. STATE OF FLORIDA DEPARTMENT OF HEALTH DEPARTMENT OF HEALTH, through its BUREAU OF PHARMACY SERVICES, Petitioner, ; Case No: vs. (DOH: 99-03872) JEMCO MEDICAL INTERNATIONAL, INC., a Florida Corporation, JOSE A. CASTILLO, Individually, and BRIAN A. HILL, Individually, Respondents. ADMINISTRATIVE COMPLAINT Notice is hereby provided that Petitioner, Department of Health by and through its Bureau of Pharmacy Services (the “bureau’), intends to deny the renewal application and revoke the permit of Jemco Medical International, Inc., (“Semco”), to operate.as a prescription drug wholesaler (permit number 22:00961) in Florida and impose against Respondents, Jemco, {nc., a Florida corporation, Jose Castillo, individually, and Brian Hill, individually, an administrative fine in the amount of three hundred fifty-six thousand two hundred dollars ($356,200), 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 Pharmacy 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. 04/25/02 THU 09:23 FAX © (2) Respondent, Jemco, Inc., is a Florida registered corporation whose principal place of business is currently 21011 Johnson Street, Suite 120-121, Pembroke Pines, Broward County, Florida 33029. During a portion of the period covered in this Administrative Complaint Respondent, Jemco was permitted to conduct business at the former address of 13295-B NW 107 Avenue, Hialeah Gardens, Miami-Dade Country, Florida, 33018. Respondent, Jernco, is permitted as a prescription drug wholesaler (permit number 22:00961) pursuant to the Act. This permit expired on February 28, 2002, and a timely application to renew permit 22:00961 was received by the bureau on January 25, 2002. Permit number 22:00961 was initially issued by the bureau to Jemco on February 20, 1998. a: (3) Respondent, Jose Castillo, is the president of Jemco and was at all times material hereto responsible for and involved in the prescription drug wholesale operations of Jemco, and specifically the activities alleged in this complaint. (4) Respondent, Brian Hill, is the Vice President and Secretary of Jef co and was at all times material hereto responsible for and involved in the prescription drug co operations of Jemco, and specifically the activities alleged in this complaint. (5) Section 499.005(22), F.S., prohibits operating without a valid permit when a permit is required by ss. 499.001-499.081. Section 499.01(1)(d), F.S., requires a permit for each establishment that operates as a prescription drug wholesaler. An establishment is defined in s. 499.003(13), F.S., as a place of business at one general physical location. Furthermore, ss. 499.012(2)(a) and (3), F.S., state that a person that engages in the wholesale distribution of prescription drugs in this state must have a wholesale distributor's permit issued by the department prior to engaging in prescription drug wholesaling activity. Wholesale distribution is defined in s. 499.012(1), F.S., as the distribution of prescription drugs to persons other than a consumer or patient, with certain exceptions not germane to this complaint. (6) On or about April 12, 2002, Respondents were storing approximately three million dollars worth of prescription drugs and was engaged in the wholesale distribution of ooz 04/25/02 THU 09:23 FAX 003 prescription drugs at and from Suite #105 at 20914 Johnson Street, Pembroke Pines, without first obtaining a permit that would authorize Respondents to possess prescription drugs or wholesale prescription drugs at and from that establishment. Respondents leased this warehouse space in October 2001. Further, Suite #105 was not air-conditioned or otherwise equipped to assure the prescription drugs therein were held under appropriate temperature and humidity requirements, if any, in the labeling of the drugs or at “controlled” room temperature as required by s. 499.0121(3), F.S. Asa result, Respondents (a) were in unlawtul possession of prescription drugs at Suite #105 and thereby violated ss. 499.005(12), and 499.03, F.S., a: (b) engaged in the wholesale distribution of Prescription drugs at and from Suite #105 without first obtaining a prescription drug wholesaler permit for this establishment and thereby violated s. 499.005(22), F.S., and (c ~~ adulterated prescription drugs as defined in s. 499.006(2) and (3), F.S., since the drugs were held under conditions whereby they could have wet ranans with filth or rendered injurious to health and the methods used in, or the facilities or controls used for the holding did not conform to, or were not operated or administered in conformity with current good manufacturing practices to assure that the drugs meet the requirements of ss. 499.001-499.081 and that the drugs have the identity and strength, and meet the standard of quality and purity which