Townwood Pharmacy; Revocation of Registration

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 96-6]

Townwood Pharmacy; Revocation of Registration

On October 31, 1995, the Deputy Assistant Administrator, Office of

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

Order to Show Cause to Townwood Pharmacy (Respondent) of Houston,

Texas, notifying the pharmacy of an opportunity to show cause as to why

DEA should not revoke its DEA Certificate of Registration, AT8866468,

and deny any pending applications for renewal of such registration as a

retail pharmacy under 21 U.S.C. 823(f), for reason that the pharmacy's

continued registration would be inconsistent with

[[Page 8478]]

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

By letter dated November 15, 1995, Respondent, through counsel,

timely filed a request for a hearing, and following prehearing

procedures, a hearing was held in San Antonio, Texas on October 16,

1996, before Administrative Law Judge Mary Ellen Bittner. At the

hearing, both parties called witnesses to testify and introduced

documentary evidence. After the hearing, Government counsel submitted

proposed findings of fact, conclusions of law and argument. Respondent

did not submit any posthearing filing. On November 10, 1997, Judge

Bittner issued her Opinion and Recommended Ruling, Findings of Fact,

Conclusions of Law and Decision, recommending that Respondent's DEA

Certificate of Registration be revoked. Neither party filed exceptions

to her decision, and on December 12, 1997, Judge Bittner transmitted

the record of these proceedings to the Acting Deputy Administrator.

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, in full, the Opinion and

Recommended Ruling, Findings of Fact, Conclusions of Law and Decision

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 a retail

pharmacy located in Houston, Texas. A.B. Hurd, has been a licensed

pharmacist for 25 years and has been Respondent's owner and operator

for 17 years. In late 1992, DEA received information from the Houston

Police Department that Respondent pharmacy had a reputation for

diverting controlled substances.

As a result of this information, DEA initiated an investigation of

Respondent, which included five undercover visits between December 17,

1992 and July 9, 1993. The purpose of these visits was to determine

whether Respondent would dispense controlled substances for no

legitimate medical purpose. DEA obtained a total of nine controlled

substance prescriptions written by a local Houston orthopedic physician

for a Symone Williams to be used in the undercover investigation. Five

of these prescriptions were for various quantities of Tylenol #4 with

codeine, a Schedule III controlled substance, and four were for various

quantities of Valium 10 mg., a Schedule IV controlled substance.

However, none of the prescriptions were for an excessive quantity of

either drug, given that each undercover visit was made more than a

month after the previous visit. The prescriptions did not contain the

patient's address or the date of issuance. Four out of the five visits

were conducted by an undercover agent posing as Symone Williams and the

fifth visit was conducted by an undercover agent posing as Ms.

Williams' boyfriend.

On each occasion, the undercover agent had a conversation with Mr.

Hurd while he was filling the prescriptions. At least four of these

visits were tape recorded and transcripts of these recordings are in

evidence in this proceeding. During the course of these visits, the

undercover agents made a number of statements to Mr. Hurd in an attempt

to indicate to him that the controlled substances were not going to be

used for a legitimate medical purpose. For instance, during the first

visit, the undercover agent told Mr. Hurd, ``I just tell my doctor to

write 'em, I don't tell him anything''; ``I like the brand, `cause

that's what my boyfriend likes''; and ``He's gonna have some alcohol

with it anyway.'' During the second visit, the undercover agent told

Mr. Hurd, ``Me and my boyfriend used [the controlled substances,] they

worked good''; and ``take that with a little bit of Crown,'' referring

to alcohol. On another occasion, the agent made the following comments

to Mr. Hurd: ``I go back to my doctor and * * * I told him I'm feeling

bad, and he just give it to me''; and ``[Y]ep, we'll get high. That's

right, some Crown and some Tylenol.'' During several of these visits,

the undercover agent posing as Symone Williams kept talking about

``partying'' with Mr. Hurd. Throughout the transcripts of these visits,

almost all of Mr. Hurd's comments, especially those in response to the

above statements, were unintelligible. Mr. Hurd filled all of the

prescriptions presented to him by the undercover agents. The

prescriptions for Valium were filled with its generic equivalent

diazepam.

