STATE OF FLORIDA DEPARTMENT OF HEALTH Ky DEPARTMENT OF HEALTH, through its BUREAU OF STATEWIDE PHARMACEUTICAL SERVICES, a Petitioner, me vs. FLOMED CORPORATION d/b/a FLOMED, INC., a Florida Corporation, and FABIO LISBOA, Individually, Respondents. ADMINISTRATIVE COMPLAINT Notice is hereby provided that Petitioner, Department of Health by and through its Bureau of Statewide Pharmaceutical Services (the "bureau’), intends to deny renewal and revoke the permit of Flomed Corporation (‘Flomed") to operate as a prescription drug wholesaler (permit number 22:00359) in Florida and impose against Respondents, Flomed Corporation and Fabio Lisboa, individually, an administrative fine in the amount of ninety-two thousand five hundred dollars ($92,500), pursuant to section 499.066(3), Florida Statutes. In support of the intended final agency action the bureau states: (1) Petitioner, Department of Health, through its Bureau of Statewide Pharmaceutical Services, (“Bureau”) 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, Florida Statutes, (“the Act”) including the regulation of the acquisition and distribution of prescription drugs in Florida as well as the permitting of entities to engage in this activity. The prescription drug wholesaler permit is established under the Act. (2) Respondent, Flomed Corporation is a Florida registered corporation whose principal place of business is 8355 N.W. 54th Street, Miami, Miami Dade County, Florida 33166. Respondent, Flomed, is permitted as a prescription drug wholesaler (permit number 22:00359) pursuant to the Act. The bureau initially issued permit number 22:00359 to Flomed on September 3, 1993, and renewed it biennially thereafter. Prior to that date Flomed was authorized to engage in the wholesale distribution of prescription drugs in Florida under an antecedent statute. Flomed timely submitted a renewal application which was received by the bureau on August 8, 2002, for permit number 22:00359 that was scheduled to expire on September 30, 2002. (3) Respondent, Fabio Lisboa, is the president of Flomed and the person responsible for Flomed’s day to day operations related to prescription drugs. Further, Fabio Lisboa was at all times material hereto responsible for and involved in the prescription drug wholesale operations of Flomed, and specifically the activities alleged in this complaint. Alternatively, the corporate veil of Flomed should be pierced in that Flomed is the alter ego of Lisboa. (4) A person located outside the state is required to hold a valid permit as an Out-of- State Prescription Drug Wholesaler as provided by ss. 499.01(1)(d)8., 499.012(2)(c), and 499,.012(3), F.S., to engage in the wholesale distribution of prescription drugs in or into Florida prior to selling or physically distributing any prescription drug into Florida, and specifically to Flomed. Flomed purchased prescription drugs from persons not permitted to wholesale prescription drugs into the state of Florida as required under the Act and therefore Flomed violated s. 499.005(14), F.S., as follows. (a) Flomed purchased prescription drugs from Eyecare Associates / Affiliated Physicians Medical Group, 11546 Downey Avenue, Downey, California 90241 in at least six transactions identified by the following invoice numbers and invoice dates: #88908-A dated 4/11/01: #88908-B dated 4/11/01; #2015100 dated 5/29/01; #2015101 dated 6/1/01; #2016104 dated 6/18/01; and #3 dated 8/1/01. Eyecare Associates / Affiliated Physicians Medical Group was not permitted as an Out-of-State Prescription Drug Wholesaler at the time of these six transactions. Further, Eyecare Associates / Affiliated Physicians Medical Group was not permitted in California to engage in the wholesale distribution of prescription drugs in or from that state. (b) Flomed purchased prescription drugs from Pharm-Med LLC, at 315 West Broughton Street, Savannah, Georgia in at least one transaction identified as invoice #80502 dated on or about 8/7/2002. Although licensed in Georgia to wholesale prescription drugs, Pharm-Med LLC was not permitted as an Out-of-State Prescription Drug Wholesaler under the Act at the time of this transaction. (c) Flomed purchased prescription drugs from Pharmaceutical Medica! Supply, 7762 Wall Triana Highway, Harvest, Alabama in at least one transaction marked as Exhibit 4. Although licensed in Alabama to wholesale prescription drugs, Pharmaceutical Medical Suppliers was not permitted as an Out-of-State Prescription Drug Wholesaler under the Act at the time of this transaction. (5) For purposes