Cases Clarify Compounding Liability

As an equine veterinarian, you need to manage your risks and exposure if you use compounded products in your veterinary practice.
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As an equine veterinarian, you need to manage your risks and exposure if you use compounded products in your veterinary practice.
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Whether for top-level competition horses or backyard ponies, there are rules and regulations that stipulate when equine veterinarians can use compounded drugs.

Veterinary compounding—preparing a multi-ingredient drug from generic or tradename pharmaceuticals—is a time-honored practice. Veterinary patients run the gamut from carnivores to reptiles to food-producing animals. With different systems and different end purposes, there are no FDA-approved animal drugs available to treat all conditions in all animals.

Because of this, many veterinarians demonstrate a blasé attitude toward legal compliance with federal and state compounding regulations. The relative “newness” of the regulations, coupled with the complexity of jurisdictional issues between federal and state regulations, doesn’t help.

Finally, the law is not self-enforcing. It can be “on the books” but is evident only when educated plaintiffs’ lawyers begin suing under it. Prior to 2014, there was no case law incentive demanding accountability for improper compounding practices.

That’s no longer the case.

The public is now more educated, thanks to highly visible cases such as the 2009 deaths of the polo ponies in Florida, or the 2010 human deaths from spinal meningitis arising from contaminated vials of joint injections. Recent cases and disciplinary actions alert veterinarians that a better-educated public is now holding practitioners accountable for compounds gone bad. The savvy practitioner must know applicable rules and regulations and employ a more mindful attitude toward the use of compounded products.

General Rules and Regulations

What is “compounding”? Compounding is defined broadly by the AVMA as: “Any drug that is manipulated based on a licensed practitioner’s prescription, but not in accord with an FDA-approved label, to meet the medical needs of a specific patient.” (Go to AVMA.org and search for “compounding definitions” on the website.)

By contrast, the AVMA defines “FDA-Approved Drug” as: “A drug whose manufacturer has demonstrated safety, efficacy and product quality to the U.S. Food and Drug Administration for the labeled indication. Both ‘pioneer brand-name’ drugs and generic drugs are FDA-approved.”

When is compounding justified? According to the International Academy of Compounding Pharmacists, justifiable instances include:

Discontinued products—when commercial medications have been discontinued for reasons other than safety or effectiveness and are unavailable.

Product integrity—where using a commercially available, finished product as the compounding ingredient source adds unnecessary expense, increases the risk of contamination or yields a product with insufficient concentration.

No alternative therapy—where there’s no commercial alternative to treat the disease or condition, or an FDA-approved drug is temporarily unavailable.

Patient compliance—where a medication must be altered to enable a patient to take it, such as adding flavoring or changing the dosage form.

Other examples are more subtle, such as combining two injectable medicines into one syringe.

In recent developments, you might see a Veterinary Medical Device (VMD)—such as an equine surgical lavage— improperly used off-label as a joint injection treatment. (For more information on this topic visit AAEP.org, log in, and search for “medical devices.”)

Legal compliance is based on two primary factors:

1. scale of the “production” and “use” of the compounded product

2. documentation of the justified use of the compounded product

Compounding sanctions rarely apply when a unique alteration is employed under a documented VCPR (vet/client/patient relationship) for a single patient with unique needs not met by an existing FDA-approved drug. This is the essence of “traditional compounding,” and by statute, is not regulated by the Food and Drug Administration. Where compounded products are not tested for potency, purity, efficacy, sterility and shelf life compliance, this limited production is key.

But when a product is mass manufactured without oversight, issues arise. Many mass produced compounded products

a. arrive in contaminated containers;

b. contain too little active ingredient—i.e., they do not reach the therapeutic threshold for treatment;

c. contain too much active ingredient—i.e., they may present a toxicity issue;

d. contain active ingredients prohibited for therapeutic use in particular animals;

e. contain active ingredients harmful to human handlers;

f. contain active ingredients prohibited in food-producing animals;

g. contain active ingredients contraindicated in breeding animals; or

h. are not accurately or appropriately labeled.

Thus, the production and sale of one large batch of bad product can be catastrophic, as evidenced in the deaths of the polo ponies and the humans who developed meningitis.

Federal Regulations

Federal standards require all “new animal drugs” intended for interstate sale to pass FDA testing and approval. Under the 1938 Food, Drug and Cosmetic Act (FDCA), an “animal drug” is defined as a drug “intended for use in the mitigation, treatment or prevention of disease in animals” (Section 201(g) (1)(B) Federal Food, Drug and Cosmetic Act (the FDCA) [21 U.S.C. § 321(g)(1)(B)].)

Under the FDCA, made applicable to animal drugs under the 1994 Animal Medicinal Drug Use Clarification Act (AMDUCA), drugs intended for use in animals require an approved new animal drug application (NADA) unless they are generally recognized as safe and effective. This requires extensive research and testing to ensure consistent potency, purity, efficacy, sterility and stable shelf life before FDA approval is granted.

If a drug is mass produced and sold without this testing, it is by federal regulations deemed “unsafe” under section 512(a) (1)of the FD&C Act [21 U.S.C.§ 360b(a)], and “adulterated” under section 501(a)(5) of the FD&C Act [21 U.S.C.§351(a)(5) and (c)]. Sale of such products is a violation of sections 512(a) (1) of the FD&C Act [21 U.S.C.§ 360b(a)], Section 501(a)(5) of the FD&C Act [21 U.S.C.§ 351(a)(5)], and is expressly prohibited under section 301(a) of the FD&C Act [21 U.S.C. § 331(a)].

