, 1449; Gov't
Exs. 20 at 8, 28 at 22. However, there was no testimony or other
documentation that suggested an export date other than May 18, 2017 or
June 10, 2017. Indeed, at the hearing, Dr. Shi offered testimony that
``the best possible date'' of shipment was May 18, 2017, despite
telling DI 1 during her June 22, 2017, pre-registration inspection that
she had not exported any drugs. Tr. 361-63, 1313, 1368-69, 1449-50;
Gov't Ex. 21 at 9.
Based on the testimony and admitted exhibits, it is evident that
this diazepam was exported on either May 18, 2017, or June 10, 2017.
Regardless of which date the diazepam was actually shipped, both dates
are approximately six to seven months before the Respondent's
registration as an exporter was issued on December 5, 2017.
I therefore find that the Respondent exported this controlled
substance when it was not properly registered to do so in violation of
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00301 (Briviact)
DI 3 testified that this Briviact was shipped on August 2, 2017.
Tr. 440. The documentation that DI 3 received from the Respondent also
indicates an export date of August 2, 2017. Gov't Ex. 12 at 7, 26 at
36, 27 at 2. Furthermore, correspondence from Dr. Shi states the
shipping label was created on August 2, 2017. Gov't Ex. 20 at 8. Dr.
Shi confirmed the August 2, 2017 date in her testimony at the hearing.
Tr. 1313-14.
Based on the testimony and admitted exhibits, this Briviact was
exported on August 2, 2017. This date is approximately four months
before the Respondent's registration as an exporter was issued on
December 5, 2017.
I therefore find that the Respondent exported this controlled
substance when it was not properly registered to do so in violation of
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00315 (Belviq)
DI 3 testified that this Belviq was shipped on November 1, 2017.
Tr. 459. The documentation that DI 3 received from the Respondent also
indicates an export date of November 1, 2017. Gov't Ex. 12 at 3, 26 at
38-39, 27 at 2. In her testimony, Dr. Shi confirmed the November 1,
2017 date in the documentation she provided to the Government as
reflected in Government Exhibits 12 and 27, but also testified it was
an estimated date.\92\ Tr. 1318-20.
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\92\ Dr. Shi did not offer an alternative date in her testimony.
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Based on the testimony and admitted exhibits, this Belviq was
exported on November 1, 2017. This date is approximately one month
before the Respondent's registration as an exporter was issued on
December 5, 2017.
I therefore find that the Respondent exported this controlled
substance when it was not properly registered to do so in violation of
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00315/OKS-00315-2 (Lyrica)
DI 3 testified that this Lyrica was shipped on November 20, 2017.
Tr. 471. Some documentation that DI 3 received from the Respondent also
indicates an export date of November 20, 2017. Gov't Ex. 12 at 9-10.
Other documentation that DI 3 received from the Respondent provides a
date of November 17, 2017 (Gov't Ex. 28 at 32), Novem
[…truncated; see source link]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.