[Federal Register: August 31, 2007 (Volume 72, Number 169)]
[Notice]
[Page 50397-50410]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31au07-134]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 7-21]
United Prescription Services, Inc. Revocation of Registration
On February 13, 2007, I, the Deputy Administrator of the Drug
Enforcement Administration, issued an Order to Show Cause and Immediate
Suspension of Registration to United Prescription Services, Inc.
(Respondent), of Tampa, Florida. The Order immediately suspended
Respondent's DEA Certificate of Registration, BU6696073, as a retail
pharmacy, based on my preliminary finding that Respondent was diverting
large quantities of controlled substances and that its continued
registration during the pending of these proceedings ``would constitute
an imminent danger to the public health and safety because of the
substantial likelihood that [it would] continue to divert controlled
substances.'' Show Cause Order at 4 (citing 21 U.S.C. 824(d)). The
Order also sought the revocation of Respondent's registration on the
ground that its ``continued registration is inconsistent with the
public interest.'' Id. at 1 (citing 21 U.S.C. 823(f) & 824(a)(4)).
The Show Cause Order alleged that Respondent distributed large
quantities of controlled substances based on prescriptions that it knew
or should have known ``were not written for a legitimate medical
purpose or were written by a practitioner not acting in the usual
course of professional practice.'' Id. More specifically, the Show
Cause Order alleged that between
[[Page 50398]]
October 1, 2005, and January 31, 2006, Respondent distributed 1,808,693
dosage units of controlled substances and that more than 1,275,000
dosage units of these controlled substances were prescribed by a single
physician. Id. at 3. Relatedly, the Show Cause Order alleged that
during this period, Respondent filled 11,830 prescriptions which were
written under a single physician's registration. Id.
The Show Cause Order further alleged that Respondent ``is owned and
operated by Mr. Samuel Ballinger,'' and that Mr. Ballinger also
``controlled and operated University Physician Resources, Inc.,''
(hereinafter, University), which either employed or contracted with
physicians and other persons who issued prescriptions for controlled
substances that were ordered through several internet sites, and which
were then filled by Respondent. Id. at 1-2. The Show Cause Order also
alleged that Respondent filled prescriptions issued by physicians who
were affiliated with other internet sites. Id.
The Show Cause Order alleged that Respondent knew or should have
known that the prescriptions were invalid. Id. at 2. Specifically, the
Show Cause Order alleged that ``the prescribing physicians were
geographically separated from the majority of their customers,'' thus
indicating that it was likely that the physicians had not examined the
customers, and that ``[t]he volume of the prescriptions generated by
one physician in a given period of time was so excessive as to indicate
that the practitioner could not have conducted an appropriate medical
exam, obtained a medical history, or made a prior diagnosis.'' Id.
Relatedly, the Show Cause Order alleged that while Respondent required
the physicians ``to submit an affidavit indicating that [they] had
supervised and directed a medical exam[,] [it] knew that, in many
cases, the prescribing physician had not directed and supervised any
examination.'' Id.
As for those instances ``in which physicians obtained medical
records from other medical professionals prior to issuing'' a
controlled-substance prescription, the Show Cause Order alleged that
Respondent ``knew the physicians did not consult with the medical
professionals who conducted the physical examinations.'' Id. The Show
Cause Order also alleged that ``Mr. Ballinger directed individuals
without a DEA registration to issue prescriptions for controlled
substances using the DEA registration of physicians employed by
University'' and that Respondent ``then filled those invalid
prescriptions for controlled substances.'' Id. Relatedly, the Show
Cause Order alleged that Respondent filled numerous prescriptions
issued by Dr. Wayne Starks after the expiration of Starks' registration
and its retirement from the DEA database. Id. at 3.
The Show Cause Order also alleged that Respondent violated various
other provisions of Federal law and regulations. Specifically, the Show
Cause Order alleged that Respondent was purchasing bulk hydrocodone
powder and manufacturing controlled substances without a manufacturer's
registration as required by 21 U.S.C. 822(b). Id. at 4. The Show Cause
Order alleged that this activity was not compounding because it was not
done ``pursuant to individual prescriptions.'' Id. The Show Cause Order
also alleged that Respondent violated 21 CFR 1306.05(a) by filling
prescriptions which ``either did not contain the full address of the
patient or contained an incorrect address for the patient,'' id., and
by dispensing a prescription which bore one physician's DEA number but
which ``appeared to be signed by'' a different physician. Id. at 3.
Finally, the Show Cause Order alleged that Respondent violated
various provisions of state law. Specifically, the Show Cause Order
alleged that Respondent ``dispensed controlled substances into a number
of states in which the dispensing violated the state law'' because the
prescription had not been written by a physician licensed under the
laws of the patient's state. Id. (citing Cal. Health & Safety Code
Sec. 11352). Relatedly, the Show Cause Order alleged that Respondent
had ``shipped controlled substances into * * * Kentucky in violation of
Kentucky law.'' Id. at 3-4 (citing Ky. Rev. Stat. Ann. Sec. 315.320).
On February 14, 2007, the Show Cause Order was served on
Respondent. Thereafter, on March 5, 2007, Respondent, through its
counsel, requested a hearing. The matter was assigned to Administrative
Law Judge (ALJ) Mary Ellen Bittner, who conducted a hearing on April 9
through 13, 2007, in Arlington, Virginia. At the hearing, both parties
elicited the testimony of witnesses and introduced documentary
evidence. Following the hearing, both parties submitted briefs
containing their proposed findings of fact and conclusions of law.
On May 31, 2007, the ALJ issued her decision. In that decision, the
ALJ found ``that the prescriptions that Respondent filled were not
issued in the course of a legitimate physician-patient relationship''
and thus were ``not valid prescriptions.'' ALJ at 67. In support of
this finding, the ALJ noted that it was ``undisputed that Dr. Reppy''
(who worked for University and wrote a large number of the
prescriptions filled by Respondent), ``examined few, if any, of the
patients to whom he issued prescriptions.'' Id. at 65. While the ALJ
acknowledged Dr. Reppy's testimony that he had ``spoke[n] with some of
the doctors who had previously treated patients with whom [he]
consulted by telephone,'' the ALJ found dispositive that ``there is no
evidence that any of these doctors referred their patients to
University or Dr. Reppy.'' Id. Relatedly, the ALJ noted that there was
also ``no evidence whatsoever that any physicians who had examined
Respondent's customers had referred them to the physicians who
prescribed to them and sent the prescriptions to Respondent to be
filled.'' Id. at 66. Finally, the ALJ noted that ``in some instances
the records show that physicians who had examined these individuals
refused to prescribe analgesics to them.'' Id. The ALJ thus concluded
``that there was no physician-patient relationship between Dr. Reppy--
or any of the other physicians discussed above who issued prescriptions
that Respondent filled--and the customers to whom they issued those
prescriptions.'' Id.
Relatedly, the ALJ found that ``Mr. Ballinger established a scheme
whereby University, which he controlled, would employ a physician to
issue prescriptions for Respondent to fill, and that representatives of
Respondent also actively arranged with operators of websites that
solicited customers to obtain prescriptions after telephonic
consultations with physicians that the physicians would send those
prescriptions to Respondent to be filled.'' Id. at 66. The ALJ thus
further found that Respondent knew the prescriptions were invalid and
violated 21 CFR 1306.04(a) when it filled them. Id. at 67.
Moreover, having concluded that the prescriptions Respondent filled
were invalid, the ALJ further held that ``Respondent's production of
dosage form controlled substances was not compounding within the
meaning of the Controlled Substances Act * * * and that * * *
Respondent manufactured controlled substances without holding a DEA
registration to do so.'' Id. The ALJ thus further found that Respondent
violated 21 U.S.C. 841(a). Id. at 68.
Finally, the ALJ rejected--as unsupported by the record--
Respondent's assertion that in January 2007, it changed its practices.
Id. at 68-69 (quoting Resp. Br. at 12). The ALJ
[[Page 50399]]
thus concluded that ``Respondent's continued registration would be
inconsistent with the public interest'' and recommended that its
registration be revoked and that its pending application for renewal be
denied. Id. at 69.
Thereafter, Respondent filed exceptions. Therein, Respondent
``agrees with the Recommended Ruling's finding that the evidence showed
that in many instances, prescriptions by Dr. Reppy were issued based on
a telephonic interaction with the patient after review of medical
records that included a physical examination which was conducted by a
practitioner who did not necessarily have a referral arrangement with
Dr. Reppy.'' Resp. Exceptions at 4 n.4.
Respondent argues, however, that the ALJ's proposed decision
imposes ``a requirement that a prescribing practitioner either
personally conduct a physical examination of a patient or have a
referral arrangement with another health care practitioner who
personally conducts a physical examination of a patient in order to
have a valid doctor-patient relationship.'' Id. at 3. Respondent argues
that the ALJ's decision thus ``adopts a new national standard for the
requirements of a valid doctor-patient relationship that is completely
unsupported by current federal law and regulation and which is outside
the scope of the Controlled Substances Act.'' Id. Respondent thus
contends that the ALJ's decision ``seeks to * * * regulate the practice
of medicine.''\1\ Id. at 3 n.2 (citing Gonzales v. Oregon, 126 S.Ct.
904, 923 (2006)).
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\1\ Relatedly, Respondent also contends that it was improper for
the ALJ to rely on the testimony of DEA's expert witness, Dr. Carmen
Catizone, ``as the basis for a legal standard applicable to the
regulation of the practice of medicine.'' Id. at 6.
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On June 26, 2007, the ALJ forwarded the record to me for final
agency action. Having reviewed the entire record, I hereby issue this
Decision and Final Order. While I do not adopt the ALJ's reasoning with
respect to the validity of the prescriptions, the record nonetheless
establishes that both Dr. Reppy and the other physicians issued
prescriptions in violation of various state laws because the physicians
were engaged in unlicensed activity and/or failed to comply with
applicable state standards of practice for issuing treatment
recommendations including the prescribing of controlled substances. I
further conclude that the record establishes that Respondent had reason
to know that numerous prescriptions it filled were unlawful because the
prescribing physicians either did not establish a valid doctor/patient
relationship or were engaged in the unlicensed practice of medicine.
Relatedly, I find Respondent violated Federal law by filling
numerous prescriptions issued by a physician whose DEA registration had
expired and a physician assistant who lacked authority to prescribe
controlled substances under Florida law. I therefore adopt the ALJ's
ultimate conclusion that Respondent's continued registration would be
inconsistent with the public interest and will revoke its registration
and deny its pending application for renewal. I make the following
findings.
Findings
Respondent United Prescription Services, Inc., is licensed in the
State of Florida as a community pharmacy and as a retail pharmacy
wholesaler. Resp. Ex. 1, at 2-5. Respondent also holds or has held\2\
numerous out-of-state or non-resident pharmacy licenses. See id. at 6-
124.
