Tap Pharmac. Prod. v. State Bd. of Pharmacy, No. SC 88318.

• Court: United States State Supreme Court of Missouri
• Writing for the Court: William Ray Price, Jr.
• Citation: 238 S.W.3d 140
• Parties: TAP PHARMACEUTICAL PRODUCTS INC., d/b/a Pharmacy Solutions, Respondent, v. STATE BOARD OF PHARMACY, Appellant.
• Decision Date: 20 November 2007
• Docket Number: No. SC 88318.

238 S.W.3d 140 TAP PHARMACEUTICAL PRODUCTS INC., d/b/a Pharmacy Solutions, Respondent,
v.
STATE BOARD OF PHARMACY, Appellant. No. SC 88318. Supreme Court of Missouri, En Banc. November 20, 2007.

[238 S.W.3d 141]

Jeremiah W. (Jay) Nixon, Atty. Gen., James R. Layton, State Solicitor, Stacy E. Yeung, Asst. Atty. Gen., William Vanderpool, Asst. Atty. Gen., Jefferson City, MO, for Appellant.

Morgan R. Hirst, Jones Day, Chicago, Ill., Duane E. Schreimann, Michael J. Schmid, Jefferson City, MO, for Respondent.

WILLIAM RAY PRICE, JR., Judge.

I. Introduction

TAP Pharmaceutical Products Inc., d/b/a Pharmacy Solutions, seeks review of a Board of Pharmacy decision placing TAP's pharmacy permit on probation for three years. The Board's action, however, is barred by a settlement agreement that TAP entered into with the State of Missouri. Pursuant to Rule 84.14, the trial court judgment is vacated and the Board's order is reversed.

II. Facts

In September 2001, TAP agreed to plead guilty to the offense of conspiracy to violate the Prescription Drug Marketing Act, 21 U.S.C. sections 331(t) and 333(b). Specifically, TAP provided free samples of the drug Lupron to physicians with the expectation that those samples would be prescribed to patients and then illegally billed to the Medicaid program. The United States District Court for the District of Massachusetts accepted TAP's guilty plea on December 6, 2001.

TAP and the State of Missouri entered into a Settlement Agreement and Release ("Agreement") on December 3, 2001. Under the terms of the Agreement, TAP paid the state $1,827,331.90. In exchange, the state agreed to release TAP from specified claims arising from the conduct underlying the guilty plea. TAP executed a similar agreement with all other states and the federal government.

Thereafter, the attorney for the Missouri Board of Pharmacy ("Board") filed a felony conviction complaint with the Board pursuant to section 338.065,¹ which allows for discipline of a pharmacy permit if:

[A] licensee . . . has entered a plea of guilty . . . in a felony prosecution pursuant to . . . the laws of the United States of America for any offense reasonably related to the qualifications, functions or duties of a licensee . . . or any felony offense, an essential element of which is fraud, dishonesty or an act of violence, or for any offense involving moral turpitude. . . .

The Board sought to impose discipline against TAP's pharmacy permit based on the 2001 guilty plea.² The Board held a disciplinary hearing, issued its findings, and ordered TAP's pharmacy permit placed on probation for three years. TAP filed a petition for review in the circuit court, which reversed the Board's decision and remanded the case to the Board.

III. Standard of Review

In an appeal following judicial review of an agency's administrative action, this Court reviews the decision of the agency, not the circuit court. Mo. Coalition for the Environment v. Herrmann.,

238 S.W.3d 142

142 S.W.3d 700, 701 (Mo. banc 2004). Pursuant to section 536.140.2, this Court reviews to determine "whether the agency's findings are supported by competent and substantial evidence on the record as a whole; whether the decision is arbitrary, capricious, unreasonable or involves an abuse of discretion; or whether the decision is unauthorized by law." Community Bancshares, Inc. v. Secretary of State, 43 S.W.3d 821, 823 (Mo. banc 2001).

IV. Arguments

TAP challenges the Board's determination on two fronts. First, it argues that the Board's actions did not comport with due process because TAP received an insufficient hearing and the Board was not a fair and impartial tribunal. Second, TAP points to three provisions in the Agreement that it argues bar the Board from instituting the action in question. Those provisions provide:

TERMS AND CONDITIONS

• Paragraph 2: "In consideration of this Agreement and payment set forth herein and subject to the exceptions from release set forth in Paragraph 3 below, the state of Missouri on behalf of itself, its officers, agents, agencies and departments shall release and forever discharge TAP, its predecessors, subsidiaries, joint venture owners, and their corporate parents and affiliates, successors and assigns, and their current and former directors, officers, and employees from any civil or administrative claims for damages or penalties that the state of Missouri has or may have relating to the Covered Conduct as defined in Preamble Paragraph F. The payment of the Settlement Amount fully discharges TAP from any obligation to pay Medicaid-related restitution, damages, and/or any fine or penalty to the State for the Covered Conduct." (emphasis added)

• Paragraph 4: "In consideration of the obligations of TAP set forth in this Agreement, conditioned upon TAP's payment in full of the Settlement Amount and except as reserved in paragraph 3 above, the state of Missouri agrees to release and refrain from instituting, directing or maintaining any administrative claim or any action seeking exclusions from the state of Missouri's Medicaid program against TAP, its predecessors, subsidiaries, joint venture owners, their corporate parents and affiliates, successors and assigns, for the Covered Conduct or for TAP's conviction in the Criminal Action. Nothing in this Agreement precludes the state of Missouri from taking...