they purport or are represented to possess and thereby violated ss. 499.005(1), (2), and (4), F.S. (7) Respondents could not provide purchase records supporting the purchase and acquisition of the prescription drugs they held in the unpermitted warehouse referenced in paragraph (6) of this complaint upon a request for these records pursuant to the authority of s. 499.051, F.S., on April 12, 2002. To date, Respondents have never produced any records for the purchase of prescription drugs as required under Chapter 499, FS. As a result, Respondents 04/25/02 THU 09:24 FAX @oo4 (a) failed to maintain records as required by ss. 499.001-499.081 and rules adopted under those sections, and thereby violated s. 499.005(18), F.S., and (b) failed to produce records for inspection as required by chapter 499, F.S., and therefore violated s. 499.005(6)(b), F.S. (c) cannot demonstrate that the purchase or receipt of the prescription drugs referenced in paragraph (6) came from a person authorized under the Act to engage in the wholesale distribution of prescription drugs in or into the State of Florida and therefore Respondents violated s. 499.005(14), F.S. (d) cannot provide any assurance that the prescription drugs referenced in paragraph (8) had been held and stored in accordance with standards to assure the drugs were not rendered injurious to health prior to coming into Jemco's possession and therefore Respondents violated s. 499.005(3), F.S. (8) Respondents also had Ronsonol lighter fluid and cleaning spof ges in suite #105 at 20911 Johnson Street in Pembroke Pines. These supplies are used when dispensing labels from prescription drugs that have been dispensed by a pharmacy. (9) Jemco purchased prescription drugs from A & J Trading, LLC, 4614-J Wilgrove- Mint Hill Road, Charlotte, NC in 26 transactions during the period August 29, 2001 through September 27, 2001, marked as exhibits A-1 to A-26. A & J Trading is required to hold a valid permit as an Out-of-State Prescription Drug Wholesaler as provided by s. 499.012(2)(c), F.S.,.to engage in the wholesale distribution of Prescription drugs into Florida prior to selling or physically distributing any Prescription drug to Jemco. A & J Trading, however, is not currently and has not been permitted under Chapter 499, F.S., at any time relevant and material to this Complaint, to engage in the wholesale distribution of any prescription drug from, in or into the State of Florida. (10) Jemco paid Wholesale International approximately $193, 876 by check numbers 60332 dated June 20, 2001; 60394 dated June 26, 2001; and 60410 dated June 28, 2001 for v4a/szo/uz THU 09:24 FAX oos Prescription drugs Jemco obtained from Eliseo Martinez on behalf of Wholesale International, Eliseo Martinez is the president and sole corporate officer of Wholesale International and at all times material to the allegations in this Complaint, was physically located and operating in Florida. Neither Eliseo Martinez or Wholesale international of 3663 S.W. 8" Street, Miami, Florida, 33134 are currently permitted and were not permitted under the Act at any time relevant and material to the transactions alleged herein to engage in the wholesale distribution of any Prescription drug from, in or into the State of Florida. (11) Jose Castillo, on behalf of Jemco engaged in schemes to create documentation for the acquisition of prescription drugs that did not accurately reflect wholesale transactions of = *- these prescription drugs as follows. (a) At the request of Jose Castillo, Hector Bermudez of Global Rx created sales documentation, marked as Exhibits A-27 through A-36, for the sale and distribution of prescription drugs to Rx Pius, However, Hector Bermudez fs bought or sold, nor took possession of these prescription drugs. Rx Plus’ reco Is then reflect the sale and distribution of these same prescription drugs to Jemco. (b) Jemco's invoices for the purchase of prescription drugs from Professional Pharmaceutical Supply, Inc. (“PPS”), marked as Exhibits A-35 through A-79 during the period January 5, 1999 through October 20, 1999 are not accurate records reflecting the source of the Prescription drugs represented on these invoices. According to Perry Vitale and Michael Buller, the two principles responsible for the prescription drug wholesaling activities of PPS, PPS did not sell these prescription drugs to Jemco. Further, Messers Vitale and Buller deny preparing these invoices and claim these invoices are not documents of PPS. Finally, Perry Vitale, the President of PPS indicated he closed the prescription drug wholesale business activities of PPS in April 1999, (04/25/02 THU 09:24 FAX Boos Therefore, Jemco obtained prescription drugs by fraud, deceit, misrepresentation or subterfuge, and engaged in misrepresentation