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\2\ As the ALJ observed, some of these licenses had expired.
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Respondent is also the holder of DEA Certificate of Registration,
BU6696073, which authorizes it to dispense controlled substances in
schedules II through V as a retail pharmacy at the registered location
of 2304 E. Fletcher Ave., Tampa, Florida. Gov. Ex. 1, at 1. While
Respondent's certificate indicates that its registration expired on May
31, 2006, id., Respondent submitted a timely application for renewal of
its registration. ALJ Ex. 4, at 1. I therefore find that Respondent
holds a current registration (albeit in suspended status) pending the
issuance of this Final Order. See 5 U.S.C. 558(c).
Respondent was founded by Mr. Robert Carr, a Tampa, Florida
personal injury lawyer, ``to fill prescriptions for personal injury
patients.'' Gov. Ex. 87, at 2. Mr. Samuel Ballinger, Respondent's
current owner, was an administrator at a law firm where Carr practiced.
Id. According to a statement given by Mr. John Todd Miller, Ballinger
and Carr were partners in Respondent. Id. However, Respondent
introduced into evidence a copy of a sales agreement dated March 25,
2005, under which Carr, who was then the sole shareholder and owner of
Respondent sold his interest to Ballinger. Resp. Ex. 5, at 1.
In addition to Mr. Miller's statement, the record contains evidence
indicating that Ballinger was involved in the operation of Respondent
from before the date of this transaction. For example, Ballinger was
listed on several of Respondent's Uniform Business Reports as a
corporate officer or director. See GX 97, at 6 (Jan. 27, 2001 filing
listing Ballinger as Respondent's President/Director); GX 74 (August
18, 2002 filing listing Ballinger as Respondent's President). While on
Respondent's January 2003 filing Ballinger was no longer listed as
Respondent's President, GX 97, at 9; the record also contains a July
16, 2003 letter from a physician, Mildred E. Watson, to Ballinger, at
Respondent's address, in which she expressed her excitement at joining
Respondent's ``nationwide physicians network.'' GX 62, at 83.
Moreover, during the cross-examination of Robert Reppy, a physician
who worked for Ballinger at University Physician Resources\3\ between
early 2004 and October 2006, Respondent's counsel stipulated that
Ballinger had a relationship/affiliation with Respondent during the
period of Reppy's employment at University. Tr. 1172-73. Consistent
with Mr. Miller's statement that Carr and Ballinger were partners, see
GX 87, at 2; Reppy testified that ``Ballinger was a major stockholder''
in Respondent and was Carr's partner. Tr. 1173. Furthermore, Reppy
testified that Ballinger directed that the prescriptions he issued be
faxed to Respondent. Id. at 1179; see also GX 87, at 4 (statement of
Miller). Thus, even if Ballinger did not have an equity interest in
Respondent prior to the sale, it is clear that Ballinger had a
relationship with Respondent and its owner during Reppy's employment
with University.
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\3\ University's role is discussed below.
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According to Mr. Miller, Respondent ``did not do well initially.''
GX 87, at 3. Eventually, Mr. Ballinger obtained ``a computer program
for an Internet pharmacy business'' and Ballinger and Carr opened
``their own Internet pharmacy site and began filling internet
prescriptions.'' Id. Miller also introduced a Florida-based physician,
Juan Ibanez, to Ballinger and Carr. Id. Thereafter, Ibanez began
issuing prescriptions for persons who visited Ballinger's and Carr's
Web site. Id. Numerous patient files (that were seized from Respondent)
indicate that it filled these prescriptions. See, e.g., GX 110 (Excerpt
2 at 4893-94); id. (Excerpt 3, at 5277, 5279, 5284), id. (Excerpt 6, at
9750, 9758, 9764, 9770), id. (Excerpt 9, at 3937, 3938). According to
Miller, both the computer servers and call center for the internet
business ``were located inside'' Respondent at its Tampa location. GX
87, at 3.
Miller further stated that five or six internet pharmacy Web sites
were affiliated with Respondent. Id. at 5.
[[Page 50400]]
Throughout the patient files, there are numerous documents indicating
that Respondent filled prescriptions that were sent to it through
internet sites such as http://www.fedxmeds.com, PhoneConsultation.Com,
and accuratemd.com. Id.; see also GX 110 (Excerpt 3, at 5202-03; and
Excerpt 4, at 6980, 6994-96); GX 84 at 2 (affidavit of Robert Reppy).
Ballinger was also the owner of University, a clinic which provided
both in-office medical treatment and what it termed ``telemedicine.''
See GX 22; GX 87, at 4; GX 84, at 1 (affidavit of Robert Reppy).
University employed various physicians including Dr. Robert Reppy, a
doctor of osteopathy, and a physician's assistant, John Protheroe. GX
84, at 2-4. Ballinger hired Reppy in early 2004, to replace other
physicians (Juan Ibanez, M.D., and Richard Long, M.D.) who had left the
clinic. Id. at 2. With the exception of the period between November
2004 and March 2005 when he was on a leave of absence, Reppy worked for
University until October 2006. Id. at 2-5. During the course of his
employment at University, Ballinger ``directed [its] operations.'' Id.
at 5.
At University, Reppy, who was licensed only in the State of
Florida, id. at 1, reviewed the medical records provided by individuals
and conducted telephone consultations with them. Id. at 3. According to
Reppy, ``most of [his] patients * * * were telephone consultation
patients who were referred to University by an Internet Web site.''\4\
Id. Moreover, ``many of [his] patients were from outside the [S]tate of
Florida.'' Id. Based on his review of a person's medical records and
the telephone consultation, Reppy would decide whether to issue a
prescription for the person's purported condition. Id. Most of the
prescriptions Reppy issued were for controlled substances such as
schedule III drugs containing hydrocodone and schedule IV
benzodiazepines such as alprazolam and diazepam. See GX 99, at 15; see
also GX 66.
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\4\ According to Dr. Reppy's sworn statement, when he started
working at University, his ``patients'' were referred to him by
fedexmeds.com and this continued until he went on his leave of
absence. GX 84, at 2-3. When, in March 2005, Reppy returned to
University, fedexmeds was no longer referring ``patients'' to it.
Id. at 3. Other websites were, however, and Reppy admitted that he
continued to issue prescriptions based on medical records and a
telephonic consultation. Id.
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At University, Reppy ``consulted with approximately 30 patients per
day.'' GX 84, at 3. Reppy also ``reviewed the * * * files for the
patients for whom Mr. Protheroe wrote prescriptions,'' which were also
based on a review of medical records and a telephone consultation. Id.
at 2. According to Reppy's affidavit, ``[m]ost of the prescriptions
written by Mr. Protheroe were for controlled substances,'' and were
then ``sent to [Respondent] to be filled unless otherwise directed by
the patient.'' Id.; see also Tr. at 1139. Reppy further testified that
Ballinger directed that University's prescriptions be faxed to
Respondent. Id. at 1179.
While Reppy was on his leave of absence, ``Protheroe continued to
write prescriptions for controlled substances using [Reppy's] DEA
number and electronic signature.'' GX 84 at 4. According to Reppy,
Protheroe did not have ``permission to issue prescriptions in my name
while I was on leave,'' and was authorized ``to issue prescriptions
[only] while he worked under [Reppy's] supervision.'' Id.
In his testimony, Reppy stated that Protheroe wrote ``over 14,000
prescriptions'' without his permission during the period of his leave
of absence. Tr. at 1182-83, 1193, 1198. To rebut this testimony,
Respondent introduced Protheroe's sworn statement in which he
``specifically denied'' having issued prescriptions without Reppy's
``knowledge or permission.'' Resp. Ex. 33.
Respondent also introduced into evidence the affidavit of Richard
Furlong, who asserted that he worked at University from February
through May 2005. See Resp. Ex. 23. In his declaration, Mr. Furlong
stated that ``Reppy supervised and authorized prescriptions issued by
Mr. Protheroe and was uncompromising that the decision to issue a
prescription rested with him.'' Id. at 1. Furlong added that while he
``was there on an everyday basis, [he] never heard any discussion about
nor saw information indicating that Mr. Protheroe was not practicing
under the supervision of Dr. Reppy, or that he took direction from
anyone, including Samuel Ballinger, other than Dr. Reppy.'' \5\
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\5\ In his testimony, Reppy denied knowing Furlong. Tr. 1207-08.
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The ALJ did not make any findings regarding this factual dispute.
See ALJ at 67 n.97. As ultimate fact finder, I do. I credit Dr. Reppy's
testimony noting that he was subject to Respondent's re-direct
examination \6\ and stuck to his story. In contrast, Respondent did not
call either Protheroe or Furlong to testify and thus they were not
subject to cross-examination by the Government. Furthermore, Mr.
Furlong was at University for only a short period after Reppy returned
to work, and Reppy, in his April 4, 2007 affidavit, stated that he had
only ``recently bec[o]me aware'' of these prescriptions. GX 84, at 4. I
thus find that at the time Furlong worked at University, Reppy was
unaware of Protheroe's activities during his leave of absence. I
further find that because Ballinger allowed Protheroe to work out of
the office, Tr. 1199-1200, 1210; the records may not even have been in
the clinic.
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\6\ Reppy was called by Respondent.
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In his testimony, Reppy maintained that his practice did not
involve making new diagnoses, but rather, ``monitoring stable patients
whose diagnoses are already well known.'' Id. at 1109. Dr. Reppy
further asserted that many of his patients contacted him because their
original doctors were ``not willing to do pain management for them
because that's not their main purview.'' Id. at 1116. Dr. Reppy also
stated that ``many'' of his patients ``have tried to get pain
management from their local hospital or pain management centers,'' but
``they are expected to come in'' either every two weeks or every month,
and that their ``prescriptions are not refilled unless they show up in
person,'' and that these office visits ``will often cost them $150 or
more.'' Id.
Reppy further asserted that he had ``rejected hundreds'' of
``patients'' because they ``cannot prove that they have the condition
they claim'' or had submitted ``fraudulent records.'' Id. at 1117-18.
Reppy also maintained that he never ``diagnose[d] over the phone''
because ``[t]hat would be inappropriate medicine,'' id. at 1123, that
the initial diagnosis was performed by the ``local doctor that actually
saw them and performed the physical examination,'' id., and that the
``patients are required to submit documentation from their own local
physicians, including radiology reports'' before he would conduct a
consultation. Id. at 1124. Reppy also testified that there are certain
conditions that are too complex to be ``appropriately * * * treated in
a telemedicine format'' such as heart conditions and pancreatitis. Id.
at 1125-26.
Reppy further testified that during his consultations he would ask
his patients to subjectively rate their pain on a scale of one-to-ten,
with the latter being ``the worst pain they can imagine.'' Id. at 1129-
30. Reppy acknowledged, however, that this was ``not as useful as the
evaluation of the pain you're getting from the'' notes of the doctor
who examined the patients, ``but it's still useful because you're
getting an idea of the patient's own perception of'' his pain level,
and that it was useful to evaluate the evolution of a patient's ``pain
over time.'' Id.
