Grider Drug #1 & Grider Drug #2; Decision and Order

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 08-19]

Grider Drug #1 & Grider Drug #2; Decision and Order

On October 30, 2007, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Grider Drug #1, the holder of DEA Certificate of Registration No. AG3498347, and Grider Drug #2, the holder of DEA Certificate of Registration No. AG9715751, (hereinafter, Respondent or Respondents), of Russell Springs, Kentucky.

1

ALJ Ex. 1, at 1. The Show Cause Order proposed the revocation of each Respondent's retail pharmacy registration, as well as the denial of any pending applications to renew or modify each registration, on the ground that the Respondents' “continued registrations are inconsistent with the public interest.”

Id.

(citing 21 U.S.C. 823(f); 824(a)). The Show Cause Order alleged that each Respondent had committed numerous violations of federal regulations, as well as that Leon Grider, the owner of Respondents, had been indicted on state law charges of trafficking in controlled substances and bribing a witness.

2

Id.

at 4.

1

The Order also sought the revocation of the registration issued to a third pharmacy, Grider Drug Key Village. ALJ Ex. 1, at 1. However, this store discontinued selling pharmaceuticals in November 2008 and the proceeding was subsequently terminated with respect to it. ALJ Ex. 5.

2

The specifics of the various allegations are discussed below.

Subsequently, on June 22, 2010, the Government raised additional allegations that Respondents were dispensing prescriptions to six persons engaged in doctor-shopping and that “Respondents knew or should have known that the above dispensed controlled substances were likely to be diverted or used for other than legitimate medical purposes” and that they “failed to fulfill their corresponding responsibility for the proper dispensing of controlled substances.” GX 21, at 1-3. Based on the allegations that this conduct had continued through early May 2010, I concluded that there was a “substantial likelihood” that it would continue.

Id.

at 3. Accordingly, I concluded that Respondents' continued registration during the pendency of the proceedings “would constitute an imminent danger to the public health and safety” and authorized the immediate suspension of each Respondent's registration.

3

Id.

at 3-4.

3

Apparently, the Government raised additional allegations in its pre-hearing statements.

Following service of the initial Show Cause Order, Respondents requested a hearing on the allegations and the matter was placed on the docket of the Agency's Office of Administrative Law Judges (ALJ) and assigned to an ALJ, who proceeded to conduct pre-hearing procedures. On June 6, 2008, the ALJ granted Respondents' motion to stay the proceedings pending the conclusion of a state-court criminal case against their owner Leon Grider, which was scheduled to conclude on October 10, 2008, noting that “the parties believe that the presentation of evidence in the above-captioned matter will be facilitated.” Order Granting Stay of Proceedings, at 1. However, nine months later, after further delays in the state proceeding, the ALJ terminated the stay, and finally, in August 2009, the ALJ commenced the hearing.

4

4

The ALJ also granted three continuances because of the medical condition of Respondent's counsel. Tr. 3005.

The proceeding also included an interlocutory appeal to this Office by Respondents of the ALJ's denial of their motion to stay the proceeding while they sought the return of numerous documents which were seized by the Kentucky Bureau of Investigation and the Medicaid Fraud Unit of the Kentucky's Attorney General's Office pursuant to a state criminal search warrant.

See

ALJ Ex. 10. I denied the interlocutory appeal.

See

ALJ Ex. 11.

Giving new force to Justice Douglas's dissenting opinion in

Sierra Club

v.

Morton,

5

the parties proceeded to take twenty-seven days of testimony over the ensuing twenty months and create a record comprised of more than 6200 pages of transcript as well as several thousand pages more of various exhibits, with much of the record devoted to litigating issues which are plainly irrelevant. Primary responsibility for the state of the record lies with the ALJ, who failed to exercise anything more than minimal control over the parties' respective presentations.

5

See

405 U.S. 727, 741 (1972) (citing Stone, 45 S. Cal. L. Rev. 450 (1972)).

After the hearing, both parties submitted briefs containing their proposed findings of fact, legal conclusions and argument.

6

Thereafter, on September 23, 2011, the ALJ issued her recommended decision.

6

These submissions will be cited as Gov. Post-Hearing Br. and Resp. Post-Hearing Br., respectively.

With respect to factors two (Respondents' experience in dispensing controlled substances) and four (Respondents' compliance with applicable laws related to controlled substances), the ALJ found,

inter alia,

that Respondents' owner, Leon Grider, had, on various occasions, distributed controlled substances to several persons without a prescription. ALJ at 85-85. Based on audits which Respondents paid an accounting firm to conduct on themselves, the ALJ further found that Respondents could not “account for a substantial number of dosage units of controlled substances” including hydrocodone and methadone.

Id.

at 85-86. In addition, the ALJ found that Respondents did not report various thefts of controlled substances and failed to reduce to writing and maintain called-in prescriptions.

Id.

at 87.

The ALJ further found that Respondents had violated their corresponding responsibility under 21 CFR 1306.04(a) by dispensing to the six persons (as alleged in the Immediate Suspension Order) controlled-substance prescriptions which lacked a legitimate medical purpose and that Respondents' pharmacists ignored various red flags indicative that the patients were engaged in drug abuse or diversion.

Id.

at 89-90.

Next, the ALJ rejected various allegations of violations that were based on data from the State of Kentucky's Prescription Monitoring Program (KASPER) on the ground that the Government had not obtained a court order as required by state law to render these reports and the underlying data contained in them admissible in this proceeding. ALJ at 91. However, the ALJ found that Respondents had violated federal regulations by dispensing schedule II controlled substances without retaining the hard copy of the prescription, as well as by dispensing prescriptions “that were never called-in or authorized by the prescribing physicians.”

Id.

at 92.

As for factor five—such other conduct which may threaten public health and safety—the ALJ found that Respondents' pharmacists had improperly billed Medicaid for medications (including controlled substances) by billing for one medication while actually dispensing another and that this conduct circumvented “the prescription check and balance such Medicaid reporting creates.” ALJ at 94. In addition, the ALJ found that Leon Grider had “inaccurately” labeled prescription bottles as well as placed false prescription labels on bottles he provided to a confidential informant.

Id.

Based on her findings under factors two, four, and five, the ALJ thus concluded that the Government had satisfied its

prima facie

case by showing that Respondent had committed acts inconsistent with the public interest.

Id.

at 95. The ALJ then held that

Respondents had failed to rebut the Government's

prima facie

showing, noting that Respondents' owner did not testify and thus had not shown “any remorse for the past failings of the Respondents or [that] he ha[s] implemented any procedures that would ensure such failings do not occur in the future.”

Id.

In addition, the ALJ noted that Eric Grider (Respondents' owner's son and the pharmacist in charge at Grider #2) testified that “Respondents had not implemented any operational or policy changes in response to this proceeding,” and that even after the service of the first Show Cause Order, Respondents had continued to violate 21 CFR 1306.04(a) by failing to fulfill their corresponding responsibility to not dispense unlawful prescriptions.

Id.

at 95-96. Finally, the ALJ rejected Respondents' contentions that the violations proved by the Government were “so minor and understandable in pharmacies doing extensive filling of controlled substances that those violations are insufficient * * * to justify suspension, revocation and/or denial of” their registrations.

Id.

at 96. The ALJ thus recommended the revocation of Respondents' registrations and the denial of their pending applications.

Id.

Respondents filed exceptions to the ALJ's decision.

7

Thereafter, the ALJ forwarded the record to me for final agency action.

7

Respondent's Exceptions have been thoroughly considered and are discussed throughout this decision.

Having considered the entire record, I adopt the ALJ's conclusions of law with respect to factors two and four, as well as her ultimate conclusion that Respondents have committed acts which render their registrations inconsistent with the public interest.

8

I also adopt the ALJ's legal conclusion that Respondents have not rebutted the Government's

prima facie

case. I therefore also adopt her recommended order. I make the following findings.

8

The ALJ's factual findings comprise 270 paragraphs, many of which contain multiple findings. As explained below, I adopt some of the findings and reject others for a variety of reasons. For example, the ALJ made extensive findings based on KASPER data and reports only to ultimately conclude that the KASPER data and reports were not admissible.

Compare

ALJ at 49-54,

with id. at

91-92. However, because I conclude that the ALJ correctly held that the KASPER data were not admissible, and cannot be disclosed other than in accordance with the KASPER statute, she should not have made these findings. The ALJ also made extensive findings as to the result of a Government audit of Respondents' handling of controlled substances which was performed by a new Diversion Investigator.

Id.

at 59-63. However, the Government did not rely on this audit, and its lead witness candidly acknowledged that the audit was flawed. Because these findings are not probative of any issue in the case, they should not have been made. Other findings of the ALJ are discussed throughout this opinion.

Findings of Fact

Respondents' Registration and License Status

Respondent Grider Drug #1 is the holder of DEA Certificate of Registration AG3498347, under which it was authorized to handle controlled substances at the registered location of 539 Main St., Russell Springs, Kentucky. GX 1. While this registration was due to expire on September 30, 2005, on August 23, 2005, Respondent filed a renewal application. GX 2. According to an affidavit of an official in charge of the DEA Registration Unit, upon filing this application, Respondent was authorized to continue dispensing controlled substances until the issuance of the immediate suspension order on June 22, 2010.

Id.

I therefore find that Grider Drug #1 has both a registration and an application currently pending before the Agency.

Respondent Grider Drug #2 formerly held DEA Certificate of Registration AG9715751, which authorized it to handle controlled substances at the registered location of 124 Dowell Rd., Russell Springs, Kentucky. GX 3. The expiration date of this registration was September 30, 2008, and Respondent did not file a renewal application until September 25, 2008. GX 4. According to an affidavit of the official in charge of the DEA Registration Unit, upon filing this application, Respondent was authorized to continue dispensing controlled substances until the issuance of the immediate suspension order on June 22, 2010. However, while the official's affidavit states that this was timely renewal application,

id.,

it was not because on October 30, 2007, the instant Order to Show Cause was issued to Grider #2, and under the Agency's regulation, when an Order to Show Cause has been issued to a registrant, the registrant must submit its renewal application “at least 45 days before the date on which the existing registration is due to expire” in order for its registration to be continued pending the issuance of the final order. 21 CFR 1301.36(i). Accordingly, I find that Respondent Grider Drug #2's registration expired on September 30, 2008. However, Respondent's Grider Drug #2's application is pending before the Agency.

See Paul H. Volkman,

73 FR 30630, 30641 (2008),

pet. for rev. denied

567 F.3d 215 (6th Cir. 2009).

The record contains evidence that Leon Grider, who is the pharmacist-in-charge at Grider Drug #1, owns both pharmacies. However, there is also some evidence that other Grider family members own shares in the pharmacies.

The Substantive Allegations

In the initial Show Cause Order, the Government raised a plethora of allegations. ALJ Ex. 1. These allegations included,

inter alia,

that:

(1) Grider #1 and #2 had refilled schedule II controlled substances seventeen and eight times respectively, in violation of 21 CFR 1306.12;

(2) Grider #1 and # 2 had refilled prescriptions for schedule III-V controlled substances without the prescribing physician's authorization fifty-seven and seventeen times respectively, in violation of 21 CFR 1306.21(a);

(3) Grider #1 and #2 filled prescriptions bearing invalid or expired DEA registration numbers 186 and 161 times respectively, in violation of 21 CFR 1306.05;

(4) Grider #1 refilled prescriptions for schedule III and IV controlled substances more than six months after the date of the original prescription, in violation of 21 CFR 1306.22(a);

(5) Grider #1 and Grider #2 engaged in the unauthorized transfer of prescriptions and prescription refills from Grider Drug Key Village 289 and 40 times respectively, in violation of 21 CFR 1306.25(a);

9

9

The Show Cause Order also alleged that Grider Drug Key Village engaged in 139 unauthorized transfers of controlled substance prescriptions and refills from Grider Drug #1 to Grider Drug Key Village and 150 unauthorized transfers of prescriptions and refills from Grider #2 to Grider Drug Key Village. ALJ Ex. 1, at 3-4.

(6) data from the Kentucky All-Schedule Prescriptions Electronic Reporting System (hereinafter, KASPER) show that Grider #1 had filled schedule III-V prescriptions for which it could not produce the actual prescription in nine instances, in violation of 21 CFR 1306.21(a);

(7) Grider #1 and #2 failed to take and maintain a biennial inventory, as required by 21 CFR 1304.11(c);

(8) “[a]n accountability audit of 50 controlled substances covering [the] period of May 31, 2003 to August 19, 2004, revealed a shortage of 22,219 dosage units of controlled substances” at Grider #1 and 105,913 dosage units at Grider #2;

(9) Grider Drug #1 “filled four controlled-substance prescriptions which incorrectly listed Grider Drug #2 as the `issuing physician' and that Grider #2 filled several schedule II controlled-substance prescriptions which listed itself as the physician, in violation of 21 CFR 1306.05(a); and

(10) Grider Drug #1 and Grider Drug #2 engaged in 133 unauthorized

transfers of prescriptions and prescription refills between themselves, in violation of 21 CFR 1306.25(a).

Id.

The Government raised additional allegations in its Pre-Hearing Statements, as well as in the Immediate Suspension Order. ALJ 21.

The Admissibility of KASPER Data

With respect to most of these allegations, a principal component of the Government's proof was reports and/or data contained in reports which were obtained by law enforcement personnel from the State of Kentucky's KASPER system. Notwithstanding Respondents' repeated objection to the use of this data on various grounds, the ALJ relied on it to make numerous findings regarding the allegations that Respondents had filled prescriptions under expired, invalid, or surrendered DEA numbers, that Respondents listed themselves as the prescribing physician in numerous instances, that Respondents refilled schedule II controlled substance prescriptions, that Respondent dispensed prescriptions without retaining a hard copy of them, and that Respondents dispensed refills of prescriptions for schedule III-V drugs which were not authorized. ALJ at 49-54. However, in her conclusions of law, the ALJ noted that Respondents also challenged the admissibility of the KASPER reports, and held that under Kentucky law, a court order is required for the reports and the data contained therein to be admissible in this proceeding. ALJ at 91 & n.46 (citing Ky. Rev. Stat. § 218A.202(8);

Sangster

v.

Kentucky Bd. of Med. Lic.,

2010 WL 4294213 (Ky. Ct. App. 2010)).

10

10

Given the ALJ's conclusion that this evidence was not admissible, it is perplexing that the ALJ made numerous factual findings relying on this evidence.

In its post-hearing brief, the Government argued that in several previous proceedings, the Agency's final orders had relied on KASPER data in making various findings. Gov. Br., at 101.

See Paul Volkman,

73 FR 30630, 30633 (2008). However, as the ALJ recognized, the admissibility of KASPER reports and data has not been previously challenged in a DEA proceeding.

Under Kentucky law, KASPER data may only be disclosed “to persons and entities authorized to receive that data under this section. Disclosure to any other person or entity, including disclosure in the context of a civil action where the disclosure is sought either for the purpose of discovery or for evidence, is prohibited unless specifically authorized by this section.” Ky. Rev. Stat. § 218A.202(6). The statute authorizes disclosure of KASPER data to eight categories of persons or entities, including: (1) “[a] designated representative of a board responsible for the licensure, regulation, or discipline of practitioners, pharmacists, or other person authorized to prescribe, administer, or dispense controlled substances and who is involved in a bona fide specific investigation involving a designated person”; and (2) a certified peace officer of a State, “or a federal peace officer whose duty is to enforce the laws of this Commonwealth, of another state, or of the United States relating to drugs and who is engaged in a bona fide specific investigation involving a designated person.”

Id.

However, “[a]uthorized users must apply for an account” and provide appropriate proof of their identity and credentials. RX 42, at 20. Most significantly, applicants must also execute an account use agreement pursuant to which they agree that access to KASPER “is granted only with the authority and rights allowed under KRS 218A.202,” as well as “to use the reports only in manners set forth under KRS 218A.202.” RX 52, at 1.

See also

Tr. 179 (testimony of supervisory DI: “We have an account with KASPER and in order to get that account we had to apply to KASPER and get all our information notarized and then approved by the Cabinet for Health Services.”).

The KASPER statute further provides that “[a] person who receives data or any report of the system from the cabinet shall not provide it to any other person or entity except by order of a court of competent jurisdiction and only to a person or entity authorized to receive the data or the report under this section, except” when done pursuant to three exceptions, none of which apply here. KRS § 218A.202(8). While one of these exceptions provides that “[t]he Department for Medicaid Services may submit the data as evidence in an administrative hearing held in accordance with KRS Chapter 13B,” an Opinion of the Kentucky Attorney General explains that:

The fact that the General Assembly deemed it necessary to make a special exception for Medicaid hearings indicates that administrative hearings, in general, were not contemplated as a permissible forum for disclosure of KASPER data. We must therefore conclude that data from the KASPER system cannot, without a court order, be used as either documentary or testimonial evidence in an administrative hearing before the Board of Medical Licensure. Any drug transactions at issue in the hearing must be proved from other sources.

5 Op. Ky. Att'y Gen. 7, at 6 (2005). However, as the Kentucky Attorney General further explained, “there is no `fruit of the poisonous tree' doctrine associated with KRS 218A.202, which would make the use of the KASPER information as a starting point for seeking confirming evidence into the equivalent of a `disclosure.' ”

Id.

at 7.

