[Federal Register Volume 76, Number 153 (Tuesday, August 9, 2011)]
[Notices]
[Pages 48887-48897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20055]


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 DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 09-1]


Liddy's Pharmacy, L.L.C. Denial of Application

    On September 15, 2008, the Deputy Assistant Administrator, Office 
of Diversion Control, Drug Enforcement Administration (DEA or 
``Government''), issued an Order to Show Cause to

[[Page 48888]]

Liddy's Pharmacy, L.L.C. (Respondent), of Lakeland, Florida. The Show 
Cause Order proposed the revocation of Respondent's DEA Certificate of 
Registration, BD8523335, as a retail pharmacy, and the denial of any 
pending applications for renewal or modification of its registration, 
on the ground that Respondent's continued registration ``is 
inconsistent with the public interest, as that term is defined in 21 
U.S.C. 823(f).'' Show Cause Order at 1.
    More specifically, the Show Cause Order alleged that Respondent 
``knowingly engaged in a scheme to distribute controlled substances 
based on purported prescriptions that were issued for other than 
legitimate medical purposes and by physicians acting outside the usual 
course of professional practice, in violation of Federal and State 
law.'' Id. The Order further alleged that Respondent ``aided physicians 
in the unauthorized practice of medicine in those states that require 
physicians to be licensed by the state before prescribing controlled 
substances to state residents and in those states that require a 
physical examination by the physician prior to prescribing controlled 
substances.'' Id. at 1-2.
    By letter of September 29, 2008, Respondent, through its attorney, 
requested a hearing on the allegations and the matter was placed on the 
docket of the Agency's Administrative Law Judges (ALJs). Thereafter, on 
January 13, 2009, an ALJ conducted a hearing in Orlando, Florida at 
which only the Government presented evidence. Following the hearing, 
both parties filed briefs containing their proposed findings of fact, 
conclusions of law, and argument.
    On October 6, 2009, the ALJ issued her recommended decision (also 
ALJ). Therein, the ALJ began by noting that under Federal law ``[a] 
prescription for a controlled substance . . . must be issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his practice'' and that a pharmacist has ``a 
corresponding responsibility'' not to fill an unlawful prescription. 
ALJ at 19 (quoting 21 CFR 1306.04(a)). The ALJ then found that ``the 
evidence shows that the Respondent filled over 42,000 prescriptions 
written by doctors for patients in states where those doctors were not 
licensed.'' Id. at 20. Having found that ``these physicians were * * * 
engaged in the unauthorized practice of medicine in at least nine 
states,'' the ALJ concluded that the ``prescriptions issued by such 
practitioners * * * are therefore invalid under the Controlled 
Substances Act [(CSA)]'' and that ``Respondent violated the CSA by 
filling them.'' Id. at 22.
    The ALJ also found that while Respondent ``is only licensed to 
practice pharmacy in Florida, Texas, and Illinois,'' it ``nevertheless 
dispensed medication to patients in Arkansas, Connecticut, New 
Hampshire, California, and Louisiana'' and thus ``engaged in the 
unlicensed practice of pharmacy in violation of the laws of these 
states.'' Id. The ALJ further found that Respondent violated Florida 
law when, despite being ``on notice by the [Florida] Board [of 
Pharmacy] that prescriptions for controlled substances must be manually 
signed,'' it ``continued to fill controlled-substance prescriptions 
containing electronic signatures.'' Id. at 23.
    Finally, the ALJ found that Respondent ``knowingly filled 
prescriptions issued in the name of a doctor whose DEA registration was 
suspended.'' Id. Describing such conduct as ``a blatant violation of 
the pharmacy's corresponding responsibility under the [CSA] and DEA 
regulations,'' the ALJ found that this conduct ``demonstrate[d] a 
disturbing lack of appreciation for the responsibilities of a DEA 
registrant'' and ``threatens the public health and safety by creating a 
substantial risk of diversion of controlled substances.'' Id. at 24. 
The ALJ thus concluded that ``in total, the Government has proven by a 
preponderance of the evidence its prima facie case.'' Id.
    The ALJ then turned to whether Respondent had rebutted the 
Government's prima facie case. Noting that ``both Mr. Liddy and Mrs. 
Liddy,'' who are Respondent's owners, ``invoked their Fifth Amendment 
privilege against self-incrimination'' and refused to testify, the ALJ 
further found that ``Respondent presented no evidence or testimony 
whatsoever to rebut any of the Government's evidence.'' Id. 
Accordingly, the ALJ ``conclude[d] that it would be inconsistent with 
the public interest to allow * * * Respondent to maintain its DEA 
registration.'' Id. at 25. Citing Respondent's ``extensive record of 
unlawful conduct,'' its ``callous disregard for the serious 
responsibilities of a DEA registrant,'' as well as its ``failure to 
present any evidence to show that it has corrected'' its unlawful 
practices, the ALJ recommended that Respondent's registration be 
revoked. Id. at 25-26.
    On October 27, 2009, Respondent filed Exceptions to the ALJ's 
decision, and on November 9, 2009, the record was forwarded to me for 
final agency action. On April 14, 2010, Respondent's owner executed a 
voluntary surrender of its registration. Notice of Surrender and Motion 
To Terminate Proceedings, at 1. Thereafter, the Government moved to 
terminate the proceeding on the ground that it is now moot. Id. at 2.
    Having reviewed the voluntary surrender form (DEA-104), I conclude 
that this case is not moot because that form contains no language 
manifesting that Respondent has withdrawn its pending application. 
Moreover, even if Respondent had withdrawn its application, under the 
Agency's regulation, once an applicant is served with an order to show 
cause, an application may only be ``withdrawn with permission of the 
Administrator * * * where good cause is shown by the applicant or where 
the * * * withdrawal is in the public interest.'' 21 CFR 1301.16(a). In 
light of the extensive resources that have been expended in both the 
litigation and review of this case, the egregious misconduct 
established by this record, and that neither the voluntary surrender 
form nor Agency regulations bar Respondent from immediately re-applying 
for a new registration or impose any time-bar on its reapplying, I 
conclude that allowing Respondent to withdraw its application would be 
contrary to the public interest.\1\ Accordingly, I conclude that the 
case is not moot. The Government's motion to terminate the proceeding 
is therefore denied.
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    \1\ I further note that there is no evidence that Respondent and 
its owners intend to permanently cease the practice of pharmacy.
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    Having considered the entire record in this matter, including 
Respondent's exceptions, I adopt the ALJ's recommended decision in its 
entirety except as noted herein. Accordingly, Respondent's pending 
application will be denied. I make the following findings.

Findings

    At the time of the hearing, Respondent held DEA Certificate of 
Registration BD8523335, which authorized it to dispense controlled 
substances in schedules II through V as a retail pharmacy at its 
Lakeland, Florida location. GX 1; ALJ Ex. 5, at 1. While Respondent's 
registration was initially to expire on March 31, 2009, on February 2, 
2009, it timely filed a renewal application. GX 1; ALJ Ex. 5, at 1. 
Accordingly, Respondent's registration remained valid until April 14, 
2010, when Respondent's owner surrendered it. See 5 U.S.C. 557(c). 
However, as explained above, the Voluntary Surrender form contains no 
language manifesting Respondent's intent to withdraw its application. I

[[Page 48889]]

