Issue: June 2018
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Compounded Drugs: Mix of Risk and Liability

Introduction

Compounded Drug Risks and Liability

Drug compounding is a practice in which a licensed pharmacist, a licensed physician, or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

 

The FDA does not verify the safety, quality, or effectiveness of compounded drugs before they are marketed. Health risks can be associated with compounded drugs that do not meet federal quality standards. Compounded drugs made using poor quality practices may be sub-potent or super-potent, contaminated, or otherwise adulterated. Additional health risks include the possibility that patients will use ineffective compounded drugs instead of FDA-approved drugs that have been shown to be safe and effective.

 

If a compounded drug does not meet appropriate quality standards it can cause serious injury or death, which may result in FDA warnings and litigation.

 

Attorneys, physicians, insurers, employers, and other potential parties to litigation need to understand the types of litigation issues that may arise in connection with a compounded drug injury.


The Perspectives: Improve Your Strategy

Attorneys:

What proof is needed for an action concerning a compounded drug injury? And, what is a potential strategy for the attorney to employ?

Physicians:

How can liability for medical malpractice be avoided for an injury from a compounded drug? And, what is a potential strategy for the physician to employ?

Insurers:

Can a payout under a medical malpractice liability policy be avoided by proof that the physician was not negligent or there was no coverage for an injury from a compounded drug? And, what is a potential strategy for the insurer to employ?

Employers:

Can an employer of a physician be subject to liability for the provider’s negligence or medical malpractice involving an injury from a compounded drug? And, what is a potential strategy for the employer to use?

Bonus:

How can a compounding pharmacy or outsourcing facility avoid liability for an injury related to a compounded drug? What is a potential strategy for this type of drug manufacturer to use?


Practice the Technique: Checklists

Attorneys:

Check this list of facts and circumstances tending to show a physician’s liability for malpractice or negligence involving a compounded drug.

Physicians:

Presented is a checklist of items a physician must consider when defending against claims of malpractice or negligence involving a compounded drug.

Insurers:

The insurer should check these “red flags” and inconsistencies when investigating a claim of injury caused by a compounded drug.

Employers:

Use this checklist to determine if an employer may be held vicariously liable for the actions of an employee or agent, such as a physician employee who prescribed a compounded drug while working at the hospital.

Bonus:

Use this checklist to determine if a manufacturer, such as a compounding pharmacy, may be held liable for a patient’s injury from a compounded drug under a theory of products liability.

Expert Analysis

How Do Rules on Interstate Delivery of Compounded Drugs Safeguard Patients?

Elizabeth Jungman, JD

What Measures Should be Used to Improve the Safety of Compounded Drugs?

Kuldip Patel, Pharm.D.

Litigation

Alternative Dispute Resolution

Arbitration or mediation may be required by contract or statute, may be mandated by the court or, in some circumstances, may be the appropriate method for a negotiated resolution.


Reasons to Reach Settlement

The following are reasons why the attorney, physician, insurer, or employer would want to reach settlement, and not take the action to trial.


Reasons to Go to Trial

The following are reasons why the attorney, physician, insurer, or employer would want to take the action to trial.


Jury Awards and Settlements

How much have juries awarded and what settlements have been reached recently in cases involving injuries related to compounded drugs?



Medical Examples

Compounded Drugs and Compounding Facilities

This section provides information on the compounding of drugs, the risks associated with compounded medications, that some drugs may not be compounded, the FDA regulation of compounded drugs, the regulation and inspection of traditional compounding pharmacies and outsourcing facilities, sterile and non-sterile compounding, and the patient employee’s ability to work. 



Law and Medicine Resources

Law and Medicine Resources

Provided is a listing of law and medical resources for further information on compounded drug negligence and products liability claims.


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Compounded Drugs: Mix of Risk and Liability

Table of Contents
Introduction

Expert Analysis
   Elizabeth Jungman, JD
   Kuldip Patel, Pharm.D.

The Perspectives: Improve Your Strategy
   Attorneys
   Physicians and Health Providers
   Insurers
   Employers and Risk Managers
   Bonus

Practice the Technique: Checklists
   Attorney Checklist
   Physician Checklist
   Insurer Checklist
   Employer Checklist
   Bonus Checklist

Alternative Dispute Resolution

Reasons to Reach Settlement

Reasons to Go to Trial

Jury Awards and Settlements

Compounded Drugs and Compounding Facilities

Law and Medicine Resources