Texas Supreme Court Holds That Compounding Pharmacies Are Health Care Providers Under Texas Medical Liability Act

On April 24, 2015, the Texas Supreme Court dismissed claims against a compounding pharmacy and its individual pharmacists which alleged negligence in compounding a lipoic acid medication, finding that the defendants were health care providers entitled to the protections in the Texas Medical Liability Act (“TMLA”).

In the case Randol Mill Pharmacy et al. v. Miller et al., Case No. 13-1014 (Tex. Sup. Ct.), the plaintiff’s physician prescribed and administered weekly intravenous injections of 200 mg/ml lipoic acid, an antioxidant supplement.  The plaintiff alleged that she underwent nine weeks of treatment without incident, but in the tenth treatment she suffered a severe adverse reaction and as a result was hospitalized for several weeks, received multiple blood transfusions, and went permanently blind in both eyes.  Randol Mill Pharmacy compounded the lipoic acid that allegedly caused the adverse reaction.

In her complaint against the compounding pharmacy and its individual pharmacists, the plaintiff alleged that these defendants gave inadequate and inappropriate warnings and instructions for using the compounded lipoid acid; that the compounded lipoid acid was defective, ineffective and unreasonably dangerous; and that the compounding pharmacy and pharmacists generally breached implied warranties with respect to the design, manufacture, inspection, marketing, and/or distribution of the compounded lipoid acid.

The compounding pharmacy and individual pharmacists moved to dismiss the complaint, arguing that the plaintiff asserted health care liability claims governed by the TMLA and was therefore required to serve an expert report within 120 days of filing suit or have her case dismissed.  The trial court denied the motion, and a divided court of appeals affirmed.  On appeal, the Texas Supreme Court reversed, finding that the compounding pharmacy and individual pharmacists met the definition of “health care providers” under the TMLA because (1) the compounded lipoic acid was a “prescription medicine” under the TMLA and (2) in compounding the medication for the plaintiff’s physician’s office use, the defendants engaged in “activities limited to the dispensing of prescription medicines.”

The Texas Supreme Court also rejected the argument that the defendants were not protected by the TMLA because plaintiff’s claims were so-called product-liability claims.  In so holding, the court found that the plaintiff’s claims were “health care liability claims” subject to the TMLA because (1) the plaintiff’s claims alleged that the compounding pharmacy and individual pharmacists departed from accepted standards of care, and (2) the plaintiff’s claims were not based on the manufacturing of a defective product.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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