Federal
Register Notices > Registrant
Actions - 2006 >
Oakland Medical Pharmacy; Revocation of Registration
FR Doc E6-14045 [Federal Register: August 24, 2006 (Volume 71, Number
164)] [Notices] [Page 50100-50102] From the Federal Register Online via
GPO Access [wais.access.gpo.gov] [DOCID:fr24au06-79]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 05-15]
Oakland Medical Pharmacy; Revocation of Registration
On October 27, 2004, I, the Deputy Administrator of the Drug
Enforcement Administration, issued an Order to Show Cause and further
ordered the immediate suspension of DEA Certificate of Registration,
AO6837477, issued to Oakland Medical Pharmacy (Respondent) of Madison
Heights, Michigan. The Show Cause Order proposed to revoke Respondent's
pharmacy registration and to deny any pending applications for renewal
or modification of its registration on the ground that Respondent's
continued registration would be inconsistent with the public interest.
See 21 U.S.C. 823(f) and 824(a). The Order of Immediate Suspension was
based on my preliminary finding that Respondent's continued registration
"would constitute an imminent danger to the public health and safety
because of the substantial likelihood" that Howard Applebaum,
Respondent's owner and chief pharmacist would "continue to divert
controlled substances to persons who will abuse them." Show Cause Order
at 3. The Show Cause Order also notified Respondent of its right to a
hearing. Id.
The Show Cause Order specifically alleged that between
February 2002 and October 2004, Mr. Applebaum had "[o]n many occasions
* * * provided [two undercover] agents with refills of controlled
substance prescriptions when refills had not been authorized by a
physician." Id. at 2. The Show Cause Order further alleged that Mr.
Applebaum had "also provided the agents with excessive amounts of
controlled substances that had not been authorized by a physician" by
providing the agents with refills when he dispensed the initial
prescriptions. Id. The Order also alleged that Mr. Applebaum had
provided refills to the agents long before their original prescriptions
would have been used up. Id.
The Show Cause Order alleged that on July
26, 2004, Mr. Applebaum filled a controlled substance prescription for
an agent "with no authorization from her physician." Id. The Order
also alleged that on the same day, the agent observed Mr. Applebaum
provide another customer with two refills for a controlled substance. Id.
The Show Cause Order further alleged that a review Respondent's
records for
[[Page 50101]]
the period January 2003 through May 2004 indicated that "Mr.
Applebaum routinely dispenses unauthorized controlled substances by
providing early refills * * * and multiple refills of prescriptions for
the same controlled substances on the same date." Id. The Order also
alleged that Respondent's records show that "Mr. Applebaum dispenses
narcotic to drug addicts and to individuals obtaining treatment for
narcotic addiction." Id.
The Show Cause Order alleged that "Mr.
Applebaum was "routinely dispens[ing] contraindicated controlled
substances at the same time to the same patient," and that he was also "routinely
dispens[ing] controlled substances" to doctor shoppers. Id.
Finally, the Show Cause Order alleged that from October 2003 through
April 2004, Respondent had purchased 350,000 units of hydrocodone
products and that 46 percent of the hydrocodone prescriptions it
dispensed were issued by the same physician. Id. at 3. The Order thus
alleged that there was a "substantial likelihood that Mr. Applebaum
will continue to divert controlled substances to" drug abusers and that
Respondent's continued registration "would constitute an imminent
danger to public health and safety." Id.
On December 13, 2004, the
Office of the Administrative Law Judges received Respondent's request
for a hearing. The case was assigned to Administrative Law Judge (ALJ)
Gail A. Randall.
On December 22, 2004, the Government moved for summary
disposition. The basis for the motion was that on November 16, 2004, the
Michigan Board of Pharmacy had filed an Administrative Complaint against
Respondent and had also summarily suspended Respondent's state pharmacy
license. The State's Order of Summary Suspension was effective
immediately. The Government thus contended that because Respondent no
longer had authority under state law to distribute or dispense
controlled substances, see 21 U.S.C. 824(a)(3), it was not entitled to
hold its Federal registration. The Government further contended that
there was no factual matter in dispute.1
1Upon receipt of the Government's motion, the ALJ ordered that the
proceedings be stayed pending a decision on the motion and further order
Respondent to file a reply.
On January 21, 2005, Respondent filed an opposition to the
Government's motion. While Respondent acknowledged that the State had
summarily suspended its registration, it contended that the State's
action "was predicated in large part on the immediate ex-parte
suspension of respondent's DEA registration * * * and the facts
developed by the DEA." Resp. Answer to Motion for Summary Disp. at 1.
Respondent further contended that the hearing before the State ALJ was
ongoing and that the state order was not final. See id. Respondent
argued that for DEA to rely on the State's summary suspension when the
State's action was based on the original DEA proceeding "is a case of
boot-strapping extraordinaire." Id. at 2.