of this complaint, a pedigree paper is a record required by s. 499.0121(6)(d), F.S., and Florida Administrative Code Rule 64F-12.012(3), to be provided by a prescription drug wholesaler, which is not an authorized distributor of record, distributing a prescription drug to another prescription drug wholesaler that traces all prior sales of the prescription drug back to a) the manufacturer or b) an authorized distributor of record for that manufacturer. Furthermore, in order for a prescription drug wholesaler to be an authorized distributor of record, the wholesaler must purchase prescription drugs directly from the manufacturer for which the authorized distributor of record status is claimed. (6) Flomed engaged in misrepresentation or fraud in the distribution of a prescription drug and thereby violated s. 499.005(23), F.S., as follows: (a) Flomed claimed to be an authorized distributor of record on the invoice / packing list dated April 17, 2001 for its sale of Alcaine 0.5%, a prescription drug, to Plaza (b) (c) Drug Distributors, Inc., a permitted prescription drug wholesaler in Florida. Furthermore, Flomed does not provide any prior sales of the prescription drug before Flomed. However, Flomed is not the manufacturer of Alcaine 0.5% and at any time material to the allegations in this complaint did not purchase any prescription drugs directly from Alcaine’s manufacturer Alcon Laboratories, Inc. Therefore Flomed is not an authorized distributor of record for this product as Lisboa and Flomed represented on records documenting the wholesale distribution of prescription drugs that Flomed provided to Plaza Drug Distributors. Flomed claimed to be an authorized distributor of record on two invoices for its sale of Epogen 10,000 a prescription drug, to Plaza Drug Distributors on August 7, 2001 (invoice #SI-1691) and September 17, 2001 (invoice #S1-1814). Furthermore, Flomed does not provide any prior sales of the prescription drug before Flomed. However, Flomed is not the manufacturer of Epogen 10,000 and at any time material to the allegations in this complaint did not purchase any prescription drugs directly from Epogen’s manufacturer Amgen. Therefore Flomed is not an authorized distributor of record for this product as Lisboa and Flomed represented on records documenting the wholesale distribution of prescription drugs that Flomed provided to Plaza Drug Distributors. Flomed claimed to be an authorized distributor of record on two invoices for its sale of Voltaren 0.1% in various sizes, a prescription drug, to Plaza Drug Distributors on June 6, 2001 (invoice #SI-1512) and June 25, 2001 (invoice #Sl- 4563). Furthermore, Flomed does not provide any prior sales of the prescription drug before Flomed. However, Flomed is not the manufacturer of Voltaren and at any time material to the allegations in this complaint did not purchase any prescription drugs directly from Voltaren’s manufacturer Ciba Vision/Novartis. Therefore Flomed is not an authorized distributor of record for this product as (d) Lisboa and Flomed represented on records documenting the wholesale distribution of prescription drugs that Flomed provided to Plaza Drug Distributors. Flomed provided the pedigree paper marked as Exhibit 2 to Red-X Medical, a prescription drug wholesaler in Hialeah, Florida with sales invoice #S1-2893 dated September 10, 2002 for Flomed’s sale of Viagra, a prescription drug, to Red-X Medical. The pedigree paper Flomed provided to Red-X identified AmerisourceBergen as the authorized distributor of record and reflects the product went directly from AmerisourceBergen to Flomed. However, Flomed did not produce a purchase invoice or other documentation that Flomed purchased any Viagra from AmerisourceBergen. Rather, Flomed produced to the bureau a purchase record and accompanying pedigree paper for Flomed’s purchase of the Viagra sold on sales invoice #SI-2893 that indicates the source of the Viagra Flomed sold to Red-X was Medic Surgical Supply. The pedigree paper allegedly provided by Medic Surgical Supply with its sale of the Viagra to Flomed, indicates Medic Surgical Supply purchased the Viagra from Insource in Virginia which, in turn, purchased the Viagra from the authorized distributor of record, AmerisourceBergen. Lisboa and Flomed omitted both Insource and Medic Surgical Supply from the pedigree paper Flomed prepared for its customer for Flomed's sale of Viagra related to sales invoice #S1-2893. (7) In addition, ‘Flomed did not provide pedigree papers to its prescription drug wholesaler