ML20023C792
| ML20023C792 | |
| Person / Time | |
|---|---|
| Issue date: | 02/01/1980 |
| From: | Gamble D NRC OFFICE OF INSPECTOR & AUDITOR (OIA) |
| To: | Strickler L NRC OFFICE OF INSPECTOR & AUDITOR (OIA) |
| Shared Package | |
| ML20023A415 | List:
|
| References | |
| FOIA-82-515 NUDOCS 8305180016 | |
| Download: ML20023C792 (8) | |
Text
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february 1, I9SC
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Lawrence J. Strickler, Investigative fianaaer Y.
MEMORANDUM FOR:
Office of-Inspector and Auditor F'
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David H. Gamble, Investigator
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.L-FROM:
Office of Inspector and Auditor
,j, MEETING BETWEEN NUCLEAR.PHARiiACY, INC., AND NR
SUBJECT:
JANUARY 21, 1980.
As requested by a representative of the U. S.
29, 1980, Support, Office of Inspection and Enforcement (IE) tives of Nuclear Pharmacy, Inc. (NPI) and NRC.
21, 1980, although it had Baci said the meeting war held on January The ilRC attendees were Baci, originally been called 1a the week before.
Victor Stello (Director, IE), James Sniezek (D d Chief and James Murray (Rulemaking and Enforcement Division Director an Counsel, Office of, the Executive Legal Director); the NPI attendees Attorney Vakerics, President Sanchez, and Art Solomon (wh to be HPI's Atlanta facilit'y manager).
Baci recalled NPI's reason fc. calling the meeting was he feels NPI really wanted to see what information NRC had about t new information.
d said that just before the meeting Stello had commented to the NRC had that he (Stello) did not know why they were having the meeting si been no change in IE's position and there was nothing NPI could te j
~
Baci recalled one of NPI's basic assertions to lj-3 for human use from suppliers that do not have specific FDA app Baci said NPI argued that this was proper because everyone even General Electric (GE),
Union Carbide).
ultimately got their Xenon from Union Carbide:an appro do i
anything to it before distributing it further.to HPI's claim by s I
Union Carbide does not do) to assure its purity.
l Baci said HPI mentioned that, during an August 1978 inspect' ion at th
[
iilwaukee facility, an unidentified NRC inspector indicated to NPI that l
l N.
8305180016 830412 ENCLOSURE 3 i
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, Lawrence J.:Str' aler
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4 Carbide.
there was no problem with NPI's obtaining lenon f rom Union is approved
'He recalled another of NPI's contentions to be thatle He said 1
'by FDA by virtue of its being listed on FDA's D
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not constitute FDA approval.
from license i
Baci said ~NPI brought up NRC's grant of an exempt onh FDA regulations) condition 15 (the. condition which mandates compliance wit f NRC.
He to letterman Army Hospital as an inconsistency on the part o thus not said Sniezek replied that Letterman had a broad license and was analogous to NPI.
from Baci recalled that Sniezek asked NPI if they recalled a 1975 -lett FDA to NPI which spelled out the FDA requirements.
i k then gave the l e t te r.to N,P, I. _,,,
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d d to Baci_ said the proposed fine was originally $24,000 but =it wa
,t
$16,000 after a couple items were deleted,
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idered a heavy fine - to which someone from NRC replied that the NRC c
("'the violation to be serious. Tc"iTcill'e specifically tfit'Ifcii6si7eEd'th'em to be in violation of their license:
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license condition 15.