Respondent thus contended
that it would be "fundamentally unfair" to grant the Government's
motion. Id. Respondent further contended that revocation was not
required by the statutory language of 21 U.S.C. 824(a)(3). See id.
(quoting 21 U.S.C. 824(a)(3) ("a registration * * * may be suspended or
revoked by the Attorney General upon a finding that the registrant has
had his State license or registration suspended, revoked or denied by
competent State authority"). According to Respondent, "[t]he action is
not mandatory nor is it warranted in this situation where the respondent
has specifically requested a hearing on the merits and is currently in
the midst of" a State hearing "on the issue of whether * * *
Respondent's conduct merits [an] order of summary suspension of the
licenses by the State." Id. at 2-3. Respondent thus requested that the
ALJ deny the Government's motion for summary disposition and that the
Federal proceeding be stayed until the State issued a decision on the
merits.
On February 4, 2005, the ALJ issued an Order for Status Report.
In the order, the ALJ notified the parties that she had taken the matter
under advisement and that the proceedings would remain stayed. The ALJ
also ordered Respondent to file a status report with respect to its
State license on or before April 18, 2005. The ALJ further notified
Respondent that if it failed to file the report, the ALJ would rule on
the government's motion based on the information then before her. See
Order for Status Report at 1.
As of May 27, 2005, Respondent had not
filed a status report. The ALJ therefore issued her order, opinion and
recommended decision. In her order, the ALJ granted the Government's
motion for summary disposition, denied the Respondent's request for a
continued stay of the proceedings and recommended the revocation of
Respondent's registration on the ground that Respondent lacked State
authority to handle controlled substances. See ALJ Dec. at 5-7.
The ALJ
specifically found that "Respondent did not deny that it is currently
without state authorization to handle controlled substances." ALJ Dec.
at 5. The ALJ further noted that Respondent had failed to file a report
advising her of the status of the state proceeding. See id. Because
state authorization is an essential prerequisite to a DEA registration,
see id. at 4, and it was undisputed that "that the Respondent does not
have authority to handle controlled substances in the jurisdiction where
it seeks to maintain its DEA registration," the ALJ granted the
Government's motion for summary disposition. Id. at 5.
The ALJ
acknowledged Respondent's argument that it was "unfair" for DEA to
revoke its registration based on the Michigan suspension, because it had
been based on the DEA Order to Show Cause and Immediate Suspension of
Registration. Id. at 5-6. The ALJ further noted that "such an action is
circular and may result in the Respondent being denied an opportunity to
adjudicate the facts." Id. at 6.
The ALJ also denied Respondent's
request for a stay until the conclusion of the state proceeding.
According to the ALJ, "[t]he fact remains that the Respondent currently
lacks state authorization to handle controlled substances, and therefore
cannot remain registered with the DEA." Id. The ALJ thus concluded that
she had "no choice but to grant summary disposition at the present
time, and to deny" Respondent's motion for a stay. Id.
Thereafter,
Respondent sought reconsideration of the ALJ's recommended decision. The
basis for Respondent's motion was that he had not intentionally failed
to file a Status Report but had erroneously believed, based on a phone
conversation with Government counsel that occurred on April 11, 2005,
that Government counsel "was going to investigate the matter and
confirm with Respondent's counsel whether it was still necessary for him
to file anything additional in writing given the status of the" state
hearing. Resp. Req. for Recon. at 2. Respondent's counsel stated that
when he did not hear back from Government counsel, he "wrongly assumed
that the issue had been resolved." Id. Respondent further informed the
ALJ that the state proceedings were continuing and that the proceeding
had been "an elongated and vigorously contested hearing," which had
been held on five different dates with one additional date to follow, at
which the State's "expert pharmacy witness" was to testify. Id. at 3.
The Government responded that while it did not object to the late filing
of the status report, it did object to
[[Page 50102]]
reconsideration of the ALJ's decision. See Govt. Resp. at 2. While
the Government counsel did not remember the aforementioned telephone
conversation, he did not dispute that Respondent's counsel may have
asked him whether he had to file anything. Id. The Government further
pointed out that Respondent's counsel did not contend that he had not
received the ALJ's Order for Status Report, and that the Order, which
the Government had not received, presumably clearly stated the deadline
for filing the Status Report. See id. at 2-3.
The Government contended
that whether Respondent should be permitted to file a status report was
irrelevant because Respondent's state license had been suspended in
November 2004 and had remained so since then. The Government further
argued that "Respondent still does not know when the state proceedings
will end, and there is no assurance that Respondent will regain its
state authority." Id. at 3. According to the Government, "[t]he ALJ
based her Decision on the fact that Respondent had no state authority to
handle controlled substances at the time of the Decision. That fact was
true at the time of the deadline for the status report, at the time of
the Decision and is true at the present." Id. Therefore, the Government
argued that there was no basis for the ALJ to reconsider her decision.
