VI Pharmacy, Rushdi Z. Salem; Revocation of Registration

On June 13, 2003, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration (DEA), issued an Order to Show Cause to VI Pharmacy (VI) and Rushdi Z. Salem of St. Thomas, U.S. Virgin Islands, notifying VI of an opportunity to show cause as to why DEA should not revoke VI's DEA Certificate of Registration, BV5900421 under 21 U.S.C. 824(a)(1), (a)(2) and (a)(4) and deny any pending applications for renewal or modification of VI's retail pharmacy registration. As a basis for revocation, the Order to Show Cause alleged that VI materially falsified an application for registration, that Mr. Salem, the owner/operator of VI had been convicted of a felony related to controlled substances and that VI's continued registration was inconsistent with the public interest. The Order to Show Cause also notified VI that should no request for a hearing be filed within 30 days, its hearing right would be deemed waived.

The Order to Show Cause was sent by certified mail to VI and Mr. Salem, at VI's registered location at 25 Dronings Gade Main Street, St. Thomas, U.S. Virgin Islands 00801. According to the return receipt, the Order to Show Cause was received at the registered address and receipted for by B. Nelthrop on or around June 23, 2003.

DEA has not received a request for hearing or any other reply from VI or anyone purporting to represent it in this matter. Therefore, the Acting Deputy Administrator, finding that (1) 30 days have passed since the receipt of the Order to Show Cause, and (2) no request for a hearing having been received, concludes that VI is deemed to have waived its hearing right. See Samuel S. Jackson, D.D.S., 67 FR 65145 (2002); David W. Linder, 67 FR 12579 (2002). After considering material from the investigative file, the Acting Deputy Administrator now enters her final order without a hearing pursuant to 21 CFR 1301.43(d) and (e) and 1301.46.

Pursuant to 21 U.S.C. 824(a)(1), the Acting Deputy Administrator may revoke a DEA Certificate of Registration and deny any pending applications for such a certificate upon a finding that the registrant has materially falsified any DEA application for registration. Pursuant to 21 U.S.C. 824(a)(2), the Deputy Administrator may revoke a DEA Certificate of Registration and deny any pending applications for such a certificate upon a finding that the registrant has been convicted of a felony related to controlled substances under State or Federal law.

In addition, the Acting Deputy Administrator may revoke a DEA Certificate of Registration and deny any pending applications for such certificate if she determines that the issuance of such registration would be inconsistent with the public interest as determined pursuant to 21 U.S.C. 823(a)(4) and 823(f). Section 823(f) requires 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, or conducting research with respect to 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 or safety.

As a threshold matter, it should be noted that the factors specified in section 823(f) are to be considered in the disjunctive: The Acting Deputy Administrator may properly rely on any one or a combination of the factors, and give each factor the weight she deems appropriate, in determining whether a registration should be revoked or denied. Henry J. Schwarz, Jr., M.D., 54 FR 16422 (1989)

The Acting Deputy Administrator finds that in 1998, VI Pharmacy, through and by Mr. Rushdi Salem, R.Ph, submitted an Application for DEA Registration as a retail pharmacy. Instead of the required evidence of State/jurisdiction licensure for the pharmacy, Mr. Rushdi submitted a copy of his personal Virgin Islands Pharmacist License, No. 125. Despite this, VI was issued and currently possesses DEA Certificate of Registration BV5900421 which, after its 2001 renewal, currently expires on May 31, 2004.

On April 18, 2001, Mr. Salem submitted a renewal application for VI's DEA Certificate of Registration, which he signed and certified as being true and correct. In response to question 3 of the application, asking if the applicant was authorized to distribute, dispense or otherwise handle controlled substances in the Virgin Islands, he checked the block “Yes” and represented that VI held Virgin Island registration number 11387. However the Virgin Island Board of Pharmacy indicates VI has never held any Board of Pharmacy license to operate as a pharmacy in its jurisdiction.

