Notice2026-01496
Allied Medical Products, Inc.; Decision and Order
Primary source
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Published
January 27, 2026
Issuing agencies
Justice DepartmentDrug Enforcement Administration
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<title>Federal Register, Volume 91 Issue 17 (Tuesday, January 27, 2026)</title>
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[Federal Register Volume 91, Number 17 (Tuesday, January 27, 2026)]
[Notices]
[Pages 3543-3546]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01496]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Allied Medical Products, Inc.; Decision and Order
I. Introduction
On April 21, 2025, the Drug Enforcement Administration (DEA or
Government) issued an Order to Show Cause (OSC) to Allied Medical
Products, Inc., of Santa Ana, California (Registrant). Request for
Final Agency Action (RFAA), Exhibit (RFAAX) 1, at 1, 6. The OSC
proposed the revocation of Registrant's DEA Certificate of
Registration, number RA0235146, alleging that its registration is
inconsistent with the public interest. Id. at 1 (citing 21 U.S.C.
823(f)).
On June 2, 2025, the Government submitted a RFAA to the
Administrator requesting that the Agency \1\ issue a default final
order revoking Registrant's registration. RFAA, at 1, 4-5. After
carefully reviewing the entire record and conducting the analysis as
set forth in detail below, the Agency grants the Government's request
for final agency action and revokes Registrant's registration. As a
preliminary matter, this Decision addresses whether Registrant is in
default and finds that it is. Thereafter, this Decision makes specific
factual findings on the alleged violations as set forth in the OSC,
including Registrant's failure to perform due diligence on a customer
before distributing controlled substances to that customer and allowing
a customer to purchase controlled substances using Registrant's account
information. Next, this Decision considers whether Registrant's
registration is inconsistent with the public interest and finds that it
is. Lastly, this Decision determines that the appropriate sanction is
revocation of Registrant's registration.
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\1\ The Controlled Substances Act (CSA) delegates authority to
the Attorney General, who has delegated it to the Administrator of
DEA (the Agency). 28 CFR 0.100.
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II. Default Determination
The Government's RFAA included a declaration by a DEA Diversion
Investigator (DI), in which DI declared under penalty of perjury that
on April 24, 2025, he traveled to Registrant's registered location and
``personally served a copy of the OSC upon an authorized
representative'' of Registrant. RFAAX 2, at 1. The declaration states
that the authorized representative signed a Form DEA-12 confirming
receipt of the OSC. Id. at 2-3. A copy of the Form DEA-12 is attached
to DI's declaration. Id. at 3. Accordingly, due to personal service of
the OSC upon a representative of Registrant, who, according to DI's
declaration was authorized to be served the OSC on Registrant's behalf,
the Agency finds that due process notice requirements have been
satisfied.\2\
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\2\ The declaration omits the statutory language: ``. . . the
foregoing is true and correct.'' 28 U.S.C. 1746(2). Nevertheless,
the declaration begins with the statement, ``I, [DI], under penalty
of perjury, declare and state the following . . . ,'' and DI's claim
of personally serving a representative of Registrant, and that the
representative was authorized to receive service of the OSC on
Registrant's behalf, is uncontroverted. RFAAX 2, at 1; see also
David Payne, M.D., 90 FR 46,925, 46,925 n.2 (2025); Immacula Michel,
M.D., 90 FR 45,813, 45,813 n.3 (2025).
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Under 21 CFR 1301.43, a registrant or applicant entitled to a
hearing who fails to file a timely hearing request ``within 30 days
after the date of receipt of the [OSC] . . . shall be deemed to have
waived their right to a hearing and to be in default'' unless ``good
cause'' is established for the failure. 21 CFR 1301.43(a), (c)(1). In
the absence of a demonstration of good cause, a registrant or applicant
who fails to timely file an answer also is ``deemed to have waived
their right to a hearing and to be in default.'' 21 CFR 1301.43(c)(2).
The OSC notified Registrant of its right to file a written request
for a hearing and an answer, and that if it failed to file such a
request and answer, it would be deemed to have waived its right to a
hearing and be in default. RFAAX 1, at 5 (citing 21 CFR 1301.43). Here,
Registrant did not request a hearing, file an answer, or respond to the
OSC in any way. RFAA, at 1-2. Accordingly, Registrant is in default. 21
CFR 1301.43(c)(1).
