Categories
Article

Before You Add Peptides to Your Practice

Peptide therapy has moved from elite biohacker circles into mainstream wellness offerings, and the marketing pitches arriving in your inbox suggest the legal questions are settled. They are not.

Most of the peptides being sold by wellness clinics today cannot be legally compounded in the United States, and the practitioners who add them to their service menu are taking on more legal risk than they realize.

Vendors like to say their peptides are “on the bulks list.” That phrase is doing a lot of work, and most of what it appears to promise is not actually what it delivers. Federal compounding law treats only a narrow set of bulk drug substances as eligible for legal compounding, and very few of the peptides driving today’s demand  make the cut.

This article walks through three things in order. First, what federal law actually requires before a pharmacy can compound with a bulk peptide, and what the term “bulks list” actually means. Second, how the regulatory status of the popular compounded peptides has shifted in the last few years and where things stand after FDA’s April 15, 2026 actions. Third, what additional state-law and standard-of-care obligations attach even when a peptide can be lawfully compounded, and how those obligations should shape your evaluation of the vendor platforms now being marketed to practitioners.

How federal compounding works

Pharmacy compounding lives under two parallel exemptions in the Federal Food, Drug, and Cosmetic Act. Both were added by the Food and Drug Administration Modernization Act of 1997 and substantively updated by the Drug Quality and Security Act of 2013.

Section 503A is the pathway for traditional compounding pharmacies that prepare drugs for individual patients pursuant to a valid prescription. When the conditions of Section 503A are met, the compounded drug skips three federal requirements that would otherwise apply: premarket approval, current good manufacturing practice (cGMP), and adequate-directions-for-use labeling.

Section 503B is the pathway for “outsourcing facilities” that compound without patient-specific prescriptions and supply provider offices in bulk. Outsourcing facilities have to register with FDA, follow cGMP, report adverse events, and submit to FDA inspection. Section 503B has its own bulk drug substance list, separate from the Section 503A list.

Almost all peptide compounding for outpatient injection runs through Section 503A. The rest of this article focuses on that pathway, although the same logic applies to outsourcing facilities.

The three ways to qualify for legal compounding under 503A

Compounding under Section 503A is permitted only when the bulk drug substance used in the compound clears one of three gates. The gates are hierarchical. The statute lists them in order, and each one is reached only if the prior one is unavailable.

The first gate is a USP or NF monograph. If the substance has a monograph in the United States Pharmacopeia or the National Formulary, the pharmacy must comply with that monograph and with the USP chapter on pharmacy compounding. Few peptides have monographs.

The second gate is the FDA-approved drug pathway. If no monograph exists, the substance can still qualify if it is a component of an FDA-approved drug, even if the brand has been discontinued. Gonadorelin is the textbook example. It was approved as LutrePulse, the brand has been off the market for years, but gonadorelin remains compoundable because it is a component of an approved drug.

The third gate is the 503A bulks list. If no monograph exists and the substance is not a component of an approved drug, the substance has to appear on the FDA-approved 503A bulks list. This is the catch-all, and it is the gate the popular compounded peptides try to use, because the typical compounded peptide has no monograph and is not a component of an approved drug.

A peptide that fails all three gates falls outside Section 503A and cannot be compounded. It is treated like any other unapproved drug under federal law, with all of the misbranding and unapproved-new-drug exposure that goes with that classification.

What “the bulks list” actually means

This is where the marketing language and the legal reality come apart. When a vendor or a pharmacy tells you a peptide is “on the bulks list,” that phrase is covering two very different things, plus a third pipeline that is sometimes mistaken for either of the first two.

The final 503A bulks list

The first list is the real one. FDA develops the final 503A bulks list by regulation, after notice and public comment, under Section 503A’s bulks list authority. Substances on the final list have completed FDA’s review against the statutory criteria and have been formally added through rule-making. Inclusion on the final list is the affirmative legal authorization to compound. As of April 2026, the final list contains only a small number of substances, and none of the popular peptides are on it.

Category 1 of the interim list

The second list is Category 1 of the interim bulks list. While FDA grinds through nominations, the agency has been running an interim system through enforcement-discretion guidance. The framework was first formalized in FDA’s 2017 guidance on bulk drug substances and was updated effective January 7, 2025.

Category 1 lists substances that, after FDA’s preliminary look, “may be eligible for inclusion on the 503A bulks list.” For Category 1 substances, FDA has said it does not intend to take enforcement action against 503A pharmacies that compound with the substance, as long as the other Section 503A conditions are met. That is enforcement discretion, not statutory authorization. It is a regulatory commitment not to prosecute pending the formal review.

