Evaluating Risk When Prescribing Compounded Semaglutide

MICA Risk Team Consultants are helping an increasing number of MICA members evaluate the medical professional liability risks of prescribing compounded semaglutide for weight loss. Compounded semaglutide products became available after semaglutide-containing Wegovy landed on the FDA’s drug shortages list less than a year after its FDA approval in 2021. When a drug is on the shortages list, the FDA allows pharmacies to make compounded versions.

With endless radio and TV ads promoting semaglutide, and compounded versions available at a fraction of Wegovy’s staggering cost, patients are clamoring for a prescription and health care providers are responding. Med-spas and direct-to-consumer telemedicine companies like Hims & Hers or Henry Meds were the first to jump on the cash cow bandwagon. Now an increasing number of physician practices are doing the same, often advertising bundled pricing for a medical exam and a 3-month supply of semaglutide.

MICA risk consultants have talked with Utah and Arizona primary care practices considering prescribing compounded semaglutide for patients. A google search of semaglutide in Arizona reveals that chiropractors, med-spas, internists, ob-gyns, nurse practitioners, naturopaths, and plastic surgeons are advertising semaglutide weight loss programs. While adding a cash-pay source of revenue may be attractive to physicians and advanced practice providers tired of the insurance reimbursement game, prescribing and dispensing compounded semaglutide comes with risks for both prescribers and patients.

Before you decide whether to prescribe compounded semaglutide in your practice, it is important to understand the risks and weigh them against the benefits. To help you in this analysis, in this article, MICA:

• Discusses risks posed by compounded drugs generally; 
  
  
• Summarizes FDA publications cautioning patients and prescribers about compounded semaglutide;
  
  
• Describes potential lawsuits and regulatory investigations that could arise from marketing, prescribing, or dispensing compounded semaglutide; and
  
  
• Offers risk reduction strategies for those prescribing compounded semaglutide.

Recognized Risks of Compounded Drugs

Although compounding pharmacies are regulated and inspected either by the FDA or state boards of pharmacy, quality concerns remain. The FDA notes that “poor compounding practices can result in serious drug quality problems, such as contamination or a drug that contains too much active ingredient,” which can result in patient injury or death.

In 2012, before compounding regulations were strengthened, a U.S. compounder shipped injectable steroids contaminated with fungus throughout the country. The drugs were injected into patients’ joints and spines, killing more than 60. Hundreds of others developed fungal infections. A pharmacist who himself uses compounded semaglutide recently likened compounders to the airline industry because of the ever-present risk that one batch of a poorly made drug could injure many. The pharmacist told KFF Health News: “When you have an airline crash, it hurts everybody.” The FDA cautions that the steroid incident was not an isolated event and says since 2012 there have been “many” instances where patient infection or death was linked to a poor quality compounded drug.

Novo Nordisk, manufacturer of Wegovy, says it has conducted its own testing of compounded semaglutide products. It is using the results to support its allegations in multiple lawsuits filed against pharmacies, medspas, and weight loss clinics for false advertising and patent infringement. Novo Nordisk alleges the compounded semaglutide marketed by defendants is adulterated, misbranded, and poses potential safety and effectiveness risks for patients. It claims that its testing proves some products lack any semaglutide, while others contain bacteria and other impurities.

Some physicians consider compounding quality risks, and their potential consequences, to be too steep. Ricardo Correa, MD, EdD, the director of the University of Arizona endocrinology fellowship, told MedPage Today in 2022 that compounders “are probably using the same active pharmacological part [semaglutide], but when you combine things and you add different excipients, the effectiveness – if you don’t measure that in a randomized controlled trial – will not be the same.” He added that not knowing exactly what the formulation contains makes prescribing too risky for him and the patient: “You’re treating 100 patients and all of them have been doing fine with a compound medication you recommend. One develops a problem. That’s it. That’s the end of your career.”  

FDA Warnings About Compounded Semaglutide

In 2023, the FDA issued postmarket drug safety information directed at patients and prescribers concerning compounded semaglutide. The FDA also sent letters to the National Association of Boards of Pharmacy and the Federation of State Medical Boards. In these documents, the FDA warned about risks associated with compounded semaglutide.

In particular, the agency said:

• Compounded drugs are not FDA-approved.
  
  
• The FDA does not review compounded versions for safety, effectiveness, or quality.
  
  
• “Patients should not use a compounded drug if an approved drug is available to treat a patient.”
  
  
• There are no approved generic versions of Wegovy or Ozempic.
  
