Case 3:22-cv-00414-BAJ-SDJ Document 1 06/21/22 Page 1 of 25
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`UNITED STATES DISTRICT COURT
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`MIDDLE DISTRICT OF LOUISIANA
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`CIVIL ACTION
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`NO. 22-414
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`UNITED STATES OF AMERICA
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`VERSUS
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`STEVENS PHARMACY, INC. &
`STEVEN W. GOUGH
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`COMPLAINT
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`The United States of America brings this Complaint against Stevens Pharmacy, Inc. and
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`its owner and pharmacist-in-charge, Mr. Steven W. Gough, based on violations of the federal
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`Controlled Substances Act, 21 U.S.C. § 801 et seq. In support of this Complaint, the United States
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`represents:
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`INTRODUCTION
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`1.
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`Congress enacted the Controlled Substances Act (the “CSA”), 21 U.S.C. § 801 et
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`seq., in 1970 “to conquer drug abuse and to control the legitimate and illegitimate traffic in
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`controlled substances.” Gonzales v. Raich, 545 U.S. 1, 12 (2005). “Congress was particularly
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`concerned with the need to prevent the diversion of drugs from legitimate to illicit channels.” Id.
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`at 12-13.
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`2.
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`“To effectuate these goals, Congress devised a closed regulatory system making it
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`unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a
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`manner authorized by the CSA.” Id. at 13. “The CSA and its implementing regulations set forth
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`strict requirements regarding registration, labeling and packaging, production quotas, drug
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`security, and recordkeeping.” Id. at 14.
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`3.
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`Since the CSA’s enactment, the United States has faced an opioid crisis, “[t]he
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`magnitude and significance of [which] . . . cannot be overstated.” In re Nat’l Prescription Opiate
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`Litig., No. 1:17-MD-2804, 2019 WL 4686815, at *1 (N.D. Ohio Sept. 26, 2019).
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`4.
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`The U.S. Department of Health and Human Services has declared “a nationwide
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`public health emergency regarding the opioid crisis” and has noted that “[e]ach day, according to
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`the Centers for Disease Control and Prevention, more than 140 Americans die from drug
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`overdoses, 91 specifically due to opioids.”1
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`5.
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`According to the Centers for Disease Control and Prevention (the “CDC”),
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`Louisiana had an opioid dispensing rate of 68.3 opioid prescriptions per 100 persons in 2020,
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`which was the fourth highest dispensing rate in the United States for that year.2
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`6.
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`The 2020 opioid dispensing rate was even higher for East Baton Rouge Parish. The
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`CDC reports that East Baton Rouge Parish had an opioid dispensing rate of 98.194 opioid
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`prescriptions per 100 persons in 2020—meaning that, on average, there was almost one opioid
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`prescription for every person in East Baton Rouge Parish for that year.3
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`7.
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`The United States brings this civil enforcement action against Stevens Pharmacy,
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`Inc. (“Stevens Pharmacy”), and its owner and pharmacist-in-charge, Mr. Steven W. Gough, based
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`on numerous, systemic violations of the CSA. In particular, between 2018 and 2020, Stevens
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`Pharmacy and Mr. Gough filled hundreds of facially invalid prescriptions for controlled
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`substances, including opioids. Such violations include (but are not limited to) filling prescriptions
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`1 U.S. Dep’t of Health & Human Servs., HHS Acting Secretary Declares Public Health Emergency to Address
`National Opioid Crisis (Oct. 26, 2017), https://www.hhsgov/about/news/2017/10/26/hhs-acting-secretary-declares-
`pubic-health-emergency-address-national-opioid-crisis.html
`[https://public3.pagefreezer.com/browse/HHS.gov/31-
`12-2020T08:51/https://www.hhs.gov/about/news/2017/10/26/hhs-acting-secretary-declares-public-health-
`emergency-address-national-opioid-crisis.html].
`2 Ctrs.
`for Disease Control & Prevention, U.S.
`State Opioid Dispensing Rates,
`https://www.cdc.gov/drugoverdose/rxrate-maps/state2020.html (last visited June 16, 2022).
`3 Ctrs.