customers as required by s. 499.0121(6)(d), F.S., for the transactions alleged in sub- paragraphs (a) through (d) in paragraph (6). Therefore, Flomed violated s. 499.005(18), F.S., for not maintaining and providing records as required by s. 499.0121(6), F.S. (8) On September 23, 2002, Flomed provided the bureau with false or fraudulent records regarding Flomed’s purchases of over $154,600 worth of Viagra. Flomed provided the bureau with the invoices identified in the following chart that indicate the only source of Viagra sold by Flomed in calendar year 2002 was Medic Surgical Supply in Hialeah, Florida. However, Medic Surgical Supply did not sell any Viagra to Flomed. Date Invoice # [ Date | Invoice # 9/9/02 00961-63 1/22/02 011103A 8/29/02 00961-58 41/16/00* | 011144A 8/14/02 00961-46 1/16/02 2/28/02 _| 00171-3 1/14/02 011102A (9) Flomed sold some or all of the Viagra that was allegedly acquired through the invoices identified in paragraph (8). Flomed’s records identified by sales order $O-2952 dated June 27, 2002; sales invoice SI-2860 dated August 26, 2002; and sales invoice SI-2877 dated September 5, 2002 document these sales. Flomed’s pedigree papers associated with these three sales of Viagra falsely indicate that Flomed acquire the Viagra from Medic Surgical Supply. (10) There is no reasonable assurance that the prescription drugs identified in paragraph (8) have remained within the regulated channels for the distribution of prescription drugs. Prescription drugs that have left the regulatory controls established in federal and state laws for the distribution of prescription drugs are adulterated pursuant to s. 499. 006(2) and (3), F.S., or unfit for human use pursuant to s. 499.005(1), F.S. These drugs are adulterated or unfit for human use because they could have been contaminated with filth or rendered injurious to health, and the methods used in or the facilities or controls used for their holding could have failed to conform to or could have failed to be operated or administered in conformity with current good manufacturing practices to assure that the drug meets the requirements of s. 499.001-499.081 and that the drug has the identity and strength, and meets the standard of quality and purity, which it purports or is represented to possess. (11) Based on the allegations in paragraphs (8) through (10) (a) Flomed provided the department with false or fraudulent records regarding Flomed's source of prescription drugs and therefore violated s. 499.005(19), F.S. (b) Flomed was not maintaining a complete and accurate audit trail for the acquisition of prescription drugs as required by s. 499.0121(6), F.S., and therefore violated s. 499.005(18), F.S. (c) Flomed purchased and sold adulterated prescription drugs and therefore violated s. 499.005(1), (3), and (4), F.S. (d) Lisboa and Flomed engaged in misrepresentation or fraud in the distribution of a prescription drug by not disclosing Fiomed’s true source of these prescription drugs in the pedigree papers related to the sale of these prescription drugs and therefore violated s, 499.005(23), F.S. (12) Furthermore, based on the allegations in paragraphs (4)(a) and (10), Flomed purchased and sold adulterated prescription drugs and therefore violated s. 499.005(1), (3), and (4), F.S. (13) The violations of Chapter 499, F.S., by Lisboa and Flomed as set forth in this complaint constitute sufficient grounds for DOH to impose an administrative fine of Ninety-two thousand five hundred dollars ($92,500) or impose any other penalty authorized by chapter 499, F.S. and chapter 64F-12, Fla. Admin. Code against the Respondents. (14) | The intended fine is within the limits prescribed for such violations by section 499.066(3), F.S. and Rule 64F-12.024, Fla. Admin. Code due to the threat to public health posed by these violations. In particular, Respondents’ violations jeopardize public health because Respondents have not documented the true source of prescription drugs they purchased and ultimately distributed and failed to take reasonable steps to assure that the prescription drugs they purchased and distributed remained within regulated channels and under appropriate regulatory controls for the wholesale distribution of prescription drugs. As a result, Respondents’ action provide no assurance that the prescription drugs they purchased and distributed had been held under conditions to assure that each drug had the identity and strength, and met the standards of quality and purity which it was represented to possess, and that the drugs