City Drug Company: Revocation of Registration

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 96-47]

City Drug Company: Revocation of Registration

On August 29, 1996, the Deputy Assistant Administrator, Office of

Diversion Control, Drug Enforcement Administration, (DEA), issued an

Order to Show Cause to City Drug Company, (Respondent) of Opp, Alabama,

notifying it of an opportunity to show cause as to why DEA should not

revoke its DEA Certificate of Registration, AC5430450, and deny any

pending

[[Page 53339]]

applications for registration under 21 U.S.C. 823(f), for reason that

its continued registration would be inconsistent with the public

interest pursuant to 21 U.S.C. 824(a)(4).

By letter dated September 19, 1996, Respondent, through counsel,

filed a request for a hearing, and following prehearing procedures, a

hearing was held in Mobile, Alabama on April 15, 1997, before

Administrative Law Judge Gail A. Randall. At the hearing, both parties

called witnesses to testify and introduced documentary evidence. After

the hearing, counsel for both parties submitted proposed findings of

fact, conclusions of law and argument. On July 24, 1997, Judge Randall

issued her Opinion and Recommended Ruling, recommending that

Respondent's DEA Certificate of Registration be revoked and any pending

applications for renewal of such registration be denied. In addition,

Judge Randall recommended that favorable consideration be given to a

new application for registration should Respondent present any

persuasive evidence of proposed procedural changes for the dispensing

of controlled substances. On August 4, 1997, Respondent filed a general

objection to the Administrative Law Judge's decision, and on August 26,

1997, Judge Randall transmitted the record of these proceedings to the

Acting Deputy Administrator.

By letter dated September 17, 1997, Judge Randall forwarded a

letter from Respondent's counsel dated September 9, 1997, that set

forth information concerning procedural changes implemented at

Respondent and continuing education received by Respondent's owner.

This letter was received by the Administrative Law Judge after the

record had closed and been transmitted to the Acting Deputy

Administrator. The Acting Deputy Administrator has not considered

Respondent's September 9, 1997 letter in rendering his decision in this

matter since it was submitted after the record had closed, and

Respondent did not offer any explanation as to why this information was

not submitted prior to the closing of the record.

The Acting Deputy Administrator has considered the record in its

entirety, and pursuant to 21 CFR 1316.67, hereby issues his final order

based upon findings of fact and conclusions of law as hereinafter set

forth. The Acting Deputy Administrator adopts, with one noted

exception, the Opinion and Recommended Ruling of the Administrative Law

Judge, and his adoption is in no manner diminished by any recitation of

facts, issues and conclusions herein, or of any failure to mention a

matter of fact or law.

The Acting Deputy Administrator finds that Respondent is one of

five pharmacies located in Opp, Alabama and has been in existence for

approximately 25 years. Joseph Grimes is the owner and pharmacist in

charge of Respondent.

On March 2, 1992, a search warrant was executed at Respondent

pharmacy as a result of an undercover operation conducted by a local

police department. During the search, DEA investigators conducted a

physical count of controlled substances on the premises using

Respondent's pill counting machine, and collected all relevant

controlled substance records for the period January 15, 1990 to March

2, 1992, except purchase invoices and records of controlled substances,

if any, returned to suppliers. A DEA investigator later contacted

Respondent's suppliers and obtained records of controlled substance

sales to Respondent for the period January 15, 1990 to March 2, 1992.

Alabama law requires a pharmacy to conduct an inventory of

controlled substances on the 15th day of January of each year. Included

in the records seized during execution of the search warrant were these

inventories conducted by Respondent for 1990, 1991, and 1992. Mr.

Grimes testified at the hearing in this matter that when performing an

inventory, he counts all individual dosage units of Schedule II

controlled substances, and as permitted by Federal and state law, he

estimates the quantities of Schedule III through V controlled

substances.

