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Pharmacist Case Study: Alleged Compounding Error Results in Patient Injury and Hospitalization

Pharmacists and Medical Malpractice
Case Study with Risk Management Strategies
Presented by HPSO and CNA

This case study describes an incident involving a 33-year-old male patient with a history of chronic lymphocytic thyroiditis (Hashimoto thyroiditis) diagnosed three years prior. The patient had previously participated in intercollegiate athletics and continued to maintain a regular exercise plan and healthy diet since his graduation.   


Following a recent medical visit, the patient’s endocrinologist modified the thyroid supplement dose. Finding the right dose for the patient had been challenging since his diagnosis, leading the endocrinologist to prescribe a compounded product to facilitate dose flexibility, especially in the first 12-18 months of therapy. The patient picked up the prescription a few days later from the compounding pharmacy, and according to pharmacy records, refused the offered counseling.
Soon after starting the medication, the patient began experiencing a number of symptoms, including nausea, vomiting, chills and body aches. Given the time of year and recent community spread, the patient assumed he had influenza. The following day when symptoms worsened and expanded to include severe headache and a “racing” heartrate, the patient contacted his primary care physician’s office. The office referred him to the hospital emergency department (ED) for assessment.  
The ED treated the patient for dehydration and possible gastrointestinal (GI) infection, administering antibiotics and IV fluids. These efforts mitigated the patient’s symptoms, and he was released with instructions to follow up with his primary care physician or return to the ED if symptoms persisted or worsened. The patient scheduled a follow-up visit with his primary care physician. However, the symptoms worsened soon after the ED visit. Vomiting made it nearly impossible to hold down much liquid or solid food, causing further dehydration and weakness. The patient’s spouse noticed signs of confusion and memory lapses, as well as the worsening GI symptoms. A return ED visit resulted in immediate hospital admission.  
Hospitalist providers struggled to determine a definitive diagnosis. Treatment for possible colitis was initiated, and the patient received several medications to help calm his agitation and treat other symptoms. The medications administered included benzodiazepines, morphine, and haloperidol. Further assessment in the intensive care unit (ICU) led to a thyrotoxicosis diagnosis. The ICU providers administered a number of medications to induce a comatose state and manage/treat the thyrotoxicosis, including cholestyramine, hydrocortisone, propranolol and methimazole. A feeding tube and peripherally inserted central catheter (PICC) line provided nutritional support and fluids.
The patient’s condition improved, however, he remained in the ICU for several days after discontinuation of the medically induced coma. Upon discharge, the patient returned home, having experienced significant weight loss, mental anguish, and a secondary infection at the PICC line site. During the patient’s hospital stay, the ICU provider consulted with the patient’s endocrinologist, who contacted the patient’s pharmacy and requested that it review its prescription and compounding records. This review led to the discovery of a formulation error involving the active ingredient thyroxine (T4).         

Risk Management Comments

Analysis of the compounded/dispensed capsules found an extraordinarily high active ingredient level, hundreds of times more than the desired level. The pharmacy’s investigation determined that, instead of a 1:1000 T4 dilution, a more highly concentrated material had been used, leading to the negative outcome. Records indicated that the insured pharmacist used a properly diluted active ingredient for part of the formulation. However, a large portion of the contents of the bottle spilled and could not be used to complete the prescription. The pharmacist then accessed a second bottle of active ingredient to complete the mixture and fill the capsules.
Further testing revealed a much higher active ingredient strength in the second bottle, apparently due to weighing errors of the other pharmacist defendant during preparation of the dilution batch.  The pharmacy’s procedure included external testing to confirm that the dilution batch potency fell within the required range before its release. However, the batch was not quarantined as the procedure required. Instead, it was placed in inventory by the pharmacist. When the spillage of bottle one occurred, the next bottle provided a sufficient quantity of “diluted” active ingredient to complete the prescription. Fortunately, the pharmacy dispensed only one other compounded prescription using the high-strength ingredient batch. The timing of the incident described here, and the ensuing investigation, led to a recall of the second prescription before any injury could occur.