Following the undercover visits, the undercover agent telephoned

Mr. Hurd on September 27, and October 12, 1993, in an attempt to obtain

controlled substances without presenting a prescription. Mr. Hurd did

not agree to dispense any more controlled substances to the undercover

agent. At the hearing, Mr. Hurd testified that he denied the undercover

agent's telephone requests because there were no refills listed on the

previously presented prescriptions and the agent had not authorized Mr.

Hurd to contact the doctor to request a refill.

Mr. Hurd testified at the hearing before Judge Bittner that he did

not recall any of the undercover agent's comments about using the

controlled substances with alcohol or sharing them with her boyfriend.

In addition, there was testimony that there was music or a television

playing in the background during these visits: that the undercover

agent and Mr. Hurd were approximately two arms' length apart during the

transactions; that the undercover agent was also having conversations

with the pharmacy's clerk; and that the undercover agent was not

standing directly in front of Mr. Hurd when she was making conversation

with him.

In addition, Mr. Hurd testified that he was familiar with the

doctor who purportedly issued the prescriptions; that the doctor has a

good reputation in the Houston area; and that Respondent pharmacy had

never had any problems with the doctor's prescriptions in the past. Mr.

Hurd further testified that the prescriptions appeared to be facially

valid to him; that the quantities prescribed and the frequency of the

prescriptions did not raise suspicions; and that Tylenol # 4 with

codeine and Valium are commonly prescribed by orthopedic physicians. He

also testified that he cannot determine whether or not a customer has

pain and/or anxiety simply from looking at the individual. Mr. Hurd

testified that he observed the undercover agent and that she had a

professional appearance, her eyes were not red, and her speech was not

slurred.

Mr. Hurd testified that he concluded that the prescriptions were

valid, and that had he suspected that the prescriptions were invalid,

he would not have filled them. Instead, he would have reported the

prescriptions to the appropriate authorities and/or called the

prescribing physician for verification.

Another area pharmacist testified at the hearing before Judge

Bittner on behalf of Respondent. He stated that he has worked as a

retail pharmacist in Houston for 27 years and has known Mr. Hurd since

1967. Like Mr. Hurd, this pharmacist testified that he is familiar with

the physician who issued the prescriptions used in the undercover

operation; that the physician has a good reputation; and that so long

as the physician's prescriptions met the legal requirements, he would

fill them. This pharmacist also testified that his practice is similar

to that of Respondent and that it is not at all unusual for customers

to strike up a conversation with him while he is filling a

prescription, but that he does not pay too much attention to what a

customer

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says because his main objective is to fill the prescription. However,

the pharmacist conceded on cross-examination that he would be concerned

if a customer represented that he was going to take the prescribed

controlled substance with alcohol.

After the completion of the undercover investigation, DEA conducted

an accountability audit of ten controlled substances at Respondent. The

audit covered the period February 26, 1993 to January 25, 1994, and

revealed discrepancies for nine of the audited substances. Of

particular note, Respondent could not account for 5,363 dosage units of

diazepam 10 mg., 1,077 dosage units of hydrocodone 7.5/500, and 6,207

dosage units of APAP with codeine 60 mg. During the course of

conducting the audit, it was discovered that Respondent did not

maintain copies of 12 prescriptions and 6 purchase invoices. Respondent

was nonetheless given credit for these dispensations and purchases by

the investigators conducting the audit. Following the audit, the

results were discussed with Mr. Hurd and he was given the opportunity

to provide any additional records. Mr. Hurd subsequently provided the

investigators with copies of additional prescriptions, however the

prescriptions did not change the audit results because they were either

not for the audited substances or were outside of the audit period. In

addition, Mr. Hurd subsequently informed the investigators that he had

discovered another bottle of diazepam, which the investigators counted

and included in the audit calculations.