Using Respondent's records, records from Respondent's suppliers,

and the closing inventory conducted on March 2, 1992, DEA conducted

several accountability audits. One audit of Schedule III and IV

controlled substances was conducted using Respondent's January 15, 1990

inventory as the initial inventory figure and DEA's March 2, 1992 count

as the closing inventory. This accountability audit revealed that

Respondent could not account for 80,223 dosage units, including 18,774

dosage units of Darvocet/propoxyphene 100 mg. and 10,428 dosage units

of Darvocet/propoxyphene 65 mg. In addition, the audit revealed an

overage of 402 dosage units of hydrocodone 5 mg. (brand and generic).

An audit of the Schedule II controlled substance oxycodone 5 mg.

for the period January 15, 1990 to January 15, 1992, revealed an

overage of 859 dosage units. This unit used Respondent's January 15,

1990 inventory as the initial inventory figure, and its January 15,

1992 inventory as the closing inventory figure.

Another audit was conducted of Schedule III and IV controlled

substances using Respondent's January 15, 1990 inventory as the initial

inventory figure and its January 15, 1992 inventory as the closing

inventory figure. This audit revealed shortages totaling 13,706 dosage

units and overages totaling 705 dosage units.

Following execution of the search warrant, DEA organized

prescription records taken from Respondent according to the prescribing

doctor. Eleven of these doctors were provided copies of prescriptions

attributed to them and each doctor reviewed his patient records in the

presence of a DEA investigation to determine whether or not he had

authorized the prescriptions found at Respondent pharmacy.

Prescriptions taken from Respondent pharmacy indicated that Dr. Rex

Butler had prescribed a total of 2,427 dosage units of controlled

substances to five patients. By affidavit dated March 19, 1997, Dr.

Butler indicated that he had not authorized any of these prescriptions.

Respondent provided affidavits from two of these patients and one of

their relatives which indicated that they had witnessed Mr. Grimes

receiving authorization from Dr. Butler for controlled substance

prescriptions for them. Another of the patients indicated by affidavit

that Dr. Butler had prescribed Limbitrol DS for him on several

occasions. However, like Judge Randall, the Acting Deputy Administrator

finds these patient affidavits to be of limited value since they do not

specifically address the prescriptions at issue nor do they reference

any time period for their statements. In addition, the Acting Deputy

Administrator finds Dr. Butler's affidavit to be more reliable than the

patients' affidavits, since Dr. Butler's affidavit is based upon a

review of his patient records which were prepared and maintained during

the relevant time period, whereas the patients' affidavits are based

upon their recollection more than six years after the event.

Dr. Steven Davis declared in an affidavit dated March 3, 1997, that

after reviewing the prescriptions taken from Respondent's files that

were attributed to him and comparing them to his patient records, he

determined that he had not authorized prescriptions for 20 specifically

named patients, amounting to a total of approximately 2,650 dosage

units of controlled substances. Respondent provided affidavits from

patients or immediate family members of patients concerning Dr. Davis's

[[Page 53340]]

prescribing practices. The majority of these affidavits fail to address

the specifically questioned prescriptions or to provide relevant time

periods for their statements, and are therefore of limited value.

However, two of the patients do indicate in their affidavits that they

were prescribed the medication on the specific date at issue.

Nonetheless, the Acting Deputy Administrator finds Dr. Davis' affidavit

to be more reliable than the affidavits of these two patients since Dr.

Davis' affidavit is based upon a review of his patient records which

were prepared and maintained during the relevant time period, whereas

the patients' affidavits are based upon their recollection more then

six years after the event. As Judge Randall noted, the affidavit of the

wife of one of the patients verified that her husband was prescribed

Vicodin in December 1991 by Dr. Davis. Since Dr. Davis does not address

in his affidavit whether or not he authorized this prescription, the

Acting Deputy Administrator agrees with Judge Randall that the wife's

affidavit ``warrant[s] a belief that this December 1991 prescription

was authorized by Dr. Davis.''

Prescriptions taken from Respondent pharmacy indicated that Dr.

