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Are You Covered? A Liability Insurance Primer for Compounders | Essentials: The Pharmacy Compounding Podcast · Pharmacy Podcast Network

• 0:05
  Speaker 1: You are listening to the global network of podcasters dedicated
• 0:09
  Speaker 1: to the pharmacy profession. Welcome to the Pharmacy Podcast Network.
• 0:22
  Speaker 2: Welcome to Essential Pharmacy Compounding news and analysis from the
• 0:26
  Speaker 2: Alliance for Pharmacy Compounding. I'm your host, Andrew Canter. As usual,
• 0:31
  Speaker 2: we're going to give you a bit of compounding news
• 0:33
  Speaker 2: before we get into the main event. That's when we'll
• 0:35
  Speaker 2: talk with Kristin Jones from Pharmacists Mutual about how insurance
• 0:39
  Speaker 2: companies think differently about compounding pharmacies and what that means
• 0:43
  Speaker 2: if you're compounding, say, peptides. Spoiler, you don't want to
• 0:47
  Speaker 2: be compounding peptides, not just yet. But first the news
• 0:52
  Speaker 2: an anti compounding bill in California has quietly died, and yes,
• 0:57
  Speaker 2: APC members can take some credit for that. Nineteen ninety
• 1:01
  Speaker 2: that's the bill's number. It would have basically banned compounded
• 1:04
  Speaker 2: GLP ones even when they were in shortage or they
• 1:07
  Speaker 2: needed to be personalized. After a lot of pushback, thank
• 1:11
  Speaker 2: you again, APC members, the bill was rewritten so it
• 1:14
  Speaker 2: only affected advertising and labeling. But even then there were
• 1:17
  Speaker 2: some seriously problematic provisions, like requirements for labeling compounded drugs
• 1:23
  Speaker 2: that could violate federal law. As I said, though the
• 1:26
  Speaker 2: bill has quietly died, so compounds in California. They don't
• 1:30
  Speaker 2: need to worry about their patients being cut off from
• 1:32
  Speaker 2: many meds or having to choose between breaking California law
• 1:36
  Speaker 2: or breaking federal law. Oh and if you're keeping score,
• 1:39
  Speaker 2: that's twelve out of twelve of these state anti compounding
• 1:43
  Speaker 2: bills that APC members have killed or least stripped down
• 1:47
  Speaker 2: this year. We've also got good news on the federal
• 1:52
  Speaker 2: level about the ironically named Safe Drugs Act, which is
• 1:56
  Speaker 2: really just a bill written by drug makers and designed
• 1:59
  Speaker 2: to cripple compound. Thanks to APC's lobbying and a lot
• 2:02
  Speaker 2: of phone calls and emails and faxes and telegrams, a
• 2:05
  Speaker 2: lot of the worst language in the bill was removed
• 2:08
  Speaker 2: or replaced in July before it passed out of the
• 2:10
  Speaker 2: Senate's Committee on Health, Education, Labor, and Pensions Help. It's
• 2:15
  Speaker 2: now headed for the full Senate. The biggest change was
• 2:17
  Speaker 2: that the bill no longer eliminates shortage drug compounding, and
• 2:21
  Speaker 2: that would have been an absolute disaster for patients. I mean, really,
• 2:24
  Speaker 2: when a drug is in shortage, that's when patients absolutely
• 2:27
  Speaker 2: need the compounded version. Another change the addition of a
• 2:31
  Speaker 2: requirement that traditional compounding pharmacies must report serious adverse events
• 2:37
  Speaker 2: via the FDA's MedWatch system. That one's been a long
• 2:40
  Speaker 2: time coming. APC is happy to support it. There are
• 2:43
  Speaker 2: some other good changes in the bill, but the big
• 2:46
  Speaker 2: takeaway is that it went from being an absolute horror
• 2:49
  Speaker 2: show for patients to a bill that offers some reasonable reforms.
• 2:56
  Speaker 2: With all the focus on GLP ones and efforts to
• 2:59
  Speaker 2: allow compounding of certain currently unauthorized peptides. There's one issue
• 3:04
  Speaker 2: that almost slipped under the radar, thyroid medications like desiccated
• 3:09
  Speaker 2: thyroid extract DTE. There are two kinds of thyroid meds.
• 3:13
  Speaker 2: There's the natural kind that comes from animals, and there
• 3:16
  Speaker 2: are the synthetic drugs. The FDA would prefer that patients
• 3:20
  Speaker 2: use the synthetic kind, but that doesn't work for everyone.
• 3:23
  Speaker 2: Some patients need the natural stuff, which they often get
• 3:26
  Speaker 2: from compounding pharmacies, like for decades, since before the FDA
• 3:30
  Speaker 2: even existed. Anyway, last year the FDA decided against logic
• 3:35
  Speaker 2: or even its own precedent, that it now considers these
• 3:38
  Speaker 2: animal derived thyroid meds to be biologics, and in case
• 3:43
  Speaker 2: you didn't know, pharmacists aren't allowed to compound with biologics.