`for Disease Control & Prevention, U.S. County Opioid Dispensing Rates,
`https://www.cdc.gov/drugoverdose/rxrate-maps/county2020.html (last visited June 16, 2022).
`2
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`2020,
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`2020,
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`for controlled substances lacking required data elements; dispensing more controlled substances,
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`including opioids, than prescribed; and the early filling of prescriptions for controlled substances.
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`8.
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`Further, during a 2020 audit, the Drug Enforcement Administration (DEA)
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`uncovered evidence that Stevens Pharmacy failed to maintain accurate inventories of its controlled
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`substances, including opioids, resulting in unexplained overages and shortages in its drug stocks.
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`9.
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`These violations occurred despite a nearly decade-long history of Consent
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`Agreements with the Louisiana Board of Pharmacy arising from prior inventory variances of
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`controlled substances, the failure to report the theft of drugs to the DEA and the Board of
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`Pharmacy, and the dispensing of controlled substances with an expired state license.
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`10.
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`Stevens Pharmacy and Mr. Gough have therefore increased the likelihood of abuse
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`and diversion of controlled substances, justifying substantial civil penalties under the CSA.
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`11.
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`The United States of America brings this lawsuit on its own behalf to enforce the
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`PARTIES
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`CSA.
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`12.
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`On information and belief, Defendant Stevens Pharmacy, Inc. is a registered
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`Louisiana corporation with a principal place of business at 520 S. Alexander Ave., Ste. 200, Port
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`Allen, Louisiana 70767. The pharmacy currently has an active, but restricted, Controlled
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`Dangerous Substance (CDS) License, No. CDS.038660-PHY, with the Louisiana Board of
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`Pharmacy. Until March 4, 2020, Stevens Pharmacy held DEA Registration Number BS7083607,
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`under which it was authorized to dispense controlled substances in Schedules II-V. Stevens
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`Pharmacy voluntarily surrendered its DEA Registration on March 4, 2020, and does not currently
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`dispense or distribute controlled substances.
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`13.
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`On information and belief, Defendant Steven W. Gough is a Louisiana resident and
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`the sole owner and pharmacist-in-charge of Stevens Pharmacy. Mr. Gough is registered with the
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`Louisiana Board of Pharmacy with license numbers PIC.013199 and PST.013199. He has been a
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`registered pharmacist in Louisiana since 1982. On information and belief, Mr. Gough serves as
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`the President, Treasurer, Secretary, and Director for Stevens Pharmacy.
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`JURISDICTION AND VENUE
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`14.
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`The Court has subject-matter jurisdiction over all claims in this matter under 28
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`U.S.C. §§ 1331, 1345, 1355(a) and 21 U.S.C. § 842(c)(1)(A).
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`15.
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`The Court may exercise personal jurisdiction over the defendants because they are
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`residents of Louisiana and are therefore subject to the jurisdiction of a court of general jurisdiction
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`in the state of Louisiana. See Fed. R. Civ. P. 4(k)(1)(A); cf. La. Code Civ. Proc. art. 6(A).
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`16.
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`Venue is proper in this Court under 28 U.S.C. §§ 1391(b)-(d), 1395(a) because the
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`defendants reside in and may be found in this district and because the Government’s claims have
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`accrued in this district based on the acts or omissions of the defendants within the Middle District
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`of Louisiana.
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`OVERVIEW OF THE CONTROLLED SUBSTANCES ACT
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`17.
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`The CSA and its implementing regulations govern the manufacturing, distributing,
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`and dispensing of controlled substances that pose a risk of abuse and dependence in the United
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`States. Cf. 21 U.S.C. §§ 811-812.
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`18.
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`The CSA categorizes controlled substances into five schedules. See 21 U.S.C.
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`§ 812.
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`19.
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`Schedule I consists of substances that have “a high potential for abuse,” “no
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`currently accepted medical use in treatment in the United States,” and “a lack of accepted safety
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`for use of the drug or other substance under medical supervision.” 21 U.S.C. § 812(b)(1); see also
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`21 C.F.R. § 1308.11.
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`20.
