Superior Pharmacy I and Superior Pharmacy II Decision and Order

Federal RegisterMay 18, 2016

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket Nos. 15-6 and 15-7]

Superior Pharmacy I and Superior Pharmacy II Decision and Order

This is a consolidated proceeding involving two pharmacies located in Tampa, Florida with common ownership. On October 8, 2014, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration issued an Order to Show Cause to Superior Pharmacy, L.L.C. (hereinafter, Superior II), which proposed the revocation of its DEA Certificate of Registration BS9699731, pursuant to which it is authorized to dispense controlled substances in schedules II through V as a retail pharmacy, at the registered location of 5416 Town `N' Country Blvd. ALJ Ex. 1, at 1 (No. 15-7). The next day, the Deputy Assistant Administrator issued an Order to Show Cause to Superior Pharmacy, L.L.C. (hereinafter, Superior I), which proposed the revocation of its DEA Certificate of Registration BS9255274, pursuant to which it is authorized to dispense controlled substances in schedules II through V as a retail pharmacy, at the registered location of 3007 W. Cypress Street, Suite 1. ALJ Ex. 1, at 1 (No. 15-6).

As grounds for the proposed actions (which also included the denial of any pending applications), the Show Cause Orders alleged that each pharmacy's “continued registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).”

Id.; see also

ALJ Ex. 1, at 1 (No. 15-7); 21 U.S.C. 824(a)(4). Specifically, with respect to each pharmacy, the Orders alleged that their “pharmacists repeatedly failed to exercise their corresponding responsibility to ensure that controlled substances they dispensed were dispensed pursuant to prescriptions issued for legitimate medical purposes by practitioners acting within the usual course of their professional practice” and that their “pharmacists ignored readily identifiable red flags that [the] controlled substances prescribed were being diverted and dispensed despite unresolved red flags.” ALJ Ex. 1, at 1 (No. 15-6); ALJ Ex. 1, at 1 (No. 15-7) (both citing 21 CFR 1306.04(a);

Holiday CVS. L.L.C., d/b/a CVS Pharmacy Nos. 219 and 5195,

77 FR 62315, 62319 (2012)).

The Show Cause Orders further alleged that each pharmacy's “pharmacists dispensed controlled substances when they knew or should have known that the prescriptions were not issued in the usual course of professional practice or for a legitimate medical purpose, including circumstances where the pharmacist knew or should have known that the controlled substances were abused and/or diverted by the customer.” ALJ Ex. 1, at 2 (No. 15-6); ALJ Ex. 1, at 2 (No. 15-7). Each Show Cause Order then listed various red flags which each Respondent's pharmacists allegedly failed to resolve before dispensing prescriptions, including: (1) “Multiple individuals presenting prescriptions for the same drugs in the same quantities from the same doctor”; (2) “individuals presenting prescriptions for controlled substances known to be highly abused, such as oxycodone and hydromorphone”; (3) “individuals paying . . . for controlled substances with cash”;

and (4) “individuals residing long distances from the pharmacy.” ALJ Ex. 1, at 2 (No. 15-6); ALJ Ex. 1, at 2 (No. 15-7). Each Show Cause Order then set forth allegations of specific instances in which Respondents' pharmacists dispensed oxycodone 30 mg or hydromorphone 8 mg without resolving various red flags presented by the patients and/or the prescriptions; the Order further alleged that several of these prescriptions were facially invalid because they lacked the patient's address. ALJ Ex 1, at 2 (No. 15-6); ALJ Ex. 1, at 2 (No. 15-7).

With respect to Superior I, the Show Cause Order stated the red flag as “individuals paying high prices for prescriptions for controlled substances with cash.” ALJ 1, at 2 (No. 15-6).

Each Show Cause Order further alleged that Respondents' pharmacists dispensed hydromorphone, notwithstanding that the “dosage amounts . . . if taken as directed, far exceeded the recommended dosages of hydromorphone that should be taken on a daily basis.” ALJ Ex. 1, at 2 (No. 15-6); ALJ Ex. 1, at 3 (No. 15-7). The Superior I Order also alleged that its pharmacists dispensed prescriptions, which were written by the same doctor on the same day, for “large and substantially similar quantities of” oxycodone 30 mg, “to two customers . . . both of whom resided at the same address,” in a town “located approximately [449 miles] from” the pharmacy. ALJ Ex. 1, at 2 (No. 15-6). Likewise, the Superior II order alleged that its “pharmacists dispensed large and substantially similar quantities of hydromorphone and oxycodone to two individuals with the same last name who received their prescriptions on the same day from doctors at the same clinic.” ALJ Ex. 1, at 3 (No. 15-7).

In addition, the Superior I Order alleged that the pharmacy “failed to create and maintain accurate [schedule II order forms] in violation of 21 U.S.C. 842(a)(5),” and that “[a]t least two [of its] pharmacists . . . shared a private key (password) for digitally signing” controlled substances orders, “in violation of 21 CFR 1311.30(a), (c), and (e).” ALJ Ex. 1, at 3-4 (No. 15-6). Finally, the Superior I Order alleged that a DEA audit for the period of May 2, 2011 through February 4, 2013 found,

inter alia,

that the pharmacy was short 15,560 dosage units (du) of oxycodone 30 mg; 11,951 du of hydromorphone 8 mg; 946 du of hydromorphone 4 mg; and 864 du of methadone 10 mg.

Id.

at 4.

The Superior II Order alleged that it had also failed to maintain accurate schedule II order forms and had failed to retain copy three of these forms as required by DEA regulations. ALJ Ex. 1, at 3 (No. 15-7) (citing 21 CFR 1305.13(a) & (e);

id.

§ 1305.17(a); 21 U.S.C. 827(b)). The Order further alleged that the pharmacy failed to create records of the quantity and date received for orders it placed using the Controlled Substances Ordering System (CSOS) and that it “also failed to electronically archive and link these records to the original order.”

Id.

at 4. Finally, the Superior II Order alleged that a DEA audit for the period of July 31, 2012 through February 4, 2013 found,

inter alia,

that the pharmacy had overages of 2,576 du of hydromorphone 8 mg; 1,189 du of oxycodone 30; and 896 du of methadone 10 mg.

The Show Cause Order issued to Superior I was served on October 17, 2014, and the Show Cause Order issued to Superior II was served on October 16, 2014.

See

ALJ Ex. 3 (No. 15-6); ALJ Ex. 4 (No. 15-7). On November 14, 2014, each pharmacy, through its counsel, requested a hearing on the allegations.

See

ALJ Ex. 2 (No. 15-6); ALJ Ex. 3 (No. 15-7). Each matter was placed on the docket of the Office of Administrative Law Judges and assigned to Administrative Law Judge (ALJ) Christopher B. McNeil.

The Prehearing Motions and Rulings

On December 3, 2014, the ALJ issued an Order for Prehearing Statements and Setting the Matter for Hearing (hereinafter, Prehearing Order) in each case.

See

ALJ Ex. 5 (No. 15-6); ALJ Ex. 6 (No. 15-7). In each Prehearing Order, the ALJ directed the Government to file its Pre-hearing Statement no later than 2 p.m. on December 22, 2014, and each Respondent to file its Prehearing Statement no later than 2 p.m. on January 5, 2015. ALJ Ex. 5, at 1 (No. 15-

6); ALJ Ex. 6, at 1 (No. 15-7). The Orders also directed the parties to “[p]rovide the names and current addresses of all witnesses whose testimony is to be presented,” and that “[i]f the Respondent's corporate representative intends to testify, the representative must be listed, and a summary of anticipated testimony as described below must be provided.” ALJ Ex. 5, at 2 (No. 15-6); ALJ Ex. 6, at 2 (No. 15-7). The ALJ's Orders provided the following instruction regarding the summaries of testimony:

Provide a brief summary of the testimony of each witness, with counsel for the Government to indicate clearly each and every act, omission or occurrence upon which it relies in seeking to revoke the Respondent's Certificate of Registration, and counsel for Respondent to indicate clearly each and every matter as to which Respondent intends to introduce evidence in opposition. The summaries are to state what the testimony will be, rather than merely listing the areas to be covered. The parties are reminded that testimony not disclosed in the prehearing statements or pursuant to subsequent rulings is likely to be excluded at the hearing.

ALJ Ex. 5, at 2 (No. 15-6); ALJ Ex. 6, at 2 (No. 15-7).

The ALJ's Orders also provided that “[a]ny requests for subpoena[s] are to be filed by 2:00 p.m. E.S.T. on January 12, 2015,” and that “[s]ubpoena requests that do not comply with these instructions will be returned to the requestor without further action.”

ALJ Ex. 5, at 4 (No. 15-6); ALJ Ex. 6, at 4 (No. 15-7). The ALJ's Orders further provided that “[w]henever a party seeks to file any document, motion, exhibit or otherwise communicate in writing with the Administrative Law Judge, the party must provide a true copy of the same to the opposing party, using the contact information shown in the Certificate of Service below . . . [and] [t]he party making such a filing shall include a `Certificate of Service' stating that a true copy of the submission has been provided to the opposing party, and shall specify the means by which” this was accomplished. ALJ Ex. 5, at 5-6 (No. 15-6); ALJ Ex. 6, at 5-6 (No. 15-7).

The Order further required that “[a]ny motion to quash a subpoena must be filed within three working days of receipt of the subpoena request and must be served on the opposing party.” ALJ Ex. 5, at 4-5 (No. 15-6); ALJ Ex. 6, at 4-5 (No. 15-7).

Finally, the ALJ's Orders directed the parties to file their proposed exhibits with his Office no later than 2:00 p.m. on January 12, 2015; it also directed that a copy of the exhibits be served on the opposing party. ALJ Ex. 5, at 2 (No. 15-6); ALJ Ex. 6, at 2 (No. 15-7). The ALJ's Orders further directed that “[w]hen any party seeks to . . . present proposed exhibits,” the party must “timely provid[e] the OALJ with a facsimile copy” and “must mail hard copy filings sufficiently in advance of the due date to assure timely receipt by the hearing clerk” as well as “that documents are to be filed in triplicate.” ALJ Ex. 5, at 5-6 (No. 15-6); ALJ Ex. 6, at 5-6 (No. 15-7).

In his Orders, the ALJ also noted that the cases appeared to “involve common questions of law or fact” and thus directed the parties to address whether they should be consolidated. ALJ Ex. 5, at 3 (No. 15-6); ALJ Ex. 6, at 3 (No. 15-7). Thereafter, the Government moved to consolidate the cases (as well as two other cases). Respondent opposed the Government's motion.

On December 22, 2014, the Government filed its Prehearing Statements with respect to each pharmacy. In each of these, the Government disclosed that it intended to elicit testimony from an expert regarding his review of “numerous controlled substance prescriptions filled by Respondent that contained one or more red flags for diversion which Respondent never resolved.” ALJ Ex. 6, at 3 (No. 15-6); ALJ Ex. 8, at 3-4 (No. 15-7). The Government then identified the same set of seven red flags. ALJ Ex. 6, at 3 (No. 15-6); ALJ Ex. 8, at 3-4 (No. 15-7). With respect to both pharmacies, the Government then set forth the expert's proposed testimony regarding various oxycodone 30 mg prescriptions and the red flags they presented, as well as his proposed testimony regarding the pharmacy's dispensing of large quantities of hydromorphone and the red flags they presented. ALJ Ex. 6, at 4 (No. 15-6); ALJ Ex. 8, at 3-4 (No. 15-7). And with respect to Superior I, the Government also disclosed that the expert “will also testify about a customer who willingly purchased a prescription for oxycodone . . . that costs 37% more than the same prescription four months earlier,” and “that this fact, combined with the fact that the prescription was facially invalid [as it contained] no patient address constituted a red flag for diversion.” ALJ Ex. 6, at 5 (No. 15-6).

The Government then noticed both Respondents that its expert “will testify that the facts surrounding the prescriptions listed above constituted red flags for diversion and that there is no evidence that any of the red flags were resolved prior to distributing the controlled substances to the customers.”

Id.

at 3 (No. 15-6). Finally, it noticed Respondents that its expert “will testify that . . . Respondent[s'] pharmacists failed to exercise their corresponding responsibility to ensure that prescriptions for controlled substances were issued for a legitimate medical purpose in the usual course of professional practice.” ALJ Ex. 6, at 3 (No. 15-6); ALJ Ex. 8, at 3-4 (No. 15-7).

On January 5, 2015, each Respondent filed a “Motion to Compel” and a “Motion for Enlargement of Time to File . . . Pre-hearing Statement,” as well as a Prehearing Statement. ALJ Exs. 9, 10, 11 (No. 15-6); ALJ Exs. 9, 10, 12 (No. 15-7). In their Motions to Compel, each Respondent noted that on February 4, 2013, DEA had executed an Administrative Inspection Warrant at it and sought an Order from the ALJ requiring the Government to disclose the documents and testimony submitted by DEA Investigators to the Federal Magistrate Judge in obtaining the Warrants. ALJ Ex. 10, at 2 (No.15-6); ALJ Ex 10, at 2 (No. 15-7). Each Respondent's Motion to Compel also sought to require the Government to: (1) Provide “full and complete copies of all computer data seized . . . during the execution of the” warrant; (2) identify “all DEA personnel involved in the preparation and execution of the [warrant] and the subsequent review and analysis of the information, records, and data seized”; and (3) provide “reports of, and the substance of, any statements made to DEA investigators by [Respondent's] staff.” ALJ Ex. 10, at 5 (No.15-6); ALJ Ex 10, at 5 (No. 15-7).