Pursuant to 21 U.S.C. 824(a0(1), falsification of a DEA application constitutes independent grounds to revoke a registration. Past cases have established that the appropriate test for determining whether an applicant materially falsified any application is whether the applicant “knew or should have known” that the submitted application was false. See Barry H. Brooks, M.D., 66 FR 18305, 18307 (2001); Terrance E. Murphy, M.D., 61 FR 2841, 2844 (1996); Bobby Watts, M.D., 58 FR 46995 (1993).

Prior DEA cases have also held that “ ‘[s]ince [it] must rely on the truthfulness of information supplied by applicants in registering them to handle controlled substances, falsification cannot be tolerated.’ ” See Terrance E. Murphy, M.D., supra, 61 FR at 2845 (quoting Bobby Watts, M.D.., supra, 58 FR at 46995.). Further, in prior DEA cases the Deputy Administrator has held that the totality of the circumstances is to be considered in determining whether a registration should be revoked because of a registrant's material falsification of an application. See Barry H. Brooks, M.D., supra, 66 FR at 18308; Martha Hernandez, M.D., 62 FR 61145, 61147-48.

After considering the totality of the circumstances, the Acting Deputy Administrator finds that VI, through its owner Mr. Rushdi, provided false information in its April 18, 2001, Application for DEA Registration and this misrepresentation constitutes a material falsification of an application warranting revocation of VI's certificate.

The Acting Deputy Administrator further finds that in December 2000, an undercover U.S. Federal agent posing as a patient contacted VI Pharmacy by phone requesting narcotics without a prescription. He was told to fax an order and credit card number. The agent later faxed a request for approximately 200 dosage units of Schedule II and III narcotic controlled substances. VI Pharmacy, by return fax, quoted a per-pill price for some, but not all of the drugs. In a subsequent phone call, Mr. Salem told the agent to come to VI in person to purchase the drugs. Later that month, without a prescription, the agent purchased 100 tablets of Vicodin, a controlled substance, from Mr. Salem. In February 2001, using the mail, the agent then bought another 100 tablets of Vicodin and on two occasions in May 2001, the agent visited the pharmacy and purchased a total of 1,100 tablets of Vicodin. Finally, in June 2001, the agent purchased 1,500 tablets of Vicodin from Mr. Salem's brother, an employee of VI. All of these purchases were made without a prescription.

On January 20, 2003, in United States v. Rushdi Z. Salem, United States District Court for the Virgin Islands, Criminal Case No. 2001-235, Mr. Salem pled guilty to 21 U.S.C. 841(a)(1), knowingly and intentionally distributing a controlled substance. It is well settled that a pharmacy operates under the control of owners, stockholders, pharmacists, or other employees, and if any such person is convicted of a felony offense related to controlled substances, grounds exist to revoke the pharmacy's registration under 21 USC 824(a)(2). See Rick's Pharmacy, Inc., 62 FR 42595, 42597 (1997); Maxicare Pharmacy, 61 FR 27368 (1996); Big-T Pharmacy, Inc., 47 FR 51830 (1982). The Acting Deputy Administrator finds that grounds exist to revoke VI's registration under 21 USC 824(a)(2) based on the controlled substance related felony conviction of Mr. Rushdi.

Finally, with regard to the public interest factors of 21 U.S.C. 823(f), the Acting Deputy Administrator considers the above facts as relevant and adverse to the registrant under factors two, three, four and five of section 823(f). She concludes that VI Pharmacy's continued registration is inconsistent with the public interest, as that term is used in 21 U.S.C. 823(f) and 824(a)(4).

Accordingly, the Acting Deputy Administrator of the Drug Enforcement Administration, pursuant to the authority vested in her by 21 U.S.C. 823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that DEA Certificate of Registration BV5900421, issued to VI Pharmacy, be, and it hereby is, revoked. The Acting Deputy Administrator further orders that any pending applications for renewal of such registration be, and they hereby are, denied. This order is effective March 8, 2004.