Cp jas” On le STATE OF FLORIDA 1 MO fee DEPARTMENT OF HEALTH wet OP 7 woe “ - * ion DEPARTMENT OF HEALTH, through its “os BUREAU OF STATEWIDE PHARMACEUTICAL SERVICES, Petitioner, Case No: DOH 03-06087 vs. ALBERS MEDICAL, INC., d/b/a ALBERS MEDICAL DISTRIBUTORS, INC., registered as a fictitious name to do business in Missouri, Respondent. ADMINISTRATIVE COMPLAINT Notice is hereby provided that Petitioner, Department of Health by and through its Bureau of Statewide Pharmaceutical Services, intends impose an administrative fine in the amount of Fifteen Thousand Dollars ($15,000) and intends to revoke and deny renewal of the out-of-state prescription drug wholesaler permit issued to Albers Medica! Distributors, Inc., a company located and registered to do business in Missouri. In support of the intended final agency action the bureau states: (1) Petitioner, Department of Health (hereinafter “the Department”), through the Bureau of Statewide Pharmaceutical Services (‘the Bureau’), 2818-A Mahan Drive, Tallahassee, Florida, 32308, is the state agency charged with implementing ancl 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, into and from Florida as well as the permitting of entities to engage in this activity. The out-of-state prescription drug wholesaler permit is established under the Act in s. 499.012(2)(c), F.S., fora person, as defined in s. 499.003(24), F.S. (2002), located outside of Florida to engage in the wholesale distribution of prescription drugs from the permitted establishment identified on the permit into the state of Florida. (2) Albers Medical Distributors, Inc., (“Albers”) located at 4400 Broadway, Suite 116, Kansas City, Missouri 64111, is registered to do business in Missouri with the Secretary of State; however it is not registered with the Secretary of State in Florida. Albers is permitted in Missouri to engage in the wholesale distribution of prescription drugs in and from Missouri pursuant to its wholesale drug distributors permit (certificate / license number 900306) issued by the Department of Economic Development, Division of Professional Registration, Missouri Board of Pharmacy. Albers is permitted to engage in the wholesale distribution of prescription drugs into the state of Florida pursuant to its out-of-state prescription drug wholesaler permit number 23:00537 issued in accordance with the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes (“the Act”). Albers’ out-of-state prescription drug wholesaler permit expired on April 30, 2003; however Albers timely submitted a renewal application that was received by the department on April 24, 2003. (3) On or about February 17, 2003, the bureau’s agents conducted an inspection of Medcom Pharmaceutical Wholesale Drugs ("Medcom”), a permitted prescription drug wholesaler located in Jensen Beach, Florida. Medcom had received a shipment of 200 bottles of Zyprexa 10mg that morning from Albers. (Reference invoice number INV129007) The bureau’s agents examined the bottles of Zyprexa and determined that many were missing the manufacturer's outsert. An outsert is labeling of a 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 the product being dispensed, misbrands a prescription drug under federal law and more specifically, under s. 499.007, F.S., and Rule 64F-12.006(1), Florida Administrative Code. (4) Based on the allegations in paragraph (3), Albers distributed misbranded prescription drugs into Florida and thereby violated s. 499.005(1) and (4), F.S. (5) The agents also determined that some of the containers of prescription drugs referenced in paragraph (3) had sticky outer manufacturer's labels. In addition, some of the prescription drug containers referenced in paragraph (3) were discolored or wrinkled. (6) A prescription drug that is missing the outsert, has a sticky label, or label that is discolored or wrinkled indicates the drug, more likely than not, had previously been dispensed by a pharmacy and the dispensing labels had been removed for the unlawful reintroduction of the drug into commerce. (7) For purposes of this complaint, a pedigree paper is a record required by s. 499.0121(6)(d), F.S., (2002) 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. (8) The pedigree paper Albers provided to Medcom to support the wholesale distribution of the Zyprexa referenced in paragraph (3) indicated that Cardinal Health in Houston, Texas had soid the Zyprexa to Promis Wholesale Distributors in Laredo, Texas, which sold the drugs to G & K Pharma in Odenton, Maryland, which in turn sold the drugs to Albers. However, Cardinal Health in Houston, Texas has not sold any prescription drugs to Promis Wholesale and therefore did not sell the Zyprexa to Promis Wholesale as indicated on the pedigree paper. As a result, the true source(s) of approximately 200 units of prescription drugs totaling over $ 90,000 sold and distributed by Albers into Florida is not disclosed in these transactions. ) As a result, there is no reasonable assurance that the prescription drug have remained within the regulated distribution channels at all times and have been stored in accordance with the manufacturer's recommendations to maintain the safety, integrity, and efficacy of the drug and are adulterated pursuant to s. 499.006(2) and (3), F.S. (9) Based on the allegation in paragraphs (5), (6) and (8), Albers distributed adulterated prescription drugs into Florida and thereby violated s. 499.005(1) and (4), F.S. (10) Since the pedigree paper Albers