STATE OF FLORIDA DEPARTMENT OF HEALT’ DEPARTMENT OF HEALTH, through its BUREAU OF STATEWIDE PHARMACEUTICAL SERVICES, Petitioner, Case No: vs. FLORIDA BRECKENRIDGE, INC., d/b/a BRECKENRIDGE, INC., a Florida Corporation, and LAURENCE D. RUNSDORF, Individually, Respondents, ; ee ADMINISTRATIVE COMPLAINT Notice is hereby Provided that Petitioner, Department of Health by and through its Bureau of Statewide Pharmaceutical Services (the "bureau’”), intends to revoke the permit of Florida Breckenridge, Inc., d/b/a Breckenridge, Inc., (“Breckenridge”), to operate as a Prescription drug wholesaler (permit number 22:00537) in Florida and impose against Respondents, Breckenridge, Inc., a Florida corporation, and Laurence D, Runsdorf, individually, an administrative fine in the amount of Ninety-two thousand dollars ($92,000), 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. EXHIBIT A (2) Respondent, Florida Breckenridge, Inc., is a Florida registered corporation, that does business under the name Breckenridge, Inc., and whose principal place of business is 4141 South Rogers Circle, Suite 3, Boca Raton, Palm Beach County, Florida 33487. Respondent, Breckenridge, is permitted as a Prescription drug wholesaler (permit number 22: 00537) Pursuant to the Act. The bureau initially issued permit number 22:00537 to Breckenridge on November 13, 1992 and renewed it biennially thereafter. Permit number 22:00537 will expire on November 30, 2002, unless sooner suspended or revoked. (3) Respondent, Laurence D. Runsdorf, is the president and sole owner of Breckenridge. Further, Mr. Runsdorf was at all times material hereto responsible for and involved in the Prescription drug wholesale operations of Breckenridge, and specifically the activities alleged in this complaint. (4) Breckenridge purchased prescription drugs from Premier Medical, 1881 NE 26" Street, Wilton Manors, Florida 33325 in two transactions on October 1, 2001 and October 17, 2001, marked as Exhibits 1 - a &band2-a&b. Premier Medical is required to hold a valid permit as a Prescription Drug Wholesaler issued to the address of 1881 NE 26 Street, Wilton Manors, Florida as provided by ss. 499.01(1)(d)6., 499.012(2)(a), and 499.012(3), F.S., to engage in the wholesale distribution of Prescription drugs in or from Florida prior to selling or Physically distributing any Prescription drug to Breckenridge. However, Premier Medical at 1881 NE 26" Street, Wilton Manors, Florida 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 or in the State of Florida. (5) Breckenridge purchased prescription drugs from Matrix Distributors or Matrix Medical Distributors, 11 Russell Avenue, South River NJ 08882 i in 5 transactions during October 2001, marked as Exhibits 3-a&b through 7-a&b, Although licensed in New Jersey to wholesale prescription drugs, Matrix Distributors and Matrix Medical Distributors are 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 to Breckenridge. In addition to being address specific, permits issued under the Act that authorize the wholesale distribution of Prescription drugs are issued in the Specific name in which the person is doing business in accordance with s. 499.012(3), F.S. Neither Matrix Distributors nor Matrix Medical Distributors were permitted under Chapter 499, F.S., at any time relevant and material to the allegations in this Paragraph to engage in the wholesale distribution of any prescription drug from, in, or into the State of Florida. (6) Based on the allegations in Paragraphs (4) and (5), Breckentidge violated s. 499.005(14), F.S., in that it purchased prescription drugs from sources not authorized under the Act to wholesale Prescription drugs from, in or into the state of Florida. (7) Breckenridge distributed (sold) the prescription drugs, marked as Exhibits 1 - ¢ &d and 2 -c¢ &d, that had been purchased from unauthorized sources as alleged in Paragraphs (4), thereby violating s. 499.005(1), (3), and (4), F.S., since it purchased, received, and distributed adulterated 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, (8) For purposes of this complaint, a pedigree paper is a record required by s. 499.0121(8)(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. (9) Breckenridge is not an authorized distributor of record for the prescription drugs it sold to other prescription drug wholesalers in at least 31 transactions, marked as Exhibits 8-a to 8-d through 39-a to 39-d. Included with the documentation for each of these 31 transactions is a pedigree paper provided by Breckenridge to the purchaser of the prescription drugs on the invoice. Breckenridge did not disclose on the pedigree papers related to these 31 transactions