Each Respondent also sought an extension of the time to file its Prehearing Statement to the end of March 2015 and sought to reschedule the hearing “to no sooner than June 2015.” ALJ Ex. 11, at 3 (No. 15-6); ALJ Ex. 9 (No. 15-7). As support for the motions, Respondents argued that since the execution of the warrants, the Government had 20 months to review the records, and that “[d]uring this time, the information was not available to Respondent.” ALJ Ex. 11, at 3 (No. 15-6); ALJ Ex. 9, at 3 (No. 15-7). Respondents further argued “[w]hile a portion of the seized information, most notably the prescriptions, was provided to Respondent[s] in electronic format, the sheer volume of information coupled with the unreasonably short deadlines surrounding the holiday season make analysis of the information by [it] impossible.” ALJ Ex. 11, at 3 (No. 15-6); ALJ Ex. 9, at 3 (No. 15-7). Respondents further argued that “due process requires, and good cause exists, for a significant” extension of the time to file the Prehearing Statements and “to prepare for a lengthy hearing in” these

matters. ALJ Ex. 11, at 3 (No. 15-6); ALJ Ex. 9, at 3 (No. 15-7).

The Government opposed these motions. With respect to the Motions to Compel, the Government argued that in its Prehearing Statements, it had provided a summary of the testimony it intended to elicit as well as a list of the exhibits it intended to offer; the Government also noted that several weeks earlier, it had met with one of Respondents' counsels and that at no time then or since its motion, had Respondents' counsel “communicate[d] a need for, or request[ed] any” of the information it sought through the motions. ALJ Ex. 16, at 3 (No. 15-7). The Government further argued that it had fully complied with its disclosure obligations, and that to the extent Respondents were seeking discovery, “ `[t]here is . . . no general right to discovery under either the APA or DEA regulations, but rather only a limited right to receive in advance of the hearing the documentary evidence and summaries of the testimony which the Government intends to rely upon.' ” ALJ Ex. 16, at 4 (No. 15-7) (quoting

Roy E. Berkowitz,

74 FR 36758, 36760 (2009)). Finally, the Government argued that to the extent Respondents were asserting that they had a right to receive these materials as a matter of due process, “Respondent[s] ha[d] not even articulated how the requested materials might be relevant to this proceeding.” ALJ Ex. 16, at 5 (No. 15-7).

Each Respondent filed a Reply to [the] Government's Response to Motion to Compel. ALJ Ex. 27 (No. 15-6); ALJ Ex.18 (No. 15-7). Therein, Respondents contended that they were entitled to the documents as a matter of due process because the Government had represented that one of its proposed witnesses (a Diversion Investigator) would testify regarding his/her interviews with Respondents' staff and that they would be prejudiced if the Government did not provide the “same.” ALJ Ex. 27, at 2 (No. 15-6); ALJ Ex. 18, at 2 (No. 15-7). Respondents further asserted that the “information is essential,” because the Government intended to put on evidence that the prescriptions raised red flags and that “Respondent[s] fail[ed] to exercise [their] corresponding responsibility to resolve the `red flag[s],' ” and the Government “has not identified one patient or doctor related to the prescriptions allegedly containing unresolved red flags.” ALJ Ex. 27, at 2 (No. 15-6); ALJ Ex. 18, at 2 (No. 15-7).

The Government also opposed Respondents' Motions for Enlargement of Time. ALJ Ex. 16, at 6 (No. 15-7). The Government argued that the Show Cause Orders and Prehearing Statements had “specifically outlined” the allegations, “as well as the approximate number of documents it intend[ed] to introduce into evidence.”

Id.

The Government further argued that it was “patently specious” for Respondents “[t]o characterize this matter as something much more voluminous and complicated than what it is and, as a result, argue that further delay is necessary.”

Id.

The Government also contended that to the extent Respondents were seeking an extension to review records and prescriptions beyond those referenced in the Show Cause Orders and its Prehearing Statements, those documents were not “material to the allegation that he [sic] unlawfully dispensed to customers identified in the OTSC and Government's Prehearing Statement.”

Id.

at 6-7.

On January 5, 2015, the ALJ denied Respondents' Motions for Enlargement. ALJ Ex. 11, at 3 (No. 15-7); ALJ Ex. 12, at 4 (No. 15-6). The ALJ specifically noted “that since at least October 16, 2014, Respondent[s] ha[ve] been informed of the nature of the charges presented in the Order to Show Cause,” and that in their motions, Respondents had acknowledged that the Government had provided them with the prescriptions. ALJ Ex. 11, at 3 (No. 15-7); ALJ Ex. 12, at 3 (No. 15-6). The ALJ explained that neither Respondent had “established that it has been prevented from evaluating those prescriptions identified in the Order to Show Cause [or] that it has been prevented from preparing its prehearing statement.” ALJ Ex. 11, at 3 (No. 15-7); ALJ Ex. 12, at 3 (No. 15-6). The ALJ also explained that Respondents had known since the issuance of his Prehearing Orders that they were required “to object to any term of that Order by not later than December 10, 2014,” and that they failed to object to the orders until the day their Prehearing Statements were due. ALJ Ex. 11, at 3 (No. 15-7); ALJ Ex. 12, at 3 (No. 15-6). The ALJ thus concluded that:

I am compelled to consider the nature of the allegations, which if proved suggest Respondent[s'] ability to fill controlled substance prescriptions would be inconsistent with the public interest. I am further compelled to consider Respondent[s'] own role in attempting to delay th[ese] proceeding[s], given that [they] failed to timely object to the deadlines set forth in the Order[s]. I am further compelled to consider fairness to all parties, and the convenience of witnesses now identified by the Government in its timely prehearing statement[s]. I am further compelled to consider the need for orderly and prompt administration of justice. All of these considerations compel my finding that good cause has not been shown for either enlarging the time for Respondent[s] to file [their] prehearing statement[s], or for continuing the hearing now set to being on January 27, 2015.

ALJ Ex. 11, at 3 (No. 15-7); ALJ Ex. 12, at 3 (No. 15-6).

The same day (according to OALJ date stamps), each Respondent filed its Prehearing Statement. ALJ Ex. 9 (No. 15-6); ALJ Ex. 12 (No. 15-7). Each Respondent proposed as witnesses “[a]ny and all patients whose prescriptions were seized . . . pursuant to the Administrative Inspection Warrant executed [on] February 4, 2013 or whose prescriptions for controlled substances were dispensed between January 1, 2011 and February 4, 2013.” ALJ Ex. 9, at 3 (No. 15-6); ALJ Ex. 12, at 3 (No. 15-7). Respondent Superior I further attached a list of 2,355 purported patients, ALJ Ex. 9, at Attachment A (No. 15-6); and Respondent Superior II attached a list of 2,253 purported patients. ALJ Ex. 12, at Attachment A (No. 15-7). As for the required summary of anticipated testimony, each Respondent proposed that:

These patients will each be asked to provide testimony regarding their medical history, injuries and related pathology, interactions with treating physicians and dispensing pharmacists, effectiveness of the prescribed controlled substances, continuity of treatment, their reasons for patronage of Superior Pharmacy, LLC . . . such other testimony relevant to the Government's allegation that any of these prescriptions raised `red flags' which should have caused pharmacists to refuse to dispense the prescribed controlled substances.

ALJ Ex. 9, at 4 (No. 15-6); ALJ Ex. 12, at 4 (No. 15-7).

Respondents further proposed as witnesses “[a]ny and all physicians who issued the prescriptions seized . . . pursuant to the Administrative Inspection Warrant[s] . . . or whose prescriptions for controlled substances were dispensed at [them] between January 1, 2011 and February 4, 2013,” as well as “[a]ny and all physicians who issued prescriptions for controlled substances to the patients identified . . . above after February 4, 2013.” ALJ Ex. 9, at 3 (No. 15-6); ALJ Ex. 12, at 3 (No. 15-7). Each Respondent attached a list of several hundred physicians who had purportedly issued the controlled substance prescriptions dispensed by them. ALJ Ex. 9, at Attachment B (No. 15-6); ALJ Ex. 12, at Attachment B (No. 15-7). As for the anticipated testimony of the physicians, Respondents represented that:

These physicians will confirm they performed adequate and appropriate physical examinations of the patients to whom they

issued prescriptions for controlled substances, communication with the dispensing pharmacies regarding such prescriptions, the reasonableness and necessity of the prescriptions to control the pain or other complaints of their patients as required by the standard of care and Florida statutes.

ALJ Ex. 9, at 4 (No. 15-6); ALJ Ex. 12, at 4 (No. 15-7).

Next, Respondents proposed as witnesses “[a]ny and all pharmacists who dispensed prescriptions for controlled substances to the patients identified . . . above

after

February 4, 2013.” ALJ Ex. 9, at 3 (No. 15-6); ALJ Ex. 12, at 3 (No. 15-7) (emphasis added). As for their anticipated testimony, Respondents represented that “[t]hese pharmacists will describe the information they obtained from the patients, physicians and other sources in order to resolve `red flags,' if any, raised by the described prescriptions for controlled substances.” ALJ Ex. 9, at 5 (No. 15-6); ALJ Ex. 12, at 5 (No. 15-7). Respondent did not, however, provide the names of any of the pharmacists. ALJ Ex. 9, at 3 (No. 15-6); ALJ Ex. 12, at 3 (No. 15-7).

Respondents also proposed as a witness Mr. Sam Badawi, a pharmacist and attorney. ALJ Ex. 9, at 3 (No. 15-6); ALJ Ex. 12, at 3 (No. 15-7). As for Mr. Badawi's anticipated testimony, Respondents represented that he:

will testify regarding his qualifications as an expert in the field of pharmacy and the legal and ethical responsibilities of the pharmacists dispensing prescriptions at [each Respondent], the procedures used at [each Respondent] to consider and resolve `red flags,' inventory, ordering and CSOS compliance issues. Mr. Badawi will further testify that he had reviewed the prescriptions at issue, the relevant inventory and ordering records and prepared summaries of the prescription dispensing activity at [each pharmacy] during 2011 and 2012, and identified significant errors in the inventory performed by the DEA.

ALJ Ex. 9, at 6 (No. 15-6); ALJ Ex. 12, at 6 (No. 15-7).

Respondents further proposed as a witness Mr. Jack Crowley of Gates Healthcare Associates. Respondents represented that Mr. Crowley:

will testify regarding his knowledge and experience in the investigation, preparation and execution of Administrative Inspection Warrants and the subsequent investigation required. [He] will testify regarding errors in the audits performed by the agents/investigators involved in the investigation of [Respondents]. [He] reviewed the prescriptions, inventory and CSOS records of [Respondents]. [He] will further testify regarding [Respondents'] procedure[s] for resolving potential `red flag' issues and compliance with recordkeeping requirements related to inventory records, DEA-222 order forms and CSOS issues.

ALJ Ex. 9, at 5 (No. 15-6); ALJ Ex. 12, at 5 (No. 15-7).

Respondents also proposed as witnesses each person “who participated in the preparation of the application for the Administrative Inspection Warrant[s],” as well as each person “who participated in the execution of the Administrative Inspection Warrant[s].” ALJ Ex. 9, at 3-4 (No. 15-6); ALJ Ex. 12, at 3-4 (No. 15-7).

On January 9, 2012, each Respondent filed a motion to enlarge the time for filing its proposed exhibits or to alternatively provide its proposed exhibits electronically, as well as a motion to enlarge the time to file its requests for subpoenas. ALJ Ex. 22 (No. 15-6); ALJ Ex. 23 (No. 15-7). In its motion, Superior I explained that its “Prehearing Statement identifies four categories of proposed exhibits which consist of 23,032 documents,” of which “20,925 pages represent the documents seized, and provided to Respondent electronically, by the DEA.” ALJ Ex. 22, at 2 (No. 15-6). Superior I explained that to comply with the ALJ's Pre-hearing Order, which required that three copies of each exhibit be filed with the OALJ and one copy be filed with opposing counsel, this would require more than 92,000 pages and “approximately nineteen standard boxes of paper, which is approximately 950 pounds.”

Id.

Superior I further explained that because of the volume of copying needed to comply with the Pre-hearing Order, the documents would have to be sent “to a third party for reproduction” and “the reproduction cannot be completed in the allotted time.”

Id.

at 3. As for its subpoena requests, Superior I contended that the ALJ's Prehearing Order was ambiguous “as to whether the requests and completed subpoenas are to be filed in triplicate with the Hearing Clerk,” and because it was seeking to subpoena 2,861 witnesses, it “cannot complete the . . . requests . . . with the completed subpoenas using the required template in the allotted time.”

Id.

Superior II made similar assertions to Superior I, noting that its proposed exhibits “consist of 32,123 documents,” of which “30,441 pages represent the documents seized, and provided to [it] electronically, by the DEA,” and that to comply with the ALJ's Prehearing Order, it would have to provide more than 128,000 pages of documents, and require “approximately 1,300 pounds” of paper. ALJ Ex. 23, at 2 (No. 15-7). As did Superior I, Superior II asserted that it would have to use a third-party to perform the necessary copying, which could not “be completed in the allotted time.”

