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###### Department of Justice

###### Drug Enforcement Administration

                    On November 8, 2023, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause and Immediate Suspension of Registration (OSC/ISO) to Halowells Pharmacy (Registrant) of Pearland, Texas. Request for Final Agency Action (RFAA), Exhibit (RFAAX) A, at 1. The OSC/ISO informed Registrant of the immediate suspension of its DEA Certificate of Registration, Control No.                           ( print page 82268)                        FH9037830, pursuant to 21 U.S.C. 824(d), alleging that Registrant's continued registration constitutes “ `an imminent danger to the public health or safety.' ”                     *Id.*                     (quoting 21 U.S.C. 824(d)). The OSC/ISO also proposed the revocation of Registrant's registration, alleging that Registrant's continued registration is inconsistent with the public interest.                     *Id.*                     (citing 21 U.S.C. 823(g)(1), 824(a)(4)).                

                    The OSC/ISO notified Registrant of its right to file with DEA a written request for hearing, and that if it failed to file such a request, it would be deemed to have waived its right to a hearing and be in default.                     *Id.*                     at 9 (citing 21 CFR 1301.43). Here, Registrant did not request a hearing. RFAA, at 2.[1]                                          “A default, unless excused, shall be deemed to constitute a waiver of the registrant's/applicant's right to a hearing and an admission of the factual allegations of the [OSC/ISO].” 21 CFR 1301.43(e).                

                    Further, “[i]n the event that a registrant . . . is deemed to be in default . . . DEA may then file a request for final agency action with the Administrator, along with a record to support its request. In such circumstances, the Administrator may enter a default final order pursuant to [21 CFR] § 1316.67.”                     *Id.*                     § 1301.43(f)(1). Here, the Government has requested final agency action based on Registrant's default pursuant to 21 CFR 1301.43(c), (f), 1301.46. RFAA, at 3;                     *see also*21 CFR 1316.67.                

## I. Findings of Fact

                    The Agency finds that, in light of Registrant's default, the factual allegations in the OSC/ISO are admitted.[2]                                          Registrant is deemed to have admitted that it repeatedly dispensed prescriptions in violation of the minimum practice standards that govern pharmacy practice in Texas. RFAAX A, at 4. Specifically, from at least January 2022 through July 2023, Registrant repeatedly filled controlled substance prescriptions that contained multiple red flags of abuse and/or diversion without addressing or resolving the red flags, in violation of both Federal and State law.                     *Id.*                     at 4-5.                

### A. Pattern Prescribing

                    Texas regulations identify the following prescribing patterns as red flag factors: Dispensing to numerous persons substantially identical prescriptions by the same prescriber for the same controlled substances; a prescriber's prescriptions are routinely for controlled substances commonly known to be abused drugs, including opioids; and a prescriber's prescriptions for controlled substances are commonly for the highest strength of the drug and/or for large quantities (                    *e.g.,*                     monthly supply). 22 Tex. Admin. Code section 291.29(f)(1), (3), (5); RFAAX A, at 3-4.                

                    Registrant is deemed to have admitted that it failed to identify and resolve the red flag that occurs when a practitioner prescribes the same controlled substance in identical or substantially similar quantities to multiple patients. RFAAX A, at 5. Specifically, between January 2022 and June 2023, Registrant filled over 90 prescriptions for oxycodone issued by Dr. V.M. to C.W., D.S.T., D.W., E.W., J.L., J.R., and L.T.                     *Id.*                     Each prescription was for the highest strength of oxycodone, 30 mg, which is known to be frequently abused, and each prescription ranged from 98 to 105 dosage units.                     *Id.*

                    Further, between January 2022 and June 2023, Registrant filled over 30 prescriptions for hydrocodone-acetaminophen issued by Dr. V.M. to D.S.E., D.S.M., and J.J.                     *Id.*                     Each prescription was for the highest strength of hydrocodone-acetaminophen, 10/325 mg, which is known to be frequently abused, and the prescriptions ranged from 90 to 105 dosage units.                     *Id.*

Accordingly, the Agency finds that Registrant filled over 120 controlled substance prescriptions without first resolving the pattern prescribing red flags.