therefore find that Respondent's application remains pending before the 
Agency.
    Respondent, which is licensed as a pharmacy in the states of 
Florida, Texas, and Illinois, Tr. 42, is owned by Mr. Robert Bruce 
Liddy, Sr., and Mrs. Melinda Carol Liddy. GX 5. Respondent is also 
known by the name ``Discount Mail Meds.'' Tr. 19; see also GX 9.
    At the hearing, the Government called both Mr. and Mrs. Liddy to 
testify. Id. at 12, 15. However, both Mr. and Mrs. Liddy asserted their 
Fifth Amendment right against self-incrimination and thus did not 
answer questions on various subjects including on whether Respondent 
was also known as ``Discount Mail Meds,'' on ``all matters regarding 
[Respondent's] operations,'' and on Respondent's ``association'' with 
Internet Web sites, doctors, or Web site operators regarding the 
filling of prescriptions for those Web sites. Id. at 12-13, 15-16.
    At some point not established by the record, multiple law 
enforcement agencies including DEA commenced an investigation into 
Respondent's practices, specifically focusing on its filling of 
prescriptions for hydrocodone (a Schedule III controlled substance), 
alprazolam (a Schedule IV controlled substance), and Soma or 
carisoprodol (a drug controlled under Florida law), which were issued 
by doctors who did not appear to have valid physician-patient 
relationships with the recipients of the prescriptions because the 
latter were located throughout the country. Id. at 20-21.
    According to the DEA's lead investigator, Respondent was associated 
with four to five internet prescribing Web sites, including 
ExpressReliefServices.com and NationwidePills.com. Id. at 22; see also 
GXs 7 & 8. Generally, the Web sites offered a person the ability to 
purchase prescription medication, including controlled substances, 
based on a person's completion of an online questionnaire and without 
the prescribing physician's having performed a physical exam of him/
her. Tr. at 22; see also GX 7, at 3 (terms and conditions for 
Nationwidepills.com) (``You understand that an on-line medical 
consultation will not include a physical examination. You hereby waive 
a physical exam at this time and agree to obtain a timely medical 
follow-up examination with a physician before you take treatments 
prescribed by Nationwidepills.com.''). Moreover, while some of the Web 
sites required medical records and/or identification, others did not. 
Tr. 22. Physicians who held DEA registrations ``lent their DEA numbers 
for the filling of * * * prescriptions.'' Id. However, the actual 
creation of the prescriptions ``appear[ed] to have been done by a 
physician's assistant frequently without the knowledge of the 
physician.'' Id.
    Between June and August 2006, DEA Investigators from the Cleveland 
District Office made four undercover purchases of 10 mg. strength 
hydrocodone drugs by accessing several unidentified Web sites, 
completing questionnaires, providing medical records, and speaking with 
a physician's assistant. Id. at 23. The shipments of hydrocodone 
medication arrived via either UPS or FedEx and had been filled by 
Respondent. Id. at 23-24. Moreover, at some unspecified date in either 
2005 or 2006, a DEA Diversion Investigator went to Respondent and 
interviewed its owners. Tr. 82.
    Approximately one year later, on July 30, 2007, a search warrant 
was executed at Respondent and five other locations. Id. at 34; GX 5, 
at 1. During the search, another DI interviewed Robert Bruce Liddy, 
Sr.; the DI subsequently provided an affidavit about that interview.
    According to the affidavit, Mr. Liddy was first approached by the 
owner of Express Relief Services (ERS) in December 2004. GX 5, at 1. 
The owner of ERS was ``seeking a pharmacy to fill prescriptions 
generated from his `network of physicians' in the telemedicine field.'' 
Id. At a dinner meeting, ERS's owner explained that Respondent would 
``receive prescriptions via facsimile directly from the doctor's [sic] 
office'' and be paid a ``'dispensing fee of $28-$30 for each'' 
prescription it filled. Id. Respondent received ``approximately 500-750 
new prescriptions per week'' from ERS's Web site and also filled 
requests for refills. Id. According to the affidavit, ``Mr. Liddy 
stated that at one point his pharmacy would fill more than 180 
prescriptions a [sic] day for Express Relief Services'' for such drugs 
as hydrocodone, alprazolam and carisoprodol, with the vast majority of 
the prescriptions being for hydrocodone products. Id.
    Mr. Liddy told the DI that Respondent received the prescriptions 
directly from the prescribing physicians, among them one Dr. Jorge 
Alsina. Id. at 2. Mr. Liddy further told the DI that the owner of ERS, 
whom Mr. Liddy believed to be ``addicted to hydrocodone,'' would ``pick 
up hydrocodone prescriptions for himself and `his friends,' '' and that 
these prescriptions were also written by the doctors who worked for 
ERS. Id.
    During the interview, Mr. Liddy stated that, while he worked for 
ERS, he also contracted with other Internet Web sites to fill 
prescriptions for them. Id. Also at the interview, Mrs. Liddy 
``revealed that [Respondent] was also working with Opti Health, First 
Priority, Nationwide Pills, Pharmanet, U.S. Meds, and CDR.'' Id.
    Mr. Liddy asserted that he had a pharmacy license ``in each state 
where he had out-of-state customers.'' Id. He also claimed that he was 
not breaking the law ``because he believed there were safeguards in 
place against the wrong people getting the drugs.'' Id. He further 
stated his belief that ```people will get the drugs''' anyway and that 
he ```was not the prescription police.''' Id.
    During the execution of the search warrant, Respondent's dispensing 
records were seized by downloading them from the hard drives of its 
computer system. Tr. 53, 55, 97. The Government introduced into 
evidence both summaries of data seized at the execution of the search 
warrant prepared by the National Drug Intelligence Center (NDIC) and 
DEA's forensic digital laboratory in Lorton, Virginia, as well as data 
from DEA's Automated Reports and Consummated Order System (ARCOS) which 
showed the monthly amounts of hydrocodone (in dosage units) which 
Respondent purchased between January 1, 2004 and September 16, 2008. 
Id. at 91 & 95; GX 3. The latter showed that Respondent's purchases of 
hydrocodone increased from a total of 47,900 dosage units in calendar 
year 2004, to 3,688,500 dosage units in 2005, and to 4,557,840 in 2006. 
GX 3.
    Dr. Jorge Alsina was listed as a prescribing physician in records 
seized from Respondent. Id. at 42-43; GXs 13, 14 & 19. Dr. Alsina was 
licensed to practice medicine only in the State of Florida. Tr. 43. 
Initially, he received $1,000 per week for writing prescriptions for 
Respondent; subsequently, according to the DI, he received $2,000 per 
week. Id. at 58-59.
    The DI further testified as to manner in which ERS operated. 
According to the DI, an ERS clerk would request medical records and a 
copy of a driver's license from a customer; the records were then faxed 
to either Dr. Alsina or to Mr. Folder, who was a physician's assistant. 
However, in an interview, Dr. Alsina stated that he did not have a 
registered supervisory relationship with Folder as required by Florida 
law. Id. at 60-63.
    Dr. Alsina also ``did not necessarily review'' the medical records 
which he would fax to the physician's assistant; Alsina would also e-
mail the prescription to Folder as well. Id. at 64-65; 67. However, 
according to Dr. Alsina, sometimes his part in the e-mail

[[Page 48890]]