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`Schedule II contains drugs with “a high potential for abuse” that “may lead to
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`severe psychological or physical dependence” but nonetheless have “a currently accepted medical
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`use in treatment in the United States or a currently accepted medical use with severe restrictions.”
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`21 U.S.C. § 812(b)(2); see also 21 C.F.R. § 1308.12.
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`21. With limited exceptions applicable only in emergency situations, “[a] pharmacist
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`may dispense directly a controlled substance listed in Schedule II . . . only pursuant to a written
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`prescription signed by the practitioner . . . .” 21 C.F.R. § 1306.11(a).
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`22.
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`Schedule III contains drugs that, although the potential for abuse is less than a
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`Schedule II drug, may lead to a moderate or low “physical dependence or high psychological
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`dependence.” Schedule III drugs also have “a currently accepted medical use in treatment in the
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`United States.” 21 U.S.C. § 812(b)(3); see also 21 C.F.R. § 1308.13.
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`23.
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`Schedule IV contains drugs that, although having a lower potential for abuse than
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`Schedule III drugs, may still lead to a limited physical or psychological dependence when abused.
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`21 U.S.C. § 812(b)(4); see also 21 C.F.R. § 1308.14.
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`24.
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`Schedule V contains drugs that, although having a lower potential for abuse than
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`Schedule IV drugs, may still lead to a limited physical or psychological dependence when abused.
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`21 U.S.C. § 812(b)(5); see also 21 C.F.R. § 1308.15.
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`25.
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`The CSA requires persons or entities who dispense or propose to dispense
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`controlled substances to obtain a registration from the DEA. 21 U.S.C. § 822(a)(2). Such
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`registrations are issued for between one and three years before renewal is required. Id.
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`26.
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`“The Attorney General is authorized to promulgate rules and regulations and to
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`charge reasonable fees relating to the registration and control of the manufacture, distribution, and
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`dispensing of controlled substances and to listed chemicals.” 21 U.S.C. § 821. Further, “[t]he
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`Attorney General may promulgate and enforce any rules, regulations, and procedures which he
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`may deem necessary and appropriate for the efficient execution of his functions” under the CSA.
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`Id. § 871(b). The Attorney General’s authority under the CSA has been redelegated to the
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`Administrator of the DEA. See 28 C.F.R. § 0.100(b).
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`27.
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`A prescription for a controlled substance may be issued only by an individual
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`practitioner who is “(1) [a]uthorized to prescribe controlled substances by the jurisdiction in which
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`he is licensed to practice his profession and (2) [e]ither registered or exempted from registration”
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`under limited circumstances. 21 C.F.R. § 1306.03(a).
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`28.
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`Likewise, “[a] prescription for a controlled substance may only be filled by a
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`pharmacist, acting in the usual course of his professional practice and either registered individually
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`or employed in a registered pharmacy, a registered central fill pharmacy, or registered institutional
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`practitioner.” 21 C.F.R. § 1306.06.
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`29.
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`“An order purporting to be a prescription issued not in the usual course of
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`professional treatment or in legitimate and authorized research is not a prescription within the
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`meaning and intent of section 309 of [the CSA] (21 U.S.C. 829) and the person knowingly filling
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`such a purported prescription, as well as the person issuing it, shall be subject to the penalties
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`provided for violations of the provisions of law relating to controlled substances.” 21 C.F.R.
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`§ 1306.04(a).
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`30.
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`Federal law also imposes strict requirements on the necessary data elements in a
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`prescription for controlled substances. In particular, “[a]ll prescriptions for controlled substances
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`shall be dated as of, and signed on, the day when issued and shall bear the full name and address
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`of the patient, the drug name, strength, dosage form, quantity prescribed, directions for use, and
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`the name, address and registration number of the practitioner.” 21 C.F.R. § 1306.05(a); cf. also
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`La. Admin. Code tit. 46, pt. LIII §§ 2511(B)(1)-(7), 2745(C)(2) (setting forth the required data
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`elements for a prescription under Louisiana state law).
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`31.
