STATE OF FLORIDA DEPARTMENT OF HEALTH DEPARTMENT OF HEALTH, through its BUREAU OF PHARMACY SERVICES, Petitioner, Case No: vs. : (DOH: 01-04818, 01-04819 and 99-04145) HABANA HOSPITAL PHARMACY, INC., a Florida Corporation, and WALTER E. DYKES, R.Ph., individually, Respondenis. ADMINISTRATIVE COMPLAINT Notice is hereby provided that Petitioner, Department of Health by and through its Bureau of Pharmacy Services (the "bureau, intends to revoke the prescription drug wholesaler permit of Habana Hospital Pharmacy; Inc., d/b/a Habana Wholesale Drug Company, revoke and deny renewal of the retail pharmacy wholesaler permit of Habana Hospital Pharmacy, Inc., d/b/a Habana Hospital Pharmacy pursuant to section 499.067, Florida Statutes; and impose an administrative fine in the amount of $96,500 against Habana Hospital Pharmacy, Inc., and Walter E. Dykes pursuant to section 499.066, Florida Statutes. In suppgtt of the intended final - agency action the bureau states: (1) Petitioner, Department of Health, through its Bureau of Pharmacy Services, 2818-A Mahan Drive, Tallahassee, Florida, 32308, is the Florida state agency responsible for ~ implementing and enforcing the provisions of the Florida Drug and Cosmetic Act, Chapter 499, Sopp arsersp eee reece permet on nae Dstt OE AE ee ee eee ee a Florida Statutes, including the regulation of the acquisition and distribution of prescription drugs in Florida. _ (2) Respondent, Habana Hospital Pharmacy, Inc., (“Corporate”) is a Florida registered corporation whose principal place of business is 4710 N. Habana Avenue, Suite 101, Tampa, Hillsborough County, Florida 33614. Corporate is licensed under the Florida Drug and Cosmetic Act, Chapter 499, F.S., (“the Act’) asa prescription drug wholesaler to do business under the name Habana Wholesale Drug Co. (“Habana Wholesale”) with permit number 29-0106. This two-year permit was originally issued on February 5, 1999, has been renewed once and is scheduled to expire by operation of law on February 28, 2003. (3) Respondent is also licensed under the Act as a retail pharmacy wholesaler to do business under the name Habana Hospital Pharmacy, Inc., (“Habana Pharmacy”) with permit number 24:00242. This two-year permit was originally issued on October 22, 1993, has been renewed several times, and was scheduled to expire by operation of law on October 31, 2001. Habana Pharmacy. submitted an application to renew the retail pharmacy wholesaler permit 24:00242 that was received by the bureau on September 21. 2001. A check in the amount of $100 for the renewal application fee was also submitted with the reriewal application. (4) Further, Respondent, Corporate, is licensed under the Florida Pharmacy Act, Chapter 465, F.S., to operate as a community pharmacy and special parenteral / enteral pharmacy with license number PH1815. This permit expires on February 28, 2003. Habana Pharmacy’s U.S. Drug Enforcement Administration (DEA) registration nuiber is AH0208226. (5) Walter E. Dykes, R.Ph., is the president of Corporate’ and is responsible for the operations of Habana Wholesale and Habana Pharmacy. (6) On June 10, 2001, the bureau’s agent presented himself at 4710 N. Habana Avenue in Tampa for an inspection of the wholesale operations of Habana Wholesale’ under the Spm erp oe ee SE Der ee oe SOUR ore og Ser Ape em re Ter a prescription drug wholesaler permit and Habana Pharmacy under the retail pharmacy wholesaler permit. (7) In response to the bureau’s request for records related to the prescription drug wholesaling activities of Habana Wholesale, Corporate produced purchase records from Response Oncology / Impact Center of Tampa selling prescription drugs to Habana Pharmacy. These purchase records indicate Response Oncology / Impact Center sold the prescription drugs to Habana Pharmacy and reference Habana Pharmacy’s DEA number. Corporate represented that these were all the records of purchase for prescription drugs sold by Habana Wholesale. (8) Habana Wholesale purchased or received prescription drugs from a person not authorized to wholesale prescription drugs to it, in violation of.s. 499.005(14), FS. See for example Exhibits 15a — 18a; 21 - 34; and 44 - 47, which are attached to and by reference made a part of this complaint. Habana Wholesale acquired the prescription drugs it wholesaled from Habana Pharmacy, which is not permitted under the Act to wholesale prescription drugs to a prescription drug wholesaler. - (9) : Habana Pharmacy: wholesaled prescription. drugs