This is the point to keep in mind: Lawful compounding under “the bulks list” pathway requires inclusion on either the final list (statutory authority) or Category 1 (enforcement discretion). When a vendor tells you a peptide is “on the bulks list,” that should mean one of those two states. Everything else falls outside the bulks list framework, even if the substance has been nominated, even if it has been considered, and even if its status was different a year ago.

Category 2 and the off-limits substances

Category 2 of the interim list is the opposite of Category 1. These are substances FDA has reviewed and concluded raise significant safety concerns serious enough that compounding with them is not allowed. Pharmacies that compound with a Category 2 substance are compounding illegally, and may receive warning letters, injunctions, product seizures, and referral for criminal prosecution. Category 2 is FDA’s affirmative position that the substance does not belong on the bulks list and that compounding with it should stop.

The PCAC pipeline

The path from Category 1 (or from any other status) onto the final list runs through a defined process. The Pharmacy Compounding Advisory Committee, or PCAC, is the FDA federal advisory committee that evaluates each nominated substance against FDA’s published criteria and makes a recommendation. After the PCAC recommendation, FDA consults with USP, publishes proposed action in the Federal Register, takes public comment, and makes a final determination. Only after that whole process concludes is a substance formally added to the final list.

Here’s where people get confused or intentionally misdirect. Removal from Category 2 and referral to PCAC is a procedural step, not a green light. It signals that FDA is starting the formal review, not that the agency has decided the substance meets the criteria. PCAC review can produce either a positive recommendation followed by inclusion on the final list, or a negative recommendation followed by exclusion. The typical interval between PCAC review and a final FDA determination runs six to twelve months. Pharmacies that compound with substances that have been referred to PCAC but have not been placed on Category 1 or the final list remain exposed to enforcement during that interval.

How we got here

Contributing to the confusion, the status of the popular compounded peptides on the interim list has changed several times since FDA first asked for nominations in 2014. The history matters for two reasons. Vendor marketing routinely conflates regulatory developments at different points in the timeline, and what is or is not compoundable today depends on where a peptide currently sits, not on where it sat earlier in its history.

2014 through 2017: the original framework

The FDA put out its first call for bulks list nominations in late 2013 and early 2014. Trade associations like the Alliance for Pharmacy Compounding and the Professional Compounding Centers of America, plus a number of individual pharmacies, sent in hundreds of nominations covering peptides, hormones, and a wide range of other substances. By mid-2015, FDA had organized the nominations into a working framework and started publishing public dockets.

The 2017 guidance formalized the Category 1 / Category 2 / Category 3 scheme that had been used informally since 2015. The 2017 guidance was the operative framework until it was replaced in January 2025.

2017 through September 2023: the “stable” years

For roughly six years, the interim list was reasonably steady. Category 1 included sermorelin, NAD+, vasoactive intestinal peptide (VIP), gonadorelin acetate (also independently eligible as a component of an approved drug), and others. A larger group of peptides sat in Category 2 because of safety concerns, and many more remained nominated but unreviewed in Category 3.

Compounding pharmacies routinely supplied Category 1 peptides to practitioners, and the legal posture was understood to be relatively stable. The peptide market built itself around that stability, and a lot of the marketing premises that drive present-day vendor pitches are leftovers from the pre-2023 status quo.

September 2023: the freeze

In September 2023, FDA reclassified nineteen peptides from Category 1 to Category 2. The reclassification swept in a substantial portion of the peptides driving practitioner interest, including BPC-157, thymosin beta-4 (TB-500), CJC-1295, ipamorelin, AOD-9604, melanotan II, epitalon, thymosin alpha-1, and GHK-Cu.

FDA cited three categories of concern. Immunogenicity risk: the patient’s immune system might react against the peptide, including the patient’s own naturally occurring version of the molecule. Manufacturing impurities associated with bulk peptide synthesis: truncated chains, residual reagents, and other byproducts that have not been fully characterized in commercially available bulk peptide preparations. And insufficient human safety data: animal studies and small case series instead of the controlled human trials needed to support therapeutic use.

The September 2023 reclassification did not undo any compounding that had already happened under the prior Category 1 status. It did, however, immediately put any pharmacy that kept using the reclassified substances in the agency’s enforcement crosshairs.

September 2024: a partial reversal that wasn’t a reversal

A year later, the FDA partially walked back its position on five of the September 2023 reclassifications. AOD-9604, CJC-1295, ipamorelin acetate, thymosin alpha-1, and selank acetate were removed from Category 2.