At the hearing in this matter, Mr. Hurd indicated that when

conducting Respondent's yearly inventory to satisfy state requirements,

he estimates the number of Schedule III through V controlled substances

on hand. Respondent's February 26, 1993 inventory was used as the

initial inventory for DEA's accountability audit.

Following the audit of Respondent, DEA was contacted by an

individual who stated that her daughter had a drug problem, was

currently in drug rehabilitation, and previously had overdosed

approximately four to five times on prescription drugs that she had

been getting from an employee of Respondent. DEA investigators later

spoke to the daughter who confirmed that she had been getting her

supply of controlled substances from Respondent's employee. Both of

these individuals provided DEA investigators with a bag of drugs. A DEA

investigator testified at the hearing that there were in fact some

valid prescriptions for the individual on file at Respondent, but that

the individual claimed that she also obtained controlled substances

from Respondent without a prescription. The investigator further

testified however that the drugs the individual actually presented to

DEA had another pharmacy's label on the bottles.

DEA investigators never spoke to Respondent's employee about the

individual, however Mr. Hurd testified that he spoke with the employee

and the employee never admitted to giving the individual any drugs

without a prescription. Mr. Hurd nonetheless instructed the employee

not to fill any more prescriptions for the individual.

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 law

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 any 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 FR 16,422

(1989).

Regarding factor one, there is no evidence that any action has been

taken against Respondent's state license. As Judge Bittner notes

however, since ``state licensure is a necessary but not sufficient

condition for DEA registration, * * * this factor is not dispositive.''

The Acting Deputy Administrator finds that factors two and four,

Respondent's experience in dispensing controlled substances and its

compliance with applicable laws relating to controlled substances, are

extremely relevant in determining the public interest in this matter.

Under the Controlled Substances Act and its implementing regulations,

pharmacists have a corresponding responsibility to ensure that

controlled substances are prescribed and dispensed for a legitimate

medical purpose. 21 CFR 1306.04(a). The Government contends that

Respondent dispensed controlled substances to the undercover agents

knowing that the drugs were not for a legitimate medical purpose.

However, the Acting Deputy Administrator agrees with Judge Bittner's

conclusion that, ``[i]t is not clear from the record whether or not Mr.

Hurd filled the prescriptions knowing that [the undercover agent]

intended to use the drugs for no medical purposes.'' While the

undercover agents' statements indicating a nonmedical purpose for the

drugs are clearly reflected in the transcripts of the visits, Mr.

Hurd's responses are unintelligible and Mr. Hurd testified that he did

not hear the undercover agents make these statements. In addition, no

testimony was elicited from either the undercover agent or the

investigator who was monitoring the undercover visits as to what Mr.

Hurd's responses were to the undercover agents' statements.

Judge Bittner does point out however, that on one occasion, the

transcript indicates that Mr. Hurd asked the undercover agent when she

was going to ``party'' with him, and therefore, Mr. Hurd was somewhat

aware of the undercover agent's statements. Also at the hearing, Mr.

Hurd testified that he dismissed the undercover agent's comment that

``My doctor writes anything I want,'' because he was familiar with the

prescribing doctor and felt that the doctor would not prescribe

improperly. This testimony by Mr. Hurd indicates that he in fact heard

the undercover agent's statement.

The Acting Deputy Administrator finds that the record does not

clearly establish whether Respondent dispensed controlled substances to

the undercover agent for no legitimate medical purpose. But, like Judge

Bittner, the Acting Deputy Administrator concludes that ``in light of

the discussion below,* * * it [is] unnecessary to decide whether the

record establishes that Mr. Hurd's filling of the prescriptions for

Symone Williams would, standing alone, warrant revocation of

Respondent's registration.''

The Acting Deputy Administrator finds that the record is clear that

Respondent has failed, at the very least, to comply with the

recordkeeping requirements of both Federal and state law as evidenced

by the violations revealed by the accountability audit. Respondent

failed to maintain complete

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and accurate records of controlled substances in violation of 21 U.S.C.