[[Page 50401]]
Reppy also stated that ``[i]t's always preferable to see * * * the
patient face to face,'' and that he ``strongly urge[s] the patient to
make a visit to the office here in Florida.'' Id. at 1130. Reppy
further testified that he took a medical history on every patient, that
he was convinced that each patient had a medical complaint, that there
was a logical connection between the prescription he wrote and the
complaint, and that there was a valid doctor-patient relationship with
every person he issued a prescription for. Id. at 1164-65; see also id.
at 1152.
On cross-examination, Reppy admitted that since the year 2000, he
has not held a medical license in any State other than Florida. Id. at
1166. Reppy also admitted that the medical records of his telemedicine
patients were ``usually'' sent to him by his patients rather than by
the physician who had examined them. Id. at 1170-71. Reppy also
admitted that sometimes the records for the patients that were referred
to him by fedexmeds.com were provided by the Web site. Id. at 1171.
Reppy admitted that ``less than five percent'' of his
``telemedicine patients'' went to Florida to obtain a physical exam
from him. Id. at 1174. Reppy also acknowledged that he ``generally did
not'' consult ``on a regular basis'' with the physicians who had
performed the physical examinations of his telemedicine patients, and
that he did so ``less than once a day'' and only when he ``had specific
questions.'' Id. at 1175. Finally, Reppy stated that when his patient's
refills ran out, he required a new physical exam before issuing a new
prescription only if the physical exam was ``too dated.'' Id. at 1176.
The Government did not, however, ask Reppy at what point a physical
exam becomes too dated.
The record establishes that during the period between October 1,
2005, and January 31, 2006, Respondent filled 11,830 prescriptions
issued by Dr. Reppy, which totaled 1,275,400 dosage units of both
controlled and non-controlled drugs. GX 99, at 13-16. Approximately
1.058 million of these dosage units (83%) were for drugs containing
hydrocodone. Id. at 15-16. During this period, Reppy also authorized
prescriptions totaling 41,651 dosage units of alprazolam, a schedule IV
controlled substance, and approximately 84,000 dosage units of other
controlled substances. Id.
Moreover, during this period, Reppy's prescribing accounted for
approximately seventy-one percent of the prescriptions filled by
Respondent and seventy percent of the dosage units dispensed by it. Id.
at 8-11. Moreover, only 1094 (approximately 9.2%) of Reppy's
prescriptions were for Florida residents. Id. at 13-14.
Respondent's dispensing log for December 2005 establishes that
Reppy issued numerous controlled-substance prescriptions to persons
resident in States where he was not licensed to practice. See GX 101,
Excerpt 18. My review of the log found that during this month alone,
Reppy issued new controlled-substance prescriptions to residents of
Tennessee (89 Rxs), California (65 Rxs), Illinois (32 Rxs), North
Carolina (18 Rxs), and Louisiana (14 Rxs).
In addition, during December 2005, Reppy issued numerous
controlled-substance prescriptions to persons resident in States which
clearly require that the prescribing physician perform a physical exam
of a patient except in limited situations not applicable here. These
States include California, Tennessee, Louisiana, and Indiana (9 new
Rxs).
I take official notice \7\ of the following State statutes: Cal.
Bus. & Prof. Code Sec. Sec. 2052 \8\ (unlicensed practice) & 2242.1(a)
(internet prescribing); Cal. Health & Safety Code Sec. 11352(a)
(prohibiting furnishing a controlled substance ``unless upon the
written prescription of a physician * * * licensed to practice in this
state''); 225 Ill. Comp. Stat. Ann. Sec. 60/3 (licensure requirement),
Sec. 60/3.5 (prohibiting unlicensed practice); Sec. 60/49 (listing
acts constituting holding oneself out to the public as a physician);
Sec. 60/49.5 (requiring persons engaged in telemedicine to hold
Illinois license); N.C. Gen. Stat. Sec. 90-18 (``prescribing
medication by use of the Internet or a toll-free telephone number,
shall be regarded as practicing medicine'' in the State).
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\7\ In accordance with the Administrative Procedure Act (APA),
an agency ``may take official notice of facts at any stage in a
proceeding--even in the final decision.'' U.S. Dept. of Justice,
Attorney General's Manual on the Administrative Procedure Act 80
(1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with
the APA and DEA's regulations, Respondent is ``entitled on timely
request to an opportunity to show to the contrary.'' 5 U.S.C. Sec.
556(e); see also 21 CFR 1316.59(e). To allow Respondent the
opportunity to refute the facts of which I take official notice,
Respondent may file a motion for reconsideration within fifteen days
of service of this order, which shall commence with the mailing of
the order.
\8\ In Hageseth v. Superior Court, 59 Cal. Rptr.3d 385 (Ct. App.
2007), the California Court of Appeal upheld the State's
jurisdiction to criminally prosecute an out-of-state physician who
prescribed a drug to a California resident over the internet, for
the unauthorized practice of medicine.
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I also take official notice of the following state administrative
rules: 844 Ind. Admin. Code Sec. 5-3-3 (``issuing a prescription,
based solely on an on-line questionnaire or consultation is
prohibited'') & id. Sec. 5-4-1 (prohibiting the issuance of a
controlled-substance prescription ``to a person who the physician has
never personally physically examined and diagnosed'' except for ``in
institutional settings, on-call situations, cross-coverage situations,
and situations involving advanced practice nurses with prescriptive
authority practicing in accordance with standard care arrangements'');
Tenn. Comp. R. & Regs. 0880-2.14(7) (prerequisites to issuing
prescriptions); \9\ & id. 0880-2.16 (requiring telemedicine
license).\10\
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\9\ The text of this rule is discussed shortly below.
\10\ I also take official notice of the Medical Board of
California's Decision and Order in Jon Steven Opsahl, M.D., at 3
(Med. Bd. Cal. 2003) (revoking medical license and finding that ``a
physician cannot do a good faith prior examination based on a
history, a review of medical records, responses to a questionnaire
and a telephone consultation with the patient, without a physical
examination of the patient'' and that ``[a] physician cannot
determine whether there is a medical indication for prescription of
a dangerous drug without performing a physical examination''); see
also id. at 17.
In addition, the Medical Board of California has issued numerous
Citation Orders to out-of-state physicians for internet prescribing
to State residents. See, e.g., Citation Order Harry Hoff (June 17,
2003); Citation Order Carlos Gustavo Levy (Nov. 30, 2001). It has
also issued press releases announcing its position on the issuance
of prescriptions by physicians who do not hold a California license.
See Medical Board of California, Record Fines Issued by Medical
Board to Physicians in Internet Prescribing Cases (News Release Feb.
10, 2003) (available at http://www.mbc.ca.gov/NR--2003--02-10--
Internetdrugs.htm). I also take official notice of these materials.
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I also take official notice of the Louisiana State Board of Medical
Examiner's Statement of Position on ``Internet/Telephonic
Prescribing,'' which was issued on May 24, 2000. According to the
Louisiana Board, ``it is unlawful for a physician to prescribe
medication, treatment or a plan of care generally if the physician has
not examined the patient and established a diagnostic basis for such
therapy.'' Id. at 2. After discussing the acts which establish a
doctor-patient relationship, the Board further stated that ``an online
or telephonic evaluation by questionnaire for an individual that a
physician has never seen is inadequate.'' Id. at 2-3. The Board also
explained that ``[a]n individual who issues a prescription or orders
medication for an individual who is a resident of or located in
Louisiana, who does not possess a Louisiana medical license or other
authorization to practice medicine in this state, is necessarily
engaged in the unauthorized practice of
[[Page 50402]]
medicine in contravention of the Medical Practice Act.'' Id. at 3.\11\
---------------------------------------------------------------------------
\11\ The Board recognized that ``prescribing for a patient whom
the physician has not personally examined may be suitable under
certain, limited circumstances.'' Internet/Telephonic Prescribing,
at 3 n. 7. According to the Board, these ``may include admission
orders for a newly hospitalized patient, prescribing for a patient
of another physician for whom the prescriber is taking the call or
continuing medication on a short-term basis for a new patient prior
to the patient's first appointment.'' Id. The Board also explained
that it was not ``attempt[ing] * * * to limit true consultations
between out-of-state physicians and Louisiana licensed physicians.''
Id. at 4. None of these exceptions applies to the conduct of the
prescribing physicians in this case.
---------------------------------------------------------------------------
In addition to the prescriptions issued by Reppy, Respondent also
filled numerous prescriptions issued by physicians who were affiliated
with phoneconsultation.com. These physicians included Dr. Dora
Fernandez, who was located in, and licensed by, the Commonwealth of
Puerto Rico, see GX 58 at 3, 7, 16; and George Wallace Merkle, who was
located in, and licensed by the State of Indiana. See GX at 64, at 5,
9-10. Neither of the files which Respondent kept on these two
physicians contains any additional medical licenses. See generally GX
58 & 64. Moreover, Respondent produced no evidence to show that either
of these physicians had additional medical licenses beyond those
contained in their files. I therefore find that Dr. Fernandez was
licensed only in Puerto Rico and Dr. Merkle was licensed only in
Indiana.
According to the December 2005 Daily Audit Log, in just the last
twelve days of the month, Dr. Fernandez issued new controlled-substance
prescriptions to residents of various States where she was not licensed
including Tennessee (35 Rxs), California (29 Rxs), Louisiana (26 Rxs),
Illinois (9 Rxs), and North Carolina (8 Rxs). Dr. Fernandez violated
the laws of these States by engaging in the unlicensed practice of
medicine. Moreover, in light of the respective locations of Dr.
Fernandez and her ``patients,'' it is most unlikely that she complied
with the laws of Tennessee, California, Louisiana, and Indiana (8 new
Rxs) regarding the prerequisites for prescribing a drug.
During December 2005, Respondent also filled new controlled-
substance prescriptions issued by Dr. Merkle to residents of States
where he was not licensed including California (17 Rxs), North Carolina
(9 Rxs), and Louisiana (2 Rxs). Likewise, given the respective
locations of Dr. Merkle (in Indiana) and his ``patients,'' it is highly
improbable that he complied with either the regulations of his own
State or the laws of California and Louisiana which require the
performance of a physical examination before prescribing a drug.
