Friday, November 22, 2013

IS THIS the Wave of the Future from the DEA Regarding Pharmacies: FDA Law Blog--November 21, 2013 Coming Clean with DEA: No Good Deed Goes Unpunished By John A. Gilbert & Delia A. Stubbs –

In a decision published this week, DEA denied an application for a pharmacyregistration on the basis that the owner-pharmacist had previously ignored “red flags” and generally failed to exercise her corresponding responsibility in filling prescriptions.  Wheatland Pharmacy; Decision and Order, 78 Fed. Reg. 69,441 (Nov. 19, 2013).  While these factors have been used by DEA on numerous occasions to deny or revoke DEA registrations, it is worth noting that in this case the pharmacist had apparently self-reported to DEA concerns about suspicious prescriptions received at the pharmacy.  However, DEA found that the pharmacist had otherwise misrepresented her involvement and culpability in filling prescriptions that were not for a legitimate medical use.  DEA also found that the pharmacist had filled prescriptions even after her prior DEA registration had been voluntarily surrendered.  To be sure, the pharmacist’s attempt to curry favor with DEA seems rather short-sighted in light of other actions that clearly violated the law and DEA regulations.  But the lesson here is that registrants should not expect to receive brownie points for reporting suspicious activity, especially if their own conduct raises serious compliance concerns.
This case also raises several procedural and substantive issues worth noting.  First, DEA issued a final order denying the pharmacy’s application, despite the pharmacy’s request that the application be withdrawn and where the pharmacy requested to waive its right to a hearing.  Id. at 69,441.  Pursuant to 21 C.F.R. § 1301.37, if the Administrator finds the registration is inconsistent with the public interest, DEA may serve upon an applicant an Order to Show Cause (“OTSC”) why the application should not be denied.  Prior to issuance of an OTSC, the Administrator must grant an applicant’s request to withdraw his application.  Id. § 1301.16(a).  After issuance of an OTSC, the Administrator may, but is not required by regulation, to permit withdrawal of the application.  Id.  In Wheatland, the Deputy Assistant Administrator denied the applicant’s request to withdraw the application for registration (the record is silent, but we presume the request was made after the OTSC).  78 Fed. Reg. 69,441.  The applicant subsequently waived its right to a hearing, and DEA then filed a request with the Administrator pursuant to DEA regulations that permit the Administrator to issue a final order based on the “findings of fact and conclusions of law upon which the order is based.”  21 C.F.R. §§ 1301.43(e), 1301.46. 
This summary judgment process used in Wheatland is not commonly exercised by DEA, but may signal a wave of the future.  The process was previously considered in a decision issued earlier this year, where DEA, overruling prior agency precedent, held that the Administrator may deny an application based on findings made in an OTSC on the person’s prior application – where the person declined to request a hearing on that OTSC.  The Administrator ruled its decision was permitted by the doctrine of res judicata.  See Jose G. Zavaleta, M.D.; Decision and Order, 78 Fed. Reg. 27,431 (May 10, 2013).
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