or fraud in the distribution of these drugs and thereby violated s. 499.005(23),-F.S. (12) Since’A & J Trading was not permitted as a Florida Out-of-State Prescription Drug Wholesaler as alleged in paragraph (9), and the source of the prescription drugs referenced in paragraphs (10) and (11) is unknown, Jemco purchased or received a prescription drug from a person that is not authorized under Chapter 499, F.S., to distribute prescription drugs and thereby violated s. 499.005(14), F.S. (13) Furthermore, the prescription drugs acquired in paragraphs (10) and (11) were ¢: adulterated pursuant to s. 499.006(2) and (3), F.S., because there is no assurance as to their source or storage conditions and as a result, Jemco violated ss. 499.005(1), (2), and (4), F.S. (14) On February 5, 2002, Roberts’ Drug Store at 590 W. Flagler Street, Miami, by provided the bureau’s agent with a sales invoice from Jemco, marked Ephibit A-80 as the source document for six prescription drugs in a small cardboard box. The a ent observed that the prescription drugs in the box, four containers of Crixivan 400 mg and two containers of Combivir, were missing outserts. An outsert is labeling of the prescription drug by the manufacturer required under the federal Food, Drug and Cosmetic Act and regulations promulgated thereunder, that is attached to the exterior container of a prescription drug but not directly to the label. The outsert contains essential information about the instructions for use, indications, and warnings regarding the drug. The absence of this labeling, prior to a product being dispensed, misbrands a prescription drug under federal law and more specifically, under Ss. 499.007, Florida Statutes, and Rule 64F-12.006(1), Florida Administrative Code. (15) The Bureau's agent also noted the labels on the containers of the prescription drugs identified in paragraph (14) showed signs of wear and tear and were very sticky to the touch. As a result, these prescription drugs were also adulterated pursuant to s. 499.006, F.S. anu “uyiZzZd FAX (16) Therefore, based on the allegations in Paragraphs (14) and (15), Respondents distributed prescription drugs that were misbranded and adulterated in violation of s. 499.005(1) and (4), F.S. (17) The violations of Chapter 499, F.S., by Respondents as set forth in this complaint constitute sufficient grounds for DOH to i impose an administrative fine of three hundred fifty-six thousand two hundred dollars ($356,200) or impose any other penalty authorized by chapter 499, F.S. and chapter 64F-12, Fla. Admin. Code against the Respondents. a) The intended fine is within the limits prescribed tor such violations by section 499.066(3), F.S. and Rule 64F-12.024, Fla. Admin. Code due to the threat to publis. health posed by these violations. The upper level of the range is warranted due to the egregious activities of Respondents and their disregard for the public health and welfare. In particular, Respondents’ violations jeopardize public health because Respondents have failed to demonstrate that the prescription df ugs acquired and distributed in numerous transactions were obtained from ie sources. Furthermore, Respondents have failed to demonstrate that the prescription drugs they acquired, held, and distributed were 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 drug had not been contaminated with filth or rendered injurious to health. In addition, a prescription drug that is missing the outsert, shows signs of wear and tear on the label, and has a Sticky label indicates the drug, more likely than not, had previously been dispensed by a pharmacy and that the dispensing labels had been removed for the unlawtul reintroduction of the drug into commerce. Respondents had distributed adulterated prescription drugs and, with the unpermitted warehouse and Ronsonol lighter fluid and cleaning Sponges found therein, had the means to distribute prescription drugs that had previously been dispensed by a pharmacy. @oo7 (b) Rule 64F-12.024 (4), Fla. Admin. Cade sets the range of the penalty for the unlawful possession of prescription drugs, from a Warning Letter to $1,000 per violation, per day and the allegations in Paragraph (6)(a) of this complaint warrant imposition of a fine of $1,000 per day for a total fine of $163,000. (c) Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the penalty for Operating without a valid permit at the cost of the permit, plus a fine up to $1,000 per violation, per day. The allegations in paragraph (6)(b) of this complaint warrant imposition of a fine of $1,700. (d) Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the penalty for the failure te maintain records and to make records available from a Warning Letter to $5,000 per violation per day and revocation