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From Health Law Daily, January 15, 2015

Doctors face consumer fraud and negligence suits for use of contaminated drugs

By Michelle L. Oxman, J.D., LL.M.

Patients who contracted fungal meningitis from contaminated drugs administered by their physician may proceed with their lawsuits against the physician and his employer, a clinic, for negligence, consumer fraud, and punitive damages. The physician owed the patients duties to: (1) purchase drugs that were made and sold in compliance with applicable laws and free of contamination; (2) disclose that the drugs were purchased from an unregulated compounding pharmacy; and (3) warn of the risks of the procedure, including the risks presented by the contamination of the drug. The allegations that the physician and clinic withheld safety information from the patients and used the contaminated drug with reckless disregard for their safety were sufficient to state a claim for punitive damages (In re New England Compounding Pharmacy, Inc. Products Liability Litigation, January 13, 2015, Zobel, R.).

The drug. The clinic physician injected the patients with contaminated methylprednisolone acetate (MPA), a compounded drug that they purchased from New England Compounding Pharmacy, Inc. (NECC). Ordinarily, compounded drugs are prepared to order for each patient. As a compounding pharmacy, NECC was not licensed by the FDA to manufacture drugs for purchase in bulk. The patients alleged, however, that the physician ordered the drug in bulk quantities, using false names of patients, and made no effort to assure that the drug was safe. The physician did not inform the patients that they were receiving a compounded drug, let alone that the drug was or could be contaminated, and they billed for Depo-medrol, an FDA-approved drug, rather than the MPA, which was not FDA-approved.

Negligence. The defendants argued that they had no duty to use diligence before lawfully purchasing compounded drugs from NECC, a licensed pharmacy. The court ruled, however, that they had a duty to use reasonable care to: (1) assure that the drugs they purchased and administered were procured from companies that complied with the law and used proper quality control and sterility measures; (2) assure that the drugs they used were not contaminated; ; (3) train and supervise the staff who ordered the drugs; and (4) follow appropriate policies and procedures to avoid purchasing or dispensing contaminated drugs. In addition, the physician failed to inform the patients that they may have been injected with a contaminated drug. The court also ruled that physicians have a duty to warn patients of the dangers or risks of any drug they prescribe or administer, whenever there is a danger and they have greater knowledge of the risk than an ordinary consumer.

Consumer fraud. Allegations that the physician concealed the name and nature of the drug and submitted bills for Depo-medrol, an FDA-approved drug, when they had administered MPA, stated a claim for relief under an Illinois consumer fraud statute.

Strict product liability. The court dismissed the claim for strict product liability under Illinois law because the law requires that the consumer have purchased the product that caused injury. The administration of the drug was a service, of which the drug was only one component.

Punitive damages. The court found that the alleged conduct of the clinic and physician, the disregard of safety regulations and failure to inform patients of “important safety information,” demonstrated utter disregard for the patients’ rights and complete neglect of their safety. These findings would be sufficient to justify an award of punitive damages.

The case number is MDL NO. 13-02419-RWZ

Attorneys: Harold D. Gibson (Gentry Locke Rakes & Moore LLP) for Consolidated Plaintiffs. Franklin H. Levy (Lawson & Weitzen) for Alaunus Pharmaceutical, LLC. Frederick H. Fern (Harris Beach PLLC), and Matthew P. Moriarty (Tucker Ellis, LLP) for New England Compounding Pharmacy, Inc., Ameridose LLC. Daniel M. Rabinovitz (Michaels, Ward & Rabinovitz, LLP) for Medical Sales Management, Inc. Joseph P. Thomas (Ulmer & Berne LLP) for GDC Properties Management, LLC.

Companies: Alaunus Pharmaceutical, LLC; New England Compounding Pharmacy, Inc.; Ameridose LLC; Medical Sales Management, Inc.; GDC Properties Management, LLC; Advanced Pain & Anesthesia Consultants, P.C.; APAC Centers for Pain Management

MainStory: TopStory PLDrugNews DrugBiologicNews FDCActNews LabelingNews PrescriptionDrugNews AdulterationNews MassachusettsNews

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