Baci said NPI then contended that the license.
id Yakerics.,
i condition was unclear"and 'they had attempted to comply._ He sa claimed the language of the notice of violstion went b h
cific violation of the license and bordered on being11ibelous - byBaci reca l
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~
be intentional,.he:
NPI intentionally violated their license.
l replied that, if IE had considered NPI's violation tojust imposing a would have considered -revoking their license, instead of civil penalty.
i il penalty Baci ssid NPI asked what was holddp the process of imposing the idered by and specifically asked if it had Io do with the_ matte
~
NPI l
the Department of Justice.
then asked how much longer it would be delayed.
ther agency's i.
replied that he would not make a prediction regarding ano h
nths, he activities; however, if it looks like it will take two or t ree mo i
lf, Baci said no firm commitments were made o that the matter would be addressed one step at a time.
it Baci said Vakerics requested to see the final letter and order be k"
Baci said Murray went out to make sure the language was not "off the mar.d have some agreed to this and the implication clearly was that NPI coul input into the final product.
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B B B E M,B E October 5, 1979 NUCLEAR PHARMACY, INC. (OTC-NURX)
(2.4 million common shares outstanding Current Price 1978-1979 Earnings Per Share Price / Earnings Bid Asked Range 1978 1979 1980E 1979 1980E 7
7 3/4 11 1/4-5 1/2 S0.08 NM
$.13-S.18 NM 50X Summary and Recommendation Nuclear Pharmacy, Inc. (NPI) is engaged in establishing central-ized nuclear pharmacies which prepare and distribute unit doses of radiopharmaceuticals.
Radiopharmaceuticals, radioactive tracers, are drugs administered by physicians for diagnostic purposes.
NPI has established 18 of these pharmacies and intends to expand its opera-tions to most metropolitan centers in the U.S.
Investment in NPI is recommended only as a speculative holding for accounts willing to maintain a position for several years.
The Company is in the latter phases of the venture capital stage, and is growing rapidly.
Earnings do not necessarily reflect this growth as of yet because the Company's expansion is being financed, to a great j
extent, internally.
Business Description Nuclear Pharmacy, Inc., headquartered in Albuquerque, New Mexico, l
is engaged in the preparation and distribution of radiopharmaceuticals.
Radiopharmaceuticals or radioactive tracers are drugs administered by j
physicians for diagnostic purposes.
These drugs enable diagnosticians to observe and to monitor either static or dynamic bodily functions without the need for surgery.
The use of radiopharmaceuticals for this l
purpose, due to their short half-lives, relatively non-allergic proper-ties and rapid excretion from the body results in significiant reduc-tions in radiation exposure, as compared to currently used radiology procedures such as X-rays.
l NPI's unique standing in the field of radiopharmacology results 1
f rom the fact that the Company is involved in establi:;hing centralized prepare and distribute unit doses of radiopharmaceu- [
l nuclear pharmacies.
These nuclear pharmacies, more like labs than re-s
(
\\ tail drug stores, ticals to major hospitals in the metropolitan areas they serve.
NPI's system centralizes the preparation and handling of these radioactive s
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' substances, functions which until now have been performed)by each hospital.
Nuclear Pharmacy was incorporated in the State of New Mexico on January 8, 1974.
The original capitalization of $250,000 was obtained through the Small Business Administration and from private investors.
It was applied to the development of the first location in Houston, Texas.
This geographic location permitted serving the major medical capital of southwestern United States.
Two medical schools, six re-search hospitals, leadership in cancer research, basic' medical re-search facilities for NASA, and the research practices of America's leading heart and vascular surgeons Drs. Debakey and Cooley, are lo-cated in Houston.
Within 18 months the Houston operation became profitable for Nucl ear. Pharmacy, Inc.
In only four years the operation now dominates the market with a 90 percent share of the entire Houston market.
The second Nuclear Pharmacy location selected was Phoenix, Arizona, with a market consisting of 30 hospitals.
The opening of the pharmacy was in Novenber, 1974.
This pharmacy hit the break-even point in 18 months and today' commands 85 percent of the market for diagnostic radioiso-topes in the greater Phoenix market.
Presently NPI has 18 nuclear pharmacies and management plans-to have 25 operational by the end of 1979.
Pharmacies currently in opera-tion are:
Birmingham Nashville Denver Phoenix Houston Philadelphia Atlanta El Paso Miami Chicago-Elmhurst Dallas San Diego Louisville Milwaukee Anaheim Memphis Austin Van Nuys (Distributor)
Advantages of Centralized Nuclear Pharmacies 1.
