Article: Liability of Veterinarians When Using Compounded Drugs

The following article appearing in the November 3, 2011, edition of Veterinary Practice addresses the liability issues a veterinarian may be exposed to when violating the law regarding compounded medications.

Legal Exposure Might Not be Worth the Savings

Using a compounded drug instead of an FDA-approved animal medication could open a veterinarian to legal exposure if the animal has a bad outcome.

By Marie Rosenthal, MS

For Veterinary Practice News

Posted: Nov. 3, 2011, 2:35 p.m. EDT

Some veterinarians believe they are helping clients reduce costs by ordering compounded drugs instead of medications approved by the U.S. Food and Drug Administration.

But there’s a reason compounded drugs are cheaper than FDA-approved medications, pharmaceutical companies say. Compounding pharmacies’ quality-control procedures are rarely as stringent or comprehensive as the good manufacturing practices required by the FDA for approved products. Therefore, the safety and efficacy of compounded drugs are not guaranteed.

In a case of therapeutic failure of a compounded product when an FDA-approved medication is available, the amount the veterinarian saves the client might turn a competitive advantage into a serious disadvantage. That prescription could leave the veterinarian exposed to legal liabilities because the FDA does not test or approve compounded drugs. 

Liability Dangers

“Many times veterinarians don’t understand that they are the first in line in liability in the event that a compounded product goes bad,” says Denise E. Farris, Esq., owner of Farris Law Firm LLC in Kansas City, Mo.

“If there is an adverse reaction, he or she is liable to the client for veterinary malpractice. The liability coverage may not cover that activity because most policies do not cover ‘gross negligence’ or ‘intentional acts.’

“If a veterinarian is prescribing a compounded product, the veterinarian could be charged with negligence because he or she knew or should have known that the product was untested and its efficacy was not proven,” she says.

She adds that there can be further liability if a client is not fully informed about the risk of using the compounded substitute.

Several studies have reported quality problems with compounded drugs, including subpotency, superpotency and contamination. In 2006, 33 percent of active pharmaceutical ingredients for human drugs used by compounding pharmacists or finished compounded human drugs failed an FDA test, primarily because of sub- or super-potency or a lack of uniformity. Potency ranged from 67.5 percent to 268.4 percent of the amount of drug declared on the product labeling, according to the FDA.

In its report, the FDA says, “The results of the survey suggest that problems with the quality of compounded drugs occur throughout the country.”

Finding a Place

This is not to say that compounded products do not have a legitimate place in equine medicine. They do, the FDA acknowledges, but it says that place is narrow.

In a 2006 warning letter to a veterinary compounding pharmacy, the FDA wrote: “The drugs that pharmacists compound are rarely FDA-approved and thus lack an FDA finding of safety and efficacy.”

The FDA regards traditional compounding as the extemporaneous combining, mixing or altering of ingredients by a veterinarian or a pharmacist as ordered by a veterinarian (or physician) to create medication tailored to the specialized needs of an individual patient.

“Compounding is a very narrow, specific field,” says Jeffrey T. Berk, VMD, who practices equine medicine at Equine Medical Associates in Lexington, Ky. “A compounded product is supposed to be produced for a particular patient, for a particular condition, at a particular time and is obviously tailored for a unique need for which there is no approved product.”

Many clients think that compounded drugs are generic substitutions of a name-brand medication, but they are not. By law, compounding pharmacies are not allowed to make large quantities of medications using commercial-scale equipment—that could be construed as manufacturing drugs without a license.

Although the compounding pharmacist is supposed to use FDA-approved active ingredients when compounding a drug, the final compounded drug formulation is not an FDA-approved medication because it has not been tested for efficacy, safety, potency, sterility, dosage or even stability.

Approvals

Generic drugs are subject to FDA oversight just as brand-name medications are, but compounded drugs are not. A pharmaceutical company that wants to make a generic version of a brand-name medication must prove to the FDA that the generic is equivalent in all characteristics to the brand-name medication. The generic drug must also meet the same manufacturing quality control requirements as the brand-name product.

“There are appropriate times and ways to compound, and there are inappropriate ways to compound,” says Lynne White-Shim, MS, DVM, an assistant director in the American Veterinary Medical Association’s Scientific Activities Division. “When a veterinarian is deciding how to treat his or her patient that has a medical condition, the veterinarian needs to follow federal rules if he or she decides on an extralabel use of a product, and compounding rules are a component of extralabel drug-use rules.”

The experts say there is a hierarchy to prescribing medications, especially when it comes to food animals. The rules allow for greater flexibility when treating non-food animals, says Dr. White-Shim:

* The first choice should be an FDA-approved veterinary medication indicated for that species and marketed for that condition;

* The second choice should be an FDA-approved veterinary medication which might be indicated for another species;

* The third choice would be an FDA-approved human medication indicated for that condition; and

* Fourth, if there are no FDA-approved medications, a compounded drug.

“If a veterinarian is prescribing a compounded product knowing that there is an equivalent FDA-approved medication on the market, then that is an FDA violation,” says Farris, the attorney. “If there is an FDA-approved medication, FDA regulations prohibit veterinarians from prescribing a compounded equivalent, and prohibit a compounding pharmacy from producing it.”

Limitations

Generally speaking, compounding pharmacies are restricted from promoting or advertising unapproved new animal drugs, creating and marketing compounded preparations that mimic FDA-approved medications, and manufacturing large quantities of drugs under the guise of compounding or distributing these preparations wholesale.

They are permitted to advertise in certain instances, such as when the compounded product serves many patients that do not have access to an FDA-approved product.

Some compounding pharmacies skirt the law, veterinarians and pharmaceutical companies contend, and the FDA lacks the resources to prosecute every violation.

Berk notes that the American Association of Equine Practitioners and the AVMA, which have issued guidance for veterinarians about the appropriate use of compounded products in veterinary medicine, encourage the FDA to become more involved in enforcing compounding regulations.

“Veterinarians are under additional legal exposure when they use compounded drugs,” Berk says.

The experts provide these tips to limit that exposure:

* Make sure you have a valid veterinarian-client-patient relationship and provide full disclosure about the compounded drug, its risks and why it is being prescribed.

* Use compounded drugs only if an FDA-approved medication (indicated for either animals or human use) is not available or cannot adequately treat the medical condition at hand, and the health of the animal is threatened, or if suffering or death may result from failure to treat.

* Check whether the pharmacy is certified by an independent body, such as the Pharmacy Compounding Accreditation Board.

* Contact the state board of pharmacy to find out the status of the pharmacy within the state and assure that it is licensed to compound in that state.

“Veterinarians often believe they are providing a cost savings to the client, but their clients may not understand that the cost of the legitimate FDA-approved products include long-term testing for efficacy, safety, consistency and purity. There might also be a lack of understanding of the legal ramifications the veterinarian faces,” says Farris.

“In addition,” Farris continues, “the owner relies on the veterinarian to provide the appropriate standard of care. Using untested, unproven compounded products when there is an FDA-approved medication available not only violates FDA regulations, but increases the veterinarian’s liability exposure in circumstances not typically covered by insurance.”