Pharmacies: DOJ Wins TRO to Immediately Suspend Registration for Controlled Substances

In February, the Department of Justice (DOJ) successfully leveraged a new weapon to target pharmacies as it battles the nation’s opioid crisis. The new approach utilizes court-ordered temporary restraining orders (TROs) that result in an immediate suspension of a pharmacy’s ability to dispense controlled substances at the outset of a Drug Enforcement Administration (DEA) registration revocation process. A TRO prevents the suspect pharmacies from dispensing any medications until the DEA and the DOJ proceed through the usual course of revoking the offending pharmacies’ DEA controlled substance registrations.

In this context, the Federal District Court for the Middle District of Tennessee granted two TROs to DOJ against two commonly-owned pharmacies in Tennessee, thereby immediately prohibiting them from dispensing any medications prior to the initiation of revocation proceedings with the DEA.  The TROs were set to last until hearings scheduled for March. However, on February 20 and March 8, 2019, the Court granted joint consent motions that converted the TROs into Preliminary Injunctions, which further extends the suspension of the DEA registrations.

The DOJ’s complaint alleged that the commonly-owned defendant pharmacies violated the federal Controlled Substances Act (CSA) by routinely dispensing controlled substances while ignoring numerous warnings signs of abuse and diversion, including unusually high doses of opioid medication, prescriptions for opioid and other controlled substances in dangerous combination and patients traveling unusually long distances to obtain and fill prescriptions.  In its arguments, the government also tied the pharmacies’ alleged unlawful actions to several deaths, the hospitalization of at least five customers, and an overdose in the restroom of one of the defendant pharmacies.

DOJ characterized its approach of filing a complaint for injunctive relief to immediately suspend Xpress Pharmacy and Dale Hollow Pharmacy’s controlled substance registrations as the “first of its kind.”  The action originated with  DOJ’s Prescription Interdiction & Litigation (PIL) Task Force, which seeks to coordinate and deploy “all available criminal, civil and regulatory tools to reverse the tide of opioids overdoses in the U.S.

Temporary Suspension.  Typically, the DEA and the United States Attorney General (AG), who heads DOJ, do not suspend controlled substance licenses immediately. While the DEA has the ability to temporarily suspend a pharmacy’s DEA registration under 21 U.S.C. Section 824, it must show “imminent danger,” which has historically proven difficult for the DEA. The DEA took this approach when it issued an Immediate Suspension Order to Morris & Dickson Company on May 4, 2018. However, in May 2018, the U.S. District Court entered a TRO against the DEA, effectively reinstating Morris’s DEA registration. Specifically, the Court reasoned that there was a substantial likelihood that the DEA’s issuance of the Immediate Suspension Order was arbitrary and capricious. After this decision, it appeared that the DEA would face similar challenges if it again attempted to rely on its immediate suspension authority in its efforts to combat the opioid epidemic.

Order to Show Cause as an Alternative to Temporary Suspension.   Instead of seeking the temporary suspension, the DEA has often issued an Order to Show Cause stating that a registrant violated the CSA. Violations of the CSA relied upon by the DEA as a basis for the Order to Show Cause include, among others, felony convictions related to controlled substances, exclusion from federal health care programs, and actions that would render the pharmacy’s controlled substance registration inconsistent with the public interest.  See 21 U.S.C. §824(a).

The Order to Show Cause includes a date for the registrant to appear before the DEA at least thirty (30) days after the order was issued. The registrant is also allowed to present a corrective action plan on or before the date of appearance. 21 U.S.C. § 824(c)(2). The registrant’s controlled substance registration remains active during the process, which can take months.

TROs.  In contrast, the DOJ filed a complaint under seal in the Oakley case, requesting that the court immediately issue a TRO against the target pharmacies, their common owner, and three pharmacists for violating 21 U.S.C. § 824(a). Specifically, DOJ argued that “pharmacists are frequently the last line of defense before a controlled substance that was prescribed without any legitimate medical purpose is sold to a patient. The Defendant pharmacies, pharmacists, and the pharmacies’ owner here failed to muster that defense…by filling those thousands of illegitimate prescriptions, Defendants crossed the line between pharmacy practice and violating the Controlled Substances Act.”

The Court granted DOJ’s motion. The TRO resulted in the suspension of the pharmacies’ controlled substance registrations, which, in effect, shut down the operations with respect to dispensing controlled substances until the matter is resolved (if not longer). This tactic provides the government with several advantages, including preservation of evidence and immediate cessation of potentially dangerous pharmacy operations.  While the alleged facts of the case surely contributed to the government securing injunctive relief outside of the standard DEA revocation process, pharmacies should be on notice that the DOJ is willing to take actions to shut down dispensing operations ahead of revocation and other prosecution.  Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division notes that this action “should serve as a warning to those in the pharmacy industry who choose to pit profit over customer safety.”