Ken Paxton

Tuesday, November 27, 2012

Texas Attorney General Resolves Case Against Compounding Pharmacy and Pharmacist

DALLAS Texas Attorney General Greg Abbott today announced the resolution of the State’s enforcement action against Dallas-based pharmacist Gary Osborn, the defendant’s compounding pharmacy, Apothecure, Inc., and another of Osborn’s companies, SpectraPharm, Inc. In 2007, the State charged Osborn and Apothecure with unlawfully formulating an unauthorized painkiller that led to three deaths in Oregon and Washington. The State also charged Osborn and SpectraPharm with employing substandard practices during the manufacture of over-the-counter drugs and the unlawful marketing of dietary supplements to treat diseases.

The State’s investigation found that the defendants’ injectable product Colchicine had eight times the potency level listed on the label. Further, the State found that the defendants failed to safeguard patients by testing the mixture for potency even knowing the ingredient to be toxic. Osborn and Apothecure also unlawfully made drugs not approved by the U.S. Food and Drug Administration (FDA), and did so under the guise of compounding prescription drugs.

Licensed pharmacies under state and federal drug laws can legally compound drugs only by combining, mixing or altering ingredients to create a customized medication for an individual patient based on a physician’s prescription. However, Texas law requires that the drug to be compounded has to be an FDA-approved drug. Apothecure’s actual activities exceeded the authorized scope for compounding pharmacies, resulting in numerous unapproved drugs and adulterated and misbranded drugs on the market, and crossed the line into prescription drug manufacturing.

The permanent injunction prohibits the defendants from:
Compounding a drug before receiving a prescription order for an individually identified patient from a physician;
Compounding a drug which appears on an FDA list as a drug which has been withdrawn from the marketplace because the drug has been found to be unsafe or ineffective;
Compounding a drug with an active ingredient that is not in an FDA-approved drug;
Compounding any drugs for wholesale distribution rather than for a specific patient;
Advertising or selling any drug unless the drug has been approved by the FDA, or the drug is compounded in compliance with the judgment;
Advertising that a FDA-approved drug is effective for uses other than the uses approved by FDA;
Making any claim in the labeling or advertising of a dietary supplement that it can cure, mitigate, treat, or prevent disease in humans.

In addition to complying with the terms of the permanent injunction, the defendants must pay a total of $200,000 with $100,000 assessed as civil penalties for violations of the Texas Food, Drug and Cosmetic Act and the Texas Deceptive Trade Practices Act. The Texas Department of State Health Services referred the case to the Attorney General’s Office.

Apothecure and Osborn also pled guilty to federal misdemeanors for violations of the Federal Food, Drug, and Cosmetic Act regarding the lethal Colchicine injections and were sentenced in October 2012 to five years and one year probation, respectively. In addition, Osborn was placed under house arrest and each defendant was fined $100,000.