The patient worked as a highly compensated sales/marketing executive for a large computer software company. He returned to work after his initial recovery, but in the following months, he experienced a lack of focus, ongoing anxiety, chronic weakness, and an inability to perform at a cognitive level required for his position. The plaintiffs (the patient and his spouse) filed a lawsuit within the statute of limitations time period, seeking compensation for damages from the pharmacy, the insured dispensing pharmacist and a pharmacist who prepared the active ingredient dilution.  
Medical expenses at the time of the filing totaled approximately $200,000. However, the plaintiffs’ demand included the plaintiffs’ financial requirements for past/future pain and suffering, projected medical expenses, recent and future lost wages, decreased brain function and cognitive abilities, and loss of consortium. The overall demand exceeded $5,000,000. The plaintiffs asserted that decreased cognitive abilities, as well as the other issues, resulted in a failure to thrive both professionally and personally, leading to a lost promotion, low activity level, and an overall downward spiral of the patient’s physical and mental health. Although the patient and his spouse pursued the lawsuit together, they divorced prior to the filing, asserting that the medication error and the resultant physical/mental injuries were to blame.
The defense team believed that this case was risky and wanted to pursue settlement negotiations with the plaintiffs. The insured pharmacist agreed with settling the case, as they did not wish to risk a trial. Prior to trial, the defense team was able to negotiate a settlement on behalf of the insured pharmacist.
Total Incurred*: $345,000
(Monetary amounts represent the payments made solely on behalf of the insured pharmacist.)
Compounding errors often lead to costly pharmacist professional liability claims, with an average total incurred* of  more than twice the overall average of $124,407 for all pharmacist professional liability claims (CNA-HPSO Pharmacist Liability Claim Report: 2nd Edition). Although the total incurred for the insured pharmacist in this case ($345,000) significantly exceeded the average total incurred for compounding error claims of $256,381, it represented approximately 25 percent of the global settlement in this case. Effective defense actions and negotiations significantly reduced both the final settlement amount and the insured’s contribution percentage.   
*Total incurred – This term refers to monies paid on behalf of an insured in the investigation, management, defense, and settlement or judgment of a claim.

Risk Management Recommendations

Medication errors often result in serious injury and death with respect to both inpatient and outpatient care, or, as in this case, associated with community-based medication services. Although all medication services require implementation of and compliance with appropriate safety processes and procedures, medication compounding introduces additional risks that must be mitigated to ensure safe practices. The claim report that was previously cited found that hospital and compounding specialty locations have the highest average total incurred of all pharmacy types.
Consider the following risk management recommendations:
  • Designate a compounding area that is separate from other pharmacy activities.
  • Assess the availability of ready-made product formulations.
  • Ensure that written compounding policies, procedures and checklists are in place and readily available. Adhere to procedures in all cases, unless a deviation is justified for the case at hand. Deviations must be documented and must not represent routine practice. If a change is necessary, recommend, test and validate procedure changes prior to implementation.
  • Apply an independent double check process to verify selection of the correct compounding formula and the identity of all ingredients.
  • Apply an independent double check process for active ingredient calculations and other critical tasks involved in the compounding procedure. Additional checks may be appropriate to mitigate risks for narrow therapeutic index active ingredients, or those requiring an aliquot preparation process.
  • Implement automated identification systems, such as barcode scanning, to reduce the risk of selection errors.
  • Assess active pharmaceutical ingredients and bulk chemicals used for compounding at least quarterly. Those that are not regularly used should be eliminated from stock.
  • Verify that active pharmaceutical ingredients and bulk chemicals, including dilutions—used in the pharmacy for compounding, are clearly labeled with their contents, the date the product was first opened, and the manufacturer’s expiration date, if applicable. If an expiration date is unavailable from the manufacturer, consult appropriate formulation/stability guidelines, official pharmacy compendia and/or other professional resources to help determine shelf life. If necessary, consider serial batch analysis to establish the expiration.
Implementation of and compliance with safety procedures and processes related to compounding and other medication services will help pharmacists meet the needs of individual patients, improved patient safety and adhere to the standard of care.
These are illustrations of actual claims that were managed by the CNA insurance companies.  However, every claim arises out of its own unique set of facts which must be considered within the context of applicable state and federal laws and regulations, as well as the specific terms, conditions and exclusions of each insurance policy, their forms, and optional coverages. The information contained herein is not intended to establish any standard of care, serve as professional advice or address the circumstances of any specific entity. These statements do not constitute a risk management directive from CNA. No organization or individual should act upon this information without appropriate professional advice, including advice of legal counsel, given after a thorough examination of the individual situation, encompassing a review of relevant facts, laws and regulations. CNA assumes no responsibility for the consequences of the use or nonuse of this information.
This publication is intended to inform Affinity Insurance Services, Inc., customers of potential liability in their practice. This information is provided for general informational purposes only and is not intended to provide individualized guidance. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy. Any references to non-Aon, AIS, NSO, HPSO websites are provided solely for convenience, and Aon, AIS, NSO and HPSO disclaims any responsibility with respect to such websites. This information is not intended to offer legal advice or to establish appropriate or acceptable standards of professional conduct. Readers should consult with a lawyer if they have specific concerns. Neither Affinity Insurance Services, Inc., HPSO, nor CNA assumes any liability for how this information is applied in practice or for the accuracy of this information.

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