More recently, the Supreme Court of Kentucky has held that the KASPER statute creates an evidentiary privilege, which fosters important objectives, even if it is not absolute.

Commonwealth Cabinet for Health and Family Services

v.

Chauvin,

316 SW.3d 279, 288 (Ky. 2010). In

Chauvin,

the Kentucky Supreme Court further explained that the statute's exceptions which permit disclosure “are rather limited and do not undermine the general prohibition on disclosure.”

Id.

11

11

Under 21 U.S.C. 876(a), the Attorney General is authorized to “require the production of any records * * * which the Attorney General finds relevant or material to” an investigation under the CSA. This case does not, however, present any question as to whether the CSA preempts the KASPER statute's prohibition against disclosure in a proceeding under 21 U.S.C. 824(a).

Here, while there is no argument that DEA Investigators were authorized to obtain KASPER data to pursue their investigation, they agreed, as a condition of obtaining this data, to use the reports only in the manners permitted under Kentucky law. However, as explained above, with the exception of a state Medicaid proceeding, Kentucky law does not authorize disclosure of this information in an administrative proceeding without a court order. Because DEA Investigators did not obtain a court order authorizing the use of the KASPER data in this proceeding and agreed to use the reports and data only as authorized by Kentucky law, the reports and data contained therein were not admissible.

Accordingly, the ALJ should not have made any findings based on them. However, where DEA Investigators merely used the KASPER reports and data as an investigative tool to facilitate the search for other evidence which establishes violations on the part of Respondents, that other evidence is admissible. Accordingly, I turn to whether the various allegations set forth above are supported by substantial evidence.

12

12

The Government also introduced data from the DEA ARCOS system to show Respondents' purchases of oxycodone and hydrocodone in various years and compare them with the average purchases of pharmacies in the local area, the State of Kentucky, and United States. However, while some of the figures show that Respondents were purchasing greater quantities than the average of the pharmacies in these categories, some of the data shows the opposite. And while the hydrocodone

data generally shows that Respondents purchased more than the average pharmacy in each of the three categories, no further evidence was offered to explain the statistical significance of Respondents' purchases. Moreover, in its brief, the Government offered no further explanation as to what this evidence proved.

Allegation One—Refilling Schedule II Controlled Substances

The Controlled Substances Act explicitly prohibits the refilling of a schedule II controlled substance.

See

21 U.S.C. 829(a).

13

With respect to Grider #1, the Government produced copies of fifteen schedule II prescriptions which it alleged were refilled. GX 13. However, with respect to many of these prescriptions, the DI testified (and/or the copies of the prescriptions include a handwritten notation) that his finding was based on his review of the KASPER report. Tr. 357-371; GX 13, at 3, 7, 9, 15, 17, 19. In another instance, the DI identified two prescriptions for OxyContin issued to a patient on December 20, 2002 (with a fill date of 1/30/03) and February 13, 2003. GX 13, at 5-6; Tr. 361. However, when questioned regarding these prescriptions, the DI testified that “I made no annotations. I don't think I saw anything really wrong with these two.” Tr. 361. And with respect to other prescriptions in this exhibit (

See

GX 13, at 11-14), the DI offered no explanation at all as to why they were included. Tr. 364-65.

13

However, under a DEA regulation promulgated several years after the prescriptions at issue here, a practitioner “may issue multiple prescriptions authorizing the patient to receive a total of up to a 90-day supply of a schedule II controlled substances provided” that several “conditions are met,” including that the “practitioner provides written instruction on each prescription * * * indicating the earliest date on which a pharmacy may fill each prescription.” 21 CFR 1306.12(a).

The Government's Exhibit with respect to Grider #2's refilling of schedule II drugs contained thirteen prescriptions (two of which were actually for Lortab, a schedule III drug, and Xanax, a schedule IV drug).

See

GX 15. Here again, the Government's contention that Grider #2 refilled the schedule II prescriptions was based on inadmissible KASPER data. Tr. 418-35 (DI's testimony at Tr. 427: “[a]ll the prescriptions and the annotations [in GX 15] were done in comparing and contrasting with KASPER.”). In addition, with respect to the first prescription contained in this exhibit (which was for a schedule II drug), the DI acknowledged that the prescription had not been refilled.

Id.

at 420. Instead, the DI's concern was prompted by the fact that the KASPER report indicated that it had been filled on a Sunday, when the pharmacy was closed.

Id.

Even if this fact was adduced by admissible evidence, by itself, it would not constitute substantial evidence of any violation of the CSA.

However, another document in this exhibit is a copy of a label for a hydrocodone prescription. GX 15, at 4. Consistent with the annotation on this document, the DI testified that during a 2004 search of Respondents, Investigators did not find either a hard copy (

i.e.,

a prescription signed by the prescriber) or a called-in prescription. Tr. 422. Rather, the only document found by the Investigators was the label.

Id. See also

Tr. 468-74 and GX 39, at 4 (dispensings for Duragesic (fentanyl) and Roxicet filled on April 8, 2003 to patient LC). As explained more fully below, this evidence does constitute substantial evidence of a violation of the CSA, which prohibits the dispensing of controlled substances by a pharmacist without a prescription.

See

21 U.S.C. 829(a) (schedule II) & (b) (schedules III & IV).

The DI also testified to a split distribution of a prescription for 15 Duragesic patches, noting that ten of the patches had been dispensed initially and the remaining five had been dispensed eight days later and that this was “an instance where it seems the pharmacy didn't have enough in stock.” Tr. 426. However, once again, this allegation was based on inadmissible KASPER data and no other evidence establishes that the prescription was dispensed in this manner.

Allegation Two—Refilling Schedule III Through V Prescriptions Without Authorization of the Prescriber

As noted above, the Government alleged that both Respondents dispensed numerous unauthorized refills of schedule III through V controlled substances. However, the documentary evidence with respect to Grider #1 included only four prescriptions (two for hydrocodone combination drugs, and two for Ambien (zolpidem)); with respect to Grider #2, the evidence included only six prescriptions (three for Xanax, one for diazepam, and two for Lorcet (hydrocodone)).

See

GXs 14 & 16. In addition, the Government offered the testimony of its lead DI and Dr. CS and two exhibits regarding Grider #1's dispensing of multiple refills for Dr. CS's patient BW.

See

GXs 30 & 31.

As for the prescriptions contained in GX 14 (Grider #1), once again the DI relied on the KASPER data in concluding that Grider #1 had dispensed unauthorized refills. GX 14, at 1-2. As for the Grider #2 prescriptions, the first prescription found in GX 16 (a Xanax prescription to BP, which authorized no refills) was the subject of the DI's concern because while both the prescription and the label were dated June 5, 2003, KASPER data indicated that it was filled eighteen days later. GX 16, at 1-2. However, there is no contention that the KASPER data shows that the prescription was filled on both dates, and thus, even if this data was admissible, it would not establish that this was an unauthorized refill as there is otherwise no indication that this prescription was filled more than once.

The DI further asserted that per KASPER records, a June 18, 2003 prescription for Xanax issued to JB, which authorized no refills, was filled on both June 18 and June 19, 2003.

Id.

at 3. Once again, the Government produced no other evidence to prove its allegation.

14

However, the Government did produce a copy of a label for a Xanax prescription which was dispensed on March 12, 2003 to JB.

Id.

at 6. According to the DI's testimony (and a notation on the copy), Investigators could not find either the original signed prescription or a called-in prescription for this dispensing.

Id.;

Tr. 442.

14

This page of GX 16 also includes a March 26, 2003 prescription for Xanax with no refills issued by the same physician to JB and a copy of the prescription label which bears the date “03/26/03.” GX 16, at 3-4. No contention was made that this prescription was improperly refilled. In addition, the exhibit contains an August 14, 2003 prescription for diazepam issued by a Dr. JE with two refills, and a label for the dispensing which is dated “09/16/03.”

Id.

at 5-6. Here again, no contention was raised that this prescription was improperly refilled.

Also included in this exhibit were two prescriptions for 30 Lorcet (TID, a 10-day supply), with no refills, which were dated December 24, 2002, and January 3, 2003, as well as labels indicating that the prescriptions were filled on December 31, 2002 and January 6, 2003. GX 16, at 7-8. Next to the signed prescription which is dated January 3, 2003, is the handwritten notation: “Script filled 1-6-2003, just one (1) day after refilling script above!”

Id.

at 7. However, the Government elicited no testimony from the DI explaining the basis for this statement. Tr. 441-44. Here again, this does not constitute substantial evidence of the allegation.

However, the evidence also shows that on June 6, 2007, Dr. CS issued a prescription for 91 Lortab 7.5/500 to BW, with no refills, with instructions to take a decreasing dose of the medicine at two-week intervals and then stop. GX 30, at 1. The evidence further shows

that the prescription was dispensed on the date of issuance.

Id.

Dr. CS testified that in 2006, she instituted a policy that her staff was not authorized to call in refills because she had received two phone calls from pharmacies that patients were “masquerading as [her] office staff, trying to obtain * * * Lortab.” Tr. 3031-32. Dr. CS further testified that on June 6, 2007, BW had wanted to get off of Lortab and that the prescription she wrote was to taper BW off of the drug. Tr. 3050-52, 3056.

According to the evidence, another doctor had run a KASPER on BW and upon noticing that she was getting Lortab refills, contacted Dr. CS regarding the refills. GX 30, at 2. On November 9, 2007, Dr. CS's Office Manager (LBB) then called Grider #1 and spoke with Leon Grider regarding the refills and documented this conversation in BW's medical record. Tr. 3040, 3054-55. According to the note:

He [Leon Grider] stated that the DEA has the original prescription and he would contact them to fax it to us. He also stated that Richard Potters filled the original prescription and it showed 0 refills. He said someone from our office must have called in refills. The last one filled was on 10/18/07. I informed him that we do not call in controlled's-which is stated in our policy. We also discussed that controlled's prescribed from our office are not to be refilled earlier than one day.—lbb

GX 70.

15

Dr. CS further testified that no one from her office had called in refills for BW. Tr. 3055-56. Dr. CS subsequently filed a complaint with the State Attorney General regarding the refills.

16

Id.

at 3056.

15

Dr. CS testified that GX 70 “are notes that I made from my chart records concerning the patient who had brought complaints to me about discrepancies or discrepancies that we found during their visits, and also [a] note about one patient who actually had unauthorized refills.” Tr. 3040.

16

Respondent's star witness was James Faller, a federally convicted swindler and money launderer,

see

GXs 79 (judgment of conviction) & 80 (opinion of the Eleventh Circuit denying appeal), who was allowed to sit in on the entire proceeding as a representative of Respondents and then testify regarding the various allegations. Faller asserted that Dr. CS “was in some kind of trouble” and “was under some kind of investigation” because her prescription pads had been stolen and that these were used to obtain controlled substances which were used by employees of the call center Faller ran. Tr. 5508. He then maintained that he had evidence to contradict Dr. CS's testimony, stating “we have the records of what actually took place, not only the state's records, and her records and the pharmacy records. And they contradict that.”

Id.

at 5509. As was typically the case throughout his testimony, Faller's bark was stronger than his bite, as notwithstanding his statement, Respondents produced no such records.

While Faller's felony conviction does not render him incompetent to testify, there is ample reason to reject nearly all (if not all) of his testimony as incredible. According to Faller, his legal troubles which led to the federal convictions began back in 1993, when he had “blown the whistle” on his boss, who was purportedly stealing from various people to fund the PKK, a terrorist organization, and that his boss was doing this “on behalf of the United States Government.”

Id.

at 5519. Faller claimed that following this, threats were made on the lives of his attorneys; that he was falsely incarcerated; that shortly before he was indicted on the money laundering and fraud charges, an FBI agent had “contacted my attorneys and I [sic] * * * and said [that] if I wouldn't shut up and go away, if I wouldn't pay him money he would destroy my life.”

Id.

at 5521. According to Faller, following this, the FBI “had [his] car stolen in Europe”; caused his daughter to be “sexually assaulted,” by tampering with a custody dispute he had with his ex-wife,

id.

at 5523 & 5540; “threatened to rape and murder my wife and cut the baby out of her stomach,”

id.

at 5523; then “were going to try to shoot” him; and tried to kill his attorney and her husband by running them off the road.

Id.

at 5526-27.

Faller also alleged that upon moving to Russell Springs in April 2001 to run a call center, he developed new legal troubles because both the Police Chief and the Commonwealth Attorney “wanted me out because we were knocking down * * * drug problems” by “start[ing] mandatory drug testing for all the employees.”

Id.

at 5011. Faller then claimed that the Police Chief and Commonwealth Attorney had interfered with his efforts to address Russell Spring's drug problem because the Police Chief was “a part of it.”

Id.

at 5569. As for why the Commonwealth Attorney also “wanted [him] out,” Faller stated this was because he had “raised so much cane all across the board” with the Commonwealth Attorney,

id.,

even though he had only recently moved to Russell Springs.

Faller further testified he had filed a lawsuit alleging public corruption against the Police Chief, the State Police Detective who investigated the Respondents, and other officials of Russell Springs, and “got the grand jury fired up,” but that the grand jury “actually had convicted drug dealers on” it and that “[i]t was incredible what they did to tamper with” it.

Id.

at 5570. He then claimed that “there would have been indictments,” but that the State of Kentucky moved to stop them by bringing in a KBI [Kentucky Bureau of Investigation] Agent (Agent Dudinsky), who had assisted in executing the 2007 state search warrants at Respondents; he also claimed that “[t]hey immediately removed the foreperson of the grand jury” and replaced him/her with DB, who he alleged was a drug dealer associated with the Police Chief. Faller asserted that the Police Chief and the KBI agent “were using a cell phone to eavesdrop on the grand jury,”

id.

at 5574, and that he was going to be held in contempt by the state judge, R. Cletus Maricle, who was supervising the grand jury, because he found this out, but that the FBI arrested Judge Maricle and charged the Judge with various crimes of which he was eventually convicted.

Id.

However, a report issued by the Grand Jury states that it believed that the KBI Agent “ha[d] very efficiently carried out our instructions in investigating the matter we have asked him to investigate,” that he had provided “able assistance,” and that he “ha[d] been unfairly vilified for simply doing his job.” GX 85, at 2-3. The Grand Jury further stated that the original foreperson “was excused due to illness.”

Id.

Moreover, the Grand Jury report was signed by its foreperson, whose name was not DB.

Id.

at 3. Apparently the Grand Jury did not return any indictments as, in Faller's words, “[i]t was another one of these whitewashing grand juries.” Tr. 5104. Faller further claimed that he had been asked by the FBI and U.S. Attorney to prepare “an aid in sentencing Judge Maricle, which [he] did,” (which seems rather strange given his past history with the FBI) and that he said “in the sentencing memorandum” that Judge Maricle “was involved in the same exact conduct in Russell County to protect Chief Irvin” as the conduct which led to his conviction. Tr. 5577.

Faller asserted the existence of still other conspiratorial acts on the part of various governmental entities. These included the Kentucky Attorney General, who “somehow managed to get the Department of Defense * * * to ask Express Scripts to cut off Grider Drug and all insurance carriers,” Tr. 5456; that during the 2007 search, KBI Agent Dudinsky had planted drugs in Leon Grider's office, which Faller purportedly based on a videotape he viewed but which was not presented at the hearing,

id.

at 5448-53; and then the IRS, which had recently searched Faller's home (for reasons unclear on the record), and which, following the search, “accidentally turned over” files that Faller had been working on for the Griders which Faller alleged had been stolen during a break-in of his home “years ago.”

Id.

at 5436-38.

It is further noted that much of Faller's testimony, which went on for nearly three days, was plainly irrelevant, and even when he testified regarding one of the Government's allegations, it was typically clear that he lacked personal knowledge of the allegation.

See

Tr. 5018 (Faller's testimony that he was first contacted by Leon Grider in April 2006). The ALJ ultimately ignored nearly all (but not all) of Faller's testimony, which was typically provided in a rambling narrative even when questioned by Respondents' counsel (notwithstanding the Government's objections and the ALJ's instructions), and did not even address whether she found it credible. It is perplexing that the ALJ did not exercise more control over Faller's typically irrelevant and ludicrous testimony.

While the note recorded by Dr. CS's Office Manager is hearsay, I conclude that it is sufficiently reliable to constitute substantial evidence. Leon Grider's statements establish that he did in fact refill Dr. CS's prescription and constitute an admission. While that statement was made to Dr. CS's Office Manager, it was recorded in the patient's medical record, a source of evidence which the Supreme Court has long recognized as inherently reliable.

See Richardson

v.

Perales,

402 U.S. 389 (1971). Moreover, Leon Grider did not testify and refute this evidence. Thus, this allegation is proved without resort to the KASPER data.

17

17

In his affidavit, the supervisory DI also stated that a review of the prescriptions (which was completed by November 1, 2004) issued at Grider Drug #2 and seized during the August 2004 search showed “sixteen (16) instances of refilling a schedule III-V controlled substances [sic] prescription without authorization in violation of 21 U.S.C. 829(b) and 21 CFR 1306.21 and 1306.22.” GX 9, at 16. These provisions require that any controlled substance, which is a prescription drug, may only be dispensed pursuant to a prescription and that “[s]uch prescriptions may not be filled or refilled more than six months after the date thereof or be refilled more than five times after the date of the prescription unless renewed by the practitioner.”