provided to Medcom was false and fraudulently represented the source of the prescription drugs to which it related as alleged in paragraph (9), Albers engaged in the misrepresentation or fraud in the distribution of a drug. Albers therefore violated s. 499.005(23), F.S. (2002). (11) Albers purchased prescription drugs from G and K Pharma, located in Odenton, Maryland, in at least 38 transactions dating from August 9, 2002 through December 20, 2002. Refer to Exhibit A, which is attached to and by reference made a part of this complaint, for the invoice numbers and dates of these 38 transactions. The pedigree papers provided by G and K Pharma to Albers indicate G and K Pharma acquired the prescription drugs from Complete Wholesale Distribution, also located in Odenton, Maryland. The pedigree papers further indicate that Complete Wholesale Distribution purchased the prescription drugs from Cardinal Distribution in Swedesboro, New Jersey. However, Cardinal Distribution in Swedesboro, New Jersey has not sold any prescription drugs to Complete Wholesale Distribution. Therefore the pedigree papers for over $4.6 million dollars in Albers’ purchases of prescription drugs in these 38 transactions are false and the true source of the prescription drugs is unknown. Moreover in several of these transactions, Albers returned certain containers of prescription drugs to G and K Pharma because the containers were damaged, had no safety seal or an open safety seal, had faded or unreadable lot numbers, the labels were damaged, or for other unspecified reasons. The recurrence of receiving such questionable product from G and K Pharma should have put Albers on notice to investigate further into the source of the drugs as identified on the pedigree papers it received from G and K Pharma to prevent the acquisition and distribution of adulterated prescription drugs. (12) Albers failed to adequately and completely examine the pedigree papers and prescription drugs that it purchased in the transactions alleged in paragraphs (8) and (11) 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, Albers has violated s. 499.005(1) and (4), F.S., for purchasing and holding for sale adulterated prescription drugs. (13) On May 23, 2003, the federal Food and Drug Administrative (FDA) announced that Albers had voluntarily recalled three lots of 90-count bottles of the prescription drug Lipitor because the three lots of Lipitor, distributed by Albers, were counterfeit. (14) The Missouri Board of Pharmacy filed a complaint with the Administrative Hearing Commission against Albers on Apri! 9, 2003. A final determination on that complaint has not been issued. Although this is not a complete list of the allegations in that complaint, in summary the Missouri Board of Pharmacy alleged that (a) Albers purchased prescription drugs from numerous distributors that were not licensed to distribute prescription drugs into Missouri during the period May, 2000 through June, 2002. Many of these purchases from unauthorized distributors occurred after the Board had instructed Albers that such purchases were contrary to Missouri law. For example, an inspection of records disclosed that during the period May 8, 2000 through May 15, 2000 Albers purchased prescription drugs from 44 distributors not permitted in Missouri. On or about November 16, 2000, after Aibers had been instructed against purchasing from unauthorized distributors, an inspection disclosed that Albers had continued purchasing prescription drugs totaling over $3 million dollars from approximately 17 of the 44 distributors not permitted in Missouri as documented by 98 invoices. Subsequent inspections up through an inspection that occurred on June 10, 2002, disclosed en ongoing pattern of Albers to purchase from unauthorized distributors. (b) During an inspection of Albers on June 10, 2002, agents of the Missouri Board of Pharmacy randomly selected seven pedigree papers for verification. Six of the seven pedigree papers could not be verified to document the accuracy of the information on the pedigree paper. (c) Albers distributed in a wholesale distribution, Trizivir, which is a prescription drug, that had previously been dispensed by a pharmacy. The Trizivir that Albers had distributed had a pharmacy dispensing label on the product. (15) The violations alleged in this complaint in paragraphs (3) — (13) evidence a substantial failure to comply with, and are substantial violations of, the Act. The unlawful acquisition and wholesale distribution practices of Albers alleged in this complaint in paragraphs (3) — (14) represent a substantial disregard for and an unwillingness to abide by the regulatory scheme regarding the wholesaling of prescription drugs, which undermines the regulatory structure established by federal and state laws intended to protect the nations’ drug supply and public health. Albers acquisition and wholesale distribution practices also represent a disregard for the health, safety, and welfare of the ultimate patients receiving the prescription drugs that Albers distributed. Furthermore, Albers’ practices facilitated the distribution of counterfeit and adulterated prescription drugs and present a serious threat to the public health and people in Florida if Albers were to continue to engage in the wholesale distribution of prescription drugs into Florida. (16) The violations of Chapter 499, F.S., by Albers as set forth in this complaint constitute sufficient grounds for DOH to impose