James Guest had prescribed a total of 1,205 dosage units of Halcion and

Xanax for one patient between June 25, 1990 and February 29, 1992. By

affidavit dated February 13, 1997, Dr. Guest stated that he had last

seen this patient on May 17, 1989, and had not authorized any of the

prescriptions taken from Respondent pharmacy that were attributed to

him. Respondent provided affidavit from the patient and her daughter

which indicated that Mr. Grimes had telephoned Dr. Guest's office for

authorization to dispense Halcion and Xanax. However, like many of the

previously discussed affidavits, these affidavits fail to address the

specific prescriptions in question or to provide any specific time

period for their statements.

Respondent's prescription records indicated that Dr. Joe Sanders

authorized the dispensing of 2,600 dosage units of propoxyphene N-100

or Darvocet N-100 to one patient between August 31, 1990 and February

1, 1992. But, in a letter dated June 4, 1993, Dr. Sanders wrote that he

had last seen the patient on May 17, 1990, and had no record or

recollection of calling in any prescriptions for the patient since that

time.

According to Respondent's records, between January 19, 1990 and

November 21, 1991, Respondent dispensed 2,280 dosage units of lorazepam

2 mg. to one patient as allegedly authorized by Dr. Kirit Joshi.

However, by affidavit dated February 18, 1997, Dr. Joshi declared that

while he has issued that patient prescriptions for other controlled

substances, he had not authorized the lorazepam prescriptions for the

patient. In an affidavit, the patient's husband stated that, ``[t]o my

knowledge Joe Grimes has phoned Dr. Kiruit [sic] Joshi's office for

lorazepam and other medication in 1990 and 1992 for my wife * * *.''

The Acting Deputy Administrator finds Dr. Joshi's affidavit to be more

reliable than the husband's affidavit, since Dr. Joshi's affidavit is

based upon a review of his patient record which was prepared and

maintained during the relevant time period, whereas the husband's

affidavit is based upon his recollection more than six years after the

event.

Respondent's records indicate that Dr. D.A. Marsh telephoned two

prescriptions to Respondent for an individual, one on November 25,

1991, for 18 dosage units of Fiorinal #3 with codeine, and the other on

December 5, 1991, for 6 dosage units of Fiorinal #3 with codeine. In an

affidavit dated February 19, 1997, Dr. Marsh declared that he did in

fact see this patient on November 19 and 25, 1991, and that he did

write her a prescription for 20 Fiorinal #3 with codeine on November

25, 1991. However, Dr. Marsh stated he did not orally authorize any

prescriptions for this individual, and specifically denied authorizing

the two prescriptions noted above. In an affidavit dated April 9, 1997,

the patient stated that, ``[p]rescriptions for Fiorinal #3 were

authorized for me by D.A. Marsh MD in November and December of 1991 and

were filled at [Respondent] * * *. Some of these prescriptions were

phoned in.'' She indicated that she was allergic to a drug prescribed

for her by Dr. Marsh and that once he was informed of this allergy,

``Dr. Marsh authorized a prescription for 6 Fiorinal with codeine

capsules for me.'' While the patient's affidavit might help explain the

prescription in Respondent's files for the six Fiorinal #3 with

codeine, it does not address the 18 dosage units allegedly dispensed

pursuant to an oral prescription, on the same day Dr. Marsh admitted

issuing the patient a written prescription for 20 dosage units.

However, as with the other affidavits, the Acting Deputy Administrator

finds Dr. Marsh's affidavit to be more reliable than that of the

patient since it is based upon a review of his patient record which was

prepared and maintained during the relevant time period, whereas the

patient's affidavit is based upon her recollection more than six years

after the event.

According to Respondent's records, between January 1, 1990 and

March 2, 1992, Dr. Donald Newman orally authorized prescriptions for

2,600 dosage units of chlordiazepoxide 10 mg. for a specific patient.

By affidavit dated February 18, 1997, Dr. Newman stated that while he

did prescribe controlled substances on occasion to this patient, it was

always in writing and he did not authorize any of the oral

prescriptions for chlordiazepoxide found in Respondent's files.

