Same Playbook, Two More Pharmacies: DEA's Red Flag Doctrine Keeps Surviving by Default
By Hunter DeKoninck
Published: October 7, 2026
Last week's post flagged something easy to miss in the St. Michael's Pharmacy decision: for the first time since the Fifth Circuit's ruling came out in Neumann's Pharmacy v. DEA, DEA quietly reasserted the very same negligence-based "red flag" standard that Neumann's rejected, which went unchecked because the St. Michael's Pharmacy had defaulted and failed to request a hearing in the matter. This morning (just five days later), DEA published two more decisions revoking registrations for two Texas pharmacies, and both do precisely the same thing. Three cases in a week is no longer a coincidence worth a footnote — it's a pattern worth naming.
This post is for general informational purposes and does not constitute legal advice. Consult counsel regarding your specific compliance obligations.
1. The Two New Cases at a Glance
Arenbii Pharmacy LLC — Missouri City, Texas. DEA alleged that from January 2024 through May 2025 the pharmacy filled prescriptions despite glaring red flags: over 90% of its Schedule II opioid prescriptions came from a single physician, at least 67 oxycodone and 30 promethazine-with-codeine prescriptions were filled at maximum strength or excessive quantity, and 16 hydrocodone/acetaminophen prescriptions went to patients at the same Houston address, several filled within 25 minutes of each other. An independent expert found the dispensing fell outside Texas's binding minimum pharmacy practice standards. The pharmacy never requested a hearing. DEA revoked the registration effective November 6, 2026.
Wellwise Pharmacy Inc. — Houston and Conroe, Texas. DEA alleged that from January 2023 through March 2025 the pharmacy filled roughly 1,360 controlled substance prescriptions in violation of Texas's red-flag standards: three doctors accounted for 91% of its oxycodone 30mg prescriptions and two of those same doctors accounted for 97% of its hydrocodone prescriptions, patients traveled as far as 303 miles to fill prescriptions, and many paid cash at inflated prices of $290 to $1,180 per prescription. The pharmacy never requested a hearing. DEA revoked the registration effective November 6, 2026.
2. The Pattern Confirmed
Put all three recent decisions side by side — St. Michael's, Arenbii, and Wellwise — and the overlap isn't just in the underlying facts (pattern prescribing, cash payments, shared addresses, patients traveling long distances). It's in the legal reasoning itself. Each decision cites Neumann's Pharmacy for the identical sentence: "DEA unquestionably has broad authority to deregister pharmacies and substantial discretion to shape policy within statutory bounds." Wellwise even cites it with a full reporter citation — 167 F.4th 320, 323 (5th Cir. 2026) — confirming the opinion is now published and controlling law in the circuit. And each decision then reasserts, without engaging's actual holding, that DEA "need not prove intentional diversion" because "careless or negligent handling of controlled substances creates the opportunity for diversion" and can justify revocation on its own.
Every one of these cases is an uncontested default. Arenbii and Wellwise, like St. Michael's before them, never requested a hearing and never filed an answer, so the factual allegations were deemed admitted and the legal theory went entirely unchallenged. All three pharmacies are in the greater Houston area, squarely inside the Fifth Circuit where Neumann's is binding precedent.
3. Why This Keeps Working
Whether or not it's a deliberate strategy, the effect is the same: DEA's negligence-based red flag theory has now gone unexamined three times in two weeks, in exactly the circuit where a reviewing court already found that theory inconsistent with the regulation's text. None of these pharmacies put the agency to the test, so none of them challenged whether DEA could actually show what Neumann's now requires — that the pharmacy knew, not merely should have suspected, that a prescription was invalid. A pattern of unopposed defaults is a low-risk way for an agency to keep relying on a standard that has already lost once, for the simple reason that an uncontested order can't be appealed.
My Read
Three Texas pharmacy revocations in two weeks, three identical citations to Neumann's Pharmacy for authority while ignoring its knowledge requirement holding, and three defaults that left DEA's legal theory untested. There appears to be a pattern of DEA leaning on a rejected legal standard specifically where no one will test it. For any client facing an Order to Show Cause built primarily on red flags and "careless or negligent" dispensing rather than concrete evidence of actual knowledge, defaulting isn't just giving up the facts — in the Fifth Circuit, it's giving up what may be the strongest legal argument available. That doesn't mean every case should be litigated; contesting an OTSC carries its own costs and risks, and the facts in all three of these cases were genuinely bad. But the calculus on whether to answer and request a hearing, rather than let the clock run, has shifted meaningfully since February, at least for registrants located in Texas, Louisiana, and Mississippi.