chain was skipped and the prescription was sent directly from the 
physician's assistant to Respondent. Id. Alsina indicated that ERS had 
a template with his signature so that with the ``hit[ing] of a 
button,'' his signature could be generated by either himself or Folder. 
Id. at 69, 70.
    The Government introduced into evidence eight prescriptions for 
controlled substances that were sent as e-mail attachments from 
``Matthew and Gayle Folder'' to ``Bruce Liddy.'' GX 4, at 2, 4, 8, 10, 
12, 14, 18, and 20. All of the prescriptions were dated March 19, 2005 
and bore Dr. Alsina's electronic signature. See id. The DI testified 
that these prescriptions were ``representative of the vast majority of 
the prescriptions that were seized from [Respondent's] computers.'' Id. 
at 85.
    The Government also entered into evidence an e-mail dated September 
10, 2004, from Danna E. Droz, Executive Director, Board of Pharmacy, 
State of Florida, to Mr. Liddy at the e-mail address: 
<a href="/cdn-cgi/l/email-protection#1e7c6c6b7d7b5e7a776d7d716b706a737f7772737b7a6d307d7173"><span class="__cf_email__" data-cfemail="a0c2d2d5c3c5e0c4c9d3c3cfd5ced4cdc1c9cccdc5c4d38ec3cfcd">[email protected]</span></a>. GX 11. The e-mail specifically explained 
that ``[e]lectronic prescriptions such as would come from a PDA or a 
computer to a pharmacy's fax machine or to a pharmacy's computer may be 
used only for prescriptions for non-controlled substances.'' GX 11. 
Continuing, Ms. Droz explained that ``[a] prescription for a controlled 
substance must be manually signed at this time.'' Id.; Tr. 87. While 
the e-mail further noted that DEA is in the process of developing 
regulations to permit the electronic transfer of a prescription,'' GX 
11, the requirement that a controlled substance prescription be 
manually signed remained in effect as of the date of the hearing under 
the regulations of both DEA and the State of Florida. Tr. 88.
    The DI testified that the ``vast majority'' of the seized 
prescriptions did not comply with the manual signature requirement. Id. 
Moreover, the eight prescriptions contained in Government Exhibit 4 
were issued subsequent to the date on which Mr. Liddy received notice 
that controlled substance prescriptions must be manually signed.
    Based on the records seized from Respondent, the NDIC prepared a 
chart compiling the number of prescriptions dispensed by Respondent by 
each prescriber for hydrocodone, alprazolam and other drugs. GX 14. 
According to the chart, Respondent filled 19,447 prescriptions which 
were written by Dr. Alsina; 12,796 of the prescriptions were for 
hydrocodone products and 5,860 were for alprazolam. GX 14, at 1; GX 15. 
Only 791 prescriptions were for other drugs, some of which may have 
also been controlled substances.\2\ GX 14, at 1.
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    \2\ The Government's evidence lists the prescriptions as being 
in one of three categories: hydrocodone, alprazolam, or ``other'' 
medications. GX 14. The evidence does not, however, further identify 
the drugs listed under ``other'' medications and whether this 
category includes any controlled substances. See GXs 14-20.
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    Moreover, between October 2004 and the end of December 2005, 
Respondent dispensed prescriptions written by Dr. Alsina to patients in 
such states as West Virginia (4,308 prescriptions), Tennessee (4,307 
prescriptions), Ohio (2,455 prescriptions), Kentucky (2,346 
prescriptions),\3\ Virginia (2,345 prescriptions), Alabama (633 
prescriptions), Florida (425 prescriptions), California (311 
prescriptions), Indiana (275 prescriptions), and North Carolina (177 
prescriptions). GX 19, at 1; GX 20, at 1-68.\4\ Even if all of the 
remaining 791 prescriptions which were not specifically identified as 
being for controlled substances were for non-controlled drugs and are 
subtracted from the various state figures, the evidence still shows 
that Dr. Alsina prescribed large quantities of controlled substances to 
individuals in West Virginia, Tennessee, Ohio, Kentucky, and Virginia, 
if not the other States as well.
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    \3\ As the ALJ noted in her recommended decision, there is a 
slight discrepancy between the raw data in Government Exhibit 13 and 
the NDIC-prepared data in Government Exhibit 19, the source cited 
here. See ALJ at 9 n.8. The count in Government Exhibit 13 for 
Kentucky is 2,345 and not 2,346. Other discrepancies are as follows: 
Alabama, 632, not 633; Florida, 424, not 425; and California, 310, 
not 311. See id. I concur in the ALJ's determination that, while 
``the Government's calculated exhibits may be slightly inaccurate,'' 
they nevertheless ``are sufficiently close to the actual numbers'' 
for the purposes of this decision. See id.
    \4\ The ALJ treated all of the prescriptions as if they were for 
controlled substances including those listed as ``other'' drugs and 
which were not specifically identified as being for controlled 
substances. See ALJ at 9 (FOF 19 and 20) (discussion of ``Unlicensed 
Practice of Medicine''). However, even after subtracting out all of 
the ``other'' prescriptions, it is still clear that the physicians 
wrote numerous controlled substance prescriptions for residents of 
States where they were not licensed. The ALJ's error is therefore 
inconsequential. See ALJ at 20-21.
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    As an example of Dr. Alsina's prescribing of controlled substances 
across state lines, on July 6, 2005, he issued 351 prescriptions \5\ to 
residents of various States and in the following quantities: West 
Virginia (98), Tennessee (98), Virginia (65), Ohio (58), Alabama (6), 
North Carolina (5), Arizona (4), Michigan (4), Indiana (3), Georgia 
(2), Arizona (1), Connecticut (1), Maryland (1), New Hampshire (1), and 
Utah (1). GX 20, at 48. Obviously, Dr. Alsina did not fly or drive all 
over the country on a single day to conduct physical exams on these 
patients. Nor does it seem likely that any of these patients travelled 
from all over the country to see him (this was, after all, an internet-
based operation). In any event, seeing 351 patients in a single day 
would be a remarkable achievement for any physician. I therefore find 
that Respondent either had to have known, or willfully closed its eyes 
to the fact, that Dr. Alsina could not possibly have issued all of 
these prescriptions pursuant to a legitimate doctor-patient 
relationship.
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    \5\ He also issued eight prescriptions to individuals in 
Florida, for a total of 359 prescriptions on that date. GX 20, at 
48.
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    DEA suspended Dr. Alsina's Certificate of Registration on September 
26, 2005. Tr. 44-45; GX 10. Dr. Alsina notified Respondent of this fact 
by an e-mail of October 5, 2005, which Respondent acknowledged with 
another e-mail of the same date. Tr. 47-48; GX 12. However, 
Respondent's records reflect that through December 2005, Respondent 
continued to fill prescriptions issued using Dr. Alsina's registration. 
GX 20, at 66-68. More specifically, it appears that Respondent filled 
67 prescriptions from the time of the suspension through the end of 
December 2005. GX 20; GX 13; see also ALJ at 9 n.10.\6\ However, the 
Government's evidence does not identify what drugs these prescriptions 
were for.
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    \6\ The ALJ did not count the prescriptions listed under 
February 1, 2006 and July 26, 2006, noting that the ``date filled'' 
for those prescriptions is one year earlier in 2005, when Dr. 
Alsina's license was still valid. Like the ALJ, I conclude that the 
dates of February 1 and July 26, 2006 are typographical errors. See 
ALJ at 10 n.12.
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    Respondent's pharmacy records also listed Dr. Dora Fernandez as a 
prescribing physician. Tr. 43; GXs 13-14, 19 & 20. Dr. Fernandez is 
only licensed to practice medicine in the State of Florida. Tr. 43.
    The NDIC data indicate that Dr. Fernandez wrote a total of 13,603 
prescriptions which were filled by Respondent. Of these, 3,242 were for 
hydrocodone, 60 were for alprazolam, and 301 were for other 
medications. GX 14, at 1; GX 15. Between February 2006 and the end of 
April 2007, Respondent dispensed prescriptions written by Dr. Fernandez 
to individuals in numerous States, in the following quantities: Florida 
(1,448 prescriptions), Texas (1,387 prescriptions), Alabama (856 
prescriptions), Virginia (837 prescriptions), New York (702 
prescriptions), Washington (690 prescriptions), Michigan (652 
prescriptions), Pennsylvania (497 prescriptions), Ohio (476 
prescriptions)

[[Page 48891]]

and Georgia (467 prescriptions). See GXs 19, at 1, & GX 20, at 68-195. 
Even if all of the remaining 301 prescriptions which were not 
specifically identified as being for controlled substances were for 
non-controlled drugs, Dr. Fernandez prescribed controlled substances to 
residents of each of these ten States. Moreover, she also prescribed 
controlled substances to residents of at least nine States where she 
did not possess licensure and could not practice medicine.
    As an example of her prescribing across state lines, on November 
13, 2006, Dr. Fernandez issued 91 prescriptions.\7\ GX 20, at 152-53. 
The States and number of prescriptions are as follows: New York (11), 
Michigan (8), Arizona (7), Georgia (7), Alabama (6), Texas (6), 
Virginia (5), Washington (5), Connecticut (4), Ohio (3), Wisconsin (3), 
Arkansas (2), Colorado (2), Indiana (2), Kansas (2), Pennsylvania (2), 
Alaska (1), California (1), Iowa (1), Idaho (1), Minnesota (1), Montana 
(1), New Mexico (1), Oklahoma (1), Oregon (1), Rhode Island (1), and 
South Carolina (1).
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    \7\ She additionally issued seven prescriptions to individuals 
in the State of Florida. GX 20, at 152.
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    Given the respective locations of Dr. Fernandez and those she 
prescribed to, it is implausible that Dr. Fernandez conducted physical 
examinations of these persons and established bona fide doctor-patient 
relationships with them. Here again, Respondent clearly had reason to 
know that Dr. Fernandez could not have established a bona fide doctor-
patient relationship with these persons. Tr. 43-44.
    Respondent's records also listed Dr. Jose Mercado Francis as a 
prescribing physician. Tr. 43; GXs 13-15, 19 & 20. Dr. Francis is only 
licensed to practice medicine in the State of Michigan.
    The NDIC data indicates that Dr. Francis wrote 7,319 prescriptions 
which were filled by Respondent, including 5,135 for hydrocodone 
products, 1,135 for alprazolam, and 1,049 for other medications. GX 14, 
at 1. Between February 2006 and the end of April 2007, Respondent 
dispensed prescriptions written by Dr. Francis to individuals in a 
number of States, the top ten being as follows: Alabama (1,294 
prescriptions), California (568 prescriptions), Louisiana (518 
prescriptions), Texas (486 prescriptions), Washington (456 
prescriptions), Ohio (404 prescriptions), Florida (386 prescriptions), 
Georgia (337 prescriptions), Virginia (272 prescriptions), and Maine 
(268 prescriptions). GXs 19, at 1; GX 20, at 195-270. Again, even 
assuming that all of the non-specified prescriptions were for non-
controlled drugs and subtracting them out, Dr. Francis still clearly 
issued numerous controlled substance prescriptions to residents of 
Alabama.
    As an example of his prescribing across state lines, on March 3, 
2006, Dr. Francis issued thirty prescriptions to residents of the 
following States: Georgia (7), South Carolina (4), Florida (3), 
Maryland (3), Ohio (3), California (2), Indiana (2), Louisiana (2), 
Colorado (1), Maine (1), North Carolina (1), and Texas (1). GX 20, at 
196. Clearly, Dr. Francis could not have established bona fide doctor-
patient relationships with these patients or performed physical 
examinations on them. Here again, Respondent, when it filled these 
prescriptions, had reason to know this.
    Respondent's records list Dr. Edward Cheslow as a prescribing 
physician. Tr. 44; GXs 13-14, 19-20. Dr. Cheslow is only licensed to 
practice in the State of New York. Tr. 44.
    NDIC data show that Dr. Cheslow wrote 6,577 prescriptions which 
were filled by Respondent; of these, 6,362 were for hydrocodone 
products, 36 were for alprazolam, and 179 were for other medications. 
GX 14, at 1. From February 2006 through May 1, 2007, Dr. Cheslow wrote 
prescriptions for medications which were filled by Respondent for 
residents of numerous States, the top ten being California (2,831 
prescriptions), Texas (349 prescriptions), Florida (299 prescriptions), 
Georgia (232 prescriptions), New York (206 prescriptions), New Jersey 
(185 prescriptions), Ohio (177 prescriptions), Washington (168 
prescriptions), Virginia (162 prescriptions), and Alabama (140 
prescriptions). GX 19, at 1-2; GX 20, at 270-343. Subtracting out the 
179 prescriptions for ``other'' medication, the evidence still shows 
that Dr. Cheslow wrote controlled substance prescriptions for 
individuals in California, Texas, Florida, Georgia, and New Jersey.
    As an example of Dr. Cheslow's daily prescribing, on October 23, 
2006, he issued thirty prescriptions to residents of States where he 
was not licensed to practice as follows: California (16), Texas (3), 
Florida (2), Mississippi (2), Alabama (1), Maine (1), Minnesota (1), 
New Jersey (1), Ohio (1), Utah (1), and Virginia (1). GX 20, at 305. 
Again, Respondent dispensed these prescriptions having reason to know 
that Dr. Cheslow was prescribing to persons who resided in States where 
he was not licensed to practice medicine and that he was prescribing to 
persons he did not physically examine and with whom he did not 
establish a bona fide doctor-patient relationship.
    Respondent's records list Dr. Gerard Romain as a prescribing 
physician. Tr. 44; GXs 13-14, 19-20. Dr. Romain is only licensed to 
practice medicine in the State of Florida. Tr. 44.
    The NDIC data indicate that Respondent filled 6,121 prescriptions 
issued by Dr. Romain, of which 5,103 were for hydrocodone products, 681 
were for alprazolam, and 337 were for other medications. GX 14, at 2. 
Between May 2004 and June 18, 2007, Respondent dispensed prescriptions 
issued by Dr. Romain to individuals in numerous States, the top ten 
being as follows: Virginia (672 prescriptions), California (433 
prescriptions), West Virginia (367 prescriptions), Ohio (354 
prescriptions), Florida (339 prescriptions), Tennessee (321 
prescriptions), Alabama (309 prescriptions), Texas (294 prescriptions), 
Georgia (231 prescriptions), and Indiana (205). GXs 19, at 2, & 20, at 
428-517. Again, even if the 337 prescriptions for other medications 
were for non-controlled drugs, at a minimum, Dr. Romain prescribed 
controlled substances to residents of Virginia, California, West 
Virginia, and Ohio, and likely other States as well.
    As an example of Dr. Romain's daily prescribing, on September 23, 
2005, he issued twenty-two prescriptions to individuals in the 
following States: West Virginia (6), Virginia (5), Ohio (3), California 
(2), Washington (2), Alabama (1), Connecticut (1), Kansas (1), and 
Texas (1). GX 20, at 435. Again, in filling these prescriptions, 
Respondent had reason to know that Dr. Romain did not physically 
examine the patients and could not have established bona fide doctor-
patient relationships with them.
    Respondent's pharmacy records also list Dr. Felix Llamido as a 
prescribing physician. Tr. 44; GXs 13-14; GXs 19-20, at 343-428. Dr. 
Llamido is only licensed to practice in the State of Florida. Tr. 44.
    According to the NDIC data, Respondent filled 6,481 prescriptions 
written by Dr. Llamido, of which 6,290 were for hydrocodone products, 
32 were for alprazolam, and 159 for other medications. GX 14, at 1. 
Between February 2006 and the end of April 2007, Respondent dispensed 
prescriptions written by Dr. Llamido to patients in numerous States, 
the top ten being California (766 prescriptions), New Jersey (582 
prescriptions), Georgia (550 prescriptions), Massachusetts (518 
prescriptions), Maryland (470 prescriptions), Texas (363 
prescriptions), Illinois (350

