The price of pain: Questionable marketing, loose oversight of compound creams

This is the second in our series of reports on the compound cream industry. You can read Part One here and Part Three here.

Last year, former NFL quarterback Bret Favre appeared on Sirius XM’s NFL show to pitch the benefits of RX Pro, a compound cream for which he is a spokesperson.

"It's a safe way to treat some of your ailments," said Favre. "It even works with cramps, stomach pain. It's amazing."

Favre predicted  RX  Pro would "revolutionize" the treatment of sports injuries.

"It's just endless what's going to happen with this product," he said.

RX Pro  is made by Mississippi-based World Health Industries, which declined comment for this story.  On its web page, it claims  RX  Pro can help with everything from warts to scars.  It also says the cream can help military veterans with all kinds of problems, asserting that it is "less addictive" and has "minimized side effects."

What the web page doesn't mention is that  RX  Pro is not FDA-approved.

"This is an unapproved medication that has never been tested," said Dr. Sarah Sellers, a pharmacist and drug safety consultant, who added, "so if the suggestion is this is a benefit to our veterans, I completely disagree." 

Sellers worked on compounding issues from 2006 through 2008 for the Food and Drug Administration. She has testified on Capitol Hill about the need for oversight of compound pharmacies. She's concerned about what she claims are false and misleading claims being made by some compounding firms and pharmacies, as compound creams have grown in popularity — and price — in recent years.

"It is out of control, and from a public health perspective I am very concerned, because the safety and in fact the efficacy of the creams are unknown," said Sellers.

Soliciting doctors

KPCC found several online advertisements and job postings by companies linked to compounding pharmacies that are recruiting doctors to participate in studies and data collection.

It's not always clear what is being studied or why data are being collected.

Doctors can make up to $8,000 a month for "moments of their time" by having their patients fill out a 10 question survey, according to one online job posting.  The ad was placed by a company that contracts with compounding pharmacies.

Confidential documents obtained by KPCC raised questions about a study conducted by Texas-based PharmaCo, which markets and produces compound creams and claims to have joint venture partnerships with compounding pharmacies nationwide. In a 2014 internal memo, the company’s lawyers warn that a PharmaCo study could raise regulators’ eyebrows, because physicians getting paid to participate in the study were also writing prescriptions for compounds provided by PharmaCo.

The lawyers note these payments could "potentially implicate anti-kickback laws," and they urge PharmaCo to "reduce the risk" they would break the law.

PharmaCo has not responded to requests for comment.

Sellers says studies and clinical trials are a new trend in compounding, one that can be lucrative.

"The doctors can receive reimbursements, and those types of arrangements are described in those job advertisements," said Sellers, adding, "physicians can make $5,000 to $10,000 a month simply by screening and prescribing compounded creams, even if [their patients] don’t need them."

It's not known how many of these physician-pharmacy relationships exist in California because state officials do not track them, and there is no law requiring that the information be disclosed.  A doctor cannot own more than 10 percent of a pharmacy in California.

California Board of Pharmacy Executive Director Virginia Herold would not comment on any specific cases or investigations, but said she is interested in certain physician-pharmacy arrangements.  

"Insofar as a system is being set up to direct patients to a particular pharmacy through a particular prescriber so they could get a particular drug that they may or may not need, I think then we may want to take a look at that relationship and whether or not it is appropriate to the public's health and safety," said Herold.

Last month, the Board of Pharmacy asked Orange County Superior Court Judge Thomas Goethals to suspend the licenses of two Southern California pharmacists, Michael Rudolph and Curt Hague. Both have been charged with accepting kickbacks involving a massive compound cream fraud scheme. The judge refused, saying there is insufficient evidence at this point to show the men are a threat to public safety. The judge also refused to suspend the licenses of three chiropractors indicted in the case.

A total of 12 medical professionals have been indicted in the Orange County case. Their arraignment is set for Sept. 12.

Rudolph and Hague declined to comment on the charges against them.

Rudolph is on staff at USC's School of Pharmacy. The university would not comment on his current status.

Selling in bulk

In August 2008, insurance fraud researcher Amy Blettner came across Rudolph’s name when she investigated an advertisement on Craigslist that read, "Work Comp Doctors Make $20,000+ a month to prescribe pain cream."

Blettner said she followed up via email with the ad's author, who called himself "creamguy." The email response laid out a plan in which brokers would guarantee pharmacies prescriptions by a doctor in exchange for the pharmacies making compound cream samples in bulk. "Creamguy" wrote that his company’s product was "compounded by the University of Southern California pharmacy family," and that the company’s chief pharmacist was Rudolph.

That set off alarm bells for Blettner.

"That's clearly encouraging a pharmacy in my opinion to produce these compound samples in mass without having the mandatory patient-doctor relationships," she said, arguing that such activity is equivalent to "producing samples without it being attached to a prescription."

DOCUMENTS: Original Craigslist ad and emails from "creamguy"

View documents

Blettner said she reported this to the FDA, but got no response.

Rudolph declined comment on the ads.

The purpose of a compound cream is to treat people with a specialized condition, such as those who can't swallow. It is not intended for mass production and therefore not FDA approved.  It cannot be made in bulk.

Since 2006, the FDA has sent out five warning letters to compounding pharmacies ordering them to stop mass producing compound creams.

Government oversight is a gray area

State pharmacy boards are in charge of overseeing compound pharmacists and pharmacies. It's unclear how many of California’s 7,000 pharmacies do this type of compounding, because the Board of Pharmacy does not track that information.

While a few states do spot testing of the ingredients of compound creams, California does not.  The Board of Pharmacy says it is the responsibility of the FDA, which in turn says it is the job of the state agency. The FDA does have the right to inspect facilities and take enforcement action.

Critics like Sellers worry that there is insufficient regulation of what's going into compound medications.

In 2005, a 21-month-old baby grew pubic hair and an enlarged penis after his compound skin cream was tainted with testosterone.

Last year, a Los Angeles infant died after being exposed to his mother's compound cream.

No one knows how many people have had problems with compound creams, because the FDA does not require pharmacists or doctors to report complaints.