The Price of Pain – Are Compounded Medications A Treatment Or A Fraud?

By Charles A. Ross & Maritere Arsuaga

Sometimes doctors prescribe a mixture of pharmaceutical products to address pain or other ailments.  Most often these products take the form of ointments and are known as compounded creams.  Pharmaceutical compounding investigations focused on fraud and subsequent prosecutions are on the rise, especially in South Florida.

The FDA defines compounding as 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  medicine to create a medication tailored to the needs of an individual patient”.  The vast majority of compounded creams are used to treat pain.  Although these compounded drugs are not FDA approved, and thus, not subject to the same oversight as FDA approved medications, they do constitute a recognized and viable alternative for patients who are unable to take commercially prepared medications. For example, compounded medications can be prescribed in liquid form to children or elderly patients who are not able to swallow a pill, or formulated without certain dyes in cases of patients with allergies.  These medicines are meant to be specifically tailored to each individual patient.  However, the advertising of compounded medications has been widespread and has involved famous sports figures such as retired Green Bay Packers quarterback Brett Favre.  These pain relief creams have become popular

Hot button issues that get the attention of regulators or prosecutors are:

  • High volume production or prescription
  • Intermediate pharmacies that hide the identity of the compounding organization
  • Use of call centers for marketing
  • High volume out-of-state prescriptions
  • Physicians who receive something of value from the compounding pharmacy such as fees for research, speaking, and medical directorships

Physicians must be cautious when they prescribe these compound medications.  First and foremost, doctors must evaluate each patient individually to determine the need and effectiveness of compounded drugs.  Even though there are benefits to these medications they may not be right or necessary for all patients.  Absent a proven “medical necessity”, an individual patient may better benefit from FDA approved medications. A doctor can only certify as to this medical necessity after a thorough and individualized examination of each patient.  Furthermore, doctors must be wary of offers for remuneration in exchange for the prescription of compounded drugs.  Otherwise, they run the risk of being investigated and possibly charged with fraud, false claims and violations of the Anti-Kickback Statute.  There are significant defenses to these often very technical charges.  However, a bit of study, prevention and compliance can avoid the need to retain experienced criminal health care counsel.