VERY IMPORTANT CRIMINAL CASE/MUST READ--KUDOS to US ATTORNEY'S OFFICE --Owner of National Respiratory Services LLC and Minority Shareholder pled guilty to charges of misbranding and altering drugs --Caused Compounded Drugs to Be Sent to Patients through Interstae Commerce then submitted false and fraudulent bills indicating that medications were non-compounded

LOUISVILLE, KY—The former owner of National Respiratory Services, LLC (NRS) and a former minority shareholder have pleaded guilty in United States District Court before Magistrate Judge James D Moyer to charges of misbranding and altering drugs, and the company admitted to committing health care fraud, announced David J Hale, United States Attorney for the Western District of Kentucky. Christopher Keegan, age 55, of Lexington, Kentucky, the former owner of NRS, pleaded guilty yesterday to count two of a federal information and agreed to a restitution payment of $2,030,343.11 to the Centers for Medicare and Medicaid Services, jointly and severally with co-defendants. According to the plea agreement, while owner and majority shareholder of NRS, Keegan and others, through NRS, caused compounded medications to be sent to patients, through interstate commerce, which were sub-potent, super-potent, non-sterile, and therefore adulterated and misbranded in violation of the Food Drug & Cosmetic Act. Further, Keegan and others, through NRS, then submitted to Medicare false and fraudulent billings which indicated that the medications they were providing to patients were non-compounded and FDA-approved when they were not.

The total loss of this activity is $2,030,343.11. Compounded medications are not FDA approved, but FDA regulations permit pharmacists to make compounded drugs, including prescription drugs, in limited amounts and under narrow circumstances, for particular patients and at the direction of a physician when other available drugs cannot be prescribed. Also, co-defendant James Rives, age 71, of Louisville, Kentucky, a former minority shareholder of NRS, pleaded guilty yesterday to count two of the federal information and agreed to a restitution payment of $75,996.85. As a result of the plea agreement, the United States will not pursue felony charges of conspiracy to commit health care fraud against Rives for the activity he engaged in during the period of 2006 through 2008 while defendant Rives was associated with NRS.

At sentencing, the defendants face a maximum term of one year in prison, a fine, restitution, and a period of supervised release. In separate indictments, Johnny Perry, of Mt. Washington, Kentucky, the former vice-president of NRS, was charged on August 3, 2011, and pleaded guilty to a five-count felony indictment. Perry admitted that between June of 2006 and June of 2008, as vice-president of NRS, she provided compounded medications to patients, but led both Medicare and the patients’ doctors to believe that the pharmaceutical company was providing non-compounded medications.

Also, Perry admitted to submitting false and fraudulent claims to Medicare for the cost of FDA-approved, commercially manufactured, prescription inhalation drugs, when they were not. Sentencing is scheduled for August 5, 2013, at 11:00 AM in Louisville before Chief Judge Joseph H McKinley, Jr Former NRS pharmacists Leo Parrino and Linda Schmidt pleaded guilty to introducing compounded inhalation drugs that bore false and misleading labeling and represented them to be of greater strength and potency than they actually were. Parrino pleaded guilty to the charge on September 8, 2011 and was sentenced by Magistrate Judge Moyer to one year probation and restitution in the amount of $14,098.24 and Schmidt was sentenced to one year probation and restitution in the amount of $20,000. The case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb and it was investigated by the Food and Drug Administration Office of Criminal Investigations, Health and Human Services Office of Inspector General, United States Postal Inspection Service, and the Federal Bureau of Investigation.

Doctor pleads not guilty to illegal weight-loss meds 2 Bucyrus patients were on the physician's client list

COSHOCTON — Dr. David A. Velasquez, accused of illegally selling weight-loss medication, pleaded not guilty Thursdsay to charges brought by indictment of a recent grand jury.
While he’s lived in the United States as a permanent resident with a green card, Velasquez retains his citizenship with El Salvador, said Jill Del Greco, spokesperson for the Ohio Attorney General’s Office.
Therefore he has the right to notify the El Salvador Embassy of the felony charges against him, according to the Ohio Attorney General’s Office. If Velasquez chooses to notify the embassy of his status, a consular officer has the right to visit him and arrange for legal representation, according to the U.S. State Department.
Continue reading here

Millions in cash and property seized from alleged synthetic drug sellers

7:07 AM, Dec 22, 2012

A Ducati motorcycle, property in northern California, guns and millions in cash are among the assets federal authorities have seized from scores of suspected peddlers of synthetic drugs.

Court documents filed in the case reveal large sums of money that, prosecutors say, were gained from selling dangerous chemicals marketed as incense but meant to be consumed as a drug.

In all, 21 local shop owners, managers and employees were indicted by a federal grand jury early this month in the first-of-its-kind roundup of those suspected of selling synthetic marijuana in Springfield, Joplin and elsewhere.

In less than three years, one family-owned business is alleged to have made nearly $7 million. The Franklins, authorities say, created a business that mailed synthetic drugs to head shops throughout southwest Missouri.