had not been contaminated with filth or rendered injurious to health. Specifically, (a) Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the penalty for acquiring (b ~~ a prescription drugs from an unauthorized source from a Warning Letter to $1,000 per violation per day. Since, for purposes of this complaint, the source of the prescription drugs in paragraphs (4) (b) and (c) were permitted in their resident states, but not Florida, the administrative fine for that violation is $500. However, the prescription drugs involved in the allegations in paragraph (4)(a) of this complaint were outside all regulatory channels. These transactions warrant imposition of an administrative fine of $1,000 each for the six transactions and further warrant revocation of Flomed’s prescription drug wholesaler permit. The total fine for violating s. 499.005(14), F.S., is $6,500. Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the penalty for activity with an adulterated drug from a Warning Letter to a fine of $5,000 per violation per day and revocation of a permit. The violations alleged in paragraphs (8), (10), (11){c), and (12) with respect to purchasing adulterated prescription drugs in violation of s., 499.005(1), (3), and (4), F.S., warrant an administrative fine of $5,000 for each of the seven transactions alleged in paragraph (8), and $1,000 for each of the six transactions in paragraphs (4)(a) and (12). The violations alleged in paragraph (9) and (6)(a) and (c) with respect to selling adulterated prescription drugs warrant an - administrative fine of $5,000 for each of the six transactions alleged in those paragraphs. The total fine for violating s. 499.005(1), (3), and (4), F.S., is $71,000. These violations further warrant the revocation of Flomed’s prescription drug wholesaler permit. Rule 64F-12.024, Fla. Admin. Code sets the range of the penalty for engaging in misrepresentation or fraud in the distribution of a prescription drug at $500 to $5,000 per violation per day and revocation of the permit. The allegations in paragraphs (6) (9) and (11)(d) for violating s. 499.005(23), F.S., warrant an administrative fine of $9,000 based on $1,000 for each of the nine transactions and revocation of Fiomed’s prescription drug wholesaler permit. (d) Rule 64F-12.024, Fla. Admin. Code sets the range of the penalty for failing to maintain records in accordance with requirements of the Act at $500 to $5,000 per violation per day and revocation of the permit. The allegations in paragraphs (7) and (11)(b) for violating s. 499.005(18), F.S., warrant an administrative fine of $1,000 and revocation of Flomed’s prescription drug wholesaler permit. (e) Rule 64F-12.024, Fla. Admin. Code sets the range of the penalty for providing false or fraudulent records or statements to the department at $500 to $5,000 per violation per day and revocation of the permit. The allegations in paragraphs (8) and (11)(a) for violating s. 499.005(19), F.S., warrant an administrative fine of $5,000 and revocation of Flomed’s prescription drug wholesaler permit. (15) Section 499.067(1), Florida Statutes (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. In addition, s. 499.067(3)(c), F.S., authorizes the department to deny, suspend or revoke a permit if the permittee has violated any provisions of ss. 499.001- 499.081 or rules adopted under those sections. (16) The violations alleged in this complaint evidence a substantial failure by Respondents to comply with the Act and are substantial violations of the Act. Prescription drugs moving from permit holder to permit holder is the cornerstone for the federal and state regulatory scheme for the distribution of prescription drugs in this country. Flomed’s failure to provide accurate pedigree papers to it's customers of prescription drugs prevents the customer from thoroughly examining the product in accordance with Florida Administrative Code Rule 64F-12.013(5) to prevent acceptance of prescription drugs that are unfit for distribution or use. The allegations in this complaint regarding Respondents’ acquisition of prescription drugs from unknown sources and their subsequent distribution of these prescription drugs together with the repetitive deficiencies regarding the true source of the prescription drugs reflected in Flomed’s documentation provided to customers demonstrate Lisboa’s and Flomed's disregard for the regulatory scheme for the wholesale distribution of prescription drugs. These deficiencies also demonstrate Lisboa’s and Flomed’s disregard for the health and