provided to Breckenrdige’s customers that it had purchased the prescription drugs from Stone Group. Stone Group is a permitted prescription drug wholesaler in Florida that is located at the same address as Breckenridge. (a) Breckenridge thereby violated s. 499.005(18), F.S., because Breckenridge failed to maintain records as required by ss. 499.001-499.081 and the rules adopted under those sections because it did not provide pedigree papers in accordance with the requirements of s. 499.0121 (6)(d), F.S., and Florida Administrative Code Rule 64F- 12.012(3) and (b) Breckenridge violated s. 499.005(23), F.S., because Breckenridge engaged in misrepresentation or fraud in the distribution of a prescription drug by not disclosing its source of these prescription drugs in the pedigree papers related to these 31 transactions. (10) Breckenridge purchased Prescription drugs from Stone Group and received corresponding pedigree papers from Stone Group in 14 transactions, marked as Exhibits 32-a to 32-d through 45-a to 45-d, that are false Each pedigree paper indicates that Cardinal Distribution in Phoenix, Arizona sold the relevant Prescription drug(s) to Optia Medical in Salt Lake City, Utah. These pedigree papers reflect that Optia Medical in turn sold the prescription drug(s) directly to Stone Group or through another Prescription drug wholesaler to Stone Group. However, Cardinal Distribution had not conducted prescription drug wholesaling operations from Phoenix, Arizona since September 10, 2000, and at all times material to the time period covered by the distribution of the Prescription drugs as represented in these pedigree Papers, Cardinal Distribution’s Arizona Distribution Center was located in Tolleson, Arizona. Further, neither the Cardinal Distribution Center in Arizona nor a nearby Cardinal Distribution Center in Utah distributed prescription drugs to Optia Medical in Salt Lake City, Utah. As a result, the true source(s) of approximately 1640 units of prescription drugs totaling over $ 3.2 million purchased and sold by Breckenridge is not disclosed in these transactions and has not been disclosed to date. (11) Breckenridge purchased two boxes of Procrit 20,000 Lot #P003043, a prescription drug, from Stone Group and sold these two boxes of Procrit 20,000 according to the records marked at Exhibits 35 - a, 35 - b-2, 35 - c, and 35 — d-2. The pedigree papers supporting the purchase and sale of this prescription drug indicates Consumer Service Group in Knoxville, Tennessee is an authorized distributor of record for this product and the pedigree Paper does not disclose any previous sellers of the Procrit before Consumer Service Group. However, Consumer Service Group in Knoxville, Tennessee is not the manufacturer of Procrit and at any time material to the allegations in this complaint, did not purchase Procrit directly from the manufacturer, Amgen. Therefore Consumer Service Group is not an authorized distributor of record as reflected on these pedigree papers. The pedigree papers related to these two boxes of prescription drugs are false, (12) The pedigree Papers related to the prescription drugs Breckenridge purchased from Premier Medical as aileged in paragraph (4) are false. These pedigree papers indicate Consumer Service Group in Knoxville, Tennessee is an authorized distributor of record for these prescription drugs and the pedigree paper does not disclose any previous sellers of the prescription drugs before Consumer Service Group. However, Consumer Service Group in Knoxville, Tennessee is not the manufacturer of the Prescription drugs reflected in these transaction and at any time material to the allegations in this complaint, did not purchase them directly from the manufacturer, Amgen. Therefore Consumer Service Group is not an authorized distributor of record as reflected on these pedigree Papers. (13) Breckenridge purchased two boxes of Epogen 40,000 Lot #P001486, a prescription drug, from Stone Group and sold these two boxes of Epogen 40,000 according to the records marked at Exhibits 8 - a to8-d. The pedigree Papers supporting the purchase and sale of this prescription drug indicates El Paso Pharmaceutical in EI Paso, Texas is an authorized distributor of record for those prescription drugs and the pedigree paper does not disclose any previous sellers of the Epogen 40,000 before El Paso Pharmaceutical. However, EI Paso Pharmaceutical is not the manufacturer of Epogen and at any time material to the allegations in this complaint, did not purchase Epogen 40,000 directly from the manufacturer, Amgen. Therefore El Paso Pharmaceutical is not an authorized distributor of record as reflected