• 3:47
  Speaker 2: That would leave patients with one, well one and a
• 3:50
  Speaker 2: half options. They could either use these synthetic thyroid meds,
• 3:54
  Speaker 2: or they could wait for big pharma companies to get
• 3:57
  Speaker 2: biologic licenses that they've applied for, then get the natural
• 4:01
  Speaker 2: version that those big companies eventually make. At the moment, though,
• 4:05
  Speaker 2: compounded natural thyroid meds are still available, and the FDA
• 4:09
  Speaker 2: said it will release its final guidance on the whole thing. Well,
• 4:13
  Speaker 2: it was supposed to be by August sixth, but that
• 4:15
  Speaker 2: came and went. But once the agency does take formal
• 4:18
  Speaker 2: action on thyroid meds, compounding pharmacies will not be able
• 4:21
  Speaker 2: to compound natural thyroid drugs, and patients, well, like I said,
• 4:26
  Speaker 2: they'll have to choose between the synthetic drugs, or if
• 4:29
  Speaker 2: synthetics don't work for them, they can just wait until
• 4:32
  Speaker 2: pharma companies create and release these natural biological versions, however
• 4:37
  Speaker 2: long that takes. So right now, the whole issue of
• 4:40
  Speaker 2: natural thyroid products is up in the air until the
• 4:42
  Speaker 2: FDA makes the decision. We're just hoping that it prioritizes
• 4:45
  Speaker 2: patient continuity of care. It's got to take into account
• 4:48
  Speaker 2: the people who can't take the artificial thyroid products. There
• 4:52
  Speaker 2: are millions of them. By the way. About peptides, and
• 4:58
  Speaker 2: if you follow compounding, you probably already know that the
• 5:01
  Speaker 2: newly updated FDA Pharmacy Compounding Advisory Committee, or PEACACK, voted
• 5:06
  Speaker 2: to recommend that the FDA adds six peptides to the
• 5:10
  Speaker 2: five H three A bulks list. The beauty of this
• 5:13
  Speaker 2: is that patients could get at least some of the
• 5:15
  Speaker 2: peptides that they've been taking from a reliable, licensed, above
• 5:20
  Speaker 2: board compounding pharmacy rather than some shifty Bodegon sixth Avenue.
• 5:25
  Speaker 2: But peacack's vote was just a recommendation, meaning the FDA
• 5:28
  Speaker 2: isn't required to follow it, So we honestly don't know
• 5:31
  Speaker 2: what's going to happen with peptides or when based on
• 5:34
  Speaker 2: the mainstream news coverage of that Peacack vote, though we
• 5:37
  Speaker 2: will all hear about it when it does happen. And
• 5:43
  Speaker 2: with that it is time for our deep dive. APC
• 5:46
  Speaker 2: CEO Scott Brunner has as his guest today Kristin Jones,
• 5:50
  Speaker 2: Associate vice president at Pharmacists Mutual insurance company, which I
• 5:54
  Speaker 2: assume most listeners have heard of their topic. Some of
• 5:57
  Speaker 2: the things compounding pharmacists need to know about what their
• 6:00
  Speaker 2: insurance covers and what it might not. Scott Kristin, Welcome.
• 6:06
  Speaker 3: Thank you Andrew, and welcome to Kristin Jones, our guest
• 6:12
  Speaker 3: for this month's episode of Essential. We talk a lot
• 6:16
  Speaker 3: about public policy issues, legislation, advocacy, state boards of pharmacy,
• 6:22
  Speaker 3: new therapies. We don't always talk so much on this
• 6:25
  Speaker 3: podcast about business issues, but in light of some of
• 6:28
  Speaker 3: what's going on right now in the compounding universe, I
• 6:33
  Speaker 3: thought it might be a good idea to welcome one
• 6:36
  Speaker 3: of our APC supporters, Kristin Jones, with Pharmacist Mutual, to
• 6:41
  Speaker 3: join us to talk. And please don't yawn. We're going
• 6:45
  Speaker 3: to talk about insurance. But I do think if you
• 6:47
  Speaker 3: are an owner of a compounding pharmacy, you will be
• 6:50
  Speaker 3: quite interested in what Kristin has to say about the
• 6:54
  Speaker 3: coverage you have, coverage you may think you have but
• 6:59
  Speaker 3: may not, and maybe some activities that could get you
• 7:03
  Speaker 3: into some hot water, not only legally but with your insurer.
• 7:09
  Speaker 3: So Kristin, you ready to go?
• 7:12
  Speaker 4: I'm ready?
• 7:13
  Speaker 3: Scott good well, welcome. Tell us a little bit about
• 7:16
  Speaker 3: Pharmacist Mutual first and your role there.
• 7:19
  Speaker 4: Okay, thank you.
• 7:20
  Speaker 5: So, yeah, Pharmacist Mutual, we are a insurance carrier, been
• 7:25
  Speaker 5: in business covering pharmacies for over one hundred years, so
• 7:29
  Speaker 5: have seen really the run the gamut of what pharmacy
• 7:32
  Speaker 5: has done and expanded. And I would like to say,
• 7:36
  Speaker 5: you know, we provide professional liability insurance, so that malpractice piece,
• 7:40
  Speaker 5: but then we're also in on the business side, so
• 7:43
  Speaker 5: we're here to cover your building, the contents or the
• 7:46
  Speaker 5: business personal property.
• 7:47
  Speaker 4: We do cyber liability.