The FDA did not put those five substances back on Category 1. Instead, it placed them in a separate published listing called “Other Bulk Drug Substances That May Present Significant Safety Risks.” That listing does not authorize compounding, and it does not provide enforcement discretion. It is a holding designation for substances on which FDA has stepped back from its Category 2 position but has not adopted a Category 1 position.

Pharmacies that compound with substances on that “Other Significant Safety Risks” list are exposed to enforcement on the same statutory grounds that applied during their Category 2 period. The September 2024 action narrowed the agency’s affirmative safety opposition without expanding the lawful compounding pathway.

January 7, 2025: new guidance closes the front door

Then on January 7, 2025, the FDA changed everything. It issued updated guidance that replaced the 2017 framework. The new guidance kept existing categorizations for substances nominated before the effective date, but made three big changes for everything that comes next.

First, FDA will no longer sort newly nominated bulk drug substances into interim categories. The Category 1 enforcement-discretion pathway is, for new nominees, closed.

Second, pharmacies cannot compound with newly nominated substances unless and until the FDA completes the formal review and adds the substance to the final list. The interim safe harbor is no longer available for substances entering the system after January 7, 2025.

Third, the formal review pathway is the only route forward for new nominees. PCAC review, USP consultation, Federal Register notice and comment, and a statutory determination are required steps before any new substance can be lawfully compounded under the bulks list pathway.

Substances categorized before January 7, 2025 keep their existing status. The September 2023 and September 2024 actions remain in effect, the “Other Significant Safety Risks” listing remains in effect, and Category 1 remains a lawful compounding pathway for the substances already on it.

February 2026: an announcement without publication

In February 2026, the Secretary of Health and Human Services announced publicly that approximately fourteen peptides currently in Category 2 would be restored to Category 1. The substances named in the announcement included BPC-157, DSIP, epitalon, GHK-Cu, GHRP-2, GHRP-6, kisspeptin-10, KPV, LL-37, melanotan II, MOTS-c, PEG-MGF, semax, and thymosin beta.

The announcement, however, was not formalized through publication in the Federal Register or through any corresponding action on the FDA’s interim categorization lists. Until publication happens, the announced reclassification has no operative legal effect. The named substances technically remain in Category 2 (or, for the September 2024 group, on the “Other Significant Safety Risks” list), and pharmacies that compound with them continue to be exposed to the same enforcement risk as before the announcement.

This matters because some vendors and pharmacies are unwisely relying on the announcement. An agency announcement that has not been formalized through rulemaking or guidance does not bind the agency, does not displace existing enforcement positions, and does not give a pharmacy or a prescriber a defense if FDA acts. Treating the February 2026 announcement as binding is assuming a level of certainty that the agency has not provided.

April 15, 2026: twelve peptides referred to PCAC

On April 15, 2026, FDA took its first concrete step partially aligned with the February 2026 announcement. The agency removed twelve peptides from Category 2 and referred them to PCAC for evaluation at the meetings scheduled for July 23 and 24, 2026. The twelve substances are BPC-157, TB-500, GHK-Cu, KPV, epithalon, MOTS-c, MK-677, semax, dihexa, DSIP, LL-37, and melanotan II. The matching public comment docket (FDA-2025-N-6895) closes on July 22, 2026, and a second PCAC meeting is scheduled before the end of February 2027 to consider an additional five peptides.

The April 15 action is a procedural step, not an authorization. The twelve substances have not been added to Category 1 or to the final list. PCAC review is the next step in a process that requires PCAC recommendation, FDA evaluation, USP consultation, Federal Register notice and comment, and a final FDA determination before any of these substances can be lawfully compounded under the bulks list pathway. Pharmacies that compound with the referred substances pending PCAC review and final action are still subject to enforcement.

Where the common compounded peptides actually sit

A practitioner evaluating a peptide offering should be able to answer one threshold question. Is the substance currently on the final 503A bulks list, on Category 1 of the interim list, eligible as a component of an approved drug, or recognized in USP or NF? If the answer is no on all four, the compounding is unauthorized.

Applying that test to the peptides commonly marketed into chiropractic and wellness practices:

Lawfully compoundable through the bulks list pathway (Category 1): Sermorelin (also independently eligible as a component of the approved drug Geref); NAD+; vasoactive intestinal peptide (VIP); gonadorelin acetate (also independently eligible as a component of LutrePulse); and GHK-Cu, but Category 1 status is limited to non-injectable routes of administration. Injectable GHK-Cu is not on Category 1.

