Federal
Register Notices > Registrant
Actions - 2007 > CRJ
Pharmacy, Inc. and YPM Total Care Pharmacy, Inc.; Revocation of
Registrations
FR Doc E7-10624 [Federal Register: June 4, 2007 (Volume 72, Number
106)] [Notices] [Page 30846-30849] From the Federal Register Online via
GPO Access [wais.access.gpo.gov] [DOCID:fr04jn07-85]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 07-19]
CRJ Pharmacy, Inc. and YPM Total Care Pharmacy, Inc.; Revocation
of Registrations
This is a consolidated proceeding involving two pharmacies under
common ownership. On February 2, 2007, I issued an Order to Show Cause
and Immediate Suspension of DEA Certificates of Registration, BC9458539,
issued to CRJ Pharmacy, Inc., and BY9713276, issued to YPM Total Care
Pharmacy, both of Lakeland, Florida. I immediately suspended each
Respondent's registration based on my preliminary finding that they had "diverted
and continue to divert massive amounts of controlled substances in
violation'' of federal law "thereby creating an imminent danger to
public health or safety.'' Show Cause Order at 5. The Show Cause Order
further sought the revocation of each Respondent's registration on the
ground that its continued registration would be "inconsistent with the
public interest.'' Id. at 1 (citing 21
U.S.C. 823(f) & 824(a)(4)).
With respect to CRJ Pharmacy, the Show Cause Order alleged that it
was the fourteenth largest retail purchaser of hydrocodone-combination
products in the State of Florida, and that "[f]rom January through
November 2006, CRJ purchased 1,416,320 dosage units of brand name and
generic hydrocodone combination products,'' a schedule III controlled
substance. Id. The Show Cause Order further alleged that on March 30,
2006, DEA investigators had inspected CRJ and determined that it filled
controlled substance orders placed through a Web site,
yourpainmanagement.com; that the orders were for persons throughout the
United States; and that the orders were authorized by only two
physicians. Id. at 2. According to the allegations, one of the
physicians was licensed to practice only in Florida; the other was
licensed only in Minnesota. Id.
The Show Cause Order further alleged that on January 22, 2007, DEA
investigators executed an administrative search warrant at CRJ and
obtained records showing that between July 3, 2006, and January 22,
2007, CRJ had "filled approximately 19,223 controlled substance drug
orders and shipped them to customers throughout the United States.'' Id.
The Show Cause Order also alleged that these prescriptions were
authorized by physicians located in Texas, Wisconsin, Puerto Rico, New
York, California, Kansas, and Florida, for persons who did not reside in
the same States as the physicians, that the prescriptions were
disproportionately for "one or two types of highly addictive and abused
controlled substances,'' that "CRJ filled large quantities of
prescriptions per day, per physician,'' and thus CRJ knew or should have
known that the prescriptions it dispensed "were not issued 'for a
legitimate medical purpose by an individual practitioner acting in the
usual course of his professional practice.' '' Id. at 4 (quoting 21
CFR 1306.04(a)).
The Show Cause Order alleged that CRJ's owner, Mr. Chris Larson, had
admitted to investigators that he owned bestrxcare.com. Id. at 2.
According to the Show Cause Order, Mr. Larson told investigators that
persons seeking controlled substances completed an on-line questionnaire
and then faxed their medical records to bestrxcare.com, where they were
scanned into a database for review by either a physician or a
physician's assistant (PA). Id. Mr. Larson allegedly told investigators
that if the records were "ok,'' a physician or a PA would then consult
with the customer by telephone. Id. According to the Show Cause Order,
after the customer had paid the Web site and the phone consultation was
completed, a "prescription'' was issued which CRJ then downloaded from
the Internet and dispensed. Id.
The Show Cause Order further alleged that a physician employed by
Larson had admitted to investigators that Larson was using his DEA "license
for pain pills.'' Id. at 3. According to the Show Cause Order, the
physician further admitted that "he does not speak with any of the
Internet customers or their primary care physicians,'' and that he "does
not diagnose the Internet customers or provide after care services for
the Internet customers.'' Id.
With respect to YPM, the Show Cause Order alleged that it was
dispensing controlled substances that were ordered through another Web
site, yourpainmanagment.com, which was also owned by Larson. Id. at 4.