827 and 21 CFR 1304.21, as evidenced by the audit discrepancies. For

less than a one year period of time, Respondent could not account for

over 13,500 dosage units of controlled substances. Respondent did not

actually offer any explanation for its failure to account for these

drugs. Instead, Mr. Hurd seemed to suggest that the discrepancies were

caused by the compounding over time of his estimates of Schedule III

through V drugs on hand when conducting his yearly inventory. The

Acting Deputy Administrator recognizes that it is permissible to

estimate Schedule III through V controlled substances when-conducting

controlled substance inventories. See 21 CFR 1304.11(e)(3). However,

such estimations would not compound over time. Instead, for each

inventory, Respondent would estimate what it had on hand on that date.

It was Respondent's estimated inventory taken on February 26, 1993,

that was used as the initial inventory for DEA's accountability audit.

It is inconceivable that Respondent's estimations on that date were off

by over 13,500 dosage units. Therefore, the Acting Deputy Administrator

concludes that Respondent did not offer any plausible explanation

whatsoever for the tremendous shortages revealed during the audit.

Respondent's failure to maintain 6 purchase invoices and 12

prescriptions is further evidence of its failure to maintain complete

and accurate records of controlled substances as required by 21 U.S.C.

827. This failure to keep accurate records also violated the Texas

Controlled Substances Act, title 6 Tex. Health & Safety Code Secs.

13.6(d) & 13.64(b).

While the Acting Deputy Administrator has concluded that it is

unnecessary to determine whether or not Respondent dispensed controlled

substances to the undercover agents for no legitimate medical purpose,

its dispensing of controlled substances pursuant to the prescriptions

presented nonetheless violated 21 CFR 1306.05(a). This regulation

imposes a ``corresponding liability [on] the pharmacist who fills a

prescription not prepared in the form prescribed by these

regulations.'' Pursuant to 21 CFR 1306.05(a), a prescription must

contain, among other things, the date of issuance and the address of

the patient. The prescriptions filled for the undercover agents did not

contain this information. Additionally, Respondent's filling of these

prescriptions violated the Texas Controlled Substances Act, Title 6,

Tex. Health & Safety Code Sec. 481.074(k)(2) & (3).

Regarding factor three, as Judge Bittner found, ''[t]here is no

evidence that Mr. Hurd or any other officer or agent of Respondent has

ever been convicted under State or Federal laws relating to controlled

substances.'' As to factor five, the Acting Deputy Administrator agrees

with Judge Bittner's assessment that the allegation that Respondent

dispensed controlled substances without a prescription to the

individual who overdosed is entitled to little weight. No corroborating

evidence was presented to support the allegation.

Judge Bittner concluded that ``Respondent offers little in the way

of an explanation for the serious shortages in inventory and there is

no suggestion in this record that Respondent is likely to be more

responsible in the future.'' Consequently, Judge Bittner found that

Respondent's continued registration would be inconsistent with the

public interest, and therefore recommended that its registration be

revoked. The Acting Deputy Administrator agrees with Judge Bittner.

Respondent's failure to account for over 13,500 dosage units of

controlled substances over an approximately one year period of time, is

extremely troublesome. At the very least, the shortages indicate that

respondent has failed miserably in complying with the requirement that

it maintain complete and accurate records of its controlled substance

handling. These requirements are in place in order to prevent and

detect the diversion of these potentially dangerous substances.

Respondent's failure to recognize the seriousness of the shortages,

does not bode well for its future compliance with the laws and

regulations relating to controlled substances. See Rocco's Pharmacy, 62

FR 3056 (1997). Therefore, the Acting Deputy Administrator concludes

that Respondent's continued registration would be inconsistent with the

public interest.

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 of Registration AT8866468, previously issued to

Townwood Pharmacy, be, and it hereby is, revoked. The Acting Deputy

Administrator further orders that any pending applications for the

renewal of such registration, be, and they hereby are, denied. This

order is effective March 23, 1998.

Dated: February 12, 1998.

Peter F. Gruden,

Acting Deputy Administrator.

[FR Doc. 98-4201 Filed 2-18-98; 8:45 am]

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