Kentucky-based Compounding Pharmacy and Its Owner Plead Guilty to Unlawful Distribution of Prescription Drugs

A compounding pharmacy based in Kentucky, and its owner, admitted on October 29, 2020 in federal court to unlawful distribution of compounded prescription drugs. 

The Pharmacy pleaded guilty to unlawful distribution of substances that the FDA had not approved for distribution in the United States. The owner of the Pharmacy pleaded guilty to one count of unlawfully engaging in wholesale distribution of a prescription drug, without licensing the Pharmacy as a wholesale distributor with the Board of Pharmacy for the Commonwealth of Kentucky.  According to the plea agreement, from October 23, 2018 through May 14, 2020, a prescription form of vitamin B12 was dispensed to a licensed physician who operated an anti-aging/wellness clinic in California.  Rather than sending individualized, patient-specific prescriptions to the Pharmacy, the Physician made bulk orders of the drug without issuing prescriptions or providing accurate patient names to the Pharmacy.  When authorities from the FDA and the Kentucky Board of Pharmacy inspected the Pharmacy the owner took steps to hide records of the illicit wholesale distribution.

Sentencing for both the Pharmacy and owner are scheduled for February 24, 2021.  The Owner faces up to 10 years in prison and a maximum fine of $250,000. 

Federal compounding laws and the FDA regulations and guidance related thereto are frequently ill-defined and in some cases in conflict with applicable state laws. The Drug Quality and Security Act (DQSA), which codified Sections 503A and 503B related to compounding, was passed in late 2013. Although DQSA enabled the FDA to craft rules related to compounding, and in many cases required rules to be promulgated by the FDA through the formal rule making process pursuant to the Administrative Procedure Act (APA), the FDA has been painfully slow to provide clarity to compounders. Rather than following the APA the FDA has issued a series of “Guidance” documents in the 7-years since the passage of the DQSA. Agency guidance does not carry the same force of law as regulations that follow APA rule making.

The issuance of guidance by the FDA, lack of formal rule making and conflicting state laws leaves compounding pharmacies, physician and other providers to navigate a regulatory minefield.  Some states allow compounding for in-office use by physicians while others either prohibit the practice or are silent on the subject. This case demonstrates the significant risk that licensees (both pharmacies and physicians) face when attempting to provide compounded medications for office-use.      

How Frier Levitt Can Help

Frier Levitt’s representation of compounding pharmacies predates DQSA. Our interdisciplinary team of pharmacist and clinician attorneys, litigators, healthcare attorneys, white-collar criminal defense and PBM specialist possess unparalleled knowledge of the myriad of compounding laws and regulations. We assist clients in navigating the regulatory minefield of compounding as well as defend pharmacies from PBM audits. Contact us today.

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