• 7:50
  Speaker 5: Employment practices, liability, some business interruption coverages. So really important
• 7:56
  Speaker 5: that as you think about your insurance, finding the agent
• 8:00
  Speaker 5: you already have an agent, or getting with an agent
• 8:03
  Speaker 5: and talking about what's going on within your pharmacy, what
• 8:06
  Speaker 5: coverages you need, and how we can potentially help you.
• 8:10
  Speaker 5: As far as as far as I'm concerned, I was
• 8:13
  Speaker 5: a practicing pharmacist for eleven years and then came to
• 8:15
  Speaker 5: Pharmacist Mutual about twelve years ago, and really in my role,
• 8:19
  Speaker 5: came in focused on that compounding piece and what's going
• 8:23
  Speaker 5: on in the compounding industry.
• 8:24
  Speaker 4: How was it.
• 8:25
  Speaker 5: Changing, How did pharmacist mutual need to change to make
• 8:28
  Speaker 5: sure that we were covering compounding in a way that
• 8:31
  Speaker 5: made sense not only for us but for you as insureds.
• 8:36
  Speaker 5: We have grown and expanded into other niches, but still
• 8:41
  Speaker 5: pharmacy is our main focus.
• 8:43
  Speaker 3: Great well, and I will say the idea for having
• 8:46
  Speaker 3: you as a guest on this podcast really originated with
• 8:49
  Speaker 3: a presentation you made this past March at APC's Compounding
• 8:54
  Speaker 3: Pharmacy Owner Summit. I think there were a lot of
• 8:57
  Speaker 3: AHAs from audience men based on that presentation, and I'm
• 9:02
  Speaker 3: going to follow up by asking you some questions related
• 9:07
  Speaker 3: to those issues as we go forward. Compounding is different.
• 9:10
  Speaker 3: It's different in a lot of ways, but as insurance
• 9:13
  Speaker 3: coverage goes, the liability exposure that a compounding pharmacy takes
• 9:20
  Speaker 3: on is different from that of what i'll call a
• 9:23
  Speaker 3: traditional retail dispensing pharmacy. Can you explain how that is
• 9:28
  Speaker 3: and why that is?
• 9:29
  Speaker 4: Yep, yep, Scott.
• 9:30
  Speaker 5: It's very different and the risk profile is significantly different.
• 9:34
  Speaker 5: So when you think about a pharmacy that dispenses a
• 9:36
  Speaker 5: commercially manufactured medication, it's generally providing a product that has
• 9:40
  Speaker 5: already gone through extensive testing, manufacturing controls, and quality assurance processes.
• 9:46
  Speaker 4: With compounding, the.
• 9:47
  Speaker 5: Pharmacy becomes part of the manufacturing process itself. So that
• 9:51
  Speaker 5: means that the pharmacy, the compounding pharmacy, assumes responsibility for
• 9:55
  Speaker 5: formulation accuracy, the ingredient selection, calculations, which is a big
• 9:59
  Speaker 5: piece these preparation techniques, documentation, quality controls, and so a
• 10:04
  Speaker 5: single error in concentration or sterility can have serious clinical consequences,
• 10:11
  Speaker 5: and from an insurance perspective, compounding creates a different risk
• 10:14
  Speaker 5: profile because those errors can affect multiple patients, especially if you.
• 10:18
  Speaker 4: Batch within your pharmacy.
• 10:20
  Speaker 5: Many times we'll see higher severity claims because if you
• 10:23
  Speaker 5: think about calculations and a thousand times too much medication
• 10:27
  Speaker 5: if we inadvertently miss that decimal piece in the math portion, right,
• 10:32
  Speaker 5: And the other side of it too is think about
• 10:35
  Speaker 5: the regulatory scrutiny and the media. You know, if a
• 10:38
  Speaker 5: major compounding error comes out, you know there's a there's
• 10:41
  Speaker 5: oftentimes a lot of a lot of coverage over that
• 10:44
  Speaker 5: from the regulatory standpoint.
• 10:47
  Speaker 3: Well, and you mentioned calculation errors among others. Are there
• 10:51
  Speaker 3: are there certain kinds of errors that you see more
• 10:54
  Speaker 3: than others. In terms of coverage you provide compounding pharmacies,
• 10:59
  Speaker 3: claims guess related to that compounding.
• 11:03
  Speaker 5: Right, So actually, I will say that calculation and ingredient
• 11:08
  Speaker 5: selection many times, almost half the time in some of
• 11:12
  Speaker 5: the studies that we've done, is what actually contributes to
• 11:15
  Speaker 5: the error within the compounding sector. So we really actually
• 11:18
  Speaker 5: don't even see that money that many claims that have
• 11:21
  Speaker 5: to do with sterility. I think there's a lot of
• 11:24
  Speaker 5: times that people are concerned about sterile compounding, when really
• 11:27
  Speaker 5: the concern needs to be about ingredient selection and calculations
• 11:33
  Speaker 5: first and foremost when making these products.
• 11:36
  Speaker 3: I get it, I get it well, and you've mentioned
• 11:39
  Speaker 3: sterile and it's my understanding that there is you do
• 11:44
  Speaker 3: view sterile compounding differently than you might view non sterile
• 11:47
  Speaker 3: because the risk profile may well be higher when you're
• 11:51
  Speaker 3: making sterile injectables, for instance. Can you tell us a
• 11:55
  Speaker 3: little bit about how you address a sterile compounding pharmacy
• 11:59
  Speaker 3: versus one that's only doing doing non stale.