Lawfully prescribed through other Section 503A pathways: The FDA-approved peptide drugs themselves, including semaglutide, tirzepatide, liraglutide, leuprolide, octreotide, and many others, when sourced through approved channels, prescribed by an authorized prescriber for an approved or off-label use, and dispensed by a licensed pharmacy.

Not lawfully compoundable today:

  • BPC-157, TB-500, MK-677 (ibutamoren), epithalon, MOTS-c, KPV, semax, dihexa, DSIP, LL-37, and melanotan II. These were removed from Category 2 on April 15, 2026 and referred to PCAC, but they are not yet on Category 1 or the final list.
  • CJC-1295, ipamorelin (and ipamorelin acetate), AOD-9604, thymosin alpha-1, and selank acetate. These are on the “Other Bulk Drug Substances That May Present Significant Safety Risks” list following the September 2024 partial reversal. That listing is not an authorization to compound.
  • GHRP-2, GHRP-6, kisspeptin-10, and PEG-MGF. These were named in the February 2026 announcement but were not in the April 15, 2026 PCAC referral. They technically remain in Category 2.
  • PT-141 (bremelanotide) is FDA-approved as Vyleesi, but compounded versions outside the approved indication and formulation are subject to scrutiny under both the unapproved-new-drug analysis and the FDA’s prohibition on compounding copies of commercially available drugs.

The practical universe of legally compoundable peptides currently being marketed is small. Most everything else in the typical vendor catalog is being compounded outside the lawful pathway.

FDA hasn’t stopped enforcing

A common assumption inside the peptide market is that the political signals from HHS leadership translate into a softer enforcement posture on the ground. Two recent actions indicate otherwise.

In September 2025, FDA issued more than fifty warning letters to compounding pharmacies producing GLP-1 receptor agonists, principally compounded semaglutide and tirzepatide. The warning letter wave came after FDA determined that the brand shortages that had previously supported large-scale GLP-1 compounding were over.

On April 1, 2026, the U.S. Department of Justice indicted Dr. Watkins, a Utah-licensed osteopathic physician, for receiving and selling misbranded, non-FDA-approved peptides to more than two hundred patients. The indictment covers both FDA-approved drugs sourced through improper channels (tirzepatide, semaglutide, retatrutide, cagrilintide) and compounded peptides outside the lawful pathway (BPC-157, TB-500, ipamorelin, CJC-1295, GHK, GHK-Cu, NAD+). DOJ’s theory leans in part on FDA’s informal “503A do not compound list,” which identifies bulk drug substances that have been considered for the 503A bulks list but were ultimately excluded.

The Watkins indictment matters for two reasons. It puts the prescribing physician inside the criminal liability chain, not just the compounding pharmacy. And it shows that the federal government is willing to treat compounding and prescribing as criminal misbranding, not just a regulatory issue to be resolved with warning letters.

Even when it’s legal, that’s only step one

Federal compounding law sets the floor. Three additional layers have to be cleared independently before the prescription, dispensing, and administration of a compounded peptide are lawful in Texas.

The compounded product has to be compounded in accordance with USP standards. USP 797 covers sterile compounding, which injectable peptides require. The standards address cleanroom design, environmental monitoring, garbing, beyond-use dating, sterility testing, and potency testing. A pharmacy that cuts corners on any of these is exposed to FDA and state board action, plus civil liability if a patient is harmed by a contaminated, sub-potent, or super-potent product.

Further, the compounding pharmacy itself has to be properly licensed. In Texas, that means a valid Texas pharmacy license under the Texas Pharmacy Act, in addition to whatever federal Section 503A or 503B requirements apply. State pharmacy compliance is independent of federal compliance. A pharmacy that satisfies the federal rules but lacks proper Texas licensure cannot lawfully dispense to Texas patients.

Then, the prescription itself has to satisfy the standard of care. The peptide has to be prescribed by a licensed prescriber based on a valid provider-patient relationship. Only physicians and authorized mid-level providers can write prescriptions.

Standards of medical and nursing care expect a good faith examination, a documented diagnosis, a treatment plan, informed consent that addresses the off-label and non-FDA-approved nature of compounded peptides, and ongoing monitoring of the patient.

Many times, especially with the vendor platforms discussed below, the good faith exam is provided via telehealth. That is lawful as long as it meets the many requirements for telehealth exams in Texas. A telemedicine intake form that a remote physician rubber-stamps without an independent clinical evaluation is not acceptable. The Medical Board has over the last decade disciplined physicians who delegated their clinical judgment to non-medical entities or signed prescriptions on the strength of patient-supplied information alone.