See

21 U.S.C. 829(b).

Noting the above statement, Government Counsel then asked the supervisory DI: “With regard to this particular paragraph, during the course of your investigation did you come across a physician by the name of Robert Shipp.” Tr. 436. The DI answered “[y]es,” and then explained that “[i]n July of 2004, Dr. Shipp surrendered his DEA registration to us as a result of an investigation that we conducted of his medical clinic in Columbia, Kentucky, which is about a 30 minute drive from Russell Springs.”

Id.

at 437. According to the DI,

“[t]he case was well publicized” and that “Dr. Shipp is very well known, or was very well known in the area.”

Id.

The DI then explained that in July 2008, he had obtained a further KASPER report on the Respondents for the period of January 1, 2005 through July 7, 2008, and found that several prescriptions had been dispensed by Grider #2 under the registration number of Dr. Shipp after he had surrendered his registration. GX 18.

When the Government moved for the admission of the KASPER report (GX 18), the Respondent objected to the admission of this exhibit both because it was a KASPER report and on grounds of relevancy. Tr. 440. However, the ALJ admitted the exhibit. Even if this evidence was relevant to prove the allegation (which does not appear to have been made in either the Show Cause Order or the Government's various pre-hearing statements), here again, the Government's proof of the dispensings was based solely on an inadmissible KASPER report. The allegation is therefore not supported by substantial evidence.

Allegation Three—Respondents Filled Prescriptions Bearing Invalid or Expired DEA Numbers

Next, the Government alleged that Respondent filled numerous prescriptions that bore invalid or expired DEA numbers. While the Government submitted copies of various prescriptions which Respondent filled,

see

GXs 23 & 26; it produced no evidence that any of the DEA numbers on the prescriptions themselves were either expired or invalid. Rather, the Government's proof was based on KASPER reports submitted by Respondents which listed DEA numbers which differed from those on the actual prescriptions.

See id; see also

GX 9; Tr. 316, 321. Here again, the Government relied on inadmissible evidence to prove the violations. Accordingly, the allegation is not supported by substantial evidence.

There is, however, evidence that Respondents violated DEA regulations because, in some instances, the labels they affixed to prescriptions contained the wrong physician's name.

See

GX 26, at 1-2; 7-8; 9-10.

Allegation Four—Grider #1 Refilled Prescriptions More Than Six Months After the Date of the Original Prescription

In support of this allegation, the DI asserted that on four occasions between January 2003 and August 2004, Grider filled schedule III and IV controlled substance prescriptions that had been issued more than six months earlier. GX 9, at 14. With respect to Grider #1, the Government's proof was limited to the bare assertion by the DI that he had “reviewed prescriptions seized from Grider #1, and compared and contrasted these prescriptions with prescription logs, transfer records, and KASPER reports.”

18

Id.

No further evidence was offered specifically identifying the prescriptions, their date of issuance, and the date on which they were refilled. Moreover, here again, it appears that this allegation was based on KASPER data.

18

This statement was made in support of six different allegations which the DI raised in his affidavit.

See

GX 9, at 14.

The Government did submit an exhibit which purports to show that Grider Key Village engaged in the same practice. GX 24. Although this allegation is properly considered given the common ownership of the three pharmacies, the documentary evidence, which includes four prescriptions and four labels for refills, does not support the allegation as the dates of the refills are all well within six months of the date of the original prescriptions.

See id.

And while the exhibit contains various handwritten comments asserting that refills occurred more than six months after the original prescription was issued (two were allegedly refilled one day late), when asked by the ALJ what was the source of the information as to the refill dates, the DI testified that it came from the KASPER report. Tr. 308. Here again, the Government's reliance on inadmissible KASPER data precludes a finding that the allegation is supported by substantial evidence.

Allegations Five and Ten—Grider #1 and Grider #2 Engaged In the Unauthorized Transfer of Prescriptions and Refills To and From Grider Key Village, as Well as To and From Each Other

In his affidavit, the supervisory DI stated that his review of Grider #1's “prescription logs, transfer records, and KASPER reports” showed that there were 289 “instances of unauthorized transfer of controlled substances [sic] prescriptions and/or prescription refills from Grider Drug-Key Village to Grider Drug #1,” and 453 “instances of unauthorized transfer of controlled substances [sic] prescriptions and/or prescription refills from Grider Drug #2 to Grider Drug #1.” GX 9, at 14. The supervisory DI further testified that during the August 2004 search of the pharmacies, one of his investigators relayed information to him regarding the existence of logbooks listing prescriptions which were transferred between the pharmacies. Tr. 695-96. The supervisory DI testified that “[t]here were two logs,” which were provided to DEA by either Mr. Grider or another employee, and which bore on their cover, the titles of either “Grider-Key Village transfers or Grider Drug #2 transfers.”

Id.

at 696-97.

The DI further testified that the logs contained “the date and the prescription that was being or had been courtesy filled.”

Id.

at 697. Explaining the term “courtesy fill,” the DI gave the example of where “the prescription was originally brought * * * to Grider #2, but for some reason or other it was * * * actually filled at Grider #1, but the records and the distribution of that filling, when you look at the KASPER and you get the actual prescriptions, is at Grider Drug #2.”

Id.

The DI subsequently testified that the only information in the log was “the date and the prescription number,” and acknowledged that he determined that the prescriptions had been filled at the other pharmacy by looking at KASPER data.

Id.

at 699. However, the DI then explained that pharmacy's employees had told the Investigators that the log was used to list prescriptions that were actually filled by other pharmacies.

Id.

The DI then added that this was not permitted under the law because while “you can transfer a prescription from one pharmacy to the other * * * once you transfer that prescription, you can't transfer that prescription back.”

Id.

at 701. Continuing, the DI explained that this “is a violation” of regulations requiring the pharmacy “to maintain complete and accurate records of receipt and distribution” and that this is “what causes the skewage” in “the audit figures” with one pharmacy being short of a drug and the other pharmacy having an overage.

19

Id.

at 701-02.

19

This allegation might well have been proved without introducing KASPER data (given the testimony that pharmacy employees had stated what the logs documented). However, the Government did not introduce the logbooks into the record and thus there is a lack of evidence to substantiate the number of instances in which the prescriptions were transferred.

Allegation Six—KASPER Data Shows That Grider #1 Filled Nine Schedule III—V Prescriptions for Which It Could Not Produce the Actual Prescriptions

On its face, proof of this allegation requires KASPER data for which the Government did not obtain the required court order. Accordingly, the allegation is not supported by substantial evidence.

Allegation Seven—Grider #1 and Grider #2 Failed to Take and Maintain a Biennial Inventory, as Required by 21 CFR 1304.11(c)

As evidence of this violation, the Government submitted the DI's affidavit. GX 9. Therein, the DI stated that he “developed further information

during the execution of the * * * search warrants [on August 19, 2004] that each of the three Grider Drug locations failed to take and complete a biennial inventory as required by 21 U.S.C. 827(a) and 21 CFR 1301.11(c).”

20

Id.

at 13.

20

The Show Cause Order had also alleged that Grider Drug—Key Village did not take and maintain a biennial inventory. ALJ Ex. 1, at 4.

However, less than a month after executing his affidavit, the DI testified that he had done an audit of the three pharmacies' handling of certain drugs. Tr. 606-13. Contradicting the statement in his affidavit, the DI testified that in performing the audit, he had used Grider #1's and Grider #2's biennial inventories of May 31, 2003 as the initial inventories, and that there was no biennial inventory for Grider Drug—Key Village, “because it wasn't required for them at that time.” Tr. 609. Given the DI's testimony at the hearing, this allegation is not supported by substantial evidence.

Allegation Eight—The Accountability Audits

The Government further alleged that it had performed an audit of 50 controlled substances for the period May 31, 2003 through August 19, 2004 and that the audit “revealed a shortage of 22,219 dosage units of controlled substances” at Grider Drug #1 and “105,913 dosage units of controlled substances” at Grider Drug #2. ALJ Ex. 1, at 2-3. The evidence shows that this audit was done by a DI

21

who was a recent graduate of the Basic Diversion Investigators Course, and who told her supervisor that she “did not have the experience” and “really was unsure [of] what [she] would be doing.” Tr. 2863. According to the supervisory DI, the DI's audit was flawed because it included both invoices for Respondents' purchases and some distributions which occurred outside of the audit period.

Id.

at 607-08.

21

To make clear, this DI did not take the closing inventories; these were done by inspectors from Kentucky Drug Control and Kentucky Board of Pharmacy. Tr. 608.

The Government did not, however, introduce this audit into evidence. Rather, it relied on a separate audit of three drugs (Xanax, alprazolam (the generic for Xanax), and methadone) which was done by the supervisory DI. GX 11. According to the DI, this audit found numerous shortages and overages, some of which would be significant if the audit was accurate.

See, e.g.,

id.

(finding shortages of 5,842 and 5,225 dosage units of alprazolam .5mg and 1mg respectively at Grider Drug #1 and 3,271 and 8,900 dosage units of same drugs at Grider #2, and a shortage of 3,562 and 2,786 dosage units of methadone 5 and 10mg respectively at Grider #2). However, in doing his audit, the DI used KASPER information to determine the distributions by each Respondent. Tr. 617-19. The DI did not verify the totals provided by KASPER against the individual patient information he had also obtained from KASPER.

Id.

at 619. Most significantly, in determining the quantity of the drugs that Respondents distributed, the DI did not use the pharmacies' dispensing records, even though they were required to maintain these records under the CSA and DEA regulations.

See

21 U.S.C. 827(a)(3); 21 CFR 1304.22(c). Moreover, on cross-examination, the DI acknowledged that he had “no idea how accurate” the KASPER data was. Tr. 622.

Respondents put on extensive evidence challenging the DEA audits. More specifically, the evidence shows that shortly after DEA executed the August 19, 2004 search warrant, Respondents hired an entity (McDonald Group) to conduct inventories at each store on August 28, 2004. Tr. 1987-88. Respondents also hired Stivers and Associates, an accounting firm, to review the DEA audit results. Tr. 1980. David W. Hicks, CPA, who has been Stiver's Auditing Director for the past twelve years and has nearly twenty years of professional auditing experience, RX 101, at 1-2, conducted what he termed a “consultation examination” of Respondents.

Id.

at 3; Tr. 2009. According to Mr. Hicks, “[a]n audit differs from our consultation examination in that our consultation examination focuses directly in one specific area and tests at 100% with available information, whereas an audit provides only reasonable assurance and sample tests available information to provide an opinion on the reliability of the information.” RX 101, at 3; Tr. 2010.

In its report, Stivers detailed the procedures it used in conducting its examination.

Id.

at 62. For the beginning or initial inventory, Stivers used the same May 31, 2003 inventories taken by Grider #1 and #2 as DEA did in doing its audits. To determine Respondents' purchases of controlled substances, Stivers received reports directly from Respondents' suppliers and compiled a schedule for each store which tabulated the quantity purchased by drug name and strength.

Id.

at 62. In obtaining this information, Stivers also obtained credit memos for Respondents' returns of drugs to their suppliers.

Id.

Stivers then added the purchases and subtracted the returns to the initial inventory figures to determine the total amount for which Respondents were accountable (Total Accountable For).

Id.

To determine the amount of drugs Respondents could account for (Total Accounted For), Stivers used the inventories conducted on August 28, 2004 by the McDonald Group.

Id.

at 63. With respect to outdated/expired drugs, Stivers explained that they were set aside in a separate bin apart from the pharmacies' stock until they could be disposed of, and that on September 2, 2006, Stivers inventoried the drugs that had expired prior to August 28, 2004, when the McDonald Group performed its inventory.

Id.

Mr. Hicks maintained that these drugs “would have been removed from [the] current inventory prior to the McDonald Group's inventory” and were thus not included in the August 28, 2004 counts.

Id.

Stivers counted a total of 2,414 dosage units of expired drugs. Tr. 2043.

As for Respondents' dispensings, Stivers tabulated the quantities for each drug “for each location from the PC V computer software system Narcotic and Controlled Substance Drug Sales Report,” obtaining monthly reports for the audit period for each of the fifty drugs that were initially audited by DEA. RX 101, at 63. Stivers totaled the monthly quantities for each drug to determine the total number of dosage units sold during the audit period.

Id.

Stivers then added the August 28, 2004 inventories, the outdated drugs, and Respondents' sales to determine the “Total Accounted For” for each drug.

Id.

While Stivers' results demonstrate that both DEA audits were flawed (largely because the DIs used KASPER data to determine the amounts of the dispensings), they provide little comfort to Respondent because they point to massive accountability problems at each of the pharmacies. For example, at Grider #1, Stivers found that the pharmacy had the following shortages (by number of dosage units): (1) Alprazolam, 2,316; (2) Ambien, 170; (3) diazepam, 6,372; (4) Duragesic, 462; (5) Endocet, 214; (6) hydrocodone, 28,097; (7) lorazepam, 2,191; (8) Lorcet, 500; (9) Lortab, 375; (10) Valium, 40; and (11) Vicodin, 200.

Id.

at 14. Stivers also found that Grider #1 had overages in the following drugs: (1) Clonazepam, 7,568; (2) methadone, 3,025; (3) oxycodone, 1,335; (4) OxyContin, 262; (5) phentermine, 1,751; and (6) Stagesic, 514.

Id.

At Grider #2, Stivers found that the pharmacy had the following shortages: (1) Ambien, 428; (2) Duragesic, 290; (3) hydrocodone, 8,135; (4) lorazepam, 1,253; (5) methadone, 3,207; (6) oxycodone, 1,240; (7) OxyContin,

17,875; (8) phentermine, 3,203; and (9) Stagesic, 2,013.

Id.

In addition, Stivers found that Grider #2 had the following overages: (1) Clonazepam, 3,979; (2) diazepam, 2,787; (3) Endocet, 425; (4) Lorcet, 619; (5) Lortab, 342; (6) Valium, 662; and (7) Vicodin, 109.

Id.

Moreover, even after Stivers took the figures for all three pharmacies (including Grider Key Village) to determine the combined shortages and overages, there were still substantial shortages and overages of various drugs (all figures in d.u.). The combined shortages included: (1) Alprazolam, 1,496; (2) diazepam, 7,329; (3) Duragesic, 605; (4) hydrocodone, 35,418; (5) lorazepam, 4,928; (6) OxyContin, 16,998; (7) phentermine, 2,791; and (8) Stagesic, 717.

Id.

The combined overages included: (1) Clonazepam, 31,951; (2) Endocet, 871; (3) Lorcet, 1,051; (4) Lortab, 889; (5) methadone, 15,747; (6) oxycodone, 900; and (7) Valium, 872.

Id.

Regarding the results of his examination, Mr. Hicks testified that when all the drugs for the three stores were added up, Respondents only failed to account for an overage of 644 pills.

Id.;

Tr. 2035. He then asserted that this result is “so minute, it's just totally immaterial.” Tr. 2035.

This conclusion is properly characterized as “fuzzy math,” as contrary to Mr. Hicks' understanding, the various controlled substances which a DEA registrant handles are not fungible. Rather, pursuant to the CSA and DEA regulations, a registrant which dispenses is required to maintain “a complete and accurate record

of each such substance

* * * received, sold, delivered, or otherwise disposed of by” it. 21 U.S.C. 827(a)(3) (emphasis added); 21 CFR 1304.21(a). This means that each drug (including a generic (alprazolam) v. a legend drug (Xanax)), must be separately accounted for. Moreover, “[s]eparate records shall be maintained by a registrant for each registered location.” 21 CFR 1304.21(a). As Mr. Hicks' examination demonstrated, both Grider #1 and Grider #2 had numerous material shortages and overages of the controlled substances they handled.

22

22

For reasons explained in my discussion of the public interest factors, I reject Respondents' exception that the Stivers' audit was not accurate and reliable as to the overages and shortages. While I conclude that the DEA audits were inaccurate, I am not required to ignore other reliable evidence in the record.

Allegation Nine—Grider Drug #1 Filled Four Controlled Substance Prescriptions Which Listed Grider Drug #2 as the Issuing Physician and Grider Drug #2 Listed Itself as Issuing Physician On Several Schedule II Controlled Substance Prescriptions

In support of this allegation, the Government offered the testimony and affidavit of the supervisory DI.

See

GX 9, at 3-11. The Government did not enter into evidence any of the prescriptions which the DI asserted listed Respondents as the prescribing physician, and the DI's affidavit makes clear that the evidentiary basis for this allegation is the data contained in KASPER reports the DI obtained on Respondents.

See id.

Because the Government produced no evidence other than the inadmissible KASPER data to prove the allegation, it is not supported by substantial evidence.