### B. Prescriptions Lacking Specific Diagnosis

Texas regulations identify the following prescribing pattern as a red flag factor: “[P]rescriptions for controlled substances by a prescriber presented to the pharmacy contain nonspecific or no diagnoses, or lack the intended use of the drug.” 22 Tex. Admin. Code section 291.29(f)(4); RFAAX A, at 3.

                    Registrant is deemed to have admitted that it failed to identify and resolve the red flag of prescriptions lacking a specific diagnosis. RFAAX A, at 5. Specifically, between January 2022 and June 2023, Registrant filled prescriptions lacking specific diagnoses for all ten individuals [3]                                          for oxycodone 30 mg and hydrocodone-acetaminophen 10/325 mg.                     *Id.*                     Accordingly, the Agency finds that Registrant filled controlled substance prescriptions without first resolving the red flag of prescriptions lacking a specific diagnosis.                

### C. Shared Addresses

Texas regulations identify the following prescribing pattern as a red flag factor: “[M]ultiple persons with the same address present substantially similar controlled substance prescriptions from the same practitioner.” 22 Tex. Admin. Code section 291.29(f)(11); RFAAX A, at 4.

                    Registrant is deemed to have admitted that it failed to identify and resolve the red flag of multiple persons with the same address presenting the same, or substantially similar, prescriptions from the same practitioner. RFAAX A, at 6. Specifically, between January 2022 and June 2023, Registrant filled prescriptions for oxycodone 30 mg for C.W. and D.W., who both share the same address and received their prescriptions from the same practitioner, Dr. V.M.                     *Id.*                     Between January 2022 and April 2023, Registrant filled prescriptions for hydrocodone-acetaminophen 10/325 mg for D.S.M. and J.J., who both share the same address and received their prescriptions from the same practitioner, Dr. V.M.                     *Id.*                     Between February 2022 and June 2023, Registrant filled prescriptions for oxycodone 30 mg for J.R. and L.T., who both share the same address and received their prescriptions from the same practitioner, Dr. V.M.                     *Id.*                     Finally, between January 2022 and May 2023, Registrant filled prescriptions for hydrocodone-acetaminophen 10/325 mg for D.S.E. and J.L.,[4]                                          who both share the same address and received their prescriptions from the same practitioner, Dr. V.M.                     *Id.*

                    Accordingly, the Agency finds that Registrant filled controlled substance prescriptions without first resolving the red flag of shared addresses.                          ( print page 82269)    

### D. Prescriber Area of Practice

                    Texas regulations identify the following prescribing pattern as a red flag factor: “[T]he controlled substance(s) or the quantity of the controlled substance(s) prescribed are inconsistent with the practitioner's area of medical practice.” 22 Tex. Admin. Code section 291.29(f)(9); RFAAX A, at 6. Registrant is deemed to have admitted that between January 2022 and June 2023, Registrant repeatedly filled prescriptions for oxycodone and hydrocodone-acetaminophen issued by Dr. V.M., despite Dr. V.M. prescribing outside of her family and administrative medicine area of practice. RFAAX A, at 6.[5]                                          Accordingly, the Agency finds that Registrant filled controlled substance prescriptions without first resolving the red flag arising from the prescriber's area of practice.                