Id.

at 3. Superior II also asserted that it could not complete the 2,549 subpoena requests for its proposed witnesses on time.

Id.

On January 12, 2015, each Respondent submitted a letter (dated Jan. 9) to the Hearing Clerk along with thumb drives which contained “the images of each of the exhibits in [its] Prehearing Statement.” ALJ Ex. 24 (No. 15-6); ALJ Ex. 24 (No. 15-7). Each Respondent's letter also advised that the paper copies of the subpoena requests would be hand delivered on Monday, January 12, 2015, and on that date, the ALJ “received more than 3,000 written requests for the issuance of subpoenas in the[] two cases.” Tr. 18;

see also

ALJ Ex. 24 (No. 15-6); ALJ Ex. 24 (No. 15-7). According to the ALJ, neither Respondent provided “a certificate of service establishing that [they] ha[d] provided the Government with a true copy of these requests.” Tr. 18.

The same day, the ALJ's Law Clerk sent a letter under his own signature to each Respondent's Counsel noting that the OALJ had received the thumb drives. ALJ Ex. 28 (No. 15-6); ALJ Ex. 28 (No. 15-7). The Law Clerk then explained that he was returning the thumb drives to each Respondent's counsel because “[t]he submission of the thumb drive does not adhere to the” ALJ's Prehearing Order of December 3, 2014. ALJ Ex. 28 (No. 15-6); ALJ Ex. 28 (No. 15-7).

On January 12, the ALJ denied each Respondent's Motion to Compel. The ALJ noted that in the case of

Edge Pharmacy

(Docket No. 15-3), the respondent had sought to compel the disclosure of much of the same material as sought by Superiors I and II. ALJ Ex. 29, at 4 (No. 15-6); ALJ Ex. 29, at 4 (No. 15-7). The ALJ further noted that in

Edge,

the Chief Administrative Law Judge (CALJ) had denied the motion of the respondent on the ground that it did “not comport with the narrowly-focused grant of authority in 21 CFR 1316.52(d),” and that the respondent did “not seek to compel . . . the class of documents discoverable under the [Administrative Procedure Act] or subject to inspection under DEA regulations.” ALJ Ex. 29, at 4 (No. 15-6); ALJ Ex. 29, at 4 (No. 15-7). As for the reports and the substance of any statements made by Respondents' staff to the Agency's Investigators, the ALJ also found that the CALJ's reasoning applied to these materials. ALJ Ex. 29, at 4 (No. 15-6); ALJ Ex. 29, at 4 (No. 15-7). The ALJ thus concluded that each Respondent had failed to establish its entitlement to the documents. ALJ Ex. 29, at 4 (No. 15-6); ALJ Ex. 29, at 4 (No. 15-7).

The same day, in the Superior I matter, the Government submitted its request for the issuance of subpoenas for four witnesses, and in the Superior II matter, the Government submitted its request for the issuance of subpoenas for five witnesses, all of whom had been previously identified in the respective Prehearing Statement.

ALJ Ex. 25, at 1-2 (No. 15-6); ALJ Ex. 25, at 1-2 (No. 15-7). The Government also submitted its proposed exhibits in each matter. Docket Sheet, at 2 (No. 15-6); Docket Sheet, at 2 (No. 15-7).

The Government also served a copy of both subpoena requests on each Respondent. ALJ Ex. 25, at 2 (No. 15-6); ALJ Ex. 25, at 2 (No. 15-7).

The Government's Motions To Consolidate

On January 13, 2015, the Government moved to consolidate the cases, along with a third matter (Jet Pharmacy). ALJ Ex. 31 (No. 15-6); ALJ Ex. 31 (No. 15-7). In its motions, the Government argued that there were common issues of law and fact with respect to the pharmacies, noting that it intended to call the same expert in each of the cases and each Respondent had stated that it intended to call the same two experts. ALJ Ex. 31, at 2-3 (No. 15-6); ALJ Ex. 31, at 2-3 (No. 15-7). The Government further argued that the expert's testimony would “account for the bulk of the Government's and likely the Respondents' cases in terms of length of testimony,” and that consolidation would “result in a tremendous conservation of time and resources by allowing the Government to present its expert's testimony in one proceeding rather than in three separate proceedings.” ALJ Ex. 31, at 5 (No. 15-6); ALJ Ex. 31, at 5 (No. 15-7).

The Government also argued that, although “each of the Respondent pharmacies is a separate business entity, there are also strong indications of common ownership, management, and/or control between the Respondents,” and that Superior I and II “are both owned and operated by Victor Obi-Anadiume.”

ALJ Ex. 31, at 3 (No. 15-6); ALJ Ex. 31, at 3 (No. 15-7). As support for this assertion, the Government attached to its motions various documents it obtained from the Florida Department of Heath showing that Victor Obi owned both Superior I and II. The Government thus maintained that consolidation was warranted “because the conduct of one Respondent may be imputed to other Respondents if it can be shown that the same individuals responsible for misconduct at one pharmacy also managed and/or controlled other pharmacies.” ALJ Ex. 31, at 5 (No. 15-6); ALJ Ex. 31, at 5 (No. 15-7).

Mr. Obi-Anadiume is also referred to as Mr. Obi throughout this decision.

Each Respondent filed identical oppositions to the Government's motions.

See

ALJ Ex. 30 (No. 15-6); ALJ Ex. 32 (No. 15-7). Therein, Respondents argued that “it is not . . . sufficient for two (2) actions to have a common defendant or one common issue of law” and that “other considerations are necessary such as whether maintaining separate actions would lead to inconsistent rulings on similar issues of fact and law and to ensure that the same standard is applied to the determination of such issues as they arise in each case.” ALJ Ex. 30, at 3-4 (No. 15-6); ALJ Ex. 32, at 3-4 (No. 15-7) (citation omitted). Respondents also argued that consolidation of the cases “may cause unnecessary confusion for the fact finder and prejudice to the parties.” ALJ Ex. 30, at 4 (No. 15-6); ALJ Ex. 32, at 4 (No. 15-7) (citation omitted).

Respondents then maintained that “because each prescription represents a different pattern of facts, it appears there is no overlapping factual issue between the two matters,” and “[a]s such, there is no risk of inconsistent results” which would support consolidation. ALJ Ex. 30, at 5 (No. 15-6); ALJ Ex. 32, at 5 (No. 15-7). Respondents further maintained that “there is a high risk that one defendant could be prejudiced by evidence relating to another defendant.” ALJ Ex. 30, at 5 (No. 15-6); ALJ Ex. 32, at 5 (No. 15-7). Respondents also asserted that consolidation would not promote judicial economy “[b]ecause of the large number . . . and limited overlap of” the witnesses and because “the time necessary to complete the hearing as to both parties could exceed ninety (90) days.” ALJ Ex. 30, at 6 (No. 15-6); ALJ Ex. 32, at 6 (No. 15-7).

On January 15, 2015, each Respondent filed a further pleading, which appear to be identical, on the issue of consolidation. ALJ Ex. 40 (No. 15-6); ALJ Ex. 40 (No. 15-7). In addition to the arguments they previously raised, Respondents contended that “[t]o the extent the government seeks to rely on a single expert to prove its case in all three matters, it heightens the risk of confusion or attempts to conflate issues between three distinct defendants.” ALJ Ex. 40, at 6 (No. 15-6); ALJ Ex. 40, at 6 (No. 15-7). They also argued that “although Respondent[s] share Mr. Obi as a common owner, [he] is not responsible for the day-to-day operations or the implementation of policies and procedures at these separate businesses” as each pharmacy had a “different pharmacy manager[ ].” ALJ Ex. 40, at 7 (No. 15-6); ALJ Ex. 40, at 7 (No. 15-7). Respondents further contended that “Mr. Obi did not dispense medication or otherwise process prescriptions at these pharmacies during all relevant time periods described in the Orders to Show Cause.” ALJ Ex. 40, at 7 (No. 15-6); ALJ Ex. 40, at 7 (No. 15-7).

On January 21, 2015, the ALJ granted the Government's motions with respect to Superior I and Superior II. ALJ Ex. 1 (No. 15-6 & 15-7). The ALJ specifically found that “the Government ha[d] demonstrated the presence of common questions of law and fact with respect to Superior I and Superior II, and ha[d] shown the need to take steps to avoid unnecessary cost or delay.”

Id.

at 7. More specifically, the ALJ found that the Show Cause Orders “set forth substantially similar factual claims” in that “pharmacists at both pharmacies dispensed controlled substances under conditions where the pharmacists knew or should have known that the controlled substances were being either diverted or abused by those who received the substances.”

Id.

The ALJ further found that “[i]n both cases, the [Government] alleged the pharmacists filled prescriptions notwithstanding red flags relating to the unusual distance the patients traveled to have their prescriptions filled, and notwithstanding red flags relating to evidence that the patients were filling multiple prescriptions which bore no address for the patients.”

Id.

The ALJ also rejected Respondents' contention that there was “a substantial risk of prejudice to Respondents in either case.”

Id.

at 8. The ALJ specifically found that “the prospect of hearing from the fact and expert witnesses in both cases will reduce the risk of inconsistencies like those that could arise through separate hearings.”

Id.

The ALJ also “expressly rejected” Respondent's contention that there was a heightened “risk of confusion” because the Government intended to use the same expert to prove its case, explaining that “[o]ne expert can easily address the conduct attributed to pharmacists working at these two pharmacies.”

Id.

Finally, the ALJ reasoned that “[g]iven there is at least some showing of common ownership, the Government should be, and will be, permitted to advance its theory that `the conduct of one Respondent may be imputed to [the] other Respondent[ ] if it can be shown that the same individuals responsible for misconduct at one pharmacy also managed and/or controlled other pharmacies.'”

Id.

(citation omitted). The ALJ thus ordered that the cases against Superior I and

Superior II be consolidated under Docket No. 15-6.

Id.

The Government's Motions

in Limine

On January 15, 2015, the Government also filed a Motion

in Limine

in each matter. Therein, the Government argued that Respondents had failed to comply with the ALJ's Pre-hearing Orders in that they failed to provide adequate summaries of the testimony of their proposed witnesses. With respect to Mr. Badawi, Respondents' proposed expert in pharmacy practice, the Government argued that Respondents' Prehearing Statements “state[d] no facts or conclusions which, if proven, would rebut any allegations that the Government has made in its OTSC[s] or Prehearing statement[s].” ALJ Ex. 36, at 4 (No. 15-6); ALJ Ex. 36, at 4-5 (No. 15-7). The Government specifically argued that while “Respondent[s] state[d] that Mr. Badawi ha[d] `prepared summaries' of prescription activity and identified `errors' in DEA inventory[,] [they] fail[ ] to disclose what those summaries entail or what errors have been discovered.” ALJ Ex. 36, at 4-5 (No. 15-6); ALJ Ex. 36, at 5 (No. 15-7). The Government further argued that Respondents had “also failed to identify a single `procedure used at [the pharmacies] to consider and resolve alleged `red flags,' inventory, ordering and CSO[S] compliance issues.” ALJ Ex. 36, at 5 (No. 15-6); ALJ Ex. 36, at 5 (No. 15-7). The Government also argued that “notably absent from [the] Prehearing Statement[s] is any notice that Mr. Badawi will opine that any of the prescriptions identified in the [Show Cause Orders] and the Government's Prehearing Statement[s] were issued in compliance with federal or state law.” ALJ Ex. 36, at 5 (No. 15-6); ALJ Ex. 36, at 5 (No. 15-7).

As for Respondents' disclosures pertaining to the testimony of Mr. Crowley, the Government argued that “no facts [were] proffered to give [it] any notice regarding [his] conclusions regarding audit errors, or the basis for those conclusions, should they exist.” ALJ Ex. 36, at 5 (No. 15-6); ALJ Ex. 36, at 5 (No. 15-7). The Government also argued that while Respondents proposed that this witness would testify regarding their procedures for resolving red flags and complying with other requirements, Respondent had not “offer[ed] a single fact or detail to describe, identify, or explain that procedure.” ALJ Ex. 36, at 5 (No. 15-6); ALJ Ex. 36, at 5 (No. 15-7). The Government further contended that it is unclear whether this witness's proposed testimony would discuss the procedures in place during the period of the alleged misconduct or as to procedures subsequently instituted. ALJ Ex. 36, at 6 (No. 15-6); ALJ Ex. 36, at 6 (No. 15-7). Finally, the Government argued that Respondents' disclosure was “void of any detail about the information [this witness] reviewed to form his opinions about the DEA audits or the procedures Respondents employed at their pharmacy.” ALJ Ex. 36, at 6 (No. 15-6); ALJ Ex. 36, at 6 (No. 15-7).

