On September 15, 2022, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause (OSC) proposing to revoke the registrations of and deny any pending applications of Emed Medical Company LLC and Med Assist Pharmacy (collectively Registrants). Request for Final Agency Action (RFAA), Exhibit (RFAAX) 38 (OSC), at 1, 2, 3, 7. The OSC alleged that Registrants materially falsified multiple applications for registration and renewal. Id. at 2–6 (citing 21 U.S.C. 824(a)(1)).
The OSC proposed to revoke Emed Medical Company LLC's Certificate of Registration No. RE0357271 at the registered address of 11551 Adie Road, Maryland Heights, Missouri 63043, and Med Assist Pharmacy's Certificate of Registration No. FM2022008 at the registered address of 11551 Adie Road, Maryland Heights, Missouri 63043.
The Agency makes the following findings of fact based on the uncontroverted evidence submitted by the Government in its RFAA dated February 10, 2023.
Based on a Declaration from a DEA Diversion Investigator, the Agency finds that the Government's service of the OSC on Registrants was adequate. RFAAX 39, at 2. Further, based on the Government's assertions in its RFAA, the Agency finds that more than thirty days have passed since Registrants were served with the OSC and Registrants have neither requested a hearing nor submitted a corrective action plan and therefore have waived any such rights. RFAA, at 10; see also21 U.S.C. 824(c)(2); 21 CFR 1301.43.
I. Findings of Fact
a. Relationship Between Registrants
The OSC was addressed to both Emed Medical Company LLC and Med Assist Pharmacy. RFAAX 38, at 1. The Agency finds that for the purposes of this matter, Registrants are one and the same. The Missouri “Registration of Fictitious Name” documentation provides that Emed Medical Company LLC is the sole owner of Med Assist Pharmacy and identifies Eric Bailey, who is the sole owner and operator of Emed Medical Company LLC, as the point of contact. RFAAX 2; RFAAX 7, at 2. Further, both Agency records and publicly available Missouri records show that Registrants share a registered address and share a President/contact, Eric Bailey. RFAAX 1, at 2–3; RFAAX 3; RFAAX 4; RFAAX 5, at 1–2; RFAAX 6; RFAAX 34, at 1–2.
b. Registrants' Falsified Applications
At all times relevant to this matter (July 2007 through August 2022), the DEA “Application for Registration Under Controlled Substances Act of 1970” (Application) asked as a question regarding liability information: “3. Has the applicant ever surrendered (for cause) or had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation, or is any such action pending?” RFAAX 18, at 1; see also RFAAX 19–33, 37.
As part of a settlement agreement with the Missouri State Board of Pharmacy, Eric Bailey, signing on behalf of Emed Medical Products, agreed that Emed's license as a wholesale distributor would be placed on probation for two years beginning on or about January 17, 2003. RFAAX 7, at 1, 6, 9. Despite clear evidence of having had their wholesale distributor license placed on probation, Registrants answered “No” to liability question 3 for their initial application with DEA on July 7, 2007, and on each of the sixteen subsequent applications submitted by Registrants annually between 2008 and 2022. RFAAX 18–33, 37.
The record shows that in Missouri, Emed Medical Company does business as Emed Medical Products. RFAAX 16, at 1; ( compare the registration numbers in RFAAX 7, at 2 with RFAAX 16, at 2).
The agreement settled an allegation that Mr. Bailey purchased medication through Emed for his personal use rather than for distribution. Id. at 2–3.
Moreover, the following events occurred but were never disclosed by Registrants in response to liability question 3 on any of their applications. See RFAAX 18–33, 37. On January 28, 2013, the State Board of Pharmacy of South Carolina temporarily suspended Emed Medical Company's pharmacy permit. RFAAX 10, at 1. Further, on January 22, 2019, the State Board of Pharmacy of South Carolina permanently revoked Emed Medical Company's pharmacy permit as a result of, among other things, a criminal conviction. RFAAX 14, at 1, 3. On August 8, 2019, the State of Ohio Board of Pharmacy permanently revoked Emed Medical Company's license as a wholesale distributor of dangerous drugs. RFAAX 15, at 4–5; see also id. at 6–9 (May 3, 2019, letter proposing to revoke Emed Medical Company's license). Finally, on December 28, 2020, Registrants entered into settlement agreements with the Missouri Board of Pharmacy that placed both Emed Medical Products' drug distributor permit and Med Assist Pharmacy's pharmacy permit on probation for three years beginning on or about January 23, 2021. RFAAX 16, at 6, 9; RFAAX 35, at 5, 9.