[[Page 48892]]

prescriptions), Florida (302 prescriptions), New Hampshire (215 
prescriptions), and Washington (175 prescriptions). GX 14, at 2; GX 20 
at 343-428. Thus, at a minimum, Dr. Llamido issued controlled substance 
prescriptions to individuals in California, New Jersey, Georgia, 
Massachusetts, Maryland, Texas, Illinois, New Hampshire and Washington.
    As an example of his daily prescribing, on March 27, 2006, Dr. 
Llamido issued thirty-nine prescriptions to residents of the following 
states: California (6), Maryland (5), New Hampshire (3), Ohio (3), 
Pennsylvania (3), New Jersey (2), Texas (2), Virginia (2), Washington 
(2), West Virginia (2), Connecticut (1), Georgia (1), Hawaii (1), 
Indiana (1), Minnesota (1), Mississippi (1), Oklahoma (1), Utah (1), 
and Wisconsin (1). GX 20, at 350. Again, Respondent had reason to know 
that Dr. Llamido could not have performed physical examinations on 
these patients and did not have bona fide doctor-patient relationships 
with them.
    Finally, Respondent's pharmacy records listed Dr. Caroline Moore as 
a prescribing physician. Tr. 44; GXs 13-14, 19-20, at 517-35. Dr. Moore 
is licensed only in the State of Florida. Tr. 44.
    The NDIC data shows that Respondent filled 2,687 prescriptions 
written by Dr. Moore, including 1,884 for hydrocodone products, 659 for 
alprazolam, and 144 for other medications. GX 14, at 1-2. From January 
2, 2005 through the end of December 2006,\8\ Dr. Moore issued 
prescriptions to individuals in numerous States, the top ten including 
West Virginia (790), Ohio (463), Virginia (422), Alabama (106), 
California (94), Florida (89), Tennessee (70), Texas (57), Georgia 
(53), and Indiana (44). GXs 19, at 2, & 20, at 517-35. Again, even 
subtracting out the 144 prescriptions for other medications, Dr. Moore 
clearly issued controlled substance prescriptions to individuals in 
West Virginia, Ohio, and Virginia.
---------------------------------------------------------------------------

    \8\ There appear to be some typographical errors in GX 20, page 
535. The page lists a prescription on December 30, 2006 and then 
jumps to three prescriptions supposedly written in November 2008 and 
one prescription in December 2008. GX 20, at 535. Obviously, that 
would be impossible, as the four prescriptions in 2008 would 
postdate the execution of the search warrant of July 30, 2007.
---------------------------------------------------------------------------

    As an example of Dr. Moore's out-of-state prescribing practices, on 
November 21, 2005, she issued seventy-two prescriptions to residents in 
States other than Florida, as follows: West Virginia (22), Ohio (14), 
California (10), Virginia (3), Georgia (2), Indiana (2), Massachusetts 
(2), Missouri (2), North Carolina (2), New Jersey (2), New York (2), 
Pennsylvania (2), Texas (2), Arkansas (1), Arizona (1), Illinois (1), 
Oklahoma (1), and Washington (1). GX 20, at 524. Given the 
geographically diverse locations of Dr. Moore's ``patients,'' in 
filling these prescriptions, Respondent clearly had reason to know that 
Dr. Moore did not physically examine them and did not establish bona 
fide doctor-patient relationships with them.
    The Government also entered into evidence a letter from Robert 
Bruce Liddy, Sr., to Peter A. Grasso, Chief Compliance Investigator, 
New Hampshire Board of Pharmacy, dated November 18, 2005. GX 9. In the 
letter, Mr. Liddy wrote that Respondent did not ``solicit prescription 
sales [from] the State of New Hampshire or any other state outside of 
Florida.'' Id. He also indicated that Respondent had ``three customers 
who winter in Florida and reside in New Hampshire during the summer 
months.'' Id. According to Mr. Liddy, Respondent's records showed that 
Respondent had ``mailed 3 packages to New Hampshire in the past two 
years'' of its operation. Id. Mr. Liddy added that ``[i]f in the future 
I increase or determine it beneficial for my business to advertise or 
solicit for prescription sales in your state I will certainly abide by 
the guidelines set forth by the New Hampshire Board of Pharmacy for 
Non-Resident Pharmacy licensure.'' Id.
    The Government submitted into evidence data showing that between 
May 25, 2004 and May 14, 2007, Respondent dispensed a total of 472 
prescriptions to New Hampshire residents; the evidence also shows that 
Respondent dispensed twenty-four prescriptions prior to the date of the 
above-referenced letter. GX 18, at 1, 11. Moreover, prior to Mr. 
Liddy's letter, Respondent had dispensed seven prescriptions for 
controlled substances (as well as refills for several of the 
prescriptions) for drugs which included alprazolam, temazepam, 
hydrocodone, and oxycodone. See GX 13 (spreadsheet lines 
<greek-i><greek-i> 10930 (alprazolam), 25397 (oxycodone/acetaminophen), 
45243-45, 46893-95, 53407-09, and 68484-86 (all for hydrocodone/
acetaminophen and including two refills) and 55611 (temazepam)). 
Moreover, subsequent to Liddy's letter, Respondent continued to 
dispense controlled substance prescriptions (typically for hydrocodone) 
to New Hampshire residents. See, e.g. id. (spreadsheet lines 
<greek-i><greek-i> lines 109622-23, 110538-39, 112493, 112502, 115778).
    Respondent rested without calling any witnesses or introducing any 
other evidence. Moreover, as noted above, when called to testify by the 
Government, Respondent's owners invoked their privilege under the Fifth 
Amendment and refused to answer any questions regarding their ownership 
of Respondent, the pharmacy's operations and its association with 
various Web sites. Tr. 12-13 (testimony of Robert Bruce Liddy, Sr.); 
id. at 15-16 (testimony of Melinda Carol Liddy).