Economics of scale.
NPI is able to achieve significant econ-omies of scale in the purchase of radioactive materials and supplies.
All purchase orders are consolidated at the Company's headquarters in Albuquerque, N.M. and then sent to suppliers.
This centralized pro-cedure has reduced NPI's costs by 15% over de-centralized purchasing, representing only a fraction of the savings achieved by hospitals.
2.
Quality control.
All doses are individually prepared under the supervision of a registered pharmacist.
They are checked for their clinical effectiveness through a number of inspection procedures.
Records are maintained for all preparations, inspections, and hospital destinations of specific batches of the drug.
If ever a product recall were necessary, this system would be the cornerstone to a speedy recov-ery of all materials.
3.
Safety.
NPI's system, which eliminates the need for individual hospitals to prepare their own radiopharmaceutical compounds, central-izes the handling of these potentially dangerous substances.
The Com-
.pany's safety procedures encompass all phases of preparation, from the receipt of supplies to the eventual delivery of prescriptions to the hospital.
This minimization of the number of locations producing radio-
act'ivo materials. allows increased regulatory control and public
' safety.
4.
Hospital benefits.
Hospital. technicians no longer need to spend. time formulating radioactive compounds.
Their time is freed for more attention to administering and interpreting diagnostic tests.
In addition, hospitals do not have to store radioactive supplies since NPI delivers and picks up daily.
The TC-MEG. System Presently Nuclear Pharinacies are purchasing the radioactive sub-stance used in their drug preparations in the form of technetium-99..
Technetium-99 is the daughter element of molybdenum-99 and is produced through the decay of the parent element.
Weekly purchases of technetium-99 average about $1500 for each pharmacy and are supplied by several of the large pharmaceutical houses (Squibb, Mallinckrodt).
The expenses involved relate to the fact that the radioactive element
'is distributed in generators which cost in excess of S300 per unit.
A pharmacy producing 300 prescriptions daily may require as many as five of these generators.
Generators are disposed of at the end of the week.
FDA approval of the TC-MEG system utilizing a permanent generator will enable nuclear pharmacies to purchase raw molybdenum at a cost of $600 versus S1800 for the generators.
The TC-MEG System utilizes the technetium-99m maximum efficiency generator, a device developed by NPI associates.
The problems of avail-able technetium-99m supply, minimizing radioactive exposure, waste of materials and transportation are addressed by this patented device.
The.
technetium-99m maximum efficiency generator (TC-MEG) provides a solution to these problems.
It is a rechargable generator system capable-of being loaded with up to 20CI of Mo-99 and producing sterile, pyrogen-free sodium pertechnetate solution which meet or_ exceeds U.S. Pharma-copeia specifications.
It can be loaded with variable quantities of Mo-99 in order.that the individual needs of a central nuclear pharmacy can be adequately met.
Since the system is rechargable, radioactive wastes are minimized.
The TC-MEG rechargable generator accomplishes both of these aims.
In addition, it has a third advantage:
its use decreases the radiation exposure to nuclear Pharmacists, the primary handlers of the radioactive material.
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Competition f hA n m s p fr i
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Three other companies are presently engaged in establishing central-ized nuclear pharmacies.
Management believes that none of these compan-ies poses a threat to NPI.
Not only was NPI organized and functioning prior to any of these companies, but, in addition, NPI is unique in that it is' involved in the field on a nation-wide basis.
Because NPI's com-Petitors are localized, they do not approach the scale of operations and consequent economic efficiencies which distinguish NPI.
Furthermore, the operating margin di f ferentials between NPI and its competitors will likely be widened with the introduction of NPI's own T,C-MEG System.
'It$'Nro../kw
The likelihood of the large pharmaceutical houses becoming in-volved in centralized nuclear pharmacies is remote for several rea-sons.. Firstly, NPI's business is more akin to a retail operation than to a wholesale operation with which drug companies are familiar.