Respondent provided an affidavit from this patient dated April 9, 1997,

who stated that, ``I have witnessed Joe Grimes calling Dr. Donald

Newman's office for permission to refill Librium (chlordiazepoxide HCL)

on several occasions during the period of January 1990 to January

1991.'' However, this affidavit does not address the specific

prescriptions at issue. Again, the Acting Deputy Administrator finds

Dr. Newman's affidavit to be more reliable than that of the patient

since it based upon a review of his patient record which was prepared

and maintained during the relevant time period, whereas the patient's

affidavit is based upon her recollection more than six years after the

event.

According to Respondent's records, Dr. Steven Price authorized five

prescriptions for a total of 150 dosage units of controlled substances

to three patients. As to the first patient, Dr. Price stated in an

affidavit dated February 20, 1997, that while he had prescribed the

patient Xanax in January 1991, he did not authorize the prescription

for Xanax found in Respondent's files dated February 22, 1991.

Regarding the second patient, Dr. Price denied prescribing diazepam 5

mg. for the individual on the dates listed on the three prescriptions

found in Respondent's files. Finally, Dr. Price stated that he has no

record of the patient whose name appeared on the fifth prescription

attributed to Dr. Price. The first patient, in an affidavit dated April

9, 1997, stated that Dr. Price had prescribed Xanax for her in January

and February 1991. This affidavit confirms Dr. Price's conclusion,

after reviewing his patient's chart, that he had prescribed Xanax in

January of 1991, yet conflicts with his conclusion concerning the

February 1991 prescription. Regarding the second patient, Respondent

provided an affidavit dated April 9, 1997, from an individual who

stated that she could ``verify that [the patient] was prescribed Valium

(diazepam) by Dr. Steven Price and sometimes the prescription was

phoned into [Respondent]. I personally

[[Page 53341]]

picked up this medication on many occasions for [the patient].'' The

affidavit fails to give a time period for her statements. The Acting

Deputy Administrator finds Dr. Price's affidavit to be more reliable

than those submitted by Respondent, since it is based upon a review of

his patient records which were prepared and maintained during the

relevant time period, whereas the patients' affidavits are based upon

the recollection of individuals more than six years after the event.

During execution of the search warrant, investigators obtained from

Respondent five prescriptions allegedly authorized by Dr. B.A. Santa

Rossa for an individual for a total of 180 dosage units of

proproxyphene 65 mg. and 120 dosage units of Wygesic. In his affidavit

dated March 17, 1997, Dr. Santa Rossa stated that while he had

prescribed controlled substances for this individual in the past, he

always issued a written prescription for the drugs. In addition, a

review of his patient record revealed that he had not authorized any of

the five prescriptions attributed to him that were found in

Respondent's files. Further, in his affidavit, Dr. Santa Rossa denied

issuing a prescription to a second individual on June 8, 1991, for 30

dosage units of diazepam 10 mg. However, Respondent provided an

affidavit from this second patient who stated that, ``according to my

best judgment and recol[l]ection do attest to the fact that Joe Grimes

has called for permission to fill diazepam 10 mg. in June 1991.'' As

Judge Randall noted, ``[e]ven if this affidavit is given more

credibility than Dr. Santa Rossa's affidavit, a total of 300 dosage

units of controlled substances were dispensed, without authority, by

the Respondent's pharmacists * * *.''

According to Respondent's records, Dr. Richard Spurlin authorized

multiple prescriptions to six individuals which accounted for the

dispensation of over 12,000 dosage units of controlled substances by

Respondent. By affidavit, Dr. Spurlin stated that after reviewing his

records for these patients, he determined that while he had at various

times issued these individuals controlled substances prescriptions, he

had not authorized any of the prescriptions found in Respondent's

files. Respondent provided affidavits from four of these patients.

Three of them indicated that they had observed Mr. Grimes telephoning

Dr. Spurlin's office for authorization to fill or refill prescriptions.