Douglas K. Franklin and his son Brandon D. Franklin, of Springfield, stuffed bank accounts across the country, according to court documents filed against them.

Almost $700,000 was transferred to an account for Hellbender Meadery, a honey wine store Caitlyn E. Franklin was expected to open this year in Rogersville.

Federal authorities are also seeking more than $1 million from the Reynolds brothers, who owned stores in Lebanon and Eldridge.

Stephen and Eric Reynolds might also be required to forfeit real estate, $128,000 in cash, the contents of a safe deposit box, a 2012 Jeep Grand Cherokee, three pistols, an AR-15 rifle and other items that, authorities say, were paid for by the proceeds of synthetic drug sales.

Experts who have followed the surge of synthetic drugs in the area have long held that the business is lucrative.

“The amount of money they can get from selling this stuff, in my opinion, is pretty much astronomical,” said Bob Welsh, of the Missouri Safety Center.

Welsh is program manager of the center at the University of Central Missouri in Warrensburg. He teaches law enforcement courses about synthetic drugs and has lab tested the effects of some substances on humans.

Continue reading here

Blumenthal calls for criminal investigation into meningitis outbreak

Thursday, October 11, 2012
(Washington, DC) – Today, in a letter to U.S. Attorney General Eric Holder, Senator Richard Blumenthal (D-Conn.) called for the U.S. Department of Justice to open a criminal investigation into the deadly meningitis outbreak linked to tainted drugs that has killed 14 people in 11 states.

Blumenthal wrote, “In light of recent reports that the NECC may have flagrantly and blatantly violated both state and federal law, directly contributing to contamination of steroid products distributed nationally across state boundaries, I request that the Department of Justice begin a criminal investigation of the company, its officers and employees, and others who should be held accountable. Relevant to considering possible criminal enforcement are the horrific consequences of this tragedy − at least 169 victims, including 14 deaths, as well as thousands still at risk during the incubation period for fungal meningitis.”

Blumenthal continued, "Regardless of any possible ambiguity regarding regulatory authority, this company seems to have committed misconduct, potentially involving misrepresentation, fraud, and other criminality. One claim is that the NECC knowingly misled governmental authorities, as well as health care providers. Such misstatements may constitute mail or wire fraud under state and federal law, and other possible legal violations.”

Compounding is a process of combining, mixing, or altering ingredients in order to create a drug for a particular patient. Compounding pharmacies can make drugs for patients that are not typically available commercially, such as a drug made in a lower dosage for a child or a drug made without a dye or preservative for a patient with a specific allergy. Pharmacists that compound drugs have been subject to less federal regulation because they make drugs in response to a valid patient prescription, making the safety and efficacy trials required for drug manufacturing impractical and unnecessary. Compounding drugs without a patient prescription crosses the line from traditional compounding in limited quantities for a specific patient to mass production of drugs without proper FDA oversight.

Below is a text of the letter Blumenthal sent to the Department of Justice:
October 11, 2012

The Honorable Eric H. Holder, Jr.
The Attorney General
Washington, D.C. 20530

Dear Mr. Attorney General:

I know that you are as deeply troubled as I am by the tragic deaths and sicknesses caused by the apparent wrongdoing of the New England Compounding Center (NECC). I am concerned by the increasing amount of information available publicly and privately that indicates willful violations of law as well as basic standards of care by the NECC.

In light of recent reports that the NECC may have flagrantly and blatantly violated both state and federal law, directly contributing to contamination of steroid products distributed nationally across state boundaries, I request that the Department of Justice begin a criminal investigation of the company, its officers and employees, and others who should be held accountable. Relevant to considering possible criminal enforcement are the horrific consequences of this tragedy − at least 169 victims, including 14 deaths, as well as thousands still at risk during the incubation period for fungal meningitis. The NECC’s apparent history of problems is also pertinent. In 2006, the FDA issued a warning to the pharmacy to change its practices, which seems to have been disregarded. In Massachusetts, each compounded medication requires an individual prescription. However, this requirement was allegedly ignored by the NECC.

Previously, I have called for new legislative authority, giving the FDA enhanced inspection and enforcement power that would help prevent such tragedies in the future. In some respects, compounding pharmacies like the NECC, which often make drugs in large quantities without specific individual prescriptions, engage in manufacturing that is effectively lacking in oversight. They operate in a regulatory black hole − a legal netherworld − without the regulation generally applied to pharmaceutical drug makers assuring that products are safe and effective.

Regardless of any possible ambiguity regarding regulatory authority, this company seems to have committed misconduct, potentially involving misrepresentation, fraud, and other criminality. One claim is that the NECC knowingly misled governmental authorities, as well as health care providers. Such misstatements may constitute mail or wire fraud under state and federal law, and other possible legal violations.

I ask that the Department of Justice take the lead in coordinating investigations and prosecutions that may include state as well as federal authorities. Obviously, I have reached no conclusion as to criminal liability, but there seem to be sufficient, credible factual allegations and harm to warrant this request. I appreciate your interest and concern.