Addressing Respondents' proposed taking of the testimony of the numerous patients who filled controlled substance prescriptions at Respondents, the Government maintained that Respondents' disclosure “constitute[d] a wholesale failure to describe `each and every matter as to which [they] intend[ed] to introduce evidence in opposition,' ” as required by the ALJ's Pre-hearing Order. ALJ Ex. 36, at 6 (No. 15-6); ALJ Ex. 36, at 6 (No. 15-7). As for the physicians who wrote the prescriptions, the Government argued that the disclosures were inadequate because “Respondent[s] merely indicate[ ] that these unknown individuals will testify regarding `communication[s] with the dispensing pharmacists regarding such prescriptions,” and “no facts about any such communications are revealed.”

ALJ Ex. 36, at 6 (No. 15-6); ALJ Ex. 36, at 6 (No. 15-7).

Respondents did, however, disclose the names of the physicians as part of their Prehearing Statements. Respondents also stated that they intended to elicit testimony from the physicians “confirm[ing] [that] they performed adequate and appropriate physical examinations of the patients,” as well as testimony as to “the reasonableness and necessity of the prescriptions to control the pain or other complaints of their patients as required by the standard of care and Florida statutes.” ALJ Ex. 9, at 4 (No. 15-6); ALJ Ex. 12, at 4 (No. 15-7).

The Government also contended that testimony and documentation regarding prescriptions which it did not intend to offer into evidence was irrelevant. ALJ Ex. 36, at 8 (No. 15-6) ALJ Ex. 36, at 8 (No. 15-7). Finally, with respect to the physicians who issued prescriptions filled by Respondents after February 4, 2013 and the pharmacists who filled the prescriptions, the Government argued that Respondent had not even identified these persons and that their proposed testimony was “stated only in general terms [and] lack[ed] conclusions.” ALJ Ex. 36, at 7 (No. 15-6); ALJ Ex. 36, at 7 (No. 15-7).

In its motion, the Government also addressed Respondents' use of a thumb drive to provide its exhibits. ALJ Ex. 36, at 3 (No. 15-6); ALJ Ex. 39, at 3 (No. 15-7). According to the Government, the thumb drive contained “hundreds of different files, which contain, collectively, thousands of pages of documents,” of which only one file, which “consist[ed] of 1490 pages,” “appeared to be marked for identification.” ALJ Ex. 36, at 3-4 (No. 15-6); ALJ Ex. ALJ Ex. 36, at 3-4 (No. 15-7). The Government further stated that the other files were “neither marked for identification nor paginated.” ALJ Ex. 36, at 4 (No. 15-6); ALJ Ex. 36, at 4 (No. 15-7). The Government argued that Respondents' submission of their proposed documentary evidence did not “comply with the ALJ's order in terms of labeling and form.” ALJ Ex. 36, at 8 (No. 15-6); ALJ Ex. 36, at 8 (No. 15-7). The Government also argued that because “none of [Respondents'] summarized testimony reference[d] any particular documents or page, [it was] unable to ascertain whether any of the documents . . . would be relevant to [the] proceeding.” ALJ Ex. 36, at 9 (No. 15-6); ALJ Ex. 36, at 9 (No. 15-7).

On January 21, 2015, each Respondent filed a Response to the Government's Motion; as with Respondents' other filings, the Responses appear to be identical.

Compare

ALJ Ex. 53 (No. 15-6)

with

Response to Government's Motion

In Limine

(No. 15-7) (hereinafter, Superior II Response to Motion

in Limine

Therein, Respondents argued that the Government's Motions were “completely devoid of intellectual integrity” because the Government's Prehearing Statement “fail[ed] to specifically identify a single prescription or patient and only generally refers to areas of discussion of its witnesses,” including the proposed testimony of its expert witness. ALJ Ex. 53, at 2 (No. 15-6); Superior II Response to Motion

in Limine,

at 2. Respondents also argued that “[t]he Government's Prehearing Statement only identifies two patients by their initials and only one by the alleged city of residence.” ALJ Ex. 53, at 3 (No. 15-6); Superior II Response to Motion

in Limine,

at 3.

Respondents thus contended that the Government provided an “inadequate description of the testimony concerning specific patients and prescriptions,” and that they were “placed under extreme prejudice in [their] preparation for this expedited hearing.” ALJ Ex. 53, at 3 (No.

15-6); Superior II Response to Motion

in Limine,

at 3. Respondents also disputed the Government's contention that their argument should be rejected because during a December meeting with Government Counsel, they did not ask for additional information regarding the patients' names. ALJ Ex. 53, at 3 (No. 15-6); Superior II Response to Motion

in Limine,

at 3.

While this filing is part of the record, it was not assigned an ALJ Exhibit Number and is not included on the list of ALJ Exhibits in the Superior II matter.

While this was true with respect to Superior I, the Government's Prehearing Statement in Superior II identified each of the patients whose prescriptions were at issue by their initials, and with respect to 13 of the patients, either the Prehearing Statement or the Show Cause Order identified the patient's city of residence. ALJ Ex. 1, at 2-3 (No. 15-7); ALJ Ex. 6, at 4-6 (No. 15-7).

Respondents further took issue with the Government's contention (with respect to both pharmacies) that only a small number of the thousands of persons listed in their Prehearing Statements were actually identified as patients. ALJ Ex. 53, at 2 (No. 15-6); Superior II Response to Motion

in Limine,

at 2. According to each Respondent, it listed all of the “patients whose prescriptions were dispensed and doctors who generated the prescriptions [that were] filled at the pharmacy during the relevant time period,” because at the time it filed its Prehearing Statement, the Government was “the only party . . . to know which patients, doctors, and pharmacists are material and relevant to the allegations they chose to include in the” Show Cause Order. ALJ Ex. 53, at 3 (No. 15-6); Superior II Response to Motion

in Limine,

at 3. Respondents thus contend that “the potential exclusion of material and relevant witnesses as requested by the Government . . . would be arbitrary, capricious, and an abuse of discretion.” ALJ Ex. 53, at 3-4 (No. 15-6); Superior II Response to Motion

in Limine,

at 3-4.

As for the Government's contention that Respondents had failed to disclose the proposed testimony of the patients, doctors and pharmacists with adequate specificity, Respondents argued that “without the identification of the prescriptions and/or patients at issue (as defined by the OSC), a specific summary of each and every potentially relevant witness is impossible within the timeframe provided.” ALJ Ex. 53, at 6 (No. 15-6); Superior II Response to Motion

in Limine,

at 6. Continuing, Respondents argued that “[t]he witnesses will confirm their interaction with the pharmacists in resolving `red flags' and verify the prescriptions were issued for a legitimate medical purpose in the usual course of professional practice.” ALJ Ex. 53, at 6 (No. 15-6); Superior II Response to Motion

in Limine,

at 6. Notably, Respondents did not maintain that the pharmacists would testify that they resolved red flags.

As for the Government's attempt to bar the testimony of Mssrs. Badawi and Crowley, Respondents argued that they “ha[d] summarized [their] testimony to the same extent that the Government summarized its proposed testimony.” ALJ Ex. 53, at 5 (No. 15-6); Superior II Response to Motion

in Limine,

at 5. Respondents appeared to argue that they could not offer more detail as to the testimony of these witnesses because they were “without notice of what specific facts and opinions [would] be offered in the Government's prima facie case as the Government chose to not disclose specifics.” ALJ Ex. 53, at 6 (No. 15-6); Superior II Response to Motion

in Limine,

at 6.

As for the Government's attempt to bar their proposed documentary evidence, Respondents argued that they were “prejudiced by the Government's inadequate Prehearing Statement which forced Respondent[s] to incorporate and include all potential documents and witnesses from the relevant time period.” ALJ Ex. 53, at 4 (No. 15-6); Superior II Response to Motion

in Limine,

at 4. Respondents further maintained that “[t]his prejudice would have only been exasperated [sic] by the costs associated with production of multiple sets of paper copies of the voluminous records.” ALJ Ex. 53, at 4 (No. 15-6); Superior II Response to Motion

in Limine,

at 4. Respondents asserted that the electronic files were organized in four separate folders, and the folder which included the documents seized pursuant to the Administrative Inspection Warrant, was simply “a mirror copy, in the exact form, of the digital files

dumped

on Respondent by the DEA at the time of service of the Order to Show Cause.” ALJ Ex. 53, at 4 (No. 15-6); Superior II Response to Motion

in Limine,

at 4. Respondents stated that they had no way of knowing whether folder three “represent[ed] all documents seized and/or reviewed by the Government”; they further argued that “the Government made no attempt to label and/or organize the material provided.” ALJ Ex. 53, at 4 (No. 15-6); Superior II Response to Motion

in Limine,

at 4.

Concluding, Respondents argued that the Government had nearly two years to review the documents and that between February 4, 2013 (the date the AIWs were served) and the dates of service of the Show Cause Orders), “Respondent[s] had no access to these records.” ALJ Ex. 53, at 5 (No. 15-6); Superior II Response to Motion

in Limine,

at 5. Respondents thus argued that to exclude their “proposed testimony and exhibits, based exclusively on circumstances created by the Government, would be an extreme abuse of discretion.” ALJ Ex. 53, at 6 (No. 15-6); Superior II Response to Motion

in Limine,

at 6.

On January 27, 2015, the ALJ conducted the initial day of the hearing during which he addressed the Government's Motions

in Limine.

With respect to the proposed testimony of the more than 5,000 patients who filled their prescriptions at Respondents, the ALJ granted the Government's Motions for two reasons. First, he found that Respondents had failed to comply with his Prehearing Order because they had “not described with sufficient detail the testimony of the proposed witnesses.” ALJ Ex. 7, at 3 (No. 15-6/15-7) (Journal Entry and Order From Initial Day of Hearing). Second, he found that the proposed testimony of the patients “would not constitute relevant evidence, given the nature of the charges appearing in the Orders to Show Cause, as elaborated upon by the Government's Prehearing Statements.

Id.

While the ALJ termed this day as the initial day of the hearing, he did not take any evidence. Tr. 1-36.

As for the proposed testimony of the physicians, the ALJ found that Respondents' Pre-hearing Statement did “not sufficiently identify the anticipated testimony of the witnesses, nor . . . make a sufficient showing that their testimony would constitute relevant evidence.”

Id.

The ALJ further held that this ruling applied to both those physicians who filled the prescriptions before February 4, 2013, as well as after that date.

Id.

at 3-4. As to the latter category of physicians, the ALJ barred their testimony based on the additional reason that Respondents had not “timely identif[ied] by name the proposed witnesses,” as again required by his Prehearing Order.

Id.

at 4. And the ALJ further barred Respondents from offering the testimony of “any pharmacists referred to but not identified in [their] prehearing statements.”

Id.

The ALJ also granted the Government's motion to exclude the testimony of Mssrs. Badawi and Crowley. As for Mr. Badawi, the ALJ found that Respondent had not complied with his Prehearing Order because “[u]nlike the articulation of specific red flags provided by the Government in its description of testimony for its expert, the Respondents' Prehearing Statements do not reveal the substance of this testimony, but instead presented only a list of areas to be discussed.”

Id.

at 5. As for Respondents' representation that Mr. Badawi would also testify about errors he identified “in the inventory performed by the DEA,” the ALJ found that Respondents failed to “articulat[e]

the nature of these errors” and there was “[in]sufficient information regarding the timeframe used by Mr. Badawi to permit a determination that the testimony would be relevant.”

Id.

As for Mr. Crowley's proposed testimony regarding errors in the DEA audit, the ALJ found that Respondents “fail[ed] to articulate what those errors were.”

Id.

And as for his proposed testimony “regarding procedures used by the pharmacies for resolving red flags and for complying with DEA recordkeeping requirements,” the ALJ explained that he could not “discern from the summary of [his] testimony whether [it] concerns the practices of the pharmacies at the time of the execution of the administrative warrants, at times before then, or at the present time.”

Id.

at 5-6. Finding that Respondents had “failed to comply with the prehearing order[s]” and had also “failed to establish that [his] proposed testimony would be relevant,” the ALJ barred Mr. Crowley's testimony.

Id.

at 6.

The ALJ also addressed the Government's contention that Respondents' documentary evidence should be excluded. In his Order, the ALJ explained that in his Prehearing Orders he had directed the parties to exchange their exhibits on or before January 12, 2015, and that the “failure to timely do so would result in the exclusion of the documents.”

Id.

at 4. According to the ALJ, “[o]n both January 9 and . . . 12, a representative of Mr. Sisco's office contacted a member of my staff, inquiring whether Respondents [could] submit documents by using electronic files; . . . on both occasions my staff member advised that only hard copies and facsimiles would be accepted.”

Id.

The ALJ explained that on January 12, he directed his staff to return the flash drives which Respondents' counsel had sent to his office, and that as of the date of the hearing, Respondents still had not filed their proposed exhibits with his office.

Id.

at 4-5. The ALJ then explained that he had “considered the Government's report of the contents of what presumably was on” the flash drives, as well as Respondents' explanation as set forth in their Responses to the Government's Motions, and found that good cause existed to grant the motions and bar Respondents from introducing their proposed exhibits.

Id.

at 5. The ALJ, however, provided Respondents' counsel with the opportunity to submit its proposed exhibits as a proffer, provided it did so no later than February 10, 2015, and provided his Office with an original and two copies, as well as a copy to the Government.

Id.

Subsequently, on February 3, 2015, the Government filed a “Notice of Objections to Respondent's Exhibits.” ALJ Ex. 15 (Nos. 15-6 and 15-17). Therein, the Government noted that it had received eight binders of evidence totaling nearly 4,300 pages, of which five binders appeared to be related to Superior I and three binders Superior II.