Sec-ondly, drug company involvement could entail possible anti-trust im-plications.
Lastly, the essential ingredient to NPI's success is the service aspect of its business, a factor which would be difficult to duplicate regardless of a company's financial backing.
Capitalization May 31, 1979 1978 Long-term debt S
18,l'31 25,270 Convertible subordinated debt (1).
1,000,000 Shareholder's Equity Common Stock, $0.05 par value; authorized 5,000,000 shares; issued and outstanding 2,169,065 shares in 1979.and 1,991,356 shares in 1978 (2) 108,453 99,568 Paid-in-Capital in excess of par 1,013,478 674,240 Retained Earnings (deficit)
(691,976)
(22,156)
Total Shareholder's Equity 429,95_5 S
751,652 Total-Capitalization
$1,448,086 776,922 (1)
Nuclear Pharmacy, Inc. issued a $1,000,000 convertible subordinated note to EMW Assoc., Inc., an affiliate of E.M. Warburg Pincus & Co.,
Inc.
Pending shareholder approval, this note will be converted into 333,333 shares of 5% convertible preferred stock or approxi-mately 13% of Nuclear Pharmacy's outstanding shares, p1(2)
Officers and managers of the Company control approximately 40% of the oustanding stock.
Operating Summary 1979 1978 1977 Revenues (S000)
S 5,278
$ 2,909 S 1,745
% Increase in Sales 81%
75%
76%
Gross Profit ($000)
$ 2,617
$ 1,749
$ 1,138 Operating Income ($000)
(585) 128 201 Income from~ Continuing Operations ($000)
(670) 113 145 Net Income ($000)
(670) 177 S
209 Earnings Per Share
($0.32)
$0.08 S0.14 Since its inception in 1974, Nuclear Pharmacy has grown from a single pharmacy to 18 pharmacies as of July, 1979.
At this point, the Company's financial statements still reflect start-up costs for new units, all of which are financed internally.
With the addition of new pharnacies not only will sales volume increase but margins should widen
t I
op wall.
The latter.ill result from lower per unit purchase costs
. and' increased utilization of centralized procedures for licensing, billing,'and planning which are already in place.
1979'Results Revenues in fiscal 1979 increased 81% over fiscal 1978 reflecting
.the addition of new pharmacies and the acquisition of NPM of California, Inc. (accounted for by the purchase method).
The dip in 1979 earnings resulted from expansion costs.
The aver-age cost for starting a new pharmacy is $150,000, all of which flows through NPI's corporate income statement.
It generally takes from 18 months to two years for a pharmacy to reach its optimal operating con-
-ditions.
Fiscal 1980 should be a profitable year for Nuclear Pharmacy as pharmacies which were recently established turn the corner.
Even with-out the benefit of any acquisitions, sales are likely to double over their 1979 level, and possibly triple.
We are forecasting fully-diluted earnings per share of $0.13-$0.18 for fiscal 1980.
New Developments Nuclear Pharmacy, Inc., in conjunction with Nuc-Med, Inc. (a com-pany managed by persons who are also major stockholders and officers of NPI), the University of New Mexico College of Pharmacy, and Sereno Lab-oratories, Inc., an international firm headquartered in Geneva, Switzerland, has begun research on a new radioactive tracer for the early detection of cancer.
Preliminary studies indicate that the drug could detect up to 90% of all known types of cancer.
The drug's most unique feature is the fact that it enables cancer to be detected at the cellular level, before a tumor has been formed.
Anti-human chorionic gonadotropin (anti-HCG) can be labeled with technetium-99m and then~ administered to the patient.
Because of its chemical properties, anti-HCG is cancer specific and accumulates in cells producing HCG, that is, in malignant cells.
The HCG produced by cancerous cells, commonly referred to as antigen, is a shield which surrounds these abnormal cells.
Since the anti-HCG drug is absorbed more readily by cancerous cells than by normal cells, the former may be detected by a gamma camera scan through which they would show up as a concentration of radioactivity.