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`“[T]he prescribing practitioner is responsible in case the prescription does not
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`conform in all essential respects to the law and regulations.” 21 C.F.R. § 1306.05(f). However,
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`“[a] corresponding liability rests upon the pharmacist, including a pharmacist employed by a
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`central fill pharmacy, who fills a prescription not prepared in the form prescribed by DEA
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`regulations.” Id.; cf. also id. § 1306.04(a) (“The responsibility for the proper prescribing and
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`dispensing of controlled substances is upon the prescribing practitioner, but a corresponding
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`responsibility rests with the pharmacist who fills the prescription.”).
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`32.
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`These requirements are not technical or trivial. A “failure to comply with state and
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`federal laws concerning the dispensing of controlled substances” can “create[] a substantial
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`likelihood that abuse of controlled substances would occur in the absence of an immediate
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`suspension.” Akhtar-Zaidi v. DEA, 841 F.3d 707, 713 (6th Cir. 2016) (denying a petition for
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`review of the DEA Administrator’s affirmance of an immediate suspension order where the
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`practitioner had, inter alia, prescribed controlled substances without including patients’
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`addresses); see also United States v. Poulin, 926 F. Supp. 246, 253 (D. Mass. 1996) (“The
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`Controlled Substances Act imposes liability on pharmacists who fill invalid prescriptions.” (citing
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`21 U.S.C. § 1306.05(a))).
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`LOUISIANA’S REGULATION OF THE DISPENSING OF CONTROLLED
`SUBSTANCES
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`33.
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`The Louisiana Board of Pharmacy is authorized to promulgate rules and regulations
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`relating to the registration and control of the manufacture, distribution, and dispensing of
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`controlled dangerous substances in Louisiana. See La. R.S. 40:972(A).
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`34.
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`In Louisiana, the terms “controlled dangerous substance” and “controlled
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`substance” refer to “any substance defined, enumerated, or included in federal or state statute or
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`regulations,” including at 21 C.F.R. §§ 1308.11-.15 and La. R.S. 40:964. La. Admin. Code tit. 46,
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`pt. LIII § 2701(A).
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`35. With limited exceptions, Louisiana’s schedules of controlled substances are
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`identical to the federal schedules. However, the Louisiana Board of Pharmacy states that “[i]n the
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`event there are differences in the scheduling (or the absence of a listing) [between federal and state
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`laws], then the pharmacist is always obliged to adhere to the more stringent provision.”4 For
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`example, the controlled substance carisoprodol (also known as “Soma”) is listed as a Schedule II
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`controlled substance under Louisiana law despite being listed federally as a Schedule IV controlled
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`substance. See La. R.S. 40:964; cf. 21 C.F.R. § 1308.14(c).
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`36.
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`Every person who distributes or prescribes controlled dangerous substances within
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`Louisiana must obtain a controlled dangerous substance (CDS) license from the Board of
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`Pharmacy. La. Admin. Code tit. 46, pt. LIII § 2705(A).
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`37.
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`Louisiana CDS licenses are valid for one year and must be renewed. La. Admin.
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`Code tit. 46, pt. LIII § 2707(A)(6).
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`38.
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`A pharmacist only acts within the usual course of their professional practice if they
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`comply with both federal and state law limitations on the dispensing and distribution of controlled
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`substances. See 21 C.F.R. §§ 1306.03(a)(1), 1306.04(a).
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`39.
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`Louisiana state law requires that “[a] pharmacist or dispensing physician shall
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`exercise sound professional judgment to ascertain the validity of prescriptions for controlled
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`4 La. Bd. of Pharmacy, Pharmacy Resource Center, https://www.pharmacy.la.gov/page/pharmacy-resource-center
`(last accessed June 16, 2022).
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`substances. If, in the pharmacist’s professional judgment, a prescription is not valid, said
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`prescription shall not be dispensed.” La. Admin. Code tit. 46, pt. LIII § 2747(E)(2)(b).
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`40.
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`Under Louisiana law, “[a] prescription for a controlled dangerous substance shall
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`expire: 1. 90 days after the date of issue if the drug is listed in schedule II; or 2. six months after
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`the date of issue if the drug is listed in Schedule III or IV.” La. Admin. Code tit. 46, pt. LIII
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`§ 2525(B); see also id. § 2745(F)(2), (G)(2).