• 12:01
  Speaker 5: Right, So, yeah, I mean, definitely sterile compounding. While the
• 12:05
  Speaker 5: it's not as frequent of a claim, many times it's
• 12:08
  Speaker 5: significantly more severe. And so you think about sterile compounding
• 12:12
  Speaker 5: because of the way that the patients are receiving the medication.
• 12:15
  Speaker 5: So perhaps an injection, ophthalmic administration, or other routes or
• 12:21
  Speaker 5: contamination of that product can lead to serious injury, infection,
• 12:26
  Speaker 5: vision loss, hospitalization, or even death. So if there's a
• 12:31
  Speaker 5: breakdown in that sterile compounding process, oftentimes we see batching
• 12:36
  Speaker 5: associated with steril, and so we also have multiple patients.
• 12:39
  Speaker 5: So think about a claimant pool that typically with a
• 12:42
  Speaker 5: normal dispensing error might be one person. Think about the
• 12:45
  Speaker 5: size of the batch and a sterile in a steril batge,
• 12:49
  Speaker 5: you know, we could see fifty one hundred, even two
• 12:51
  Speaker 5: hundred patients in that claimant pool, which significantly drives up
• 12:55
  Speaker 5: the legal expenses as well on the claim.
• 12:58
  Speaker 3: So how much in terms of your determinations about who
• 13:01
  Speaker 3: you will cover, what you will cover, premium setting and
• 13:05
  Speaker 3: all of that, does volume and scope of compounding play
• 13:10
  Speaker 3: into those calculations. I presume you guys are asking more
• 13:14
  Speaker 3: questions of sterile company pharmacies than you might have a
• 13:17
  Speaker 3: nonsterile Is that a fair assertion?
• 13:20
  Speaker 5: Yes, yes, definitely again because it goes back to that
• 13:23
  Speaker 5: severity piece and so really, even in the way that
• 13:25
  Speaker 5: our policy is written, we require an extra endorsement. So
• 13:29
  Speaker 5: if you buy a professional liability policy from Pharmacists Mutual,
• 13:33
  Speaker 5: it doesn't automatically cover sterile compounding. You have to have
• 13:36
  Speaker 5: a conversation with your agent so we can add that
• 13:38
  Speaker 5: on as an endorsement. And that is really helpful in
• 13:41
  Speaker 5: a couple of ways. So think, if you're not a
• 13:43
  Speaker 5: sterile compounder, then you're not paying that extra rate and
• 13:48
  Speaker 5: premium to have that coverage because you're not doing it.
• 13:51
  Speaker 5: But those pharmacies that are doing sterile compounding and adding
• 13:54
  Speaker 5: to that risk profile, then they are charged additional premium
• 13:58
  Speaker 5: for that endorsement to hover the sterile compounding. And really
• 14:03
  Speaker 5: that has to do with, you know, just looking at
• 14:06
  Speaker 5: the way that we underwrite the policies. Like you said,
• 14:08
  Speaker 5: we ask more questions. We have a questionnaire. We want
• 14:11
  Speaker 5: to know more information. We may even ask to come
• 14:13
  Speaker 5: out and visit your compounding pharmacy so that we can
• 14:16
  Speaker 5: get eyes on it and understand what the risk is
• 14:19
  Speaker 5: that we're taking on.
• 14:20
  Speaker 3: Well, and I was going to ask that if you did,
• 14:22
  Speaker 3: I don't want to call them inspections, but maybe visit.
• 14:25
  Speaker 3: So you do from time to time go out to
• 14:27
  Speaker 3: a pharmacy and you know, take eyeball it.
• 14:31
  Speaker 4: I guess yep, yep, we do. Sometimes it's me. Sometimes
• 14:35
  Speaker 4: we use a vendor a lots of times.
• 14:37
  Speaker 5: We'll also we'll also rely on other accreditation agencies depending
• 14:41
  Speaker 5: on what states the pharmacy is in. We also look
• 14:44
  Speaker 5: at that information what's gone on through the FDA.
• 14:46
  Speaker 4: So we try to use.
• 14:47
  Speaker 5: A multitude of pieces of information to tell us the
• 14:53
  Speaker 5: most we can find out about that pharmacy. And if
• 14:55
  Speaker 5: we feel like we need to go out and visit, yep,
• 14:57
  Speaker 5: we will go out. And it's not an inspection and
• 15:00
  Speaker 5: we have no regulatory authority. But the other side of
• 15:02
  Speaker 5: it too is if we look at it and we say,
• 15:04
  Speaker 5: you know what, we're really not interested in providing coverage,
• 15:07
  Speaker 5: then that also kind of that also kind occurred during
• 15:09
  Speaker 5: that visit. Go back and let it und already know
• 15:12
  Speaker 5: that you know, this is potentially at risk we're not
• 15:14
  Speaker 5: willing to take.
• 15:15
  Speaker 3: Yeah. I mentioned the session you presented at our owner
• 15:18
  Speaker 3: summit back in March, and there were they were just
• 15:21
  Speaker 3: just watching the audience. I heard and saw facial expressions
• 15:25
  Speaker 3: and even some nudges from owners saying, oh I didn't
• 15:29
  Speaker 3: know that, or I wonder if I'm covered for that?
