[Federal Register: July 24, 2003 (Volume 68, Number 142)]
[Notices]
[Page 43752-43753]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24jy03-116]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
G & O Pharmacy of Paducah, Incorporated; Denial of Application
On April 19, 2002, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to G & O Pharmacy \1\ (G & O) notifying the
applicant of an opportunity to show cause as to why DEA should not deny
its pending application for DEA Certificate of Registration as a
retail-pharmacy practitioner pursuant to 21 U.S.C. 823(f). As a basis
for the denial, the Order to Show Cause alleged that G & O's
registration would be inconsistent with the public interest. The Order
to Show Cause also notified G & O that should no request for a hearing
be filed within 30 days, its hearing right would be deemed waived.
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\1\ On the July 18, 2001 application for DEA registration, Mr.
Lockhart listed the business address of the pharmacy as ``G & O
Pharmacy of Paducah Inc.''
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The Order to Show Cause was sent by certified mail to G & O at its
proposed registered location in Paducah, Kentucky, and was received on
April 26, 2002. DEA has not received a request for hearing or any other
reply from G & O or anyone purporting to represent the pharmacy in this
matter.
Therefore, the Acting Administrator of DEA, finding that (1) thirty
days having passed since the attempted delivery of the Order to Show
Cause at the applicant's last known address, and (2) no request for
hearing having been received, concludes that G & O is deemed to have
waived its hearing right. See David W. Linder, 67 FR 12579 (2002).
After considering material from the investigative file in this matter,
the Acting Administrator now enters his final order without a hearing
pursuant to 21 CFR 1301.43(d) and (e) and 1301.46.
The Acting Administrator finds that G & O previously possessed DEA
Certificate of Registration AG2999691. On July 23, 1992, an Order to
Show Cause was issued proposing to revoke that Certificate of
Registration. The Order to Show Cause alleged in substance that (1) in
July 1990, an individual had overdosed on Demerol received from the
owner-manager pharmacist of G & O Pharmacy, Randall Lockhart, without
the benefit of a prescription; (2) accountability audits conducted of G
& O Pharmacy by DEA investigators in 1990 revealed shortages of
Schedules II and III controlled substances; (3) G & O Pharmacy had
filled at least 217 call-in prescriptions not authorized by the
physicians whose names appeared on the pharmacy's records; and (4) at
least one individual, on multiple occasions, had received controlled
substances from Mr. Lockhart without seeing the physician listed on the
call-in prescription.
Following prehearing procedures, a hearing was held in Louisville,
Kentucky, on March 10 and 11, 1993. After the hearing, both parties
submitted proposed findings of fact, conclusions of law and argument.
Subsequently, on December 16, 1993, counsel for the Government filed a
motion to reopen the proceedings, alleging that Mr. Lockhart
transferred ownership of G & O to AML Corporation (AML). The motion
also alleged that AML had applied for and received DEA Certificate of
Registration BA3838553 to operate G & O and that DEA had not been
notified pursuant to 21 CFR 1301.62 and 1307.14(b) (both sections
presently designated as section 1301.52). The motion further alleged
that G & O Pharmacy had ceased doing business under it previous
ownership or that Mr. Lockhart had transferred ownership to another
entity. When G & O failed to respond to the Government's motion,
Administrative Law Judge Mary Ellen Bittner (Judge Bittner) issued an
order reopening the proceedings in Docket No. 92-78.
On March 11, 1994, an Order to Show Cause was issued to AML d/b/a G
& O Pharmacy (containing the same allegations as those raised in the
July 23, 1992, Order to Show Cause) alleging that its continued
registration was inconsistent with the public interest. The Order to
Show Cause further alleged that Mr. Lockhart had improperly transferred
ownership of G & O without notifying DEA as required. Following the
consolidation of the two cases, a hearing was conducted on November 17,
1994.
After finding that the continuance of a registration would be
inconsistent with the public interest, the then-Deputy Administrator of
DEA revoked DEA Certificate of Registration BA3838553 previously issued
to AML Corporation d/b/a G & O Pharmacy. See, AML Corporation d/b/a G &
O Pharmacy, and G & O Pharmacy, 61 FR 8973 (March 6, 1996). The Acting
Administrator finds that the findings of fact and conclusions of law,
which led to the revocation of AML/G & O's DEA Certificate of
Registration, are set forth in great detail in the referenced final
order. They will not be repeated in this final order, but are
incorporated herein and will be referred to as necessary in rendering a
decision in this matter.
G & O has a documented history of non-compliance with DEA laws and
regulations. From 1989 to 1991 while registered under DEA registration
number AG2999691, the pharmacy dispensed 24 vials of Demerol, a
Schedule II controlled substance, to a dentist without a valid
prescription. It was later determined that these drugs were dispensed
for the dentist's personal use. Accountability audits conducted by DEA
investigators of G & O's controlled substances revealed significant
shortages of various Schedules II, III, and IV controlled substances
and the pharmacy filled numerous prescriptions for controlled
substances that were not authorized by physicians whose names appeared
on the prescriptions. In addition, Mr. Lockhart improperly transferred
ownership of G & O to AML without
[[Page 43753]]
notifying DEA as required by the agency's regulations.