Finally, Respondent also filled numerous controlled substances
prescriptions issued by Dr. Elizabeth Jamieson, another Tampa-based
physician, who is licensed only in Florida and Pennsylvania. See GX 63,
at 3. During December 2005, Dr. Jamieson issued new controlled-
substance prescriptions to residents of Tennessee (31 Rxs), California
(23 Rxs), Illinois (6 Rxs), Louisiana (5 Rxs), and North Carolina (5
Rxs).\12\
---------------------------------------------------------------------------
\12\ A review of Respondent's January 2006 daily audit log shows
that Reppy issued new controlled-substance prescriptions to
residents of Tennessee (121 Rxs), California (72 Rxs), Illinois (30
Rxs), North Carolina (16 Rxs), Louisiana (15 Rxs), and Indiana (10
Rxs). Dr. Fernandez issued new controlled-substance prescriptions to
residents of California (23 Rxs), Tennessee (22 Rxs), Louisiana (6
Rxs), North Carolina (5 Rxs), Illinois (5 Rxs), and Indiana (3 Rxs).
Dr. Merkle issued new controlled-substance prescriptions to
residents of California (43 Rxs), Louisiana (10 Rxs), Tennessee (9
Rxs), and North Carolina (6 Rxs).
---------------------------------------------------------------------------
The patient files also establish that Respondent filled numerous
prescriptions issued by Dr. Wayne Starks of Detroit, Michigan, who was
affiliated with ermeds.com. GX 101 (Excerpt 8, at 9998). While Dr.
Starks held a DEA Registration, it expired on February 28, 2003, and
Starks did not submit a new application until August 23, 2004, which he
withdrew on March 21, 2005.\13\ See GX 103; see also GX 93, at 12
(Stark's file maintained by Respondent). Starks was therefore without
authority to prescribe controlled substances after February 28, 2003.
GX 103.
---------------------------------------------------------------------------
\13\ Starks has also submitted two additional applications,
which are currently under review. GX 103.
---------------------------------------------------------------------------
The patient file for J.I., a resident of Alabama, indicates that
Starks issued him prescriptions for 120 Lortab (10 mg.), a schedule III
controlled substance containing hydrocodone and acetaminophen on
January 9, 2004 (with two refills), April 16, 2004 (with two refills),
June 24, 2004 (with no refills) and September 22, 2004 (with two
refills). GX 101 (Excerpt 8, at 9997-99, 10008). Respondent filled each
of these prescriptions including the refills. See id.
The patient file of K.Q., a resident of Texas, includes numerous
prescriptions which Starks issued for Xanax (alprazolam) and Norco
(hydrocodone/acetaminophen) after the expiration of his DEA
registration and which Respondent filled. See GX 101 (Excerpt 9). More
specifically, Starks issued K.Q. prescriptions for these drugs with
refills on July 29, 2003; October 14, 2003; December 31, 2003; March
16, 2004; May 25, 2004; August 12, 2004; and October 27, 2004.\14\ See
id. at 3877, 3885, 3895, 3905, 3907, 3912, 3914, 3917, 3921, 3923,
3928, 3930. Respondent filled each of the new prescriptions and
refilled these prescriptions numerous times.
---------------------------------------------------------------------------
\14\ The Norco prescriptions were for 120 Norco 10/325
(hydrocodone/acetaminophen); the Xanax (alprazolam) prescriptions
were either for 45 (2 mg.) tablets or 30 (1 mg.) tablets.
---------------------------------------------------------------------------
The patient files also indicate that Respondent filled
prescriptions issued by Dr. Richard Kienzle of Copperhill, Tennessee, a
Tennessee-licensed physician. See GX 101 (Excerpts 6, 7, & 14); GX 60,
at 2. More specifically, Kienzle issued T.H., a California resident,
prescriptions for 90 Norco (10/325) with two refills on January 25,
2003; April 22, 2003; July 10, 2003; October 1, 2003; and 120 Norco on
December 19, 2003. GX 101 (Excerpt 6 at 9744, 9738, 9732, 9726, &
9720). Respondent filled all of the prescriptions including the
refills. See generally id. at 9720-44.
Respondent also filled several Vicodin prescriptions Kienzle issued
to K.H., a Pennsylvania resident. Specifically, on December 7, 2003,
and March 1, 2004, Kienzle prescribed 120 Vicodin ES (hydrocodone/apap
7.5/750) with two refills.\15\ Id. (Excerpt 7, at 9585 & 9579),
Respondent filled both the initial prescriptions and the refills. See
id. On November 18, 2003, Kienzle issued to R.J., another Pennsylvania
resident, prescriptions for 120 Norco (10/325) with two refills, and on
February 2, 2004, a prescription for 120 Lortab (10/500) with two
refills. Id. (Excerpt 14 at 4731, 4736). Respondent filled both the
initial prescriptions and the refills. Id. The patient file also
includes copies of documents entitled ``Fedxmeds Management Index,''
which were faxed to Respondent by Kienzle. Id. at 4674-75.
---------------------------------------------------------------------------
\15\ The record also includes copies of a document entitled
``Fedxmeds Management Index'' for K.H., which indicate that they
were faxed to Respondent from Dr. Kienzle on December 7, 2003, and
February 3, 2004. GX 101 (Excerpt 7, at 9530-31).
---------------------------------------------------------------------------
On July 20, 2005, pursuant to an Agreed Order with the Tennessee
Board of Medical Examiners, Kienzle agreed to surrender his medical
license. See GX 60, at 29. Kienzle also admitted that he had prescribed
through several internet sites including FedexMeds.com, numerous dosage
units of various controlled substances including compounds containing
hydrocodone and codeine, as well as alprazolam, diazepam, and lorazepam
and other scheduled drugs, to persons located in forty-six different
States. Id. at 20. The Order also related that Kienzle had ``admitted
in correspondence to treating
[[Page 50403]]
via the internet or other electronic means, approximately one thousand
eighty four (1,084) patients by and through his affiliation with'' two
websites which included FedexMeds.Com. Id. at 20-21. Kienzle also
admitted that ``as a matter of routine course, [he] utilized `telephone
consultations' conducted in reliance on data derived from the * * *
FedexMeds.com internet database[ ], to speak with patients whose
credibility and authenticity he could not verify, and whose symptoms he
could not evaluate through tactile examination, visual observation, or
through other means of clinical evaluation required by the standard of
care.'' Id. at 23.
Kienzle further admitted that his internet prescribing violated
various provisions of the Tennessee Medical Examiners Practice Act,
including prohibitions on unprofessional conduct and dispensing
controlled substances in violation of State or Federal law. Id. at 24-
28. Most significantly, Kienzle admitted that his internet prescribing
violated the Board's Rule 0880-2-.14(7), which sets forth the
``prerequisites to issuing prescriptions or dispensing medications in
person, electronically, and over the internet.'' Id. at 27. This
provision states that it is ``a prima facie violation'' of the State's
Medical Practice Act:
for a physician to prescribe or dispense any drug to any individual,
whether in person or by electronic means or over the internet or
over telephone lines, unless the physician, or his/her licensed
supervisee pursuant to appropriate protocols or medical orders, has
first done and appropriately documented, for the person to whom a
prescription is to be issued or drugs dispensed * * * an appropriate
history and physical examination[.] \16\
---------------------------------------------------------------------------
\16\ The rule also requires that the physician has ``[m]ade a
diagnosis based upon the examination and all diagnostic and
laboratory tests consistent with good medical care,'' ``[f]ormulated
a therapeutic plan and discussed it, along with the basis for it,''
and ``[i]nsured availability of the physician or coverage for the
patient for appropriate follow-up care.'' GX 60, at 28.
GX 60, at 27 (quoting Tenn. Comp. R. & Regs. 0880-2-.14(7)).
The Government also introduced evidence showing that Respondent was
engaged in the compounding of large quantities of controlled
substances. More specifically, Respondent was purchasing hydrocodone
bitartrate powder and compounding it with either acetaminophen or
dextromethorpan hydrobromide in various combinations. See GX 37
(invoices for hydrocodone bitartrate powder); see also GX 36
(compounding log). Moreover, Respondent was also compounding a
formulation of phentermine and lorazepam (both schedule IV controlled
substances, see 21 CFR 1308.14). GX 36, at 16. The run size of the
compoundings was 7500 capsules. See generally GX 36.
In another proceeding, Mr. Decker, Respondent's pharmacist-in-
charge, testified that approximately one-third of the drugs it
dispensed were compounded. See Resp. 25, at 177. Mr. Decker also
testified that Respondent never had on hand ``more than 15 days''
supply of compounded drugs. Id. at 178. Mr. Decker further stated in an
affidavit that the drugs were ``compounded only to the extent that they
are prescribed by the physician, and to fulfill remaining refills as
indicated on the original prescription.'' GX 70, at 1. Respondent is
registered as a retail pharmacy and not as a manufacturer. See GX 1.
The record further establishes that Respondent violated Kentucky
law by failing to report its dispensing of controlled substances to
Kentucky residents through the State's electronic monitoring system
(KASPER). See GX 85 (affidavit of Jennifer Shearer, Agent Manager,
Kentucky Bureau of Investigation (KBI) (citing KRS Sec. Sec. 218A.202
& 315.0351)). More specifically, Agent Shearer recounted that on June
1, 2006, a KBI agent received information from the United Parcel
Service that it was ``shipping `a lot' of packages'' that came from
Respondent. GX 85, at 1. Upon receiving this information, Agent Shearer
contacted the Inspector General's office of the Kentucky Cabinet of
Health Services and determined that Respondent had not filed its KASPER
reports since April 2005. Id.
On June 9, 2006, KBI agents obtained a search warrant ``for any and
all packages being shipped by [Respondent] by [UPS] from June 5, 2006-
June 9, 2006.'' Id. The agents subsequently seized fifty-four bottles
of prescription drugs which included the controlled substances
alprazolam, diazepam, clonazepam and hydrocodone. Id. On the same date,
Agent Shearer was contacted by an employee of Respondent who wanted to
know why its shipments had been seized. Id. Agent Shearer told the
employee that the packages had been seized because Respondent ``had not
been reporting to KASPER.'' Id. Agent Shearer also advised Respondent's
employee that the prescriptions it was dispensing were illegal because
``none of the Kentucky residents * * * had ever seen'' the prescribing
physician and ``there was no physician/patient relationship.'' Id.
Agent Shearer then told the employee that Respondent must stop shipping
to Kentucky residents until it complied with the State's law.\17\
---------------------------------------------------------------------------
\17\ In similar vein, the record also contains a copy of various
documents of the Wyoming Board of Pharmacy. See GX 41, at 1. These
include a March 31, 2005 letter to Respondent notifying it that the
Board had become aware that it had dispensed a prescription issued
by Dr. Reppy to a Wyoming resident and expressing that the Board had
``strong reasons to believe that no doctor/patient relationship has
been established between [the resident] and the prescribing
physician * * * other than via the internet,'' and that ``[a]
prescription * * * dispensed based solely on a web-based
questionnaire without establishing a valid doctor/patient
relationship is considered to be a violation of the Wyoming Pharmacy
Act.'' Id. The letter further requested that Respondent ``cease
dispensing to Wyoming residents immediately.'' Id. The record also
includes a copy of an April 8, 2005 letter from the Wyoming Board to
the Florida Department of Health filing a complaint against
Respondent for its dispensing to this resident. Id. at 12.
