DEA Pharmacy Decision Highlights Agency’s Thinking on Expert Credibility and Testimony, as well as Red Flag Resolution

A recent DEA decision revoking the registration of a Louisiana pharmacy sheds light on the Agency’s approach to crediting one expert’s testimony over that of another expert during an administrative hearing.  The discussion of the Agency’s expectations of the form and substance of expert witness testimony is a must-read for entities or individuals facing a DEA order to show cause hearing.  Finally, the decision explores DEA’s current thinking on a pharmacist’s corresponding responsibility when resolving red flags.

In Neumann’s Pharmacy, LLC, 90 Fed. Reg. 8039 (Jan. 23, 2025), DEA reviewed evidence from an administrative hearing and upheld the Administrative Law Judge’s (“ALJ’s”) recommended decision to revoke the registration of a pharmacy that DEA alleged dispensed controlled substances to patients without resolving numerous red flags of diversion.

The hearing involved dueling expert testimony on the pharmacy standard of care in Louisiana from both DEA and the respondent.  While on paper the respective credentials of each of the experts would indicate a balance of authority, or maybe even weigh in favor of the pharmacy’s expert (DEA’s expert had prior disciplinary history), the ALJ and DEA Administrator each found the testimony of the government’s expert more credible.  Without the benefit of the hearing transcript, it appears from the Administrator’s decision that the testimony of the pharmacy’s expert was “unclear and contradictory” because that expert offered “contradictory testimony about whether the standard of care requires pharmacists to document the resolution of red flags.” 90 Fed. Reg. at 8039.

In a footnote explaining why the Agency credited the DEA expert over the pharmacy’s expert where they disagreed, the Administrator explained that, unlike the DEA expert, the pharmacy expert “did not actually articulate many portions of the standard of care until she was testifying about a specific patient.”  Id. at 8039 n.8.  While the pharmacy took exception to this criticism and argued that an expert should testify as to specific circumstances, DEA rejected this argument, stating that “it is also important for an expert witness to summarize certain fundamental principles of the standard of care to help the Agency assess whether the expert’s opinions are consistent with State and Federal law and to help the Agency adjudicate any disagreements among experts regarding the standard of care.”  Id.  According to the Agency, the pharmacy’s expert testimony was “often vague and amorphous,” allowing for “opportunistic conclusions” about specific patients.  Id.  Notably, this discussion does not cite any prior Agency precedent governing expert testimony standards.

What’s the take away?  Well, for respondents putting on standard-of-care expert testimony at a DEA hearing, this decision offers some insight as to the Agency’s expectations.  Expert testimony should start with a clear and robust articulation of state and federal law pertaining to the proper standards of care.  Only then should an expert delve into the application of those “fundamental principles” to the specifics of a patient’s medical file or dispensing history.  And if that is the standard, respondents facing a show cause hearing should hold the DEA to the same measure.

It’s worth taking note of the Agency’s position on two other points involving the pharmacist’s “corresponding responsibility” and duty to resolve red flags of diversion (a reminder from prior decisions).  First, DEA does not need to prove that the prescriptions in question were not issued for a legitimate medical purpose under the standard set forth in 21 C.F.R. § 1306.04(a), but only that the pharmacy failed to exercise its corresponding responsibility to ensure that the prescriptions were legitimate.  Id. At 8047.  Second, DEA does not credit “undocumented, post hoc justifications” of why the pharmacy dispensed a particular prescription.  Id.  The pharmacy is expected to document that the diligence took place prior to dispensing.  Failure to do so will be held against the pharmacy in a show cause hearing.

In sum, DEA administrative hearings are nuanced, and the procedures—including for the admission of expert testimony—require specialized knowledge of the process to avoid unnecessary pitfalls.  This is especially the case when dealing with federal and state standards of care for prescribing and dispensing.