• 15:32
  Speaker 3: What are what are in your experience the most common
• 15:36
  Speaker 3: misunderstandings that compounding pharmacy owners may have about their their
• 15:40
  Speaker 3: liability coverage and honestly, what questions should they be asking?
• 15:45
  Speaker 5: Well, definitely they need to I would say that, especially
• 15:47
  Speaker 5: these really large compounding operations that we're seeing right now,
• 15:50
  Speaker 5: you know, they need to be in regular contact with
• 15:52
  Speaker 5: their agents so that they can talk about any changes
• 15:54
  Speaker 5: that have gone on. One thing I think that's important is,
• 15:57
  Speaker 5: you know, I typically focus on professional liability, but in
• 16:00
  Speaker 5: that session we talked a lot about equipment. And you know,
• 16:04
  Speaker 5: if you're ensuring your entire building and all of the
• 16:07
  Speaker 5: equipment inside of it, and you've added new machines maybe
• 16:11
  Speaker 5: to automate your compounding, which is a huge thing right now,
• 16:14
  Speaker 5: you know, are you in touch with your agent and
• 16:16
  Speaker 5: letting you letting them know that you need increased business
• 16:19
  Speaker 5: personal property coverage because of a new machine that you've
• 16:22
  Speaker 5: possibly added, you know, so making sure that all of
• 16:25
  Speaker 5: that is in line, making sure the agent understands what
• 16:28
  Speaker 5: are you actually compounding? Have you added other states? Perhaps
• 16:31
  Speaker 5: you have a new contract with a telehealth carrier. You
• 16:34
  Speaker 5: know that is going to change how we underwrite your
• 16:39
  Speaker 5: particular risk. All information that we as your carrier need
• 16:43
  Speaker 5: to know. I think other pieces of information that that
• 16:47
  Speaker 5: business owners don't think about that's really super important. Business interruption.
• 16:52
  Speaker 5: You know, do they have business interruption insurance? I think
• 16:54
  Speaker 5: that I talked about.
• 16:55
  Speaker 4: That day about a.
• 16:58
  Speaker 5: Clean room that had been cut They had cut through
• 17:01
  Speaker 5: the wall, a perpetrator had cut through the wall, and
• 17:03
  Speaker 5: then that clean room was down for several months. You know,
• 17:05
  Speaker 5: is what business interruption coverages do you have? But what
• 17:09
  Speaker 5: also disaster planning do you have in place for your pharmacy?
• 17:12
  Speaker 5: So if your clean room were to go down for
• 17:15
  Speaker 5: six months, what's your backup plan? How are you going
• 17:18
  Speaker 5: to maintain your processes? How are you going to maintain
• 17:20
  Speaker 5: your customer base, keep your people employed and then people
• 17:24
  Speaker 5: That's another piece that I think we forget about as
• 17:26
  Speaker 5: pharmacists business owners is employment protection liability, so that that
• 17:32
  Speaker 5: piece of insurance that helps if you, unfortunately don't deal
• 17:36
  Speaker 5: with an employment situation well and end up getting sued.
• 17:38
  Speaker 4: By an employee.
• 17:39
  Speaker 5: That's another really important piece of insurance that needs to
• 17:42
  Speaker 5: be thought.
• 17:42
  Speaker 3: About great and at you and I have talked a
• 17:45
  Speaker 3: bit about the you know, the advent of compounded jop
• 17:49
  Speaker 3: one drugs. What sort of new questions did you find
• 17:52
  Speaker 3: yourself asking in this era of compounded JLP one. We've
• 17:57
  Speaker 3: seen compounding this scale. I don't know that was anticipated
• 18:01
  Speaker 3: by FDAs essentially a copy guidance. We've had pharmacies that
• 18:06
  Speaker 3: may have been doing sterile compounding, but weren't compounding these
• 18:10
  Speaker 3: glp ones in shortage or custom formulations. Based on the
• 18:14
  Speaker 3: judgment of a prescriber, Is that an issue that you
• 18:18
  Speaker 3: would be particularly interested in because of scale, or is
• 18:24
  Speaker 3: it just another therapy that compounding pharmacy may offer and
• 18:28
  Speaker 3: you would treat it like any other.
• 18:30
  Speaker 5: So I think, you know, as we looked at what
• 18:32
  Speaker 5: was happening with the glp ones and kind of the explosion,
• 18:35
  Speaker 5: that's what's really nice about pharmacists mutual and the role
• 18:37
  Speaker 5: that I play is really staying on top of what
• 18:40
  Speaker 5: is happening in the industry, what's coming, you know, kind
• 18:43
  Speaker 5: of the train coming down the tracks, and making sure
• 18:45
  Speaker 5: that we're keeping a good eye on that. So I
• 18:47
  Speaker 5: would say in the beginning, and if you're a member,
• 18:50
  Speaker 5: you probably are a customer. You probably got some questions.
• 18:53
  Speaker 5: We asked some questions right away about GLP one compounding,
• 18:58
  Speaker 5: how that was being handled, you know, in terms of
• 19:01
  Speaker 5: your process, you know, getting a prescription, that type of thing.
• 19:04
  Speaker 4: And I think that as we've seen.