---------------------------------------------------------------------------
Thereafter, KBI agents received information that Respondent had
begun shipping prescription drugs under the name of ``Makes and Models
Magazine,'' another business owned by Ballinger. Id. at 2; see also GX
84, at 5; GX 87 at 5. Accordingly, on June 16, 2006, KBI agents
obtained another search warrant ``for any and all packages being
shipped by [Respondent] and Makes and Models Magazine by [UPS] from
June 9, 2006-June 16, 2006.'' GX 85, at 2. Upon executing the warrant,
KBI agents seized twelve bottles of drugs which contained alprazolam,
diazepam, and hydrocodone. Id. Makes and Models Magazine is not
licensed as an out-of-state pharmacy under Kentucky law. Id.
In another proceeding, Mr. Decker (Respondent's Pharmacist-in-
Charge) testified that Respondent had shipped under the ``Makes and
Models'' name based on the suggestion of its UPS account
representative. Resp. Ex. 25, at 171. In this testimony, Decker claimed
that Respondent's personnel thought that the packages had been stolen
and were unaware that they had been seized by the KBI. Id. at 174.
Decker admitted, however, that Respondent did not report the purported
thefts to either DEA or the KBI. Id. at 174-75; see also 21 CFR
1301.76(b) (requiring reporting of a theft of controlled substances).
Based on Respondent's failure to report the purported thefts and
Agent Shearer's statement that on June 9, 2006 (the date the first
warrant was executed), she was contacted by an employee of Respondent
who wanted to know why the packages had been seized, I reject
Respondent's claim that the reason it shipped controlled substances
under the ``Makes and Models'' label was to prevent them from being
stolen. See Resp. Proposed Findings at 21. Instead, I find that
Respondent knew that the packages had
[[Page 50404]]
been seized by the KBI and that it used the ``Makes and Models'' label
to circumvent Kentucky law.
The record also includes files that Respondent maintained on the
various prescribing physicians. The files typically include copies of
each physician's state license and DEA registration. See generally GXs
55-65. Most of the files also include a copy of an affidavit and/or
letter in which the physician was required to state that ``any
prescription sent to [Respondent] will be for a legitimate medical
purpose within the usual course of professional practice and based on
[a] legitimate patient-physician relationship.'' See, e.g., GX 56, at
74 (Reppy).
These affidavits and/or letters also required the physicians to
state that their practice had policies and procedures in place to
satisfy the following criteria:
Our records include a positive identification of the patient.
The patient's medical complaint has been verified.
The patient's chart includes copies of prior medical records.
An extensive physician interview and consultation has been
accomplished.
That if an in-person examination was not possible that we have
supervised and directed an examination by a consulting medical
professional, for which a copy is in the patient file.
That in review of all of the above criteria contained in our
medical file we have determined the appropriateness of medications
and have issued a prescription based upon our patient/physician
relationship.
Id.
The Expert Testimony
The Government called as an expert witness, Carmen Catizone,
Executive Director, National Association of Boards of Pharmacy. GX 81.
Mr. Catizone is a registered pharmacist in Illinois and holds a
Bachelor of Science degree in pharmacy and a Master of Science degree
in pharmacy administration and has worked as a pharmacist and as a
pharmacist-in-charge. Id. at 2-5. Mr. Catizone also holds an honorary
Doctor of Pharmacy license from the Oklahoma State Board of Pharmacy.
Id. Mr. Catizone has been qualified as an expert in administrative
proceedings in all States except Alaska and has previously been
qualified as an expert in the United States District Court for the
District of Minnesota and in other DEA proceedings. Tr. 313. The
Government offered Mr. Catizone ``as an expert witness in pharmacy
practice, pharmacy regulation, pharmacy legislation and internet
pharmacy practices.'' Id.
Mr. Catizone testified that under ``all state pharmacy practice
acts,'' a ``pharmacist is responsible to ensure that the prescription
is valid, has been written within the scope of practice for that
prescriber, [that] the prescriber is appropriately licensed[,] and that
[the] prescription is valid for [the] patient's disease, symptoms or
conditions.'' Id. at 323. Mr. Catizone also testified that for a
prescription to be valid under federal and state laws, it must be based
on ``a bona fide relationship between the prescriber and the patient.''
Id. at 322.
Mr. Catizone also reviewed Respondent's daily audit logs for the
periods March 30-31, 2005, and November 9 through December 9, 2006 (GXs
18 & 39). Based on his review, Mr. Catizone opined that the
prescriptions showed ``disturbing patterns.'' Tr. 333. Most
significantly, Mr. Catizone observed that ``the overwhelming majority
of prescriptions [were] written by one physician, and that physician is
located in [a] different state[] than all of the patients.'' Id.
Moreover, ``the overwhelming prescription drug written for is
hydrocodone, which you do not see that volume or that selectivity in
any other retail pharmacy that I'm aware of.'' \18\ Id.
---------------------------------------------------------------------------
\18\ Mr. Catizone also noted the absence of prescriptions for
non-controlled drugs that are used to treat such conditions as
diabetes, asthma, and high blood pressure that are found ``in a
traditional retail pharmacy.'' Tr. 333.
---------------------------------------------------------------------------
Mr. Catizone testified that he had not seen a dispensing mix like
Respondent's ``except for internet pharmacies that we've studied in the
past that have been involved in illegal activities involving controlled
substances.'' Id. at 334. Mr. Catizone further testified that he had
``not seen these types of prescribing patterns for physicians unless
they were pain medication specialists * * * except in instances where
we've looked at internet pharmacies that were operating illegally and
prescribing controlled substances illegally.'' Id. at 335.
Finally, Mr. Catizone testified that based on the dispensing
records, Respondent had not met its corresponding responsibility to
ensure that the prescriptions it filled had been issued in the usual
course of professional practice. Id. at 343-44. Moreover, based on his
review of the dispensing records and the fact that Reppy was licensed
only in Florida, Mr. Catizone further testified that Respondent had not
fulfilled its responsibility to ensure that that there was sufficient
evidence of a legitimate doctor-patient relationship before filling Dr.
Reppy's prescriptions. Id. at 344.
On cross-examination, Mr. Catizone explained that he formed his
opinion solely on the basis of the dispensing records and had not done
any further investigation to determine whether Reppy's prescriptions
were issued pursuant to a legitimate doctor-patient relationship or
whether Reppy treated chronic pain patients. Id. at 352-53. Mr.
Catizone also testified he had not done any similar investigation with
respect to the other doctors whose prescriptions were filled by
Respondent. Id. at 353-54. Mr. Catizone further stated that his opinion
was based strictly on ``the numbers and the prescribing patterns and
the location of the patients.'' Id. at 355.
Mr. Catizone agreed that under federal and state laws it is not ``a
necessary prerequisite to the issuance of a prescription that the
prescriber be the person who conducted the physical examination.'' Id.
at 355-56; see also id. at 359-61. He further asserted, however, that
``[t]he federal requirement is that there's a bona fide relationship.
And if that relationship can be established as a referral from another
prescriber or physician that's made that examination,'' then the
prescriber does not have to have performed the physical examination.
Id. at 356. Clarifying his testimony, Mr. Catizone asserted that there
had to be a relationship between the examining physician and the
prescriber, ``as well as between the patient and the initial physician
who has performed the medical examination. If care is shifted to the
other physician, then that physician also has to have a relationship
with that patient to ongoingly prescribe medications.'' Id. at 357.
Relatedly, Mr. Catizone acknowledged that under Florida law, a
physician may issue a prescription even though he did not physically
examine the patient. Id. at 359. Mr. Catizone then testified that if
one physician ordered a diagnostic test and the results of those tests
were sent to another practitioner for review and that practitioner took
a medical history and talked to the patient, the practitioner could
then issue a prescription. Id. at 361.
On further cross-examination, Mr. Catizone was shown Government
Exhibit 86 which memorialized several interviews conducted by a
Diversion Investigator of Dr. Reppy's patients. In some instances,
these persons told the DI that they had been required to obtain a
physical exam from another physician or that they had at some point
been physically examined by Reppy. GX 86 at 2, 10, & 12. Others,
however, told the investigator that they had not been seen by Reppy and
had not been required to obtain a physical exam. Id. at 4, 6-9. While
Mr. Catizone acknowledged that it was ``important to have the entire
picture,'' he also noted that in some instances the ``patients'' could
not even recall the prescribing physician's name.
[[Page 50405]]
Tr. 366; see also GX 86 at 3, 7 & 8. Mr. Catizone then added that this
exhibit ``substantiate[d] my contention * * * that the practices were
not legal and not meeting the standards of care.'' Tr. 367.
Finally, Respondent's counsel asked Mr. Catizone whether his
conclusion that Respondent had dispensed invalid prescriptions would be
altered by the fact that Respondent had verified that the prescriber
was licensed and had a DEA registration, that ``there had been direct
communication between the patient and the physician,'' and that it had
obtained ``an affidavit from the physician attesting to the existence
of a physician/patient relationship.'' Id. at 371-72. Mr. Catizone
testified that these facts would not lead him to change his testimony
``unless [it] was documented for every single patient.'' Id. at 372.
Respondent excepted to the testimony of Mr. Catizone, asserting
that he ``is not competent to offer any expert opinion, much less an
opinion on the requirements of a valid doctor-patient relationship.''
Resp. Exceptions at 4. Respondent asserts that Mr. Catizone is ``little
more than a fraud'' because he ``refers to himself as `Dr. Catizone'''
when ``he has never earned a doctorate degree nor even been conveyed
with an honorary one from an academic institution,'' but rather, holds
an ``honorary title'' granted by the Oklahoma Board of Pharmacy. Id. at
4-5.
The short answer to Respondent's contention is that whether Mr.
Catizone can properly call himself Dr. Catizone is irrelevant because
what matters are his qualifications to testify as an expert. And
contrary to Respondent's contention, a witness can be qualified as an
expert by virtue of his skill, training, knowledge, education or
experience. Cf. F.R.E. 702. Accordingly, Mr. Catizone's lack of a
degree at the doctoral level does not disqualify him from testifying as
an expert. Nor does the fact that he ``has not worked in a clinical
pharmacy setting since 1995.'' Resp. Exceptions at 5. Mr. Catizone's
expertise in pharmacy practice is amply established by his prior work
as a practicing pharmacist, his professional experience as the
Executive Director of the National Association of Boards of Pharmacy,
and his extensive writings. I therefore find that Mr. Catizone was
competent to testify as to the scope of a pharmacist's obligations
under Federal law and the pharmacy practice acts of the various States.
Respondent also excepted to Mr. Catizone's testimony on the ground
that there is no evidence that he has ``received any medical training
or has ever been involved in patient care in any form which would
provide him a basis to opine on the requirements of a doctor-patient
relationship.'' Id. Relatedly, Respondent argues that the Government
has not shown ``that Mr. Catizone has received any legal training which
would qualify him to interpret uncited, yet apparently relied upon,
court cases regarding same.'' Id.