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`41.
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`Further, a “prescription form shall clearly indicate the authorized prescriber’s
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`name, licensure designation, address, telephone number, and, if for a controlled substance, the
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`Drug Enforcement Administration (DEA) registration number.” La. Admin. Code tit. 46, pt. LIII
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`§ 2511(C)(2); see also id. § 2745(C)(1)-(3).
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`42.
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`“In the event that multiple practitioners are identified on the prescription form, the
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`authorizing prescriber’s specific identity shall be clear and unambiguous.” La. Admin. Code tit.
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`46, pt. LIII § 2511(C)(2); see also id. § 2745(C)(7)(a)(ii).
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`43.
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`Additionally, “[n]o prescription form shall contain more than four prescription drug
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`orders.” La. Admin. Code tit. 46, pt. LIII § 2511(C)(3); see also id. § 2745(C)(7)(a)(iii).
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`44.
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`Although there is no corresponding allowance under federal law, Louisiana state
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`law permits a pharmacist to make limited corrections and additions to a prescription order for a
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`controlled substance “[f]ollowing a consultation with the prescriber and the appropriate
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`documentation thereof on the prescription form . . . .” La. Admin. Code tit. 46, pt. LIII
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`§ 2747(B)(4); see also id. § 2511(F).
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`45.
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`In particular, a pharmacist may add the patient’s address, the drug dosage form, or
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`the prescriber’s DEA registration number to a prescription form for controlled substances. La.
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`Admin. Code tit. 46, pt. LIII § 2747(B)(4)(b)(i)-(iii); cf. also id. § 2511(F)(1).
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`46.
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`A pharmacist may also record changes to the patient’s address, the drug strength,
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`the quantity prescribed, or the direction for use on a prescription for controlled substances. La.
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`Admin. Code tit. 46, pt. LIII § 2747(B)(4)(a)(i)-(iv); cf. also id. § 2511(F)(2).
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`47.
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`However, “a pharmacist shall never make changes to or add the following data
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`elements on the prescription form: i. patient’s name; ii. date of issue; iii. drug name (except for
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`generic interchange as permitted by law); or iv. prescriber signature.” La. Admin. Code tit. 46,
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`pt. LIII § 2747(B)(4)(c)(i)-(iv); cf. also id. § 2511(F)(3).
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`48.
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`Otherwise, “[i]t is unlawful to personally alter a prescription, or to dispense an
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`altered prescription, for a controlled substance, except as provided by” La. Admin. Code tit. 46,
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`pt. LIII § 2747(B)(4). La. Admin. Code tit. 46, pt. LIII § 2747(E)(4).
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`49.
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`The Louisiana Board of Pharmacy has adopted Policy No. I.A.20, which states that
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`“[i]t is permissible for a pharmacist to attach transaction labels to prescription forms; however,
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`those attachments are not the forms.”5 As a result, the attachment of a transaction label to a
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`prescription form does not remedy a missing data element on that prescription and does not
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`constitute an acceptable change or addition to the prescription in accordance with La. Admin. Code
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`tit. 46, pt. LIII § 2747(B)(4).
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`STEVENS PHARMACY’S AND STEVEN W. GOUGH’S HISTORY OF CSA NON-
`COMPLIANCE
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`50.
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`Both Stevens Pharmacy and Mr. Steven W. Gough have a history of violations
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`pertaining to controlled substances and have entered into several Consent Agreements with the
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`Louisiana Board of Pharmacy, dating back to 2012.
`
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`5 La. Bd. of Pharmacy, Recording Patient Address on Prescriptions for Controlled Substances, Policy No. I.A.20
`(Aug. 12, 2015), https://www.pharmacy.la.gov/assets/docs/GuidanceDocuments/PPM_I.A.20_RecordingPtAddress
`CDSRx_2015-0812.pdf.
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`51.