Id.

at 2. While the Government contended that it was unclear whether the Respondents were offering the exhibits as a proffer or as evidence to be admitted in the proceeding, it then explained that even if the exhibits were offered as a proffer, they should not be included in the record because Respondent had not made an offer of proof as required by 21 CFR 1316.60.

Id.

The Government further noted that none of the documents were “self-authenticating” and many of them, which included patient medical records, “appear to come from sources other than the Respondents.”

Id.

at 3.

At the first day of the evidentiary phase of the hearing, the ALJ addressed the Government's objection. Tr. 54. After re-affirming his earlier ruling which barred Respondents from introducing any documentary evidence, the ALJ then turned to the Government's contention that Respondents had not complied with 21 CFR 1316.60. On the issue of whether Respondents had made an adequate offer of proof, the ALJ asked one of Respondents' counsel if he was “correct in understanding that the Respondent[s'] Pre-hearing Statements and the premises that [he] articulated during the initial day of hearing in support of receiving these exhibits should, taken together, be regarded as containing the statement of the substance of the evidence which you would have accompany the excluded documents?” Tr. 58. Respondents' counsel answered “[y]es.”

Id.

While the ALJ had also noted that “an offer of proof shall be part of the record only if a proper foundation has been laid for its admission,”

id.

at 57, the ALJ did not ask Respondents' counsel to lay a foundation for any of the exhibits.

Id.

at 57-69. After noting that he received only a single copy of the proffered exhibits (vice the three copies required by his Prehearing Order), the ALJ ordered Respondents to provide two additional copies of the proffered exhibits prior to 5 p.m. that day; he further advised that if the copies were not filed, he would return the proffered exhibits to Respondents.

Id.

at 69. Subsequently, Respondents filed the additional copies of the exhibits, and the exhibits were forwarded as a proffer.

The ALJ's Ruling on Respondents' Subpoena Requests

During the January 27 hearing, the ALJ also addressed each Respondent's request for subpoenas. Tr. 17-23. As explained above, each Respondent submitted requests for an extensive number of subpoenas but failed to include with its requests a certificate of service establishing that they had provided copies to the Government.

Asked by the ALJ to address its requests, Respondents' counsel asserted that “the request for subpoenas was copied to [Government counsel] timely as to each of the subpoenas.”

Id.

at 18. However, when asked by the ALJ if it was correct that he did not include a certificate of service, Respondents' counsel answered: “If the Court says that that wasn't included then I'll accept that. However, I will represent that everything that I provided to the Court has been provided to” Government counsel.

Id.

at 20. The ALJ then asked the Government's counsel if he had been provided with copies of the subpoena requests.

Id.

at 21. Government counsel answered that he had received a thumb drive which “contains so many thousands of pages of documents” that he “did not look for specific subpoenas.”

Id.

Subsequently, Respondents' counsel confirmed that he had sent the subpoena requests to the Government electronically.

Id.

at 22.

The ALJ then explained that in his Prehearing Orders, he had advised the parties that subpoena requests that did not comply with his instructions would be returned without further action; he also explained that Respondents had neither objected to nor sought clarification of the Prehearing Orders.

Id.

at 23. Finding that Respondents had not complied with his Prehearing Orders, the ALJ announced that he would be returning Respondents' subpoena requests without further action.

Id.

The ALJ did not address whether Respondents had made an adequate showing as to relevancy with respect to either the patients or the physicians.

Id.

at 17-23.

Respondents' Motions for a Daubert Hearing and To Exclude the Testimony of the Government's Expert

On January 15, 2015, Respondents also filed motions to exclude the testimony of the Government's pharmacy expert Robert Parrado. ALJ Ex. 41 (No. 15-6); ALJ Ex. 41 (No. 15-7). The basis of Respondents' motions was that “Mr. Parrado's proposed opinions are based on nothing more than a cursory review of the written prescriptions to the exclusion of all

other information,” and that he “did not apply any reliable methodology as mandated” by

Daubert

Merrell Dow Pharmaceuticals, Inc.,

509 U.S. 579 (1993), and its progeny. ALJ Ex. 41, at 2 (No. 15-6); ALJ Ex. 41, at 2 (No. 15-7). Respondents also argued that Mr. Parrado was “not qualified to render any opinions regarding whether the physician issuing the prescriptions did so for a legitimate medical purpose in the usual course of professional practice.” ALJ Ex. 41, at 2 (No. 15-6); ALJ Ex. 41, at 2 (No. 15-7) (both citing Fla. Stat. 766.102(5) (“person may not give expert testimony concerning the prevailing professional standard of care unless the person is a health care provider who holds an active and valid license and conducts a complete review of the pertinent medical records”).

Respondents argued that the ALJ was required to perform a “gatekeeping” function in determining whether Mr. Parrado's testimony was admissible. ALJ Ex. 41, at 2 (No. 15-6); ALJ Ex. 41, at 2 (No. 15-7). They further argued that under

Daubert,

the Government was required to show that: (1) Mr. Parrado was qualified to testify as an expert; (2) that he used a sufficiently reliable methodology in reaching his conclusions; and (3) that his testimony would assist the trier of fact. ALJ Ex. 41, at 2 (No. 15-6); ALJ Ex. 41, at 2 (No. 15-7). Respondents then suggested that under

Daubert,

the ALJ was required to consider “whether the theory or technique” used by Mr. Parrado “has been subject to peer review and publication.” ALJ Ex. 41, at 4 (No. 15-6); ALJ Ex. 41, at 4 (No. 15-7). According to Respondents, Mr. Parrado's testimony should be excluded as unreliable because “he failed to conduct a thorough investigation and failed to base his proposed opinion on any reliable methodology.” ALJ Ex. 41, at 5(No. 15-6); ALJ Ex. 41, at 5 (No. 15-7).

The Government opposed the motions. Quoting agency precedent, the Government argued that where, as here, non-scientific expert testimony is at issue, the expert's “ `knowledge and experience' ” may provide a sufficient foundation for concluding that his testimony is reliable. ALJ Ex. 50, at 3 (quoting

Holiday CVS, L.L.C., d/b/a CVS Pharmacy No. 219 and 5195,

77 FR 63316, 62334 (2012) (quoting

Surles ex rel. Johnson

Greyhound Lines, Inc.,

474 F.3d 288, 295 (6th Cir. 2007))). The Government noted that Mr. Parrado has been a licensed pharmacist for more than 40 years and had been “the recipient of numerous professional appointments.”

Id.

The Government further argued that at the hearing, Respondents would “have ample opportunity to question [him] regarding his knowledge and experience, but . . . to exclude him on that basis, prior to trial, is both misguided and premature.” ALJ Ex. 50, at 4. The Government also argued that Respondents provided no support for their contention that Mr. Parrado's testimony should be excluded because “he did not interview [the] patients or other persons.” ALJ Ex. 50, at 4.

The ALJ denied Respondents' motions. The ALJ reasoned that in each Show Cause Order and its Prehearing Statements, “the Government identifie[d] red flags or other conditions which, according to the Government, triggered a corresponding obligation on the part of pharmacies who were presented with a number of prescriptions. The thrust of this evidence is [not] dependent upon scientific or technical analysis, but upon documentary or testimonial evidence establishing or rebutting the claimed corresponding obligation.” ALJ Ex. 7, at 7 (Nos. 15-6 and 15-7).

The ALJ then held that “[t]he Government ha[d] made a sufficient showing to permit Mr. Parrado to appear and give testimony.”

Id.

Continuing, the ALJ explained that at the hearing, he would allow Respondents to question Mr. Parrado as to his qualifications and the methodology he used, but that he was not making a “preclusive ruling prior to the time [he] testified.”

Id.

The ALJ thus denied Respondents' motions to either conduct a separate hearing on the admissibility of Mr. Parrado's testimony or to exclude his testimony prior to the hearing.

Id.

Respondents' Motions for a Continuance

On January 15, 2015, each Respondent also moved for a continuance. ALJ Ex. 42 (No. 15-6); ALJ Ex. 42 (No. 15-7). Respondents sought a continuance of the proceeding “to commence no sooner than June 2015.”

See, e.g.,

ALJ Ex. 42, at 5 (No. 15-6). Respondents asserted that they needed the continuance “to interview and subpoena witnesses,” and that they “ha[d] timely requested the issuance of numerous subpoenas and . . . ha[d] exercised due diligence in this regard.”

Id.

at 3. Respondents further asserted that “[d]ue to the short time period between the issuance of the order[s] to show cause and the commencement of the hearing, and the numerous potential witnesses, [they] will undoubtedly be prejudiced by a [sic] the lack of time to adequately interview and obtain service on the necessary witnesses.”

Id.

Respondents argued that “the Government has had years to prepare its case whereas [they have] only been afforded a few months.”

Id.

at 4. Continuing, Respondents contended that the Government “has had more than 20 months to process and analyze the seized information,” and that “[d]uring this time, the information was not available to Respondent.”

Id.

at 5. While Respondents then acknowledged that “a portion of the seized information, most notably the prescriptions, was provided to [them] in electronic format,” they then contended that “the sheer volume of information coupled with the unreasonably short deadlines surrounding the holiday season makes analysis of the information . . . impossible.”

Id.

On January 27, 2015 (during the initial day of the hearing), the ALJ denied Respondents' motions.

In so ruling, the ALJ relied on his previous ruling that Respondents had “failed to timely submit their request for subpoenas.” Tr. 30. The ALJ then explained that he could not “reconcile” Respondents' assertion that they needed more time to prepare with the representations made in each of their Prehearing Statements that their two proposed experts had “reviewed the prescriptions at issue, the relevant inventory and ordering history and prepared summaries of the pharmacies' dispensing activities during 2011 and 2012.” Tr. 31;

See also supra

note 12 (collecting cases).

Next, the Government asked Mr. Parrado about the prescriptions reproduced at pages 14 and 15. Of note, the latter prescription was issued to a patient (C.M.), who provided an address in Uvalda, Georgia and who has the same last name as that of the patients discussed in the preceding paragraph.

See

GX 3, at 15. Mr. Parrado again opined that he believed these persons travelled together to obtain the prescriptions. Tr. 198. Asked by the Government—over the overruled objection of Respondent—whether the red flags presented by these were resolvable, Mr. Parrado explained:

These are the kinds of prescriptions that would cause me not to be able to resolve that—this many red flags together. The long distance, the same name, the like, similar drugs, thousands of dollars involved here, in cash, would cause me . . . concern.

It's not, in my practice, it's not been—the average customer doesn't come into the pharmacy with $1,000 in their pocket. You know, it's average you tell the person they have a $20 copay they get upset.

For these process [sic] to be charged, you know, it's just—that's a red flag that I would have a hard time resolving.

Here too, Respondent objected that Mr. Parrado “ha[d] no idea what people who come into a pharmacy have in their pocket or they don't.” Tr. 199-200. Respondent thus contended that Mr. Parrado's testimony was speculation and was outside the scope of the Prehearing Statement.

Id.

at 200. The ALJ stated that he noted the objection and that he did not need Respondent to tell him “what should be or should not be allowed in this hearing.”

Id.

The ALJ then explained that he had made his ruling and instructed the Government to ask its next question.

Id.

I agree with Respondent that this testimony was speculative because the patients could well have paid for their prescriptions with credit cards. However, the prescriptions list their respective prices as $833 (RX 452157), $952 (RX452156), and $833 (RX452155). GX3, at 13-15. Regardless of the method of payment used to purchase them, Mr. Parrado testified that the cost of the prescriptions was also a red flag.

Id.

at 199. Asked the same question with respect to the prescriptions reproduced at pages 13 and 14, Mr. Parrado testified: “It would be the same answer. It's the same situation.”

Id.

at 200.

This prompted the same objection by Respondent and the same ruling. Tr. 200.

The Government then asked Mr. Parrado whether, with respect to the 16 oxycodone 30 prescriptions (GX 3, at 1-16), which were issued and filled on August 5, 2011, there was any evidence, other than the placement of the address stickers, that the red flags they presented “were resolved?” Tr. 200. Mr. Parrado testified: “[t]here is no documentation to that effect on any of these prescriptions.”

Id.

Following up, the Government asked Mr. Parrado if he had seen any evidence “that any of the red flags [other than the missing addresses] were even investigated?”

Id.

at 201. Mr. Parrado replied:

In some of the partial medical records I looked at, there wasn't any evidence of any conversations between the clinics and the

pharmacist.

Also, this is one of the things I got out of the partial medical records, that there wasn't any evidence that they had even talked with the pharmacy. And there was nothing here being documented either.

On cross-examination, Mr. Parrado testified that he had been given the partial medical records after the New Year's holiday. Tr. 357-58.

Id.

Mr. Parrado then opined that it “would be outside the standard of care for a pharmacist to fill these without having resolved the red flags before dispensing.”

Id.

Asked to opine on whether, based on the prescriptions and records he reviewed, the pharmacists “exercise[d] their corresponding responsibility to ensure that a prescription for a controlled substance was issued for [a] legitimate medical purpose,” Mr. Parrado answered: “[n]ot that I can tell from the records shown to me.”

Id.

at 201-02.

