Practitioners Take Huge Risks Dealing With Rogue Drug Compounders

December 2017 | Volume 16 | Issue 12 | Editorials | 1308 | Copyright © December 2017

Sheldon Bradshaw JD

FDA and Life Sciences Practice Group, King & Spalding,Washington, DC

of a medication to a patient by a practitioner who prescribed the medication for one patient and summarily, and without our knowledge, gave it to a completely different patient.”Another potential risk to practitioners is malpractice liability. When doctors buy misbranded, non-FDA-approved or adulterated drugs from rogue compounders, it is imperative that they understand that such drugs may:• Contain harmful ingredients;• Be ineffective, containing incorrect amounts of active ingredients or no active ingredient at all;• Cause adverse health events; or• Have been produced, stored and shipped under unsanitary or incorrect conditions, with the risk of contamination.If a patient suffers an adverse event from one of these drugs, a medical malpractice carrier may balk when asked to provide assistance. Many medical malpractice policies (following the NECC tragedy) typically exclude liability caused by the administration of unapproved or misbranded/adulterated drugs, which include drug products that are not legally compounded.Even more concerning for practitioners, the lure of large potential financial gains have given rise to significant fraud investigations associated with drug compounding. Importantly, the FDA and the Department of Justice will not hesitate to prosecute practitioners who are viewed as participating in claims fraud against private and governmental payors. For example, in March 2017 and May 2017, the Justice Department announced that fifteen people (including two doctors) had been sentenced in a $172 million insurance fraud scheme. According to the Justice Department:The defendants prepared medications in bulk quantities, which they alleged to be compounded medications for specific individualized patient needs. The defendants falsely represented to the health insurance providers that these medications were prepared in limited quantities for individual patients and were exempt from FDA inspection. The health insurance providers compensated the defendants for the alleged costs of the ingredients for such medications. The defendants concealed from the health insurance providers that the defendants paid illegal kickbacks to physicians for the issuance of the compounded medications. [The] defendants unlawfully provided the physicians with pre-printed prescription pads.In fact, a practitioner should be especially leery about a compounding pharmacy that promises increased profits for administering and prescribing their drug products. They should be even leerier about a compounding pharmacy that offers to pay a practitioner for every compounded drug that they order. What the practitioner may view as a new profit center may be viewed by the government as claims fraud or an illegal kickback. To get some sense of the scope of fraud associated with drug compounding, put the following search request into Google: “fraud and drug compounding site:justice.gov” (and these hundreds of examples are just the cases the government has caught!). For further background, see “Compounding the Problem: The Government Cracks Down on Compounding Pharmacy Fraud and Abuse” (ABA Health eSource, 2015).Concrete Precautions Practitioners Should Take When Using Compounded ProductsThe FDA generally expects practitioners to use FDA-approved drug products whenever they are available. The reason, of course, is that compounded medications (unlike their FDA-approved counterparts) have not been clinically studied or found by FDA to be safe and effective. But, as FDA’s Commissioner, Dr. Scott Gottlieb, recently observed, a practitioner may use compounded drugs “when the needs of their patients cannot be met by FDA-approved drugs.” Therefore, in those limited instances when practitioners use compounded drugs, they should take the following concrete steps to ensure that they are only purchasing high quality (and legal) products.• Be wary of compounders who offer to provide products that are less expensive alternatives to the FDA-approved drug products the practitioner currently prescribes or administers to their patients. Indeed, a loud alarm bell should go off in the practitioner’s ears. Under federal law, compounders may not compound drugs that are essentially just copies of FDA-approved drugs that are commercially available. If an FDA-approved drug works and is commercially available, there is no legitimate basis for switching to a compounded drug.• Be wary of compounders who offer to provide products that have slight (and clinically irrelevant) differences from an FDA-approved product, such as different inactive ingredients or strengths. Such products will likely be considered to be essentially copies of FDA-approved products and, therefore, unlawful.• Be wary of compounders who offer a single drug product that simply combines the active ingredients found in two separate FDA-approved drug products. Such products may be considered to be essentially copies of FDA-approved products, and they may be unlawful.If the compounder is not obviously engaged in traditional pharmacy compounding, e.g., they are not universally asking for prescriptions for individually identified patients or are