Sincerely,

Richard Blumenthal
United States Senate 

Source here

Successful Year So Far for FDA Prosecutions

From all the press releases since January 2012, it looks like the FDA and the United States Attorneys' Offices have had a very successful year prosecuting crimes under the FDA's jurisdiction.

Recent Press Releases

• August 27, 2012: Nevada Man Indicted for Allegedly Selling Misbranded Drugs Over the Internet and Shipping Them to Customers by Mail¹
• August 23, 2012: California Man Sentenced for Importing Adulterated Cancer Drugs; Forfeits $1.4 Million & Land Rover Automobile²
• August 17, 2012: Local and Out of State Pain Clinic Owners and Doctors Charged in Prescription Drug Conspiracies³
• August 10, 2012: South Carolina Pharmaceutical Distribution Company Pleads Guilty in Multi-Million Dollar Scheme to Purchase and Sell Drugs in the Grey Market⁴
• August 8, 2012: Former PIN Rx Pharmacist Sentenced to Almost 4 Years on Kickback and Tax Charges⁵
• August 1, 2012: Bodybuilding.com, LLC and DeLuca Brothers Sentenced for Violating the FDCA⁶
• July 25, 2012: $100 Million Customs Fraud Uncovered; President of San Diego Customs Brokers Association and Ten Others Charged in Scheme⁷
• July 19, 2012: Bristol Man Pleads Guilty to Misdemeanor Misbranding Charge⁸
• July 19, 2012: Former Employee of Exeter Hospital Arrested in Connection with Hepatitis C Outbreak⁹
• July 12, 2012: Kimberly Smedley Sentenced to 3 Years in Prison for Providing Illegal Silicone Buttocks Injections in Hotel Room¹⁰
• July 2, 2012: GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data¹¹
• June 29, 2012: Chinese National Indicted for Allegedly Smuggling Counterfeit Tobacco Products into the U.S.¹²
• June 21, 2012: Ocala Man Pleads Guilty to Medical Tampering Charges and to Firearm Charge¹³
• June 14, 2012: Federal Jury Convicts Distributor of Counterfeit Pharmaceuticals¹⁴
• June 14, 2012: Two Doctors Guilty of Health Care Fraud¹⁵
• June 14, 2012: Internet Pharmacy Owner Charged in $95 Million Fraud Scheme¹⁶
• May 25, 2012: Palm Beach Man Sentenced for Mislabeling Medical Test Kits¹⁷
• May 23, 2012: Miami Food Supplier Sentenced for Distributing Misbranded Food¹⁸
• May 22, 2012: Bodybuilding.com, LLC and Jeremy DeLuca Plead Guilty in Federal Court to Violating FDCA¹⁹
• May 17, 2012: NY Man Indicted on Charges of Illegal Disposal of a Hazardous Waste²⁰
• May 16, 2012: Rochester Man Sentenced for Importing Counterfeit Pharmaceuticals²¹
• May 15, 2012: Former Hershey Resident Charged Federally with Adulteration of Medical Devices²²
• May 11, 2012: Former Federal Corrections Officer Sentenced to 24 Months' Imprisonment for Trafficking Steroids²³
• May 11, 2012: Mayo Clinic Radiology Tech Pleads Guilty to Spreading Hepatitis C²⁴
• May 9, 2012: Stoughton Nurse Sentenced for International Money Laundering and Illegal Distributing Prescription Drugs²⁵
• May 8, 2012: NJ Woman Sentenced for Counterfeit Cosmetics²⁶
• May 9, 2012: Bodybuilding.com LLC and Jeremy DeLuca Charged with Violating the FDCA²⁷
• May 8, 2012: Nurse Sentenced for Stealing Narcotics From Patients²⁸
• May 8, 2012: Medical Device Distributor Sentenced For Importing, Reselling Counterfeit and Contaminated Surgical Hernia Mesh²⁹
• May 7, 2012: Abbott Labs to Pay $1.5 Billion to Resolve Criminal and Civil Investigations of Off-Label Promotion of Depakote³⁰
• April 25, 2012: NY Man Charged with Illegal Disposal of a Hazardous Waste³¹
• April 25, 2012: Nurse Sentenced for Stealing Vicodin from Patients³²
• April 24, 2012: Dallas Compunding Pharmacy Owner Pleads Guilty in Connection with Misbranded Drug Shipment³³
• April 24, 2012: Eight Central Pennsylvania Men Indicted, $6 Million Seized in Federal Bath Salts Prosecution³⁴
• April 24, 2012: Two Israeli Men Sentenced for Smuggling Counterfeit and Misbranded Cialis into the United States³⁵
• April 19, 2012: U.S. Pharmaceutical Company Merck Sharp & Dohme Sentenced in Connection with Unlawful Promotion of Vioxx³⁶
• April 19, 2012: Four Defendants Indicted in Alleged 2007 Conspiracy to Distribute 110,000 Pounds of Adulterated Mexican Cheese Throughout the U.S.³⁷
• April 10, 2012: Founder of Bodybuilding.com Pleads Guilty to Selling Misbranded Drugs as Dietary Supplements³⁸
• April 2, 2012: Equitable Sharing of $500 Million Google Foreiture Approved³⁹
• March 28, 2012: Kimberly Smedley Admits Illegal Silicone Buttocks Injections in Hotel Room⁴⁰
• March 27, 2012: United States Department of Justice and the State of Washington Announce Successful Health Care Fraud Settlement with Bates Drug Stores in Spokane⁴¹
• March 23, 2012: SK Foods Former Owner and CEO Scott Salyer Pleads Guilty to Racketeering and Price Fixing⁴²
• March 23, 2012: Spearfish Man Indicted on Several Counts of Mail Fraud and Misbranding of a Drug⁴³
• March 20, 2012: Sacramento Man Arrested for Importing Counterfeit Drugs⁴⁴
• March 15, 2012: Sentencings in Human Growth Hormone Distribution Case⁴⁵
• March 14, 2012: Brownsville Woman Arrested for Selling Fake Botox⁴⁶
• March 5, 2012: Illinois Sales Rep Sentenced on Drug Charges⁴⁷
• March 5, 2012: Ferguson Pleads Guilty to Wire, Mail Fraud in Hollywood Body and Laser Center Case⁴⁸
• March 2, 2012: Former Kauai Physician Sentenced to Over 12 Years in Prison⁴⁹
• March 1, 2012: Albuquerque Man Sentenced to 24 Months in Prison for Adulterating Yogurt with Semen⁵⁰
• February 10, 2012: Nationwide Supplier of Medical Equipment Sentenced to 37 Months in Federal Prison for Health Care Fraud, Money Laundering and Selling Adulterated and Misbranded Medical Devices⁵¹
• February 28, 2012: Rhode Island Man Pleads Guilty to Selling Mislabeled Maple Syrup⁵²
• February 21, 2012: Former Monroe County Pharmacy Operator Pleads Guilty to Misbranding of Medication in Federal Court⁵³
• February 21, 2012: Florida Physician Pleads Guilty to Conspiracy to Commit Mail and Wire Fraud⁵⁴
• February 17, 2012: Former PIN Rx Pharmacist Pleads Guilty to Kickback and Tax Charges⁵⁵
• February 17, 2012: Medical Equipment Sales Rep Pleads Guilty to Federal Charge of Health Care Fraud⁵⁶
• February 16, 2012: Local Cancer Doctor Pleads Guilty to Receiving Misbranded Cancer Drugs Two Californians also Named in Indictment⁵⁷
• February 9, 2012: Sioux City Man Sentenced for Selling Erectile Dysunction Mediciation Without a Prescription⁵⁸
• January 30, 2012: Rochester Pharmacist Sentenced for Forging Prescriptions⁵⁹
• January 30, 2012: Registered Nurse Convicted of Illegally Distributing Prescription Drugs and International Money Laundering⁶⁰
• January 24, 2012: R.I. Medical Equipment Sales Representative to Plead Guilty to Health Care Fraud⁶¹
• January 17, 2012: Two Manufacturers Sentenced for Misbranding Products as Dietary Supplements⁶²