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`On September 27, 2012, Stevens Pharmacy signed a Consent Agreement in Case
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`No. 10-0247. See Attachment A. That agreement resolved allegations that Stevens Pharmacy
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`(a) failed to report a break-in and theft of drugs to the Board of Pharmacy and to the DEA; (b) had
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`variances in its inventories for nine controlled substances; (c) failed to report prescriber
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`information for certain prescriptions to the Louisiana Prescription Monitoring Program (PMP);
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`and (d) failed to report the filling of 16 prescriptions for OxyContin CR 60 mg and 16 prescriptions
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`for OxyContin CR 80 mg to the PMP.
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`52.
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`In particular, the Louisiana Board of Pharmacy found that Stevens Pharmacy had
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`the following variances in its controlled substances inventories during the period from May 1,
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`2010, to May 1, 2012:
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`Controlled Substance
`Oxycodone 30 mg Tablets
`Methadone 10 mg Tablets
`Promethazine with Codeine
`Syrup
`Hydrocodone/APAP 10/325
`Tablets
`Zolpidem 10 mg Tablets
`Oxycodone 15 mg Tablets
`Carisoprodol 350 mg Tablets
`Alprazolam 1 mg Tablets
`Alprazolam 2 mg Tablets
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`DEA Schedule
`II
`II
`II
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`Inventory Variance
`-21,845 tablets
`-13,721 tablets
`-13,212 mL
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`II
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`IV
`IV
`IV
`IV
`IV
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`-7,892 tablets
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`-5,735 tablets
`-5,260 tablets
`-4,442 tablets
`-3,593 tablets
`-2,115 tablets
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`53.
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`As a result of the Consent Agreement, Stevens Pharmacy’s CDS license was placed
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`on probation for a period of five (5) years. Stevens Pharmacy was also required to perform a
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`perpetual
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`inventory on all Schedule
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`II drugs, all hydrocodone products, and all
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`promethazine/codeine products for the probation period. It was also required to perform an
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`inventory on all remaining Schedules III, IV, and V drugs by the tenth day of each month for the
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`probation period. Further, the Louisiana Board of Pharmacy mandated that Stevens Pharmacy
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`“shall not violate or be found guilty of violating any local, state, or federal pharmacy laws or laws
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`regarding controlled dangerous substances.” Attachment A, at 3.
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`54. Mr. Steven W. Gough also signed a Consent Agreement with the Louisiana Board
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`of Pharmacy on September 27, 2012, in Case No. 10-0248 in connection with the same allegations
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`asserted against Stevens Pharmacy. See Attachment B. Under the agreement, Mr. Gough’s
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`pharmacy license was placed on probation for a period of five (5) years. The Louisiana Board of
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`Pharmacy also admonished that Mr. Gough “shall not violate or be found guilty of violating any
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`local, state, or federal pharmacy laws or laws regarding controlled dangerous substances.” Id. at 3.
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`55.
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`On July 1, 2017, Stevens Pharmacy signed a second Consent Agreement with the
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`Louisiana Board of Pharmacy in Case No. 16-0219. See Attachment C. That agreement resolved
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`allegations that Stevens Pharmacy had the following variances in its controlled substances
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`inventories for the period between November 14, 2014, and various dates in June 2016:
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`Controlled Substance
`Hydrocodone/APAP 10/325
`Tablets
`Methadone 10 mg Tablets
`Oxycodone 15 mg Tablets
`Oxycodone 30 mg Tablets
`Promethazine with Codeine
`Syrup
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`DEA Schedule
`II
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`Inventory Variance
`-884 tablets
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`II
`II
`II
`II
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`-899 tablets
`+179 tablets
`-578 tablets
`-5,595 mL
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`56.
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`In addition, the Louisiana Board of Pharmacy found that Stevens Pharmacy had
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`failed to maintain timely monthly inventories of Schedules III, IV, and V controlled substances
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`and that it had not recorded purchases and prescriptions for Promethazine with Codeine Syrup in
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`its perpetual inventories.
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`57.
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`As a result of the July 1, 2017 Consent Agreement, the probationary period for
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`Stevens Pharmacy’s pharmacy permit and CDS license was extended through October 1, 2022.
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`The Louisiana Pharmacy Board also required that Stevens Pharmacy “shall not violate or be found
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`guilty of violating any local, state, or federal pharmacy laws or laws regarding controlled
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`dangerous substances.” Attachment C, at 3.