I need not resolve this issue because I decline to adopt the ALJ's
reasoning as to why the prescriptions written by Dr. Reppy and the
other physicians were not based on valid doctor-patient relationships.
The States have the primary responsibility for regulating the practice
of medicine. I therefore conclude that the appropriate course in
determining whether Dr. Reppy and the other physicians prescribed
pursuant to valid doctor-patient relationships is to examine the
specific legal authorities of the various States.\19\
---------------------------------------------------------------------------
\19\ This is not to say that Mr. Catizone is not competent to
testify in this area. A pharmacist has a ``corresponding
responsibility'' to ascertain whether a prescription has been
``issued for a legitimate medical purpose by an individual
practitioner acting in the usual course of his professional
practice.'' 21 CFR 1306.04(a). Determining whether a physician has
acted in accordance with this standard necessarily requires that the
pharmacist have knowledge of the applicable State's law. See United
States v. Smith, 2006 WL 3702656 (D. Minn 2006).
---------------------------------------------------------------------------
The Government also introduced the declaration of George Van Komen,
M.D., the former President of the Federation of State Medical Boards
(FSMB), as well as Dr. Van Komen's testimony in In re Trinity Health
Care Corp., 72 FR 30849 (2007). See GXs 78 & 83. In his written
declaration, Dr. Komen explained the standard for establishing a
legitimate doctor-patient relationship under the FSMB's guidelines:
The standard in terms of forming a legitimate doctor-patient
relationship is that there needs to be a documented face-to-face
history and physical * * * evaluation of the patient, and then if
this patient chooses to receive further consultative work or be
established with a physician who practices on the Internet, that the
Internet physician first of all and most importantly needs to be
identified, and he needs to have a license in the state in which the
patient resides.
* * * * *
And we also feel that [the] primary care doctor who did the
history and physical needs to stay in touch with the patient, even
though the patient might be seeking further consultation from
another physician through the Internet.
GX 78, at 14-15.\20\
---------------------------------------------------------------------------
\20\ In his written declaration, Dr. Van Komen further explained
that ``[t]here is no way to detect abuse or monitor the appropriate
treatment or care of a patient by reviewing an online questionnaire,
because a doctor has no way of knowing that the person that filled
out that questionnaire filled it out honestly. If I had to describe
a drug addict by using one word, the word I would use is
`dishonest.' '' GX 78, at 17. Dr. Van Komen did not, however,
address the legitimacy of prescribing using the methods employed by
Dr. Reppy.
---------------------------------------------------------------------------
In Trinity Healthcare, Dr. Van Komen testified, however, that
``under certain circumstances,'' a physician can write a lawful
prescription without ever meeting the patient. GX 83 (Tr. 608). Besides
the situation where a physician is covering for another physician, Dr.
Van Komen explained that under the FSMB guidelines, ``there are
physicians who have internet practices, and they are provided
information from the physician who the patient had previously seen. And
they provide them with information through a request of the patient's
medical records, and the patient themselves usually do not provide
those medical records.'' Id. Continuing, Dr. Van Komen explained:
``[s]o there [are] no alternate medical records by the patients
themselves and then the physician who has an internet practice uses
that history and physical from what I call the primary care physician
with whom the patient has had face-to-face contact.'' Id. at 609.
Dr. Van Komen's testimony raises a strong suspicion that Reppy's
prescriptions were not issued pursuant to a valid doctor-patient
relationship. But neither Dr. Van Komen's declaration nor his Trinity
Health Care testimony addressed whether the laws of Florida (where Dr.
Reppy was located) or any other State where the prescribers or the
patients were located, prohibit a physician from prescribing because he
received the medical records from the patients themselves. \21\
---------------------------------------------------------------------------
\21\ Dr. Van Komen's testimony also does not establish at what
point a physical exam becomes too dated to be relied upon. Finally,
while Dr. Van Komen also testified in Trinity Healthcare that
``[t]here is absolutely no way that you can continue to prescribe
controlled substances without a review of how the patient is
doing[,] [a]nd that cannot be evaluated without a face-to-face
confrontation,'' GX 83 (Tr. 579), his testimony did not specify at
what point this encounter must occur. I therefore do not make any
findings as to whether Reppy issued unlawful prescriptions because
he relied on physical examinations which were too dated or continued
to prescribe without requiring an in-person follow-up examination.
---------------------------------------------------------------------------
Respondent also put on an expert witness, Dr. Thomas E. Johns. Dr.
Johns holds a Doctor of Pharmacy degree and serves as the Assistant
Director, Clinical Pharmacy Services, Department of Pharmacy, Shands at
the University of Florida, a teaching hospital which is affiliated with
the University of Florida. RX 28, Tr. 1256. Dr. Johns also teaches at
the University of Florida College of Pharmacy as an adjunct faculty
member. Tr. 1256. Dr. Johns has responsibilities related to the
institution's compliance
[[Page 50406]]
with applicable pharmacy laws and regulations.\22\ Id. 1260-61.
---------------------------------------------------------------------------
\22\ As is the case with Mr. Catizone, Dr. Johns does not
actively engage in the actual dispensing of prescription drugs. Tr.
1271.
---------------------------------------------------------------------------
On direct examination, Dr. Johns asserted that both the Agency's
2001 guidance document on dispensing controlled substances over the
internet \23\ and the Pharmacist's Manual were unclear regarding the
scope of a pharmacist's corresponding responsibility under 21 CFR
1306.04(a). Tr. 1273. Dr. Johns testified that if a prescription
creates a suspicion that it has been issued ``for an illegitimate
purpose or that the [doctor-patient] relationship is not valid,'' then
the pharmacist should call the doctor. Id. at 1275. Dr. Johns further
asserted that if the physician affirms that there ``is a valid doctor/
patient relationship,'' then ``no further action is really needed or
warranted on the part of the pharmacist.'' Id. Dr. Johns also testified
that the DEA Pharmacist Manual states that the ``frequency and volume
[of prescriptions] in and of itself is not indicative of fraud or
abuse.'' Id. at 1277; see also id. at 1278.\24\
---------------------------------------------------------------------------
\23\ See DEA, Dispensing and Purchasing Controlled Substances
over the Internet, 66 FR 21181 (2001). The guidance document is
included in the record as GX 6.
\24\ Dr. Johns also addressed the allegation that Respondent
should not have filled prescriptions that lacked the patient's
address. Tr. at 1279. Dr. Johns testified that while there are
certain items of information that appear on a prescription which a
pharmacist ``cannot change'' even in consultation with the
physician, ``the pharmacist is authorized to fill in the patient's
address if it's not on the prescription.'' Id. DEA's regulations
are, however, to the contrary. See 21 CFR 1306.05(a).
---------------------------------------------------------------------------
Dr. Johns further testified that in his experience, it is not ``the
usual and customary practice in the distributive pharmacy setting to
verify the existence of a doctor/patient relationship before filling a
prescription.'' Id. at 1280 (quoting question of Respondent's counsel).
Dr. Johns also testified that it is not ``the usual and customary
practice'' in the distributive pharmacy setting to verify the
prescriber's medical license and DEA registration. Id. Finally, Dr.
Johns testified that it is not the responsibility of a pharmacist to
``second guess'' a prescribing practitioner's diagnosis. Id.
On cross-examination, Dr. Johns admitted that in preparing for his
testimony, he was only ``actually shown the first or second page of a
prescription log'' and nothing ``other than that.'' Id. at 1286; see
also id. at 1289. Dr. Johns further admitted that he had never been in
a pharmacy which asked physicians to send in the medical records of its
customers as Respondent did. Id. at 1286-87; see also GXs 29 & 30
(patient files). Dr. Johns further stated that he could not think of a
reason why a retail pharmacy would require a physician to send in a
customer's medical records. Tr. 1286-87.
Dr. Johns further testified that he had never visited Respondent,
id. at 1289, and that his knowledge regarding Respondent's actual
operations was based on the Show Cause Order and a document ``which
described [its] business model.'' Id. at 1290. Dr. Johns also
acknowledged that volume in combination with other factors could raise
a suspicion that a particular physician's prescriptions were not
legitimate. Id. at 1292. Dr. Johns then admitted that ``it could''
create a suspicion if a physician was located in Puerto Rico and
issuing eighty new prescriptions a day to persons who were not located
in Puerto Rico. Id. at 1293. He also acknowledged that ``if the
pharmacist knew that patients were being solicited over the internet
[it] would certainly raise a red flag to that pharmacist that there
could be an invalid doctor/patient relationship.'' Id.
Relatedly, Dr. Johns testified that if a prescription indicated
that it was faxed from a website, it would make him ``curious'' as to
what the website was engaged in, id. at 1311, and that it would create
a suspicion that the drugs would be diverted. Id. at 1317. Dr. Johns
also admitted that it is not the usual course of practice for a
pharmacy to solicit physicians to send their prescriptions to it and
that it is inappropriate for a pharmacy to do so. Id. at 1296-98.
Dr. Johns maintained, however, that it was ``probably'' not
inappropriate to fill a prescription for controlled substances issued
by a practitioner whose DEA registration had expired even if the
pharmacy had a copy of the expired registration on file. Id. at 1300.
Subsequently, Dr. Johns admitted that while a pharmacist is not
required to ``proactively * * * determine whether the physician has [a]
valid DEA number,'' if ``something raises a suspicion of irregularity,
then perhaps a more thorough investigation'' is required. Id. at 1301.
The Government then asked whether it would be suspicious ``if a
physician was practicing medicine in a jurisdiction where [he wasn't]
licensed?'' Dr. Johns answered: ``If [he] knew that [he wasn't]
licensed in that jurisdiction.'' Id. at 1302. Dr. Johns then admitted
that a pharmacy must know not only a State's law regarding pharmacy
practice, but also the law of the State where the dispensing is
occurring regarding the requirements for a lawful prescription. Id.
Relatedly, Dr. Johns testified that a pharmacy has ``a professional
obligation to know the law.'' Id. at 1303. Finally, Dr. Johns testified
that if he ``knew that [a] physician was away from his practice and
prescriptions were being issued under his name, [he] would be
suspicious.'' Id. at 1320.
Discussion
Section 304(a) of the Controlled Substance Act (CSA) provides that
``[a] registration * * * to * * * dispense a controlled substance * * *
may be suspended or revoked by the Attorney General upon a finding that
the registrant * * * has committed such acts as would render his
registration under section 823 of this title inconsistent with the
public interest as determined under such section.'' 21 U.S.C. 824(a).
Section 304(d) further provides that ``[t]he Attorney General may, in
his discretion, suspend any registration simultaneously with the
institution of proceedings under this section, in cases where he finds
that there is an imminent danger to the public health or safety.'' 21
U.S.C. 824(d).