``A default, unless excused, shall be deemed to constitute a waiver
of [Registrant's] right to a hearing and an admission of the factual
allegations of the [OSC].'' 21 CFR 1301.43(e). Because
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Registrant is in default and has not moved to excuse the default, the
Agency finds that Registrant has admitted to the factual allegations in
the OSC. 21 CFR 1301.43(c)(1), (e), (f)(1).
Further, ``[i]n the event that [a registrant] . . . is deemed to be
in default . . . DEA may then file a request for final agency action
with the Administrator, along with a record to support its request. In
such circumstances, the Administrator may enter a default final order
pursuant to [21 CFR] 1316.67.'' 21 CFR 1301.43(f)(1). Here, the
Government has requested final agency action based on Registrant's
default pursuant to 21 CFR 1301.43(c), (f), and 1301.46. RFAA, at 1, 5;
see also 21 CFR 1316.67.
III. Public Interest Determination
A. Overview of Law
Congress enacted the Controlled Substances Act (CSA) ``to conquer
drug abuse and control the legitimate and illegitimate traffic in
controlled substances.'' Gonzales v. Raich, 545 U.S. 1, 12 (2005). A
particular concern of Congress was ``the need to prevent the diversion
of drugs from legitimate to illicit channels,'' and it ``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.'' Id. at 12-13.
The CSA's requirements under this closed regulatory system include
that ``[e]very person who . . . distributes any controlled substance .
. . , or who proposes to engage in the . . . distribution of any
controlled substance . . . , shall obtain annually a registration
issued by [DEA].'' 21 U.S.C. 822(a)(1); see also Gonzales v. Raich, 545
U.S. at 27-28. To protect the American people and ensure compliance
with the CSA, Congress empowered the Agency to deny, suspend, or revoke
a registration if it would be inconsistent with the public interest.\3\
21 U.S.C. 823(f); 21 U.S.C. 824(a)(4); Gonzales v. Oregon, 546 U.S.
243, 251 (2006).
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\3\ A statutory basis to deny an application pursuant to section
823 is also a basis to revoke or suspend a registration pursuant to
section 824, and vice versa, because doing ``otherwise would mean
that all applications would have to be granted only to be revoked
the next day . . . .'' Robert Wayne Locklear, M.D., 86 FR 33,738,
33,744-45 (2021) (collecting cases).
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In determining whether Registrant's registration is inconsistent
with the public interest, the Agency analyzes five statutorily
established public interest factors. Gonzales v. Oregon, 546 U.S. at
251; 21 U.S.C. 823(f)(1)-(5). The five factors for distributors are:
(1) maintenance of effective controls against diversion of
particular controlled substances into other than legitimate medical,
scientific, and industrial channels;
(2) compliance with applicable State and local law;
(3) prior conviction record of applicant 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(f).
These five public interest factors are considered in the
disjunctive. Morris & Dickson Co., LLC, 88 FR 34,523, 34,533 (2023);
Masters Pharm., Inc., 80 FR 55,418, 55,472-73 (2015); Southwood Pharm.,
Inc., 72 FR 36,487, 36,497 (2007); Holloway Distrib., 72 FR 42,118,
42,122 (2007). Any one factor, or combination of factors, may be
decisive, and the Agency ``may give each factor the weight . . .
deem[ed] appropriate in determining whether a registration should be
revoked or an application for registration denied.'' Morall v. Drug
Enf't Admin., 412 F.3d 165, 185 n.2 (Henderson, J., concurring)
(quoting Robert A. Smith, M.D., 70 FR 33,207, 33,208 (2007)); see also
Penick Corp. v. Drug Enf't Admin., 491 F.3d 483, 490 (D.C. Cir. 2007);
Morris & Dickson, 88 FR at 34,533; Masters, 80 FR at 55,472-73;
Southwood, 72 FR at 36,497-98; Holloway, 72 FR at 42,122.
Moreover, while the Agency is required to consider each of the
factors, it ``need not make explicit findings as to each one.'' MacKay
v. Drug Enf't Admin., 664 F.3d 808, 816 (10th Cir. 2011) (quoting
Volkman v. U.S. Drug Enf't Admin., 567 F.3d 215, 222 (6th Cir. 2009));
Morris & Dickson, 88 FR at 34,533; Masters, 80 FR at 55,473; Southwood,
72 FR at 36,497-98; Holloway, 72 FR at 42,122. ``In short, . . . the
Agency is not required to mechanically count up the factors and
determine how many favor the Government and how many favor the
registrant. Rather, it is an inquiry which focuses on protecting the
public interest; what matters is the seriousness of the registrant's
misconduct.'' Jayam Krishna-Iyer, M.D., 74 FR 459, 462 (2009).