Discussion

    Section 303(f) of the Controlled Substances Act (CSA) provides that 
``[t]he Attorney General may deny an application for [a practitioner's] 
registration if he determines that the issuance of such registration 
would be inconsistent with the public interest.'' 21 U.S.C. 823(f). In 
determining the public interest, section 303(f) directs 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 * * * 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 and 
safety.

    Id.
    ``[T]hese factors are * * * considered in the disjunctive.'' Robert 
A. Leslie, 68 FR 15227, 15230 (2003). I ``may rely on any one or a 
combination of factors, and may give each factor the weight [I] deem[] 
appropriate in determining whether a registration should be revoked or 
an application should be denied.'' Id. Moreover, I am ``not required to 
make findings as to all of the factors.'' Hoxie v. DEA, 419 F.3d 477, 
482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173-74 (DC 
Cir. 2005).
    Having considered all of the factors, I conclude that the evidence 
pertaining to factors two and four is dispositive and establishes that 
Respondent has committed acts which render the issuance of a 
registration to it ``inconsistent with the public interest.'' \9\

[[Page 48893]]

21 U.S.C. 823(f). I also find that Respondent has not rebutted the 
Government's prima facie showing. Accordingly, Respondent's pending 
application to renew its registration will be denied.
---------------------------------------------------------------------------

    \9\ This Agency has repeatedly held that the possession of a 
valid state license is not dispositive of the public interest 
inquiry. See Patrick W. Stodola, 74 FR 20727, 20730 n.16 (2009); 
Robert A. Leslie, 68 FR at 15230. DEA has long held that ``the 
Controlled Substances Act requires that the Administrator * * * make 
an independent determination as to whether the granting of 
controlled substances privileges would be in the public interest.'' 
Mortimer Levin, 57 FR 8680, 8681 (1992). Nor is the lack of any 
criminal convictions related to controlled substances dispositive. 
Edmund Chein, 72 FR 6580, 6593 n.22 (2007). Thus, the fact that 
Respondent may still hold its Florida pharmacy license and that 
neither it, nor its owners, have been convicted of a criminal 
offense is not dispositive.
---------------------------------------------------------------------------

Factors Two and Four--Respondent's Experience in Dispensing Controlled 
Substances and Its Compliance With Applicable Federal, State and Local 
Laws Relating to Controlled Substances

    Under a longstanding DEA regulation, a prescription for a 
controlled substance is unlawful unless it has been ``issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his professional practice.'' 21 CFR 1306.04(a). 
Moreover, while ``[t]he responsibility for the proper prescribing and 
dispensing of controlled substances is upon the prescribing 
practitioner * * * a corresponding responsibility rests with the 
pharmacist who fills the prescription.'' Id. Accordingly, the ``person 
knowingly filling such a purported prescription, as well as the person 
issuing it, [is] subject to the penalties provided for violations of 
the provisions of laws relating to controlled substances.'' \10\ Id.
---------------------------------------------------------------------------

    \10\ As the Supreme Court has explained, ``the prescription 
requirement * * * ensures patients use controlled substances under 
the supervision of a doctor so as to prevent addiction and 
recreational abuse. As a corollary, [it] also bars doctors from 
peddling to patients who crave the drugs for those prohibited 
uses.'' Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United 
States v. Moore, 423 U.S. 122, 135, 143 (1975)).
---------------------------------------------------------------------------

    The Agency has interpreted this regulation as ``prohibiting a 
pharmacist from filling a prescription for controlled substances when 
he either `knows or has reason to know that the prescription was not 
written for a legitimate medical purpose.' '' Trinity Healthcare Corp., 
72 FR 30849, 30854 (2007) (quoting Medic-Aid Pharmacy, 55 FR 30043, 
30044 (1990)); see also United Prescription Services, Inc., 72 FR 
50397, 50407 (2007); Frank's Corner Pharmacy, 60 FR 17574, 17576 
(1995); Ralph J. Bertolino, 55 FR 4729, 4730 (1990); see also United 
States v. Seelig, 622 F.2d 207, 213 (6th Cir. 1980). The Agency has 
further held that ``[w]hen prescriptions are clearly not issued for 
legitimate medical purposes, a pharmacist may not intentionally close 
his eyes and thereby avoid [actual] knowledge of the real purpose of 
the prescription.'' Bertolino, 55 FR at 4730 (citations omitted); see 
also United Prescription Services, 72 FR at 50407.
    As I explained in United Prescription Services, ``when a pharmacy 
receives a prescription which indicates that the prescriber and patient 
are located nowhere near each other, it should be obvious that further 
inquiry is warranted to determine whether the prescription was issued 
pursuant to a valid doctor-patient relationship.'' 72 FR at 50409. 
``Determining whether a physician has acted in accordance with this 
standard necessarily requires that the pharmacist have knowledge of the 
applicable State's law.'' 72 FR at 50405 n.19 (citing United States v. 
Smith, 2006 WL 3702656 (D. Minn. 2006)).
    Moreover, ``[a] physician who engages in the unauthorized practice 
of medicine is not a `practitioner acting in the usual course of * * * 
professional practice.' '' United, 72 FR at 50407 (quoting 21 CFR 
1306.04(a)). Under the CSA, the ``term `practitioner' means a physician 
* * * licensed, registered, or otherwise permitted, by the United 
States or the jurisdiction in which he practices * * * to * * * 
dispense * * * a controlled substance.'' 21 U.S.C. 802(21); see also 21 
U.S.C. 823(f) (``The Attorney General shall register practitioners * * 
* to dispense * * * if the applicant is authorized to dispense * * * 
controlled substances under the laws of the State in which he 
practices'').
    Consistent with the statutory text, shortly after the CSA's 
enactment, the Supreme Court explained that ``[i]n the case of a 
physician, [the Act] contemplates that he is authorized by the State to 
practice medicine and to dispense drugs in connection with his 
professional practice.'' United States v. Moore, 423 U.S. 122, 140-41 
(1975). Accordingly, a controlled substance prescription issued by a 
physician who lacks the license necessary to practice medicine within a 
State is therefore unlawful under the CSA. Cf. 21 CFR 1306.03(a)(1) 
(``A prescription for a controlled substance may be issued only by an 
individual practitioner who is * * * [a]uthorized to prescribe 
controlled substances by the jurisdiction in which he is licensed to 
practice his profession''); see also United Prescription Services, 72 
FR at 50407.
    As found above, Respondent dispensed millions of dosage units of 
hydrocodone (a schedule III controlled substance, see 21 CFR 
1308.13(e)) and alprazolam (a schedule IV controlled substance, see 21 
CFR 1308.14(c)), based on prescriptions issued by physicians who were 
prescribing to persons who resided in States where the physicians were 
not licensed to practice medicine (although they were required to be) 
and were thus engaged in the unauthorized practice of medicine. The 
prescriptions violated both the CSA and the laws of the respective 
States including, inter alia, Alabama, California, Georgia, Indiana, 
North Carolina, Ohio, Texas, and Virginia. See Ala. Code Sec. Sec.  34-
24-50 (defining practice of medicine to include prescribing), 34-24-51 
(requiring a license for the practice of medicine), 34-24-502 
(requiring special license for practice of medicine across state 
lines); Cal. Bus. & Prof. Code Sec. Sec.  2052 (criminalizing the 
practice of medicine without state license); Ga. Code Ann. Sec. Sec.  
43-34-26(a) (requiring license), 43-34-31 (requiring state license for 
medical treatment of individual in state by physician in another 
state); Ind. Code Ann. Sec. Sec.  25-22.5-8-1 (prohibiting the practice 
of medicine without a state license) & 25-22.5-1-1.1(a) (defining 
practice of medicine); N.C. Gen. Stat. Ann. Sec.  90-18 (prohibiting 
practice of medicine across state lines unless licensed in state); Ohio 
Rev. Code Ann. Sec. Sec.  4731.296 (prohibiting out-of-state practice 
of telemedicine without a special permit), 4731.41 (prohibiting 
practice of medicine without state license); Tex. Occup. Code Ann. 
Sec. Sec.  155.001 (requiring license to practice medicine), 151.056(a) 
(making out-of-state treatment of individual in state the practice of 
medicine in state); Va. Code Ann. Sec. Sec.  54.1-2902 (prohibiting 
practice of medicine without state licensure), 54.1-2903 (making 
prescribing the practice of medicine), 54.1-2929 (requiring license for 
the practice of medicine).\11\
---------------------------------------------------------------------------

    \11\ All cited statutes were enacted and in effect at the time 
of the conduct in question.
---------------------------------------------------------------------------