To view all FDA press releases click here.

Another Example of a Federal Prosecution Involving Compounded Drugs

Former Vice-President Of Pharmacutical Company Pleads Guilty To FDA Violations And Health Care Fraud

– Company received more than $2 million in payments from Medicare for misbranded, adulterated and contaminated inhalation medications

February 7, 2012

LOUISVILLE, KY – The former vice-president of National Respiratory Services, LLC (NRS) has pled guilty in United States District Court before Chief Judge Joseph H. McKinley, Jr., to charges of misbranding and altering drugs and to committing health care fraud announced David J. Hale, United States Attorney for the Western District of Kentucky.
Johnny Perry, age 62, of Mt. Washington, Kentucky, was indicted by a federal grand jury in Louisville on August 3, 2011. The five count indictment alleged that between June of 2006 and June of 2008, Perry, as vice-president of NRS, provided compounded medications to patients, but led both Medicare and the patients’ doctors to believe that the pharmaceutical company was providing non-compounded medications (FDA approved-commercially manufactured). Compounded medications are not FDA approved, but FDA regulations permit pharmacists to make compounded drugs, including prescription drugs, in limited amounts and under narrow circumstances, for particular patients, and at the direction of a physician when other available drugs cannot be prescribed.
The defendant, through the NRS Corporation submitted false and fraudulent claims to Medicare for the cost of FDA-approved, commercially manufactured, prescription inhalation drugs, when they were not. As a result of this conduct, NRS received approximately $2,030,343 in payments from Medicare to which they were not legally entitled.

