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

Annual Responses: 8,090; Total Annual 

Hours: 74,038. (For policy questions 

regarding this collection, contact Kristy 

Holtje at 410–786–2209.) 

Dated: December 29, 2020. 

William N. Parham, III, 

Director, Paperwork Reduction Staff, Office 

of Strategic Operations and Regulatory 

Affairs. 

[FR Doc. 2020–29116 Filed 12–31–20; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

[Docket No. FDA–2020–N–1415] 

Sunrise Lee: 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 Sunrise Lee 

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 Ms. 

Lee was convicted of a felony under 

Federal law for conduct that relates to 

the regulation of a drug product under 

the FD&C Act. Ms. Lee was given notice 

of the proposed permanent debarment 

and an opportunity to request a hearing 

to show why she should not be 

debarred. As of October 8, 2020 (30 days 

after receipt of the notice), Ms. Lee had 

not responded. Ms. Lee’s failure to 

respond and request a hearing 

constitutes a waiver of her right to a 

hearing concerning this action. 

DATES: This order is applicable 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, (ELEM–4029) Division 

of Enforcement, 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 

January 22, 2020, Ms. Lee was convicted 

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

FD&C Act when judgment was entered 

against her in the U.S. District Court for 

the District of Massachusetts, after a jury 

verdict, on one count of Racketeering 

Conspiracy in violation of 18 U.S.C. 

1962(d). The pattern of racketeering 

activity she was convicted of included 

engaging in multiple acts of mail fraud 

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

U.S.C. 1343). 

The factual basis for this conviction is 

as follows: Ms. Lee held executive 

management positions, to include 

Regional Sales Manager for the MidAtlantic Region, Regional Director for 

the Central Region, and Regional 

Director for the West Region, of Insys 

Therapeutics Inc. (Insys), 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 2012 and continuing through 

2015, Ms. Lee participated in a 

conspiracy whereby employees of Insys 

bribed medical practitioners in various 

states to get those practitioners to 

increase prescribing SUBSYS to their 

patients, many of whom did not have 

cancer. Ms. Lee, along with her coconspirators, measured the effect of 

these bribes on each practitioner’s 

prescribing habits and on the revenue 

that each bribed practitioner generated 

for Insys. Ms. Lee, along with her coconspirators, reduced or eliminated 

bribes paid to those practitioners who 

failed to meet the minimum 

prescription requirements or failed to 

generate enough revenue to justify 

additional bribes. To further this 

conspiracy, Ms. Lee’s co-conspirators 

mislead and defrauded health insurance 

providers to ensure those providers 

approved payment for SUBSYS. Insys 

achieved this goal by establishing the 

‘‘Insys Reimbursement Center,’’ which 

was designed to shift the burden of 

seeking prior authorization for SUBSYS 

from practitioners to Insys. This allowed 

Insys to determine what medical 

information was presented to insurers. 

Ms. Lee’s co-conspirators directed Insys 

employees to mislead insurers to obtain 

payment authorization. 

As a result of this conviction, FDA 

sent Ms. Lee by certified mail on August 

3, 2020, a notice proposing to 

permanently debar her 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 Ms. 

Lee was convicted of a felony under 

Federal law for conduct relating to the 

regulation of a drug product under the 

FD&C Act. The proposal also offered 

Ms. Lee an opportunity to request a 

hearing, providing her 30 days from the 

date of receipt of the letter in which to 

file the request, and advised her 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. Ms. 

Lee received the proposal on September 

8, 2020. She did not request a hearing 

within the timeframe prescribed by 

regulation and has, therefore, waived 

her opportunity for a hearing and any 

contentions concerning her 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 Ms. Sunrise 

Lee has been convicted of a felony 

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, 

Ms. Lee is permanently debarred from 

providing services in any capacity to a 

person with an approved or pending 

drug product application, effective (see 

DATES) (see sections 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 Ms. Lee in any 

capacity during her 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 Ms. Lee provides services 

in any capacity to a person with an 

approved or pending drug product 

application during her period of 

debarment, she 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 application from Ms. Lee during 

her period of debarment, other than in 

connection with an audit under section 

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.