Allegation Eleven—Respondent[s] Filled Prescriptions Issued by a Tennessee Mid-Level Practitioner in Violation of Kentucky Law

In support of this allegation (which was raised in the Government's pre-hearing statement), the supervisory DI stated in his affidavit that the Louisville District Office “Diversion Unit completed a * * * review of prescriptions seized on August 18, 2004 from Grider Drug #2,” and that “the review of these prescriptions revealed * * * [t]welve (12) instances of filling prescriptions issued by a Mid-Level Practitioner licensed in Tennessee, who is not authorized to prescribe controlled substances in Kentucky in violation of 21 U.S.C. 829(b) and 21 U.S.C. 842(a)(1) and [KRS § ] 314.011(8) and [§ ] 314.042.” GX 9, at 16. Yet, when asked at the hearing to “elaborate further” on this assertion, the supervisory DI testified that “[i]n conducting my review of the KASPER reports and of course running the DEA numbers through our system and trying to identify the prescribers, I came upon the fact that—I identified 12 prescriptions that were being filled for a nurse practitioner out of Tennessee.” Tr. 200-01;

see also

GX 9, at 7-11 (listing KASPER data for Grider #2 including prescriptions issued by a “TN MLP”). The DI then explained that at the time the prescriptions were filled, nurse practitioners were not authorized to prescribe drugs in Kentucky and thus the pharmacy should not have filled the prescriptions. Tr. 201.

The Government offered no further evidence establishing the identity of the prescriber and his/her licensing status. Nor, notwithstanding the DI's statement in his affidavit that he had reviewed the prescriptions, did the Government introduce into evidence the prescriptions, the pharmacy's dispensing log, or copies of the labels for the dispensed prescriptions. Indeed, given the DI's testimony at the hearing, it is unclear whether the DI based this allegation on anything other than the KASPER data. I therefore conclude that this allegation is not supported by substantial evidence.

Allegation Twelve—Respondents Failed to Report All Thefts of Controlled Substances to DEA

The Government put forward evidence that numerous break-ins and thefts had occurred at the Respondents and that several of them were not reported to DEA as required by federal regulations. According to the supervisory DI, he received information from Narcotics Detective with the Kentucky State Police (Scott Hammond) and the Police Chief of Russell Springs (Joe Michael Irvin), who alleged that Leon Grider was trading controlled substances for sex and “hiding * * * the distribution[s] by reporting theft and losses for the pharmacy.” Tr. 160. In addition to the theft and loss reports which he obtained from the Police Chief and the State Pharmacy Board, the DI also obtained from the Russell Springs Police Department a chronology of the various break-ins which had occurred at Respondents.

23

Id.

at 162-63;

see also

GX 32.

23

It does not appear that the Government provided adequate notice of its intent to litigate this allegation in either the Show Cause Order or the Pre-Hearing Statements. However, Respondents did not object that the allegation was beyond the scope of the proceeding and that they were denied adequate notice of it. Moreover, Respondent fully litigated the issue. As judicial decisions make clear, even where the Government fails to provide notice of an allegation in the Show Cause Order or Pre-Hearing Statements, the parties, in the absence of objection, can be deemed to have litigated the allegation by consent where the parties fully litigate the issue.

See Citizens State Bank

v.

FDIC,

751 F.2d 209, 213 (8th Cir. 1984) (citing

Kuhn

v.

Civil Aeronautics Bd.,

183 F.2d 839, 841-42 (D.C. Cir. 1950));

Yellow Freight System, Inc.,

v.

Martin,

954 F.2d 353, 358 (6th Cir. 1992).

The Government introduced into evidence an exhibit which contains sixteen police reports

24

documenting the various incidents; also included in this exhibit were a number of DEA Form 106s, a form which a registrant is required to submit to report the theft of controlled substances.

See

21 CFR

1301.76. However, there was not an accompanying DEA Form 106 for each incident for which the police filed a report and the DI testified that on comparing the theft and loss reports which DEA had received from Respondents with the police reports, he determined that Respondents had not filed reports with DEA for some of the incidents. Tr. 169. More specifically, there were four instances in which a theft of controlled substances occurred at one of the Respondent's locations which was not also reported to DEA.

See

GX 33, at Tab E (Feb. 22, 2002 theft from Grider #2);

id.

at Tab L (Oct. 28, 2003 theft from Grider #1);

id.

at Tab M (November 2, 2003 theft from Grider #2);

id.

at Tab N (November 3, 2003 theft from Grider #2).

25

24

While the cover of GX 33—Tab E states that it includes a report for a February 22, 2002 break-in at Grider Drug #2, the tab actually includes reports for both this break-in and a second incident, which occurred later that morning at Grider #1; however, the report for Grider #1 stated that while the store's window had been broken with a large rock, no entry was made. GX 33, Tab E, at 5.

25

Not proved by credible evidence was Respondents' far-fetched contentions that: (1) The Russell Springs Police Chief was actually behind the break-ins because he sold alarm systems on the side and Leon Grider refused to buy one from him, and/or (2) that the Russell Springs Police Chief was behind the break-ins because he was dealing the drugs that were stolen.

With respect to the latter contention, James Faller testified that he had been called by one Bobby Bunch, who “said that he had burglarized Grider drugs” and that when he was caught by the police, he had “a whole lot more [pills] than what were turned into evidence,” Tr. 5086, and that Bunch ” had agreed to testify about what had happened to him,” but was murdered and no one has been charged with the crime because “[i]t was another one of these whitewashing grand juries.”

Id.

at 5103. No further evidence was offered to corroborate Faller's testimony regarding Bunch's purported statements regarding the disposition of the drugs the police seized from him, or even that Bunch had, in fact, been murdered.

Another of Faller's incoherent tales was that Leon Grider had received a call from a prisoner Brian Lawless (which Grider purportedly had on tape, but which was not produced at the hearing), who, according to Faller, had written a letter to the Commonwealth Attorney stating “that Leon had left money for him that was paying him to break into these stores,” and that this letter was used to get Leon Grider indicted. Tr. 5085-86. According to Faller, Lawless had stated that he wrote the letter because the Chief “told [him] he was going to kill [his] little brother if I didn't write them.”

Id.

While Respondents introduced a transcript of a sworn statement given by Kevin Lawless, Brian's brother, which Faller obtained in his pursuit of his public corruption claims, the only persons present were Mr. Lawless, Faller, and Grider. RX 13. Moreover, nothing in Kevin Lawless's statement corroborates Faller's contention that Brian Lawless made up his story.

Id.

Contrary to Faller's assertion that Brian Lawless's letter was used to procure Leon Grider's indictment, the record seems clear enough that the only indictments brought against Leon Grider were based on his having unlawfully trafficked in controlled substances to LW and PG and not on conduct related to the break-ins. GXs 44, 45.

Allegation Thirteen—Respondents' Owner, Leon Grider, Unlawfully Distributed Controlled Substances

In the initial Order to Show Cause, the Government alleged that in August 2005, Leon Grider had been indicted in both the Russell County and Adair County Circuit Courts on state felony charges of trafficking in controlled substances. ALJ Ex. 1, at 4. The Show Cause Order further alleged that Leon Grider had also been indicted in Russell County on charges of bribing a witness.

Id.

In its initial pre-hearing statement, the Government provided further notice that it intended to elicit testimony from Scott Hammond, a narcotics detective with the Kentucky State Police, regarding “illicit distributions of controlled substances from” the Respondent and various “undercover operations.” Gov. Pre-Hearing Statement, at 7.

As part of its case-in-chief, the Government called Detective Hammond who testified regarding the decision to initiate undercover operations and the undertaking of the operations in the investigation of Respondents. The ALJ found Detective Hammond's testimony credible.

26

ALJ 56 at nn.22 & 23. In addition, as part of its rebuttal case, the Government called LW, who had acted as a confidential informant and who obtained controlled substances from Leon Grider on various occasions without a prescription. Notwithstanding the determined efforts of Respondents' counsel to destroy the credibility of the Detective and LW, the ALJ found their testimony credible as do I. ALJ at 56 n.52.

26

The Detective acknowledged that his mother had formerly worked as a cashier at Grider #2, and that she was either fired or quit on her own after the August 2004 DEA search in which the Detective assisted. Tr. 1389, 1540, 1617-18. In addition, the Detective testified that his wife's sister was married to Greg Grider, Leon Grider's oldest son. Tr. 1388.

In an attempt to impeach Detective Hammond's credibility, Mr. Faller asserted that Hammond had threatened to have LW's children murdered, that he had gotten her thrown out of her apartment, that PG (LW's former boyfriend) had told him that he had things he wanted to share but “was afraid for his life,” and that Hammond had “start[ed] harassing me [Faller] and running witnesses off the road.” Tr. 5098.

LW testified, however, that Detective Hammond had never threatened her. Tr. 5935. Moreover, while LW testified that Detective Hammond had moved her to a safe house, he had done so at her request.

Id.

at 6131.

Respondents introduced into evidence a transcription of an unsworn interview Faller conducted of PG, during which Faller made numerous suggestive statements to PG regarding the conduct of Hammond and Irvin.

See

RX 25, at 22 (p. 51,”my guess is, what happened is, they created a crime against you, too. That's my belief.”);

id.

(“I think they've threatened you ruthlessly. I think they're telling you you're going to come up with the testimony they want you to come up with. I think that they've . . . used the kids and the threat of the kids and everything else to try to force you to go along with this stuff. * * * And I think, quite frankly, you're scared to death. * * * In fact, the * * * scared to death part I'm sure of it, because I can see it. This isn't a guess * * * you know, it's nothing against you. It's clear to me you're scared to death.”). Subsequently, PG related a conversation during which Hammond and Irvin were attempting to recruit him and LW to work as informants PG said:

Leon's got enough money. If we done something like this to him, it wouldn't be no problem for him to have us took care of. And the statement was made to me not to worry about Leon, that we'd be more or less—I think their words were, they could help us or they could hurt us, make our life easier or make our life hell, and, more or less to watch what's I'm doing. And their exact words were, that they could take us out and nobody would ever find us was their exact words.

RX 25, at 32. Faller then asked, “In other words, they'd kill you,” to which PG said, “uh-huh.”

Id.

Faller then asked: That's the way you took it?”

Id.

PG replied: “That was their exact words, without saying, I'm going to kill you, but just, I'll take you out and nobody will ever find you. You don't have to worry about Leon.”

Id.

Another participant in the interview then asked PG: “They didn't use the words, I'll kill you, though?”

Id.

PG responded: “No. They said you don't have to worry about Leon killing you. We can take you out, nobody will ever find you. And he would, too.”

Id.

Later, PG asserted that “they did threaten us with Federal charges and to hurt the kids.”

Id.

Putting aside the ambiguity of PG's statement as to whether his life was threatened by either Hammond or Irvin, because both Detective Hammond and LW were placed under oath and were subject to cross-examination and the ALJ found them to be credible, I reject the unsworn hearsay statement of PG as inherently unreliable.

It is further noted that Respondents did not take exception to the ALJ's finding that Detective Hammond's testimony was credible.

See generally

Respondents Exceptions.

According to the Detective, sometime in May or June 2003, SD, a female in her early to mid-twenties,

27

was arrested by the Russell Springs Police Department on a DUI charge; at the time of the arrest, PC was her passenger.

28

Tr. 1404. A day or so after their arrests, the Detective interviewed them and asked them where they got their drugs.

Id.

at 1404-5. While they were initially “uncooperative,” they told the Detective that they were getting drugs from Leon Grider without a prescription.

Id.

SD agreed to cooperate and told the Detective she would see Leon Grider after the pharmacy's closing, knock on the door, go in if the door was open, ask him for controlled substances, and that most of the time he gave them to her.

Id.

at 1406. When asked what she provided in return, SD denied paying for the drugs or providing stolen property to Leon Grider.

Id.

at 1407. However, when then asked if she had sex with him, SD would neither confirm nor deny doing so.

Id.

SD also admitted that she was addicted to drugs and had previously been arrested for possession of some unidentified drug.

Id.

at 1408.

27

The Detective described SD as having blond hair, brown eyes, and being “probably five-four or five-five,” and “115 or 120 pounds.” Tr. 1407.

28

According to the Detective, he had first received information about SD and PC from an Investigator with the State Pharmacy Board and had discussed them with Chief Irvin of the Russell Springs Police Department. Tr. 1403.

SD agreed to attempt a controlled drug buy which both the Detective and

the Police Chief (Joe Michael Irvin) observed; however, upon SD's going to Grider #1, the door was locked and she was unable to get in.

Id.

at 1409-10. After debriefing SD, who said that Grider would answer the door, the Detective went to SD's apartment complex to do surveillance (which was “right down the road” from Grider #1) and the Police Chief watched the back of Grider #1.

Id.

at 1410. Shortly after he arrived at SD's apartment complex, the Detective was called by the Chief and told that Grider had left the store and was carrying something.

Id.

The Detective returned to Grider #1, picked up the Chief, and the two observed Leon Grider go to his house, stay a few minutes and then leave.

Id.

at 1411-12. The Detective and Chief then watched Grider drive to a “community called Salem,” where he met up with a red Jeep that was behind a church.

Id.

at 1412. A woman got out of the Jeep and entered Grider's car.

Id.

at 1415. After fifteen minutes, Grider and the Jeep departed; the Detective and Chief followed the Jeep to a “community called Eli” and obtained its license plate number, which was traced to a female, PL.

Id.

at 1412.

Either the next day or the day after, the Detective and the Chief went to PL's residence and asked to speak with her.

Id.

at 1413.

PL did not want to do so at her residence, but agreed to meet the officers at the Russell Springs Police Department, where she was interviewed.

Id.

During her interview, PL admitted that Leon Grider had brought her both Xanax and hydrocodone, for which she did not have a prescription.

Id.

at 1414-15. When asked what she was doing in Grider's car, PL admitted to “just messing around,” but when asked to define what she meant, she stated “let's just leave it at that. We were just messing around.”

Id.

at 1415. While PL said that she also received methadone prescriptions from a physician,

id.

at 1418-19, she further stated that she had gotten controlled substances from Leon Grider both with and without a prescription,

id.

at 1416, and that when she had a prescription, she would ask for some extra.

Id.

at 1418.

PL agreed to act as a cooperating witness, and was approved by the Detective's supervisors; her background check did not reveal any felonies.

Id.

at 1416.

On October 21, 2003, PL obtained a methadone prescription and met with the Detective on the outskirts of town, where she was searched, interviewed, had a transmitting/recording device placed on her, and was driven to Grider #1.

Id.

at 1419-20. PL entered the pharmacy, spoke with Leon Grider, and asked him to come out from behind the counter and into an aisle, where she gave him her methadone prescription and said that she “need[ed] some Zs,” street slang for Xanax.

Id.

at 1420-21.

Leon Grider did not say anything and went back behind the counter and filled PL's methadone prescription.

Id.

at 1420. PL left the pharmacy and had a smoke, while standing around its back entrance.

Id.

PL then re-entered the pharmacy and came back out with a white bag; PL was then picked up by the Detective, and after being searched, gave him the bag.

Id.

at 1420-21. Upon opening the bag, the Detective found a pill bottle containing methadone, as well as “thirty orange, oval-shaped pills that were loose in the bottom of the bag.”

Id.

at 1421. The Detective gave PL the methadone and placed the other pills in evidence bags, which he turned in to the Kentucky State Police; the orange pills were subsequently tested by the lab and determined to be Xanax.

Id.

at 1421-22.

PL was debriefed and confirmed what the Detective heard through the transmitter; she was then allowed to leave.

Id.

Detective Hammond further testified that PL did not have a prescription for the Xanax.

Id.

at 1422. PL was used to obtain drugs only this one time.

Id.

In either late November or early December 2003, the Detective received a phone call from SD, who stated that she had been at “the Manor,” a Government housing project in Russell Springs and had seen Leon Grider there.

Id.

at 1423. SD also stated that LW was receiving hydrocodone from Leon Grider.

Id.

Upon receiving this information, the Detective interviewed LW, who initially denied that she received controlled substances from Leon Grider.

Id.

at 1424. However, LW then admitted “that she was getting controlled substances from” Grider.

Id.

During the interview, LW admitted that she had obtained hydrocodone, Xanax, and alprazolam from Leon Grider, both with and without a prescription; she also told the Detective that she believed she could get more drugs from him without a prescription.

Id.

LW, who was then in her early twenties,

29

denied trading either money or sex for the drugs.

Id.

at 1426.

29

The Detective described LW as being “five-two, blond hair, blue eyes, [and] 115 pounds the last time I saw her.” Tr. 1426.

While during the interview, LW agreed to perform undercover transactions for the Detective, sometime in December 2003, she then told Leon Grider about her having been contacted by the Detective, that the police knew what was going on, and that she was “scared to death.”

Id.

at 1427, 1435. Grider told her she “needed to leave the county for a little while just to let them cool off of” her.

30

Id.

at 6019. LW then left town and would not “answer her cell phone.”

Id.

at 1426. However, eventually, the Detective regained contact with LW, who told him that she had gone to Leon Grider and told Grider that the state police knew what was going on.

Id.

at 1427, 1435. LW told the Detective that Grider “gave her some money” and “an undetermined amount of hydrocodone and told her to leave.”

Id.

at 1435. LW told the Detective that she had gone to Bowling Green and Somerset, Kentucky with PG, her boyfriend.

Id.

30

According to LW, Leon Grider never told her not to become a CI. Tr. 6020.

The Detective developed additional information showing that on six occasions beginning on December 19, 2003 and ending on January 14, 2004, Leon Grider wired a total of $2800 to PG through Western Union offices in Bowling Green and Somerset, Kentucky.