It is further alleged that Ms. Perry, aided and abetted by others, from November 2006 through June 2008, misbranded inhalation drugs in that they contained false and misleading labeling that misrepresented the strength and potency of their active ingredients or the type of drug actually provided. During the same period it is alleged that Perry, aided and abetted by others, adulterated inhalation drugs in that the strength differed from what it was purported or represented to possess and that the drugs were contaminated and non-sterile.
“This case should send a clear message that offenses endangering public health will be vigorously prosecuted,” stated U.S. Attorney David J. Hale. “Misrepresenting the strength and potency of a prescribed medication and delivering contaminated products to patients are unconscionable crimes.”
“The Office of Inspector General is committed to protecting the health of patients covered by Medicare and Medicaid,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services in Atlanta, Georgia, “This company billed for medications that never should have been dispensed in the first place which created serious quality of care concerns.”
The maximum potential penalties are 46 years in prison, a $770,000 fine, and supervised release for a period of 3 years.
The case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb and Assistant United States Attorney James Lesousky, and it was investigated by the Food and Drug Administration, Health and Human Services Office of Inspector General, United States Postal Inspection Service, and the Federal Bureau of Investigation.

Press Release Found here.

Criminalization of Medication Errors; Mistakes by Pharmacists

The following article appears at http://www.uspharmacist.com/content/c/16572/

Jesse C. Vivian, BS Pharm, JD

Professor, Department of Pharmacy Practice
College of Pharmacy and Health Sciences
Wayne State University
Detroit, Michigan

11/19/2009

US Pharm. 2009;34(11):66-68. Here is a sobering thought. A pharmacist makes a mistake. The error results in the death of a patient, and the pharmacist is charged with negligent homicide. He is found guilty of involuntary manslaughter and faces up to 5 years in prison and a maximum fine of $10,000. Of course, his pharmacist license is revoked and chances are he will never work in the profession again. His crime? He did not check the accuracy of calculations used by a pharmacy technician under his charge to compound the concentration of sodium chloride in a prescription for a cancer chemotherapy solution.
Negligent? Yes. Accountability and responsibility? Yes and Yes. Malpractice? Yes. Loss of license? Yes. Guilty? Yes. But a crime? Prison term? For a mistake, albeit a mistake with a worst-case outcome? That is tough medicine to swallow. More important, how is justice served by putting this pharmacist in jail? The message to pharmacists and perhaps all other health care practitioners—watch out. There may be prosecutors out there just itching to put you away.

Facts of the Case

On February 24, 2006, while working at the Rainbow Babies and Children’s Hospital in Cleveland, Ohio, licensed pharmacist Eric Cropp received a prescription for a chemotherapy solution of Eposin (etoposide phosphate) that was supposed to be mixed in an IV bag of normal saline containing 0.9%

And yet another example of criminal charges against a compounding pharmacist

Compounding Pharmacist Gains Partial Judicial Relief; Still Guilty on Eight

On April 30, 2010 Judge Marcia S. Krieger, United States District Judge,
District of Colorado dismissed 23 guilty counts against Thomas Bader, a
compounding pharmacist and owner of College Pharmacy in Denver Colorado,
while affirming eight counts and $4.8 million in forfeiture.
The case illustrates many of the nuanced risks involved with compounding
pharmacies, importing and exporting of active pharmaceutical ingredients
(API), compounding and selling high profile drugs such as human growth
hormone (HGH) and anabolic steroids, understanding the subtle distinction
between compounding and manufacturing, and the tenuous interplay between
state compounding laws and the Federal Food, Drug and Cosmetic Act (FDCA).
The case stems back to 2007 when Mr. Bader was charged with illegal
distribution, mail fraud, and conspiracy to facilitate the sale of smuggled
goods. Mr. Bader was importing HGH from China and compounding the API into
finished drug products. As Colorado’s compounding statute is very expansive,
he believed his practice to be protected under state law, and outside the
purview of FDCA.
The federal smuggling charges focused on the fact that imported HGH was from
a non-FDA registered facility and the compounded products thus involved new,
unapproved drugs requiring an NDA under FDCA. Mr. Bader was further charged
with illegal distribution of HGH and testosterone cypionate (a controlled
substance) as both products involved promotion for unapproved uses, illegal
under federal law.
On February 2, 2010 a federal jury found Mr. Bader guilty of 31 counts
including illegal distribution of HGH and controlled substances and unlawful
importation (i.e. smuggling) of HGH. Mr. Bader and counsel then moved to
acquit, or alternatively seek a new trial based on a number of legal
propositions including entrapment by estoppel, violation of due process
rights, erroneous juror instructions, failure to establish a criminal
purpose or intent, and insufficient evidence to support the findings.
Ultimately, on April 29, 2010 Judge Krieger dismissed 23 counts involving
illegal distribution of HGH. The Judge acknowledged a number of Mr. Bader’s
sales were for approved uses of HGH, including some even written for
children. Additionally, Mr. Bader had no way of knowing if the
prescriptions were for permissible uses and thus his actions were protected.
Still, the ruling upheld eight guilty counts. Two smuggling charges were
upheld, as importation of HGH from a non-FDA registered facility was seen as
“contrary to law,” and thus illegal. Simple repackaging or relabeling of a
product may be lawful under state compounding laws; however this
“compounding defense” could not shield Mr. Bader from further provisions of
the FDCA.
Five illegal distribution counts involving HGH were upheld as the use of HGH
as an anti-aging drug is unauthorized and illegal. The lone distribution
charge involving controlled-substances was also upheld, as selling and
promoting testosterone cypionate for muscle building and ant-aging is
illegal. Lastly, the judge affirmed $4.8 million forfeiture in assets based
on the nature of the guilty counts. Sentencing in this matter is scheduled
for June 10, 2010.
To read the remainder of the article click here.