Accordingly, as the Eleventh Circuit has recognized, Agency decisions
have explained that findings under a single factor can support a
sanction. Jones Total Health Care Pharmacy, 881 F.3d at 830; Pharmacy
Doctor Enters., Inc. v. Drug Enf't Admin., 789 Fed. Appx. 724, 729
(11th Cir. 2019).
In this matter, the Government's evidence is confined to factor
one. RFAAX 1, at 2. Evidence is considered under factor one when it
concerns the maintenance of effective controls against diversion of
controlled substances into other than legitimate channels. 21 U.S.C.
823(f)(1). To determine whether Registrant's registration is in the
public interest, the Agency has evaluated the Government's allegations
of Registrant's failure to maintain effective controls against
diversion, including failure to conduct due diligence on a customer and
allowing a customer to purchase controlled substances using
Registrant's account.
The Government has the burden of proof in this proceeding, Morris &
Dickson, 88 FR at 34,533 (citing 21 CFR 1301.44(e)), and the Agency
must make its findings based on ``substantial [record] evidence.'' 5
U.S.C. 556(d); see also 5 U.S.C. 706(2)(E); 21 U.S.C. 877. If the
Government meets its burden of establishing a prima facie case that
revoking Registrant's registration is in the public interest, then the
burden shifts to Registrant to rebut the Government's case. Morris &
Dickson, 88 FR at 34,538; Masters, 80 FR at 55,473; Southwood, 72 FR at
36,498.
B. Public Interest Factor One: Effective Controls Against Diversion
In determining whether a distributor's registration is inconsistent
with the public interest, the CSA requires the Agency to consider the
distributor's ``maintenance of effective controls against diversion of
particular controlled substances into other than legitimate medical,
scientific, and industrial channels.'' 21 U.S.C. 823(f)(1); RFAAX 1, at
2. Likewise, DEA rules require all registrants, including distributors,
to ``provide effective controls and procedures to guard against theft
and diversion of controlled substances.'' 21 CFR 1301.71(a); RFAAX 1,
at 2.
Part of the requirement to maintain effective controls against
diversion is the ``duty to perform due diligence on [the distributor's]
customers.'' Masters, 80 FR at 55,477 (citing 21 U.S.C. 823 and 21 CFR
1301.71(a)); RFAAX 1, at 2. A distributor ``has an affirmative duty to
protect against diversion by knowing its customers and the nature of
their . . . sales.'' Holloway, 72 FR at 42,124; RFAAX 1, at 2. A
distributor's duty to know its customers includes ``conduct[ing] a
reasonable investigation `to determine the nature of a potential
customer's business before it' sells to the customer, and the
distributor cannot ignore `information which raise[s] serious doubt as
to the legality of [a potential or existing customer's]
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business practices.' '' Masters, 80 FR at 55,477 (quoting Southwood, 72
FR at 36,498); RFAAX 1, at 2. ``Moreover, the obligation to perform due
diligence is ongoing throughout the course of a distributor's
relationship with its customer.'' Id. (citing Southwood, 72 FR at
36,498-500); RFAAX 1, at 2.
Here, the Agency finds that, in light of Registrant's default, the
factual allegations in the OSC are deemed admitted. 21 CFR 1301.43(e).
Accordingly, Registrant is deemed to have admitted to each of the
following facts.\4\
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\4\ According to the CSA, ``[f]indings of fact by the [DEA
Administrator], if supported by substantial evidence, shall be
conclusive.'' 21 U.S.C. 877. Here, where Registrant is found to be
in default, all the factual allegations in the OSC are deemed to be
admitted. These uncontested and deemed admitted facts constitute
evidence that exceeds the ``substantial evidence'' standard of 21
U.S.C. 877; it is unrebutted evidence.