The 50 to 200 micrograms of the drug that would be injected into the body would dissipate within two days, and would pose no danger to the patient.
The new drug involves less radiation exposure to the patient than do conventional x-ray pro-cedures.
Nuclear Pharmacy, Inc. holds exclusive licensing and marketing rights for the drug in the U.S.
For this right, NPI shall pay a royalty to Nuc-Med, Inc.
Potentially, the drug could be used as a routine part of all physicial examinations.
Research and eventual FDA approval are expected to take from one to three years.
.[
]
' Growth Potential Management expects'the Northeast to be NPI's principal area for expansion.
The demand for NPI's services should be strong'in this area since over-fifty percent of the hospitals in the U.S. are located here.
Presently, Philadelphia is the only Northeastern city where NPI has established a pharmacy..
This pharmacy has exceeded expectations in terms of reaching the break-even point and becoming profitable.
Growth for Nuclear Pharmacy, Inc. relates not only to geographic expansion but to new developments in medicine and radiopharmacology as well. 'Some analysts have projected the market.for pharmaceuticals to expand at a 25% per annum rate through 1981.
Cardiac imaging, due to its noninvasive nature, and the information it provides, is ex-pected.to sustain the fastest growth in nuclear imaging over the next several years.
NPI's TC-MEG System and cancer detection drug develop-ments are evidence of the Company's innovative role in-the field of nuclear medicine.
Accordingly, we believe that NPI is well-positioned in this growing industry.
We recommend Nuclear Pharmacy, Inc. fcr businessmen's risk ac-counts seeking potential for long-term growth. <NPI common stock is marginable.
Malinda P. Berardino Research. Department Elkins, Stroud, Suplee & Co. is a market-maker in the common stock of Nuclear Fharmacy, Inc.
Certain Partners and employees of Elkins, Stroud, Suplee & Co.
hold stock in Nuclear Pharmacy, Inc.
Th.s letter is neither a s.ri.npectus rent a schce?ation of orders The enfoernation risen has twen cc no. ed tre m scueces =thth we t*Is.ve se batte; us.t et is not
- ntended los, at d Sheusc not t,e rehed upon as, a complete ecs, art ce a9.lybes J.temacy ar.J tt n raateness are not f.9tanteed. Forecasts, esteenates, corn.
p4'IshnS and *PLOr"fut se.f a* On$ are tam * *8' e n l'he d Af a t uttently at fierad af d oo.-p.ta ent e naf y c r eneOn Vee c a6h*t a%surne icip0MOInhty IDF ConClu5 sons m
l 81f am n the te ls&M The ma?ef eat a;eten s 6* CL,n%ed*r ed Cn rf f Pt'on t o the-and&dsal ne e db A90 ct,Misten E l the s9ve5hst. In tf e noernal cousse of huss.
. ht1% wP may can One or anote of the *
- entione d, ces our assocestes, emph pees, and nw ar + ets cf three fr'mi.eb niay have a t't nef. Leal int
- felt thereen.
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UNITED STATES 8
NUCLEAR REGULATORY COMMISSION W ASHING? ON, D. C. 20555 G'
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OCT 121979 Mr. Lawrence Lippe, Chief General Litigation and Legal Advice Section Criminal Division U. S. Department of Justice Washington, D. C.
20530
Dear Mr. Lippe:
Submitted for your consideration and appropriate action is an inspection report, Report t! umber 79-1 ( Attachment A), prepared by a member of the Region III (Glen Ellyn, Illinois) staff of the t!uclear Regulatory Commission (tiRC), Office of Inspection and Enforcement.
The report identifies possible violations by fluclear Pharmacy, Incorporated, Milwaukee, Wisconsin, and its management, of Section 223 of the Atomic Energy Act, 42 USC s2273, and 10 CFR 530.34(c), 530.41(b)(5), and E30.41(c).
These possible viola tions arise from the sale of chemical grade Xenon-133 (Xe-133) which had been misrepresented and sold for use as a radiopharmaceutical for human use.