on these pedigree papers. The pedigree papers related to these two boxes of prescription drugs are false. (14) Matrix Distributors provided pedigree papers to Breckenridge, marked Exhibits 3 -b through 7 - b for Beckenridge’s purchase of the prescription drugs alleged in Paragraph (5). These pedigree papers indicate that JGW Pharmaceuticals in Houston, Texas is an authorized distributor of record for Epogen, Procrit and Neupogen and the pedigree papers do not disclose any previous sellers of these prescription drugs prior to JGW Pharmaceuticals. However, JGW Pharmaceuticals is not the manufacturer of these prescription drugs and at any time material to the allegations in this complaint, did not purchase Epogen, Procrit, or Neupogen directly from the manufacturer, Amgen. Therefore JGW Pharmaceuticals is not an authorized distributor of record as reflected on these pedigree papers. The pedigree papers related to these prescription drugs are false. (15) Respondents failed to examine the prescription drugs that it purchased in the transactions alleged in paragraphs (10) through (14) as required by Florida Administrative Code Rule 64F-12.013(5)(a). Compliance with this rule would have disclosed that the pedigree papers did not document that the prescription drugs had remained within the regulated channels for the wholesale distribution of prescription drugs. Further, there is no reasonable assurance that the prescription drugs have remained within the regulatory controls for the distribution of prescription drugs, therefore these prescription drugs were rendered unfit for human distribution and use and accordingly are adulterated pursuant to s. 499.006(2) or (3), F.S. As a result of this failure to examine the prescription drugs, including the pedigree papers that are intended to demonstrate that those prescription drugs have remained within the regulatory oversight of governmental agencies to help ensure the safety and integrity of the prescription drugs, Breckenridge has violated s. 499.005(1), (3), and (4), F.S., for purchasing and distributing adulterated prescription drugs or prescription drugs that otherwise have been rendered unfit for human use. (16) Breckenridge distributed the prescription drugs that it purchased in the transactions alleged in paragraphs (10) through (14). These distributions are marked as Exhibits 1-¢ & d,2-c&d,3-c&d through 7-c &d, 8-a& b through 45 - a & b. Breckenridge and Runsdorf engaged in misrepresentation or fraud in the distribution of prescription drugs when they sold the prescription drugs referenced in paragraphs (10) through (14) since the pedigree papers they provided to customers did not accurately reflect the true source(s) of the prescription drugs Breckenridge sold. Breckenridge thereby violated s. 499.005(23), F.S. (17) Breckenridge accepted incomplete pedigree papers from Matrix Distributors, marked as Exhibits 3 - b through 7 - b since these documents did not contain the lot number or quantity of the prescription drugs to which the transactions relate as required in Florida Administrative Code Rule 64F-12.012(3). Therefore, Breckenridge violated s. 499.005(18), F.S. for the failure to receive and maintain complete records related to the prescription drugs it purchased. (18) In addition, Breckenridge purchased over $24,000 in prescription drugs from Stone Group, marked as Exhibits 8 ~ c & d through 11 -c&d. Breckenridge received pedigree papers from Stone Group that indicate Stone Group purchased the prescription drugs from R.G.D. Enterprise, Inc., in Boone, North Carolina. However, R.G.D. Enterprise is not permitted as an Out-of-State Prescription Drug Wholesaler under the Act to wholesale prescription drugs into Florida. Therefore, the pedigree papers disclosed that Stone Group purchased the prescription drugs from a source not authorized to distribute prescription drugs into Florida. (19) Respondents failed to examine the prescription drugs, including that it purchased as alleged in paragraphs (17) and (18) required by Florida Administrative Code Rule 64F- 42.013(5)(a). Compliance with this rule would have disclosed that the pedigree papers did not document that the prescription drugs had remained within the regulated channels for the wholesale distribution of prescription drugs. Further, there is no reasonable assurance that the prescription drugs have remained within the regulatory controls for the distribution of prescription drugs, therefore these prescription drugs were rendered unfit for human distribution and use and accordingly are adulterated pursuant to s. 499.006(2) or (3), F.S. As a result of this failure to examine the prescription