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On August 3, 2023, DEA requested Registrant's due diligence files
for Salus Medical, LLC (Salus), a mid-level distributor located in
Phoenix, Arizona, that was registered with DEA. RFAAX 1, at 4. Although
Registrant had been distributing controlled substances to Salus since
approximately June 2021, Registrant failed to maintain or conduct any
meaningful due diligence prior to establishing Salus as a customer or
distributing controlled substances to Salus. Id.
On September 7, 2023, Registrant provided DEA with limited
documentation purporting to constitute Registrant's due diligence
regarding Salus. Id. The documentation provided showed a signature/
creation date of August 30, 2023--approximately one month after DEA
requested information from Registrant and over two years after
Registrant established Salus as a customer. Id.
Additionally, from at least June 2021 until at least October 2022,
Registrant knowingly provided its account information and password to
employees of Salus, allowing Salus to obtain direct access to
Registrant's purchasing authority. RFAAX 1, at 4. This conduct allowed
Salus to directly purchase controlled substances through Registrant's
account, misleading suppliers with respect to the actual purchasing
entity. Id. By providing the account and password information, and
without conducting adequate due diligence, Registrant facilitated the
unlawful distribution of approximately 3,221 437-ml bottles of
promethazine with codeine \5\ 6.25 mg.\6\ Id.
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\5\ This combination of promethazine with codeine falls into
Schedule V. 21 CFR 1308.15(c); RFAA, at 4.
\6\ In October 2024, the owners of Salus pleaded guilty in the
Southern District of Texas to one count of conspiracy to unlawfully
distribute and dispense controlled substances in connection with a
scheme to distribute over 18.6 million dosage units of commonly
diverted controlled substances. RFAAX 1, at 5. Following its
conviction, on October 16, 2024, Salus surrendered for cause its DEA
registration. Id.
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Therefore, the Agency finds substantial record evidence that
Registrant failed to maintain effective controls against diversion by:
failing to conduct any due diligence (i.e., failing to know its
customer) prior to distributing controlled substances to Salus; failing
to conduct any ongoing due diligence on Salus while it was distributing
controlled substances to Salus from approximately June 2021 to August
2023; and allowing Salus to purchase controlled substances using
Registrant's account information. RFAAX 1, at 4; 21 U.S.C. 823(f)(1);
21 CFR 1301.71(a); Morris & Dickson, 88 FR at 34,526; Masters, 80 FR at
55,477; Holloway, 72 FR at 42,124; Southwood, 72 FR at 36,498-500.
C. Public Interest Conclusion
While the Agency considered all the public interest factors of 21
U.S.C. 823(f),\7\ its findings are relevant to factor one (maintenance
of effective controls against diversion of controlled substances into
other than legitimate channels). 21 U.S.C. 823(f)(1); 21 CFR
1301.71(a); Masters, 80 FR at 55,473, 55,477; Southwood, 72 FR at
36,498-500. Here, the Agency found substantial record evidence that
Registrant failed to conduct due diligence on a customer prior to and
while it was distributing controlled substances to that customer for
over two years. See supra Section III.B. The Agency further found
substantial record evidence that Registrant allowed another entity to
purchase controlled substances using Registrant's account information.
Id. Registrant's proven misconduct, therefore, establishes that it
failed to maintain effective controls against diversion of controlled
substances. 21 U.S.C. 823(f)(1); 21 CFR 1301.71(a); Southwood, 72 FR at
36,502; Holloway, 72 FR at 42,123-24.
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\7\ The lack of evidence regarding the other public interest
factors is not dispositive, and weighs neither for nor against a
finding that Registrant's registration is inconsistent with the
public interest. See, e.g., Tracy Amerson-Rivers, A.P.R.N., 90 FR
48,884, 48,886 n.10 (2025).
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Accordingly, the Agency finds that after considering the factors of
21 U.S.C. 823(f), the Government satisfied its prima facie burden
showing that Registrant's registration is ``inconsistent with the
public interest.'' \8\ 21 U.S.C. 824(a)(4); see also 21 U.S.C.
823(f)(1). The Agency further finds that there is insufficient
mitigating evidence to rebut the Government's prima facie case. See
supra Section II. Thus, the only remaining issue is whether revocation
of Registrant's registration is the appropriate sanction.
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\8\ Given the violations of law proven by unrebutted record
evidence as discussed herein, the Agency need not reach the
remaining allegations related to the failure to report suspicious
orders of controlled substances. RFAAX 1, at 4. Registrant's failure
to maintain effective controls against diversion of controlled
substances are sufficient to revoke.
