When Leslie-Ann Lescarbeau saw the sales pitch from a pharmacy called Med4Home on the Internet and TV in 2004, she couldn't resist signing up. Med4Home promised to deliver her medications right to her door and file her Medicare claims for her. Lescarbeau, 50, suffers from asthma and other lung problems and sometimes uses a wheelchair. But what Med4Home actually sent her, she believes, were reformulated versions of the brand-name medicines she was supposed to take. One of the drugs even allegedly contained alcohol, a known lung irritant. After Lescarbeau made several harrowing trips to the ER, struggling to breathe, a doctor discovered the Med4Home drugs and ordered her to switch pharmacies. "I did not see anything on Med4Home's Web site that said I wouldn't be getting the real thing," says Lescarbeau, a nondenominational Christian pastor who lives in Middletown, Conn.
Now Med4Home's parent company, home health-care provider Lincare Holdings Inc., (LNCR) is in the crosshairs of the Food & Drug Administration. In August the agency sent a warning letter to another Lincare affiliate that makes the drugs Med4Home delivers. The FDA blasted the affiliate, Reliant Pharmacy Services, for making drugs at "ineffective or dangerous dosage levels," maintaining poor quality-control practices, and in some cases sending patients non-FDA-approved copies of commercially available drugs without getting clearance from their physicians. The letter, obtained by BusinessWeek under the Freedom of Information Act, warns that if the company continues these practices, the FDA "may take immediate enforcement action, including seizure and injunction, against [the company], its products, and its principals." A spokesman for Lincare repeatedly declined to comment.
Pharmacies are allowed to make and sell their own drugs. The practice, known as compounding, has long been accepted as a way for physicians to tailor drug therapies to individual patients—say, by instructing a pharmacist to turn pills into liquids for someone who has trouble swallowing. Such products can be sold without FDA approval, provided the pharmacist has a prescription from a doctor. But once a compounding pharmacy starts mass-marketing its own recipes, via the Web or other means, the FDA can regulate it as if the pharmacy were a commercial drug manufacturer.
The FDA and professional organizations are starting to take action against compounding pharmacies, with targets ranging from mom-and-pop operations to publicly held companies such as Lincare. And while other types of compounded drugs have raised alarm bells, the FDA lately has focused on respiratory medications. The same day the agency sent the warning to Lincare's subsidiary, it also warned Rotech Healthcare (ROHI) and CCS Medical to stop mass-producing unapproved respiratory drugs. "We think the compounding of inhalation drugs is serious and requires vigorous attention," says Steven Silverman of the office of compliance at the FDA's Center for Drug Evaluation & Research.
Some compoundingpharmacies use sneaky tactics to get patients to switch from FDA-approved drugs to their own concoctions, critics contend. They target seniors who respond to ads or who order medical equipment, seeking permission to switch them to "generic" or "low-cost" versions of the drugs their doctors have prescribed even when no FDA-approved generics exist. A Med4Home TV ad that ran in 2005 included a disclaimer that its products and services had not been "authorized" by the Health & Human Services Dept., but it flashed by so quickly that the average viewer probably wouldn't have had time to read it. No such disclaimer is readily visible on Med4Home's or Lincare's Web sites.
"Patients simply want to breathe," says Nancy Sander, founder of Allergy & Asthma Network Mothers of Asthmatics (AANMA), a patient advocacy group in Fairfax, Va. "They don't know to ask, Is this an FDA-approved drug?'" AANMA, which receives some funding from pharmaceutical companies, has documented more than 20 cases of patients who believe they have been harmed by non-FDA-approved respiratory drugs. In the summer the group presented the details to lawmakers on Capitol Hill, including Senators Edward Kennedy (D-Mass.) and Chuck Grassley (R-Iowa).
Some doctors may be getting duped, too. Compounders sometimes gain doctors' permission to switch patients to unapproved drugs by faxing them authorization forms and pressing them for their signatures. "I don't know how many of these passed my desk, but I'm sure I signed them," admits Dr. Allan Stillerman, an allergy specialist in the Minneapolis area. Stillerman, who has served as a paid speaker for several pharmaceutical companies, became more vigilant several months ago after he discovered three of his patients were on compounded drugs that he didn't remember prescribing. "The fact that I found three [patients] in my practice makes me wonder: How much more rampant is this problem?"
ADVERTISING UNDER ATTACK
With the FDA strapped for resources, some big companies are stepping in to track down wayward compounders. In 2005, AstraZeneca (AZN) sued online pharmacy Broncho-Dose Ltd. for false advertising, alleging that its Web site was improperly pitching a compounded version of Astra's Pulmicort Respules, an asthma drug that patients inhale through a device called a nebulizer. Broncho-Dose didn't admit to any wrongdoing. But, as part of a settlement, it had to place a disclosure on its site that says it does not sell Pulmicort Respules and that the compounded version has not been proven to have the same effect as the real drug. One problem: On the Spanish version of the site, the disclaimer is in English. When told of this situation by BusinessWeek, AstraZeneca said it would look into having the warning translated. "We'd like for people to understand it," says Cathy Bonuccelli, vice-president for external scientific affairs. Broncho-Dose declined to comment.
In November, Lescarbeau, the Connecticut pastor, called Med4Home out of sheer curiosity and asked if it sells Pulmicort. "They said they have a substitute," Lescarbeau recalls, frustration rising in her voice. "No, no, no!" she adds. "There is no substitute."
By Arlene Weintraub