an administrative fine of Fifteen Thousand Dollars ($15,000) or impose any other penalty authorized by Chapter 499, F.S., and Chapter 64F-12, Florida Administrative Code against Albers. Furthermore, because the source of these prescription drugs, which are needed by people who are extremely ill, suffering from AIDS, cancer and other conditions of persons with compromised immune systems is unknown and Albers’ has demonstrated a recurring pattern of acquisition of counterfeit, adulterated and diverted prescription drugs from unknown and unreliable sources, it warrants the department imposing the upper fevel of the range of penalty for the violations cited. It also supports the department revoking the out-of-state prescription drug wholesaler permit and denying renewal of the out-of-state prescription drug wholesaler permit that authorizes Albers to wholesale prescription drugs into the state of Florida. (17) Rule 64F-12.024(4), Fla. Admin. Code sets the range of the penalty for violations of the Florida Drug and Cosmetic Act, Chapter 499, F.S. Pursuant to that rule, the bureau intends to impose the fines as noted: (a) The rule authorizes a fine for selling or delivering a misbranded prescription drug ranging from $250 - $5,000 per violation per day. The bureau intends to fine Albers $5,000 for the allegations in paragraphs (3) and (4). (b) The rule authorizes a fine for selling or delivering an adulterated prescription drug ranging from $250 - $5,000 per violation per day. The bureau intends to fine Albers $5,000 for the allegations in paragraphs (3) and (5) — (8). (c) The rule authorizes a fine for engaging in misrepresentation or fraud in the distribution of a drug ranging from $500 - $5,000 per violation per day and also authorizes the suspension or revocation of a permit with a fine. The bureau intends to fine Albers $5,000 for the allegations in paragraph (10), and intends to revoke and not renew Albers’ out-of-state prescription drug wholesaler permit. (18) Section 499.067(1)(a), F.S., (2002) 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., (2002) 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. The violations alleged in this complaint evidence a substantial failure to comply and are substantial violations of the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes and the rules that the department has adopted thereunder. (19) In addition, s. 499.067(1)(b), F.S. (2002) 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. The allegations in this compiaint demonstrate that it would be a danger and not in the best interest of the public health, safety, and welfare for the department to renew the out-of-state prescription drug wholesaler permit that would authorize Albers to distribute prescription drugs into the state of Florida. (20) 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 to impose an administrative fine and revoke or deny renewal of the out-of-state prescription drug wholesaler permit for Albers Medical Distributors, Inc. 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) You have the right to be represented by counsel or other qualified representative, at your expense to present evidence and argument; to call and cross-examine witnesses; and to have subpoena and subpoena duces tecum issued on your behalf if a hearing is requested. (b) 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 correspondence. 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, (c) Mediation is not available as an alternative remedy. (d) Your failure to submit a petition for hearing within 21 days from receipt of this complaint and notice 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’. (e) Should this complaint and notice become a final order, a party who is adversely affected by it is entitled to judicial review pursuant to s 120.68, F.S. 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. (21) The undersigned certifies that a true copy of this administrative complaint was sent by U.S. Certified Mail, Return Receipt Requested, to Douglas C. Albers, President, Albers Medical Distributors, Inc., at its physical address at 4400 Broadway, Suite 116, Kansas City, : ot Missouri 64111, this__-! day of July, 2003. 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 AO2 Tallahassee, Florida 32399-1703 Telephone (850) 245-4005 Facsimile (850) 413-8743 Florida Bar No. 191599 G and K Pharma Sales to Albers Medical Pedigree Cardinal Distribution Swedesboro, NJ Complete Wholesale Distribution Odenton, MD Invoice Date Invoice # Amount 4 8/9/02 2111 622,616 2 9/4/02 2500 300,823 3 9/4/02 2501 62,998 4 9/4/02 2502 141,237 5 9/4102 2503 15,636 6 9/11/02 2504 31,125 7 9/11/02 2506 267,770 8 9/11/02 2507 43,630 9 9111/02 2507A 29,947 10 9/11/02 2508 41,048 11 9/11/02 2509 105,595 12 9/11/02 2510 83,979 43 9/23/02 2511 44,231 14 9/23/02 2512 333,265 15 9/23/02 2513 412,309 16 9/23/02 2514 183,489 17 9/25/03 2515 2,313 18 9/25/02 2516 75,617 19 9/25/02 2517 375,873 20 10/2/02 2520 117,173 21 10/2/02 2521 308,000 22 10/2/02 2522 9,001 23 40/29/02 2523 113,318 24 10/31/02 2524 27,193 25 11/4/02 2526 54,850 26 11/8/02 2528 31,536 27 11/12/02 2529 69,673 28 11/14/02 2531 4,436 29 41/21/02 2534 76,000 30 42/H02 2538 37,239 31 12/10/02 2540 44,253 32 12/11/02 2541 2,907 33 12/12/02 2542 90,809 34 42/17/02 2544 42,000 35 42/18/02 2545 531,038 . 36 42/20/02 2547 52,682 37 1/8/03 2553 173,983 38 9/18/02 3035 26,067 Total $ 4,686,359.00 Ad Aun. Corxp. Kypibit A TINTIO3

Docket for Case No: 03-003125