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IV. Sanction
When the Agency concludes that a registrant's registration is
inconsistent with the public interest, the Agency then determines the
appropriate sanction, which may include revocation of the registration.
21 U.S.C. 824(a)(4); see also Pharmacy Doctors, 789 Fed. Appx. at 734
(the Agency is entitled to choose a sanction); Scott Hansen, A.R.N.P.,
90 FR 27,338, 27,341 (2025); Jeffrey Stein, M.D., 84 FR 46,968, 46,972-
73 (2019). At this stage, the burden is on registrants to show why they
can be trusted to maintain their registration. Morall, 412 F.3d at 174;
Jones Total Health Care Pharmacy, 881 F.3d at 830; Garrett Howard
Smith, M.D., 83 FR 18,882, 18,904 (2018). The issue of trust is
necessarily a fact-dependent determination based on the circumstances
presented by the individual respondent. Stein, 84 FR at 46,972; see
also Jones Total Health Care Pharmacy, 881 F.3d at 833.
As past performance is the best predictor of future performance,
the Agency requires that a registrant who has committed acts
inconsistent with the public interest accept responsibility for those
acts and demonstrate that they will not engage in future misconduct.
Jones Total Health Care Pharmacy, 881 F.3d at 833; ALRA Labs, Inc. v.
Drug Enf't Admin., 54 F.3d 450, 452 (7th Cir. 1995). Moreover, the
Agency requires a registrant's unequivocal acceptance of
responsibility. Morris & Dickson, 88 FR at 34,537; Janet S. Pettyjohn,
D.O., 89 FR 82,639, 82,641 (2024); Mohammed Asgar, M.D., 83 FR 29,569,
29,573 (2018); see also Jones Total Health Care Pharmacy, 881 F.3d at
830-31.
In addition, a registrant's candor during the investigation and
hearing is an important factor in determining acceptance of
responsibility and the appropriate sanction. Jones Total Health Care
Pharmacy, 881 F.3d at 830-31;
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Hoxie, 419 F.3d at 483-84. The Agency also considers the need to deter
similar acts by Registrant and by the community of registrants. Stein,
84 FR at 46,972-73.
Here, Registrant failed to answer the allegations contained in the
OSC and did not otherwise avail itself of the opportunity to prove to
the Agency that it can be trusted to maintain its registration. See
supra Section II. Thus, there is no record evidence that Registrant
takes responsibility, let alone unequivocal responsibility, for the
misconduct. Accordingly, it has not convinced the Agency that its
future controlled-substance-related actions will comply with the CSA
such that it can be entrusted with the responsibilities of a
registration.
Further, the interests of specific and general deterrence weigh in
favor of revocation. Registrant's misconduct in this matter concerns
the CSA's ``strict requirements regarding registration'' and,
therefore, goes to the heart of the CSA's ``closed regulatory system''
specifically designed ``to conquer drug abuse and to control the
legitimate and illegitimate traffic in controlled substances.''
Gonzales v. Raich, 545 U.S. at 12-14. If the Agency were to allow
Registrant to maintain its registration under these circumstances, it
would send a dangerous message that compliance with the law is not
essential to maintaining a registration.
In sum, Registrant has not offered any evidence on the record that
rebuts the Government's case for revocation of its registration, and
Registrant has not demonstrated that it can be entrusted with the
responsibility of registration. Accordingly, the Agency will order the
revocation of Registrant's registration.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 824(a)(4) and 21 U.S.C. 823(f), I hereby revoke DEA Certificate
of Registration No. RA0235146 issued to Allied Medical Products, Inc.
Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by
21 U.S.C. 824(a)(4) and 21 U.S.C. 823(f), I hereby deny any pending
applications of Allied Medical Products, Inc., to renew or modify this
registration, as well as any other pending application of Allied
Medical Products, Inc., for additional registration in California. This
Order is effective February 26, 2026.
Signing Authority
This document of the Drug Enforcement Administration was signed on
January 16, 2026, by Administrator Terrance C. Cole. That document with
the original signature and date is maintained by DEA. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DEA Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of DEA. This administrative process in no way alters the legal effect
of this document upon publication in the Federal Register.
Heather Achbach,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2026-01496 Filed 1-26-26; 8:45 am]
BILLING CODE 4410-09-P
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