In determining the public interest, the CSA directs that the
following factors be considered:
(1) The recommendation of the appropriate State licensing board or
professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled
substances.
(3) The applicant's conviction record under Federal or State laws
relating to the manufacture, distribution, or dispensing of controlled
substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health and
safety.
Id. Sec. 823(f).
``[T]hese factors are * * * considered in the disjunctive.'' Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or
a combination of factors, and may give each factor the weight [I] deem[
] appropriate in determining whether a registration should be
revoked.'' Id. Moreover, case law establishes that I am ``not required
to make findings as to all of the factors.'' Hoxie v. DEA, 419 F.3d
477, 482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173-74
(D.C. Cir. 2005).
In this case, I conclude that factors two and four are dispositive
and establish that Respondent's continued registration would ``be
inconsistent with the public interest.'' 21 U.S.C. 823(f). I also find
unpersuasive Respondent's contention that it is attempting to comply
with the law. Accordingly,
[[Page 50407]]
Respondent's registration will be revoked and its pending application
for renewal of its registration will be denied.
Factors Two and Four--Respondent's Experience in Dispensing Controlled
Substances and Its Compliance With Applicable Federal, State, and Local
Laws
Under DEA's regulation, a prescription for a controlled substance
is unlawful unless it has been ``issued for a legitimate medical
purpose by an individual practitioner acting in the usual course of his
professional practice.'' 21 CFR 1306.04(a). Moreover, while ``[t]he
responsibility for the proper prescribing and dispensing of controlled
substances is upon the prescribing practitioner, * * * a corresponding
responsibility rests with the pharmacist who fills the prescription.''
Id. Accordingly, ``the person knowingly filling such a purported
prescription, as well as the person issuing it, [is] subject to the
penalties provided for violations of the provisions of law relating to
controlled substances.'' Id.
DEA has interpreted the regulation ``as prohibiting a pharmacist
from filling a prescription for controlled substances when he either
`knows or has reason to know that the prescription was not written for
a legitimate medical purpose.''' Trinity Health Care Corp., 72 FR
30849, 30854 (2007) (quoting Medic-Aid Pharmacy, 55 FR 30043, 30044
(1990)); see also Frank's Corner Pharmacy, 60 FR 17574, 17576 (1995);
Ralph J. Bertolino, 55 FR 4729, 4730 (1990). See also United States v.
Seelig, 622 F.2d 207, 213 (6th Cir. 1980). This Agency has further held
that ``[w]hen prescriptions are clearly not issued for legitimate
medical purposes, a pharmacist may not intentionally close his eyes and
thereby avoid [actual] knowledge of the real purpose of the
prescription.'' Bertolino, 55 FR at 4730 (citations omitted).
As the ALJ recognized, one of the primary issues in this case is
whether the prescriptions Respondent filled were issued by physicians
pursuant to valid doctor-patient relationships. Reasoning that
``[t]here is no evidence * * * that any physicians who had examined
Respondent's customers had referred them to the physicians who
prescribed to them and sent the prescriptions to Respondent to be
filled,'' the ALJ concluded that ``there was no physician-patient
relationship between Dr. Reppy--or any of the other physicians * * *
who issued prescriptions that Respondent filled'' and its customers.
ALJ at 66. The ALJ thus held that the prescriptions were not issued
pursuant to valid doctor-patient relationships. Id.
The ALJ did not, however, cite any legal authority for this
holding. Instead, the ALJ apparently based her holding on Mr.
Catizone's testimony that ``if the prescriber has not performed the
physical examination, then there must be some relationship between the
person who did conduct the examination and the physician who issues the
prescription.'' Id. at 65.
Mr. Catizone's testimony was not supported by reference to the
laws, regulations, or decisions (either judicial or administrative) of
any particular State. While Mr. Catizone's testimony appears to be
consistent with the guidance of the American Medical Association, see
GX 3, at 5; the AMA's statement does not have the force and effect of
law absent its adoption by competent state authorities. Moreover, this
Agency has not promulgated such a rule through either notice-and-
comment rulemaking or adjudication.
That there is no Federal standard requiring a referral or
consultative arrangement between the examining and prescribing
physicians does not mean that the prescriptions issued by Dr. Reppy and
the other physicians were lawful under Federal law. As the 2001
Guidance Document explained, the CSA looks to state law in determining
whether a physician has established a valid doctor-patient
relationship. See 66 FR at 21182-83. Moreover, the CSA also requires
that a physician be acting ``in the usual course of * * * professional
practice'' in order to issue a lawful prescription. 21 CFR 1306.04(a).
Finally, as noted above, the public interest inquiry mandates that a
registrant's compliance with applicable state laws be considered. 21
U.S.C. 823(f)(4).
As found above, in December 2005, Respondent filled numerous
prescriptions issued by prescribers who were engaged in the practice of
medicine without the required state licenses in violation of various
state laws. For example, even though Dr. Reppy was licensed only in
Florida, he issued new controlled-substance prescriptions to residents
of California, Tennessee, Illinois, North Carolina, and Louisiana. Both
Dr. Fernandez (who was licensed only in Puerto Rico) and Dr. Jamieson
(who was licensed only in Florida and Pennsylvania) also issued new
controlled-substance prescriptions to residents of these same States.
Finally, Dr. Merkle, who was licensed only in Indiana, issued new
controlled substance prescriptions to residents of California, North
Carolina, and Louisiana.
A physician who engages in the unauthorized practice of medicine is
not a ``practitioner acting in the usual course of * * * professional
practice.'' 21 CFR 1306.04(a). Under the CSA, the ``[t]he term
`practitioner' means a physician * * * licensed, registered, or
otherwise permitted, by the United States or the jurisdiction in which
he practices * * * to * * * dispense * * * a controlled substance.'' 21
U.S.C. 802(21). See also 21 U.S.C. 823(f) (``The Attorney General shall
register practitioners * * * to dispense * * * if the applicant is
authorized to dispense * * * controlled substances under the laws of
the State in which he practices.''). As the Supreme Court has
explained: ``In the case of a physician [the CSA] contemplates that he
is authorized by the State to practice medicine and to dispense drugs
in connection with his professional practice.'' United States v. Moore,
423 U.S. 122, 140-41 (1975) (emphasis added). A controlled-substance
prescription issued by a physician who lacks the license necessary to
practice medicine within a State is therefore unlawful under the CSA.
Cf. 21 CFR 1306.03(a)(1) (``A prescription for a controlled substance
may be issued only by an individual practitioner who is * * *
[a]uthorized to prescribe controlled substances by the jurisdiction in
which he is licensed to practice his profession[.]'').
Respondent had ample reason to know that these prescriptions were
unlawful under both Federal and state law. As the California Court of
Appeal has noted: the ``proscription of the unlicensed practice of
medicine is neither an obscure nor an unusual state prohibition of
which ignorance can reasonably be claimed, and certainly not by persons
* * * who are licensed health care providers. Nor can such persons
reasonably claim ignorance of the fact that authorization of a
prescription pharmaceutical constitutes the practice of medicine.''
Hageseth v. Superior Court, 59 Cal. Rptr.3d 385, 403 (Ct. App. 2007).
Moreover, as Respondent's expert admitted, an entity which voluntarily
engages in commerce by shipping controlled substances to persons
located in other States is properly charged with knowledge of the laws
regarding the practice of medicine in those States. See Tr. at 1302.
While this allegation was included in the Show Cause Order and
litigated, see ALJ Ex. 1, at 3; in its brief, Respondent largely sweeps
it under the rug.\25\ See
[[Page 50408]]
Resp. Prop. Findings at 22. I find, however, that Drs. Reppy, Jamieson,
Fernandez, and Merkle, repeatedly issued unlawful prescriptions when
they prescribed controlled-substances to residents of States where they
were not licensed to practice medicine. Respondent knew the physicians
were generally licensed in only one State and yet dispensed the
prescriptions. I thus find that Respondent had ample reason to know
that these prescriptions were unlawful, that it deliberately ignored
these state licensure requirements, and thus, that it repeatedly
violated the CSA. See 21 CFR 1306.04(a).
---------------------------------------------------------------------------
\25\ In its proposed findings, Respondent asserts that ``there
is a conflict in California law'' regarding the legality of an
unlicensed physician's issuance of a prescription to a resident of
the State. Resp. Prop. Finding at 22. (] 120). Respondent does not,
however, cite to any statutory language to support its claim of
conflict, but rather, relies on a document it created which the
Government entered into evidence. See id. (citing GX 7, at 1). I
therefore reject this contention.
---------------------------------------------------------------------------
Ignoring these patent violations of both Federal and state laws,
Respondent contends that Dr. Reppy and the other physicians were
engaged in the legitimate practice of ``telemedicine'' because ``there
is no requirement that the prescribing physician personally conduct a
physical examination of a patient for a valid doctor-patient
relationship to exist.'' Resp. Proposed Findings and Conclusions of Law
at 26 (] 143). In support of its contention, Respondent argues that the
practitioners whose prescriptions it filled ``required, at a minimum,
the patient to provide recent medical records, including a physical
examination, to substantiate the objective portion of the diagnosis,
prior to the telephonic consultation with the doctor.'' Id.
I also reject this contention. Even if Dr. Reppy's (and Dr.
Jamieson's) conduct established a valid doctor-patient relationship
under Florida law (a dubious proposition at that, see GX 56, at 53-54),
both physicians violated the laws of other States which clearly require
that the prescriber personally perform the physical exam except in
limited situations not applicable here. Dr. Reppy violated the laws of
California, Tennessee, Indiana, and Louisiana. Dr. Jamieson (and Dr.
Fernandez) violated the laws of California, Tennessee, and Louisiana.
Moreover, Dr. Merkle violated the laws of California, Tennessee, and
his own State, Indiana.\26\
---------------------------------------------------------------------------
\26\ As found above, Respondent also filled numerous controlled-
substance prescriptions issued by Dr. Kienzle, a Tennessee-licensed
physician who ultimately surrendered his medical license for
prescribing over the internet.
---------------------------------------------------------------------------
In its exceptions, Respondent argues that it is the victim of
``unclear'' guidance because the Agency's regulations and
Practitioner's Manual do not state ``that the prescribing physician
[must] personally conduct a physical examination.'' Resp. Exceptions at
9-10. This argument misses the mark because as the 2001 Guidance
Document recognized, whether certain acts by a physician establish a
bonafide doctor-patient relationship is a question of state law, see 66
FR at 21182-83, and as explained above, some States allow a physician
to prescribe without performing a physical exam in various, but
limited, circumstances.
The rules (and/or interpretations) adopted by the States of
California, Tennessee, Indiana, and Louisiana (among others) requiring
that a prescribing physician perform the physical exam were issued well
in advance of the conduct at issue here.\27\ These rules and
interpretations were also clear enough to put Respondent on notice that
the prescriptions being issued to residents of those States were
unlawful.