    As found above, five of the doctors whose prescriptions Respondent 
filled were licensed to practice medicine only in Florida and yet wrote 
controlled substance prescriptions to residents of States where they 
were unlicensed and thus engaged in the unauthorized practice of 
medicine. More specifically, the evidence clearly establishes that Dr. 
Alsina wrote controlled substance prescriptions for residents of 
Virginia, Ohio, California, Alabama, and Georgia; that Dr. Fernandez 
wrote controlled substance prescriptions for residents of Texas, Ohio, 
and Georgia; that Dr. Romain wrote controlled substance prescriptions 
to residents of Virginia, California, and Ohio; that Dr. Llamido wrote 
controlled substance prescriptions for residents of California, 
Georgia, Texas; and that Dr. Moore wrote controlled substance

[[Page 48894]]

prescriptions for residents of Ohio and Virginia, as well as other 
States.
    The record also establishes that while Dr. Francis was licensed to 
practice medicine only in Michigan, he wrote controlled substance 
prescriptions to residents of Alabama and other States. Finally, while 
Dr. Cheslow was licensed to practice medicine only in New York, he 
wrote controlled substance prescriptions in California, Texas, and 
Georgia as well as other States.
    As found above, Respondent filled prescriptions written by each of 
the above doctors on a regular basis for a lengthy period of time, and 
in each case, Respondent received prescriptions (which it filled) which 
were written by a physician on a single day for persons located in 
numerous States in which the physicians were not licensed. As explained 
above, ``[a] physician who engages in the unauthorized practice of 
medicine is not a `practitioner acting in the usual course of * * * 
professional practice.' '' United, 72 FR at 50407 (quoting 21 CFR 
1306.04(a)). The prescriptions were therefore unlawful under the CSA 
and Respondent had ample reason to know that these physicians were 
engaged in the unauthorized practice of medicine and that the 
prescriptions they issued were unlawful under both Federal and state 
laws.
    In its Exceptions, Respondent invokes an Agency rulemaking which 
clarified the registration requirements for practitioners to argue that 
prior to January 2, 2007 (when the regulation became effective), ``a 
physician could prescribe in any state provided the physician held a 
[DEA] registration in a single state.'' Exceptions at 4 (discussing 
DEA, Final Rule, Clarification of Registration Requirements for 
Individual Practitioners, 71 FR 69478 (Dec. 1, 2006)). Respondent 
further maintains that ``there was no evidence produced that [it] was 
aware that the physician may have been acting outside the scope of 
their certificate or aided in any way the unlicensed practice of 
medicine by filling prescriptions for patients in other states.'' Id.
    Beyond the fact that Respondent simply misstates the Agency's 
published interpretation of the authority conveyed by a DEA 
registration (and which had been published before much of the conduct 
at issue here had occurred), its argument conflates two separate 
issues: (1) The requirements for holding a DEA registration for a 
particular location, and (2) the licensure requirements for prescribing 
under state law. As the Agency explained in its Notice of Proposed 
Rulemaking, ``[t]o be valid in a particular jurisdiction, a controlled 
substance prescription must be written by a practitioner who possesses 
valid state authority in that jurisdiction and, equally important, the 
practitioner must possess a DEA registration predicated upon valid 
state authority in that jurisdiction.'' DEA, Notice of Proposed 
Rulemaking, Clarification of Registration Requirements for Individual 
Practitioners, 69 FR 70576 (Dec. 7, 2004) (emphasis added).
    Contrary to Respondent's contention that there is no evidence that 
it aided the unlicensed practice of medicine, the evidence exists in 
the thousands of prescriptions it filled which indicated that the 
patients resided in one State and the prescribing physician practiced 
in another. See, e.g., GX 4. Moreover, as the California Court of 
Appeals has noted, the ``proscription of the unlicensed practice of 
medicine is neither an obscure nor an unusual state prohibition of 
which ignorance can reasonably be claimed, and certainly not by persons 
* * * who are licensed health care providers. Nor can such persons 
reasonably claim ignorance of the fact that authorization of a 
prescription pharmaceutical constitutes the practice of medicine.'' 
Hageseth v. Superior Court, 59 Cal.Rptr.3d 385, 403 (Ct. App. 2007). As 
a state-licensed pharmacy and participant in the health care industry, 
Respondent (and its owners) cannot reasonably claim ignorance of the 
fact that prescribing a drug constitutes the practice of medicine and 
that a physician must be licensed to do so.
    The controlled substance prescriptions Respondent filled were 
unlawful for a further reason. Under the CSA, it is fundamental that 
``a practitioner must establish a bona fide doctor-patient relationship 
in order to act `in the usual course of * * * professional practice' 
and to issue a prescription for a `legitimate medical purpose.' '' 
Patrick W. Stodola, 74 FR 20727, 20731 (2009) (citing Moore, 423 U.S. 
at 141-43). At the time of the events at issue here, the CSA generally 
looked to state law to determine whether a doctor has established a 
bona fide doctor-patient relationship with an individual.\12\ Stodola, 
74 FR at 20731; see also Kamir Garces-Mejias, 72 FR 54931, 54935 
(2007); United Prescription Services, 72 FR at 50407. As explained 
below, prior to the dispensings at issue here, numerous States had 
either enacted legislation or promulgated administrative rules which 
generally prohibited (except for in narrow circumstances not relevant 
here) a physician from prescribing a controlled substance to a person 
without first performing a physical examination.
---------------------------------------------------------------------------

    \12\ On October 15, 2008, the President signed into law the Ryan 
Haight Online Pharmacy Consumer Protection Act of 2008, Public Law 
110-425, 122 Stat. 4820 (2008). Section 2 of the Act prohibits the 
dispensing of a prescription controlled substance ``by means of the 
Internet without a valid prescription'' and defines, in relevant 
part, the ``[t]he term `valid prescription' [to] mean[] a 
prescription that is issued for a legitimate medical purpose in the 
usual course of professional practice by * * * a practitioner who 
has conducted at least 1 in-person medical evaluation of the 
patient.'' 122 Stat. 4820 (codified at 21 U.S.C. 829(e)(1) & (2)). 
Section 2 further defines ``[t]he term `in-person medical 
evaluation' [to] mean[] a medical evaluation that is conducted with 
the patient in the physical presence of the practitioner, without 
regard to whether portions of the evaluation are conducted by other 
health professionals.'' Id. (codified at 21 U.S.C. 829(e)(2)(B)). 
These provisions do not, however, apply to Respondent's conduct.
---------------------------------------------------------------------------

    Since January 2001, California has prohibited the prescribing or 
dispensing of a dangerous drug ``on the Internet for delivery to any 
person in this state, without an appropriate prior examination and 
medical indication therefore, except as authorized by Section 2242.'' 
Cal. Bus. & Prof. Code Sec.  2242.1. In 2003, the Medical Board of 
California made clear that ``[b]efore prescribing a dangerous drug, a 
physical examination must be performed'' by the prescribing physician. 
In re Steven Opsahl, M.D., Decision and Order, at 3 (Med. Bd. Cal. 
2003) (available by query at http://publicdocs.medbd.ca.gov/pdl/mbc.aspx). Furthermore, the Medical Board of California determined that 
``[a] physician cannot do a good faith prior examination based on a 
history, a review of medical records, responses to a questionnaire and 
a telephone conversation with the patient, without a physical 
examination of the patient.'' Id.
    Moreover, well before Respondent commenced to dispense the 
prescriptions at issue here, the Medical Board of California had issued 
numerous Citation Orders to out-of-state physicians for prescribing 
over the Internet to California residents. These Orders invariably 
cited not only the physicians' failure to perform a ``good faith prior 
examination,'' but also their lack of a ``valid California Physician 
and Surgeon's License to practice medicine in California.'' Citation 
Order, Martin P. Feldman (August 15, 2003); see also Citation Order, 
Harry Hoff (June 17, 2003); Citation Order, Carlos Gustavo Levy (Jan. 
28, 2003); Citation Order, Carlos Gustavo Levy (November 30, 2001).
    Doctors Cheslow, Romain, and Llamido all wrote a substantial number 
of controlled substance prescriptions based on internet consultations 
with

[[Page 48895]]