The ALJ denied Respondent's motion for reconsideration. Again, the ALJ
noted that "under the Controlled Substances Act it is clear that the
DEA does not have statutory authority to maintain a registration if the
registrant is without state authority to handle controlled substances in
the state in which the registrant conducts business." Order Denying
Resp. Req. for Recon. at 2. The ALJ then transmitted the record to
me.2
2I emphasize that there is no provision in DEA's regulations for
either party to request reconsideration of an ALJ's recommended
decision. See generally 21 CFR Subpart D. The appropriate means of
challenging the ALJ's decision is to file exceptions. See 21 CFR
1316.66.
Having considered the record as a whole, I hereby issue this decision
and final order. I adopt the ALJ's findings of fact and conclusions of
law. I further adopt the ALJ's recommended decision to revoke
Respondent's registration. I do not, however, adopt the opinion to the
extent it suggests that it was "unfair" for this agency to revoke
Respondent's Federal registration based on the State proceeding and that
"such an action is circular and may result in the Respondent being
denied an opportunity to adjudicate the facts." ALJ Dec. at 6.
I
acknowledge that the State's Administrative Complaint relied in part on
my Order to Show Cause and Immediate Suspension of Registration. See
Admin. Complaint at 3. But the state complaint did not rely solely on my
action. The state complaint cited a variety of grounds under Michigan
law for imposing sanctions including "failing to comply with applicable
Federal laws," id. at 2 (citing Mich. Comp. Laws Sec. 333.7311(1)(f));
dispensing of "controlled substances for other than legitimate medical
purposes," id. (citing Mich. Comp. Laws Sec. 333.7311(1)(g)); and "if
an officer or stockholder of the pharmacy lacks good moral character." Id. at 2-3 (citing Mich. Comp. Laws Sec. 333.17768(2)(a)). The complaint
further alleged that Respondent had violated these provisions of state
law. Id. at 3-4. Furthermore, the State's Order of Summary Suspension
was based on the "careful consideration of the documentation filed" in
the State's administrative proceeding including the complaint. Order of
Summary Suspension 1. The State's Order also provided a procedure for
Respondent to petition for dissolution of the state suspension. See
id.
I take the State on its word and conclude that its decision to summarily
suspend Respondent's state license was not based solely on my order but
was also based on its own evaluation of the evidence. Furthermore, as
Respondent itself pointed out, the State proceeding has been "an
elongated and vigorously contested hearing," which included at least
six days of hearings with the State putting on an expert witness. It is
hard to imagine why a proceeding would take so long to litigate and
require expert testimony if it did not involve an adjudication of the
underlying facts. Thus, I do not accept the ALJ's conclusion that it is "circular" for this agency to revoke Respondent's registration based
on the State's summary suspension order and that doing so "may result
in * * * Respondent being denied an opportunity to adjudicate the facts." ALJ Dec. at 6. Quite the opposite, it appears that the State
entered its suspension order based on its own examination of the
evidence; it further appears that Respondent has had a full and fair
opportunity to litigate the facts in the State proceeding.
DEA's
regulations make clear that the ALJ's decision is only a recommendation;
it is not the final agency action. The revocation of Respondent's
Federal registration becomes final only with this order. Yet in the
interval between the ALJ's decision and the publication of this order,
Respondent has submitted no evidence to show that the State has lifted
its suspension.
As the ALJ correctly recognized, DEA has consistently
held that a registrant may not hold a DEA registration if it is without
appropriate authority under the laws of the state in which it does
business. See, e.g., Rx Network of South Florida, LLC, 69 FR 62,093
(2004); Wingfield Drugs, Inc., 52 FR 27,070 (1987). Respondent does not
have authority under Michigan law to handle controlled substances.
Therefore, it is not entitled to maintain its DEA registration. See Rx
Network of South Florida, 69 FR at 62095.
Order
Accordingly, pursuant to the authority vested in me by 21 U.S.C.
823(f) and 824(a), as well as 28 CFR 0.100(b) and 0.104, I hereby order
that DEA Certificate of Registration, No. AO6837477, issued to Oakland
Medical Pharmacy be, and it hereby is, revoked. I further order that any
pending applications for renewal or modification of its registration be,
and they hereby are, denied. This order is effective September 25, 2006.
Dated: August 15, 2006.
Michele M. Leonhart, Deputy Administrator.
[FR Doc. E6-14045 Filed 8-23-06; 8:45 am]
BILLING CODE 4410-09-P
NOTICE: This is an
unofficial version. An official version of these publications may be obtained
directly from the Government Printing Office (GPO).
|