  
• “Patients should be aware that some products sold as ‘semaglutide’ may not contain the same active ingredient as FDA-approved semaglutide products.”
  
  
• The FDA has received reports that some compounders may be using semaglutide salts, including semaglutide sodium or semaglutide acetate. Salt forms differ from the base form of semaglutide, which is the active ingredient in FDA-approved Wegovy. “The FDA is not aware of any basis for compounding a drug using semaglutide salts that would meet the requirements of the federal Food, Drug, and Cosmetic (FD&C) Act.” “Salt forms have not been shown to be safe and effective.”
  
  
• The FDA has received adverse event reports after patients used compounded semaglutide.
  
  
• The FDA monitors the internet for fraudulent or unapproved products and has issued warning letters to stop the distribution of illegally market semaglutide.
  
  
• The FDA is investigating reports that counterfeit Ozempic is being marketed in the U.S. Counterfeit drugs may contain the wrong ingredients, too much/too little/no active ingredients, or contain other harmful ingredients.
  
  
• Patients should only obtain semaglutide with a prescription from a licensed health care provider and only through state-licensed pharmacies or outsourcing facilities registered with the FDA.
  
  
• The FDA encourages patients and prescribers to report adverse events or quality issues linked to compounded semaglutide to the MedWatch Adverse Event Reporting Program.

Prescriber Liability for Deceptive or Misleading Advertising

Prescribers who say, or even suggest, that compounded products are equivalent to FDA-approved products are increasing their liability risk. Physicians and advanced practice providers who prescribe or dispense compounded semaglutide should carefully review their webpages and other promotional materials and remove statements that could arguably be viewed as misleading or deceptive. MICA strongly recommends that prescribers involve their practice attorney in this review process.

Physicians and advanced practice providers should not suggest that the product they dispense or prescribe is:

• Wegovy or Ozempic,
• manufactured by Novo Nordisk,
• identical to Wegovy or Ozempic, or
• FDA-approved or approved as safe and effective.

The following are examples of risky statements found on webpages of Arizona practices or medspas prescribing compounded semaglutide:

• “Semaglutide is FDA-approved, so it is safe and proven effective for weight loss”

If your practice prescribes compounded semaglutide, you risk liability for consumer fraud if you say the product is FDA-approved or make representations about safety and effectiveness.

• “It was so effective in helping people lose weight that the FDA approved it. Semaglutide is usually given as an injection under the skin or in a pill form.”

This wrongly suggests the FDA approved semaglutide pills. The FDA approved Wegovy injections for weight loss. There is no FDA-approved pill form.

• “Semaglutide is FDA-approved as a great option for anyone looking for help with weight management. There are no dietary restrictions. To speed up weight loss you can add exercise, but it is not required.”

This misstates the FDA’s approval of Wegovy and the studies funded by the manufacturer, Novo Nordisk. Based on these studies, the FDA approved Wegovy injections for chronic weight management ONLY in adults with a BMI over 30 or over 27 with at least one weight-related condition (high blood pressure, type 2 diabetes, or high cholesterol). Approval was granted for use in addition to a reduced calorie diet and increased physical activity.

Claims for false or misleading advertising may come in various forms and may not be covered by your insurance. Consider the following:

• A dissatisfied patient or a patient who suffered an adverse event and felt misled by a prescriber’s webpage or promotional materials could take legal action under some states’ consumer fraud laws. In Arizona, the patient could file a consumer fraud lawsuit or submit a complaint to the Arizona Attorney General for investigation.
  
  
• In Arizona, consumer fraud involves deception, fraud, false pretenses, false promises, or misrepresentations in connection with selling or advertising a product or service. It may also include concealing or omitting material facts when the defendant intends for customers to rely on the concealment/omission.
  
  
• In addition to consumer fraud, the patient could complain to the licensing board about advertising on a physician’s webpage.
  
  
• Arizona law governing MDs says it is unprofessional conduct if they or their “staff, employer, or representative” commits “false, fraudulent, deceptive, or misleading advertising.”
  
  
• For DOs in Arizona, unprofessional conduct includes “advertising in a false, deceptive, or misleading manner.”
  
  
• Novo Nordisk, the manufacturer of Wegovy has filed multiple lawsuits against weight loss clinics, medspas, and compounding pharmacies alleging deceptive, unlawful, unfair, and dangerous practices in connection with the marketing and sales of compounded semaglutide.
  
  
• Most medical professional liability policies do not cover intentional acts such as fraud or deception. Depending on a particular policy’s wording, there may not be coverage for claims alleging false, misleading, or deceptive advertising.