### E. Long Distances

                    Registrant is deemed to have admitted that individuals traveling long distances to obtain or fill controlled substance prescriptions is a well-known red flag of abuse or diversion. Registrant further admits that it repeatedly filled prescriptions without identifying and resolving the red flag of patients traveling long distances to obtain or fill controlled substance prescriptions.                     *Id.*                     at 7. Specifically, Registrant is deemed to have admitted that it filled prescriptions for seven individuals, C.W., D.W., D.S.M., J.J., E.W., J.R., and L.T., whose residences were in “completely opposite areas of the Houston Metropolitan area” from their physician's office (Dr. V.M.) and from their pharmacy (Registrant).                     *Id.*                     Registrant further admits that there were several pharmacies closer to both Dr. V.M.'s office and the seven individuals' residences.                     *Id.*

Accordingly, the Agency finds that Registrant filled controlled substance prescriptions without first resolving the red flag arising from long distances traveled.

### F. Cash Payments

Texas regulations identify the following prescribing pattern as a red flag factor: “[P]ersons consistently pay for controlled substance prescriptions with cash or cash equivalents more often than through insurance.” 22 Tex. Admin. Code section 291.29(f)(12); RFAAX A, at 7-8.

                    Registrant is deemed to have admitted that it failed to identify and resolve the red flag of cash payments, which is a common red flag because it allows a patient to avoid the scrutiny associated with the use of insurance.                     *Id.*                     at 7-8. Specifically, between January 2022 and July 2023, Registrant routinely accepted cash payments for controlled substance prescriptions, including for each of the prescriptions filled for each of the ten individuals as described above.                     *Id.*                     at 8. Registrant is also deemed to have admitted that for L.T., Registrant routinely accepted cash payment for L.T.'s prescriptions between February 2022 and July 2023, despite the Texas Prescription Drug Monitoring Program Report indicating that L.T. used insurance at other pharmacies on three occasions.[6] *Id.*

Accordingly, the Agency finds that Registrant filled controlled substance prescriptions without first resolving the red flag arising from cash payments.

### G. Expert Review

                    DEA retained an independent pharmacy expert who concluded that the above prescription data presented multiple red flags that were highly indicative of abuse and diversion.                     *Id.*                     Registrant is deemed to have admitted that these red flags were not resolved by a pharmacist acting in the usual course of professional practice prior to dispensing, and, therefore, that each prescription was filled outside the Texas standard of care.                     *Id.*

## II. Discussion

### A. The Five Public Interest Factors

Under the Controlled Substances Act (CSA), “[a] registration . . . to . . . dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render [its] registration under [21 CFR 823] inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a). In making the public interest determination, the CSA requires consideration of the following factors:

(A) The recommendation of the appropriate State licensing board or professional disciplinary authority.

(B) The [registrant]'s experience in dispensing, or conducting research with respect to controlled substances.

(C) The [registrant]'s conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.

(D) Compliance with applicable State, Federal, or local laws relating to controlled substances.

(E) Such other conduct which may threaten the public health and safety. 

21 U.S.C. 823(g)(1).

                    The Agency considers these public interest factors in the disjunctive.                     *Robert A. Leslie, M.D.,*68 FR 15227, 15230 (2003). Each factor is weighed on a case-by-case basis.                     *Morall*                     v.                     *Drug Enf't Admin.,*                     412 F.3d 165, 173-74 (D.C. Cir. 2005). Any one factor, or combination of factors, may be decisive.                     *David H. Gillis, M.D.,*58 FR 37507, 37508 (1993).                

                    While the Agency has considered all of the public interest factors in 21 U.S.C. 823(g)(1),[7]                                          the Government's evidence in support of its                     *prima facie*                     case for revocation of Registrant's registration is confined to Factors B and D.                     *See*      ( print page 82270)                        RFAAX A, at 4-5. Moreover, the Government has the burden of proof in this proceeding. 21 CFR 1301.44.                

                    Here, the Agency finds that the Government's evidence satisfies its                     *prima facie*                     burden of showing that Registrant's continued registration would be “inconsistent with the public interest.” 21 U.S.C. 824(a)(4).                