The Show Cause Order alleged that on August 17, 2005, Larson stated to
DEA investigators that a person could order controlled substances for
pain management through this Web site by completing a form on which they
provided their name, address, billing information, general biographic
details and medical complaint. Id. Larson allegedly also told
investigators that the customers would then fax their medical records to
the Web site where they were then reviewed by a PA; if the records
appeared "in order,'' either a physician or the PA would conduct a
telephone consultation with the customer. Id. The Show Cause Order
further alleged that during this interview, one of Larson's employees
told DEA investigators that the Web site does not order further testing
of its customers and does not contact the physicians named on the
customers' medical records. Id.
The Show Cause Order also alleged that from May 2006 through November
2006, YPM had purchased 841,800 units of hydrocodone- combination
products. Id. Relatedly, the Show Cause Order alleged that YPM records
showed that it had dispensed 17,336 controlled substance orders to
internet customers throughout the United States and that
[[Page 30847]]
98 percent of the orders were authorized by three physicians. Id. The
Show Cause Order further alleged that two of these physicians were
licensed to practice medicine in Florida; moreover, between June 1,
2006, and January 19, 2007, the third physician, who was licensed in
Minnesota, had authorized 15,050 orders. Id. The Show Cause Order thus
alleged that YPM "knew or should have known that the 'prescriptions'
[it] dispensed were not issued 'for a legitimate medical purpose by an
individual practitioner acting in the usual course of his professional
practice''' and violated federal law. Id. at 4 (quoting 21 CFR
1306.04(a)).
On February 5, 2007, both CRJ and YPM were served with the Order to
Show Cause and Immediate Suspension of Registrations. On February 22,
2007, both Respondents, who were represented by the same counsel,
requested a hearing on the allegations. The matters were assigned to
Administrative Law Judge (ALJ) Mary Ellen Bittner.
On March 12, 2007, the Government moved for summary disposition. The
basis for the Government's motion was that Respondents had closed their
businesses on February 12, 2007, and had "transferred all prescription
records, inventory, and required DEA records to other DEA registrants.''
Gov. Mot. for Summ. Disp. at 1. The Government's motion further asserted
that on February 27, 2007, Respondent CRJ had surrendered its Florida
Board of Pharmacy License to the Florida Board of Pharmacy. Id. The
Government further asserted that Respondent YPM had "signified its
intent to surrender its Florida Board of Pharmacy License in its letter
to DEA dated February 22, 2007.'' Id. at 2. The Government thus asserted
that both "Respondents are currently without authority under Florida law
to dispense controlled substances'' and therefore are not entitled to
maintain their DEA registrations. Id.
In support of its motion, the Government attached copies of letters
from both YPM (dated Feb. 27, 2007) and CRJ (dated Feb. 28, 2007) to the
DEA Miami Office; each letter advised that the pharmacy had closed, that
it was in the process of surrendering its state license, and sought
permission to act as a one-time wholesaler to sell the controlled
substances (which apparently were still in their possession) to another
pharmacy. See Appendices I & II to Gov. Mot. The Government also
attached a copy of the letter from CRJ to the Florida Board of Pharmacy,
by which it surrendered its state license. See Appendix III to Gov. Mot.
The Government's submission did not, however, include a similar letter
from YPM.
Respondent did not oppose this motion. Response to Gov. Motion for
Summ. Disp. at 1. However, on March 16, 2007, the Government had also
filed a motion to supplement the motion for summary disposition. The
Government based its motion on my decision in William R. Lockridge,
M.D., 71 FR 77,791 (2006). In Lockridge, I reviewed the propriety of an
immediate suspension in a case in which the Respondent's registration
had expired, in part, because of the collateral consequences which
attached with the issuance of the suspension. The Government thus moved
to submit several affidavits of DEA investigators to support "the basis
for the immediate suspensions.'' Gov. Mot. to Supp. at 1.
Thereafter, on March 19, 2007, the ALJ afforded Respondents the
opportunity to respond to the Government's motion by April 2, 2007.
Subsequently, on March 22, 2007, the ALJ granted the Government's motion
for summary disposition to the extent it sought the revocation of
Respondents' DEA registrations on the ground that CRJ and YPM were
without authority under Florida law to handle controlled substances and
therefore were not entitled to maintain their DEA registrations. ALJ
Dec. at 3. The ALJ thus recommended that Respondents' registrations be
revoked. Id.
The ALJ also granted the Government's motion to supplement its
original motion for summary disposition and submit into the record the
two affidavits. The ALJ, however, also afforded Respondents the
opportunity to submit additional documents including affidavits.\1\
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\1\ The ALJ did not, however, rule on the
Government's alternative basis for summary disposition.