California residents which Respondent then dispensed. Given the 
respective locations of the physicians (New York for Dr. Cheslow and 
Florida for Drs. Romain and Llamido) and the California residents, it 
was obvious that doctors Cheslow, Romain and Llamido were not 
performing physical examinations and did not establish bona fide 
doctor-patient relationships with the Californians. Respondent and its 
owners had ample reason to know that these prescriptions lacked a 
legitimate medical purpose and were issued outside of the usual course 
of professional practice and therefore violated both state and Federal 
law. See, e.g., Cal. Bus. & Prof. Code Sec.  2242.1; 21 CFR 1306.04(a). 
By dispensing the prescriptions, Respondent violated its corresponding 
responsibility under Federal law. 21 CFR 1306.04(a).
    Similar to California, regulations adopted by the States of Ohio 
and Indiana require that a physician perform a physical examination of 
his/her patient prior to prescribing a controlled substance, except in 
limited circumstances not applicable here. Ind. Admin. Code Sec.  5-4-
1(a); Ohio Admin Code Sec.  4731-11-09(A). Doctors Llamido and Moore 
issued a substantial number of prescriptions for controlled substances 
to individuals in Indiana; Doctors Alsina, Fernandez, Romain, and Moore 
issued a substantial number of controlled substance prescriptions to 
individuals in Ohio. These doctors violated Indiana and Ohio law 
respectively, as it is inconceivable that they went to Indiana or Ohio 
to perform physical examinations on the patients when they were not 
licensed to practice in those States (or that the patients travelled to 
see them) and were also issuing numerous prescriptions to the residents 
of multiple States on the same day. And as explained above, given the 
respective locations of the patients and the physicians, Respondent had 
reason to know that the prescriptions were issued outside of the usual 
course of professional practice and lacked a legitimate medical 
purpose. 21 CFR 1306.04(a). By dispensing the prescriptions, Respondent 
further violated the CSA.
    Under Virginia law, a doctor must establish a bona fide 
practitioner-patient relationship prior to prescribing a controlled 
substance. Va. Code Ann. Sec.  54.1-3303(A).\13\ Moreover, Virginia law 
expressly requires that a practitioner ``perform or have performed an 
appropriate examination of the patient, either physically or by use of 
instrumentation and diagnostic equipment through which images and 
medical records may be transmitted electronically'' and that ``except 
for [in] medical emergencies, the examination shall have been performed 
by the practitioner himself, within the group in which he practices, or 
by a consulting practitioner prior to issuing a prescription.'' Id.
---------------------------------------------------------------------------

    \13\ This statute was enacted and in effect at the time of the 
conduct in question.
---------------------------------------------------------------------------

    Doctors Alsina, Fernandez, Romain, and Moore, all of whom were 
licensed to practice only in Florida, issued controlled substance 
prescriptions to residents of Virginia. Here again, these physicians 
issued prescriptions to Virginia residents under circumstances which 
render it inconceivable that they met the requirements of Virginia for 
establishing a bona fide doctor-patient relationship prior to 
prescribing the controlled substances. These physicians thus violated 
Virginia law. Here again, given the respective locations of the 
physicians and the patients, Respondent (and its owners) had reason to 
know that these physicians did not establish bona fide doctor-patient 
relationships with the individuals to whom they prescribed controlled 
substances and that the prescriptions were issued outside of the usual 
course of professional practice and lacked a legitimate medical purpose 
as required by Federal law. 21 CFR 1306.04(a). By filling these 
prescriptions, Respondent again failed to comply with its 
``corresponding responsibility'' under Federal law to dispense only 
lawful prescriptions. Id.
    Respondent simply ignores these various state medical practice 
standards. Instead, in its Exceptions, Respondent argues that Florida's 
telemedicine rule ``does not require that the physician issuing the 
prescription have a face to face consultation with the patient or that 
the physician issuing the prescription conduct a physical examination, 
rather that their [sic] be a `documented patient evaluation.'' 
Exceptions at 3 (quoting Fla. Admin. Code Ann. r. 64B8-9.003). However, 
even if it is the case that the State of Florida interprets its 
regulation as authorizing a physician to prescribe without having 
personally performed a physical examination of a patient, Florida has 
no authority to promulgate the standards of medical practice applicable 
in other States for prescribing a controlled substance to those States' 
residents. Thus, even if the prescriptions issued by the Florida-based 
physicians would have been lawful if they had been issued to residents 
of Florida, they were still illegal under the laws of California, Ohio, 
Indiana and Virginia.
    Finally, Respondent cites to a recommended order of a state ALJ in 
a proceeding before the Florida Board of Pharmacy to argue ``that it 
would be `problematic' to require a pharmacist to `independently 
determine the validity of the patient/physician relationship' because 
the standards used to determine the validity of such a relationship 
`differ from state to state.''' Exceptions at 3-4 (quoting Florida 
Dept. of Health v. RX Network of South Florida, 2003 WL 124675, at *32 
(Fla. Div. Admin. Hrgs. 2003) (Conclusion of Law <greek-i> 192). 
Continuing, the state ALJ reasoned that if Florida law ``were construed 
to require [the pharmacist] to exercise her own judgment on this issue, 
it is unclear whether [she] would apply Florida law to determine the 
validity of the professional relationship of a physician licensed 
outside of Florida or would apply the law of the state where the 
physician is licensed.'' Rx Network at *32.
    To the extent the Florida Board adopted the state ALJ's 
reasoning,\14\ its holding as to the scope of a pharmacist's duty under 
Florida law is not binding on this Agency's interpretation of Federal 
law and regulations. Moreover, the state ALJ's reasoning is wholly 
unpersuasive as ``an entity which voluntarily engages in commerce by 
shipping controlled substances to persons located in other States is 
properly charged with knowledge of the laws regarding the practice of 
medicine in those States.'' United Prescription Services, 72 FR at 
50407. Just as licensed health care providers cannot ``reasonably claim 
ignorance'' of state laws prohibiting the unlicensed practice of 
medicine, so too they cannot reasonably claim ignorance of various 
States' laws and rules which establish the standards of medical 
practice for prescribing a drug.
---------------------------------------------------------------------------

    \14\ In its Final Order, the Board expressly noted that it was 
responding to the ALJ's conclusions of law in which this reasoning 
is found. See Final Order at 9-10, Department of Health v. RX 
Networks of South Florida, LLC. (Fla. Bd. of Pharm. 2003). While the 
Board did not specifically address the ALJ's reasoning that it is 
``problematic'' to require a pharmacist to ``determine the validity 
of the patient-physician relationship'' because standards ``differ 
from state to state,'' it did note that ``pharmacists must be aware 
of the regulations governing those health care practitioners who 
prescribe drugs so that a pharmacist can make a reasoned decision as 
to whether the professional standards for legitimate dispensing have 
been met.'' Id. at 10.
---------------------------------------------------------------------------

    Finally, Respondent violated the laws of numerous States by 
engaging in the unauthorized practice of pharmacy.\15\

[[Page 48896]]

For example, New Hampshire law requires a pharmacy to obtain a license 
and provides for the licensing of out-of-state pharmacies licensed 
elsewhere upon the passing of an examination. N.H. Rev. Stat. 
Sec. Sec.  318:1 (defining ``pharmacy''), 318:21 (licensure of out-of-
state pharmacies), 318:37 (requiring license to operate a pharmacy), 
and 318:42 (prohibiting the sale of prescription drugs by any other 
than a licensed pharmacist in a registered pharmacy).\16\ Nevertheless, 
even after consulting with the state's Chief Compliance Officer, 
Respondent, through Mr. Liddy, continued to dispense prescriptions to 
individuals in New Hampshire. Moreover, Liddy's statement that his 
records showed that in the prior two years, his pharmacy had only 
shipped three packages to New Hampshire residents, was a bald-faced 
lie. I therefore find that Respondent violated New Hampshire law. 
Indeed, Liddy's continued violation of the law, even after being placed 
on notice, and his willingness to lie about his misconduct, makes clear 
that Respondent cannot be entrusted with a registration.
---------------------------------------------------------------------------

    \15\ In its Exceptions, Respondent contends that its failure to 
obtain pharmacy licenses for those States (other than Florida) which 
it dispensed into is outside of the scope of the proceeding. 
However, ```[p]leadings in administrative proceedings are not judged 
by the standards applied to an indictment at common law.''' Citizens 
State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984) 
(quoting Aloha Airlines v. Civil Aeronautics Bd., 598 F.2d 250, 262 
(DC Cir. 1979)). See also Boston Carrier, Inc. v. ICC, 746 F.2d 
1555, 1560 (DC Cir. 1984) (quoted in Edmund Chein, 72 FR 6580, 6592 
n.21 (2007) (``an agency is not required `to give every [Respondent] 
a complete bill of particulars as to every allegation that [he] will 
confront'')). Thus, the failure of the Government to disclose an 
allegation in the Order to Show Cause is not dispositive, and an 
issue can be litigated if the Government otherwise timely notifies a 
respondent of its intent to litigate the issue.
    The Agency has thus recognized that ``the parameters of the 
hearing are determined by the prehearing statements.'' Darrell 
Risner, D.M.D., 61 FR 728, 730 (1996). Accordingly, in Risner, the 
Agency held that where the Government has failed to disclose ``in 
its prehearing statements or indicate at any time prior to the 
hearing'' that an issue will be litigated, the issue cannot be the 
basis for a sanction. 61 FR at 730. See also Nicholas A. Sychak, d/
b/a Medicap Pharmacy, 65 FR 75959, 75961 (2000) (noting that the 
function of pre-hearing statements is to provide Due Process through 
``adequate * * * disclosure of the issues and evidence to be 
submitted in * * * proceedings''); cf. John Stafford Noell, 59 FR 
47359, 47361 (1994) (holding that notice was adequate where 
allegations were not included in Order to Show Cause but ``were set 
forth in the Government's Prehearing Statement'').
    While the Order to Show Cause did not allege that Respondent had 
failed to obtain the necessary pharmacy licenses to dispense to 
States other than Florida, in its supplemental prehearing statement, 
the Government notified Respondent that it intended to litigate the 
issue by eliciting the testimony of its owner as to its ``licensure 
status * * * in those jurisdictions where [it] shipped controlled 
substance prescriptions and whether [it] was licensed as an out-of-
state pharmacy in any jurisdiction that required such licensure.'' 
Gov. Supp. Prehearing Stmt. at 1. The Government also notified 
Respondent that it intended to litigate the issue of Respondent's 
communications with the New Hampshire Board of Pharmacy ``regarding 
the licensure requirement to ship controlled substances into that 
state.'' Id.
    \16\ These statutes were enacted and in effect at the time of 
the conduct in question.
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    Most other States also prohibit an out-of-state pharmacy from 
dispensing medication to state residents without being licensed to do 
so. See, e.g., Ark. Code Ann. Sec. Sec.  17-92-301 (prohibiting 
practice of pharmacy without a license) & 17-92-302 (prohibiting 
filling of prescription by other than Arkansas-licensed pharmacist); 
Conn. Gen. Stat. Ann. Sec.  20-627 (requiring registration of 
nonresident pharmacies); Cal. Bus. & Prof. Code Sec.  4120 (requiring 
special permit for nonresident pharmacies); La. Rev. Stat. Ann. Sec.  
37:1221 (requiring special permit for out-of-state pharmacies to 
provide pharmacy services to residents of the state).\17\ Respondent 
dispensed prescriptions to residents of all of these States without 
holding the pharmacy licenses required to do so. See GX 17. I therefore 
find that Respondent violated these laws as well. Respondent's flagrant 
disregard for the rules governing its profession manifests that it and 
its owners cannot be trusted to properly comply with Federal law and 
DEA regulations.
---------------------------------------------------------------------------