On September 14, 2012, Eric Bailey, on behalf of Emed Medical Company, entered into a Consent Agreement with the Maine Board of Pharmacy. RFAAX 9, at 1, 3. The Consent Agreement stated that “Emed Medical Company admit[ed] to failing to disclose disciplinary action to the Board for [its] initial Wholesaler application,” and that based on that information, “the Board voted to preliminarily deny Emed Medical Company's application for licensure as a Wholesaler.” Id. at 1, 2. However, the Consent Agreement also stated that because Emed Medical Company executed the Consent Agreement, “the Board [would] not deny Emed Medical Company's application . . . and [would] approve the application.” Id. at 2. In the current matter, because there are various other grounds for revocation, the Agency does not have to determine whether the Maine Board of Pharmacy's vote to preliminarily deny was required to be disclosed on Registrants' DEA applications under the circumstances. This information is included here as background information.
On March 12, 2015, Eric Bailey plead guilty to conspiracy to commit mail and wire fraud after allowing Emed Medical Products' license to be used by a criminal codefendant and facilitating the writing of funds for shipment of pharmaceuticals. RFAAX 12, at 1, 9–10; see also RFAAX 11; RFAAX 13. In the current matter, the OSC does not allege that Registrants' failure to disclose this criminal conviction in response to liability question 4 on their various DEA applications constitutes additional incidents of material falsification; instead, these facts are provided as background only and are immaterial to the Agency's decision.
In sum, despite numerous periods of probation, suspension, and revocation in multiple state jurisdictions, Registrants answered “No” to liability question 3 on each of the seventeen applications they submitted prior to issuance of the OSC. See RFAAX 18–33, 37. As such, the Agency finds that Registrants' answers were clearly false because Registrants, on multiple occasions, had their state controlled substance registrations or licensures placed on probation, suspended, and/or revoked for cause.
II. Discussion
The Administrator may suspend or revoke a registration if a registrant materially falsified an application for registration. 21 U.S.C. 824(a)(1). Here, Registrants provided false information to liability question 3 on each of their seventeen applications—falsely responding that they had never had a state controlled substance registration placed on probation, suspended, and/or revoked for cause. See RFAAX 18–33, 37. Agency decisions have repeatedly held that false responses to the liability questions on an application for registration are material. E.g., Crosby Pharmacy and Wellness,87 FR 21,212, 21,214 (2022); Frank Joseph Stirlacci, M.D.,85 FR 45,229, 45,234–35 (2020). Accordingly, the Agency finds that the Government has established grounds to revoke Registrants' registrations and to deny any pending applications of Registrants.
III. Sanction
Where, as here, the Government has established grounds to revoke a registration or deny an application, the burden shifts to the registrants to show why they can be entrusted with the responsibility carried by a registration. Garret Howard Smith, M.D.,83 FR 18,882, 18,910 (2018) (citing Samuel S. Jackson,72 FR 23,848, 23,853 (2007)). The issue of trust is necessarily a fact-dependent determination based on the circumstances presented by the individual registrant; therefore, the Agency looks at factors, such as the acceptance of responsibility and the credibility of that acceptance as it relates to the probability of repeat violations or behavior and the nature of the misconduct that forms the basis for sanction, while also considering the Agency's interest in deterring similar acts. See Arvinder Singh, M.D.,81 FR 8,247, 8,248 (2016).
Here, Registrants did not avail themselves of the opportunity to refute the Government's case or demonstrate why they can be entrusted with registration. Moreover, Registrants repeated their misconduct for years, rendering it particularly egregious. Accordingly, the Agency will order the sanctions requested by the Government, as contained in the Order below.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1) and 824(a)(2), I hereby revoke Emed Medical Company LLC's DEA Certificate of Registration No. RE0357271 and Med Assist Pharmacy's DEA Certificate of Registration No. FM2022008. 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 Emed Medical Company LLC or Med Assist Pharmacy to renew or modify their registrations, as well as any other pending application(s) that they may have for addition registration in Missouri. This Order is effective May 11, 2023.
Signing Authority
This document of the Drug Enforcement Administration was signed on April 4, 2023, 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.
[FR Doc. 2023–07512 Filed 4–10–23; 8:45 am]
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