Compounding Drugs Could Create Higher Workers Compensation Liability

Jeffrey M. Adelson, managing partner of the Santa Ana, California office of Adelson, Testan, Brundo & Jimenez, the national workers’ compensation defense firm, was recently quoted in an article on the front page of Business Insurance discussing the risks and costs associated with contaminated compound drugs in workers’ compensation cases.

Concerns over the practice of large scale compounding are rising following an outbreak of meningitis linked to a New England drug compounding company, and as Adelson noted for Business Insurance, this could have far reaching implications for employers.

How Drug Compounding Becomes a Risk

Under current regulations, in most cases compounded medication should only be manufactured to meet the customized dosage needs of individual patients via prescription when more commercially available drugs are not adequate. Exceptions would include cases of national drug shortages.

However, it appears that some pharmacies might be manufacturing compounded medication on a larger scale without prior approval by the FDA and other regulatory bodies. This appears to be the case with New England Compounding Pharmacy, Inc., the pharmacy linked to doses of injectable steroids contaminated with meningitis that have resulted in the loss of 20 lives and caused 250 confirmed meningitis cases.

Ordinarily, compounding pharmacies are not subject to the greater oversight put on large scale manufacturers of compound drugs, nor are they subject to the same price controls. This sets up the scenario in which batches of contaminated drugs are distributed, which could potentially raise the cost of a workers’ compensation claim.

Contaminated Compounds and Workers’ Comp

In his observations to Business Insurance, Adelson pointed out not only the likelihood of a workers’ compensation claimant receiving contaminated medication in large scale cases like that of the New England Compounding Pharmacy, but the ways in which this could impact the cost of workers’ compensation claims:

  • As the contaminated medication would be administered under the original workers’ compensation claim, the employer and insurer could be held liable for the additional costs to treat the health problems arising from the contamination.
  • Contamination with bacteria such as meningitis that can cause lifetime disability and even death “could turn a typical claim into a catastrophic case,” says Adelson.
  • Employers could protect themselves by subrogating under a product liability argument. Even so, the additional costs represented by taking this defense through to resolution could inflate the workers’ compensation claim.

Adelson, Testan, et al. is committed to proactively representing its clients’ litigation needs in workers’ compensation defense. We encourage our clients to ask questions about emerging issues like drug compounding and how this could impact existing and future workers’ compensation claims.


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