to- prescription drug 2 wholesalers contrary to the requirement of s. 499.012(2)(d)4., F.S. At the time of these transactions this statute only authorized a retail pharmacy wholesaler, such as Habana Pharmacy, to wholesale prescription drugs to another retail pharmacy or to a Health care practitioner licensed in this state and authorized by law to dispense of prescribe prescription drugs. Habana Pharmacy either wholesaled prescription drugs totaling in excess of $2.7 million to Habana Wholesale for further wholesale distribution or wholesaled prescription drugs directly to prescription drug wholesalers. This is reflected in a sampling of records marked Exhibits 1 a aeccaniad UR Ai a a a ee a through 21, which are attached to and by reference made a part of this complaint. Habana Pharmacy thus violated the Act as follows: (a) Habana Pharmacy violated s. 499.005(15), F.S. by selling and transferring prescription drugs to a person not authorized to purchase prescription drugs from Habana Pharmacy. . . . oe , (b) Habana Pharmacy violated s. 499.005(22), F.S., since it was operating as a prescription drug wholesaler without obtaining a permit issued under the Act that authorizes the sale of prescription drugs to a prescription drug wholesaler. However, Habana Pharmacy is not eligible to obtain a prescription drug wholesaler permit in its name under the Act pursuant to s. 499.01(1)(c), F.S. (10) (a) On or about May 26, 1999, Walter E. Dykes represented to the department that the estimate of monthly prescription drug purchases for Habana Hospital Pharmacy was $200,000 and that the estimate for the monthly wholesale drug sales was $40,000. See Exhibit 35, which is attached to and by reference made a part of this complaint. However, according to records obtained by the Bureau as referenced in paragraph (7), Habana Pharmacy purchased prescription drugs totaling approximately $115,270 for January 1999; $664,826 for February 1999; $872,000 for March, 1999; and $392,156 for April 1999. ‘Corporate represented that these records represent prescription drugs that were distributed in wholesale transactions and not dispensed. These transactions do-not take into consideration prescription drugs that might have been purchased for dispensing by Habana Pharmacy. According’ to Ss. 499.012(2)(d)2, F.S., a retail pharmacy wholesaler may only wholesale up to 30% of prescription drugs purchased by the retail pharmacy. Therefore these representations obstructed the bureau's ability to adequately assess Habana Pharmacy’s compliance with s. 499.012(2)(d)2., F.S., and its retail pharmacy wholesaler permit. As a result, Walter Dykes has violated s. 499.005(19), Ten Ter one ee mE Ae die le Seger een ropegrees 2 F.S., by providing the department with false or fraudulent statements regarding the value of prescription drug purchases and wholesale distributions. * (b) Ina telephonic conference call on June 27, 2001, with several representatives of the bureau, Mr. Dykes, and his attorney to discuss the impact of the letter addressed in paragraph (13), Mr. Dykes stated that Habana Wholesale had not done any business. The bureau repeated this representation in a follow-up letter to the conference call. See Exhibit 23, whichis _ attached to and by reference made a part of this complaint. Mr. Dykes did not correct this representation. However, Exhibits 15 — 18, 21 — 34, and 44 - 47, which are attached to and by reference made a part of this complaint, document that Habana Wholesale did conduct prescription drug wholesale activity. Again, Mr. Dykes Violated s. 499.005(19), F.S., by providing false or fraudulent information to the department regarding specific regulated activity. . . (11) Respondents were not maintaining records in accordance with the requirements of s. 499.0121(6), F.S., and Rule 64F-12.012, Florida Administrative Code. Specifically, (a) operational systems between the Habana Pharmacy retail pharmacy wholesaling activities and the Habana Wholesale activities were not separate and distinct as required by Rule 64F-12.012(12), Fla. Admin. Code, and as further “specified for retail pharmacy wholesalers in s. 499.012(2)(d)5, F.S. For example, records documenting the wholesale distribution of prescription drugs under the two Chapter 499 permits were intermingled and some records do not identify who wholesaled the prescription drugs. See for example, Exhibits 12-14, 19, and 36, which are attached to and by reference made a part Of this complaint. (b) Habana Wholesale could