Compounders Slip Through Deadly FDA Loophole

A Big-Pharma-funded Congress has tied regulators’ hands. The result? Lethal drugs.

Terry J. Allen

The FDA warns it 'cannot guarantee for sterility' any injectable manufactured by NuVision. (Kevork Djansezian/Getty images)
What do you suppose a Texas drug compounding company did after the Food and Drug Administration (FDA) told it repeatedly to recall all its potentially “life-threatening” drugs? Well, basically, NuVision Pharmacy told the FDA to fuck off.
“NuVision Pharmacy is not recalling all sterile injectables,” the company stated flatly on its website.
And the official FDA reaction? It admitted impotence. The agency wrote in an August 16 press release that it “cannot require NuVision to undertake such a recall.”
Congress, in its campaign-dollar-soaked wisdom, has not granted the FDA the power to recall any drug—whether manufactured by Big Pharma or compounded in a pharmacy. Even if the product is proven dangerous, or made in violation of federal laws, the agency can only request compliance.
America’s thousands of “compounding pharmacies” like NuVision slip through additional regulatory loopholes. The category was established under now-outmoded rules developed to regulate your local drug store. Barred from “manufacturing” drugs, a compounder, by FDA definition, just “combines, mixes, or alters ingredients in response to a prescription, to create a medication tailored to the medical needs of an individual patient”—someone who needs, say, a custom-tailored dosage or formula without an allergen.
But hospitals, veterinarians, alternative practitioners and traditional doctors bypass that definition by mass ordering compounded drugs in “anticipation” of need—without a specific prescription. Thus, compounding pharmacies have expanded to fill the same role—and sometimes prescriptions—as major drug manufacturers. Except they fall more under state than federal oversight and regulation, don’t need to register with the FDA or comply with its standards or labeling requirements, and don’t need to submit their drugs to the FDA for testing and approval processes before sale.
Dallas-based NuVision, founded by Gary Osborn, says it is licensed in 38 states and boasts on its website: “Quality Beyond Reproach.” Beyond recall, yes. Beyond reproach? Not so much. FDA inspectors found such a panoply of quality, sterility and control violations at the facility that the agency sent out a press release telling healthcare providers to quarantine and stop administering all NuVision sterile products.
To be fair, in April NuVision did voluntarily recall one drug linked to “adverse reactions” including fever, flu-like symptoms and injection site soreness. But among the drugs NuVision still markets, which FDA inspectors “cannot guarantee for sterility,” are “cocktails” delivered by catheter to treat bladder infections and impotence treatment injections “easily delivered into the penis.”
NuVision defends its refusal to recall on its website: Since it is a simple compounder, the FDA cannot legally hold it to the same standards it sets for manufacturers, and, in any case, third-party labs test “every lot of [its] sterile products.” Even if true, this reassurance is less than ironclad. The independent labs to which NuVision and other compounders turn for quality-control testing have their own problems. On August 21, the FDA issued a statement on Colorado-based Front Range Laboratories, which does testing for more than 100 compounders in 32 states, noting “concerns that results obtained from Front Range are not reliable” when it comes to sterility, dose accuracy and drug stability.
If your eyes are rolling back in your head, it’s because this regulatory black hole is deep and stupid beyond belief. But snap out of it, and keep reading—as if your life depended on it.
And it did last year, for 14,000 people in 23 states who were injected with a fungi-and bacteria-contaminated steroid made by New England Compounding Center (NECC). The drug sickened 749 people with fungal meningitis and other infections; it killed 63.
And patients’ lives—and deaths—also depended on compounded drugs made by ApothéCure and its sister company SpectraPharm. Both pharmacies were headed by NuVision’s founder Gary Osborn, and both were run out of NuVision’s Dallas headquarters. In 2007, three people in the Pacific Northwest died after being injected with colchicine, compounded by ApothéCure and SpectraPharm. The drug was 640 percent more potent than labeled. Osborn told an Associated Press reporter that it was the first such incident and, “You know what people say, stuff happens.”
Osborn should know. Two years before, ApothéCure’s unproven chelation treatment for autism was implicated in the death of a 5-year-old child in Pennsylvania.
As for sterile conditions, in 2010, ApothéCure was “riddled with unsanitary conditions,” reported the Washington Post after obtaining an internal audit. “Insect body parts were found in ‘clean rooms’ [and] exposed pipe, wiring and duct work, allowed ‘contaminants to flow over the sterile suite and fall through the suspended ceiling,’” said the audit.