This entry was posted on Monday, May 10th, 2010 at 3:06 pm and is filed under General.      

Another Example of Pharmacist Being Criminally Charged for Death Resulting from Compounding Error.

Here is an article about a case where the death from compounding error occurred in 2006 that shows a pharmacist who plead no contest to involuntary manslaughter of a 2-year old child.

Article appears here.

Failed check system for chemotherapy leads to pharmacist's no contest plea for involuntary manslaughter

From the April 23, 2009 issue
The April 19, 2009, Cleveland Plain Dealer covered another disconcerting report about a healthcare professional who is facing criminal charges for his role in a fatal medication error.(1) According to the news report, a former Ohio pharmacist will plead no contest next month to involuntary manslaughter of a 2-year-old child who died in 2006 as a result of a chemotherapy compounding error. We first wrote about this tragic error in our March 8, 2007 newsletter, when criminal investigation of the event was being considered.(2) Since then, the pharmacy board revoked the pharmacist’s license, and a grand jury indicted him on charges of reckless homicide and involuntary manslaughter. The pharmacist faces up to 5 years in prison.
Prosecutors hold the pharmacist responsible for the toddler’s death because he oversaw the preparation of her chemotherapy. The child had undergone surgeries and four rounds of chemotherapy to treat a curable malignant tumor at the base of her spine. She was supposed to receive her last dose of chemotherapy on the day of the error. A pharmacy technician mistakenly prepared the infusion using too much 23.4% sodium chloride. According to a news report,(3) the technician mentioned to the pharmacist that the final preparation didn’t seem right, but the error went unnoticed. The infusion was administered to the child, who died 3 days later.
Though we cannot shed more light on the root causes of the error, our experiences with analyzing other errors strongly suggest that underlying system vulnerabilities played a role. For example, some pharmacies remove fluid from a bag when they have to add a large volume of medication to infuse, and then add additional fluid to the bag and titrate with 23.4% sodium chloride injection to bring the final concentration of the infusion to whatever was prescribed. Or they start with an empty bag and follow a similar process. Compounding the solution from scratch is error-prone. Such exactness of base solutions is most often unnecessary from a clinical standpoint. Communication failures between technicians and pharmacists, IV compounder-related failures, inadequate documentation of the exact products and amounts of additives, and other system issues have contributed to numerous fatal errors. We have also seen compounding errors and subsequent failed double-checks due to adverse performance shaping factors such as poor lighting, clutter, noise, and interruptions. In fact, in this particular case, news reports suggest that the pharmacist felt rushed, causing him to miss any flags that may have signaled an error.(3)
Without minimizing the loss of life in this case, we continue to be deeply concerned about the criminalization of human errors in healthcare. Ever since the advent of powerful machines like automobiles, the law allows for the criminal indictment of people who make errors that harm others, despite no intent to cause harm. To cite one instance, drivers who have been involved in an accident that caused the death of another person might be prosecuted in most states for vehicular homicide, even if the accident resulted from human error. The reality is, mere human errors that randomly occur in well-meaning people are considered “criminal” in a number of circumstances where public safety is at issue.
Safety experts including ISMP advocate for a fair and just path for individuals involved in adverse events, arguing that punishment simply because the patient was harmed does not serve the public interest. Its potential impact on patient safety is enormous, sending the wrong message to healthcare professionals about the importance of reporting and analyzing errors. It could also have a chilling effect on the recruitment and retention of an already depleted healthcare workforce. All professionals are fallible human beings destined to make mistakes along the way and drift away from safe behaviors as perceptions of risk fade when trying to do more in resource-strapped professions. Who would knowingly put themselves at risk for criminal indictments by entering the medical profession? If warranted, licensing boards can protect patients from reckless or incompetent actions of healthcare practitioners by limiting or revoking licenses.
While the law clearly allows for the criminal indictment of healthcare professionals who make harmful errors, despite no intent to cause harm, it will long be debated whether this course of action is fair, required, or even beneficial. The fact remains that the greater good is served by focusing on system issues that allow tragedies like this to happen. By focusing instead on those involved—the easy targets—one can easily avoid addressing the systems issues. Focus on the easy target in this case makes us wonder whether any regulatory or accreditation agency is assuring that all hospitals learn from this event and adjust their systems to prevent the same type of error. If not, the death of this little girl is a heartbreaking commentary on healthcare’s inability to truly learn from mistakes so they are not destined to repeat.
Some good has come from this tragic error. In Ohio, Senate Bill 203, called Emily’s Law after the child that died, requires pharmacy technicians to be 18 years or older, possess a high-school diploma, pass a criminal background check, and pass a competency exam approved by the Ohio State Board of Pharmacy. A similar House bill did not pass in the federal legislature.
References: 1) McCarty J. Eric Cropp, ex-pharmacist in case in which Emily Jerry died, is ready to plead no contest. Cleveland Plain Dealer. April 19, 2009. Available at: www.cleveland.com/news/plaindealer/index.ssf?/base/cuyahoga/1240129922221300.xml&coll=2. 2) ISMP Medication Safety Alert! Criminal prosecution of human error will likely have dangerous long-term consequences. 2007;12(5):1-2. 3) McCoy K, Brady E. Drug error killed their little girl. USA Today. February 25, 2008. Available at: www.usatoday.com/money/industries/health/2008-02-24-emily_N.htm.