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On April 2, 2007, Respondents filed their response which vigorously
opposed the Government's motion. Respondents contended that there is "no
dispute'' that they "can no longer hold DEA registrations.'' Response at
3. Respondents maintained, however, that the Government's reliance on
Lockridge was misplaced because in there, a full hearing had been held
and "[m]ootness was implicated only when the respondent's registration
expired after the hearing.'' Id. at 4.
Respondents further argued that "[t]he Government itself has claimed
that this case is moot and therefore no hearing should be held,'' and
that this precludes a "ruling on the immediate suspension as the
Government seeks.'' Id. Respondents also contended that because of the
collateral consequences that attach with the issuance of an immediate
suspension, "to the extent the Deputy Administrator seeks to uphold the
suspension, CRJ and YPM have a right to a hearing.'' Id. Respondents
thus maintained that granting the Government's supplemental motion would
"violate [their] hearing rights'' because the Government's affidavits
are "conclusory'' and cannot support the "factual findings'' sought by
the Government. Id. at 4-5 (citing 21
CFR 1316.41). Finally, Respondent contended that Lockridge "does
not, and cannot, hold that a decision on the merits may issue after a
summary disposition.'' Id. at 5. Respondents did not, however, submit
any affidavits of their own.
Neither party filed exceptions to the ALJ's decision. Thereafter, the
ALJ forwarded the record to me for final agency action. Having
considered the record as a whole, I hereby issue this final order. I
adopt the ALJ's recommendation that each Respondent's registration be
revoked on the ground that it no longer has authority to handle
controlled substances in the State of Florida and thus is not entitled
to hold a DEA registration in that State. I further conclude that my
decision in Lockridge is not controlling and that the issue of the
validity of the immediate suspensions is now moot because each
Respondent has surrendered its Florida pharmacy license and closed its
business. Moreover, neither the Government nor Respondents have pointed
to any non-speculative collateral consequence which a ruling on the
merits of the immediate suspension order would resolve. I make the
following findings.
Findings
On April 21, 2006, Respondent YPM Total Care Pharmacy, Inc., was
issued DEA Certificate of Registration, BY9713276, as a retail pharmacy,
with an expiration date of May 31, 2009. On some date not specified in
the record, Respondent CRJ Pharmacy, Inc., was issued DEA Certificate of
Registration, BC9458539, with an expiration date of August 31, 2008.
On February 7, 2007, DEA investigators served both YPM Total Care
Pharmacy, Inc., and CRJ Pharmacy, Inc., with the above described Order
to Show Cause and Immediate Suspension of Registration. Shortly
thereafter, on February 12, 2007, YPM closed its pharmacy. Moreover, on
February 26, 2007, YPM transferred its prescription records to another
DEA registrant, and
[[Page 30848]]
on February 28, 2007, YPM transferred its records and inventory of
controlled substances (with the Agency's approval) to that registrant.
YPM subsequently surrendered its Florida Pharmacy License. I take
official notice of the online records of the Florida Department of
Health which confirm that YPM Total Care Pharmacy has closed.\2\
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\2\ Under 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. 556(e);
see also 21
CFR 1316.59(e). Respondent can dispute these facts by filing a
properly supported motion for reconsideration within fifteen days of
service of this order, which shall begin on the date this order is
mailed.
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According to the record, on February 12, 2007, CRJ Pharmacy, Inc.,
also closed its pharmacy. On February 26, 2007, CJR transferred its
prescription records to another DEA registrant, and on February 28,
2007, transferred its records and inventory of controlled substances to
that registrant. CJR subsequently surrendered its Florida Pharmacy
License. I also take official notice of the online records of the
Florida Department of Health which confirm that CRJ Pharmacy has closed.
Discussion
Under the Controlled Substances Act, a practitioner must be currently
authorized to handle controlled substances in "the jurisdiction in which
[it] practices'' in order to maintain its DEA registration. See 21
U.S.C. 802(21) ("[t]he term 'practitioner' means a * * * pharmacy *
* * licensed, registered, or otherwise permitted, by * * * the
jurisdiction in which [it] practices * * * to * * * dispense a
controlled substance in the course of professional practice''). See also
id. section
823(f) ("The Attorney General shall register practitioners * * * if
the applicant is authorized to dispense * * * controlled substances
under the laws of the State in which [it] practices.''). As numerous
agency orders have held, "a registrant may not hold a DEA registration
if it is without authority under the laws of the state in which it does
business.'' Bourne Pharmacy, Inc., 72 FR 18273, 18274 (2007) (quoting
Oakland Medical Pharmacy, 71 FR 50100, 50102 (2006)). Accord Rx Network
of South Florida, LLC, 69 FR 62,093 (2004); Wingfield Drugs, Inc., 52 FR
27,070 (1987).