not produce records, from any Source, for the purchase of all prescription drugs which it sold. For example, the 15 vials of Hycamtin 4mg and the 80 vials of Neupogen sold on February 16, 1999 (See Exhibit 4-a); the six vials of Taxol 300mg sold on March 3, 1999 (See Exhibit 6-a); the five vials of Hycampton 4mg (according to the NDC code Pe mp mer ore SCOR RRR TT ee eee Some pep i the product should be Hycamtin 4 mg) or 30 vials of Neupogen 300 meg sold on March 25, 1999 (See Exhibit 8-a); and the 10 vials of Hycamtin 4mg (10x 4 mg two boxes) sold on October 19, 1999 (See Exhibit 38) were not supported by purchase records. In addition, there were no ) records to document the transfer of prescription drugs from Habana Pharmacy to . Habana Wholesale, notwithstanding ‘such a transfer i is not authorized under the Act. (c) Invoices did not clearly reflect whether Corporate was wholesaling as Habana Pharmacy under the retail pharmacy wholesaler permit or as Habana Wholesale under the prescription drug wholesaler permit since there was no identifying information as to the seller's name, address, and permit number as required by s. 499.0121(6)(a)1, F.S., and Rule 64F- 12.012(2)(a), Fla. Admin. Code. See Exhibits 12 — 14, 19, and 36, which are attached to and by reference made a part of this complaint. None of the records documenting wholesale . distributions included the seller's permit number on the invoices. Furthermore, none of the records documenting wholesale distributions of prescription drugs included the purchaser’s or recipient's permit number on the invoices. Rule 64F-12.012(2)(a), Fla. Admin. Code, requires these elements to appear on one document. See Exhibits 1a — 21a; 22 - 34, 36 - 40 and 44 - 47, which are attached to and by reference made a part of this complaint. (d) Invoices did not clearly identify the name, strength, and dosage form of prescription drugs sold in wholesale transactions as required by s. 499.0121(6)(a)3., F.S. For example, on the invoice dated February 16, 1999 (Exhibit 4-a), the product is identified as Neupogen. Neupogen comes in several strengths such as 300mcg and 480 mcg. Fithough the NDC code, that is included on the invoice, if listed correctly, which this one is ot, can help ascertain by reference to other resources which product was sold, the Act requires the specific identification of the product to appear on the invoice. TOP PERE OS Ta ea a ee Sm oe rere orem oer eR oe eR (e) Section 499.0121(6)(a)4, F.S., requires the dates of receipt and distribution to appear on records related to the wholesale distribution of prescription drugs. Dates were not included on at least three invoices related to the wholesale distribution of prescription drugs. See Exhibits 12, 39, and 40, which are attached to and by reference made a part of this complaint. . . | (f) Neither Corporate or Habana Wholesale were an authorized distributor of record, as defined in s. 499.0121 (6)(d), F.S., for prescription drugs sold to prescription drug wholesalers (See for example Exhibits 1-11; 14-15, and 47) and did not provide pedigree papers for these wholesale transactions. A pedigree paper is an historical record of the previous sales of a ’ prescription drug required by s. 499.0121(6)(d), F.S., to be provided by a prescription.drug wholesaler distributing a prescription drug to another prescription drug wholesaler when the disiributing wholesaler is not the authorized distributor of record forthe prescription drug which is the ‘Subject of the transaction. The pedigree paper is required to be provided in addition to an invoice or other business records documenting the distribution of a prescription drug. . . (12) Habana Hospital Pharmacy sold prescription drugs to Armenia Surgery Center, a person not authorized to purchase and possess prescription drugs and therefore violated s.” 499.005(15), F.S. Armenia Surgery Center did not hold any type of permit issued by the Department of Health or any other state agency at the time of the transaction that authorized the purchase and possession of prescription drugs. See Exhibit 37, which is attached to and by reference made a part of this complaint. B&B (13) Habana Pharmacy does not now meet the requirements for a retail pharmacy wholesaler permit pursuant to ss. 499.01 and 499.012(1)(c), F.S., as elaborated in Exhibit 41, which is attached to and by reference made a part of this complaint. Furthermore, Habana Pharmacy purchases prescription drugs at prices other than fair market value’ for retail el cee ete ae ceca a SO WEIR PepoR ore , pharmacies because it is a member of several group purchasing organizations. Specifically, Habana Pharmacy purchases prescription drugs under Innovatix Alternative Homecare and PBI-Home Infusion Provider/Retail Pharmacy Combo gfoup purchasing arrangements. To bea member of either of these purchasing arrangements the member must serve a unique or special patient population. Moreover, ‘ ‘own use” restrictions in these group purchasing arrangements ‘ preciude the wholesale ‘distribution of prescription drugs purchased | thereunder. Therefore Habana Pharmacy does not qualify for a retail pharmacy wholesaler permit because itis a health care entity and does not purchase prescription drugs at fair market prices for retail pharmacies. (14) Section 499.067(1), F.S., authorizes the department to deny, suspend, or revoke a permit if it finds that there has been a substantial failure to comply with ss. 499.001 -499.081 or ‘chapter 465, chapter 893, or chapter 501, or the rules adopted under any of those sections or chapters. Subparagraph (b) of that subsection authorizes the department to deny an application for a permit if it is shown that the applicant is not of good moral character or that it would be a danger or not in the best interest of the public health, safety, and welfare if the applicant were issued a permit. - (15) In addition, s. 499:067(3)(c), F.S., authorizes the department to deny, suspend or revoke a permit if the permit was obtained by misrepresentation of fraud or through a mistake of the department, or if the permittee has violated any provisions of ss. 499.001-499.081 or rules adopted under those sections. : & (16) | Habana Pharmacy’s wholesale distributions of prescription drugs to prescription drug wholesalers, totaling in excess of $ 2.7 million in a one-year period, represent a substantial failure to comply with the Act. In addition, the recordkeeping deficiencies and lack of a clear audit trail related to the wholesale distribution of prescription drugs by both Habana Pharmacy Co pcrgene epraere op peemee Pepe oe cpae , : and Habana Wholesale not only represent a substantial failure to comply with the Act, but - present a public health threat because the absence of accurate records obscures the movement of prescription drugs. This in turn creates an environment that fosters the diversion of prescription drugs and the introduction of adulterated and counterfeit drugs into the marketplace. "Accurate and complete recordkeeping is integral to the federally mandated and ~ state implemented requirements for the regulation of prescription drugs to protect the safety and integrity of prescription drugs in this country and more particularly, in Florida. Furthermore, the : misleading representations made by Walter Dykes regarding the extent of prescription drug wholesaling activities conducted by Habana Pharmacy impeded the department’s ability to protect the public health. Moreover, Mr. Dykes’ misleading or inaccurate representations call into question any future communications regarding his establishments’ activities regulated under chapter 499. Finally, since Habana Pharmacy does not meet the definition of a retail pharmacy but is consideréd a health care enitity, and the fact that it actually purchases prescription drugs at other than fair market prices, it is not in the best interest of the public health, safety and ‘welfare for the bureau to issue a ‘permit that would appear to authorize the wholesale : distribution of these prescription drugs. Issuing .a permit that authorizes the wholesale distribution of prescription drugs facilitates the pharmacy, either intentionally or unintentionally, to violate the Act. Therefore, the continued authority for Habana Pharmacy and Habana Wholesale to engage in the wholesale distribution of prescription drugs under permits 24:00242 and 22:01066, respectively, poses a danger and is not in the best intergst of the public health, safety and welfare. Accordingly, the bureau seeks to deny renewal f permit number 24:00242 and revoke permit number 22:01066. (17) Rule 64F-12.024 (4), Fla. Admin. Code, sets the range of the penalty that will normally be imposed for violations of the Act. Based on this rule, the bureau imposes an eee adneere ate = cemre os SRE RE Or REE RNR ER EERE PHP RE Re REE oR administrative fine against Habana Hospital Pharmacy Inc., and Walter E. Dykes in the amount of $96,500. This total administrative fine is comprised of