The Government then questioned Mr. Parrado about the remaining prescriptions in its Exhibit 3. These included a prescription for 240 oxycodone 30 issued on December 10, 2011 to J.M.; as with the other prescriptions, the prescriber had not written the patient's address on the prescription but the prescription contained a small sticker listing J.M.'s address as Lenoir, Tennessee. GX 3, at 22 (No. 15-6). Asked if the prescription raised any red flags, Mr. Parrado noted J.M.'s address and explained that his “first concern” was the “person coming from Tennessee.” Tr. 202. Mr. Parrado identified additional red flags presented by the prescriptions, including the physician's failure to include the patient address on the prescription, that the quantity of 240 pills was a “very high dose” for oxycodone 30, that the prescription came “from the same clinic,” and that it cost $1,155.

Id.

Mr. Parrado then explained that “[t]hose are all red flags that I could not have resolved.”

Id.

However, when asked by the Government if he could tell who filled the prescription, Mr. Parrado testified that the prescription bore the initials “CD,” thus indicating “the pharmacist responsible” for the script; he then added that “there's a scribble on the front from somebody that canceled the prescription.”

Id.

at 203. Moreover, the prescription has two diagonal lines drawn through it, along with a circle with the letter “C” in bold, and while there is a copy of the dispensing label attached to the back,

see

GX 3, at 22, the Government offered no further evidence to clarify whether the prescription was actually dispensed.

Next, the Government asked Mr. Parrado whether the prescriptions (reproduced at GX 3, at 17-18), which are dated August 6, 2011 and bear sequential prescription numbers presented any red flags. Both of these prescriptions were issued by Dr. S.A.H., a physician at the same 24th Century Medical Center in Tampa, to two persons (E.P. and R.B.) for 150 and 140 tablets respectively of oxycodone 30. GX 3, at 17-18. Here too, the front of each prescription lacked the patient's address.

See id.

However, each prescription bore a sticker listing the patient's address, and the stickers indicated that E.P. and R.B. lived at the same street address in Milton, Florida.

See id.

Asked by the Government whether the prescriptions presented any red flags, Mr. Parrado identified the patients' addresses and added that “Milton, Florida is way in the [w]estern panhandle of Florida. It's well over 400 miles” to the pharmacy. Tr. 204.

Mr. Parrado noted that “both of them seem to have the same address.”

Id.

However, he then testified that the driver's license that was in R.B.'s “partial medical records” listed his address as being in a different city (Pace, Florida) than Milton.

Id.

at 205. Mr. Parrado explained that the disparity between the address on the prescription and the address on the driver's license “caused me concern that they weren't looking very closely.”

Id.

at 205-06.

Respondent's counsel objected that the testimony was outside the scope of the Government's Prehearing Statement and was rank speculation. Tr. 204-5. The ALJ overruled the objection.

Id.

at 205. Here again, the Show Cause Order specifically alleged that “[o]n August 6, 2011, one or more Superior I pharmacists dispensed large and substantially similar quantities of thirty milligram tablets of oxycodone to two customers, E.P. and R.B., both of whom resided at the same address in Milton, Florida, which is located approximately four hundred and forty nine miles (449) from Superior I's location.” ALJ Ex. 1, at 2 (No. 15-6). While this alone provided adequate notice, the Government's Prehearing Statement further advised that “Mr. Parrado will further testify that, on August 6, 2011, Respondent dispensed large quantities of thirty milligram oxycodone to two individuals, E.P. and R.B., who resided at the same address in a city located more than 440 miles . . . from Respondent's pharmacy.” ALJ EX. 7, at 4 (No. 15-6). The ALJ thus properly overruled the objection.

After noting that E.P.'s prescription cost $562 and R.B.'s prescription cost $525, Mr. Parrado testified that “two people from one address paying over $1,000 would be a red flag from somebody coming . . . from 400 miles away.”

Id.

at 206. He further noted that both prescriptions were written by the same physician and were for the same drug and in essentially the same quantities.

Id.

Mr. Parrado then testified that he had seen “no documentation anywhere” that Superior I's pharmacist resolved the red flags, including in the “partial medical records,” which contained “no evidence that there was any conversation between the pharmacy and the physician['s] office.”

Id.

at 206-07.

Next, the Government asked Mr. Parrado about a prescription issued by Dr. V.S. (also of the 24th Century Medical Center) and dispensed on December 2, 2011 to B.W., for 200 tablets of Dilaudid (hydromorphone) 8 mg.

See

GX 3, at 21; Tr. 207. Here again, the prescription lacked the handwritten patient's address but contained a sticker which listed B.W.'s address as being in Fort Ogden, Florida. GX 3, at 21.

Asked if the prescription presented any red flags, Mr. Parrado testified that there were multiple red flags, including that “it's a very, very potent drug” and that the quantity was for 200 pills. Tr. 208. Continuing, Mr. Parrado testified that:

I have never seen a prescription in my 41 years as a pharmacist for a quantity like that of . . . Dilaudid 8 milligrams as being dosed at every . . . three to four hours.

Which would be six to eight times a day. So 48 to 72 milligrams . . . would be the daily dose for a drug that the recommended upper dose be probably 24 milligrams.

So it's a much higher dose then [sic] what I have ever seen as a pharmacist. And that would have caused me serious concern that I had to resolve before I could do anything, period.

The fact that they came a long way, again, from Fort Ogden, from that same clinic that I'm seeing all these prescriptions from, would cause me not to be able to resolve that red flag.

Id.

at 208-09.

Mr. Parrado was then asked whether a prescription (GX 3, at 19) for 196 Dilaudid 8 mg issued by Dr. P.C. and dispensed on December 1, 2011 to R.L. (Largo, Fl.) also presented red flags. Tr. 209. Mr. Parrado testified that the quantity and dosing raised the “exact same concern” as the dosing was “well outside the recommended upper dosage of that drug.”

Id.

Continuing, he explained: “And I don't see anything where that was resolved to establish that the patient had developed a tolerance to that drug to avoid the respiratory depression that would have been inherent at that dose.”

Id.

Asked whether R.L.'s address in Largo was also a red flag (here too, the patient's address had not been written on the prescription but had been added by a sticker), Mr. Parrado testified that the distance was 20 to 25 miles.

Id.

at 209-10. While he acknowledged that this was not “a very long distance,” he

explained that “the fact that there's so many coming from outside the area just starts compounding the fact that this is almost . . . like a destination clinic or destination pharmacy where people know to go there.”

Id.

at 210. Mr. Parrado then testified that he found no evidence that Superior I's pharmacist attempted to resolve the red flags.

As for the prescription (GX 3, at 20), which was issued by Dr. R. (also of 24th Century) to C.L. for 224 Dilaudid 8 mg on December 1, 2011 and filled the same day, Mr. Parrado again found the quantity to be a red flag, testifying that this would be “a lethal dose to an opioid naïve patient.” Tr. 211. He then explained that “there's nothing here to show that the patient has developed a tolerance to this drug.”

Id.

As for the prescription (GX 3, at 23), which was issued by Dr. V.S. (of the same clinic) to M.A. for 224 Dilaudid 8 mg on December 2, 2011 and filled the same day, Mr. Parrado testified that the “very high dose” was a red flag and that there was no evidence that the patient had developed tolerance to the drug. Tr. 212.

In response to the Government's question whether the fact that these two prescriptions were presented the same day raised “[a]ny additional red flags,” Mr. Parrado testified that “[t]hat's another pattern prescribing red flag. To me.” Tr. 211-12. I conclude, however, that two prescriptions do not establish pattern prescribing.

Concluding its direct examination of Mr. Parrado regarding the Superior I prescriptions, the Government asked if he had an opinion as to whether the pharmacists who dispensed the prescriptions knew or had reason to know that they were issued without a valid doctor-patient relationship. Tr. 220-21. After the ALJ overruled Respondent's objection,

Mr. Parrado explained:

Respondent objected on the ground that “[t]here's no opinion summarized anywhere in the Government's [P]re-hearing [S]tatement . . . that relates to whether or not . . . the pharmacist knew or should have known that those prescriptions were issued. And it's outside his area of expertise. It's nothing but rank speculation.” Tr. 221.

Even assuming that the first ground for objection was that the Government did not provide notice that it intended to ask whether the pharmacists knew or should have known that the prescriptions were issued without a valid doctor-patient relationship, in its Prehearing Statement, the Government advised that Mr. Parrado “will testify that, based on his expertise, training, and experience, and based on his review of the evidence summarized above, Respondent's pharmacists failed to exercise their corresponding responsibility to ensure that prescriptions for controlled substances were issued for a legitimate medical purpose in the usual course of professional practice.” ALJ Ex. 7, at 5. Asking whether the prescriptions “were issued without a valid-doctor patient relationship” is just another way of asking whether the prescriptions “were issued for a legitimate medical purpose in the usual course of professional practice,” as a physician must establish and maintain a valid doctor-patient relationship to act in the usual course of practice and to issue a prescription for a legitimate medical purpose.

Nor was it beyond Mr. Parrado's expertise to opine on whether the prescriptions were issued outside of a valid doctor-patient relationship.

See United States

Hayes,

595 F.2d 258, 261 & n.6 (5th Cir. 1979) (“[A] pharmacist can know that prescriptions are issued for no legitimate medical purpose without his needing to know anything about medical science.”). Indeed, pharmacists are expected to review the patient record and each prescription for therapeutic appropriateness and identify,

inter alia,

over-utilization, incorrect drug dosage, and clinical abuse/misuse. Fla. Admin Code r.64B16-27.810(1). A pharmacist is obviously required to be able to determine when a prescription calls for the dispensing of such potent narcotics as oxycodone or Dilaudid in quantities that far exceed recommended upper dosages and would be lethal in an opioid naïve patient, let alone when a patient presents such other red flags of abuse or diversion, such as travelling long distances to obtain narcotics.

There's no documentation that I saw that there was any conversation with a physician determining that. Because at these doses there would had to have been conversation determining tolerance. There would have been conversation determining medical need at this dosing.

So at that point I would have had a question in my mind, as a pharmacist filling or being presented with this prescription, that there may have been . . . not a very good valid patient-doctor relationship going on at that point in time.

Id.

at 221-22.

On cross-examination, Mr. Parrado acknowledged that he could not offer an opinion as to whether any of the patients, whose prescriptions were provided in GX 3, were opioid naïve. Tr. 235-36. Asked whether it was true that he had no knowledge as to the procedures used at Superior I to revolve red flags, Mr. Parrado answered that “[n]othing that was documented on the prescriptions showed that anything had been done.”

Id.

at 237. After acknowledging that “there's nothing that mandates where [documentation] has to be,” he also acknowledged that if the resolution of the red flags was documented someplace other than on the prescription itself, the documentation wasn't provided to him, and thus he does not know whether it exists or not.

Id.

at 237-38.

While Mr. Parrado testified that he knew one of the pharmacists who worked at Superior I, he stated that he had not spoken with her about any of the prescriptions.

Id.

at 246. Nor has he discussed with any of Superior I's pharmacists the policies or procedures the pharmacy had in place from January 1, 2011 through February 4, 2013, or currently has in place, for identifying diversion and for documenting the resolution of red flags.

Id.

at 246-47.

Mr. Parrado further testified that he asked DEA “for complete profiles on all these patients” but was told to look at only the prescriptions.

Id.

at 247. He then testified that he believed the Agency had the profiles because he had seen some of them in the DEA's office.

Id.

Mr. Parrado testified that he had not consulted with any other pharmacists in forming his opinions.

Id.

at 248. He also testified that he did not speak with any of the prescribers of the 25 prescriptions or with the patients who received them.

Id.

at 249. He then testified that he did not know what training or experience the prescribers had.

Id.

at 250.

Asked by Respondent whether, based on the materials provided to him by DEA, he knew if Superior I's pharmacists had called the prescribers “to discuss any issues related to the patients or the prescriptions,” Mr. Parrado answered that “did not see anything to that effect.”

Id.

at 251. He then testified that if “[i]t wasn't documented[,] [i]n my mind, they didn't do it.”

Id.

However, Mr. Parrado acknowledged that he did not know if this was documented other than on the prescriptions.

Id.

at 252.

Mr. Parrado did not know whether Superior I kept a paper file which included medical records on their patients.

Id.

at 254. He also did not know if Superior I's pharmacists obtained copies of MRIs, X-Rays and CT scans.

Id.

He then testified that:

In the partial patient records that I did receive, there was evidence of some MRIs. What struck me was that these MRIs were old and not ordered by the physician who was writing these prescriptions, which would have been a red flag to me. Some of these MRIs were two/three years old. They were ordered by someone else.

There were some . . . MRIs, reports didn't even have a referring prescription on it. That would have concerned me as a pharmacist filling that prescription.

Id.

at 254-55.

Respondent then asked Mr. Parrado if, based on the information provided to him, he was “aware that the pharmacists were obtaining copies of radiographic studies [and] reports of radiographic studies?”

Id.

at 255. Mr. Parrado answered:

No, I didn't say I saw it in the pharmacy records. I saw it in the medical records. If the pharmacist would have had access to that, that would have presented another red flag in the fact that that was an old record ordered by someone else. That would have raised the bar there if you will.

Id.