Medisca, Inc. and Signature Compounding Pharmacy: Overview of Criminal Case

Here is another example of a compounding pharmacy, Signature Compounding Pharmacy, charged in a criminal case.  Signature was located in Orlando, Florida but the criminal case was brought in Albany, New York.  The Florida Department of Health filed administrative complaints against the pharmacy for improper distribution of human growth hormone but never pursued the charges.  Signature closed down after the indictment.  A Plattsburgh pharmaceutical company, Medisca Inc., and its president, a Canadian citizen, both pleaded guilty to misdemeanor federal drug charges for mislabeling more than $1 million worth of human growth hormone that was imported from China and distributed to pharmacies around the country.  Signature Compounding Pharmacy was among the customers of  Medisca, Inc, which had corporate offices in St. Laurent, Quebec.  This case has led to 17 convictions. The remaining case is against Naomi Loomis; her husband, Robert "Stan" Loomis; his brother, Kenneth Michael Loomis; Kirk Calvert; and Anthony Palladino.

Soares defends steroids case
Albany prosecutor cites factual errors in federal ruling; rejects bias claim
By BRENDAN J. LYONS Senior writer
Published 05:00 a.m., Monday, September 13, 2010

ALBANY -- Prosecutors have asked an Albany judge to forge ahead with a criminal trial for five Florida pharmacy operators accused of being at the center of an alleged illegal steroids business. It's a part of a case that drew national interest in 2007, but that has since brought attacks on the Albany County district attorney's office.
The remaining criminal case, which targets the pharmacist-owners of Orlando's former Signature Compounding Pharmacy, has languished for three years following an interstate law enforcement raid in February 2007 -- spearheaded by Albany County prosecutors -- that exposed illicit steroid use by professional athletes and others.

More than 15 people, including doctors and business owners, pleaded guilty to related drug charges in a case that exposed systemic abuse of prescription drug laws. But the case against the pharmacists and their managers, who were also targets of a related federal criminal investigation, has thrust a spotlight on District Attorney David Soares' decision to indict operators of a faraway company that did a small percentage of its multi-million-dollar business in New York state and Albany County.
Two years ago an Albany County judge threw out the first indictment against the pharmacy's operators, citing prosecutorial missteps in the grand jury proceedings. A month later, the pharmacists fought back with a federal civil rights lawsuit in Florida seeking millions of dollars in damages for false arrest and malicious prosecution. They sued Soares, an assistant district attorney, the Orlando Police Department and other law enforcement officials.
But their criminal case in New York was not over. Earlier this year a state appellate court reversed a portion of the county judge's dismissal order that barred prosecutors from bringing a new indictment, which they did in June.
Last month defense attorneys for the five Signature defendants asked the same judge who dismissed the first case, County Judge Stephen W. Herrick, to do it again. This time, they claimed similar grand jury problems and also pointed repeatedly to a scathing analysis of the investigation last June by a federal judge in Florida, whose ruling has the civil rights lawsuit on course for a jury trial in Florida
"Soares not only participated in, but directed (assistant District Attorney Christopher) Baynes and others to violate plaintiffs' Fourth Amendment right to be free from unlawful arrests," wrote the federal judge, Gregory A. Presnell. "Rather than wait for any documentary evidence that plaintiffs had committed a crime in New York and comply with the very limited requirements of federal and state extradition statutes, Soares decided to orchestrate Plaintiffs' arrests without valid New York warrants and, in the process, garner significant media attention."
Last week, Christopher D. Horn, special counsel to the Albany County district attorney, filed a 34-page motion that seeks to uphold the latest 33-count indictment. It also accuses the federal judge of making numerous factual errors. Horn's written statement marks the first detailed response to Presnell's searing criticism of the Albany district attorney's investigation.
Lawyers in the criminal case are subject to a gag order and were unable to comment for this report.