See

GX 46; Tr. 1490. In a second interview he conducted with LW in January 2004, she stated that Leon Grider “told her to leave town and stay from us.”

Id.

at 1489.

On some date not specified in the record, LW agreed again to work as a cooperating witness and was signed up to do so.

31

Tr. 1495. LW contacted Leon Grider and said she needed to see him; Grider told her to come to Grider #1 before it opened on February 24, 2004.

Id.

Before LW went to the store, she was searched, a recorder was placed on her, and she was given instructions.

Id.

The Detective followed LW and PG to the store; upon their arrival, LW, accompanied by PG, went inside and told Leon Grider that they were going to court and were “short on their pills” and were concerned that they would be subjected to a pill count.

32

Id.

at 1495-96. Grider gave them 40 hydrocodone tablets and 40 alprazolam tablets in two pill bottles, which LW brought to the Detective.

Id.

at 1496. LW did not have a prescription for the drugs.

Id.

at 1497.

31

At one point, LW testified that she was in Bowling Green for six months. Tr. 6066-67. However, other evidence suggests that she was in Bowling Green for a considerably shorter period of time. Tr. 1496; GX 46.

32

According to the Detective, PG accompanied LW on the undercover transaction. Tr. 1498-99.

On June 4, 2004, LW performed undercover transactions in both the morning and either the afternoon or evening.

Id.

at 1499; 1513-14. In the morning, the Detective drove LW, who was wearing a recorder, to Grider #1. Tr. 1515. LW went into the store and obtained Lortab and alprazolam, which

Leon Grider placed loose in a brown bag; she then got back in the Detective's car and they left the scene.

Id.; see also id.

at 6033 (testimony of LW that “I just went in and asked him [Leon] for some pills, and he gave them to me.”);

id.

(testimony of LW that she received Lortab and Xanax at first transaction); GX 48. Notably, the pills were not placed in a prescription bottle. Tr. 6033.

As for the second set of transactions, LW and PG lived together in a trailer in Adair County, the county next to Russell County.

Id.

at 1500. LW called Leon Grider and asked him to bring some methadone to her.

Id.

During a phone call, Leon Grider explained that he needed to go to Grider #2; in a subsequent phone call, Grider told LW that he would bring some methadone to her at her residence.

Id.

Another officer followed Leon Grider to within a short distance of LW's residence, with the detective being “just around the corner” from LW's residence.

Id.

Upon his arrival, Leon Grider gave LW 60 alprazolam in an envelope and 100 dosage units of methadone, which were in a sealed “distributor's bottle.”

Id.

at 1501. After Grider left, the Detective entered the residence and obtained the controlled substances.

Id.

LW did not have a prescription for either drug.

Id.

On April 24, 2005, a further undercover transaction occurred. On some date not clear on the record, LW and PG contacted the Detective and indicated that they could still obtain controlled substances from Leon Grider. Tr. 1507. The Detective (along with the Police Chief) met with LW and PG, who offered to call Leon Grider and seek more drugs from him; LW and PG stated that they believed that he would give them Duragesic (fentanyl) patches.

Id.

On the date of the transaction, LW and PG were searched and recorders were placed on them.

Id.

At 3:49 p.m., LW called Leon Grider and left a voicemail message in which she asked to meet with him; a short while later, Leon Grider returned the call. GX 27. Because Leon was going to see his mother, he agreed to meet LW (and PG) at a church graveyard on the Adair and Russell County line; the Detective and Chief observed Leon Grider arrive at the graveyard and watched the transaction from the back side of the graveyard.

Id.

at 1507-08.

The Detective used a scanner to listen to the conversation between Leon Grider, LW, and PG, during which LW asked if she could get Duragesic patches from Leon Grider.

Id.

at 1508; GX 27. Leon Grider explained what strength the patches were and that he had to go back to town to get the patches, after which he would meet LW and PG at Houchens Supermarket in Key Village. GX 27, at 3-4. However, while driving back to town, Leon Grider observed the Detective and Police Chief and called LW and PG to tell them that they were being watched; however, he still told LW and PG to go to Houchens but that he was going stay at Grider #1 for fifteen to twenty minutes.

Id.

at 4. LW passed this information on to the Detective.

Id.

Grider then told LW and PG to go to the parking lot of Houchens.

Id.

Leon Grider returned to Grider #1.

Id.

In the meantime, the Detective also told LW to call Leon and tell him that he and the Chief were no longer around; LW did so.

Id.

The Detective and Chief switched vehicles, drove to Key Village, and parked across the parking lot from Houchens.

Id.

Upon arriving, Leon Grider entered the store and PG went in and met him.

Id.

at 1508-09. Following a conversation, Leon Grider gave PG twenty Duragesic patches and 88 alprazolam; PG did not have a prescription for either drug

Id.

at 1509; GX 27. After PG left the store, he (and LW) met the Detective and Chief who searched them and their car; the Detective also took possession of twenty Duragesic patches and 88 Xanax pills.

33

GX 27, at 2, 4. The CIs did not have prescriptions for the drugs.

Id.

at 2.

33

It is acknowledged that there is a conflict in the evidence as to the number of patches. I conclude that the conflict is not material to the resolution of this matter.

LW testified that while she initially had legitimate prescriptions for both Lortab and Xanax, she had heard from acquaintances that Leon Grider would provide extra pills and that she noticed that she would get extra pills in her prescriptions Tr. 5911, 5915. Eventually, LW started asking Leon Grider “if there was any way possible” he could “double” her prescriptions; Grider did so.

Id.

at 5916-17. LW testified that about a year to a year and a half later, she started getting 500-1000 Lortab 10mg a week in commercial-size containers,

34

and that this continued for a period of “about two years.”

Id.

at 5917, 5925. LW took 50 to 60 pills a day and also sold some of them.

Id.

at 5918. According to LW, Leon Grider expressed his attraction to her and asked if he could stay at her house; however, LW denied engaging in sexual activities with him.

Id.

at 5920. LW also stated that Leon Grider had given her his cell phone number so that she could reach him without calling the store.

Id.

at 5921.

34

LW also testified that her physician eventually stopped prescribing to her. Tr. 5928.

Leon Grider also told LW that some of the commercial bottles that were labeled for hydrocodone actually had pinto beans in them and were marked with either a red line or a red X.

Id.

According to LW, Leon Grider did this in the event he was robbed.

Id.

at 5921-22. LW testified that Leon Grider never gave her a hydrocodone bottle which actually contained pinto beans rather than hydrocodone.

Id.

at 5922, 6039. LW also testified that Leon Grider had told her “not to come in the store when [his wife, Anna Mae] was around” and that Leon Grider would leave drugs for her outside of the store in the gutter of Grider #1.

35

Id.

at 5923, 5926-27.

35

According to LW, the gutter was at her “head-level,” and standing “flat-footed,” she could reach into it with her hand. Tr. 6042.

LW testified that sometime probably in 2004,

36

she asked Leon Grider for some pills and Grider told her to meet him at Grider Key Village.

Id.

at 5930-31. LW parked in front of the store, knocked on the door and was let in by Leon.

Id.

at 5931. Grider gave LW a bottle with 500 pills; however, before LW could leave, Anna Mae Grider pulled up in the front and entered the store. Leon told LW to leave out the back, but the rear door was locked; LW sat in a storage room but Anna Mae came to the room, found LW, and took the pills from her.

Id.

at 5931-32. LW then left the store.

Id.

at 5932.

36

However, LW later testified that this incident occurred before she agreed to work as a confidential informant. Tr. 6037.

The next day, LW called Leon and told him that she was “starting to detox really bad” and asked “if there was any way possible [she] could get that bottle back.”

Id.

Leon told LW to meet him later, and upon meeting at Grider #1, gave her two 500-count bottles.

Id.

at 5932-33.

Anna Mae Grider also testified regarding this incident. At the hearing, Mrs. Grider asserted that the bottle contained pinto beans, Tr. 4802, and that Leon had given it to LW, who “was in there begging for pills,”

id.

at 4803, “[p]robably to get her off his neck.”

Id.

at 4804. However, in a deposition she had previously given in a civil action, Mrs. Grider testified that the bottle contained hydrocodone, that the bottle was a white bottle and not a prescription vial, and that she did not give the bottle back to LW. GX 68, at 212-15. Given the inconsistency between Mrs. Grider's testimony at the hearing and at her earlier deposition as to the contents of the bottle, I find that her deposition testimony is more credible than her testimony at the hearing. I further find that Mrs. Grider's deposition testimony corroborates LW's

testimony regarding the Key Village incident.

LW further testified that neither Detective Hammond nor Chief Irvin threatened her or threatened to take her children away from her. Tr. 5935. She also testified that neither Detective Hammond nor Chief Irvin had ever engaged in inappropriate conduct towards her.

Id.

at 5953. She further testified that neither Detective Hammond nor Chief Irvin threatened PG.

Id.

at 5936.

LW also acknowledged that she had become addicted to drugs and that she was paid $150 to $300 for each undercover transaction.

Id.

at 6046. In addition, LW “guessed” that her addiction had caused “a little bit of damage” to her brain and had caused, in the words of Respondent's counsel, “little problems with [her] recall sometimes.”

Id.

at 6099-6100. She further noted that it had been six or seven years since the events to which she testified.

Id.

However, LW later testified that her past drug use had no effect on her recollection of her interactions with Leon Grider.

Id.

at 6124. As noted above, the ALJ generally found LW's testimony credible as do I.

37

See also

ALJ at 84-85.

37

Respondents took exception to the ALJ's finding that LW was credible, noting her testimony as to her drug addiction and its effect on her memory, her having admitted to selling controlled substances, as well as the incentives she had to lie about her work (such as the money she was paid for her work as a confidential informant and that she was still at risk for criminal prosecution because under Kentucky law, there is no statute of limitations for felonies). Resp. Exceptions at 11-12.

However, LW's testimony was corroborated in large part by Detective Hammond and her testimony was internally consistent. Moreover, having personally observed LW's testimony, the ALJ's finding is entitled to deference.

See Universal Camera Corp.

v.

NLRB,

340 U.S. 474, 496 (1951).

Regarding her decision to leave Russell County upon being approached by Detective Hammond and Chief Irvin, LW testified that Leon Grider gave her $1000 and three 500-count bottles of hydrocodone and told her that she “needed to leave town” and “to let them slack off of me for a while.”

Id.

at 5939;

see also id.

at 5941-42. She also testified that when she and PG were staying in Bowling Green, Leon wired the money in PG's name because “it would look better.”

Id.

at 5942-43.

LW testified that in 2004, she had asked for and received a bottle of 100 methadone from Leon Grider without having a prescription.

Id.

at 5939-40. LW also testified that after she had stopped talking to Leon Grider “as much” and was coming off of methadone, she obtained four Suboxones from him to help her “from detoxing.”

Id.

at 5946. LW testified that she eventually had a seizure and woke up in an ambulance on her way to the hospital.

Id.

at 5946-47. LW further testified that she had received about twenty-five morphine

38

patches worth about $2,500 to $3,500, as well as 98 OxyContin tablets, from Leon Grider.

Id.

at 5948, 6096. Regarding her obtaining of the morphine patches, LW testified that she told Leon Grider that she needed money and was going to sell them.

Id.

at 6092.

38

LW testified that the patches were turned over to Detective Hammond and Chief Irvin. Thus, I find that this is actually the incident in which Leon Grider provided the Duragesic patches to LW. Duragesic patches actually contain fentanyl, a drug which is considerably more powerful than morphine. However, both drugs are schedule II narcotic controlled substances.

See

21 CFR 1308.12(b) & (c).

As for the 98 OxyContin tablets, LW testified that she obtained this drug from Leon Grider before she agreed to work as a confidential informant and that she needed the drug for her addiction because she was concerned about the number of Lortab tablets she was taking and the effect of the Tylenol (acetaminophen, which is combined with hydrocodone in Lortab) on her liver.

Id.

at 6095-96. LW testified that she consumed the OxyContin in five days but did not ask Leon Grider for more because she did not think that he would provide the drug to her again.

Id.

at 6097. LW also testified that after she “didn't have a prescription anymore,” Leon Grider created false prescription labels so she would not “get caught” with the drugs if she was stopped by the police.

39

Id.

at 6126.

39

In his testimony, Faller alleged that various recordings that were made of the undercover transactions had been tampered with. Tr. 5045-64. However, Faller's testimony was (as was typical) confused and incoherent.

It is further acknowledged that Respondents submitted several affidavits of an individual who maintained that he is a Forensic Audio and Video Examiner, which were prepared for other litigation between Leon Grider and the Commonwealth and Chief Irvin. Therein, the affiant asserts that various tapes were either copies, have erasures, or were edited. RX 28. While in an affidavit (dated October 2, 2007), Respondent's Expert made reference to tapes which appear to be of the various undercover transactions engaged in by LW, even here, the affidavits fall short of establishing that any of the original tapes were altered.

See id.

at 9 (“Q-4 is a `copy' of a video tape (not the original) of a scene behind a commercial location where an alleged transaction took place.”); (“Q-5 has been identified as a `copy' (not the original) of a video tape with a portion of the tape as a tape over edit. I will need the original tape and proper recorder to properly determine the extent and content of the edits. (This video tape is of some sort of surveillance at a cemetery.)”). Notwithstanding that the record in this proceeding did not close for another three years, Respondents produced no credible evidence that the original recordings of these transactions had been tampered with.

Most significantly, the Government did not introduce the tapes into evidence. Nor was the Government required to as the testimony of Detective Hammond and LW, which the ALJ found to be credible, is substantial evidence that Leon Grider distributed controlled substances to LW, even though she did not have a prescription for the drugs. I thus reject Respondent's suggestion that because Detective Hammond did not actually view Leon Grider distribute the drugs to LW, the Government was required to produce the tapes.

See

Resp. Exceptions at 12-13.

I further reject the ALJ's finding that “[t]he record casts serious doubts as to the reliability of any audio or video tapes made related to this proceeding,” ALJ at 56 n.22, as unsupported by substantial evidence. Given that neither party introduced the tapes into evidence and the ALJ observed both Detective Hammond and LW testify and found them to be credible, this finding is both incorrect and unnecessary.

In addition to the incidents involving PL and LW, the record contains substantial evidence that Leon Grider distributed controlled substances to BL without a prescription. More specifically, JD, who is BL's daughter, testified that her mother sold Suboxone (buprenorphine and naxalone) and Klonopin (clonazepam), which she obtained through prescriptions, the majority of which she filled at Grider #1.

Id.

at 3139. JD admitted that she participated in the transactions, which took place at her mother's house, by handing the drugs over to the buyer and obtaining the money.

Id.

at 3139-40. JD further testified that her mother had obtained Lortab 7.5 and Klonopin from Leon Grider without a prescription, and that while her mother initially had a prescription for the Klonopin, she had run out and yet Grider had gone to BL's house and given her more of the drug using “the same label of the original prescription.”

Id.

at 3142. Moreover, while JD was not present at her mother's house when Leon Grider delivered the drugs, she “saw the medication that [her mother] didn't have a prescription for.”

Id.

at 3173.

JD also testified that on March 15, 2006, she had spoken with Chief Irvin regarding her mother's “slurring speech, stumbling, drunken behavior, [and] drug behavior.”

Id.

at 3144. JD further testified that she “had found two bottles with the same date and [that] there was another bottle of Klonopin that had been duplicated” and that she reported this to Chief Irvin.

Id.

According to Irvin, he then met with JD who told him that Leon Grider had provided her mother with “pills that she wasn't supposed to be getting” when she was hospitalized.

Id.

at 3201. JD also told Irvin “this was being done * * * with multiple pill bottles with duplicat[e] labels.”

Id.

Irvin then told JD, who “claimed to have” the bottles, that if she gave them to him, he would see what he could do.

Id.

Later that day, JD called Irvin and asked to meet again; Irvin agreed and during the meeting, JD gave him the pill bottles.

Id.

at 3202. The Government subsequently introduced into evidence photographs of two pill bottles; the bottles bear prescriptions labels for 28 Suboxone tablets under the prescription number 4439582, and list BL as the patient and a Dr. WLS as the prescriber. GX 71.

On March 18, BL called the dispatch center and the call was patched through to Chief Irvin, who was then at home. Tr. 3203. The call was recorded and played into the record; in addition, a copy of the recording was submitted into evidence.

Id.

at 3204; 3215.

During the call, BL complained that her daughter had seen Irvin “the other day about Leon.”

Id.

at 3215. BL further stated that her daughter had attempted to fill an outdated prescription but that Leon Grider had refused to so and that JD had told her that because Grider wouldn't fill her prescriptions, she was going to “get him.”

Id.

at 3216. BL accused her daughter of making up the allegations she raised with Irvin.

Id.

at 3216-17.

When BL maintained that Grider had not been giving out pills, Irvin responded: “Well, can you explain to me why that there are bottles with your name on them, with your name on them, that are exactly duplicated, that's a violation of the law?”

Id.

at 3217. BL replied: “no, no, no, no, no, no, no, no,” and in response to Irvin's follow-up question, stated: “he has not done that.”

Id.

After stating that he had a different view of Grider's conduct and he knew that the allegation was true, BL explained that “[t]he only time he ever fronted me—and that was when I was in the hospital, because I missed my doctor's appointment, and he g[a]ve me a couple but he took it right back out when I came in and went to the doctor's.”