Mr. Parrado then explained that he did not know the source of the medical records.

Id.

Subsequently, the lead Investigator testified that the medical records had been obtained

pursuant to a subpoena issue to the 24th Century Clinic and had been provided to Mr. Parrado by Government Counsel. Tr. 578, 589-90.

Mr. Parrado acknowledged patients become dependent and develop tolerance to opioid analgesics and that there is no upper limit as to the quantity or dose that can be prescribed.

Id.

at 260. He also acknowledged that he did not know if any of the patients who received the prescriptions in GX 3 worked in Tampa.

Id.

He also conceded that the patients “were seeing the physicians regularly over a good period of time.”

Id.

Continuing, Mr. Parrado acknowledged that there is an expressway which runs from Spring Hill to Tampa, and that people may commute from the former to the latter for work.

Id.

at 261. Mr. Parrado testified that this red flag would have been resolvable if the question had been asked and answered.

Id.

at 262.

Next, Mr. Parrado testified that a pharmacist can add an address to a prescription if “you've checked with the physician and gotten the correct thing and that matches what the patient is telling you.”

Id.

at 263. He then acknowledged that he did not attempt to determine if any of the prescriptions in GX 3 were necessary for the treatment of chronic or recurring disease.

Id.

at 264.

On re-direct, Mr. Parrado was asked whether the one patient profile he was provided with was for P.D. (GX 3, at 24) and whether the profile showed that there was a gap in care. Tr. 268. Asked to describe what was on the document, Mr. Parrado testified that:

[t]there was a list of dates for Mr. P.D. that showed the dates he had prescriptions filled for this drug and there was a gap of two months in there which, as a pharmacist, anybody that stops taking opioids or if I don't know he's continued taking opioids, at that point I can't fill a further prescription till I've established that.

He could have been in jail. He could have been in a rehab unit. It is well-documented that patients that have gone into these things, gone back in the community and accessed a prescription at the old dosage they were on would kill them and it has killed them.

Id.

at 269-70.

Asked by the Government whether when he reviewed this document, he saw any indication that red flags had been resolved or explained, Mr. Parrado answered “no.”

Id.

at 271.

At this point, Respondent objected, arguing that if Mr. Parrado was going to talk about this document, the Government should be required to “produce the document so that we can see what it is that he's talking about. You know, he's talking about some amorphous document.” Tr. 270. He also argued that the testimony was outside the scope of either cross examination or the Prehearing statement.

Id.

While the ALJ disagreed that it was outside the scope, he explained that because there was “no document in front of him” and he was “relying on the frailties of human memory,” he was not going to give this testimony “a whole lot of weight.”

Id.

at 271.

Questioned by the ALJ as to where he would document the red flags presented by a prescription, Mr. Parrado testified that: “I would have identified the red flags that concerned me when the prescription was presented. I would have noted that on the back and I would have noted what I did to resolve each one of those if there was more than one.”

Id.

at 273. Mr. Parrado added that “you scribble on the back and/or you write on a piece of paper and staple it to that prescription.”

Id.

The ALJ then asked Mr. Parrado if, in his “experience working with other pharmacists, . . . they have other ways of making records . . . to keep track of the red flags and how they've been resolved?”

Id.

at 274. Mr. Parrado answered: “[n]ot in the 43 years I've been a pharmacist.”

Id.

On further re-cross, Respondent asked Mr. Parrado: “Not all pharmacists document in the same way that you do, do they?”

Id.

Mr. Parrado answered: “[a]s a Board of Pharmacy member, I would have expected them when they came before the Board to show me that documentation. It was always on the prescription. It's always on that prescription record somehow.”

Id.

Noting that Mr. Parrado had not been on the Board of Pharmacy for some time, Respondent then asked if he had “ever seen in your 43 years[,] pharmacists document the same information in different ways?”

Id.

at 275. Mr. Parrado answered: “I've seen them document in different ways but always on the prescription.”

Id.

The Superior II Prescriptions

With respect to the Superior II prescriptions, Mr. Parrado testified that he reviewed them in the same manner as he did the Superior I prescriptions.

Id.

at 277. He then proceeded to identify various red flags presented by the prescriptions.

The first of these was a prescription issued by Dr. H.V.D. (also of the 24th Century Medical Center) to J.T. of Fort Meyers, Florida, for 280 oxycodone 30. GX 3, at 1-2 (No. 15-7). Here again, the patient's address was left blank and the address was provided by a sticker, which was affixed to the front of the prescription.

Id.

at 1. Mr. Parrado testified that prescription presented the following red flags: The drug having “a high potential for abuse”; the “very large quantity” and “the dosing at a very high rate, well above . . . 80 milligrams a day”; the “patient travelling from Fort Meyers, which is . . . 150 miles or so from Tampa”; and the patient paying $1,260 cash for the drugs. Tr. 277-78.

Mr. Parrado then testified “there was nothing on the prescription to show me that these things had been discussed.”

Id.

at 279.

Respondent objected to Mr. Parrado's testimony as to the price, asserting it was beyond the scope of the Pre-hearing Statement because it did not specifically identify “the pricing issue” as being one of the red flags associated with the prescription. Tr. 278. The Government did, however, identify that it intended to elicit testimony on the issue of “individuals playing [sic] high prices for prescriptions . . . with cash.” ALJ Ex. 7, at 3 (No. 15-7).

The second prescription was issued on December 2, 2011 by Dr. R. (the same Dr. R. of 24th Century), to R.B. of Milton, Florida (the same R.B. discussed in the Superior I findings) for 168 oxycodone 30. GX 3, at 3-4 (No. 15-7). Here again, the patient's address was left blank and the address was provided by a sticker, which was affixed to the front of the prescription.

Id.

at 3. After Mr. Parrado identified R.B. as being one the persons who filled a prescription at Superior I which presented red flags, the Government asked him to also look at the prescriptions reproduced at pages 5-6 of the exhibit. The latter prescription was also issued on December 2, 2011 by Dr. V.S. (also of 24th Century) to E.P., who again used R.B.'s address as her address; the prescription was also for 168 oxycodone 30.

Id.

at 5-6. Of further note, R.B.'s and E.P.'s prescriptions had sequential RX numbers.

Id.

Asked if these prescriptions presented any red flags, Mr. Parrado testified that “[t]hese were the same two patients that had gotten prescriptions filled at the other pharmacy, both with the same Milton, Florida address, both paying $924 in cash, travelling a long way, very high dosing, all the same concerns I had with the previous prescriptions.” Tr. 280-81. He also observed that the prescriptions “were filled consecutively” and that the dispensing labels show that the same pharmacist (M.F.) filled the prescriptions, and that these circumstances would have caused him concern.

Id.

at 282-83. And Mr. Parrado further testified that he saw no evidence that the pharmacist attempted to resolve the red flags.

Id.

at 283.

The next prescription was issued on September 18, 2012 by Dr. V.S. (the same Dr. V.S. who had worked at 24th Century) to L.P. of Jacksonville, for 168 oxycodone 30. GX 3, at 7-8. Mr. Parrado testified that the prescription presented multiple red flags including “the drug,” the “very high quantity,” that the patient was “coming from Jacksonville . . . over 200 miles” from Tampa, and that the patient was “paying $1,344 in

cash.” Tr. 284. Mr. Parrado then testified that there was “nothing documented” regarding the pharmacist's attempt to resolve the red flags.

Id.

After Respondent “object[ed] to the repetitive nature of this,” the ALJ asked Mr. Parrado if he had found “the same kinds of red flags” throughout the Exhibit.

Id.

at 285. Mr. Parrado answered “[y]es.”

Id.

The ALJ then asked Mr. Parrado if he had also found that “the failure to resolve the red flags is documented on the documents there?”

Id.

Mr. Parrado answered “[y]es.” However, after the ALJ asserted that “[t]hat seems to address all of Exhibit 3,” the Government advised the ALJ that there were “some differences.”

Id.

The Government then questioned Mr. Parrado about two prescriptions which were issued on May 22, 2102 by Dr. C. (also of 24th Century) to L.B. of Dover, Florida, which the latter filled the same day. GX 3, at 11-14. The prescriptions were for 168 oxycodone 30 and 84 Dilaudid 8 mg.

See id.

Asked by the Government whether the combination of these two drugs raised a red flag, Mr. Parrado testified that “that's a major red flag in that you have two immediate use opioids being dispensed at the same time. The practice is never to dispense two immediate use opioids at once, at the same time for the same patient.”

Id.

at 286. Mr. Parrado then testified that both of the drugs were immediate release, and upon being asked if there was a way to resolve this red flag, Respondent objected to the testimony, arguing that it was beyond the scope of the Government's Prehearing Statement.

Id.

at 287.

The ALJ overruled the objection, explaining that “I'd like to know.”

Id.

Mr. Parrado then testified that he could not resolve the red flag, and that while it was proper therapy to prescribe a “long-acting opioid, like OxyContin” and an immediate release drug “such as hydromorphone for breakthrough,” using “two immediate use opioids[,] [y]ou just don't do that.”

Id.

Here again, Respondent objected on the ground that the opinion was beyond the scope of Mr. Parrado's expertise because he is not a physician.

Id.

at 287-88. The ALJ overruled the objection.

Id.

at 288.

As discussed above, the Government failed to provide Respondent with constitutionally adequate notice on this issue.

See, e.g., Pergament United Sales,

920 F.2d at 135 (“The primary function of notice is to afford [a] respondent an opportunity to prepare a defense by investigating the basis of the complaint and fashioning an explanation that refutes the charge of unlawful behavior.”).

On May 22, 2012, Respondent filled prescriptions for 168 oxycodone 30 and 56 Dilaudid 8 issued by Dr. S.A.H. (of 24th Century) to V.B., who has the same last name and lived in the same town as L.B.

GX 3, at 15-18. Asked whether “seeing these prescriptions together,” there were “additional red flags,” Mr. Parrado testified that “the fact that two people from essentially the same address were coming together with the same last name for the same drugs which were two immediate use opioids from the same clinic . . . I would have found that unresolvable.” Tr. 289-90. Mr. Parrado then testified that he found no evidence that the red flags were resolved.

Id.

at 290.

Mr. Parrado noted that while the prescriptions for L.B. and V.B. indicated that they lived on different streets, they had the same house number. Tr. 288. While Mr. Parrado then suggested that “may have been just a typo,”

id.,

the Government offered no further evidence to corroborate this testimony.

On October 22, 2012, Dr. V.S. (who, according to the prescription was then working at the MD Plus Clinic in Lakeland), issued a prescription for 168 oxycodone 30 to J.P., whose address (which again was not written on the prescription) was in Ft. Walton Beach, Florida; Respondent filled the prescription the same day. GX 3, at 19-20. Upon being asked “what kind of route J.P. [would have] follow[ed] if he came from home, went to the doctor's office in Lakeland and then went to Tampa” to fill the prescription, Respondent objected on the ground that the testimony would be speculative because Dr. V.S. could legally prescribe at any place in the State. Tr. 293-94. After the ALJ overruled the objection, Mr. Parrado testified that while he did not “know the exact route [J.P.] took . . . the triangle between . . . the three places is very large [and] would have to be resolved.”

Id.

On October 23, 2012, Dr. V.S. (of the MD Plus Clinic) issued a prescription to K.B. of Jacksonville, for 168 oxycodone 30; Respondent filled the prescription on November 7, 2012. GX 3, at 21-22. On October 22, 2012, Dr. R.R. (of the 24th Century Medical Center) issued a prescription to R.B. of Milton for 168 oxycodone 30; Respondent filled the prescription on November 1, 2012.

Id.

at 23-24. Mr. Parrado testified that both prescriptions presented the same red flags that he had previously discussed. Tr. 295-96.

On November 5, 2012, Dr. H.D. (of the 24th Century Medical Center) issued a prescription to J.S. of Panama City Beach, for 180 oxycodone 30; Respondent filled 120 tablets of the prescription the same day. GX 3, at 25-26. Asked where Panama City Beach is in relation to Tampa, Mr. Parrado testified that it is located in the “extreme western part of the Florida panhandle” and 450 miles from Tampa. Tr. 297.

Notably, the prescription contains a handwritten notation: “120 per pat” with the rest of the word obscured by the address sticker, below which is the date and time. GX 3, at 25. According to Mr. Parrado, “this was the only form of any kind of notation or documentation I saw on any of the records showing that they did document at one point and the only thing they documented was that they shorted the person pills.”

Tr. 298. Mr. Parrado further noted while the address on prescription listed Panama City Beach as J.S.'s town of residence, the sticker attached to the prescription, as well as the dispensing label, listed her town of residence as Port Charlotte, which is in the “opposite direction” from Tampa.

Id.

Mr. Parrado further testified that it is common practice to make a note on the prescription when pharmacist does not provide a patient with the entire quantity of the prescription.

Id.

at 299.

On November 5, 2012, Dr. R.R. (24th Century) issued a prescription to A.R. for 180 oxycodone 30; Respondent filled the prescription the same day. GX 3, at 27-28. While the prescription lists the patient's address as Lawtey, Florida, both the address sticker attached to the prescription and the dispensing label list A.R.'s address as in Gainesville, Florida.

Id.

Over Respondent's objection (on grounds of no notice), Mr. Parrado testified that this was an additional red flag and the “difference . . . should have been documented.” Tr. 300-01.