the following elements: (a) . Paragraph (8) alleges the violation of s. 499.005(14), F.S., for which the bureau seeks $1,000 for each of the 22 invoices, for a total of $22,000. This falls within the range allowed by rule. an . _ (b) Paragraph (9) alleges the violation of ss. 499.005(15) and (22), and 499.012(2)(d)4., F.S., for which the bureau seeks $2,000 each of the 21 invoices, for a total of $42,000. This falls within the range allowed by rule. (c).. Paragraph (10) alleges the violation of s. 499.005(19), F.S., for which the bureau seeks $5,000 for this violation and revocation of permit 24:00242 and 22:01066 because of the severity and repetitiveness of the offense. This falls within the range allowed by rule. (d). Paragraph (11) alleges the violation of s. 499.005(1 8), F.S., for which the bureau. seeks a total of $27,250 for all components in this violation and revocation of permit 24:00242 , and permit 22:01066. The intended fine of $27,250 is calculated as follows: $10,000 (5 invoices * $2,000 each) for not having the seller identified on the invoice; $250 for not including the purchaser’s license number on any of the invoices; $250 for not including-the date on some ° , of the invoices; $250 for not fully identifying the prescription drug on the invoice; $10,000 (4 invoices * $2,500 each) for not having any records of purchase for prescription drugs sold; $5,500 (22 transactions * $250 each) for not having transfer documentation from. Habana Pharmacy to Habana Wholesale; and $1,000 (lump sum) for not maintaining and providing pedigree papers. These fall within the range allowed by rule. , (e) Paragraph (12) alleges the violation s. 499.005(15), F.S., for which the bureau seeks $250 for this violation. This falls within the range allowed by rule. 10 cee meer ee Open geen mr ee ee ie i ee i Se oe Eee (18) You have the right to request an administrative hearing pursuant to sections 120.569 and 120.57, F.S., if you wish to challenge the intended agency action. Such proceedings are governed by Rule 28-106, Florida Administrative Code. In order to obtain a formal proceeding under section 120.57(1), F.S., your request for an administrative . hearing must conform to the requirements of Rule 28-1 06. 201, Florida Administrative Code, and must state which issues of material fact you dispute. Failure to dispute material issues of fact in your request for a hearing may be treated by the department as an election by you of an informal proceeding pursuant to section 120.57(2), F.S. A petition for administrative hearing must be in writing and must be received by Mr. Theodore M. Henderson, Agency Clerk for the Department, within twenty-one (21) days from’ the receipt of this order. The address of the Agency Clerk is 4052 Bald Cypress Way, BIN # A02, Tallahassee FL 32399- 4703. The Agency Clerk’s facsimile number i is 850-410-1448, Mediation i is not available as an alternative remedy. 7 Your failure to submit a petition for hearing within 21 days from receipt of this complaint will constitute a waiver of your tight to an administrative hearing, under Florida Administrative Code Rule 28-106.111 and this complaint shall become a "final order". , . Should this complaint become a final order, a party who is adversely affected by it is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings may be commenced by filing one copy of a Notice of Appeal with the Agency Clerk of the Depatiment of Health and . a second copy, accompanied by the filing fees required by law, with the Court of Appeal in the appropriate District Court. The notice must be filed within 30 days of rendition of the final order. (19) The undersigned certifies that a true copy of this administrative complaint was sent by U.S. Certified Mail, Return Receipt Requested, to Mr. Walter E. Dykes, R.Ph., Habana 11 Sr eee oe Ceres ee cope Hospital Pharmacy, Inc., at 4710 N. Habana Avenue, Suite 101, Tampa, Florida 33614 and to the attorney for Habana Hospital Pharmacy, Inc., Charles E. Bergmann, Esquire, at One Urban ath Centre, Suite 750, 4830 W. Kennedy Boulevard, Tampa, Florida 33609 this Ze day of 1 Mie phe 2001. ief o harmacy Services 2818-A Mahan Drive . Tallahassee, Florida 32308 -? . Telephone: (850) 922-5190 Copy also furnished to: , Counsel for the Department: Robert P. Daniti Senior Attorney 4052 Bald Cypress Way Bin #A02 Tallahassee, Florida 32399 - (850) 245-4005 Se 12 SORE ORT RE TRE RENEE fee mtr ETO ret Soe mE RRR SOR OU TERRE oo RRR RE SER

Docket for Case No: 02-000577