In 2012, federal and Texas courts ruled on the three Pacific Northwest deaths. They found Osborn, ApothéCure and SpectraPharm guilty of various charges, including substandard practices, selling misbranded drugs, unlawfully marketing dietary supplements to treat diseases and illegally formulating an unauthorized painkiller that led to three deaths in the Pacific Northwest. The court allowed Osborn to keep his pharmacist license but imposed probation, a $100,000 fine and a 90-day house arrest, which shouldn’t be too onerous in his $1.8 million, 5,000-square-foot, 5-bathroom home in Far North Dallas. Nor will the six-figure fines on ApothéCure make too deep a dent in its $10 million annual earnings. The ruling placed restrictions on ApothéCure—but not on NuVision. Osborn founded the new company in 2010, in the midst of bad press and the court proceedings—setting up shop in the same building as ApothéCure.
On May 18, increasingly frustrated by NuVision’s recall refusal, the FDA issued a stronger request. Then on July 26, the agency wrote NuVision that it was issuing a Class I recall, its most serious advisory, used only when there is “a reasonable probability …[of] serious adverse health consequences or death.” Calling all sterile products from NuVision’s inadequately designed facility “adulterated,” the recall was “necessary to protect the public health and welfare” against the pharmacy’s possibly “life-threatening” products, the FDA wrote.
NuVision, which did not return numerous calls and emails from In These Times, reiterated on its website that the FDA had no evidence “that our products lack sterility assurance,” nor any authority in the matter, since compounders are exempted from manufacturers’ stricter standards. In August, four months after the original recall, the FDA issued the 21st-century equivalent of putting a miscreant in stocks in the village square. Its public shaming of NuVision took the form of a news release detailing the compounder’s recalcitrance and the agency’s inability to enforce a recall.
As for its threat to take “further regulatory action,” the FDA acknowledged only that it “may seek enforcement actions, such as seizure or injunction” when “appropriate.” Spokesperson Christopher Kelly added in an email, “We are speaking about our authority to take enforcement action in a general sense only; this does not indicate a specific intention to take those actions in this case. [Emphasis in original.]” Kelly has not responded to other written questions, and declined to talk on the record.
There are currently several proposals in Congress to better define and regulate compounders—but, as Public Citizen points out, they leave patients “at risk” since compounding pharmacies would still be exempt from FDA standards for drug manufacturers.
The compounding industry benefits from this ambiguous status. It has used its lobbying clout to defeat or dilute state and federal reform efforts. The stakes are high. Compounding pharmacies make up between 1 and 3 percent of the $300 billion annual U.S. prescription drugs market, according to the International Academy of Compounding Pharmacists. The trade group spent $1.1 million from 2001 to 2012 on lobbying, and bragged to members that it had helped defeat a bill to increase FDA authority.
And since Medicare and private insurance companies often pay fixed reimbursements for drugs, docs and hospitals may have a financial incentive to sell patients cheaper, less regulated compounded versions, and pocket the difference.
“The industry is more dangerous than people realize,” says Doletta Sue Tuck-Richmond, who writes an intensively documented blog about the industry. “NuVision is an example of how states have dropped the ball on enforcing. The feds have stepped in, but don’t have power to do much beyond issuing a warning letter and hoping that we pay attention.”

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Terry J. Allen is a veteran investigative reporter/​editor who has covered local and international politics and health and science issues. Her work has appeared in the Guardian, Boston Globe, Times Argus, Harper’s, the Nation​.com, Salon​.com, and New Scientist . She has been an editor at Amnesty International, In These Times , and Cor​p​watch​.com. She is also a photographer. Her portraits of people sitting in some of the 1900 cars lined up outside a Newport, Vt., food drop can be seen on www​.flickr​.com/​p​h​o​t​o​s​/​t​e​r​r​y​a​l​l​e​n​/​a​lbums. Terry can be contacted at tallen@​igc.​org or through www​.ter​ry​jallen​.com.
Democratic Rep. Summer Lee, who at the time was a candidate for the state House, at a demonstration in Pittsburgh for Antwon Rose, who was killed by police, in 2018. Lee recently defeated her 2024 primary challenger.
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