Prosecutors and investigators have previously characterized Signature pharmacy as a prescription mill that manufactured many of its own drugs, including steroids, that were marketed to people through "wellness clinics" that did a large volume of business through the Internet. Several people convicted in the case admitted they set up the wellness clinics that funneled prescriptions to Signature, which mailed drugs to people around the country. Some of the clinic operators said they paid doctors to write prescriptions for people who were never evaluated in person, and who had no legitimate medical need for the controlled substances, including steroids and human growth hormone.
The case, especially the fallout of its exposure of illicit drug use by athletes, shook up the pro sports world. It also was cited by former Sen. George L. Mitchell in his 2007 report on illegal steroid use in Major League Baseball.
While Signature's defense team has characterized their clients as law-abiding pharmacists who were victims of a zealous prosecutor, others convicted of dealing with them have cast doubt on that assertion.
Last year in Rhode Island, Orlando businessman Victor Martin Effron pleaded guilty to federal charges related to the illegal importation of human growth hormone from China. Federal authorities said the product was being sold to Signature pharmacy, which had contracted Effron to smuggle the drug into Florida, and marketed as approved for use by the Food and Drug Administration.
Orlando police, who were an integral part of the Signature case, asked Albany's prosecutors four years ago to join their investigation after building a criminal case from wiretaps, cooperating witnesses and evidence collected from trash bins outside Signature's pharmacy. They solicited the interest of Soares, according to court records, because the company dispensed prescriptions in New York, which has some of the strictest prescription drug laws in the nation.
Still, defense attorneys have countered that Soares, known from his position as district attorney for the state capital, only became involved in the case to thrust himself into a national spotlight. They said the new charges should be dismissed, or a special prosecutor appointed, because Soares' office has a conflict due to the related federal civil rights lawsuit that has gained traction in Orlando.
Horn, who also handles appeals for the office, countered last week that appointing a special prosecutor would set a precedent for criminal defendants to disqualify prosecutors from pursuing cases by suing them, then claiming there is a conflict.
"The defendants had been being prosecuted for the same criminal conduct for well over a year prior to the filing of their federal civil lawsuit," Horn wrote in the motion to Herrick. "Now the defendants argue that the filing of a fifth indictment is evidence of bias born of the 'conflict' which the defendants themselves manufactured. They are in no different position than they were before they filed their lawsuit. They were being prosecuted then and they are being prosecuted now."
The defendants, three of whom are licensed pharmacists in the state of Florida, are: Naomi Loomis, 37, her husband, Robert "Stan" Loomis, 59; Kenneth Michael Loomis, 62, who is Robert's brother; former business manager Kirk Calvert, 40; and former business manager Tony Palladino, 34.
Horn's motion also attacks key sections of the federal court order, and notes that days after Presnell ordered the civil case to proceed, the judge abruptly issued a corrective order dismissing the claim against a former state Health Department investigator, Mark Haskins, who had played a key role in the Signature investigation.

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Plea Hearing in ApothéCure and Gary D. Osborn Criminal Case

A hearing in the criminal case of ApotheCure and Gary D. Osborn is scheduled for 10:30 a.m. today.  It is expected that ApothCure and Gary D. Osborn will plead guilty to the two-count information, charging violations of  21 U.S.C. Section 331(a), 352(a) and 333(a)(1)--all criminal, class A misdemeanors--for introducing in interstate commerce a misbranded drug in that its label was false and misleading. The defendants were responsible for introducing into interstate commerce two lots of misbranded colchicine injectable solution that led to the deaths of three people in the Pacific Northwest.  Updates on the hearing will be posted as soon as the information is available.

Criminal Charges in a Compounding Case: Exercise of Federal Authority

The Criminal Information filed against ApothéCure, a major compounder in the United States, and Gary D. Osborn charges violations of 21 U.S.C. Section 331(a), 352(a) and 333(a)(1)--all criminal, class A misdemeanors.  Basically, the information charges that  ApothéCure and Gary D. Osborn introduced in interstate commerce a misbranded drug in that its label was false and misleading.  Criminal misdemeanors under the federal system are criminal offenses eligible for terms of imprisonment that do not exceed one year but are more than six months in length by federal statute. See 18 U.S.C. 3559(a)(6)  Under the federal system, the district court also uses the advisory United States Sentencing Guidelines to determine the range and actual punishment.  Both the criminal charges in ApothéCure and the attempt to obtain an injunction in Franck's show the FDA and DOJ attempting to exercise its federal jurisdiction to regulate and punish compounders who step out of bounds.  It will be interesting to see how far the federal courts allow the FDA and DOJ  to exercise this power against other compounders who violate the law.   The appeal  in Franck's while only binding on those states in the 11th Circuit Court of Appeals--Alabama, Florida, and Georgia--will be precedent setting with the possibility, no matter the outcome, of making its way to the United States Supreme Court.  The other possibility if DOJ/FDA loses the appeal is for there to be a legislative fix attempting to define the parameters of federal jurisdiction to regulate this area of the law.