Yet, none of these affidavits address the specific prescriptions at

issue nor do they provide a time period for the statements made. The

other patient's affidavit indicated that ``Dr. Spurlin has authorized

prescriptions for Xanax .25 mg. (alprazolam) and Halcion for me from

1988 to 1997.'' The Acting Deputy Administrator finds that while this

patient references a general time period, like the other patients, she

fails to address the specific prescriptions at issue. Therefore,the

Acting Deputy administrator finds Dr. Spurlin's affidavit to be more

reliable than those submitted by Respondent, since it is based upon a

review of his patient records which were prepared and maintained during

the relevant time period, whereas the patients' affidavits are based

upon their recollection more than six years after the event.

In December 1992, DEA investigators asked Dr. Reddoch Williams to

review prescriptions found in Respondent's files that indicated that

they were authorized by him. By letter dated February 26, 1997, Dr.

Williams certified that he had reviewed the original prescriptions and

his patient filed. Dr. Williams also wrote that he had not authorized

``[Respondent] or any other person or pharmacy to fill or refill the

prescriptions which are marked as `forgery' or otherwise marked as not

authorized by me.'' Some of Dr. Williams handwritten comments are

difficult to read and other comments are not definitive in nature,

being qualified with statements such as ``I believe'' or ``I think''.

Therefore, the Acting Deputy Administrator declines to find that any of

these prescriptions were unauthorized. However, in those instances

where the prescriptions are clearly marked as forgeries without any

qualifying language, the Acting Deputy Administrator finds that these

prescriptions were not authorized by Dr. Williams. These unauthorized

prescriptions accounted for the dispensation of over 1,100 dosage units

of controlled substances. Three of the patients, whose names appeared

on the prescriptions which were clearly marked as forgeries by Dr.

Williams, provided affidavits. However, these affidavits did not

provide any time period for their statements and the other only

provided a general reference to a time period, but did not specifically

reference the date of the prescription at issue. Like with the

previously discussed affidavits, the Acting Deputy Administrator finds

Dr. Williams' comments to be more reliable than the patients'

affidavits, since his comments are based upon a review of his patient

records which were prepared and maintained during the relevant time

period, whereas the patients' affidavits are based upon their

recollection more than six years after the event.

In conducting the accountability audits which revealed significant

shortages, DEA investigators included the unauthorized prescriptions as

drugs for which Respondent could account. Mr. Grimes testified at the

hearing before Judge Randall that he never filled a prescription

without a doctor's authorization, and that while he disputes the

results of the accountability audits, he does not have any explanation

for the shortages and overages revealed by the audits.

The state of Alabama has not withdrawn its licensing commission

from Respondent. In addition, while arrested and charged, Mr. Grimes

was ultimately found not guilty by a jury of all charges stemming from

the undercover operation conducted by the local police department which

led to the execution of the search warrant. Further, it is undisputed

that there have never been any complaints about Respondent or Mr.

Grimes made by any drug supplier, and no doctor or pharmacist has ever

contacted Mr. Grimes about illegal prescriptions. Finally, Respondent

introduced into evidence a letter from the co-chairman of a drug

company attesting to Mr. Grimes' honesty and integrity.

Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy

Administrator may revoke a DEA Certificate of Registration and deny any

pending applications, if he determines that the continued registration

would be inconsistent with the public interest. Section 823(f) requires

that the following factors be considered:

(1) The recommendation of the appropriate State licensing board or

professional disciplinary authority.

(2) The applicant's experience in dispensing, or conducting

research with respect to controlled substances.

(3) The applicant's conviction record under Federal or State laws

relating to the manufacture, distribution, or dispensing of controlled

substances.

(4) Compliance with applicable State, Federal, or local laws

relating to controlled substances.

(5) Such other conduct which may threaten the public health or

safety.

These factors are to be considered in the disjunctive; the Deputy

Administrator may rely on any one or a combination of factors and may

give each factor the weight he deems appropriate in determining whether

a registration should be revoked or an application for registration be

denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-42, 54 F.R.

16,422 (1989).

[[Page 53342]]

Respondent contends that the Government has not met its burden of

proof in establishing that Respondent's continued registration would be

inconsistent with the public interest. Judge Randall concluded and the

Acting Deputy Administrator concurs that all five factors are relevant

in determining the public interest in this matter.