Id.

at 3218. Asked by Irvin to explain her answer, BL then stated: “What I mean by that is he went to the hospital. He knew I needed that medication. He knew that I was going to the doctor. And he took that back out of my prescriptions. * * * I don't see anything wrong with that.”

Id.

BL then asserted that “as soon as [she] got out of the hospital, [she] went to the doctor,” and that upon filling the prescription, Grider took out “what he had given me” and that she did not “see anything wrong with that.”

Id.

When asked why she needed a pharmacist to give her medication when she was in the hospital, BL stated that she “was getting ready to leave and * * * didn't know how quickly I could get in to my doctor.”

Id.

at 3219. BL further asserted that Grider “was doing this to help me out. He knew I needed the medication” and that “I was going to get them and that I would pay him right back.”

Id.

at 3221.

Respondents introduced into evidence an affidavit of BL (dated April 17, 2006) which she provided in a civil action brought by Leon Grider and others against Irvin and others. RX 106. Therein, BL stated that she “had a valid prescription for [c]lonazepam which [she] had filed [sic] at Grider Drug” and that she had “asked the pharmacist to provide [her with] two (2) bottles so that [she] could legally carry and possess this medication” when she was not home as she “did not want to carry an entire, full bottle” on her person.

Id.

at 1. In the affidavit, BL further stated that “Leon Grider has never provided me any prescription medications without a Doctor prescribing them.”

Id.

at 2.

Respondents also introduced into evidence various pharmacy records including a Narcotic and Controlled Drug Sales Report (compiled from the Grider #1 pc V Pharmacy System software) listing BL's prescriptions from December 2005 through July 1, 2010, as well as copies of her prescriptions.

See

RX 121. While the sales report lists prescription number 4439582, with a date of “01/30/06” for Suboxone and lists Dr. WLS as the prescriber,

see id.

at 1,

the exhibit does not contain a copy of the prescription. Moreover, while the sales report also lists a January 3, 2006 Suboxone prescription issued by Dr. WLS, the report indicates that no refills were authorized by it.

See id.

Having reviewed the relevant evidence (including having listened to the recording of BL's phone conversation with Chief Irvin), I find that BL's statement in her affidavit was false. I further conclude that substantial evidence supports a finding that Leon Grider distributed Suboxone to BL on or about January 30, 2006, at which time she did not have a prescription for the drug.

40

40

I have considered the various issues raised by Respondents to impeach both JD's and Chief Irvin's credibility. With respect to JD's credibility, I note that the ALJ repeatedly found her testimony credible notwithstanding that at the time of her testimony, she was under indictment for drug trafficking charges. ALJ at 47-48. It is further noted that BL's statement during her phone call to Chief Irvin corroborated JD's testimony with respect to Leon Grider's having distributed Suboxone to BL when she was in the hospital.

Respondents also waged an extensive assault on Chief Irvin's credibility. In her opinion, however, the ALJ cited Chief Irvin's testimony as support for her finding that BL obtained controlled substance from Leon Grider without a prescription.

See

ALJ at 48 (FoF 187 (citing Tr. 3204-05)). I also find Chief Irvin's testimony credible.

The ALJ nonetheless made several findings regarding Irvin which can only be described as gratuitous. For example, she found that “Anna Mae Grider provided uncontested testimony concerning” a traffic stop that Irvin made of a Grider employee (ML), which Grider alleged was done to harass ML. ALJ at 58 (FoF 227). Anna Mae Grider, however, had no firsthand knowledge of this incident and the only other evidence supporting it is an unsworn letter by ML. Thus, even if this finding would tend to show bias on the part of Chief Irvin, it is not supported by substantial evidence.

Next, the ALJ also found that “[t]he record contains evidence of other complaints being made against Irvin” and “Mrs. Grider believes Det. Hammond and Chief Irvin `have it out' for the Griders.”

Id.

at 59 (FoFs 229 and 232).

This proceeding is neither an internal affairs review board nor an investigating grand jury such as the one which Mr. Faller got “fired up.” Rather, the ALJ's sole function is to make findings that are relevant and material to the allegations raised by the Government. The ALJ's findings numbers 229 and 232 are not probative of any material issue in the case.

The ALJ made a further finding based on Anna Mae Grider's testimony that following a burglary at one of the Respondents, Chief Irvin retrieved a surveillance tape at the store and that “faces were seen on the tape,” but that Irvin took the tape and when Mrs. Grider went to the police station to view the tape, it had been erased.

Id.

(FoF 231). However, Mrs. Grider was not present when the tape was initially viewed. Tr. 4758. Moreover, while Greg Grider (another son of Anna Mae and Leon) testified that a face was visible on the tape, the ALJ did not cite this testimony as a basis for her finding and did not make any finding as to whether his testimony was credible. Thus, as ultimate factfinder, I reject this finding.

Allegation Fourteen—Respondents Violated Their Corresponding Responsibility by Distributing Controlled Substance Prescription to Patients Engaged in Doctor-Shopping

As explained above, during the course of the proceeding, the Government issued a second Show Cause Order which also immediately suspended Respondents' registrations. ALJ Ex. 21. The Order raised additional allegations that Respondents were filling controlled substance prescriptions for six patients (TA, RB, JB, JR, SR, CR), who were obtaining the prescriptions from multiple doctors, and that in doing so, Respondents were violating their corresponding responsibility because they “knew or should have known that the * * * dispensed controlled substances were likely to be diverted or used for other than legitimate medical purposes.”

Id.

at 2-3.

As proof of the allegation, the Government submitted exhibits showing Respondents' dispensings of controlled substances to each of these patients, which were prepared by Detective Hammond.

See

GXs 52-57. While Detective Hammond reviewed KASPER reports and developed information regarding the patients, he also subpoenaed each patient's profiles from the pharmacies, as well as his/her medical records from their doctors. Tr. 3299-301. Finally, Detective Hammond interviewed many of the prescribing physicians and/or dentists and prepared

spreadsheets for each patient listing their prescriptions, the date issued, the quantity dispensed and the number of days of supply it provided, the prescriber, and the dispensing pharmacy.

Id.

The Government also elicited the testimony of Donald Sullivan, Ph.D.,

41

a registered pharmacist who is also a Professor of Pharmacy Practice and the Department Chair of Pharmacy Practice at Ohio Northern University. Dr. Sullivan was qualified as an expert and testified as to the standards of pharmacy practice with respect to the dispensing of controlled substances; Dr. Sullivan also prepared a report based on his review of the prescriptions issued to each of the six patients and testified as to whether Respondents dispensings violated the Controlled Substances Act. GXs 65-66, Tr. 3405, 3414-26.

41

Dr. Sullivan obtained his Ph.D. in Pharmaceutical Administration; he also holds an M.S. in this area and a B.S. in Pharmacy; he obtained all three degrees from The Ohio State University. GX 65. Dr. Sullivan has published dozens of articles on pharmacy practice in peer-reviewed journals, as well as several books.

Id.

In addition, he has made numerous presentations on pharmacy-related topics including state and federal pharmacy laws.

Id.

To refute the Government's contentions, Respondents called Eric Grider, the son of Leon Grider and pharmacist in charge of Grider #2, as well as Tonya Moses, a pharmacist and employee of Respondents who worked at each of the stores. In addition, Respondents called each of the six patients who were accused of doctor-shopping to testify, as well as several of the practitioners who prescribed to them. Additionally, Respondents introduced various documents.

The Expert's Testimony and Report

The ALJ found that Dr. Sullivan credibly testified as an expert witness in the areas of the standards of pharmacy practice and the standards for dispensing controlled substances. ALJ at 25;

see also

Tr. 3402. In preparing his report, Dr. Sullivan reviewed prescriptions, a report prepared by Detective Hammond, patient profiles from the Respondents, Kentucky pharmacy regulations, and KASPER reports. Tr. 3393, 3427-28, 3429-33, 3442-43, 3497-98. However, because Dr. Sullivan clearly reviewed the prescriptions and patient profiles, the Government has established that his testimony was based on sources other than the KASPER data.

Dr. Sullivan testified that the concept of “corresponding responsibility” means that the pharmacist and the physician “have a shared responsibility to make sure that each prescription is for a legitimate medical purpose.” Tr. 3403, 3418. According to Dr. Sullivan, pharmacists are taught to question prescriptions that they may find are unlawful or suspicious. Dr. Sullivan identified the following examples of “red flags” which should lead a pharmacist to question the legitimacy of a prescription: (1) When a patient is obtaining controlled substances from multiple doctors, (2) when patients are being prescribed duplicate controlled substances that treat the same indications, (3) when patients seek early refills, (4) when patients obtain prescriptions for large quantities and large doses, and (5) when patients travel long distances from where they live to either the prescriber or the pharmacy.

Id.

at 3404;

see also

GX 66, at 3.

Dr. Sullivan further testified as to the obligation of a pharmacist under Kentucky law to review a patient's profile and conduct a drug utilization review (DUR) prior to dispensing a prescription. Tr. 3410. As he explained in his report:

Kentucky and federal law states that, prior to dispensing every prescription, the pharmacist shall review the patient profile (prospective drug utilization review or DUR) for the following:

(a) Over-utilization or under-utilization,

(b) Therapeutic duplication,

(c) Drug-disease state contraindications,

(d) Drug-drug interactions,

(e) Incorrect drug dose or duration of treatment,

(f) Drug-allergy interaction,

(g) Abuse/misuse,

(h) Inappropriate duration of treatment,

(i) Documented food/nutritional supplements-drug interactions.

GX 66, at 2. Dr. Sullivan further explained that over-utilization could involve “a couple of different things,” including “using more than one prescription drug for the same indication” and patients seeking refills “too early.” Tr. 3411. As an example of incorrect/inappropriate dosing and/or duration of treatment, Dr. Sullivan explained that “some narcotic cough syrups * * * should only be used for a limited period of time, based on the diagnosis.”

Id.

at 3412. And as examples of abuse or misuse, Dr. Sullivan testified “[t]hat's where you would look for patterns of patients getting things filled too early, going to multiple doctors, traveling long distances, therapeutic duplication, just a pattern of there's something not quite right going on with how this patient is using this therapy.”

Id.

Regarding the statement in his report that it was “clear that the pharmacists at the Grider Drugs did not do prospective DUR,” GX 66, at 2; Dr. Sullivan explained that this is a legal requirement, which is “very easy” to comply with, as it can be done “[j]ust by pulling up the patient profile and looking at it.” Tr. 3413. Dr. Sullivan also testified that even though a pharmacist does not have access to a patient's medical file, the pharmacist should not simply defer to the prescribing physician and fill the prescription because the corresponding responsibility requires that the prescription be issued for a legitimate medical purpose.

Id.

at 3417-18.

Dr. Sullivan testified that when confronted with these “red flags,” a pharmacist can take a number of steps in response, including having an extensive conversation with the patient, calling the physician, or refusing to fill the prescription.

Id.

at 3448-49. While in some instances, a pharmacist fulfills his obligation by calling the prescriber, Dr. Sullivan testified that “there's nothing in the law that says [pharmacists] have to fill anything,” especially if they feel that a prescription has not been issued for a legitimate medical purpose.

Id.

at 3474-75, 3477-84. Dr. Sullivan also testified that it is a pharmacist's primary responsibility to ensure patient safety.

Id.

at 3407-08; Govt. Exh. 66, at 1.

With respect to his review of patient profiles for the six patients identified in the Suspension Order, Dr. Sullivan opined that “these patients all exhibited multiple instances of” several of the red flags he identified. Govt. Exh. 66, at 3. Dr. Sullivan further opined that any “reasonable and prudent pharmacist would have caught this behavior and refused to dispense controlled substances to these patients. These are all textbook examples of drug abuse and/or drug diversion. Any reasonable and prudent pharmacist would quickly recognize this based on their education, training, and experience.”

Id.

at 8. And in his testimony, Dr. Sullivan opined that the manner in which controlled substances were dispensed by the Respondents was not in compliance with the accepted standards of practice observed by pharmacies and pharmacists in the Commonwealth of Kentucky. Tr. 3426. A discussion of the patient-specific evidence follows.

42

42

Noting the ALJ's ruling on the admissibility of the KASPER data, Respondents also contend that Dr. Sullivan's opinions “were based almost exclusively on the prescriptions information he was provided based on KASPER report data provided him.” Resp. Exceptions at 15. Dr. Sullivan made

clear, however, that he had also reviewed copies of the prescriptions. Tr. 3430-31.

TA

TA (GX 52) is a woman in her early to mid-thirties. Between June 19, 2009 and April 29, 2010, TA obtained thirty-four prescriptions for federally-controlled substances such as Duragesic (fentanyl, a schedule II drug); Endocet (oxycodone, a schedule II drug); hydrocodone with acetaminophen (schedule III); alprazolam and clorazepate (both schedule IV drugs); as well as eight prescriptions for carisoprodol, which at the time was scheduled only under Kentucky law but which has since been placed in schedule IV of the Controlled Substances Act. GX 52, Tab C;

see

also 21 CFR 1308.12 (listing schedule II drugs), 1308.13 (schedule III), 1308.14 (schedule IV); ALJ at 5-6 (stipulated facts); 76 FR 77330 (2011) (scheduling of carisoprodol).

43

All but three of the thirty-four prescriptions were filled by either Grider #1 or Grider #2, with all but three of the prescriptions being filled by Grider #1. GX 52, Tab B, at 3 & Tab C; Tr. 3298, 3857-3859.

43

The Final Order scheduling carisoprodol discussed the extensive evidence of the abuse of carisoprodol, especially when taken in conjunction with other drugs such as narcotics and benzodiazepines.

See

76 FR 77330.

TA's prescriptions were written by twelve different prescribers. GX 52, at Tab C. The prescribers included two pain clinic doctors (Dr. H and Dr. P); three dentists practicing at a clinic named Associates in Dentistry (Dr. C, Dr. S, and Dr. M); another dentist (Dr. G); two oral surgeons who did not practice together (Dr. A and Dr. H); a psychiatrist (Dr. M); and his nurse practitioner (NP W). Tr. 3844-47, 4435.

While the prescriptions written by the various dentists who treated TA were typically only for a few days' supply of hydrocodone, throughout this period TA was also receiving prescriptions from pain management doctors for thirty-day supplies of both schedule II and III drugs such as Duragesic (fentanyl), Endocet (oxycodone), and hydrocodone/apap. GX 52, at Tab C. For example, on June 19, 2009, TA received prescriptions from Dr. H for 10 Duragesic patches and 90 tablets of hydrocodone 10/500, both being a thirty-day supply.

Id.

Yet on June 24, 2009, TA received an additional twelve hydrocodone/apap from Dr. C, a dentist.

Id.

Similarly, on August 15, 2009, TA received another 100 hydrocodone 10/500 (this being a twenty-five day supply) from Dr. H, and on August 24, she received another sixteen tablets of hydrocodone from Dr. G.

Id.

On September 4, TA obtained another prescription for 100 hydrocodone 10mg, a twenty-five day supply from Dr. H (her pain doctor), followed by a prescription on September 16 for twenty hydrocodone 10mg from Dr. H (the oral surgeon), which she refilled on September 18; followed by a September 24 prescription for 120 Endocet, a thirty-day supply, from Dr. P, her new pain doctor.

44

Id.; see also

Tr. 3882.

On October 22, Dr. P issued TA a second prescription for 120 Endocet (also a thirty-day supply), and yet TA received twenty hydrocodone from Dr. S on October 31, twenty-four hydrocodone from Dr. A on November 4, and sixteen hydrocodone from Dr. C on November 16. GX 52, at Tab C.

44

In addition to Endocet, Dr. P prescribed thirty-day supplies of carisoprodol to TA numerous times. GX 52, at Tab C.

On November 18, Dr. P issued TA another prescription for 120 (thirty-day supply) Endocet; TA then obtained ten hydrocodone from Dr. G on November 30, twelve hydrocodone from Dr. M on December 3, and twenty hydrocodone from Dr. A on December 10.

Id.

Continuing this pattern, on December 17, Dr. P issued TA another prescription for 120 (thirty-days) of Endocet; TA then obtained twelve hydrocodone from Dr. C on December 28, twelve hydrocodone on January 2, 2010 from Dr. M, twelve hydrocodone from Dr. S on January 4, and twelve more hydrocodone on January 6 also from Dr. M.

Id.

In addition to the various narcotics she received (and the carisoprodol), beginning on December 31, 2009, TA obtained prescriptions for thirty-day supplies of benzodiazepines including clorazepate and alprazolam from NP W, and Dr. M.

Over the course of time, TA had all of her teeth extracted; she also testified that she was never told that any of the extractions were unnecessary. Tr. 3912, 3926, 3969. Dr. G, one of the dentists who treated TA on various occasions in 2006 (when he extracted two of her teeth) and 2009, testified at the hearing that he had reviewed her chart and that she had “bad teeth. They weren't in great shape and she needed extractions.”

Id.

at 4446. Dr. G also testified that at one of TA's visits, which probably occurred in 2009, she complained that an extraction, which had recently been done by another dentist, was causing lots of pain.

Id.

at 4447. Dr. G testified that it was “hard to tell exactly what [was] going” and because TA claimed she had “lots of pain,” he referred her to an oral surgeon.