Prescriber Liability for Inadequate Disclosure and Lack of Patient Consent

Prescribers who fail to tell patients about compounded drug risks and FDA warnings are increasing their risk of medical malpractice lawsuits. Generally, physicians and advanced practice providers have a legal duty to disclose to patients pertinent or material information about a recommended procedure or treatment plan. If you prescribe compounded semaglutide without adequate disclosure, and the patient suffers an adverse event, any resulting malpractice lawsuit may include a lack of informed consent claim.

In a recent Arizona case, one of MICA’s defense attorneys successfully defended a lack of informed consent claim.

• The patient alleged that the ob-gyn failed to disclose sufficient information about FDA communications and actions concerning the vaginal mesh product used in the procedure.
  
  
• Notably, the patient also alleged the physician violated Arizona’s consumer fraud statute by failing to warn her about mesh products’ dangers and lack of efficacy.
  
  
• During trial, experts on both sides testified about what information a reasonable and prudent ob-gyn would disclose in a similar informed consent conversation.
  
  
• Although the jury found in favor of the physician, it took 5 years of litigation to reach the result.

For compounded semaglutide prescribers seeking to reduce the risk of a lack of informed consent lawsuit, consider incorporating the following strategies into your workflow:

• Standardize your practice’s medication informed consent process so all prescribers are following the same procedures and disclosing similar information.
  
  
• Ensure that your medication informed consent discussion includes FDA information about the risks of compounded drugs generally and compounded semaglutide specifically.
  
  
• Monitor FDA publications so you can include new information as necessary.
  
  
• Manage patient expectations by explaining to patients that once Wegovy is off the shortages list, cheaper compounded versions will likely become unavailable.
  
  
• Allow sufficient time during an encounter for a comprehensive medication informed consent discussion, including answering any questions a patient asks.
  
  
• Document your discussion thoroughly. In a lawsuit or licensing board investigation, a detailed chart note made at the time of prescribing is more convincing to jurors and investigators than your testimony about what you “always” tell patients.
  
  
• Consider developing a compounded semaglutide consent form that tracks the information you provided the patient. Patients can sign to acknowledge they understand the information and confirm you answered their questions.
  
  
• If you provide the patient with any written materials about compounded semaglutide during the consent discussion, save these for as long as you retain medical records. You need them to strengthen the defense of any future lack of informed consent lawsuit.
  
  
• For additional tips on medication informed consent discussions generally, read Avoiding Prescribing Errors in Ambulatory Care in MICA’s Medication Errors and Malpractice.

More information about lack of informed consent claims in Arizona, Utah, and Nevada is available on MICA’s Risk Management blog.

Prescribers May Face Claims Even in Cases Alleging Pharmacy Errors

In a lawsuit alleging a patient was injured due to misbranded or contaminated compounded semaglutide, the pharmacy may not be the only defendant. A plaintiff could accuse the prescriber of negligence, either for recommending that the patient use the pharmacy or dispensing the pharmacy’s product to the patient. Prescribers may be able to successfully defend these claims, but lawsuits are distracting and time-consuming.

Prescribers cannot and should not offer patients written or oral guarantees about what a particular compounded product contains or whether it was made in compliance with federal regulations. The following statement on an Arizona practice website is a prime example of what to avoid:

Our medications come from a compounder registered with the FDA. We work with licensed pharmacies nationwide, using only top-grade ingredients.

Guarantees like this one are risky and misleading because prescribers lack first-hand knowledge about pharmacy operations or quality control procedures. Like patients, prescribers are not there during the manufacturing stage, so they know only what a pharmacy promises.

Because of this lack of knowledge, Dr. Cecilia Low Wang, who specializes in endocrinology, diabetes, and metabolism, teaches at the University of Colorado School of Medicine, and chairs the FDA Endocrinologic and Metabolic Drugs Advisory Committee recommends against prescribing compounded versions of semaglutide. She cautions that sterility and safety are not guaranteed: “If a compounding pharmacy tells you that there’s a certain amount of the active drug in an injection, that can’t be verified independently.” She warns, “be really careful about the potential for fraud.”

Practices that choose to prescribe or dispense compounded semaglutide should weigh the risks and conduct a careful vetting process. Online research about one national pharmacy a MICA member was considering revealed unsatisfactory inspections by both the FDA and state regulators related to quality concerns. In addition, multiple state boards of pharmacy had taken disciplinary action against the pharmacy’s license, and another had denied its application for license renewal.