The same acts which led to violations of Section 223 also appear to have resulted in violations of 18 USC 51001 and 18 USC 371.
Rationale for our opinion is as follows:
tiuclear Pharmacy, Incorporated, is a tiew tiexico based corporation with approximately 15 branch pharmacies located throughout the United States.
Each branch is individually licensed by the tiRC or by an Agreement State.
On ?!ovember 30- 1978, the State of Texas determined that a ?!uclear..
Pharmacy branch located in the State had been distributing Xe-133 obtained in bulk quantities from the Union Carbide Corporation.
Union Carbide is not approved by the Food and Drug Administration (FDA) as a manufacturer As a result of Xe-133 for human use (see Attachment 4 of Attachment A).
of that inspection, the State of Texas issued a Cease an'd Desist Order to all fluclear Pharmacy branches in Texas and advised tiRC of their findings and enforcement action. The tiRC Office of State Programs requested that the Office of Inspection and Enforcement conduct special inspections of each t1RC licensed !!uclear Pharmacy branch to ascertain the existence of similar practices by tiRC licensed branches of the lluclear Pharmacy Corporation.
This document is furnished for official no m eer and is part of a current investigativ Information contained herein should be discl -
only to NRC personnel whose duties require acces.
should not. be further disseeinate.d unless othe rai c 2ndicated.
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- Mr. L'awrence Lippe -
2 OCT.121979 As a result of this special inspection, it'was detemined, as shown in'.
Attachment-A, that the Milwaukee Nuclear Pharmacy had, from its establishment-
~in 1977 ~and continuing through slar.uary 16,.1979,'the date of the inspection, procured Xe-133 from Union Carbide on a' routine basis and had distributed the Union Carbide product both in bulk and in ' unit dose containers to medical' institutions for human use.
The' Milwaukee Nuclear Phamacy currently holds License Number d8-17466-l OIMD (Attachment B), which was issued, in part, pursuant to the Atomic Energy Act of 1954, as amended; the Encrgy Reorganization ~ Act of 1974 (Public Law 93-438); and 10 CFR, Part '30.
Its most recent. amendment is dated April 27, 1978.
Anong other. things it allows Milwaukee Nuclear 1
- Pharmacy to receive, acquire, possess and transfer the by-product Xe-133 in either a gas and/or saline fom.
4 Ten CFR 530.34(c) advises that, "Except as otherwise provided in the i
license," licenses issued pursuant to the regulations in Parts 30-35 "shall carry with it the right to receive, acquire, own, and possess by-product material."
License Condition Number 15 of Milwaukee Nuclear Pharmacy's license states, " Radioactive gases as free. gas or in solution,;
to be administered to humans, shall be procured from a supplier who distributes the product indicated for human use in' accordance-with the-Federal Food, Drug, and Cosmetic Act."
By acquiring Xe-133 from Union ' Carbide. Corporation, a firm which only produces a chemical grade product and which Union Carbide states is' not L
for human use, Milwaukee Nuclear Pharmacy, Incorporated, is in violation
+
of. License Condition Number 15, and with 10 CFR 530.34(c).
l A violation of,10.CFR 530.34(c), which was issued under the' authority of Sectio'n 161 of the Act, 42 USC 52201, is-a crime under Section' 223, 42 n
USC 62273, if committed willfully.
i Ten CFR 530.41(b)(5) restricts the transfer of by-product material to-persons authorized to receive such material under terms of a license issued by the Commission.
Ten CFR 530.41(c) requires that the transferee's l
. license must authorize receipt of the type, fom, and quantity of by-product material to be transferred.
License Co'ndition Number 9D of the Milwaukee Nuclear Phannacy, Incorporated, license limits the " distribution of prepared radiophamaceuticals to authorized recipients." Misrepresenting chemical grade Xc-133 as being a radiophamaceutical suitable for human use, and dispensing chemical grade Xe-133 to medical licensees authorized only human use of such material,is a violation of License Condition Number 9D, and with 10 CFR E30.41(b)(5) and 530.41(c).