FDA sanctioning is typically focused on the compounding manufacturer and not on the veterinarians. However, recent rule-making actions by the FDA indicate discretionary authority toward players in the stream of commerce when warranted. This, in turn, can lead to more civil actions.

In a “negligence per se” context, a plaintiff need only prove the existence of a federal or state statute—and a defendant’s violation of that statute, plus harm—to win his or her case.

A veterinarian’s provision of illegally compounded product could also constitute a violation of the federal Lanham Act, 15 U.S. Code § 1125, which prohibits misrepresentations in a commercial context. A veterinarian’s representation that a compounded drug is as efficient as an FDA-approved product would be a violation under the Lanham Act, possibly subject to injunctive relief (i.e., an order to cease and desist) coupled with treble damages (i.e., three times the actual damages).

State Applications

State violations, which run on top of federal violations, can include veterinary and pharmaceutical board sanctions plus common law actions for misrepresentation, ordinary and professional negligence, or fraud.

Many state veterinary or pharmaceutical board regulations prohibit the use of a compounded product where an FDAapproved drug exists. Nearly all state boards require evidence that “informed consent” guidelines have been met, yet very few veterinarians document informed consent compliance relative to compounded drugs.

Where poor recordkeeping is rampant, veterinarians using compounded product without documentation of the reasons and proof of informed consent from clients are legally vulnerable. Violations can include administrative sanctions (i.e., fines, reprimands, temporary suspensions and permanent license loss), as well as civil actions (i.e., court actions awarding monetary damages).

Recent Cases

Until 2014, there were no reported cases involving veterinary liability related to improper use of a compounded product. However, in 2014 a number of valuable Thoroughbred racehorses in Florida and Kentucky were improperly treated with a compounded EPM product manufactured by Wickliffe Pharmacy, even though an FDA-approved EPM product, Marquis, was available.

The horses either died or were permanently disabled. Testing revealed that death resulted from toxic levels of pyrimethamine.

The FDA imposed sanctions against Wickliffe, and the owners filed suit, cross-suits and counter-suits against Wickliffe, the stables, the trainers and the administering veterinarians under theories of general and professional negligence. While the Florida cases were confidentially settled, the Kentucky cases remain active, including claims for actual and punitive damages.

In 2016, the Florida Veterinary Board administered sanctions against a Florida equine veterinarian for, among other acts, compounding and record-keeping violations. The practitioner treated several horses for lameness issues, with deteriorating conditions that resulted in euthanasia. Records revealed the horses were given a “cocktail injection” with no other detail provided.

They were treated with Previcox, an unjustified, off-label use of an FDA-approved drug labelled for osteoarthritis treatment in dogs, as well as given compounded omeprazole versus GastroGard, with no written documentation as to why the compound was used. Sanctions included a monetary fine, a one-year probation and ongoing educational requirements.

Practice Suggestions

1. Understand and apply the rules. Review the federal and state regulations at your regular practice group meetings. Contact your state Veterinary and Pharmaceutical Boards to request a presentation on state regulations and their basic application. Watch for state-specific “special labeling” requirements. Understand the basic protocols expounded by both the AVMA and AAEP on the use of compounded products, which can be found on the AVMA website (avma.org and search for “compounding FAQs”) and the AAEP website (AAEP.org and search for “compounding guidelines”).

2. Review and implement practice protocols on written “informed consent.” Print client handouts explaining the difference between FDA-approved, generic and compounded drugs, and when and why you use the compounds. If you deviate from using an FDA-approved product in favor of a compound, document why. Remember, cost savings is not a justification under applicable law.

3. Keep Detailed Records!

4. Check with your insurance carrier to verify whether compounding exposures are “covered” under your professional liability policy.

5. Work with your state and national veterinary associations for educational articles and seminars relative to developments in this complex arena.

Your attention to these simple protocols will put you way ahead of the game in managing your compounding exposures and risks.

Denise E. Farris practices equine, insurance and veterinary law in the Kansas City, Kansas, area. “AV” rated in Martindale- Hubbell, she has been named in “Best of the Bar,” “SuperLawyers,” Preeminent Women Lawyers, Top 100 Lawyers Kansas, Top 50 Female Lawyers Kansas and EQUUS magazine’s “Leaders in Equine Law.” In addition to writing numerous articles, Denise has been a featured speaker at local, state and national symposiums, including the National Equine Law Practitioner’s Conference, the AAEP Hambletonian Conference, the National Farrier’s Convention, the National Multiple Trail Users Conflict Symposium and the North American Trail Ride Conference. She is an avid equestrian who competes in endurance and competitive trail riding events.

DISCLAIMER: his article provides general coverage of its subject area. It is provided free, with the understanding that the author, publisher and/or publication do not intend this article to be viewed as rendering legal advice or service. If legal advice is needed or required, the services of a competent professional should be sought. The author and publisher shall not be responsible for any damages resulting from any error, inaccuracy or omission contained in this publication. For more information about the author, contact the Farris Law Firm, LLC, 20355 Nall Avenue, Stilwell, KS 66085; 913-766- 1262; dfarris@farrislawfirm.com.