Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 101 

306 of the FD&C Act (section 

306(c)(1)(B) of the FD&C Act). Note that, 

for purposes of section 306 of the FD&C 

Act, a ‘‘drug product’’ is defined as a 

drug subject to regulation under section 

505, 512, or 802 of the FD&C Act (21 

U.S.C. 355, 360b, or 382) or under 

section 351 of the Public Health Service 

Act (42 U.S.C. 262) (section 201(dd) of 

the FD&C Act (21 U.S.C. 321(dd))). 

Any application by Ms. Lee for 

special termination of debarment under 

section 306(d)(4) of the FD&C Act 

should be identified with Docket No. 

FDA–2020–N–1415 and sent to the 

Dockets Management Staff (see 

ADDRESSES). The public availability of 

information in these submissions is 

governed by 21 CFR 10.20. 

Publicly available submissions will be 

placed in the docket and will be 

viewable at https://www.regulations.gov 

or at the Dockets Management Staff (see 

ADDRESSES) between 9 a.m. and 4 p.m., 

Monday through Friday, 240–402–7500. 

Dated: December 28, 2020. 

Lauren K. Roth, 

Acting Principal Associate Commissioner for 

Policy. 

[FR Doc. 2020–29044 Filed 12–31–20; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

[Docket No. FDA–2019–N–3794] 

Jerrod Nichols Smith: Debarment 

Order 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notice. 

SUMMARY: The Food and Drug 

Administration (FDA or Agency) is 

issuing an order permanently debarring 

Jerrod Nichols Smith from providing 

services in any capacity to a person that 

has an approved or pending drug 

product application. FDA bases this 

order on a finding that Mr. Smith was 

convicted of multiple felony counts 

under Federal law for conduct that 

relates to the regulation of a drug 

product under the Federal, Food, Drug, 

and Cosmetic Act (the FD&C Act). Mr. 

Smith was given notice of the proposed 

permanent debarment and was given an 

opportunity to request a hearing to show 

why he should not be debarred. As of 

September 27, 2020 (30 days after 

receipt of the notice), Mr. Smith had not 

responded. Mr. Smith’s failure to 

respond and request a hearing 

constitutes a waiver of his right to a 

hearing concerning this action. 

DATES: This order is effective January 4, 

2021. 

ADDRESSES: Submit applications for 

termination of debarment to the Dockets 

Management Staff, Food and Drug 

Administration, 5630 Fishers Lane, Rm. 

1061, Rockville, MD 20852, 240–402– 

7500, or at https://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Jaime Espinosa, Division of Enforcement 

(ELEM–4029), Office of Strategic 

Planning and Operational Policy, Office 

of Regulatory Affairs, Food and Drug 

Administration, 12420 Parklawn Dr., 

Rockville, MD 20857, 240–402–8743, or 

at debarments@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 306(a)(2)(B) of the FD&C Act 

(21 U.S.C. 335a(a)(2)(B)) requires 

debarment of an individual from 

providing services in any capacity to a 

person that has an approved or pending 

drug product application if FDA finds 

that the individual has been convicted 

of a felony under Federal law for 

conduct relating to the regulation of any 

drug product under the FD&C Act. On 

July 16, 2018, Mr. Smith was convicted 

as defined in section 306(l)(1)(A) of the 

FD&C Act when judgment was entered 

against him in the U.S. District Court for 

the Middle District of Tennessee, 

Nashville Division, after a jury trial, to 

one count of conspiracy to commit mail 

fraud in violation of 18 U.S.C. 371, 15 

counts of mail fraud in violation of 18 

U.S.C. 1341, and one count of 

obstruction of justice in violation of 18 

U.S.C. 1001. 

The factual basis for these convictions 

is as follows: Mr. Smith was one of the 

owners and operators of Cumberland 

Distribution, Inc. (‘‘Cumberland’’), 

formerly known as Midwest Pharmacy, 

which was a wholesale drug 

distribution company incorporated in 

Nevada and Tennessee. Mr. Smith was 

engaged in the business of wholesale 

distribution of prescription drugs, as 

defined by 21 U.S.C. 353(e)(3)(B), to 

pharmacy customers throughout the 

United States. From December 2006 

through August 2009, Mr. Smith, along 

with others, purchased millions of 

dollars of prescription drugs, through 

Cumberland. The vast majority of the 

prescription drugs purchased by 

Cumberland and received at the 

company’s warehouse facilities were 

sold to Cumberland, directly and 

indirectly, by individuals and entities 

whom Mr. Smith knew were not 

licensed by any State to engage in the 

wholesale distribution of prescription 

drugs and were not otherwise 

authorized to distribute prescription 

drugs pursuant to 21 U.S.C. 353. These 

unauthorized sellers obtained their 

prescription drugs from various 

networks of street level drug diverters. 