    \17\ These statutes were enacted and in effect at the time of 
the conduct in question.
---------------------------------------------------------------------------

    Finally, the evidence shows that Respondent violated DEA 
regulations by filling controlled substance prescriptions which were 
unlawful because they were not manually signed by the prescribing 
practitioner. Under 21 CFR 1306.05(a), ``prescriptions shall be written 
with ink or indelible pencil and shall be manually signed by the 
practitioner.'' Moreover, while ``the prescribing practitioner is 
responsible in case the prescription does not conform in all essential 
respects to the law and regulations[,] [a] corresponding liability 
rests upon the pharmacist * * * who fills a prescription not prepared 
in the form prescribed by DEA regulations.'' Id. As the DI testified, 
the ``vast majority'' of the controlled substance prescriptions 
Respondent filled did not comply with this requirement. Tr. 88. 
Rendering these violations especially egregious is that Mr. Liddy had 
been previously told by the Executive Director of the Florida Board of 
Pharmacy that ``a control substance prescription must be manually 
signed.'' GX 11. Once again, Mr. Liddy's flagrant disregard for the law 
makes it clear that Respondent cannot be entrusted with a DEA 
registration.\18\
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    \18\ The evidence does not, however, establish that Respondent 
dispensed controlled substance prescriptions issued under the 
authority of the registration held by Dr. Alsina after he notified 
Mr. Liddy (on October 5, 2005) that his registration had been 
suspended. See GX 12. While GX 20 lists various dates after October 
5, 2005 on which Respondent dispensed prescriptions presumably 
authorized by Dr. Alsina, the exhibit does not identify what drugs 
these prescriptions were for. Thus, the evidence does not establish 
that these prescriptions were for controlled substances. However, 
given the scope of the violations that have been proved, this 
allegation is inconsequential.
---------------------------------------------------------------------------

    As the forgoing demonstrates, Respondent's experience in dispensing 
controlled substances and its record of compliance with applicable 
controlled substance laws is marked by its (and its owner's) repeated 
and egregious violations in dispensing prescriptions that were unlawful 
under both the CSA and numerous state laws. I therefore hold that the 
Government has shown that Respondent has committed numerous acts which 
render issuing it a new registration ``inconsistent with the public 
interest.'' \19\ 21 U.S.C. 823(f).
---------------------------------------------------------------------------

    \19\ In numerous decisions, DEA has noted the serious risk of 
diversion created by internet prescribing and dispensing of 
controlled substances and the threat this poses to public health and 
safety. See Trinity Health Care Corp., 72 FR 30849, 30855 (2007) 
(internet pharmacy dispensed more than 43,000 illegal prescriptions 
and two million dosage units of controlled substances; ``it is 
manifest that diversion on this scale creates an extraordinary 
threat to the public health and safety''); William R. Lockridge, 71 
FR 77791, 77799 (2006) (noting that internet prescriber ``was a drug 
dealer'' and that conduct created ``imminent danger to public health 
and safety''); Mario Avello, 70 FR 11695, 11697 (2005); cf. 
Southwood Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007) 
(discussing increase in the rates of prescription drug abuse and the 
Internet's ``role in facilitating the growth of prescription drug 
abuse''); see also National Center on Addiction and Substance Abuse, 
``You've Got Drugs!'' IV: Prescription Drug Pushers on the Internet 
(2007), at 8 (``[T]he wide availability of dangerous and addictive 
drugs on the Internet reveals a wide-open channel of distribution. 
This easy availability has enormous implications for public health, 
particularly the health of our children, since research has 
documented the tight connection between availability of drugs to 
young people and substance abuse and addiction.'').
---------------------------------------------------------------------------

Sanction

    Under Agency precedent, where, as here, ``the Government has proved 
that a registrant has committed acts inconsistent with the public 
interest, a registrant must ` ``present[] sufficient mitigating 
evidence to assure the Administrator that it can be entrusted with the 
responsibility carried by such a registration.'' ''' Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 
23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 
(1988))). ``Moreover, because `past performance is the best predictor 
of future

[[Page 48897]]

performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), 
[DEA] has repeatedly held that where a registrant has committed acts 
inconsistent with the public interest, the registrant must accept 
responsibility for its actions and demonstrate that it will not engage 
in future misconduct.'' Medicine Shoppe, 73 FR at 387; see also 
Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006); 
Cuong Trong Tran, 63 FR 64280, 62483 (1998); Prince George Daniels, 60 
FR 62884, 62887 (1995). See also Hoxie v. DEA, 419 F.3d at 483 
(``admitting fault'' is ``properly consider[ed]'' by DEA to be an 
``important factor[]'' in the public interest determination).
    As the ALJ observed, both of Respondent's owners invoked their 
Fifth Amendment privilege when called to testify by the Government and 
refused to answer any questions. ALJ at 24. I therefore find that 
Respondent (and its owners) have failed to accept responsibility for 
their misconduct. This alone provides reason to hold that Respondent 
has not rebutted the Government's prima facie showing that issuing it a 
new registration ``would be inconsistent with the public interest.'' 21 
U.S.C. 823(f).
    In its Exceptions, Respondent nonetheless contends that ``even 
though the [Liddy's] invoked their Fifth Amendment Privilege, the 
record * * * demonstrate[s] that the complained of conduct was no 
longer present'' and that it had ceased the offending conduct prior to 
the execution of the search warrant in July 2007. Exceptions at 1-2. 
Respondent thus asserts that it has changed its practices and that its 
then-existing registration should not be revoked. Id. at 2. However, 
the evidence shows that at some time in either 2005 or 2006, a DEA 
Investigator had visited Respondent and interviewed Respondent's 
owners. Tr. 82.
    While the record does not establish the precise subject matter that 
was discussed, it is not everyday that the DEA comes knocking at one's 
door, and it is reasonable to infer that the Investigator's visit had 
something to do with the illegality of Respondent's activities in 
dispensing the internet prescriptions. Accordingly, even were I to 
ignore the failure of Respondent's owners to acknowledge their illegal 
behavior (which I decline to do), the weight to be given Respondent's 
cessation of its unlawful practices is substantially diminished by the 
fact that this followed, rather than preceded, its owners becoming 
aware that they were under investigation. Moreover, as the ALJ noted, 
Respondent put on no evidence as to what steps it has undertaken to 
reform its practices. ALJ at 24.
    I therefore concur with the ALJ's conclusion that Respondent's 
``extensive record of unlawful conduct * * *, its callous disregard for 
the serious responsibility of a DEA registrant, and its failure to 
present any evidence to show how it has corrected these practices 
outweigh'' the fact that the State Pharmacy Board has taken no action 
against its license (factor one) and the absence of any criminal 
convictions (factor three). Id. at 25. I further adopt the ALJ's 
conclusion that ``it would be inconsistent with the public interest to 
allow * * * Respondent to maintain its registration.'' Id. at 24. 
Accordingly, Respondent's pending renewal application will be denied.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 
CFR 0.100(b), I deny the Government's motion to terminate the 
proceeding as moot. I further order that the application of Liddy's 
Pharmacy, L.L.C., for a DEA Certificate of Registration be, and it 
hereby is, denied. This Order is effective September 8, 2011.

    Dated: August 2, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-20055 Filed 8-8-11; 8:45 am]
BILLING CODE 4410-09-P


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