Texas compounding pharmacy to pay $200,000 for illegal drug manufacture

DALLAS (Legal Newsline) - Texas Attorney General Greg Abbott announced the resolution of the state's action on Tuesday against a compounding pharmacy and pharmacist that allegedly compounded illegal drugs.

Dallas-based pharmacist Gary Osborn and his compounding pharmacy Apothecure Inc. were charged in 2007 by the state with unlawfully formulating an unauthorized painkiller that led to three deaths in Oregon and Washington.

Osborn and SpectraPharm Inc., another one of his companies, were also charged with employing substandard practices during the manufacture of over-the-counter drugs and the unlawful marketing of dietary supplements to treat diseases.

The state found that Colchicine, the defendants' injectable product, had a potency level eight times what was listed on its label. The defendants were also found to have failed to safeguard patients by testing for potency despite allegedly knowing the ingredients were toxic.

Osborn and Apothecure allegedly unlawfully made drugs that weren't approved by the FDA under the guise of "compounding" prescription drugs. Drugs may be compounded under state and federal drug laws by licensed pharmacies by combining, mixing or altering ingredients to create a customized medication for an individual patient based on a physician's prescription. The compounded drugs, however, must originate from FDA-approved drugs.

Under terms of the permanent injunction announced on Tuesday, the defendants are prohibited from compounding drugs prior to receiving a prescription order or compounding drugs that are on an FDA list of those withdrawn from the marketplace because they have been found to be unsafe or ineffective. The defendants are also prohibited from compounding drugs with an active ingredient not in an FDA-approved drug or compounding any drugs for wholesale distribution rather than for a specific patient.

Additionally, the defendants may not advertise that an FDA-approved drug is effective for uses other than those approved by the FDA or from making any claim in the labeling or advertising of a dietary supplement that it can cure, mitigate, treat or prevent disease in humans.

The defendants are also required to 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.

In addition to the injunction, Osborn and Aopthecure pled guilty to federal misdemeanors for violating the Federal Food, Drug and Cosmetic Act regarding the lethal Colchicine injections. Osborn received one year or probation at sentencing in October and Apothecure was given five years probation. Both defendants were fined $100,000 each and Osborn was placed under house arrest.