of a permit. The allegations in paragraphs (7)(a) and (7)(b) of this complaint warrant imposition of a fine of $5,000 and revocation of Jemco's prescription drug wholesaler permit. ; (e) Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the shan for acquiring prescription drugs from an unauthorized source from a Warning Letter to $1,000 per violation per day. Since, tor purposes of this complaint, the source of the Prescription drugs in paragraph (9) was permitted in North Carolina, but not Florida, the administrative fine for that violation is $500 due to the number of transactions with A & J Trading. However, the source of the Prescription drugs involved in the allegations in paragraphs (7)(c), (10), and (11) of this complaint came from unknown sources and were outside all regulatory channels and warrant revocation of Jemco's Prescription drug wholesaler permit. Further, the violations alleged in paragraphs (10) and (11) warrant an administrative fine of $58,000 based on $1,000 for 58 transactions. The administrative fine for the violations alleged in paragraph (7)(c) is $5,000, however the department reserves the right to amend the administrative —_—— a a ani enasnsisenguenssere wud Vas Zo/sud THU UYS26 FAX (f penaity for this allegation. The total fine for the violations of s. 499.005(14), F.S., is $63,500. 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. Since the Prescription drugs involved in Paragraphs (6), (10), and (11) of this complaint came from unknown sources and were outside the regulatory channels, they pose the greatest risks to the public health and warrant revocation of Jemco's prescription drug wholesaler permit. Further, the violations alleged in paragraphs (10) and (11) warrant an administrative fine of $58,000 based on $1,000 for 58 transactions. The administrative fine for the violations alleged in paragraph (6) is $5,000, however the department reserves the right to amend the administrative penalty for this allegation. The allegations in paragraph (16) warrant y an administrative fine of $5,000. The total fine for the violations t 499.005(1), (2), (3), and (4), F.S., is $68,000. (g) Rule 64F-12.024 (4), Fla. Admin. Code sets the range of the penalty for engaging in traud, deceit, misrepresentation or subterfuge in the acquisition or distribution of a Prescription drug as a fine ranging from $500 to $5,000 per violation per day and revocation of the permit. The allegation in paragraph (11) warrants an administrative fine of $55,000 based on $1,000 for 55 transactions and revocation of Jemco’s prescription drug wholesaler permit. (18) (a) 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. Further, the department may deny and application for a permit if it is shown that the applicant is not ot 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 @oog -—~ aay va. ecu PAA issued a permit. 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. (b) 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 and the accurate records of those transactions, timely made available for review, is the cornerstone for the federal and state regulatory scheme for the distribution of Prescription drugs in this country. The failure to Purchase prescription drugs from authorized sources, maintain those drugs under appropriate storage conditions, and make wholesale distribution records available as required by law are substantial violations of the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes. The alleged violations also demonstrate that it would be a danger and not in the best interest of the public health, safety, and welfare to renew Jemco’s Prescription drug wholesaler permit. ; 3 (19) You have the right to request an administrative hearing nbuan to sections 120.569 and 120.57, F.S., if you wish to challenge the imposition of the administrative fine and the intended agency action to deny renewal and the revocation of permit 22:00961. 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 nat available as an alternative remedy. 10 - ; . @o1o *04/25/02 THU 09:26 FAX Your faiture 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". 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 fiting 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 orderé. (20) The undersigned certifies that a true copy of this administrative complaint was sent by overnight mail to Jose Castillo, individually and as President of Jemco at 21011 Johnson Street, Suite iP 121, Pembroke Pines, Florida 33029, and to Brian Hill at the same address this 24th Y- th day of April, 2002. 4 | ‘ Chhét of Phdrmacy 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 Counsel for Respondents: Benjamin Metsch Metsch & Metsch, P.A. 1455 NW 14 Street Miami, Florida 33125 (305) 545-6400 @os

Docket for Case No: 02-002167