### B. Factors B and D

                    Evidence is considered under Public Interest Factors B and D when it reflects compliance (or non-compliance) with laws related to controlled substances and experience dispensing controlled substances.                     *See Sualeh Ashraf, M.D.,*88 FR 1095, 1097 (2023);                     *Kareem Hubbard, M.D.,*87 FR 21156, 21162 (2022). In the current matter, the Government has alleged that Registrant violated both Federal and State law regulating controlled substances. RFAAX A, at 2-4. Specifically, a pharmacist may only fill a prescription that was “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.”                     *Id.*                     § 1306.04(a). Although “[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.*                     Section 1306.04(a) prohibits “a pharmacist from filling a prescription for a controlled substance when he either knows or has reason to know that the prescription was not written for a legitimate medical purpose.”                     *Wheatland Pharmacy,*78 FR 69441, 69445 (2013) (internal quotations and alterations omitted); RFAAX 2, at 2. DEA regulations require “pharmacists to identify and resolve suspicions that a prescription is illegitimate.”                     *Trinity Pharmacy II,*83 FR 7304, 7331 (2018); RFAAX 2, at 2. Further, under Federal regulations, a prescription for a controlled substance “may only be filled by a pharmacist, acting in the usual course of his professional practice.” 21 CFR 1306.06.                

                    As for State law, under Texas regulations, “[a] pharmacist may not dispense . . . a controlled substance . . . except under a valid prescription and in the course of professional practice.” Tex. Health & Safety Code section 481.074(a). Regarding the specific standards for a pharmacist filing a new or refill prescription, “[f]or the purpose of promoting therapeutic appropriateness, a pharmacist shall, prior to or at the time of dispensing a prescription drug order, review the patient's medication record. Such review shall at a minimum identify clinically significant: . . . (III) reasonable dose and route of administration; . . . (VI) drug-drug interactions; . . . [and] (X) proper utilization, including overutilization or underutilization.” 22 Tex. Admin. Code section 291.33(c)(2)(A)(i). “Upon identifying any clinically significant conditions [or] situations . . . the pharmacist shall take appropriate steps to avoid or resolve the problem including consultation with the prescribing practitioner.”                     *Id.*                     section 291.33(c)(2)(A)(ii). “Prior to dispensing, any questions regarding a prescription drug order must be resolved with the prescriber and written documentation of these discussions made and maintained.”                     *Id.*                     section 291.33(c)(2)(A)(iv);                     *see also id.*                     sections 291.29(a)-(b), 291.33(c)(2)(C) (describing the requirements for documentation).                

Regarding “red flag factors” that are “relevant to preventing the non-therapeutic dispensing of controlled substances,” Texas regulations identify the following relevant circumstances as red flags: 

(1) the pharmacy dispenses a reasonably discernible pattern of substantially identical prescriptions for the same controlled substances, potentially paired with other drugs, for numerous persons, indicating a lack of individual drug therapy in prescriptions issued by the practitioner; . . .

(3) prescriptions by a prescriber presented to the pharmacy are routinely for controlled substances commonly known to be abused drugs, including opioids, benzodiazepines, muscle relaxants, psychostimulants, and/or cough syrups containing codeine, or any combination of these drugs;

(4) prescriptions for controlled substances by a prescriber presented to the pharmacy contain nonspecific or no diagnoses, or lack the intended use of the drug;

                        (5) prescriptions for controlled substances are commonly for the highest strength of the drug and/or for large quantities (                        *e.g.,*                         monthly supply), indicating a lack of individual drug therapy in prescriptions issued by the practitioner; . . .                    

(8) the practitioner's clinic is not registered as, and not exempted from registration as, a pain management clinic by the Texas Medical Board, despite prescriptions by the practitioner presented to the pharmacy indicating that the practitioner is mostly prescribing opioids . . . ;

(9) the controlled substance(s) or the quantity of the controlled substance(s) prescribed are inconsistent with the practitioner's area of medical practice; . . .