drugs, including the pedigree papers that are intended to demonstrate that those prescription drugs have remained within the regulatory oversight of governmental agencies to help ensure the safety and integrity of the prescription drugs, Breckenridge has violated s. 499.005(1), (3), and (4), F.S., for purchasing and distributing adulterated prescription drugs or prescription drugs that otherwise have been rendered unfit for human use. (20) All exhibits referenced in the allegations of this complaint are attached to and incorporated by teference herein. (21) The violations of Chapter 499, F.S., by Breckenridge as set forth in this complaint constitute sufficient grounds for DOH to impose an administrative fine of Ninety-two thousand dollars ($92,000) or impose any other penalty authorized by chapter 499, F.S. and chapter 64F- 12, Fla. Admin. Code against the Respondents. (22) 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 failed to take reasonable steps to examine the prescription drugs to assure that the prescription drugs they purchased and distributed remained within regulated channels for the wholesale distribution of prescription drugs and under appropriate regulatory controls, 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 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 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 paragraph (5) was permitted in New Jersey, but not Florida, the administrative fine for that violation is $500. However, the prescription drugs involved in the allegations in paragraph (4) of this complaint came from unknown sources and were outside all regulatory channels. These two transactions warrant imposition of an administrative fine of $1,000 each for the two transactions and further warrant revocation of Breckenridge’s prescription drug wholesaler permit. The total fine for violating s. 499.005(14), F.S., is $2,500. (b) 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 (7) and (10) through (14) with respect to purchasing and selling 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 two transactions alleged in paragraph (4), and $1,000 for each of the 42 transactions in paragraphs (10), (11), (13), and (14). The total fine for violating s. 499.005(1), (3), and (4), F.S., is $52,000. These violations further warrant the revocation of Breckenridge's prescription drug wholesaler permit. (c) 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 (9) and (16) for violating s. 499.005(23), F.S., warrant an administrative fine of $37,000 based on $1,000 for 37 transactions and revocation of Breckenridge’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 (9) and (17) for violating s. 499.005(18), F.S., warrant an administrative fine of $500. (23) 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 perimit if fhe permittee has violated any provisions of ss. 499.001- 499.081 or rules adopted under those sections. 10 (24) 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 examination or product, including a review of the documentation accompanying those transactions, is the cornerstone for the federal and state regulatory scheme for the distribution of prescription drugs in this country. Further Breckenridge’s failure to reflect it's immediate supplier in the pedigree papers it prepared is a substantial violation of the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes. 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 the pedigree papers received by Respondents demonstrate Breckenridge’s and Runsdorf's disregard for the regulatory scheme for the wholesale distribution of prescription drugs. These deficiencies also demonstrate Breckenridge’s and Runsdorf’s disregard for the health and safety of those persons ultimately consuming the prescription drugs they purchased and sold. Breckenridge’s and Runsdorf's conduct in this regard warrant revocation of Breckenridge’s prescription drug wholesaler permit as well as imposition of the subject fine against both Respondents. (25) 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 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. ll 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’. 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. (25) The undersigned certifies that a true copy of this amended administrative complaint was sent by certified mail to Laurence D. Runsdorf, individually and as President of Breckenridge at 1141 South Rogers Circle, Suite 3, Boca Raton, Florida 33487 this ete day of October, 2002. .P Chief ofStatewlde Pharmaceutical 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 #402 Tallahassee, Florida 32399 (850) 245-4005 12

Docket for Case No: 02-004536