WASHINGTON -- The legal landscape is littered with charges of
negligence and misconduct by compounding pharmacies such as the one
implicated in the nation's ongoing meningitis outbreak, but they rarely
result in tough punishments, an examination of legal records shows.
some cases, there's almost no penalty for pharmacies that break the
rules, and the people who run them simply continue with business as
usual, sometimes with tragic results.
which mix specialized and hard-to-get medications from raw ingredients,
have been tied repeatedly to illness outbreaks -- the Food and Drug
Administration has recorded about 200 "adverse events" linked to 71
compounded products since 1990. Some of those cases were eerily similar
to the current meningitis episode, which has killed 28 so far.
USA TODAY reviewed state and federal court records, investigative
reports and regulatory actions on dozens of cases in which compounding
pharmacies produced contaminated or adulterated medication, mismeasured
dosages, or manufactured and distributed drugs that were counterfeit or
illegal. In many cases, it wasn't regulatory action that shut down those
operations; it was damage awards they couldn't afford to pay.
lightly regulated businesses have been linked through the years in
government investigations to high-profile steroids scandals in sports
and major tragedies involving veterinary drugs.
Through them all,
there's a pattern: When a compounding pharmacy commits serious
transgressions -- wrongs that endanger lives or involve large-scale
criminal conspiracies -- the regulatory sanctions often are minimal.
Tougher punishments frequently come in the form of personal injury
lawsuits, which can elicit court-ordered penalties far more potent than,
say, the suspension of a pharmacy's license.
Civil lawsuits are a
powerful tool "to make sure the most dangerous compounding pharmacies
are forced out of business," says Joanne Doroshow, executive director of
the Center for Justice & Democracy at New York Law School. "Nothing
else seems to be doing it ... because the entire regulatory system lacks
At least three personal injury lawsuits have been filed
against the Framingham, Mass.-based New England Compounding Center,
which state and federal investigators have identified as the chief
suspect in the current meningitis outbreak. With more than 300 illnesses
in at least 16 states, more claims are sure to follow.
investigators have linked the outbreak to fungal contamination in
injectable steroids that were produced by NECC and administered to an
estimated 14,000 people for back pain. Last week, the Massachusetts
Board of Registration in Pharmacy permanently revoked NECC's state
operating license, as well as the licenses of its three chief
pharmacists, after documenting multiple problems with sanitary
conditions and quality control at NECC's facility.
But that's the
board's only bullet: Like many state pharmacy boards that regulate
compounding operations, the Massachusetts panel has no power to issue
fines for wrongdoing. Because compounding pharmacies produce medications
outside the strict federal regulations that govern traditional drug
manufacturers, the FDA has limited authority over them.
penalties are possible -- criminal investigators from the U.S. Justice
Department and the FDA are involved in the NECC probe. But such
prosecutions are extremely rare, in part because the law makes it very
difficult to hold pharmacists criminally liable for problems with the
drugs they produce or dispense.
Even state license revocations are
rare: Among cases reviewed by USA TODAY, the NECC closure was the only
time a state revoked a compounding pharmacy's license permanently.
(Neither NECC nor its pharmacists have appealed the license
revocations, though that option remains.)
"Clearly, (states) have
the authority," to shut down a bad operator," says Sarah Sellers, a
former FDA compliance official. "Whether they have the political will
and the resources to pursue those cases is a question in my mind."
who now runs Q-Vigilance, a drug-safety consulting firm, says she
doesn't ever recall seeing another case in which a state shut down a
compounding pharmacy permanently. She believes that might be due partly
to the fact that state pharmacy boards often have members who operate or
have interests in compounding pharmacies.
"If there is conflict
of interest at the state level, that may be a contributing factor in the
lack of enforcement," Sellers says.
Warnings in an earlier outbreak
the fall of 2002, a spate of meningitis cases began cropping up in
hospitals and clinics in North Carolina. In many respects, it was
strikingly similar to today's outbreak: All the patients were sickened
by a rare fungus after getting treated with an injectable steroid
produced by an out-of-state compounding pharmacy. Even the drug was the
same: methylprednisolone acetate.
When state and federal
investigators inspected the facility where the drug was prepared, Urgent
Care Pharmacy in neighboring South Carolina, they found faulty
sterilization equipment and inadequate sanitary and quality-control
practices. When they tested unopened vials of the suspect medication,
they also found the fungus.
The pharmacy was ordered to stop
selling the contaminated drug immediately, state investigation records
show. Warnings went to 11 states where hospitals and clinics had gotten
drug shipments from the facility. Several victims were hospitalized; one
The South Carolina Board of Pharmacy directed Urgent
Care to halt work until it corrected major deficiencies in its sterile
practices and oversight of technicians. Exercising an authority many
pharmacy boards lack, the panel also levied a $10,000 fine and suspended
the license of the pharmacist in charge.
Facing lawsuits from
more than a half-dozen people who claimed injuries from the contaminated
injections, Urgent Care declared bankruptcy three months later. But the
pharmacist who managed the operation moved on and now works at a
different South Carolina pharmacy. Reached at that store, he declined to
In the same order that suspended the pharmacist, the
board immediately issued a "stay" of that action. He was allowed to
continue practicing pharmacy on a probationary basis, provided he pass a
competency exam and refrain from compounding. Today, his licensure
record shows that he continues to work and lists him "in good standing"
with "no disciplinary action."
"The regulatory system failed,"
says Forest Horne, a Raleigh, N.C.-based lawyer who won a damage award
of about $1 million for the family of the woman who died in the
meningitis outbreak. "If that guy is able to go back and work in a
pharmacy ... I think the regulatory system is not working, because the
conditions in that plant were absolutely abysmal.