As to factor one, it is undisputed that the State of Alabama has

not taken any action against Respondent pharmacy or its owner Mr.

Grimes. Regarding Respondent's conviction record relating to controlled

substances, it is also undisputed that neither Respondent pharmacy nor

its owner Mr. Grimes has been convicted of any such offense.

Factors two and four, Respondent's experience in dispensing

controlled substances and its compliance with state, Federal, or local

laws relating to controlled substances, are clearly relevant in

determining whether Respondent's continued registration would be

inconsistent with the public interest. The Acting Deputy Administrator

finds that Respondent pharmacy dispensed over 25,000 dosage units of

controlled substances without authorization from a physician in

violation of 21 U.S.C. 829. Respondent argues that the physicians whose

names appeared on the prescriptions at issue could have forgotten to

note in the patient chart that the telephone prescriptions had been

authorized. Respondent further argues that a patient's recollection is

more reliable, since a patient is more likely to remember what was

actually prescribed to him or her. Respondent also contends that in

instances where there was no patient affidavit, Mr. Grimes was able to

recall the circumstances of the dispensing at issue.

The Acting Deputy Administrator concludes that it is highly

unlikely that eleven different physicians forgot to note numerous

prescriptions in patient charts which accounted for the dispensing of

over 25,000 dosage units of controlled substances. Also as stated

previously, most of the patients' affidavits are of little value since

they do not address the specific prescriptions at issue nor do they

provide a time period for the statements contained in the affidavits.

In addition, the physicians' affidavits were based upon a review of

patient records prepared contemporaneously with the events at issue,

whereas the patients' affidavits and Mr. Grimes' testimony are based

upon their recollection of events which occurred over six years ago.

Therefore, the Acting Deputy Administrator finds that Respondent

pharmacy dispensed controlled substances in violation of 21 U.S.C. 829.

In addition, Mr. Grimes violated his corresponding responsibility as

set forth in 21 C.F.R. 1306.04, to ensure that controlled substances

are only prescribed and dispensed for a legitimate medical purpose.

Additionally, pursuant to 21 U.S.C. 827, a registrant must maintain

complete and accurate records of controlled substances received, sold,

delivered or otherwise disposed of by him. The Acting Deputy

Administrator finds that accountability audits of Respondent's

controlled substances handling revealed that for the period January 15,

1990 to March 1992, Respondent could not account for over 80,000 dosage

units of Schedule III and IV controlled substances. In addition, the

audits revealed overages of some audited substances, including an

overage of 859 dosage units of oxycodone 5 mg., a Schedule II

controlled substance. In conducting these audits, the investigators

included the unauthorized prescriptions in their calculation of the

total amount of controlled substances dispensed by Respondent. Had

Respondent not been given credit for these unauthorized dispensations,

the shortages would have been significantly greater.

In its post-hearing filing, Respondent proposes a number of

possible explanations for the audit discrepancies. First, Respondent

argues that as allowed, it estimated the amount of Schedule III through

V controlled substances on hand when conducting its yearly inventory,

and consequently, it is possible that the overages and shortages could

have resulted from these estimations. Respondent also argues that the

audit results were possibly the result of a review by DEA of incorrect

or incomplete receiving and/or return records. Next Respondent argues

that it is possible that the audit discrepancies were the result of

other prescription records not being examined at the time of the audit.

In support of this argument, Respondent contends that in conducting the

audit, DEA did not examine additional ledgers used by Respondent during

the audit period. Finally, Respondent argues that another possible

explanation for the audit results is that DEA's closing inventory

conducted on March 2, 1992, was inaccurate since DEA used Respondent's

pill counting machine without first verifying the accuracy of the

machine.

