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Pharmacist license protection case study: Use of substances not approved for humans

Pharmacists and License Protection Case Study with Risk Management Strategies
Presented by HPSO 
A regulatory board complaint may be filed against a pharmacist by a patient, colleague, employer, and/or a regulatory agency, such as the State Department of Health. Complaints are subsequently investigated by the Board of Pharmacy in order to ensure that licensed pharmacists are practicing safely, professionally, and ethically. Board of Pharmacy investigations can lead to outcomes ranging from no action against the pharmacist to revocation of the pharmacist’s license to practice. This case study involves a licensed pharmacist who worked as the Pharmacist-in-Charge of a community pharmacy.
After practicing as a pharmacist for about five years, the insured pharmacist was promoted to Pharmacist-in-Charge (PIC) of the community pharmacy where he worked. The community pharmacy engaged in drug compounding, including preparing, mixing, packing, and labeling drugs for human and veterinary patients.
Six months after the insured pharmacist became PIC, the pharmacy was inspected to ensure compliance with minimum standards of operation and practice. Inspectors found that a controlled substances inventory had not been completed by the pharmacist since becoming PIC, a violation of state statute. Further, inspectors found that some compounded drug labels were missing drug names and strengths, another violation of state statute. Instead, several compounded drugs examined by inspectors were labeled with names such as “Formula #12” or “Magic Ointment.” These violations resulted in an enforcement inspection.   
Enforcement Inspection
Inspectors reviewed the pharmacy’s compounding logs. It was then discovered that the pharmacy was using substances that were not approved for human or animal use to compound drugs for human and veterinary patients. The distributor from which the pharmacy purchased these substances was not registered with the FDA.  In addition, investigators discovered an agreement between the pharmacy and the distributor in which the distributor stated that its products were “not for human or animal use.”
The investigation revealed that, after becoming PIC, the pharmacist personally dispensed drugs to human patients that were compounded using substances unapproved for human use. These findings included the dispensing of T3 and T4 thyroid medications that were compounded using substances not approved for human or veterinary use. Ivermectin labeled “for veterinary use only” was used to compound ivermectin 4.5% cream and ivermectin 1.5% cream for several human patients. Using substances approved for veterinary use only to compound drugs for human use represents a breach of the pharmacy standard of practice.
The inspection report was submitted to the State Board of Pharmacy (“the Board”), which recommended that the Board file disciplinary charges against the pharmacist. The Board reviewed the inspection report and determined that the pharmacist’s conduct was contrary to accepted standards of practice. Based upon the number of violations that Board investigators identified, the Board proposed revocation of the pharmacist’s license and impose a civil monetary penalty of more than $20,000. However, negotiations with the Board resulted in reconsideration of the proposed disciplinary actions.  
Ultimately, the pharmacist admitted to the facts alleged, which violated state and federal statutes. The pharmacist agreed to having his license placed on probation for three years and to pay a $10,000 civil penalty, with $5,000 of that fine stayed, pending compliance with the probationary order. This disciplinary action also was reported to the National Practitioner Data Bank (NPDB).
The total incurred expenses to defend the pharmacist in this Board investigation totaled more than $11,000. (Note: Monetary amounts represent the legal expenses paid solely on behalf of the insured pharmacist.)
Risk Control Recommendations
Below are some proactive concepts and behaviors to include in your practice to help mitigate the risk of Board complaints:

For Pharmacists:

  • Follow the sequence of steps for compounding drugs and processes specified in the formulas and Standard Operations Procedures (SOPs).
  • Use a preparation label, worksheet, or Master Formulation Record to guide all drug compounding. This document should express the drug name, base solution, patient-specific dose, preparation calculations, final volume of the preparation, identify the appropriate drug dosage form to be used (e.g., concentration and size of the container), and include the name or initials of the individual(s) who prepared and verified the preparation.
  • Verify the prescription against the original order. Verify that the proper drug, dosage and quantity is dispensed. Confirm that the label, patient instructions and any warnings are correct.
  • Labeling practices should follow accepted standards and legal requirements, including USP Chapters <7> and <17> standards, as well as all State Boards of Pharmacy and other regulatory requirements of oversight agencies.
  • Contact the prescribing practitioner for questions related to a prescription, such as any ambiguity or concerns, and speak directly to the prescribing practitioner. Do not dispense any prescription for which you have validity concerns.
  • Evaluate whether workplace practices or conditions represent an unacceptable risk for patient safety or liability events. Implement appropriate corrective actions. Consider seeking alternative employment if practices are not corrected.

For Pharmacy Business Owners:

  • Establish written policies and procedures addressing inspection protocols. Prepare staff so they know what to expect, and how to respond to investigators.
  • Implement SOPs for compounding and checking all compounded drugs. These procedures should be sufficiently detailed to prevent process variation among staff.
  • Pharmacists and pharmacy technicians who perform drug compounding, should participate in compounding certificate program(s), where applicable and when possible.
  • All staff members involved in preparing compounded drugs or supervising the preparation of compounded drugs should participate in a comprehensive orientation and training program, as well as ongoing competency assessments.
  • Complete performance reviews at least annually for each employee, including a review of errors, “near misses,” medication safety breaches, compliance with required documentation, and directly observed skills and competencies. Provide pharmacy staff with coaching, mentoring, and clinical and system education on a routine basis, in order to ensure compliance with medication safety requirements.
  • As part of ongoing staff competency assessments, regularly evaluate pharmacists and pharmacy technicians who prepare compounded drugs for aspects of compounding, including:
    • performing calculations and preparing dilutions
    • compounding base solutions, if necessary
    • preparing medications for complex routes of administration (e.g., intrathecal)
    • demonstrating proper use of technology, if available
    • completing competency assessments in compliance with USP, State Boards of Pharmacy, and other required oversight agencies
Dowell, MA. Compliance tips on how to pass state board of pharmacy inspections. Journal of Health Care Compliance; 2019.
Institute for Safe Medication Practices (ISMP). ISMP Guidelines for Safe Preparation of Compounded Sterile Preparations; 2016. Accessed January 31, 2022.  
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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