(11) multiple persons with the same address present substantially similar controlled substance prescriptions from the same practitioner; [and]

(12) persons consistently pay for controlled substance prescriptions with cash or cash equivalents more often than through insurance.” 

*Id.*                     section 291.29(f). Further, under Texas regulations, “[a] pharmacist shall not dispense a prescription drug if the pharmacist knows or should know the prescription drug order is fraudulent or forged.”                     *Id.*

                    Here, Registrant has admitted that it repeatedly filled prescriptions for controlled substances that contained multiple red flags of abuse and/or diversion without addressing or resolving those red flags. RFAAX A, at 5-8. DEA's pharmacy expert concluded that these red flags were highly indicative of abuse and diversion.                     *Id.*                     at 8. Registrant has further admitted that none of the above-referenced controlled substance prescriptions were filled for a legitimate medical purpose in the usual course of professional practice.                     *Id.*                     As such, the Agency finds that Registrant violated 21 CFR 1306.04, 1306.06, Texas Health & Safety Code section 481.074, and 22 Texas Administrative Code sections 291.29, 291.33.                

                    Accordingly, the Agency finds that Factors B and D weigh in favor of revocation of Registrant's registration and thus finds Registrant's continued registration to be inconsistent with the public interest in balancing the factors of 21 U.S.C. 823(g)(1). The Agency further finds that Registrant failed to provide any evidence to rebut the Government's                     *prima facie*                     case.                

## III. Sanction

                    Where, as here, the Government has established grounds for revocation, the burden shifts to the registrant to show why it can be entrusted with the responsibility carried by a registration.                     *Garret Howard Smith, M.D.,*83 FR 18882, 18910 (2018). To establish that it can be entrusted with registration, a registrant must both accept responsibility and demonstrate that it has undertaken corrective measures.                     *Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195,*77 FR 62316, 62339 (2012) (internal quotations omitted);                     *see also Michele L. Martinho, M.D.,*86 FR 24012, 24019 (2021);                     *George D. Gowder, III, M.D.,*89 FR 76152, 76154 (2024). Trust is necessarily a fact-dependent determination based on individual circumstances; therefore, the Agency looks at factors such as the acceptance of responsibility, the credibility of that acceptance as it relates to the probability of repeat violations or behavior, the nature of the misconduct that forms the basis for sanction, and the Agency's interest in deterring similar acts.                     *See, e.g.,**Robert Wayne Locklear, M.D.,*86 FR 33738, 33746 (2021).                

                    Here, Registrant failed to answer the allegations contained in the OSC/ISO                           ( print page 82271)                        and did not otherwise avail itself of the opportunity to refute the Government's case. As such, Registrant has made no representations as to its future compliance with the CSA nor made any demonstration that it can be entrusted with registration. Moreover, the evidence presented by the Government shows that Registrant violated the CSA, further indicating that Registrant cannot be entrusted.                

Accordingly, the Agency will order the revocation of Registrant's registration.

## Order

Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. FH9037830 issued to Halowells Pharmacy. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I hereby deny any pending applications of Halowells Pharmacy to renew or modify this registration, as well as any other pending application of Halowells Pharmacy for additional registration in Texas. This Order is effective November 12, 2024.

## Signing Authority

                    This document of the Drug Enforcement Administration was signed on October 4, 2024, by Administrator Anne Milgram. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA                     **Federal Register**                     Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the                     **Federal Register**                    .                

Heather Achbach, 

Federal Register Liaison Officer, Drug Enforcement Administration.

