Manufactured Compound Drugs Pharmaceutical Fraud Attorneys

Nolan Auerbach & White are experienced Pharmaceutical Fraud Lawyers helping courageous whistleblowers.

FDA guidelines, authorize pharmacists to “compound” or mix medications in response to a physician’s valid prescription. The regulations further require that the mixed or compounded medications are medically necessary and not commercially available. Compounding  pharmaceutical ingredients serves an important need for physicians and their patients.

Federal law, including the Centers for Medicare and Medicaid Services (CMS) guidelines and the regulations of other Government Healthcare Programs, prohibit coverage of claims for “compounded” medications when the claims are submitted by a company that is mass manufacturing large amounts of unapproved drugs in violation of the Federal Food, Drug and Cosmetic Act (”FFDCA”), under the guise of “compounding.”

Responding to an ever-growing problem in recent years, the FDA has issued multiple warning letters against nationwide pharmacies that have been mass manufacturing “compounded” drugs in violation of the FDCA. In addition, the FDA, together with the Department of Justice, have pursued criminal and civil prosecutions against entities and individuals involved in harmful mass-production of compounded drugs.

The Medicare Carriers Manual (MCM), section 2049.4(E) states the basic payment requirements for compounded drugs. When the section cites, “By compounding drugs on a large scale, a company may be operating as a drug manufacturer within the meaning of the Federal Food and Drug Act (FFDA), without complying with the requirements of that law,” CMS is not indicating that such large scale compounding “MAY” be acceptable. Rather, it is not acceptable – a correct interpretation of the law.

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.


Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.


Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.


Contact Us