Violations of 10 CFR 530.41(b)(5) and 30.41(c), which were issued under the authority of Section 161 of the Act, 42 USC s2201, are crimesunder Section 223, 42 USC 52273, if committed willfully.
is This document is furnished for 'of ficial purpos<"-
part of a current investigative fil ormation contained herein should be disclosed o NRC personnel whose duties iould not be further dissceinnted unless require access otherv*
Indicated.
~
OM 12 W9 Nr. Lawrence Lippe 3
According to the data in Attachment A, Milwaukee Nuclear Phannacy regularly sold and transferred chemical grade Xe-133 to medical licensees who wre only licensed by the NRC to receive radi6phannaceuticals for human use.
' All transfers of Xe-133 were accompanied by an invoice (Attachment 5 of Attachment-A), described as a " prescription blank," which contained the
.c following text, in part:
" CAUTION:
To be used under the direct supervision of a physician"-
and.
" Spec instructions:
Inhalation Administration only" "Wa rning:
This ~ radiophannaceutical is licensed by the U. S. Nuclear Regulatory Commission distribution to persons licensed pursuant to 34.14 and 35.100 Group I, Group II, Grcup IV or Group V of.10 CFR Part 35.
Syringe containing dnig should be kept in this container or within heavier shield."
By labeling chemical grade Xe-133 in a manner that clearly represented it to be a radiophannaceutical suitable for human use, Milwaukee Nuclear Pharmacy caused all of its medical licensee customers to be in violation of their NRC license conditions, thereby subverting an NRC regulatory program intended for 'the protection of public health.
It should also be noted that NRC licensees are subject to NRC inspection, To demonstrate to assure compliance with license conditions and regulations.
compliance with the condition that they only acquire.radiopharmaceuticals indicated for human use, customers of Milwaukee Nuclear Pha_rmacy would no doubt provide NRC inspectors with Milwaukee Nuclear's above quoted invoice " prescription blank."
Misrepresentingithe quality and suitability of a relevant product to both licensees of the NRC and to the NRC, would be a crime under.18 USC 1001, if conmitted knowingly and willfully.
As evidence of knowledge and willfullness regarding all of the violative acts previously cited, reference is made to Attachment A, page 6, These references paragraph 1; page 11, last paragraph; and to Attachment C.
refer to the acknowledgement by the licensee and corporate management that, due to a highly competitive industry and perceived contradictions between the regulations of various agencies, they knowingly engaged in a continuing practice which was in noncompliance with FDA requirements, NRC requirements, and the conditions of their license.
'In deternining what action to take on this referral, you may wish to consider that Xe-133 gas when used as a radiopharmaceutical (by-product) is administered to humans for various tests relating to heart and lung I
This document is furnished for officy purposes and is part of a current irvestigat'ive file.
In-i
~
formation contained here'n'should be disclosed only to NRC personnel th,ose duties require access and l
should not-be further disseminated unless otherwisf inft'ei5.
i 1
DCT 121979 Mr. Lawrence Lippe 4
disorders. The distribution of..this product not intended for human use, but misrepresented as such, indicates a. serious disregard for public health and safety.
- The NRC's Office.of Inspection and Enforcement, independent of any criminal action which might be undertaken by the Department of Justice, has proposed the imposition of civil' penalties against the firm, Milwaukee Nuclear Phannacy, pursuant to Section 234 of the Atomic Energy Act, as amended, 42 USC 2282 and 10 CFR.2.205...
Please advise what further assistance you may require in this matter.
Sincerely,
/WI ff?????f?'
, J mes -J. fum ings, Director fice of%spector and Auditor Attachments:
As stated b
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t I
f
" hic document is furnished for of fi 1 purposen and is part of a current inv-gative file.
In-
- formation contained 1 n should be disc 1bsed only to NRC personn iose duties require access and should n e further disseminated unless othen:Ise ind ted.
-