---------------------------------------------------------------------------
\27\ California adopted its internet prescribing statute in
2000, see Cal. Bus. & Prof. Code Sec. 2242.1 (West 2007). Tennessee
published its proposed rule on internet and telephonic prescribing
on September 26, 2000; while the rule was subsequently renumbered it
became effective shortly thereafter. See 26 Tenn. Admin. Reg. 62-63
(Oct. 2000). Likewise, on May 24, 2000, Louisiana issued its
position statement on internet and telephonic prescribing. Finally,
Indiana adopted its regulation on prescribing to persons not seen by
the physician in October 2003. See 844 Ind. Admin. Code 5-4-1.l.
---------------------------------------------------------------------------
Respondent argues that before it filled prescriptions, it
``required the physicians to execute an affidavit attesting that the
physician issued their prescriptions for a legitimate medical purpose
within the usual course of their practice and based on a valid
physician-patient relationship.'' Resp. Proposed Findings at 4 (] 15,
citing Resp. Ex. 3 & GX 55, at 17-19). Relatedly, Dr. Johns testified
that it is not ``the usual and customary practice in the distributive
pharmacy setting to verify the existence of a doctor/patient
relationship before filling a prescription.'' Tr. 1280 (quoting Resp.'s
Counsel).
As for Dr. Johns' testimony, Respondent was not engaged in ``the
usual and customary practice of'' pharmacy. Rather, it was filling
prescriptions that were issued by physicians who were frequently
located nowhere near their ``patients.'' Indeed, that is undoubtedly
why Respondent required the physicians to sign letters attesting to the
purported validity of their doctor-patient relationships.
The letters/affidavits were not a bona fide method of determining
the legitimacy of the prescriptions. Rather, they were a sham, and as
such, do not immunize Respondent from its obligations to know the laws
of each State into which it sent controlled substances and to
independently determine whether the physicians were in compliance with
the States' licensure requirements and specific standards for issuing
treatment recommendations and prescribing controlled substances.
I therefore also find that Respondent repeatedly violated 21 CFR
1306.04(a) by filling numerous prescriptions that it had reason to know
were issued by physicians who had not established valid doctor-patient
relationships under the laws of various States. Both this finding and
my previous finding regarding Respondent's filling of prescriptions
issued by unlicensed physicians provide independent and adequate
grounds to conclude that Respondent has committed acts ``inconsistent
with the public interest,'' and which warrant the revocation of its
registration. 21 U.S.C. 824(a)(4).
While this conduct provides reason alone to revoke Respondent's
registration, the record also contains substantial evidence of
additional violations. As found above, Respondent filled numerous
prescriptions issued by Dr. Starks well after his DEA registration
expired on February 28, 2003. Moreover, Respondent did so even though
it had on file a copy of Respondent's registration. For example, Starks
issued new prescriptions (with refills) for Lortab, which Respondent
filled, to J.I. of Alabama on January 9, 2004, April 16, 2004, June 24,
2004, and September 22, 2004. Starks also issued new prescriptions
(with refills) for Norco and Xanax, which Respondent filled to K.Q. of
Texas, on seven separate occasions between July 29, 2003, and October
27, 2004.
Under DEA regulations, a prescription for a controlled substance
can be issued only by a practitioner who is properly registered.\28\ 21
CFR 1306.03(a). The prescriptions Starks issued after the expiration of
his registration were therefore illegal.
---------------------------------------------------------------------------
\28\ Respondent does not contend that Starks was exempt from
registration.
---------------------------------------------------------------------------
Regarding this allegation, Dr. Johns testified that it was
``probably'' not inappropriate to fill a controlled-substance
prescription issued by a practitioner whose DEA registration had
expired even though the pharmacy had a copy of the expired registration
on file. Tr. 1300. This testimony is nonsense. While filling a
prescription issued by a practitioner whose registration has recently
expired might be excusable, Respondent's repeated filling of
[[Page 50409]]
numerous prescriptions long after the expiration of Starks'
registration clearly was not appropriate and was unlawful. If, in fact,
it is the custom of the pharmacy industry to dispense controlled
substances in the face of information that the prescriber's
registration has expired, then the entire industry is violating the
CSA. Cf. The T.J. Hooper, 60 F.2d 737, 740 (2d Cir. 1932) (``[T]here
are precautions so imperative that even their universal disregard will
not excuse their omission.'').
Respondent also violated the CSA by filling prescriptions that were
issued by Mr. Protheroe, a physician assistant, who used Dr. Reppy's
DEA registration while Reppy was on leave of absence and not
supervising him. As Reppy testified, Protheroe was authorized to issue
prescriptions only ``while he worked under [Reppy's] supervision,'' and
did not have ``permission to issue prescriptions in [Reppy's] name
while [Reppy] was on leave.'' GX 84, at 4. These prescriptions violated
the State of Florida's regulations (of which I also take official
notice) stating that ``[a] supervising physician may delegate to a
prescribing physician assistant only such authorized medicinal drugs as
are used in the supervising physician's practice, [and are] not
listed'' in the State's formulary. Fla. Admin. Code Ann. R. 64B8-
30.008(2).
As Reppy testified, during his leave of absence he was not in any
sense supervising Protheroe. Indeed, it appears that all of the
controlled-substance prescriptions written by Protheroe were illegal
because the State's regulations prohibit a physician assistant from
prescribing controlled substances even under a physician's supervision.
Id. R 64B8-30.008(1).\29\
---------------------------------------------------------------------------
\29\ The prescriptions were also illegal for the same reasons
that Reppy's prescriptions were illegal.
---------------------------------------------------------------------------
I further conclude that Respondent had reason to know that
Protheroe was writing illegal prescriptions and filled them anyway. See
GXs 16-18 (daily audit logs). The record amply establishes that
Ballinger directed the operations of University during the relevant
time period. Moreover, while the sale agreement for Respondent
indicated that Carr was then its sole owner, both Reppy and Miller
testified that Ballinger and Carr were partners in Respondent and other
business ventures involving the distribution of controlled substances
over the internet prior to the March 2005 sale of Respondent to
Ballinger. GX 87, at 2-4; Tr. 1172-73. Moreover, Respondent's counsel
stipulated that Ballinger had a relationship with Respondent during
Reppy's employment at University. Tr. 1172. Finally, the evidence also
establishes that Ballinger directed that University fax its
prescriptions to Respondent. Id. at 1179. I therefore hold that
Ballinger knew that Protheroe was issuing illegal prescriptions and
that this knowledge is properly imputed to Respondent. Respondent thus
violated 21 CFR 1306.04 by filling these prescriptions. This finding
thus provides additional support for the conclusion that Respondent's
registration is ``inconsistent with the public interest.'' \30\ 21
U.S.C. 823(f).
---------------------------------------------------------------------------
\30\ I also find that Respondent violated Kentucky law by
failing to report its dispensing of controlled substances.
---------------------------------------------------------------------------
Finally, Respondent argues that it made ``numerous attempts to meet
with DEA to ensure compliance with DEA's interpretations of applicable
laws and regulations'' and that it ``change[d] its business model to
assuage DEA's concerns.'' Resp. Prop. Findings at 29-30. Respondent
further asserts that ``in January 2007, * * * [it] began requiring
physicians who issued prescriptions through [it] to have personally
physically examined the patient involved.'' Id. at 12 (citing Tr. 877).
The purported support is not, however, testimony, but rather, part
of a question asked by Respondent's counsel of a DEA witness, to which
the latter answered: ``I don't recall that.'' Tr. 877. Likewise, the
further statement by Respondent's lawyer during a colloquy with the ALJ
that its reforms ``began in earnest in the beginning of January,'' id.,
is not evidence. Moreover, given the abundant evidence establishing
that Respondent filled numerous illegal prescriptions, and the failure
of Mr. Ballinger to testify, Respondent's assertion of its new-found
willingness to reform cannot be taken seriously. I therefore reject
it.\31\
---------------------------------------------------------------------------
\31\ Given the abundant evidence of Respondent's failure to
comply with applicable laws, I conclude that there is no need to
address whether its compounding activities also violated the CSA.
Moreover, in light of the evidence, I find it unnecessary to draw an
adverse inference based on Mr. Ballinger's failure to testify with
respect to the conduct alleged in the Show Cause Order and thus do
not address Respondent's exception on this point. I do, however,
rely on Mr. Ballinger's failure to testify to draw an adverse
inference regarding its assertion that it has reformed its
practices.
---------------------------------------------------------------------------
* * * * *
As the Supreme Court recently explained, ``the prescription
requirement * * * ensures [that] patients use controlled substances
under the supervision of a doctor so as to prevent addiction and
recreational abuse. As a corollary, [it] also bars doctors from
peddling to patients who crave the drugs for those prohibited uses.''
Gonzales v. Oregon, 126 S.Ct. 904, 925 (2006) (citing Moore, 423 U.S.
at 135). Even if it is not the usual and customary practice in the
traditional brick-and-mortar pharmacy setting to verify the existence
of the doctor/patient relationship before filling a prescription, see
Tr. 1280 (testimony of Dr. Johns), the prescribing and dispensing of
controlled substances over the internet poses an extraordinary threat
to public health and safety. Southwood Pharmaceuticals, Inc., 72 FR
36487, 36504 (2007) (discussing reports of the National Center on
Addiction and Substance Abuse and the National Institute of Drug
Abuse); see also William R. Lockridge, 71 FR 77791 (2006). Indeed, as
even Respondent's expert admitted, if a prescription was faxed from a
Web site, it would create a suspicion that the drugs would be diverted
and require the pharmacist to perform additional investigation before
filling the prescription. Tr. 1317. Furthermore, when a pharmacy
receives a prescription which indicates that the prescriber and patient
are located nowhere near each other, it should be obvious that further
inquiry is warranted to determine whether the prescription was issued
pursuant to a valid doctor-patient relationship. This is so regardless
of whether the pharmacy is a traditional retail pharmacy or a mail
order/internet pharmacy.
In sum, because Respondent's dismal record of compliance with
federal and state laws and its experience in dispensing controlled
substances amply demonstrate that its continued registration is
inconsistent with the public interest, there is no need to address the
other statutory factors. Moreover, for the same reasons which led me to
find that Respondent's registration posed an ``imminent danger to the
public health or safety,'' 21 U.S.C. 824(d), I conclude that the public
interest requires that its registration be revoked effective
immediately. See 21 CFR 1316.67.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) &
824(a), as well as 28 CFR 0.100(b) & 0.104, I hereby order that DEA
Certificate of Registration, BU6696073, be, and it hereby is, revoked.
I further order that any pending applications for renewal or
modification of such registration be, and they hereby are, denied. This
Order is effective immediately.
[[Page 50410]]
Dated: August 23, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7-17223 Filed 8-30-07; 8:45 am]
BILLING CODE 4410-09-P