On April 23, 2012, Dr. S.A.H. (24th Century) issued a prescription to T.P. of St. Augustine, Florida for 180 oxycodone 30; Respondent filled the prescription the same day. GX 3, at 29-30. Noting that Saint Augustine is located “just below Jacksonville” in “the upper northeast corner of Florida,” Mr. Parrado testified that “the distance” between T.P.'s residence and Respondent was a red flag. Tr. 301-02.

Also on April 23, 2012, Dr. P.C. (24th Century) issued a prescription to A.W. of Mayo, Florida, for 200 oxycodone 30; Respondent filled the prescription the same day. GX 3, at 31-32. Mr. Parrado testified that Mayo is located 150 to 200 miles from Tampa and that this was a red flag “along with all the other things,” including “the drug and the price paid,” which was $1,400. Tr. 302-03; GX 3, at 32.

On April 23, 2012, Dr. P.C. issued a prescription to D.T. of Gainesville for 190 oxycodone 30; Respondent filled the prescription the same day. GX 3, at

33-34. Also on April 23, Dr. S.A.H. issued a prescription to J.S. of Tallahassee for 168 oxycodone 30; Respondent filled the prescription the same day.

Id.

at 35-36. Mr. Parrado testified that neither prescription raised “any additional red flags” beyond those he had previously discussed. Tr. 303. However, on further questioning, he testified that Tallahassee is 250 to 260 miles from Tampa.

Id.

at 303-04.

Respondent objected to Mr. Parrado's testimony regarding the distances from Mayo to Tampa and Tallahassee to Tampa on the ground that this testimony was not disclosed in advance of the hearing. Tr. 302-03. In its Pre-Hearing Statement, the Government did disclose that Mr. Parrado “will . . . testify regarding large quantities of oxycodone distributed by Respondent on April 23, 2012, to at least twelve persons . . . and four of them (T.P., A.W., D.T., and J.S.) resided more 100 miles from Respondent's pharmacy.” ALJ Ex. 7, at 5 (No. 15-7). Respondent thus had notice that the distance between it and the residences of the patients would be at issue even if the Government did not disclose that Mr. Parrado would testify as to the precise distances.

On November 2, 2012, Dr. R.R. issued a prescription for 112 Dilaudid 8 mg to T.N., which Respondent filled the same day. GX 3, at 37-38. Of note, while the prescription as prepared by Dr. R.R. listed T.N.'s address as being in Port Salerno, Florida, both the address sticker placed on the front of the prescription and the dispensing label listed an address in Gainesville.

See id.

Mr. Parrado testified that this was a red flag, as was the high dose of the prescription (32 mg per day), which was “above the 24 milligram upper dose recommendation.” Tr. 304.

The final prescription in the exhibit was issued on November 5, 2012 by Dr. H.D. to K.P. of Spring Hill for 140 Dilaudid 8 mg. GX 3, at 39-40. Asked the same question as with previous prescription (“How about the drug and the amount?”), Mr. Parrado testified: “[t]he answer will be the same.” Tr. 304. Thereafter, the Government moved Exhibit 3 into evidence in the Superior II matter, and the ALJ admitted the exhibit.

Id.

at 305.

The Government then moved to admit into evidence its Exhibits 4 and 14.

Id.

The former is a compilation of 25 additional prescriptions for oxycodone 30 and Dilaudid 8 mg, which was offered to show additional instances in which patients presented the “red flag of long distance” between their residence, the prescriber, and Superior II.

Id.; see also

GX 4 (No. 15-7). The latter is a collection of MapQuest maps and printouts showing the distances between the patient's residence, the prescriber, and Superior II.

Id.; see also

GX 14 (No. 15-7). Both exhibits were admitted over Respondent's objection.

Tr. 305-06.

With respect to the MapQuest printouts, Respondent did not object based on authenticity, but rather on lack of foundation, arguing that “there are ways to set parameters to avoid highways, to take the shortest route, to take the fastest route.” Tr. 307. The objection is not without some merit. However, given the distances of the patients from the prescribers and Superior, any differences in mileage or driving time which would be caused by choosing between these two parameters is not significant enough to be material.

As for the prescriptions in GX 4, Mr. Parrado testified that they all presented the red flag of the patients travelling long distances. Tr. 308. He further testified that he used Google to “get an approximation of the mileage” for those cities for which he did not know the exact mileage.

Id.

at 310.

Asked by the Government whether he had seen any evidence that Superior II's pharmacists attempted to resolve the red flags presented by the prescriptions in both its Exhibits 3 and 4, Mr. Parrado testified that “[t]he only documentation I saw was that shortage of tablets. That's the only thing I saw documented anywhere.” Tr. 312. With respect to these prescriptions, Mr. Parrado then testified that he did not “see any evidence” that the dispensing pharmacist had complied with his/her corresponding responsibility to ensure that prescriptions were issued for a legitimate medical purpose.

Id.

The Government concluded its direct examination of Mr. Parrado, asking him—over Respondent's objection—whether the pharmacists, who filled the prescriptions in GXs 3 and 4, “knew or had reason to know that the prescriptions were being issued without a valid doctor/patient relationship?”

Id.

at 313-14. Mr. Parrado answered:

All these red flags would have caused me concern to where I had to call that physician to verify all these things.

And at that point I would have to use my professional judgment and whether or not even though possibly faced with what could ostensibly be a valid prescription I should know or either knew or should have known that these were being used . . . for not a legitimate medical purpose, just based on all the red flags that are present.

So even if the doctor had told me, yes, he did fill it, I would still, I still would not have filled them.

Id.

at 314-15.

On cross-examination, Mr. Parrado adhered to his earlier testimony that if the resolution of a red flag was not documented on the prescription, “it wasn't done.”

Id.

at 316. While Parrado acknowledged that he did not know whether Florida law requires that this be documented on the prescription, he testified that “[i]t's been standard practice since I've been practicing for 43 years.”

Id.

He further acknowledged that DEA does not require that the resolution of a red flag be documented on the face of the prescription.

Id.

at 318. And he also acknowledged that in rendering an opinion as to whether another pharmacist had properly exercised his professional judgment in deciding to dispense a controlled substance, it is important to understand the circumstances, including whether the pharmacist has a history with the prescriber of the prescription.

Id.

at 321.

Asked by Respondent whether he “wouldn't think twice about” a prescription he received from a reputable prescriber which was missing the patient's address, Mr. Parrado testified that “I would do something to address that and fix it.”

Id.

Asked if he would then go into his pharmacy software and use the information to put an address label on the prescription and that this would not cause him “to be concerned about diversion,” Mr. Parrado answered: “Not if I knew the patient. And there's always a circumstance where it [the prescription] could be good.”

Id.

at 321-22.

When then asked whether “one of those circumstances would be if you knew the prescribing practitioner and . . . . [his] practice[] and . . . protocols and . . . knew that when you called them [he] answered your questions about the diagnoses and the reasons for things,” the ALJ, without any objection by the Government, stated that he would not allow Mr. Parrado to answer the question because there was “no evidence that the Respondent, through any of its pharmacists, did that.”

Id.

at 322. Even after Respondent argued that it was a hypothetical question and that Mr. Parrado “was proffered as an expert” and had testified that he had asked for additional information from DEA and been denied it, the ALJ adhered to his ruling.

Id.

at 322-23.

However, Mr. Parrado subsequently agreed with Respondent that in trying to determine whether a red flag had been resolved, it is “important to know what the pharmacist knew about” the patient.

Id.

at 324. Mr. Parrado testified that he had asked for the patient profiles for the Superior II patients and that the Government told him not to look at those.

Id.

at 324-25. Mr. Parrado then acknowledged that a patient profile would show the complete history of prescriptions filled by the pharmacy in the period for which it was run and would show whether the patient was also receiving non-controlled drugs.

Id.

325. He also acknowledged that the patient profile would be important in

determining whether the patient was opioid naïve or tolerant.

Id.

Mr. Parrado then testified that he was given some “partial medical records,” and that these showed that “these people were on multiple controlled substances [and] not just the prescriptions that were given to me.”

Id.

He then added that there were “multiple people from the same address getting the exact same cocktails of these drugs.”

Id.

at 325-26.

No evidence established what the cocktails were, let alone the strength and dosing of the drugs.

Asked if his opinions were based on these medical records, Mr. Parrado testified that the medical records did not form his opinions but “just reinforced” them, because he did not “see any documentation of conversations between the pharmacy and the clinic” and the records “showed on a lot of these patients the cocktails.”

Id.

at 326. After Mr. Parrado testified that the medical records were those “of the prescribing physician,” Respondent attempted to ask if he knew whether a physician is supposed to note a conversation with the pharmacist in the chart.

Id.

The ALJ barred the question, even in the absence of an objection of the Government, reasoning that there was no evidence that any of Superior II's pharmacists had called the prescriber.

Id.

at 327.

Mr. Parrado then acknowledged that there is “no upper limit on the amount of an opioid that a patient can develop a tolerance to” and that there is no federal limit on the quantity of a drug that can be prescribed.

Id.

He further testified that whether a prescription is medically necessary is patient specific and depends on such factors as tolerance, the condition causing the pain, and the duration, intensity and frequency of the pain.

Id.

at 330.

Asked whether it was

per se

unlawful to fill an oxycodone 30 prescription, Mr. Parrado testified that “I would have to evaluate each prescription individually and know that . . . that patient had developed that tolerance . . . before I fill it.”

Id.

at 331. Then asked whether “[o]xycodone 30 standing alone is not an indicator that a prescription” lacks a legitimate medical purpose, Mr. Parrado answered: “Well, it's the leading drug of abuse on the street. So that is the first potential for a red flag.”

Id.

Mr. Parrado acknowledged that patients have the right to pay for their prescriptions in cash and that in some States, the law requires a pharmacy to allow a patient to pay in cash.

Id.

at 332. Mr. Parrado then testified that it is “not so much the paying cash, it's the quantity of cash that raised the red flag to me.”

Id.

While Mr. Parrado agreed that physicians may use a particular drug as their default option in treating a patient such as in prescribing a cholesterol-lowering medication, he disagreed that this practice also applies to pain management.

Id.

at 333. As he explained: “how you treat diabetes, blood pressure, . . . cholesterol therapy, those are relatively standard therapies. But not in pain, pain has to be individualized, starting low and going slow as you reach the proper limit” of dosing.

Id.

Respondent then asked if the fact that a prescriber tends to prescribe one drug over another for pain patients “is not necessarily indicative of diversion, is it?”

Id.

at 334. Mr. Parrado answered: “It becomes a cause for concern when it's always the number one known drug of abuse on the streets. That's where it becomes a concern. And in oxycodone and Percocet, there's a very low dose, it's only five milligrams, whereas . . . oxycodone 30 presents a different issue.”

Id.

Asked if when he verified the identity of a person filling a prescription, he would place a photocopy of the patient's identification on the prescription, Mr. Parrado acknowledged that “[a] lot of times we did,” or we had “another page with it,” or we “scanned it into our computer where it showed up as part of that patient's profile.”

Id.

at 336. When, however, Respondent asked Mr. Parrado if “it would be appropriate for certain types of verifications and resolving of red flags to keep, say for example, a photo ID in an electronic file of a pharmacy, particularly in the age of computers,” the ALJ intervened—again, in absence of an objection by the Government—and disallowed the question, explaining that “whether it's appropriate or not, there is nothing before me that suggests that that was kept.”

Id.

at 337.

Mr. Parrado subsequently agreed with Respondent that “not every failure to catch a red flag is intentional” and that pharmacists can make mistakes.

Id.

at 337-38. While he agreed that a pharmacist may make mistakes in dispensing drugs, he then explained:

The question is that it doesn't happen over and over and over and over, which was my concern in this case and the records I was looking at. Could a person come from a long distance once? Sure. Does it happen every day from a long distance multiple times? No.

Id.

at 338.

Turning more specifically to the prescriptions filled by Superior II, Mr. Parrado reiterated that he did not interview any of the patients or prescribers, as well as that DEA did not provide him with any statements made by the patients or information about the patients' conditions.

Id.

at 339. Asked whether it would be appropriate for a pharmacist, who knew the address placed on the prescription by the prescriber was incorrect, to verify the patient's address and place a sticker on the prescription with the correct address, Mr. Parrado answered: “I would want to document that I had . . . addressed that question . . . and then put [the sticker] on there.”

Id.

at 341. He then maintained that while the stickers were placed on the prescriptions, he did not know that the pharmacists had verified the patients' addresses.

Id.

Asked whether it is appropriate for a pharmacist to add the address to the prescription when the physician did not include it, Mr. Parrado testified: “[a]fter consultation with the physician.”

Id.

at 342. When then asked if a DEA letter addressing the prescribing of schedule II drugs “says that,” Mr. Parrado testified that Florida law (Chapter 893) “says that you verify with the prescriber,” before acknowledging that a DEA letter “does not say that.”

Id.

Mr. Parrado agreed with Respondent that it would be permissible for a physician to prescribe pain medicine to “two people who share a residence” and who “have chronic pain due to a car accident.”

Id.

at 343-44. Asked whether “if the prescriptions were legitimate, it would be permissible for a pharma

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