Finally, the peptide has to be administered consistent with the licensing rules of whoever is giving the injection. That requires, at a minimum, that the person administering the injectable be qualified as determined by a supervising physician.

Texas chiropractic scope

The Texas Chiropractic Practice Act sets the outer boundary for chiropractic practice in Texas. The scope of chiropractic practice does not include “the prescription of controlled substances, dangerous drugs, or any other drug that requires a prescription.” Chiropractic Board rules also prohibit chiropractors from using needles for procedures that create an incision, with a narrow exception for diagnostic blood draws.

As a result, a Texas chiropractor cannot prescribe peptide therapy, regardless of delivery method. A Texas chiropractor cannot administer injectable peptides. A chiropractic practice that wants to make peptide therapy available to its patients has to do so through a properly licensed prescriber and a properly licensed administering provider, with the chiropractor outside both functions.

That sounds like a manageable workaround until you look at how many peptide vendor platforms are structured.

The vendor problem

The problem with the turnkey vendor platforms is that they are designed to deliver clinical peptide therapy through a single transactional interface, with the chiropractic practice as the customer-facing party, even though the chiropractor cannot lawfully perform the prescribing or administering functions.

The standard package includes a patient intake system, a remote physician who reviews intake forms and writes prescriptions, an affiliated compounding pharmacy that fills the orders, and a fulfillment process that ships the product to the patient or to the practice. The economic model is a revenue share between the chiropractor and the vendor, but each piece of the package raises a discrete legal issue.

The compounding piece. If the vendor’s affiliated pharmacy compounds with substances outside the bulks list pathway, the underlying compounding violates Section 503A. That violation exposes the pharmacy, the prescriber, the vendor, and any practice that participated in the supply chain, to FDA enforcement. A chiropractic practice does not get a pass by relying on the vendor’s representation that the affiliated pharmacy is compliant.

The prescribing piece. If the remote physician writes prescriptions without a good faith examination, an independent medical judgment, and contemporaneous documentation, the prescription is legally deficient under the Medical Practice Act and the Texas Medical Board’s standard of care. Deficient prescribing exposes the physician to Board discipline and, where the underlying compounded substance is outside the lawful pathway, to potential criminal exposure.

The chiropractor’s clinical role. If the chiropractor recommends a specific peptide for a specific patient before the patient gets referred to the vendor’s prescriber, the recommendation itself is the practice of medicine. The fact that another provider writes the prescription afterward does not retroactively legalize the chiropractor’s diagnostic and therapeutic recommendation. The Texas Board of Chiropractic Examiners looks at the totality of the chiropractor’s marketing, intake forms, and patient interactions. The Chiropractic Board could consider that practice as “unprofessional conduct” and discipline the chiropractor.

The financial structure. Revenue-sharing between the chiropractic practice and the vendor for prescribed peptides raises issues under the Texas Patient Solicitation Act and fee-splitting prohibitions. When the financial relationship is the engine of the referral, what might otherwise be a clinical service can become an unlawful payment for a referral. Unlike Federal law, Texas’s statute applies to cash-pay patients. Fee splitting rules also prohibit a person from sharing revenues associated with medical services. By taking a percentage of the revenue, the chiropractor is impermissibly splitting fees with a physician.

Pharmacy operations. If the chiropractor stores or dispenses peptides on their premises, that activity may amount to operating as a pharmacy without a license under the Texas Pharmacy Act. This issue comes up frequently in platform models that ship products to the practice rather than the patient directly. The presence of a remote prescribing physician does not cure an unlicensed-pharmacy issue at the practice site.

The insurance coverage gap. Chiropractic malpractice policies are generally written to cover services within the chiropractic scope of practice. Peptide therapy is outside that scope. If a patient files a claim after an adverse outcome, the carrier’s may properly deny the claim as uncovered, leaving the chiropractor uninsured for both the injuries and the legal fees. Even if the chiropractor “wins” the case at trial, the chiropractor will have to pay out of pocket for legal fees.

The vendor’s standard answer to all of this is that they have lawyers and compliance people and the system is designed to work. Even if true, and it often isn’t, none of that protects the chiropractor when a state board investigator or an DEA inspector shows up.

Conclusion

There is no regulatory gray area when it comes to peptides. A peptide either qualifies through an approved pathway, or it does not. If it does not, the compounding is illegal. FDA can act on it. State law can act on it. The peptide vendor will not defend you, and the prescriber’s credentials will not protect you.