Id.

at 4448. Dr. G testified that he wrote TA a prescription for “a few days of pain pills to give her time to get into the oral surgeon.”

Id.

at 4449.

While Dr. G testified that TA's pain complaint seemed reasonable, he further explained that when a patient comes in after having seen another doctor, he would start checking up on the patient.

Id.

at 4449-50.

Following this incident, Dr. G saw TA several more times. At the first of these visits, TA wanted another tooth extracted; however, because Dr. G “thought that it would be a difficult extraction,” he referred her to an oral surgeon.

Id.

at 4457.

At the second visit, Dr. G told TA that she needed to have a “full mouth extraction” and would need to have this done by an oral surgeon.

Id.

After referring TA to an oral surgeon, Dr. G made a chart entry on TA's chart indicating that she was not to be prescribed any more pain medications.

Id.

at 4490-91.

In his report, Detective Hammond noted that TA engaged in a pattern of going to a dentist to have a procedure performed and then going to another dentist or oral surgeon to complain about the procedure that was done and to seek hydrocodone. GX 52, at Tab B, at 3. During his interview with Dr. A, one of the oral surgeons who treated TA, Dr. A noted that during her last visit (January 26, 2010), TA had complained about a procedure performed by another practice, Dental Associates, and had asked him to look at it.

Id.

However, Dr. A referred her back to Dental Associates and noted in TA's chart that “she was seeking pain medications.”

Id.

Detective Hammond further noted that the dental providers TA saw “ranged from Somerset, KY to Campbellsville, KY which are about 75 miles apart.”

Id.

Dr. G acknowledged that it would be the “norm” for a patient whose teeth have deteriorated to the point of requiring a total extraction to have pain. Tr. 4459. However, when questioned as to whether he would have prescribed hydrocodone 5/500 to TA (as he did on August 24, 2009) if he had known that she had received 100 hydrocodone 10/500 from Dr. H (her first pain doctor) on August 15th, Dr. G stated that “he wouldn't have prescribed that with knowledge of the previous prescription” because the earlier prescription was “twice as strong as what [he] prescribes for four days.”

Id.

at 4467. Upon being asked by Respondents' counsel whether he “would prescribe this limited amount as a booster on top of what she was already prescribed,” Dr. G stated that he “would not prescribe” it even for a limited period.

45

Id.

Moreover, on

cross-examination, Dr. G was asked whether he would have issued his November 30 prescription for ten hydrocodone 5/500 if he had known that TA had obtained a prescription for Endocet twelve days earlier.

Id.

at 4479-80. Dr. G answered “no” and explained that he “wouldn't have prescribed something that's not near as strong just because the stronger medication should normally take care of the pain.”

Id.

at 4480. And later in his testimony, Dr. G explained that while he did not “know what's considered a lot of medication in the world of pain clinics * * * I just know that there is no reason for me to prescribe it, and there are different doctors.”

Id.

at 4520.

45

Dr. G did testify that on occasion he has had chronic pain patients, who would require extra

medication for four days after a procedure, because otherwise they would run out of the medication they take for chronic pain. Tr. 4451-52. However, Dr. G explained that in this situation he would “have to get with the pharmacist * * * or have to call [the patient's] physician.”

Id.

at 4451. However, on both Respondents' direct examination and the Government's cross-examination, Dr. G was adamant that he would not have prescribed to TA if he had known about her prescription for 120 hydrocodone 10/500.

Id.

at 4478.

Dr. G reiterated that he did not receive a phone call from Grider #1 regarding any of the prescriptions that TA was receiving from other practitioners.

Id.

at 4511. Indeed, he testified that he was never contacted by either Grider #1 or Grider #2 regarding any of his patients.

Id.

at 4479. Moreover, upon reviewing the spreadsheet (Tab C) and examining the names of the various prescribers, Dr. G testified that “[t]he only prescriber [he] recognize[d] are a few of the dentists and oral surgeons. All of the physicians, I assume they are physicians, I don't recognize any of their names. I don't even know what county they are in.”

Id.

at 4468.

In her testimony, TA denied ever having sold prescriptions. Tr. 3901. However, on May 11, 2010, Detective Hammond went to Dr. P's clinic and interviewed him regarding TA; he also reviewed the medical record which Dr. P maintained on her and observed that Dr. P had performed several urine drug screens on her. GX 52, at Tab B, at 2-3. While the report for TA's March 10, 2010 urinalysis noted that she had listed that she was taking Percocet, hydrocodone, Soma, and Xanax, the results came back negative for benzodiazepines, opiates, and oxycodone.

Id.

TA, however, had received a prescription for 60 tablets (a thirty-day supply) of alprazolam on February 18, as well as a prescription for 120 tablets (also a thirty-day supply) of oxycodone on February 11.

46

GX 52, Tab B, at 3.

46

While TA's urine drug screen was negative for opiates, and Detective Hammond noted that she had listed hydrocodone as a drug she was taking, TA's last hydrocodone prescriptions provided only a two-day supply and had been issued approximately two weeks earlier.

TA testified that she was unsure whether the dentists knew about the controlled substance prescriptions from Dr. H or Dr. P.

Id.

at 3915, 3941. However, she testified that she believed that she did not inform her dentists of those prescriptions.

Id.

at 3915-3916. TA believed the pain management doctor was the one who had to know about all of the controlled substances that were being prescribed to her.

Id.

at 3942.

Tonya Moses, a pharmacist and former employee of Respondents, also testified for Respondent. Ms. Moses acknowledged that Grider #1 had filled prescriptions for TA for a lesser strength of hydrocodone from a dentist (Lortab 5) which overlapped with prescriptions for Lortab 10 from a pain management doctor.

Id.

at 4203. The ALJ found credible Ms. Moses' testimony that the second, lesser strength prescription would not be justified, because “[i]f the 10 mg is not controlling the pain, the five isn't. So, she had no reason to get that.”

Id.

Ms. Moses acknowledged that this was an example of therapeutic duplication.

Id.

Ms. Moses further testified that it was “incumbent upon a pharmacist to verify with the doctor if he sees multiple physicians prescribing, basically, the same medication.” Tr. 4214.

Respondents also called Dr. M, a family practitioner with thirty years of medical practice, whose wife's sister is married to Eric Grider, and who is a partner with Leon Grider in the medical office building where he maintains his office and Grider #2 is located.

Id.

at 5266-67. Dr. M acknowledged the existence of doctor-shopping and the prevalence of prescription drug abuse in Eastern Kentucky.

Id.

at 5962-63. Dr. M did not treat TA.

Id.

at 5357, 5361. However, upon being shown the spreadsheet listing TA's prescriptions, Dr. M acknowledged that TA's pattern of obtaining prescriptions and “taking about four [hydrocodone] a day on a regular basis,” as well as other drugs, and seeing different doctors, “would be a matter of major concern” and “probably [wa]s a potential” doctor-shopping situation.

Id.

at 5364-65.

Dr. Sullivan noted the multiple instances in which Grider Drug #1 filled hydrocodone and/or oxycodone prescriptions issued by different doctors days before the date on which an earlier prescription for either of these drugs would have been totally consumed. Tr. 3416-17; Govt. Exh. 66, at 3-4. As Dr. Sullivan wrote in his report: “[t]his pattern of filling hydrocodone and oxycodone prescriptions early when the patient still had medication left from a previous prescription occurred a total [of] 11 times during a ten-month period.”

Id.

at 4. Dr. Sullivan also noted that “[i]n addition to the hydrocodone and Endocet prescriptions, the patient was also receiving alprazolam and carisoprodol, which are known to be heavily abused. This provides further evidence that the patient was engaged in the abuse and/or diversion of controlled substances.”

Id.

Finally, Dr. Sullivan opined that “[a]ny reasonable and prudent pharmacist would have determined that the patient was either abusing and/or diverting these controlled substances.”

Id.

Notably, Leon Grider, who was the pharmacist at Grider #1, did not testify in the proceeding.

RB

RB (GX 53) is forty-year old female. Between December 2007 and April 2010, RB filled approximately 200 prescriptions which were written by two doctors (Dr. L & Dr. P) for such controlled substances as hydrocodone/apap tablets, alprazolam, and various narcotic cough syrups including Polytussin, Vicotuss, Z Hist, Tussionex, and Z Tuss.

47

GX53, at Tab C. At least 172 of these prescriptions were filled at Respondents, with all but seven filled at Grider #2.

Id.

Moreover, approximately 100 of the prescriptions were for the narcotic cough syrups.

Id.

However, according to Dr. Sullivan, narcotic cough suppressants are intended for the short-term relief of cough due to upper respiratory conditions, and in 2006, the clinical guidelines were changed to “strongly discourage the use of any type of cough suppressant in treating any type of cough.” Tr. 3419. Yet for the entirety of the twenty-eight months covered by the spreadsheet, RB received prescriptions from both Drs. P and L for narcotic cough suppressants which authorized the dispensing of 15,000 milliliters of these drugs.

Id.

at 3419-21; GX 66, at 4; GX 53, at Tab C.

47

This figure excludes the 52 prescriptions for Ultram (tramadol) which were listed on the spreadsheet. However, this drug is not currently controlled under federal law.

RB also repeatedly obtained hydrocodone tablets throughout this period while she was receiving the narcotic cough suppressants.

See

GX 53, Tab C, at 1. For example, on December 7, 2007, RB filled at Grider #2 a prescription from Dr. L for 60 tablets (a thirty-day supply) of Lorcet 7.5/650mg; however, on December 12, 17, 20, as

well as January 2 and 4, 2008, she also filled at Grider #2 four prescriptions for Polytussin and one for Codiclear.

Id.

Notably, while Dr. P wrote the Polytussin prescriptions, Dr. L wrote the Codiclear prescription.

Id.

Likewise, on January 7, 2008, RB filled at Grider #2 a prescription from Dr. L for another 60 tablets (again a thirty-day supply) of Lorcet.

Id.

However, RB filled at Grider #2 two prescriptions issued by Dr. P for Polytussin on January 11 and 16, a prescription for Codiclear issued by Dr. L on January 22, and prescriptions for Z Hist issued by Dr. P on January 30 and February 4, 2008.

Id.

As another example, on March 18, 2009, RB filled at Grider #2 a prescription issued by Dr. L for thirty tablets (a thirty-day supply) of Lorcet.

Id.

at 3.

RB then filled prescriptions issued by Dr. P for Z Hist on March 20 and 30, as well as April 13, and a prescription issued by Dr. L for Tussionex on March 26. Each of these prescriptions was filled at Grider #2, and while the Z Hist prescriptions were for either four or six-day supplies, the Tussionex prescription was for a twelve-day supply.

Id.

In addition, notwithstanding that RB had obtained a thirty-day supply of Lorcet on March 18, on both March 30 and April 6, RB also filled at Grider #2 prescriptions issued by Dr. P for twenty additional tablets of Lorcet.

Id.

In addition, even putting aside that RB was obtaining prescriptions from both doctors, the evidence shows that on multiple occasions, RB obtained early fills (or refills) of her prescriptions. For example, on July 21, 2008, RB filled at Grider #2 a prescription issued by Dr. L for a twelve-day supply of Tussionex, yet only four days later, she again obtained at Grider #2, an additional twelve-day supply of Tussionex.

Id.

at 2.

Moreover, on both April 28 and May 22, 2009, RB filled at Grider #2 prescriptions issued by Dr. L, each being for thirty tablets of Lorcet (a thirty-day supply).

48

Id.

at 3. The latter prescription was thus filled six days early. Moreover, on June 16, RB filled a prescription (also written by Dr. L) for another thirty tablets of Lorcet at Grider #1, this also being a thirty-day supply; this dispensing was thus five days early.

49

Id.

48

Also, on both May 13 and June 18, Grider # 2 filled a prescription for twenty tablets of Lorcet issued by Dr. P. GX 53, Tab C, at 3-4.

49

While the spreadsheet does not list what pharmacy this prescription was filled at, a listing of RB's Medical Expenses establishes that she filled the prescription at Grider # 1. GX 53, at Tab D.

Also, on July 15, 2009, RB filled at Grider #2 a prescription for 60 tablets of Lorcet (this also being a thirty-day supply).

Id.

at 4. Yet on August 5, 2009, RB filled at Grider #2 a prescription for 60 tablets of Lorcet; thus, this dispensing was nine days early.

Id.

As for the Xanax (alprazolam), on July 23, 2009, RB filled at Grider #2 a thirty-day supply.

Id.

Yet on August 12, 2009, RB obtained another thirty-day supply; thus, this dispensing was ten days early.

Id.

Moreover, on November 6, 2009, RB filled at Grider #2 another thirty-day supply.

Id.

at 5. However, on November 27, RB obtained at Grider #2 another thirty-day supply, this dispensing being nine days early.

Id.

Finally, RB obtained at Grider # 2 a thirty-day supply on January 28, February 15, and March 8, 2010.

Id.

The February 15 dispensing was thus twelve days early, and the March 8 dispensing was nine days early.

50

Id

.

50

There is also evidence showing that RB also filled prescriptions for hydrocodone and alprazolam at other pharmacies, during the same period in which she was obtaining these drugs at Respondents.

See

GX 53, Tab C.

On April 7, 2010, Detective Hammond interviewed Dr. L. GX 53, Tab B. Dr. L stated that he did not know that RB was also seeing Dr. P during the same period she was seeing him.

Id.

at 1. When Detective Hammond asked Dr. L whether he would have prescribed any controlled substances to RB if he had known that she was also obtaining the same or similar drugs from Dr. P, Dr. L answered “absolutley [sic] not.”

Id.

On April 9, 2010, Detective Hammond interviewed Dr. P, who likewise stated that he was unaware that RB was also seeing Dr. L at the same time she was seeing him.

Id.

at 2. Dr. P also stated that he would not have prescribed controlled substances to RB if he had known that she was also receiving the same or similar drugs from Dr. L.

51

Id.

51

Respondent introduced a statement from Dr. P. stating that RB “has a legitimate reason to take pain medicine” because of various displaced discs. RX 127. However, Dr. P further stated that he “did not know until April 2010 she was seeing other physicians,” thus corroborating in part the statement in Detective Hammond's written report.

Id.

However, even if RB has a legitimate reason to take pain medicine for her back, Dr. P's statement does not explain why she was obtaining narcotics from Dr. L as well. Nor does Dr. P's statement establish that RB had a medical condition which warranted the prescribing of narcotic cough syrups, or the alprazolam. Thus, this letter does not refute the Government contention that RB was engaged in doctor-shopping and that Respondents violated their corresponding responsibility under federal law in filling her prescriptions.

Upon reviewing the spreadsheet of RB's prescriptions, Eric Grider testified that he did not find RB's controlled substance prescriptions unusual, given the limited number of days' supply provided by each prescription. Tr. 3607-08. Regarding RB's numerous prescriptions for narcotic cough medicines, Grider asserted that these drugs could be used on both a short and long term basis, and gave as an example of the latter, COPD or chronic coronary disease with a cough.

Id.

at 3673. However, Grider admitted that he did not know if RB had either condition and that he never asked her doctors whether she had one of these conditions.

Id.

Moreover, RB testified that she never talked to a pharmacist at Grider Drugs about her medications,

id.

4676, and that no one at Grider Drugs ever questioned her about her prescriptions.

Id.

at 4688-89.

Eric Grider further testified that, notwithstanding that RB was being prescribed narcotic cough syrups by two different doctors, he did not see any potential for abuse or misuse of the medications.

Id.

at 3678. However, in retrospect, Grider conceded that he should have contacted RB's doctors to ensure they were aware that the other was prescribing to her.

Id.

As for RB's having filled the prescriptions at several different pharmacies, Eric Grider acknowledged that this was “sometimes” indicative of doctor-shopping.

Id.

at 3680. However, Grider testified that because his store was not signed up to obtain KASPER reports and RB did not have insurance and was “a cash-paying patient,” there was “no way to know” that she was getting prescriptions filled at other (non-Grider) pharmacies.

Id.

at 3602.

Dr. Sullivan concluded that RB's behavior “clearly indicates this patient was abusing and or diverting this medication.” GX 66, at 4. Dr. Sullivan opined that this abuse and or diversion “should definitely have been caught by the pharmacist.”

Id.

Also, at the same time RB was taking this narcotic cough suppressant containing hydrocodone, RB was also taking hydrocodone-containing pain killers. Such drug overlap indicates a duplicate therapy was being used. Tr. 3421. Dr. Sullivan also noted a pattern of early refills of Xanax prescriptions. He concluded that “[n]o reasonable and prudent pharmacist would fill Xanax prescriptions this early on so many occasions.” GX 66, at 5.

JB

JB is a female in her mid-fifties. GX 54, Tab A. Between September 2, 2009 and May 4, 2010, JB filled fifty-seven controlled substance prescriptions; fifty of the prescriptions were filled at Grider #2, with the remaining seven being filled at the Russell Springs Pharmacy.

Id.

at Tab C. The prescriptions, which were issued by three different doctors,

were for Lyrica (pregabalin), Propoxyphene N/Apap, Tussionex (a schedule III drug containing hydrocodone indicated for cough and allergy), hydrocodone/apap, alprazolam and Valium (diazepam).

Id.