Mr. Smith directed employees to take 

steps to conceal the true origins of the 

diverted prescription drugs shipped to 

the company’s warehouse facilities 

before shipping them to pharmacy 

customers around the country. Such 

steps included, but were not limited to, 

falsification of documents concerning 

the chain of custody or pedigree of a 

drug. These falsified pedigree 

documents, which Mr. Smith provided 

to his pharmacy customers or 

maintained at Cumberland, inaccurately 

represented that the diverted products 

had been obtained from licensed 

wholesale distributors. Mr. Smith also 

used shell companies to receive and 

relabel diverted prescription drugs 

before sending them to Cumberland’s 

warehouse facilities to create the false 

appearance that his company was 

purchasing prescription drugs from 

licensed wholesale distributors. 

The diverted drugs included, but were 

not limited to, drugs used to treat 

human immunodeficiency virus/ 

acquired immunodeficiency syndrome, 

antipsychotic medications, 

antidepressants, blood pressure 

medications, and diabetes medications. 

Numerous pharmacies reported 

problems with drugs they purchased 

from Cumberland, including 

prescription drug bottles containing the 

wrong medicine, the wrong dosage 

information, and foreign objects inside. 

At trial, several witnesses testified that 

at least one bottle of prescription drugs 

sold by Cumberland contained Tic Tacs 

instead of medicine. Through the course 

of this scheme, Mr. Smith’s company 

had gross proceeds of approximately 

$58,984,912. His profits were 

approximately $14,689,782. 

As a result of these convictions, FDA 

sent Mr. Smith by certified mail on July 

16, 2020, a notice proposing to 

permanently debar him from providing 

services in any capacity to a person that 

has an approved or pending drug 

product application. The proposal was 

based on a finding, under section 

306(a)(2)(B) of the FD&C Act, that Mr. 

Smith was convicted of felonies under 

Federal law for conduct relating to the 

regulation of a drug product under the 

FD&C Act. The proposal also offered Mr. 

Smith an opportunity to request a 

hearing, providing him 30 days from the 

date of receipt of the letter in which to 

file the request, and advised him that 

failure to request a hearing constituted 

an election not to use the opportunity 

for a hearing and a waiver of any 

contentions concerning this action. Mr. 

102 Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 

Smith received the proposal on August 

28, 2020. Mr. Smith did not request a 

hearing within the timeframe prescribed 

by regulation and has, therefore, waived 

his opportunity for a hearing and any 

contentions concerning his debarment 

(21 CFR part 12). 

II. Findings and Order 

Therefore, the Assistant 

Commissioner, Office of Human and 

Animal Food Operations, under section 

306(a)(2)(B) of the FD&C Act, under 

authority delegated to the Assistant 

Commissioner, finds that Mr. Smith has 

been convicted of multiple felonies 

under Federal law for conduct 

otherwise relating to the regulation of a 

drug product under the FD&C Act. 

As a result of the foregoing finding, 

Mr. Smith is permanently debarred from 

providing services in any capacity to a 

person with an approved or pending 

drug product application, effective (see 

DATES) (see section 306(a)(2)(B) and 

(c)(2)(A)(ii) of the FD&C Act). Any 

person with an approved or pending 

drug product application who 

knowingly employs or retains as a 

consultant or contractor, or otherwise 

uses the services of Mr. Smith, in any 

capacity during his debarment, will be 

subject to civil money penalties (section 

307(a)(6) of the FD&C Act (21 U.S.C. 

335b(a)(6))). If Mr. Smith provides 

services in any capacity to a person with 

an approved or pending drug product 

application during his period of 

debarment he will be subject to civil 

money penalties (section 307(a)(7) of the 

FD&C Act). In addition, FDA will not 

accept or review any abbreviated new 

drug applications from Mr. Smith 

during his period of debarment, other 

than in connection with an audit under 

section 306 of the FD&C Act (section 

306(c)(1)(B) of the FD&C Act). Note that, 

for purposes of section 306 of the FD&C 

Act, a ‘‘drug product’’ is defined as a 

drug subject to regulation under section 

505, 512, or 802 of the FD&C Act (21 

U.S.C. 355, 360b, or 382) or under 

section 351 of the Public Health Service 

Act (42 U.S.C. 262) (see section 201(dd) 

of the FD&C Act (21 U.S.C. 321(dd))). 

Any application by Mr. Smith for 

special termination of debarment under 

section 306(d)(4) of the FD&C Act 

should be identified with Docket No. 

FDA–2019–N–3794 and sent to the 

Dockets Management Staff (see 

ADDRESSES). The public availability of 

information in these submissions is 

governed by 21 CFR 10.20. 