safety of those persons ultimately consuming the prescription drugs they purchased and sold. Lisboa’s and Flomed’s conduct in this regard warrant denial of renewal and revocation of Flomed’s prescription drug wholesaler permit as well as imposition of the subject fine against both Respondents in that it would be a danger and not in the best interest of the public health, safety and welfare if the permit were renewed. (17) You have the right to request an administrative hearing pursuant to sections 420.569 and 120.57, F.S., if you wish to challenge the imposition of the administrative fine and the intended agency action to revoke permit 22:01164. Such proceedings are governed by sections 120.569 and 120.57, F.S., and Rules 28-106 and 28-107, Florida Administrative Code. Request for a hearing, formal or informal, must comply with Rule 28-107.004, Florida Administrative Code. A petition for administrative hearing must be in writing and must be received by the Agency Clerk for the Department, within twenty-one (21) days from the receipt of this complaint. The address of the Agency Clerk is 4052 Bald Cypress Way, BIN # A02, Tallahassee FL 32399- 1703. The Agency Clerk's facsimile number is 850-410-1448. Mediation is not available as an alternative remedy. Your failure to submit a petition for hearing within 21 days from receipt of this complaint will constitute a waiver of your right to an administrative hearing, under Florida Administrative Code Rule 28-106.111 and this complaint shall become a “final order”. 10 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, Fla. Stat. 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 Department 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. (18) The undersigned certifies that a true copy of this administrative complaint was sent by certified mail to Fabio Lisboa, individually and as President of Flomed Corporation at 8355 N.W. 54th Street, Miami, Miami Dade County, Florida 33166 this 24 — day of October, 2002. 288-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 11 Pharmaceutical Medical Supply 7702 Wall teaana Highway Harvest., "4 3574% HSA. : (N Invoi *cerk Invoice Num : : A216 Invoice 1) Fab “il, 2% oslosjez TIAZAC 1ZOMG UDLOOC?2S Voice: Z56-12L-012% . P: Fax: 256-721-5998 os . Oupilcane Sold To: Ship to: FLO-MED CORPORATION PLO-MED CORPORATION 8355 NW S4TH STPEET $355 tw 54TH MIAMI, FL 223166 MIAMI, FL 32 USA USA Customer ID Customer PO Payment Terms FLOMED (. 2% 10, Net 30 Jays Sales Rep ID Shipping Method . Ship Date. Due Date - 001 Oe Fed-EX "2/22/52 , 2/23/52 Quantity ~ Item Description Unit Price - —_ Extension 300. 000456261363 FIAZAC 1L50MG UDIOPK IO00CPS 74.93 22, 209.0! 288.0000456261263 5 17, 663.8 FZASY SO Bedise IOVays ( ad 94.5 \ 4 ~ * ’ Perpeants Peres oo Euve is “TK 2vnte a ‘ | An ‘ — Corrt ate TR. S * a o@D 34 Ss Subtotal wore Sales Tax Total Invoice Amount Payment Received TOTAL wee Exhibit | pep 1U O2 04:23p p.2 os ____ FLOMED CORPORATION 8355 NW 54TH STREET ~ MIAMI, FL 33166 U.S.A TEL:(305) 477-$352 FAX:(305) 477.2296 STATEMENT IDENTIFYING PHARMACEUTICAL SALE $1-2893 Tho following statement by a wholesale pharmaceutical distdbutor is furnished pursuant to the requirements of section 503(0)(1) of the Faderal Food Drug and Cosmetic Act as amended, Product: VIAGRA 100MG 100 TABS NOC: 00069-4220-66 Manufacturer; PFIZER Oty: 48 Lot # 29RO16A ~ EXP. 09/2005 ‘The above referenced pharmacautical was purchased fram an Aulhorized Distributor, AMERISOURCE BERGEN VIRGINIA I verify a8 on officor/agont heroof that the above stalaments are trus, and have prepared this statemant on the 10th day of September, 2002. Fd 8355 NW 54” Streat Miami, FL 33166 . Exhibit 2 COMPLETE THIS SECTION SENDER: C: m Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. Print your name and address on the reverse so that we can return the card to you. lm Attach this card to the back of the mailpiece, or on the front if space permits. COMPLETE THIS SECTION ON DELIVERY A Received by (Please Print Clearly) | 8, Date of Delivery hard 1 Agent Vinee 1 Addressee felivery address different from item 4? (1 Yes ES, enter delivery address below: No ! 4, Article Addressed to: { Flomed Corporation | 9355 N.W. 54th Street Y Certified Mail [) Express Mail | Miami, Florida 33166 Cl Registered ¥ Return Receipt for Merchandise 1 Insured Mail C.0.0. 4. Restricted Delivery? (Extra Fee) 0 Yes 2. Article Number (Copy from service label) JoOo ‘ ‘ r 00217 (SUQ 2] L 102595-00-M-0952 PS Form 3811, July 1999 Domestic Return Receipt | \

Docket for Case No: 02-004569