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`58. Mr. Steven W. Gough also signed a Consent Agreement with the Louisiana Board
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`of Pharmacy on July 1, 2017, in Case No. 16-0220 pertaining to these same allegations. As a
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`condition of his agreement, Mr. Gough’s pharmacist’s license was actively suspended effective
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`July 10, 2017. See Attachment D.
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`59.
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`Stevens Pharmacy signed a third Consent Agreement with the Louisiana Board of
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`Pharmacy in Case No. 17-0106 on July 1, 2017. See Attachment E. That agreement resolved
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`allegations that Stevens Pharmacy filled 2,203 CDS prescriptions between January 1, 2017, and
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`March 24, 2017, with an expired CDS license.
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`60. Mr. Steven W. Gough also signed a third Consent Agreement with the Louisiana
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`Board of Pharmacy in Case No. 17-0107 on July 1, 2017. See Attachment F. That agreement
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`pertained to the same allegations at issue in Stevens Pharmacy’s third Consent Agreement. As a
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`condition of his agreement with the Louisiana Board of Pharmacy, Mr. Gough received a Letter
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`of Reprimand on his pharmacist’s license.
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`61.
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`On February 21, 2018, Mr. Steven W. Gough signed a fourth Consent Agreement
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`with the Louisiana Board of Pharmacy in Case No. 18-0039. See Attachment G. As a condition
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`of that agreement, Mr. Gough’s pharmacist’s license was placed on probation through February
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`21, 2023, and Mr. Gough was required to “not violate or be found guilty of violating any local,
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`state, or federal pharmacy laws or laws regarding controlled dangerous substances.” Id. at 1.
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`CLAIMS FOR RELIEF
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`Count 1: Violations of 21 U.S.C. § 842(a)(1)
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`62.
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`The United States restates and adopts by reference the allegations in Paragraphs 1-
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`61.
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`63.
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`The CSA makes it “unlawful for any person—(1) who is subject to the requirements
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`of Part C [of the CSA] to distribute or dispense a controlled substance in violation of section 829
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`of [title 21 of the United States Code] . . . .” 21 U.S.C. § 842(a).
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`64.
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`Each violation of 21 U.S.C. § 842(a)(1) is subject to a statutory civil penalty up to
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`$25,000.00. 21 U.S.C. § 842(c)(1)(A). However, in accordance with the Federal Civil Penalties
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`Inflation Adjustment Improvement Act of 2015, 28 U.S.C. § 2461 note, these penalties have been
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`adjusted for inflation and are currently up to $72,683.00 per violation. 28 C.F.R. § 85.5.
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`65.
`
`Part C of the CSA governs the registration of manufacturers, distributors, and
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`dispensers of controlled substances. In particular, “[e]very person who manufactures or distributes
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`any controlled substance or list I chemical, or who proposes to engage in the manufacture or
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`distribution of any controlled substance or list I chemical, shall obtain annually a registration
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`issued by the Attorney General in accordance with the rules and regulations promulgated by him.”
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`21 U.S.C. § 822(a)(1).
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`66.
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`Further, “[e]very person who dispenses, or who proposes to dispense, any
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`controlled substance, shall obtain from the Attorney General a registration issued in accordance
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`with the rules and regulations promulgated by him.” 21 U.S.C. § 822(a)(2); see also 21 C.F.R.
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`§ 1301.11(a).
`
`67.
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`As a result, both pharmacists and pharmacies that dispense or distribute controlled
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`substances—including Mr. Steven W. Gough and Stevens Pharmacy—are subject to the
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`requirements of Part C of the CSA.
`
`68.
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`Under 21 U.S.C. § 829(a), “[e]xcept when dispensed directly by a practitioner,
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`other than a pharmacist, to an ultimate user, no controlled substance in schedule II, which is a
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`Case 3:22-cv-00414-BAJ-SDJ Document 1 06/21/22 Page 15 of 25
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`prescription drug as determined under the Federal Food, Drug, and Cosmetic Act, may be
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`dispensed without the written prescription of a practitioner . . . .”
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`69.