The Acting Deputy Administrator concurs with Judge Randall's

conclusion that these possibilities advanced by Respondent ``are mere

speculation, unsupported by the record in this case.'' Respondent did

not provide any specific evidence that would account for the over

80,000 dosage unit shortage of controlled substances. While it is

permissible to estimate Schedule III through V controlled substances

when conducting an inventory, clearly such estimations would not

account for over 80,000 dosage units. In addition, a registrant cannot

estimate Schedule II controlled substances, however, the audit revealed

a significant overage of the one Schedule II controlled substance

audited. The investigators who conducted the audits were confident that

they had obtained all of the necessary records. It is significant to

note that if one were to accept Respondent's argument that the

receiving records were incomplete, then the shortages revealed by the

audit should actually have been greater, since Respondent would have

had to account for more controlled substances. As to the prescription

ledgers that Respondent argues would have effected the audit, the

investigator testified that those ledgers were examined, however, since

they did not contain any information necessary for conducting an audit,

they were discounted. Finally, Respondent did not present any evidence

that its pill counting machine was not operating properly.

Thus, the Acting Deputy Administrator concludes that the

preponderance of the evidence supports a finding that Respondent did

not maintain complete and accurate records of controlled substances as

required by 21 U.S.C. 827, as evidenced by the results of the audits.

The Acting Deputy Administrator finds it extremely significant that had

DEA not included the unauthorized prescriptions in the audit and given

Respondent credit for those dispensations, the shortages would have

been far greater.

As to factor five, the Acting Deputy Administrator concurs with

Judge Randall's finding that Mr. Grime's failure to accept

responsibility for the significant unexplained shortages and

unauthorized dispensations of controlled substances indicates a

potential threat to the public health and safety. Previously, DEA's

then-Administrator found that a pharmacist's ``refusal to acknowledge

the impropriety of his dispensing practices * * * give[s] rise to the

inference that [he] is not likely to act more responsibly in the

future.'' Medic-Aid Pharmacy, 55 FR 30,043 (1990); see also, Rocco's

Pharmacy, 62 FR 3056 (1997).

The Administrative Law Judge concludes that ``[t]he Government has

proven by a preponderance of the evidence that the Respondent's past

[[Page 53343]]

conduct would justify revocation of its DEA Certificate of

Registration.'' Judge Randall further concluded that Respondent did not

present any mitigating or rehabilitating evidence as it relates to its

dispensing practices. Therefore, Judge Randall recommended that

Respondent's DEA Certificate of Registration be revoked. Judge Randall

further recommended however, that ``[s]ubsequently, should the

Respondent provide any evidence of proposed procedural changes for the

dispensing of controlled substances in a new application for a

Certificate of Registration, and should such evidence be persuasive,

then I would concur with a favorable decision concerning that

subsequent application.''

The Acting Deputy Administrator agrees with the Administrative Law

Judge that the Government has met its burden of proof and that

Respondent's registration should be revoked. However, the Acting Deputy

Administrator does not adopt Judge Randall's recommendation that

favorable consideration will be given to a new application for

registration should Respondent present persuasive evidence of

procedural changes regarding the dispensing of controlled substances. A

change in procedures, in and of itself, might not justify granting

Respondent a new registration, since Mr. Grimes has failed to

acknowledge that he and his pharmacy have done anything improper. An

unexplained shortage of $80,000 dosage units and the unauthorized

dispensation of over 25,000 dosage units of controlled substances are

not merely minor technical violations. The egregious nature of the

violations in this matter demonstrate that Respondent has failed

miserably in its responsibility as a DEA registrant to protect against

the diversion of controlled substances from the legitimate chain of

distribution. Respondent is certainly free to apply for a new DEA

Certificate of Registration. Any such application will be evaluated in

light of all of the relevant circumstances in existence at that time to

determine whether to grant the application.

Accordingly, the Acting Deputy Administrator of the Drug

Enforcement Administration, pursuant to the authority vested in him by

21 U.S.C. 823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that

DEA Certificate AC5430450, issued to City Drug Company, be, and it

hereby is, revoked. The Acting Deputy Administrator further order that

any pending applications for renewal of such registration, be, and they

hereby are, denied. This order is effective November 13, 1997.

Dated: October 7, 1997.

James S. Milford,

Acting Deputy Administrator.

[FR Doc. 97-27144 Filed 10-10-97; 8:45 am]

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