• 19:06
  Speaker 5: Over the you know, year, year and a half of
• 19:10
  Speaker 5: it kind of normalized a little bit, and so we
• 19:12
  Speaker 5: pulled back on all of the questions that we're asking
• 19:14
  Speaker 5: and just kind of monitor it from our side of things.
• 19:17
  Speaker 5: Also another piece I think that I don't think it
• 19:21
  Speaker 5: really brought us by surprise, but offered us a new
• 19:23
  Speaker 5: risk profile potentially is contracting with telehealth companies.
• 19:26
  Speaker 4: You know, what does that look like?
• 19:28
  Speaker 5: You know, obviously on the business side of things, it
• 19:30
  Speaker 5: can be very beneficial for our pharmacies, but what does
• 19:32
  Speaker 5: it look like on our side as an insurance carrier
• 19:35
  Speaker 5: and the potential person to be involved in a claim,
• 19:38
  Speaker 5: you know, with either company. And so I think it's
• 19:40
  Speaker 5: a it's an ever changing it's an ever changing model
• 19:44
  Speaker 5: and process for us.
• 19:47
  Speaker 3: We are we are recording at the end of a
• 19:49
  Speaker 3: week where uh back at the first of the week,
• 19:52
  Speaker 3: there was an announcement of a lawsuit by Eli Lilly
• 19:55
  Speaker 3: against a number of wellness spas and one state license
• 20:01
  Speaker 3: compounding pharmacy for compounding retitrue tide. Retitrue tide is not
• 20:06
  Speaker 3: approved for use in a compounded drug. It's not even
• 20:09
  Speaker 3: an FDA approved drug. Yet in addition to that, we
• 20:14
  Speaker 3: are seeing some compounding of peptides. I'm leading to a
• 20:19
  Speaker 3: question about what sort of risk position a compounding pharmacy
• 20:24
  Speaker 3: may put itself in if it proceeds to prepare substances
• 20:29
  Speaker 3: that aren't approved for use in compounded drugs. Are you
• 20:34
  Speaker 3: seeing any that any of that inclaims? How far does
• 20:37
  Speaker 3: the coverage extend? How do you guys look those circumstances.
• 20:42
  Speaker 5: This is a great question, Scott, and really, you know,
• 20:45
  Speaker 5: really at the forefront of what's going on in the
• 20:47
  Speaker 5: compounding industry, also at the forefront of our mind I
• 20:50
  Speaker 5: think about this is an area where pharmacists need to
• 20:52
  Speaker 5: be extremely careful in business owners. When I talk about
• 20:55
  Speaker 5: it from the insurance standpoint, insurance policies are not intended
• 20:58
  Speaker 5: to serve as a safety net coactive that fall outside
• 21:00
  Speaker 5: of the applicable legal or regulatory requirements. So if you
• 21:05
  Speaker 5: are compounding a substance that's not legally permitted under either
• 21:09
  Speaker 5: federal or state law, you may have coverage issues that
• 21:13
  Speaker 5: arise depending on the facts, policy, language, and circumstances involved.
• 21:17
  Speaker 5: If there is a is a claim that's filed. So
• 21:20
  Speaker 5: I think that I think I agree with a lot
• 21:23
  Speaker 5: of my peers in the industry that rather than worrying
• 21:26
  Speaker 5: about if you're covered for compounding those substances right now,
• 21:30
  Speaker 5: perhaps we should be really focused on how do we
• 21:34
  Speaker 5: compound those substances when they hit the legal regulatory framework,
• 21:40
  Speaker 5: you know, so if they are actually moved to the
• 21:42
  Speaker 5: list and we can compound them, are we prepared then
• 21:46
  Speaker 5: to source the ingredients? Do we have a good process
• 21:49
  Speaker 5: in place? Have we done any testing, validation, that type
• 21:52
  Speaker 5: of thing. So let's use this time right now to
• 21:54
  Speaker 5: prepare and not be compounding and wondering if we have coverage.
• 21:58
  Speaker 3: Yeah, completely agree with Let's not jump the gun. Let's
• 22:02
  Speaker 3: wait until these are approved. If they're approved, and that
• 22:07
  Speaker 3: there is sourcing of active ingredient from FDA registered manufacturers
• 22:11
  Speaker 3: and all of that. So I want to I want
• 22:15
  Speaker 3: to talk about the downside of compounding for a minute,
• 22:20
  Speaker 3: but to ask what I think is a pertinent question.
• 22:23
  Speaker 3: Company pharmacies get inspected. They get for eighty three letters
• 22:26
  Speaker 3: from time to time from FDA. A few god forbid
• 22:30
  Speaker 3: get warning letters. But there are also consumer complaints, there
• 22:36
  Speaker 3: is the threat of litigation. I mentioned all of those
• 22:41
  Speaker 3: unpleasant things to ask, at what point do pharmacy owners
• 22:46
  Speaker 3: need to be notifying you? I mean, if they are
• 22:48
  Speaker 3: cited by their state board of pharmacy, is that a
• 22:51
  Speaker 3: reason that they ought to put that on your radar
• 22:55
  Speaker 3: as opposed to know the threat of a lawsuit?
• 22:58
  Speaker 4: Yep.