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`Likewise, “[e]xcept when dispensed directly by a practitioner, other than a
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`pharmacist, to an ultimate user, no controlled substance in schedule III or IV, which is a
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`prescription drug as determined under the Federal Food, Drug, and Cosmetic Act, may be
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`dispensed without a written or oral prescription in conformity with section 503(b) of that Act.” Id.
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`§ 829(b).
`
`70.
`
`Therefore, a pharmacy or pharmacist that dispenses or distributes a controlled
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`substance in Schedules II-IV without a valid prescription for that drug violates 21 U.S.C.
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`§ 842(a)(1).
`
`71.
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`In order to be a valid prescription for a controlled substance, the prescription “shall
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`be dated as of, and signed on, the day when issued and shall bear the full name and address of the
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`patient, the drug name, strength, dosage form, quantity prescribed, directions for use, and the name,
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`address and registration number of the practitioner.” 21 C.F.R. § 1306.05(a). The filling of a
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`prescription that does not comply with these requirements constitutes a violation of 21 U.S.C.
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`§ 842(a)(1). See United States v. Poulin, 926 F. Supp. 246, 252-53 (D. Mass. 1996).
`
`72.
`
`On February 27, 2020, the United States filed an Application for Administrative
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`Inspection Warrant Under 21 U.S.C. § 880 with the Court in Case No. 20-mc-22, In the Matter of
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`the Administrative Inspection of Stevens Pharmacy, Inc.
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`73.
`
`In its application, the Government requested issuance of an administrative
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`inspection warrant (AIW) under 21 U.S.C. § 880 to allow the DEA to review and copy Stevens
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`Pharmacy’s inventories, records, reports, order forms, invoices, dispensing records, prescriptions,
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`and other documents required to be kept under the CSA.
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`74.
`
`75.
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`The Court issued the AIW on February 27, 2020.
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`The DEA executed the AIW on March 4, 2020. During its inspection, the DEA
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`seized thirteen (13) boxes of controlled substance prescriptions; three (3) boxes of controlled
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`substance inventories, logs, and invoices; one (1) box of manuals, controlled substance distributor
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`correspondence, loose controlled substance records, and related documents; and one (1) box of
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`Schedules II-V controlled substances.
`
`76.
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`As required by 21 U.S.C. § 880(d)(3), the DEA made a timely return with the Court
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`showing that the inspection had been completed and accounting for all property seized.
`
`77.
`
`Based on a review of the controlled substance prescriptions seized by the DEA, the
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`United States has identified numerous instances between 2018 and 2020 in which Stevens
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`Pharmacy and Mr. Steven W. Gough filled facially invalid prescriptions for controlled substances.
`
`78.
`
`As illustrated in Attachment H, which is incorporated by reference herein, those
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`violations include, for example: (a) dispensing more controlled substances or stronger dosages of
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`controlled substances than prescribed by the practitioner; (b) filling expired prescriptions for
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`controlled substances; (c) filling prescriptions for controlled substances earlier than allowed by the
`
`prescribing practitioner; (d) filling prescriptions for controlled substances despite missing DEA
`
`registration numbers for the prescribers; (e) filling prescriptions for controlled substances despite
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`missing patient addresses; (f) filling prescriptions for controlled substances that were not signed
`
`by the prescriber; (g) filling prescriptions for controlled substances in which the prescriber is not
`
`unambiguously identified; (h) filling prescriptions containing more than four drug orders; (i) filling
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`prescriptions for controlled substances despite missing issuance dates on the prescriptions; and
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`(j) filling prescriptions for controlled substances despite missing drug quantities or drug strengths.
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`79.
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`Stevens Pharmacy has also routinely filled prescriptions for controlled substances
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`despite obvious “red flags” suggesting that the prescriptions were not issued for a legitimate
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`medical purpose or were issued outside the usual course of the prescriber’s professional practice.
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`80.
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`“A ‘red flag’ of diversion is a circumstance that does or should raise a reasonable
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`suspicion as to the validity of a prescription.” In re Nat’l Prescription Opiate Litig., -- F. Supp.
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`3d --, Nos. 1:17-md-2804, 18-o