Even when a peptide qualifies, qualifying is the starting point, not the finishline. The compound still has to meet federal and state compounding standards. The pharmacy still has to hold a valid Texas pharmacy license. The prescription still has to come from an authorized prescriber, based on a good faith examination, consistent with the standard of care. And the administration still has to be performed by a provider whose license permits it. None of those layers is optional. A defect in any one is enough, on its own, to support an enforcement action, a Board complaint, or a civil claim.

The vendor platform model concentrates the legal risk on the chiropractor while delivering only logistics. Vendors do not warrant the regulatory status of the underlying peptide. They do not warrant the compounding pharmacy’s compliance. They do not warrant the prescriber’s adherence to the standard of care. They do not indemnify the chiropractor when any of those things fail. A practice that adopts the model without independent legal review is taking on the full cost of those risks in exchange for the vendor’s convenience.

The practical advice is the same advice anyone would give for any program with this much downside. Know where each specific peptide actually sits in the federal regulatory framework. Document the basis for that conclusion. Revisit it periodically, because the framework keeps moving. Verify the compounding pharmacy’s federal and state licensing and its USP compliance history. Verify that the prescribing physician’s clinical evaluation and documentation satisfy the Texas Medical Board’s standard of care. Have counsel review the vendor agreement for fee-splitting, kickback, and unlicensed-pharmacy issues. Confirm in writing what your malpractice carrier will and will not cover. The cost of doing that work on the front end is a fraction of the cost of cleaning up an enforcement action, a Board complaint, or an uninsured liability claim on the back end. The math is not close.

Categories
Health Law Highlights

Pharmacy Association and 40 Providers Sue Change Healthcare Over Cyberattack

Summary of article from The HIPAA Journal, by Steve Adler:

The National Community Pharmacists Association (NCPA) and over 40 healthcare providers from 22 states are suing Change Healthcare, Optum, and UnitedHealth Group following a February 2024 ransomware attack. This Blackcat ransomware incident resulted in significant disruptions, as Change Healthcare’s critical systems were taken offline, affecting claims processing and revenue management for numerous providers nationwide. The plaintiffs argue that the defendants failed to implement adequate security measures and did not provide timely guidance or support, exacerbating financial hardships for healthcare providers. The lawsuit, which spans 140 pages, includes claims of negligence, breach of contract, and violations of various state consumer protection laws. It seeks permanent injunctive relief, enhanced security measures, and various forms of damages.

Categories
Health Law Highlights

Pharmacies and Pharmacists in the Crosshairs: DOJ’s $408 million Settlement with Rite Aid

Summary of article from Woods Rogers, by Justin Lugar:

The Department of Justice (DOJ) announced a $408 million settlement with Rite Aid and its affiliates over allegations of violating the Controlled Substances Act (CSA) and the False Claims Act (FCA) by filling unnecessary opioid prescriptions. This settlement underscores the DOJ’s commitment to enforcing pharmacists’ responsibilities to ensure prescriptions are issued for legitimate medical purposes. Recent enforcement actions, including significant penalties against various pharmacies and individuals, highlight the increasing scrutiny and accountability faced by pharmacists and pharmacies. The DOJ, alongside the DEA, is utilizing predictive analytics and state monitoring programs to intensify these actions. Pharmacies must now be more vigilant in adhering to CSA regulations to avoid severe penalties and legal consequences.

Categories
Health Law Highlights

Drugmakers Exposed to Antitrust Probes if Patent Cache Added

Summary of article from Bloomberg Law, by Annelise Gilbert:

The US Patent and Trademark Office (USPTO) has proposed a rule that would create a repository for all settlement agreements related to patent challenges, potentially exposing pharmaceutical companies to antitrust scrutiny. The proposed rule would expand the requirements for companies to file detailed reports after reaching a settlement. The new requirement could assist the FTC and DOJ in determining if antitrust laws have been violated, and may also give non-agency third parties expanded access to the agreements. The proposal has raised concerns in the pharmaceutical industry about the disclosure of confidential agreements and potential antitrust investigations. The rule aligns with an executive order from President Joe Biden encouraging federal agencies to cooperate in policing anticompetitive practices.

Categories
Health Law Highlights

How Pharmacies Can Protect Patient Data From Cyber Threats

Summary of article from Specialty Pharmacy Continuum, by Karen Blum:

Pharmacies, both large and small, are increasingly targeted by sophisticated cyberattacks due to their databases of patient financial and health information. The breaches can lead to identity theft and drug diversion, with hackers using advanced tactics to gain access to data. To mitigate these risks, pharmacies should establish a robust cybersecurity plan, keep it updated, and conduct regular staff training. Vetting vendors for their data protection measures and having a contingency plan for data breaches are also crucial. In case of a breach, pharmacies should comply with all legal requirements, including notifying affected individuals and the Federal Trade Commission.