The Acting Administrator also finds that effective March 17, 1999,
Mr. Lockhart and the Kentucky Board of Pharmacy (Board) entered into an
Agreed Order with respect to Mr. Lockhart's license to practice
pharmacy in that state. Among the factual findings agreed upon by the
parties was that in September 1997, Mr. Lockhart made a false or
fraudulent statement or misrepresentation of a material fact to the
Board in securing renewal of his pharmacist license. As a result, Mr.
Lockhart was ordered to pay a fine of $1,000 and obtain ten hours of
continuing education.
The parties entered into a second Agree Order on September 13,
2000, when it was determined that Mr. Lockhart failed to submit
evidence of continuing education hours as required by the order of
March 17, 1999. as a result, Mr. Lockhart was fined $500, and ordered
to obtain an additional 6.5 hours of continuing education within six
months of the entry of the Agreed Order.
Pursuant to 21 U.S.C. 823(f), the Acting Administrator may deny an
application for a DEA Certificate of Registration if he determines that
such registration would be inconsistent with the public interest. In
determining the public interest, the following factors are considered:
(1) The recommendation of the appropriate state licensing board or
professional disciplinary authority.
(2) The applicant's experience in dispensing or conducting research
with respect to 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 or
safety.
These factors are to be considered in the disjunctive; the Acting
Administrator may rely on any one or a combination of factors and may
give each factor the weight he deems appropriate in determining whether
a registration should be revoked or an application for registration
denied. See Henry J. Schwartz, Jr., M.D., 54 FR 16,422 (1989).
Regarding factor one, recommendation of appropriate state licensing
board or professional disciplinary authority, in 1997 and again in
2000, Mr. Lockhart's license to practice pharmacy was subject to review
and sanction by the Kentucky Board of Pharmacy. These actions were
based upon Mr. Lockhart's misrepresentations on a renewal application
regarding his continuing education, and his failure to obtain
continuing education as required by the Board.
Factors two and four, experience in dispensing controlled
substances and compliance with applicable controlled substance laws are
relevant in determining whether G & O's registration would be
inconsistent with the public interest. The then-Deputy Administrator
previously found that Mr. Lockhart's improperly dispensed Schedule II
controlled resulting in the transfer of 24 dosage units of Demerol to a
dentist for his personal use. 61 FR at 8976. Further, accountability
audits conducted by DEA investigators revealed shortages of over 40,000
dosage units of various Schedules II through IV controlled substances
with no evidence adduced by G & O to explain the shortages. In
addition, DEA's previous investigation of G & O revealed that the
pharmacy unlawfully dispensed controlled substances in which
approximately 198 prescriptions retrieved from the pharmacy were not
authorized by the physicians whose names appeared on the pharmacy
records. Such conduct is grounds for denying G & O's pending
application for DEA registration.
In addition, Mr. Lockhart and G & O demonstrated non-compliance
with DEA regulations when Mr. Lockhart transferred ownership of G & O
to AML. Pursuant to 21 CFR 1307.14(b) (since redesignated as 21 CFR
1301.52), Mr. Lockhart was required to provide the Special Agent in
Charge in his area specific information at least 14 days in advance of
the date of the proposed transfer of his ownership in G & O. The record
before the Acting Administrator reveals that Mr. Lockhart failed to
inform DEA of the transfer.
As to factor five, the Acting Administrator finds relevant a
finding in the previous proceeding that the transfer of ownership from
G & O to AML was not a bona fide transaction, but as Judge Bittner
described, ``a stratagem to obtain a new DEA registration.'' 61 FR at
8976. The apparent ruse designed to secure a DEA Certificate of
Registration demonstrates a disturbing willingness on the part of Mr.
Lockhart to engage in dishonest conduct, and further weighs in favor of
denying G & O's pending application. Similarly, factor five is relevant
to Mr. Lockhart's use of false information on the application for
renewal of his pharmacist license. It is well settled that a
registration of pharmacy may be revoked or application denied based on
the wrongdoing of its owner or officers, Crosstown Drugs, 54 FR 28521
(1989). See also, Alexander Drug Company, Inc., 66 FR 18299 (2001).
It is clear that G & O's past experience in handling controlled
substances is dismal at best. The pharmacy, through its owner Randall
Lockhart improperly dispensed controlled substances, including
instances where the pharmacy failed to obtain physician authorization
and G & O also failed to account for shortages of large quantities of
controlled substances. Mr. Lockhart further engaged in the deceptive
transfer of his ownership interest in G & O to another entity for the
purpose of securing a DEA registration.
The Acting Administrator acknowledges that most of these events
took place more than ten years ago. However, in light of G & O's
failure to request a hearing in this matter, and the absence of
evidence to rebut the above allegations, the Acting Administrator is
left with the conclusion that the applicant has not corrected the
deficiencies which led to the revocation of its previous Certificate of
Registration. This conclusion is further supported by evidence that Mr.
Lockhart has continued to engage in dishonest conduct by providing
false information on a state professional application, resulting in
fines and further conditions being placed on his pharmacist license. In
view of the foregoing, the Acting Administrator concludes that G & O
cannot be entrusted to handle controlled substances, and the granting
of its application would not be in the public interest.
Accordingly, the Acting Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that the
application for DEA Certificate of Registration submitted by G & O
Pharmacy of Paducah, Incorporated be, and it hereby is, denied. This
order is effective August 25, 2003.
Dated: July 3, 2003.
William B. Simpkins,
Acting Administrator.
[FR Doc. 03-18870 Filed 7-23-03; 8:45 am]
BILLING CODE 4410-09-M