DEA Denies Application Based on Past Misconduct of Pharmacist in Charge
Health Law Alert 06/12/12 Larry P. Cote
On June 7, 2012, the Drug Enforcement Administration ("DEA") issued a Final Order in the Matter of Pharmboy Ventures Unlimited, Inc., d/b/a Brent's Pharmacy and Diabetes Care ("Pharmboy"). The Administrator denied Pharmboy's application for a DEA Certificate of Registration as a retail pharmacy, concluding that permitting Pharmboy's to become a DEA registrant would be inconsistent with the public interest. The Final Order contains several important holdings that impact hiring decisions, conducting employee screenings, and whether a waiver is needed to employ certain individuals that have access to controlled substances.
On August 26, 2011, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause ("OTSC") to Pharmboy of St. George, Utah proposing the denial of Pharmboy's application for a DEA Certificate of Registration as a retail pharmacy. The OTSC alleged, among other things, that Pharmboy intended to employ the owner's husband as the Pharmacist in Charge ("PIC") and sole pharmacist. The OTSC further alleged that the PIC, while previously working as a pharmacist at another pharmacy, had unlawfully taken phentermine, a schedule IV controlled substance, from the pharmacy's stock and ingested it; had failed to document the disposition of the phentermine he had taken; and that on at least four occasions had left the pharmacy unattended, when it was open to the public, in violation of Utah Admin. Code R156-1-102a. As a result of this misconduct, the PIC's pharmacy license was placed on probation for three years, and he pled no contest to seven state law counts of making or altering a false prescription.
In denying the application, DEA upheld its long-standing precedent wherein the Agency will hold the pharmacy accountable for the misconduct of owners or stockholders, pharmacists or other key employees. Thus, a pharmacy's DEA registration or application for DEA registration is subject to suspension, revocation, restriction or denial, when, as in this case, a key employee violated state or federal law with respect to controlled substances.
Of note, DEA also based the denial of the application on the PIC's past conduct of leaving a pharmacy unattended during times when the pharmacy was open to the public. While this is a state rule that is not specific to controlled substances, DEA nonetheless found that the "violations have a sufficient connection to the [Controlled Substances Act's] core purpose of preventing the diversion of controlled substances to be considered as 'such other conduct which may threaten the public health and safety.'" Accordingly, DEA held that the violation of this rule was within the Agency's authority to consider when denying the application. Lastly, DEA reiterated its position that for purposes of the CSA, "a plea of no contest which is subject to deferred adjudication, nonetheless constitutes a conviction."
A copy of the final order is attached here.
For more information on the DEA's Final Order, please contact Larry Cote at (202) 372-9524 / firstname.lastname@example.org or your Quarles & Brady attorney.