Joseph L. Fink III, BSPharm, JD
When the Drug Enforcement Administration seizes their inventory and suspends their registrations, pharmacy officials seek legal recourse.
Issue of the Case
Two pharmacies operating under common ownership were subject to an inspection by Drug Enforcement Administration (DEA) officials who indicated no urgent concerns at the time of departure. Pharmacy officials did not concur with several interpretations of federal law used by the inspectors but implemented a plan to modify operations.
Five months later, without responding to communications from the pharmacy officials, the DEA ordered suspension of the DEA registrations and seized the controlled substances at their locations. The pharmacy owners sought a temporary restraining order (TRO) from the federal court ordering the agency officials to cease the suspension and restore the registrations.
The Facts of the Case
The pharmacies in this case were located in a western state and employee-owned. There were 2 relevant DEA registrations—one for a traditional community pharmacy and the other for a pharmacy serving patients in long-term care and assisted living facilities.
During the inspection, the DEA officials advanced several innovative interpretations of DEA regulations and Controlled Substances Act statutes. For example, despite state-level Medicaid regulations addressing the use of modified unit dose packaging for the longterm care patients and the expected return of unused medications along with issuance of a credit for the unconsumed products, the DEA officials took the position that taking back medications in Schedule III and IV under such circumstances is prohibited. They also questioned, among other practices, the pharmacies’ controls to prevent theft and diversion, as well as shortcomings in several areas of required record keeping. The inspectors noted no urgent concerns when leaving, however.
DEA agents delivered the notice that the DEA registrations were being suspended, and they removed all of the controlled substances from the pharmacies. Approximately 2 weeks later, the pharmacies requested an administrative hearing, and 2 separate hearing sessions were scheduled. On the date scheduled for the first administrative hearing, the pharmacies filed an action in US district court seeking a TRO. A TRO is a remedy in equity wherein a court orders a party to cease and desist doing something. It is an intermediate step on the way to a higher-level equitable remedy, preliminary injunction.
The Court's Ruling
The TRO was granted by the judge 2 weeks after the motion was made. He ordered the DEA to restore the pharmacies’ registrations immediately. Moreover, the period of the TRO was extended for 7 weeks until the date of the hearing on the preliminary injunction.
The Court's Reasoning
Four requirements exist for the court to grant the expedited equitable remedy of a TRO: (1) the plaintiff has a likelihood of prevailing on the merits of the case once it is heard in full; (2) there is no adequate legal remedy available to address the situation, making an equitable remedy appropriate; (3) the harm that is likely to occur is irreparable; and (4) the public interest must be weighed.
First, the court concluded that the pharmacies had demonstrated a likelihood of success on the merits once the matter was subject to a full court hearing and review. The agency had alleged an imminent danger to the public derived from the pharmacies’ activities, something the court found lacking in the information compiled by DEA in its administrative record related to the case. Indeed, the court found that there was no undergirding administrative record. The conclusion was that the agency’s suspension order was arbitrary, capricious, or inconsistent with the law.
Second, the court found no adequate legal remedy was available.
Third, irreparable harm was found to exist in lost business revenue and profits, something that could not be recovered from the government agency were the pharmacies to eventually prevail in their court actions.
Fourth, focusing on the public interest, the court observed that the pharmacies were “acting in the public interest to provide medical support for their patients. The alleged violations, though serious, are nevertheless correctable and have not harmed any customer, patient, or member of the public.” The court also noted that “the health and livelihood of countless individuals—both employees and patients—depend on the pharmacies. Continuation of the Suspension Order would have an irreparable effect on these people, and, thus, a temporary restraining order is in the public interest.”
Finding all necessary elements existing in favor of the pharmacies, the TRO was entered.
Dr. Fink is professor of pharmacy law and policy and Kentucky Pharmacists Association Endowed Professor of Leadership at the University of Kentucky College of Pharmacy, Lexington.