The evidence shows that Grider #2 repeatedly filled prescriptions presented by JB for alprazolam and Valium which were issued by two different doctors. Specifically, on September 17, 2009, Grider #2 filled a prescription issued by Dr. B for 90 alprazolam .5mg (a thirty-day supply), and yet on September 24, Grider #2 filled a prescription issued by Dr. E for 60 Valium 10mg (a twenty-day supply).

Id.

On October 13, Grider #2 filled a prescription issued by Dr. E for another 60 diazepam (also a twenty-day supply), and three days later, it filled a prescription issued by Dr. B for 90 alprazolam (thirty-day supply).

Id.

Respondent filled additional prescriptions issued by Dr. E for 60 diazepam (twenty-day supply) on October 31, December 7, 2009, and January 28, February 17, March 9, April 9, and April 30, 2010; it also filled additional prescriptions issued by Dr. B for 90 alprazolam (thirty-day supply) on November 19, December 18, 2009, and January 21, February 17, March 18, and April 21, 2010.

Id.

In total, Grider #2 dispensed eight alprazolam prescriptions, each providing a thirty-day supply, for a total of 240-days' supply of this drug, and nine diazepam prescriptions, each providing a twenty-day supply, for a total of 180-days' supply of this drug; these prescriptions thus provided 420-days' supply of medication for a period which was only eight-months in duration.

With respect to these prescriptions, Dr. Sullivan explained that alprazolam and diazepam are controlled substances in the same therapeutic class of benzodiazepines. Continuing, Dr. Sullivan explained that:

[t]he two drugs, diazepam 10mg and alprazolam 0.5mg are used for the same indication. I cannot think of any clinical reason why a patient would be using these two drugs at the same time for a period of seven months. Any reasonable and prudent pharmacist would not have filled prescriptions for these two medications to be taken at the same time. This is an obvious sign of either prescription drug abuse and/or diversion.

GX 66, at 5. Dr. Sullivan also observed that on February 17, 2010, Grider #2 had filled prescriptions for both diazepam and alprazolam presented by JB.

Id.

With respect to JB, the evidence also shows that throughout most of the period in question, she was simultaneously receiving prescriptions for hydrocodone from both Dr. E and Dr. J. GX 54, at Tab C. However, while JB filled Dr. E's prescriptions at Grider #2, she filled Dr. J's prescriptions at the Russell Springs Pharmacy.

Id.

Respondents called JB to testify. Tr. 5072. However, after some preliminary questions, JB informed the tribunal that she was under indictment for prescription fraud and that she was invoking her Fifth Amendment privilege.

Id.

at 5073. JB was excused, and although she was subject to recall,

id.

at 5077, Respondents did not recall her.

Eric Grider, pharmacist at Grider Drug #2, also testified regarding JB's prescriptions. Grider, who offered the remarkable testimony that he did know of any doctor-shopping having occurred in Russell County,

id.

at 3639, testified that JB's prescriptions did not raise a red flag with him even though she was simultaneously obtaining them from three doctors.

52

Id.

at 3613. Regarding the hydrocodone prescriptions which JB was simultaneously filling at both Grider #2 and the Russell Springs Pharmacy, Eric Grider testified that Russell Springs Pharmacy was not connected with Grider Drugs.

Id.

at 3611. Mr. Grider then suggested that the only way he would have known about the prescriptions filled at Russell Springs Pharmacy was if it had billed Medicaid because JB had Medicaid, but if Russell Springs Pharmacy did not “bill her Medicaid, [he] wouldn't [have] know[n]” about those prescriptions.

Id.

However, in his testimony, Mr. Grider admitted that Respondents did not subscribe to KASPER and thus did not check to see whether their patients were obtaining drugs from multiple doctors or pharmacies.

Id.

at 3539-40, 3551.

52

According to Eric Grider, Dr. J is a family physician, Dr. E is an ear, nose and throat specialist, and Dr. B is a psychiatrist. Tr. 3612-13.

As for the prescriptions that Grider #2 filled, Mr. Grider maintained that he had talked with the patient and that “the rest of them [we]re legitimate prescriptions for her symptoms.”

Id.

at 3613. He also asserted that the prescriptions were not a large number given the number of days' supply they provided.

Id.

at 3615; RX 120F; GX 54, Tab C. However, Grider offered no further explanation as to why it was appropriate to fill JB's prescriptions for alprazolam and diazepam, and as found above, the prescriptions for these two drugs provided 420 days' supply for period of eight months' duration.

JR

JR is a male in his late fifties. GX 55, Tab A. Between November 2, 2009 and April 29, 2010, JR filled thirty-four prescriptions for narcotics including hydrocodone, OxyContin, and Tussionex, which were issued by five different doctors; all but one of the prescriptions were filled at Grider #1.

Id.

at Tab C. However, JR testified that he was diagnosed with colon cancer in September or October 2009, and that he was terminally ill at the time of his testimony in December 2010.

53

Tr. 4235. JR further testified that Dr. W was his family doctor and that Dr. M worked with Dr. W, that Dr. N was his oncologist, that Dr. K was a surgeon who had performed various procedures on him, and Dr. B was a pain management specialist.

Id.

at 4238-39. In addition, a Dr. JB performed a surgical procedure on JR. RX 120B, at 9, 34.

53

The ALJ did not, however, make a finding as to whether she found this testimony credible.

See

ALJ at 37-39.

JR testified that he had several bulging or ruptured disks in his back and that he had been on disability for a long time and been receiving painkillers for fifteen years.

Id.

at 4243. According to JR, Dr. W issued the November 2 prescription for 90 hydrocodone 7.5/500 (a thirty-day supply) for his back pain; Dr. K issued the November 23 prescription for 20 hydrocodone 10/500 (for a three-day supply) for post-surgery pain, likely following a biopsy.

Id.

at 4244. On December 1, JR received an additional 60 hydrocodone 7.5/500 (this also being a thirty-day) supply, and two days later, Dr. JB wrote him an additional prescription for twenty hydrocodone 10/500 (also a three-day supply), for pain following the installation of a chemotherapy port.

54

GX 55, at Tab C; RX 120B, at 34; Tr. 4246. Dr. W wrote additional prescriptions for 60 hydrocodone 10/500 (these being fifteen-day supplies) on December 31, as well as on January 14 and 28, and February 10, 2010. GX 55, at Tab C. However, on January 21, JR also filled a prescription for another 30 hydrocodone issued by Dr. N, his oncologist.

Id.

54

While the actual prescription was written by Dr. JB, the label for the prescription that was dispensed listed Dr. K as the prescriber. RX 120B, at 34. On December 18 and 23, as well as January 8, 2010, Dr. K wrote additional short term prescriptions for hydrocodone10/500. The record does not, however, establish why.

On February 19, 2010, Grider #1 dispensed to JR 60 tablets of OxyContin 20mg (a thirty-day supply) based on a prescription issued by Dr. K.

Id.

Yet one week later (Feb. 26), Grider #1 filled for JR a prescription for 60 hydrocodone 7.5/500 (also a thirty-day supply) issued by Dr. W, and five days later (March 3), Respondent dispensed to JR 120

hydrocodone 10/500 (a thirty-day supply), based on a prescription issued by Dr. B.

Id.

Moreover, on March 8 (just five days later), Grider #1 dispensed to JR another 60 tablets of OxyContin 20mg (a thirty-day supply) which was prescribed by Dr. B, and on March 19, it dispensed to JR 60 tablets of OxyContin 30mg (a thirty-day supply), as well as 30 tablets of hydrocodone 10/500, both of which were prescribed by Dr. K.

Id.

Only one week later (on March 26), Grider #1 dispensed to JR another 60 OxyContin 20mg (thirty-day supply) and another 30 hydrocodone 10/500; both prescriptions being issued by Dr. K.

Id.

On April 2, JR filled at Grider #1 a prescription for 120 hydrocodone 10/500 (thirty-day supply) issued by Dr. B; he also filled, albeit at a different pharmacy, a prescription for 60 OxyContin 20mg, which was also issued by Dr. B.

55

55

In addition, on ten occasions throughout this period, Dr. W prescribed a ten-day supply of Tussionex, a hydrocodone based cough syrup, to JR. GX 55, at Tab C.

Ms. Moses filled several of JR's prescriptions at Grider #1; she also reviewed Grider #1's records and prepared notes regarding several of the dispensings. On November 23, 2009, she had filled a prescription for twenty tablets of hydrocodone 10mg which was issued by Dr. K. Ms. Moses documented on the prescription that JR had filled a prescription for Lortab 7.5mg on November 2, to be taken one tablet, twice a day. Dr. K's prescription was for one tablet every six hours. Ms. Moses justified filling the hydrocodone 10mg prescription because JR had seen a surgeon, the strength of the drug was higher, and the dosing interval had increased. Tr. 4164-65.

Ms. Moses became aware of the Lortab 7.5mg prescription from the pharmacy technician who had run the Lortab 10mg prescription through the computer. Ms. Moses did not call either physician.

Id.

at 4165-66. She asked JR if he had had surgery done, and JR told her that Dr. K had put in a port for his chemotherapy.

Id.

at 4166;

but see id.

at 4244 (JR's testimony that he may have had a biopsy done on this date). Ms. Moses testified that she collected this information on November 23, before she filled the prescription.

Id.

According to Ms. Moses, a similar scenario arose with the prescription of December 3, 2009, because she knew JR was a cancer patient and had undergone a colon re-section.

Id.

at 4167-68. Moreover, the December 3rd prescription (issued by Dr. JB) was limited to a three-day supply of hydrocodone 10mg to help JR control his pain.

Id.

While Ms. Moses was aware that JR had also obtained hydrocodone 7.5mg from his primary care physician, she testified that she used her professional judgment in deciding to fill the hydrocodone 10mg prescription because she knew that hydrocodone 7.5mg twice a day would not control his post-surgical pain. Tr. 4167-68; RX 120B. Ms. Moses knew that after the 3-day supply was exhausted, JR would return to the hydrocodone 7.5mg medication for pain control. Tr. 4168.

Ms. Moses also testified regarding a January 21, 2010 prescription issued to JR by his oncologist Dr. N.

Id.

According to Ms. Moses, JR presented a prescription for the same strength (hydrocodone 10/500) and dosing interval (four tablets per day) as provided in a prescription Grider #1 had filled one week earlier which was issued by JR's primary care doctor.

Id.

at 4168.

Ms. Moses testified that she called JR's oncologist to get his approval to fill the prescription and was told by a nurse that it was “okay to fill,” which she annotated on the hard copy of the prescription.

Id.

The evidence corroborates this.

See

RX 120B, at 46-47.

Ms. Moses offered a similar explanation as to why Grider #1 filled a March 8, 2010 prescription for OxyContin 20mg. Tr. 4169. Ms. Moses testified that she recognized that JR had received an earlier prescription for OxyContin 20mg on February 19, and that she told JR that she could not fill the prescription until March 17.

Id.

JR then told Ms. Moses that “he was completely out of his medicine, because * * * the dosing * * * wasn't controlling his pain.”

Id.

Ms. Moses testified that she agreed to call the “the surgeon's office” and that the nurse said “that they were aware that [JR] was out of his medicine, and gave me the okay to fill that.”

Id; see also

RX 120B, at 65. Ms. Moses further stated that it was within professional standards to fill this prescription.

Id.

Respondents' counsel also asked Ms. Moses about the March 26, 2010 OxyContin prescription for a thirty-day supply which was filled by Leon Grider.

Id.

This prescription was at issue because the previous OxyContin prescription, which was also for a thirty-day supply, had been filled only one week earlier. As Ms. Moses testified, the March 26 prescription bore the notation: “ok early per MD—last RX stolen pt had police report.” RX 120B, at 71. As noted above, both the March 19 and 26 prescriptions were issued by Dr. K. GX 54, at Tab C. Ms. Moses testified that filling this prescription was within professional standards. Tr. 4170.

Next, Respondents' counsel asked Ms. Moses about the May 5, 2010 refill request it received from Dr. W, JR's primary physician. This form, which was faxed into Grider #1, stated “needs all meds called in (including cough syrup)” and listed numerous medications; however, various controlled drugs including Lortab and OxyContin were crossed out and the document also bore the notation “No controlled drugs except Ativan.” RX 120B, at 80.

According to Ms. Moses, a staff member at Dr. W's office “wrote down all of [JR's] medications, including OxyContin 20mg, which Dr. W does not prescribe for him. Therefore, Dr. W was aware of JR's taking this for pain control from another physician.”

Id.; see also

Tr. 4170-71. However, even if this evidence establishes that Dr. W was aware that JR was receiving OxyContin from another doctor (and it does not establish whether Dr. W was aware that JR was still obtaining prescriptions from another doctor on the various dates when he prescribed a thirty-day supply of hydrocodone to JR), it does not address whether Drs. K and B, who were prescribing OxyContin and hydrocodone to JR during the same time period, were aware that they were also simultaneously prescribing these drugs.

JR testified that he told Dr. K and Dr. N about the prescriptions he was receiving from Dr. W for his chronic back pain. Tr. 4246, 4256. However, during an interview Detective Hammond conducted with Dr. K on May 4, 2010, Dr. K stated that “he had given him [JR] multiple prescriptions while treating him but had he known he was getting controlled substances from other doctors he would not have prescribed him anything other than right after surgery and he wouldn't have prescribed him as much.” GX 55, Tab B, at 1. Dr. K further told the Detective that JR “did not tell him what he was getting from other doctors” and that while “[h]e assumed Dr. W, his family physician, had given him something for pain * * * he did not know it was an ongoing situation. Also, he did not know [JR] was going to a pain clinic.”

Id.

On the same date, Detective Hammond interviewed Dr. W, JR's primary care physician who had referred him to Dr. K.

Id.

at 2. Dr. W stated that he knew JR “would get something from Dr. K after his surgery but did not know [JR] would be continually getting medications * * * from Dr. K.”

Id.

Dr. W further stated that he would not have prescribed the hydrocodone and Tussionex if he had

known [that JR] was getting the same and/or similar medication from Dr. K because [JR] was getting `too much' with both of them prescribing.”

Id.

Dr. W also stated that JR “did not tell him that Dr. K was also giving him pain medications on a regular basis.”

Id.

56

56

In their Exceptions, Respondents contend that “[t]he fact that a patient's surgeon over this period was prescribing small quantities of the same controlled substance, although in varying degrees of strength, that the patient's primary care physician was prescribing would not trigger the need to question either of these doctors' prescriptions.” Resp. Exceptions at 19. Respondents do not cite any evidence to support this contention, and the statements of Drs. K and W indicate that had they known that JR was obtaining prescriptions they would have taken steps to reduce the quantities that were being prescribed.

Detective Hammond also interviewed Dr. B, who runs a pain management clinic at a hospital in Danville, Kentucky.

Id.

at 3. Dr. B. stated that “he did not know [JR] was getting OxyContin from Dr. K or controlled substances from Dr. W.”

Id.

Dr. B also stated that “patients at his clinic * * * are locked into a pain management contract in which they are the only ones that will be treating their pain,” and that if he had known that JR was getting controlled substances from other doctors, he would not have treated him.

57

Id.

57

With respect to Dr. K's authorization of a new prescription (which was filled on March 26, 2010) based on the theft of JR's OxyContin, Detective Hammond noted that the theft had occurred at the Russell County Hospital and that the incident was captured by a video camera.

Id.

at 2. Detective Hammond interviewed the police officer who responded to this incident and noted that upon reviewing the video tape, JR's “car was not locked and the person who broke into the vehicle appeared to know exactly where the pills were located” as she “was in the vehicle only a short amount of time and did not appear to be searching in the vehicle.”

Id.

The responding officer also stated that JR “was very persistent * * * about the pills being stolen and that she [the officer] may have to talk to the doctor so he could get his pain pills. [JR] was also very knowledgeable about the fact that the break in should be caught on video as he was within range of a security camera, [and] in fact he informed [the officer] of this.”

Id.

In his report, Detective Hammond also noted various notations in the patient filed maintained by Dr. W. These included a report that on October 29, 2009, JR called and requested a refill of Lortab, which Dr. W apparently rejected as he noted in the chart: “Hell no! not due.”

Id.

Moreover, on November 19, 2009, a person called Dr. W's office to report that JR was “selling his pain pills and Xanax” to her daughter.

Id.

Also, a chart note dated November 20, 2009 stated: “Patient needs to bring in pill bottles next week for pill counts and UDS-any day next week.” According to the chart, on November 23, JR “brought in his Xanax bottle with 2

1/2

pills left” and did not have a bottle for the Lortab.

Id.

at 3. The chart further noted: “Patient stated no Lortab left, no bottle, his yorkies get the lids off.”

Id.

Notably, Detective Hammond's statements regarding both the November 19 phone call and JR's November 23 visit are corroborated by other evidence in the record.

See

GXs 75 and 76.

In his report, Detective Hammond then noted that while he was at Dr. B's clinic, he was approached by a nurse (JB), who told him that “she had received a call from a Russell Co. phone number, in which the caller said [JR] was diverting his pain pills to her grandson in exchange for him mowing his yard” and that “her grandson is addicted to pain pills.”

Id.

Also, in his testimony, JR admitted that he had “loaned” controlled substances to friends on occasion. Tr. 4317-18

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