Publicly available submissions will be 

placed in the docket and will be 

viewable at https://www.regulations.gov 

or at the Dockets Management Staff (see 

ADDRESSES) between 9 a.m. and 4 p.m., 

Monday through Friday, 240–402–7500. 

Dated: December 28, 2020. 

Lauren K. Roth, 

Acting Principal Associate Commissioner for 

Policy. 

[FR Doc. 2020–29052 Filed 12–31–20; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

[Docket No. FDA–2020–N–1372] 

Alec Burlakoff: Final Debarment Order 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notice. 

SUMMARY: The Food and Drug 

Administration (FDA or Agency) is 

issuing an order under the Federal 

Food, Drug, and Cosmetic Act (FD&C 

Act) permanently debarring Alec 

Burlakoff from providing services in any 

capacity to a person that has an 

approved or pending drug product 

application. FDA bases this order on a 

finding that Alec Burlakoff was 

convicted of a felony under Federal law 

for conduct that relates to the regulation 

of a drug product under the FD&C Act. 

Mr. Burlakoff was given notice of the 

proposed permanent debarment and 

was given an opportunity to request a 

hearing to show why he should not be 

debarred. As of July 24, 2020 (30 days 

after receipt of the notice), Mr. Burlakoff 

had not responded. Mr. Burlakoff’s 

failure to respond and request a hearing 

constitutes a waiver of his right to a 

hearing concerning this action. 

DATES: This order is applicable January 

4, 2021. 

ADDRESSES: Submit applications for 

special termination of debarment to the 

Dockets Management Staff (HFA–305), 

Food and Drug Administration, 5630 

Fishers Lane, Rm. 1061, Rockville, MD 

20852, 240–402–7500. 

FOR FURTHER INFORMATION CONTACT: 

Jaime Espinosa, Division of 

Enforcement, Office of Strategic 

Planning and Operational Policy, Office 

of Regulatory Affairs, Food and Drug 

Administration, 12420 Parklawn Dr., 

Rockville, MD 20857, debarments@

fda.hhs.gov, 240–402–8743. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 306(a)(2)(B) of the FD&C Act 

(21 U.S.C. 335a(a)(2)(B)) requires 

debarment of an individual from 

providing services in any capacity to a 

person that has an approved or pending 

drug product application if FDA finds 

that the individual has been convicted 

of a felony under Federal law for 

conduct relating to the regulation of any 

drug product under the FD&C Act. On 

January 23, 2020, Mr. Burlakoff was 

convicted as defined in section 306(l)(1) 

of the FD&C Act when judgment was 

entered against him in the U.S. District 

Court for the District of Massachusetts, 

after his plea of guilty, to one count of 

Racketeering Conspiracy in violation of 

18 U.S.C. 1962(d). The pattern of 

racketeering activity he was convicted 

of included engaging in multiple acts of 

illegal distribution of a controlled 

substance (21 U.S.C. 841(a)(1)); mail 

fraud (18 U.S.C. 1341); wire fraud (18 

U.S.C. 1343); honest services mail fraud 

(18 U.S.C. 1341 and 1346); and, honest 

services wire fraud (18 U.S.C. 1343 and 

1346). 

The factual basis for this conviction is 

as follows: Mr. Burlakoff held executive 

management positions at Insys 

Therapeutics Inc. (Insys), including 

Regional Sales Manager for the 

Southeast Region and Vice President of 

Sales. Insys is a Delaware Corporation, 

with headquarters in Chandler, Arizona. 

Insys developed and owned a drug 

called SUBSYS, a liquid formulation of 

fentanyl to be applied under the tongue. 

FDA approved SUBSYS for the 

management of breakthrough pain in 

adult cancer patients who are already 

receiving and are already tolerant to 

opioid therapy for their underlying 

persistent cancer pain. From May 2012 

and continuing until December 2015, he 

participated in a conspiracy whereby 

employees of Insys bribed and provided 

kickbacks to medical practitioners in 

various states to get those practitioners 

to increase prescribing SUBSYS to their 

patients, many of whom did not have 

cancer. The bribes and kickbacks took 

various forms to include honoraria for 

the practitioners’ participation in 

educational events, payment of the 

practitioner’s staff salaries, and the 

completion of office tasks for the 

provider performed by Insys employees. 

Mr. Burlakoff and his co-conspirators 

used pharmacy data acquired from third 

parties to identify practitioners who 

either prescribed unusually high 

volumes of rapid-onset opioids, or had 

demonstrated a capacity to prescribe 

unusually large volumes of rapid-onset 

opioids. In exchange for bribes and 

kickbacks to these targeted practitioners, 

the practitioners increased the number 

of new SUBSYS prescriptions they 

wrote and increased the dosage and 

number of units of SUBSYS for new and 

existing prescriptions. Many of the 

targeted practitioner’s patients for