Each Respondent having surrendered its State license, neither now
disputes "that summary disposition and revocation are appropriate.''
Response to Gov. Mot. to Supplement at 3. Respondents do, however,
object to the Government's submission of the two affidavits and my
ruling on the merits of the immediate suspension.
Respondents assert that Lockridge is distinguishable because there, a
full evidentiary hearing had been held, and here, no such hearing has
been held. Respondents further argue that the validity of the immediate
suspensions is now a moot issue although they contend--inconsistently--
that they are entitled to a hearing "before bearing the adverse
collateral consequences'' that would arise were I to issue a ruling
upholding the immediate suspension orders.
I conclude that Lockridge is not controlling and that the issue of
the validity of the immediate suspensions in this case is now moot. It
is fundamental that the issuance of an immediate suspension imposes a
deprivation of a property interest which gives rise to the protections
of the Due Process Clause. See, e.g., FDIC v. Mallen, 486 U.S. 230, 240
(1988). Subsequent events may nonetheless make clear that there is no
longer a live controversy between the parties even when the Government
has yet to provide the constitutionally required process. Cf. City News
and Novelty, Inc., v. City of Waukesha, 531 U.S. 278 (2001).
In Lockridge, I held that the proceeding was not moot notwithstanding
that the practitioner had allowed his registration to expire following
the hearing and there was no existing registration to act upon. In so
holding, I relied on several factors. These included the collateral
consequences that attached with the issuance of the immediate
suspension, in particular the harm to the practitioner's reputation, and
the additional disability imposed by the Agency's requirement to report
the suspension on any subsequent application for a DEA registration.
I also noted that the practitioner had not moved to dismiss the
proceeding on mootness grounds and that he had submitted no evidence
showing that he "intend[ed] to permanently cease the practice of
medicine.'' 71 FR at 77797. I thus concluded that Respondent might apply
for a new registration and seek to engage in the same practices which
had prompted the immediate suspension. Thus, it was not " 'absolutely
clear that [the practitioner's] allegedly wrongful behavior could not
reasonably be expected to recur.' '' Id. (quoting Friends of the Earth,
Inc., v. Laidlaw Env. Servs., Inc., 528 U.S. 167, 189 (2000) (other
quotations and citations omitted)).\3\
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\3\ I also noted the extensive resources committed
by both parties in litigating the case and the potential prejudice to
the public interest were I to dismiss the proceeding without making
findings.
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Here, by contrast, the record establishes that each Respondent has
not only surrendered its State license, but has also gone out of
business. Moreover, in contrast to the registrant in Lockridge, each
Respondent has not only engaged in affirmative acts showing that it was
ending its business activities, it has also expressly communicated these
facts to the Agency. Relatedly, neither Respondent opposes the
revocation of its registration nor seeks to litigate the validity of the
suspension orders.
Finally, neither Respondent has asserted that it plans to re-enter
the business of pharmacy at some future date. The speculative
possibility that either Respondent will seek a new registration at some
point in the future is not enough to conclude that sufficient collateral
consequences exist to render the issue of the suspension orders'
validity a live dispute. See, e.g., City News, 531 U.S. at 285; Spencer
v. Kemna, 523 U.S. 1, 16 (1998). Indeed, were either Respondent to apply
for a new registration in the future, it would nonetheless be required
to disclose on its application the revocation being ordered below. Under
these circumstances, the suspension orders impose on Respondents no
additional consequence beyond what they will be required to disclose
because of the revocations of their registrations.\4\ Accordingly, the
issue is now moot.
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\4\ Finally, in this proceeding, the Government
apparently did not place under seal the controlled substances
possessed by either Respondent at the time of the suspensions. See 21
U.S.C. 824(f). Accordingly, title to the controlled substances is not
a collateral issue which would be resolved in this proceeding.
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Order
Pursuant to the authority vested in me by 21
U.S.C. 824, as well as 28 CFR 0.100(b) & 0.104, I hereby order
that DEA Certificate of Registration, BC9458539, issued to CRJ Pharmacy,
Inc., and DEA Certificate of Registration, BY9713276, issued to YPM
Total Care Pharmacy, Inc., be, and they hereby are, revoked. I further
order that pending applications for renewal or modification of either
registration be, and they hereby are, denied. This order is effective
July 5, 2007.
[[Page 30849]]
Dated: May 21, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7-10624 Filed 6-1-07; 8:45 am]
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