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Barbourville Pharmacy Set To Pay $215,000 To Resolve Allegations Of Violating Controlled Substances Act

From The US Department of Justice -

A Barbourville pharmacy, Smith Family Pharmacy, and its pharmacist-in-charge, Stephanie Smith, agreed to pay $215,000 in civil penalties, to resolve allegations that they violated the Controlled Substances Act (“CSA”) by filling prescriptions for controlled substances that had been issued without a legitimate medical purpose, in contravention of a pharmacy’s corresponding responsibility to ensure that only valid prescriptions are dispensed.

The CSA was passed to combat the illegal distribution and abuse of controlled substances, including prescription medications.  The CSA’s requirements, which apply to entities like pharmacies that purchase, dispense, and sell controlled substances, are designed to protect the public from the dangers posed by highly addictive or dangerous controlled substances that could be diverted into the illicit market.  Under the CSA, pharmacies have a legal responsibility to ensure that controlled substances are dispensed only pursuant to valid prescriptions.  Prescriptions are only valid if issued by a medical provider for a legitimate medical purpose, acting in the usual course of their professional practice.  The CSA requires pharmacists to investigate prescriptions that appear to be invalid, such as those that bear “red flags” for diversion or abuse, and to refuse to fill such prescriptions if the concerns cannot be resolved.

According to settlement documents, the Government alleged that, from April 2017 to December 2021, Smith Family Pharmacy, under Ms. Smith’s supervision, filled over 500 prescriptions for highly addictive drugs like oxycodone and oxymorphone, that showed “red flags” for diversion or abuse, but failed to resolve those concerns.  The prescriptions displayed several “red flags,” including combinations of commonly abused substances, high dosages of controlled substances, and patients traveling to out-of-state physicians to obtain prescriptions.  Some prescriptions with “red flags” that were filled by Smith Family Pharmacy were determined to have been written by out-of-state physicians that have since been convicted of illegally prescribing controlled substances (United States v. Herrell, et al., 6:21-cr-13).  

“Under the Controlled Substances Act, pharmacies and pharmacists play a critical gatekeeping function, helping to prevent diversion of controlled substances into the community,” said Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky.  “Prescription drug abuse continues to be an enormous challenge to our communities.  We simply must ensure that everyone is doing their part to combat this crisis – including pharmacies and pharmacists – and we will continue to enforce these critically important provisions of the CSA.”

“Retail pharmacies are the last line of defense against the diversion of controlled medications with a potential for abuse, and Smith Family Pharmacy fell short of their obligation to operate in accordance with the Controlled Substances Act,” said Erek Davodowich, Acting Special Agent in Charge of the Drug Enforcement Administration’s Louisville Division.  “I’m very proud of the hard work done by the men and women of the DEA in this investigation, which led to a substantial fine, as well as safeguards to oblige the pharmacy to compliance going forward.”

The DEA and Smith Family Pharmacy also entered into a four-year Memorandum of Agreement as part of the settlement.  Specifically, Smith Family Pharmacy agreed to hire a new pharmacist-in-charge, to replace Ms. Smith; agreed to submit quarterly compliance reports to DEA; and agreed to provide employee training, addressing the identification and resolution of “red flags.”  The agreement represents an opportunity for Smith Family Pharmacy to demonstrate compliance with its legal requirements under the CSA.

The settlement considered the penalties associated with the alleged violations, as well as Smith Family Pharmacy’s and Ms. Smith’s ability-to-pay. 

The Federal Government is committed to ensuring that all levels of the supply chain that manufacture, distribute, and dispense controlled substances will be held responsible for violations of the CSA.  Tips from all sources about possible violations of controlled substances laws can be reported to the DEA at

This case was investigated by the Drug Enforcement Administration, London Resident Office Tactical Diversion Squad.  Assistant United States Attorneys Meghan Stubblebine and Katie Sheridan represented the United States.  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

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