"If these people aren't stopped through litigation," Horne adds, "they're not going to be stopped."
Dead horses and more lawsuits
But litigation can take years, and it doesn't always succeed.
April 2009, 21 polo horses from a Venezuela-based team died while
preparing to compete at the U.S. Open Polo Championship in Wellington,
Fla. The deaths later were attributed to a medication that was mixed
incorrectly by Franck's Pharmacy, a high-volume compounding operation
that, like many, prepared veterinary drugs in addition to human
Franck's acknowledged the dosing error even before
federal investigators confirmed it, and owners of the horses filed a
lawsuit seeking more than $4 million in damages from the pharmacy. But
that case remains unresolved and is scheduled for a jury trial early
After the horses' death, the FDA also filed suit
against Franck's, contending its operations should be halted because it
was acting as a drug manufacturer, using bulk ingredients to produce
drugs on a large scale. As a manufacturer, Franck's would need FDA
approval and be subject to agency inspections for compliance with strict
federal rules on safety and quality.
But the court ruled that
the pharmacy was within the boundaries of compounding, a centuries-old
practice that focuses on mixing specialty medications that aren't
available commercially. Franck's remained under the supervision of
Florida's board of pharmacy. After reprimanding and fining Franck's in
the horse incident, the board allowed it to continue operating in good
It wasn't long before the pharmacy was tied to more problems.
November, 2011, weeks after the FDA lost its case, a rare fungal
infection began cropping up in the eyes of patients who had received
ocular injections of a special dye used in eye surgery. A subsequent
state/federal investigation conducted earlier this year linked the
infections to contamination in vials of the dye prepared by Franck's.
March, the pharmacy recalled the dye and a related product, and the
U.S. Centers for Disease Control and Prevention warned doctors not to
use any compounded products from Franck's that were labeled as sterile.
In a May report, the CDC identified 33 eye infections in patients who
had been injected with the products from Franck's. Three-quarters of the
cases led to vision loss.
As damage claims began trickling in, Franck's closed shop.
July 5, Franck's "turned in the permits required by Florida law to
operate as a compounding pharmacy, sold all its assets, and terminated
all its employees," according to a federal court filing. "There is no
reasonable likelihood that they will return to (compounding) practices."
Steroids and other illegal drugs
furor about contaminated medication has obscured another long-held
concern about the oversight of compounding pharmacies: their involvement
in the production and distribution of illegal or counterfeit drugs.
the steroids-in-baseball scandals of the late 1990s to the more recent
worries about illicit distribution of painkillers by so-called "pill
mills," compounding pharmacies have been implicated repeatedly in all
manner of drug scams. While even the industry's critics acknowledge
that bad actors represent a small slice of the nation's compounding
community, the lax regulation of those pharmacies makes it easy for them
to tap illicit -- and lucrative -- revenue streams.
landmark 1997 report to the commissioner of pro baseball, former Sen.
George Mitchell included a section dealing exclusively with the role of
compounding pharmacies in the distribution of steroids and other
performance-enhancing drugs. He noted that the pharmacies often are
affiliated with "rejuvenation centers" that solicit customers through
"When approached by a customer, the rejuvenation
centers arrange for a corrupt physician to issue a prescription for the
substance the customer wants to purchase, often without ever seeing
their new 'patient' and without administering any medical tests," the
report says. "The bad faith prescriptions are then filled by a
compounding pharmacy (which sometimes manufactures the steroids or human
growth hormone in its own laboratory) and sent to the user by mail."
one recent case, the owner and operator of College Pharmacy, a
compounding operation in Colorado Springs, was convicted in federal
court of illegally distributing human growth hormone and steroids to
body-building and "anti-aging" clinics without underlying prescriptions.
"College Pharmacy also promoted and sold the steroid ... at
(anti-aging) conferences and trade shows, despite the fact that neither
"anti-aging" nor "body-building" is a medically necessary use for these
drugs," the court wrote in a May ruling that affirmed the distribution
conviction on appeal.
Similar arrangements have been alleged in the illicit distribution of painkillers.
one ongoing case, the U.S. Drug Enforcement Administration seized
hundreds of thousands of dollars in assets earlier this year from a
compounding pharmacy in Georgia, asserting that it was part of an
illicit distribution network for oxycodone and other narcotics. The
pharmacy is alleged to have filled hundreds of prescriptions for a "pill
mill" -- a pain clinic that writes prescriptions without medical
However, no criminal charges were filed against
the pharmacy in conjunction with the forfeiture; the pharmacy has denied
any wrongdoing, and filed a motion in federal court to have its assets
DEA officials acknowledge that their ability to police
compounding pharmacies is limited. The agency does not inspect
compounding operations routinely, but it does monitor purchasing
records, because compounders have a DEA registration to handle
"If we suspect that they are manufacturing,
which would be a violation of their registration, we would look at
that," says DEA spokeswoman Barbara Carreno. "If we see significant
anomalies (in the data), that's a red flag for us."
notes that regulatory authority for compounders lies mainly with state
pharmacy boards. They have primary responsibility for ensuring that the
pharmacies only issue drugs in accordance with underlying prescriptions,
and they're the ones who are supposed to monitor the safety and quality
of compounding operations.
Yet, the state boards often lack the resources and expertise to identify potential problems.
states have limited resources just like the FDA, and they could be
going in maybe once every three years or only in for-cause situations,"
says Sellers, the former FDA compliance official.
is particularly risky when it comes to checking for problems with
sterility or quality control, she adds, noting that "pharmacies can
produce a lot of bad drugs in a period of three years." Sellers takes
little comfort in the notion that civil lawsuits end up being a driving
force in ensuring that pharmacies maintain adequate standards.
"That's your last resort for moving and furthering a public health agenda," she says.