Categories
Article

The Compounding Problems of Semaglutide, the Miracle Weight-Loss Drug

Semaglutide weight loss drugs are quite literally saving people’s lives. There are so many health benefits to losing weight that demand for the drugs is off the charts. Demand is so high that the manufacturer can’t keep up and the drugs are in short supply.

Where there is money to be made, there will be people willing to step in. Enter compounding pharmacies, who are catering to the demand by creating supposed duplicates of the drug.

But not all semaglutide is created equally, and concerns are rising that some pharmacies are creating inferior versions of the drug that are, at best, less effective or, at worst, dangerous.

How does semaglutide work?

Ozempic was approved by the U.S. Food and Drug Administration (FDA) in 2017 for use in adults with type 2 diabetes. After patients reported significant weight loss, Novo Nordisk rebranded the drug as Wegovy and received FDA approval in 2021 for use in chronic weight management in adults.

Semaglutide, the active ingredient for both drugs, mimics the function of a hormone that is naturally produced in the body. This hormone, released into the blood after you eat, helps lower blood sugar by stimulating insulin production, decreasing the amount of glycogen created in the liver, and ultimately making you feel fuller longer.

In short supply

These drugs work really, really well. So well, in fact, physicians prescribe Ozempic, the diabetes drug, “off-label” for weight loss. The manufacturer cannot make them fast enough due to a shortage of semaglutide. Both Ozempic and Wegovy have been on the FDA shortage list since March 2022.

This creates an attractive opportunity for compounding pharmacies. As long as the drugs stay on the official shortage list, they can be copied by compounders without fear of patent infringement.

And copy them they do. But how well?

Base or salt?

Ozempic and Wegovy use the base form of semaglutide. The base form has been approved by the FDA for the treatment of diabetes and obesity. But some compounding pharmacies are using different forms of semaglutide, known as semaglutide “salts,” that are chemically different from the base version.

Semaglutide salts have not been approved by the FDA, leading some authorities to caution patients about the efficacy or safety of the variant.

The FDA has received adverse reports from some patients after using the compounded semaglutide, which prompted them to send a public letter to the National Association of Boards of Pharmacy expressing agency concerns with the use of the salt forms of the compounded products. Some state pharmacy boards have also voiced concern.

The manufacturer of the brand-named drugs is making waves, too, and in some cases, threatening and filing lawsuits against pharmacies compounding the drugs and the health care providers administering them.

Best practices

Although the manufacturer is trying to step up production, the demand for semaglutide products will likely continue to outstrip the supply for the foreseeable future. Undoubtedly, many patients and their providers will turn to compounded variants to meet demand.

A physician’s responsibility goes beyond just prescribing the drug. They should understand how the drug is compounded and investigate the efficacy and safety of the salt forms of the product. Then decide if the salt form is appropriate for their patients.

If it is, providers should inform their patients. The Texas Medical Board considers the administration of non-FDA-approved drugs to be a form of alternative medicine. Medical board rules require that patients be informed that the drug is not FDA-approved and be told of the risks associated with the drug.

Pharmacies, too, play a key role as the backbone of our medication dispensing infrastructure. They should stay abreast of the regulations governing the compounding of semaglutide and the ethical considerations of preparing a medication for an individual patient.

They should follow the United States Pharmacopeia (USP) standards. Maintain a clean and safe environment, train personnel, appropriately label the medications, accurately identify the active ingredients, and provide accurate use instructions.

Patients have a responsibility, too. Talk to your doctor and discuss the risks and benefits of the compounded drug. If you and your doctor decide the drug is right for you, keep the lines of communication open with your physician and disclose any adverse reactions as soon as possible.

The future

The demand for these weight loss drugs will remain high for the foreseeable future. Until supply catches up with demand, growing pains will be felt in all corners of our healthcare delivery system.

From the companies that manufacture and compound the drugs to the physicians who prescribe them, the patients who take them, to the insurers who will be asked to pay for them – everyone has a responsible role to play.

Categories
Health Law Highlights

California Enacts First-in-Nation Pharmacy Medication Error Reporting Law

From Husch Blackwell, by Kevin Khachatryan:

On October 8, 2023, the California Governor signed Assembly Bill 1286 (AB 1286), a comprehensive pharmacy bill aimed at enhancing patient safety. The bill’s key mandate is a new requirement for community pharmacies to report outpatient medication errors to the California Board of Pharmacy. The legislation also includes several other provisions that regulate the practice of pharmacy in California.