• 22:59
  Speaker 5: Absolutely, And in fact, the way that the way that
• 23:01
  Speaker 5: our policy language reads it's it is the notification in
• 23:04
  Speaker 5: case of a loss or a potential non loss is
• 23:07
  Speaker 5: a requirement as part of our contract. And I think
• 23:09
  Speaker 5: that I think people tend to not want to file
• 23:13
  Speaker 5: claims with their insurance company. And that's understandable. If you
• 23:16
  Speaker 5: think about filing a claim for a hailstorm on your house,
• 23:19
  Speaker 5: then chances are your either your rates go up or
• 23:22
  Speaker 5: you get canceled the next year. It's different with professional liability,
• 23:26
  Speaker 5: and especially the professional liability at our At our company,
• 23:29
  Speaker 5: we look at professional liability claims through a different lens.
• 23:32
  Speaker 5: So you could send us fifty notice only claims potential
• 23:35
  Speaker 5: you know, issues.
• 23:36
  Speaker 4: That have come up, and.
• 23:38
  Speaker 5: We look at that every time we do your renewals
• 23:40
  Speaker 5: and so really getting us involved early is important. So
• 23:44
  Speaker 5: there is some coverage language in the policy. If the
• 23:48
  Speaker 5: State Board of Pharmacy has an issue, you know, you
• 23:51
  Speaker 5: get information from the State Board of Pharmacy, a letter,
• 23:53
  Speaker 5: or you must appear before the State Board of Pharmacy.
• 23:56
  Speaker 4: There's there could be coverage.
• 23:58
  Speaker 5: In your policy for that, and so finding our claims
• 24:00
  Speaker 5: department right away will then help you get set up
• 24:03
  Speaker 5: with legal counsel that is appropriate to handle that situation.
• 24:07
  Speaker 4: Same thing with a patient complaint.
• 24:09
  Speaker 5: You know, if you have a patient complaint, file that
• 24:11
  Speaker 5: right away, because then that way, again our claims department
• 24:14
  Speaker 5: can get involved early. They can have the conversations with
• 24:18
  Speaker 5: the claimant or the patient, they can do the investigations
• 24:22
  Speaker 5: and start getting that claim. I'm going to call it
• 24:25
  Speaker 5: under control from the very beginning.
• 24:28
  Speaker 3: Yeah, yeah. I hear occasionally pharmacists suggest that they are
• 24:33
  Speaker 3: protected by their insurance because a legitimate prescriber wrote a
• 24:39
  Speaker 3: prescription or because a supplier had validated the API source.
• 24:46
  Speaker 3: Can you talk a little bit about why neither of
• 24:49
  Speaker 3: those facts necessarily protect the pharmacy from liability or assure
• 24:54
  Speaker 3: that their policy is going to cover them.
• 24:57
  Speaker 4: Good question, Good question, Scott.
• 25:00
  Speaker 5: So we as pharmacists are professionals and we have independent
• 25:03
  Speaker 5: professional responsibilities. And if you want a glaring example of that,
• 25:07
  Speaker 5: look at the opioid situation. You know, pharmacists were held
• 25:11
  Speaker 5: were held responsible for a lot of those prescriptions that
• 25:14
  Speaker 5: were legitimate prescriptions from prescribers. So you know the fact
• 25:18
  Speaker 5: that that a prescription, you have a prescription in your hand,
• 25:21
  Speaker 5: it doesn't eliminate your obligation to evaluate whether the therapy
• 25:25
  Speaker 5: is appropriate, if the combat of preparation is legal, and
• 25:28
  Speaker 5: whether it's prepared safely and accurately. The same way, the
• 25:34
  Speaker 5: fact that an ingredient is available for purchase doesn't automatically
• 25:37
  Speaker 5: mean that it's legally or appropriately compounded into a medication.
• 25:42
  Speaker 5: And so we really need to make sure that we're
• 25:44
  Speaker 5: using our professional judgment when doing these when engaging in
• 25:49
  Speaker 5: these processes.
• 25:51
  Speaker 3: That's really help really helpful, and it's an important reminder.
• 25:56
  Speaker 3: Let's say we're in a circumstance where a patient has
• 25:58
  Speaker 3: been injured or alleged, is industry or regulator takes action.
• 26:03
  Speaker 3: Are there circumstances where uninsurer might defend the pharmacy but
• 26:09
  Speaker 3: declined to cover a judgment against the pharmacy or deny
• 26:14
  Speaker 3: coverage altogether.
• 26:16
  Speaker 5: Well, this is going to be an insurance answer, right,
• 26:19
  Speaker 5: It depends, So every claim depends on these specific facts
• 26:23
  Speaker 5: and policy language. So even the policy may change, you know,
• 26:27
  Speaker 5: not from year to year necessarily because that's a little
• 26:30
  Speaker 5: bit quick, but your policy that was in place two
• 26:32
  Speaker 5: or three years ago may have different language than it
• 26:34
  Speaker 5: does today. And so it's really going to matter on
• 26:37
  Speaker 5: when the claim was filed or when the injury occurred
• 26:40
  Speaker 5: when the claim was filed, and then the circumstances around that.
• 26:44
  Speaker 5: So coverage determinations usually are based on policy terms, the
• 26:48
  Speaker 5: nature of the allegations, and the circumstances surrounding the event.
• 26:52
  Speaker 5: So there are some situations that might involve just events coverage.