# Footnotes

1.                             Based on the Government's submissions in its RFAA dated January 4, 2024, the Agency finds that service of the OSC/ISO on Registrant was adequate and rendered on November 16, 2023. Specifically, the Government included as an attachment to its RFAA a Form DEA-12 signed by a representative of Registrant, indicating that Registrant was personally served with the OSC/ISO on November 16, 2023. RFAA, at 1-2; RFAAX B.                    
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2.                             The Agency need not adjudicate the criminal violations alleged in the instant OSC/ISO.                         *Ruan*                         v.                         *United States,*                         142 S. Ct. 2,370 (2022) (decided in the context of criminal proceedings).                    
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3.                             C.W., D.S.E., D.S.M., D.S.T., D.W., E.W., J.J., J.L., J.R., and L.T., the relevant individuals to whom prescriptions were improperly filled in this case, are referred to collectively as the ten individuals.                    
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4.                             The OSC also alleges, and it is therefore admitted, that Registrant filled oxycodone 30 mg for D.S.T. who shared an address with D.S.E. and J.L. and saw the same practitioner.                         *Id.*                         This allegation is not sustained because there is not substantial evidence or an admission that clearly establishes that hydrocodone-acetaminophen 10/325 is a “substantially similar controlled substance prescription” to oxycodone 30 mg such that the prescription presents an additional instance of the shared address red flag.                         *Id.*
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5.                             Texas regulations further identify as a red flag pattern, “[T]he practitioner's clinic is not registered as, and not exempted from registration as, a pain management clinic by the Texas Medical Board, despite prescriptions by the practitioner presented to the pharmacy indicating that the practitioner is mostly prescribing opioids, benzodiazepines, barbiturates, or carisoprodol, but not including suboxone, or any combination of these drugs.” 22 Tex. Admin. Code section 291.29(f)(8). The OSC alleges, and it is therefore deemed admitted, that “Dr. [V.M.] is not Board Certified in the area of pain management.” RFAAX A, at 6. However, there is not substantial evidence or an admission that the prescriptions issued by Dr. V.M. that were presented to the Registrant were                         *mostly*                         for opioids and the other listed controlled substances. Accordingly, the Agency cannot sustain this allegation or find that it presents an additional instance of the prescriber area of practice red flag.                    
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6.                             The OSC additionally alleged, and it is therefore deemed admitted, that “between January 2022 and July 2023, [Registrant] routinely dispensed a quantity less than the amount prescribed by the physician and provided no documentation regarding approval from the physician.”                         *Id.*                         The OSC implies that this conduct violates 22 Texas Administrative Code section 291.33(c)(2)(A)(iv), which states: “[P]rior to dispensing, any questions regarding a prescription drug order must be resolved with the prescriber and written documentation of these discussions made and maintained . . . .”                         *Id.*                         It is not clear from substantial record evidence or an admission that the Registrant filling a quantity less than what was prescribed means that Registrant must have had unresolved questions regarding the prescription drug order. Accordingly, this allegation regarding the red flag of dispensing less than prescribed is not sustained. The Agency finds that the founded allegations discussed above are more than sufficient to support the Government's requested sanction of revocation under these circumstances.                    
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7.                             As to Factor A, the record contains no evidence of a recommendation from any State licensing board or professional disciplinary authority. 21 U.S.C. 823(g)(1)(A). Nonetheless, an absence of such evidence “does not weigh for or against a determination as to whether continuation of the [registrant's] DEA certification is consistent with the public interest.”                         *Roni Dreszer, M.D.,*76 FR 19434, 19444 (2011). As to Factor C, there is no evidence in the record that Registrant has been convicted of an offense under either Federal or State law “relating to the manufacture, distribution, or dispensing of controlled substances.” 21 U.S.C. 823(g)(1)(C). Agency cases have found that “the absence of such a conviction is of considerably less consequence in the public interest inquiry” and is therefore not dispositive.                         *Dewey C. MacKay, M.D.,*75 FR 49956, 49973 (2010). Finally, as to Factor E, the Government's evidence fits squarely within the parameters of Factors B and D and does not raise “other conduct which may threaten the public health and safety.” 21 U.S.C. 823(g)(1)(E). Accordingly, Factor E does not weigh for or against Registrant.                    
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[FR Doc. 2024-23495 Filed 10-9-24; 8:45 am]

BILLING CODE 4410-09-P