The bill was enacted in response to a 2021 survey by the California Board of Pharmacy, which revealed significant staffing issues contributing to medication errors. The survey found that 91% of retail pharmacists reported inadequate staffing for safe patient care, 83% lacked sufficient time for safe patient consultation, and 78% had insufficient time to conduct proper health screenings before administering immunizations. This led to the establishment of a Medication Error Reduction and Task Force Ad Hoc Committee and the sponsorship of AB 1286.

AB 1286 also introduces several other changes, including amendments which govern staffing decisions in pharmacies and the responsibilities of the Pharmacist-in-Charge (PIC). The law now requires chain community pharmacies to be staffed at all times with at least one clerk or pharmacy technician dedicated to pharmacy-related services, subject to certain conditions. The bill also expands the list of actions that constitute unprofessional conduct and authorizes specially trained pharmacy technicians to prepare and administer certain vaccines and medications.

Categories
Health Law Highlights

The Knowledge Requirement in a Case Alleging False Claims Act Violations

From PharmacyToday, by David B. Brushwood, BSPharm, JD:

This matter involved a pharmacy corporation accused of violating the FCA due to falsification of prior authorization (PA) forms by a Clinical Pharmacy Manager (CPM). The CPM allegedly completed these forms with false information, leading to coverage of Medicaid patients who did not meet criteria for payment. This resulted in a substantial increase in the pharmacy’s revenue from just over $1.5 million to over $5 million in 15 months.

The pharmacy corporation moved to dismiss its case, arguing that it was unaware of the CPM’s illegal actions.

The court denied the motion, noting that the FCA holds liable any person who knowingly presents or causes to be presented a false or fraudulent claim for payment. “Knowingly” is defined as having “actual knowledge”, “deliberate ignorance”, or “reckless disregard of the truth or falsity.”

The court reasoned that the corporation was aware of the significant increase in revenue, which was discussed between the CPM and her supervisor. Furthermore, the corporation’s bonus program, which incentivized higher sales, could have potentially encouraged the increase in revenue by any means necessary.

The takeaway is that pharmacy supervisors should be vigilant about any unexpected increase in pharmacy revenues and should confirm a legitimate explanation to prevent liability for knowingly allowing fraudulent activity. Any unlawful request must be reported to a supervisor, and rules must be adhered to for the benefit of the patients.

Categories
Health Law Highlights

Cyberattack Shuts Down Pharmacies Across the US

From Brew Healthcare, by Quinn Sental:

Change Healthcare, a prominent health tech firm owned by UnitedHealth Group, suffered a cyberattack, disrupting patient payments and prescription processing across the US. The company, part of Optum, handles 15 billion healthcare transactions annually.

The cyberattack was first noticed as disruptions in the company’s applications, later identified as “enterprise-wide connectivity issues”, and eventually confirmed as a cybersecurity issue. In response, Change Healthcare disconnected its systems to prevent further spread.

The incident has affected pharmacies nationwide, preventing them from processing prescription orders. Some pharmacies could accept prescriptions but were unable to process them through patients’ insurance.

Change Healthcare said the disruption is expected to last at least a day and is specific to their systems, with all other UnitedHealth Group systems remaining operational.

Categories
Health Law Highlights

Ten Physicians and Local Execs Indicted in Pharmacy Kickback Scheme

From D Magazine, by Will Maddox:

A pharmaceutical kickback scheme in the Northern District of Texas has led to the indictment of 14 people, including several podiatrists, local businessmen, and executives at Next Health, a healthcare holding company. The scheme involved physicians receiving bribes and kickbacks from pharmacies for referring prescriptions to be filled at those pharmacies, with payments being proportional to the number of prescriptions received.

The scheme, which began in 2014, was concealed through complex business arrangements and involved multiple entities. Payments were funneled through management service organizations (MSOs) and a company called Med Left, which was used to conceal and funnel bribes from the pharmacies to the physicians.

The kickbacks were often disguised as legitimate returns on investments in the pharmacies. Physicians would purchase a percentage of the pharmacy for a nominal fee and were required to refer prescriptions to the pharmacy for ownership. The profits from these prescriptions were then shared with the prescribing doctors.

The owners of Next Health, Andrew Hillman and Semyon Narosov, previously pleaded guilty to charges connected with the scheme in 2018 and were sentenced to several years in prison. Ten physicians, including podiatrists, orthopedic surgeons, and a gastroenterologist, have been indicted for referring prescriptions to Next Health’s pharmacies and receiving kickbacks.