• 26:57
  Speaker 5: A lot of times that's on the license piece of it,
• 27:00
  Speaker 5: but there's also certain times when you might see an exclusion.
• 27:03
  Speaker 5: Perhaps we didn't know you were sterile compounding, and you
• 27:05
  Speaker 5: don't have that endorsement on your policy, and then all
• 27:09
  Speaker 5: of a sudden there's a compounding claim that has to
• 27:10
  Speaker 5: do with sterile compounding.
• 27:12
  Speaker 4: That's likely result.
• 27:14
  Speaker 5: In an exclusion because you don't actually have the coverage.
• 27:17
  Speaker 5: And again that goes back to talking to your agent
• 27:19
  Speaker 5: making sure that as you're making business changes, you keep
• 27:22
  Speaker 5: them in keep them in formed of what those are.
• 27:27
  Speaker 3: Yeah, it sounds like that communication between the pharmacy owner
• 27:31
  Speaker 3: and their agent ongoing is really important to assuring that
• 27:35
  Speaker 3: they understand what their coverage is and that they actually
• 27:38
  Speaker 3: have coverage they think they think they have. You've exhausted
• 27:43
  Speaker 3: all my hard questions. Very grateful for your answers. Here,
• 27:49
  Speaker 3: I'm going to ask you one sort of lightning round question.
• 27:52
  Speaker 3: Give me the three most important steps the owner of
• 27:56
  Speaker 3: a compounding pharmacy should take now to make sure that
• 27:59
  Speaker 3: they're operations and liability coverage are aligned.
• 28:04
  Speaker 5: Okay, so I'm going to start with the first one
• 28:05
  Speaker 5: we just talked about. Do an insurance check up with
• 28:08
  Speaker 5: your agent, sit down, make sure that your building is
• 28:11
  Speaker 5: appropriately covered, the contents are appropriately covered, that the operations
• 28:16
  Speaker 5: that you're doing within your building are appropriately covered.
• 28:19
  Speaker 4: And then also the external things.
• 28:20
  Speaker 5: So do you need cyber liability, do you need employment
• 28:23
  Speaker 5: practices liability? Do a comprehensive discussion with that agent. Second,
• 28:29
  Speaker 5: evaluate your operational risk controls. So you know, I've been
• 28:33
  Speaker 5: in risk management now twelve years. You know the really
• 28:35
  Speaker 5: the key to insurance is preventing the claim before it
• 28:39
  Speaker 5: ever happens. So making sure that you're reviewing what are
• 28:42
  Speaker 5: your policies and procedures, what quality assurance do you have
• 28:45
  Speaker 5: going on, is your staff training up to date, is
• 28:48
  Speaker 5: your environmental monitoring within the standards or could you even
• 28:53
  Speaker 5: go above and beyond with the standards and do more monitoring?
• 28:57
  Speaker 5: And then third, you know, make sure you have open communication.
• 29:00
  Speaker 5: If you're planning on adding a new service, maybe adding
• 29:03
  Speaker 5: a new set of drugs that you're going to compound.
• 29:05
  Speaker 5: Perhaps again like I talked about earlier, you're going to
• 29:08
  Speaker 5: enter into a relationship either with another pharmacy or a
• 29:11
  Speaker 5: telehealth platform. You know, have those conversations before you do
• 29:15
  Speaker 5: it with your agent so that we can make sure
• 29:17
  Speaker 5: the coverage is appropriate.
• 29:19
  Speaker 3: That's great, really important info. I know there are probably
• 29:23
  Speaker 3: some compounding pharmacy owners listening to this at the gym
• 29:26
  Speaker 3: or driving in their car and the phone of their
• 29:29
  Speaker 3: agent is going to be ringing just shortly. Christin, thanks
• 29:34
  Speaker 3: so much for joining us. This has been just a
• 29:38
  Speaker 3: great information for our listeners and we appreciate very much
• 29:42
  Speaker 3: our partnership with Pharmacist Mutual.
• 29:44
  Speaker 5: Thank you, Thank you Scott, and thank you for letting
• 29:46
  Speaker 5: me talk about one of my favorite topics, insurance.
• 29:48
  Speaker 3: Absolutely Andrew back to you.
• 29:51
  Speaker 2: Thank you both for taking the time to join us today.
• 29:54
  Speaker 2: I know how busy you are and we really appreciate
• 29:56
  Speaker 2: you coming buy all right, that is it for this
• 30:00
  Speaker 2: episode of Essential Before we play that outro music. Something
• 30:04
  Speaker 2: I always point out, if you are a compounding pharmacist
• 30:07
  Speaker 2: or technician, or if you prescribe compounded meds, APC is
• 30:11
  Speaker 2: almost certainly helping you and helping your patients. I won't
• 30:15
  Speaker 2: go through everything APC does, but I will say it
• 30:18
  Speaker 2: is the biggest, and in a good way, the loudest
• 30:21
  Speaker 2: trade association for the whole compounding profession. If you are
• 30:24
  Speaker 2: not a member of APC, yeah, really ought to be.
• 30:27
  Speaker 2: We're working for you. We'd love to have you on board.
• 30:30
  Speaker 2: Just head over to a four PC dot org and
• 30:33
  Speaker 2: check us out. All right, Brady, play that outro music.
• 30:37
  Speaker 2: Thanks for listening to everyone.