Jason Dearen

The Casualties of Drug Compounding

Air Date: March 29, 2021

Associated Press investigative reporter Jason Dearen discusses his new book “Kill Shot: A Shadow Industry, a Deadly Disease.”


HEFFNER: I’m Alexander Heffner, your host on The Open Mind. I’m delighted to welcome our guest today, Jason Dearen. He is author of the new book “Kill Shot: A Shadow Industry, a Deadly Disease.” He is also investigative correspondent for the Associated Press, who has covered extensively, the COVID-19 pandemic. Welcome Jason.


DAEREN: Thank you so much, Alexander, for having me.


HEFFNER: You’re welcome. What was the original inspiration of this book project, Jason?


DAEREN: So, well, as an investigative reporter I’m always looking for good projects that have an accountability angle, you know, something I can identify in our system that’s broken and needs more sunlight or fixing. And in 2017, two pharmacists were on trial for murder in federal court, which was an interesting case in and of itself. But an editor of mine at the time said, well, you might want to look deeper into this. There’s something going on with this case that’s just fascinating. So, I started looking into it and indeed the deeper I got into it, the more it made me understand that there was a big part of the pharmaceutical industry of the United States called compounding pharmacies, which are businesses that are allowed to custom-make drugs, injectable drugs without FDA oversight. And that alone was interesting to me. And then I found out that these pharmacists who are being charged with murder were involved in the largest crisis of contaminated drugs in U.S. history that caused a terrible fungal meningitis outbreak in 2012. And from there, it just steamrolled into a really big project that I became obsessed with for the last four years.


HEFFNER: Jason, talk to us about how you discovered that the FDA was not regulating or overseeing this genre of drug.


DEAREN: Sure. Well, you know, back in the 1930s, there was a terrible poison scandal with some cough syrup called Elixir Sulfanilamide that poisoned and killed more than a hundred people in the United States. And that led to a law called the Food, Drug and Cosmetic Act that was signed by FDR in 1938. And in that law, it actually it created the modern FDA oversight system and really created big Pharma. And but what it did is it had a carve-out, kind of a loophole for pharmacy compounding that if a doctor wrote a prescription for a customized drug, a pharmacist could still make that drug from active pharmaceutical ingredients, which are basically like the chemical constituents of drugs, you know, what you use in the recipe of a drug and that carve-out exists to this day. And so right around the mid 1980s, early 1990s, some pharmacists in Texas created a business that started to exploit this and basically create a new class of drugs that are made by pharmacists instead of FDA oversight of big Pharma. And it’s continued to grow and grow and grow. And with the big drug shortages we saw in the late in the mid two thousands up till now, there are many classes of drugs of which the demand is much higher than the supply, pharmacy compounding has become more important than ever. And so now we have pharmacists making injectable and other types of drugs that just aren’t in the same safety and oversight system as big Pharma, like Pfizer or Johnson and Johnson.


HEFFNER: Are they literally blending drugs together when you talk about compounding or combining, or is it the case that they are creating new drugs from scratch?


DEAREN: So, both. What you’ll see is you know, the, one kind of look of compounding is from “It’s a Wonderful Life.” You remember Mr. Gower goes into the back room and, you know, he’s upset, he’d just lost his son, got a letter about it. And he, and he mixes poison into pills and you know, the young protagonist stops him from doing it and gets, it’s a big moment in that film. Well, that kind of thing can still happen today. Pharmacists are allowed as long as they have a prescription from a doctor to make or mix drugs. And sometimes there’ll be taking known chemicals that are FDA approved, mixing them up, you know, things like cough syrups, sometimes they’ll just mix in a flavoring for a child, something like that. That’s pharmacy compounding. But what’s also happening is that they’re custom making from scratch, you know, from the chemical constituents’ drugs that are injected into people’s spines, into their hearts cardioplegia, which is used during cardiac surgeries and eye injections. These are three big areas that compounded drugs are being administered in the United States in large numbers. And a lot of those drugs are not being made under FDA supervision. And so, you see cases like this that I write about in the book, the main narrative of the book centers on it, mysterious fungal meningitis outbreak in 2012, and kind of takes you through it as the scientists unravel this mystery. But since that terrible tragedy occurred, there have been a number of compounding errors. You know, some 75 people were blinded or partially blinded from a compounding error in Texas a couple of years ago. There were babies in the Midwest in Chicago and Indianapolis who were overdosed by a morphine derivative that was compounded too strong. They had to be Narcanned these poor children. So, and there are many other examples that I read about at the end of the book to show that this is an ongoing problem with a lack of federal oversight of a drug making industry that’s operating kind of in a patchwork system, that’s overseen by individual states.


HEFFNER: Jason, I want you to expound on that discovery and the legal liability, which you write about quite poignantly in the book. First, a technical question. When the doctor’s writing the script, the doctor is not directing the combining. So, right? It’s, it’s the pharmacist, independent of the doctor, who is making the decision to do the combining?


DEAREN: That’s right. And when a doctor writes a prescription, the whole, the way that the system was supposed to work was that a prescription was supposed to slow everything down, right? So, you have big drug manufacturers make thousands upon thousands and thousands of vials like, you know, with the vaccine right now. And that’s made under strict oversight by FDA and the facilities in which they’re made are even inspected all the time. Pharmacy compounding, when that prescription is written, the pharmacist goes in, makes that, but there’s two things that are happening that get them around this prescription requirement. One is a process called back-filling where a compounding pharmacy is making large batches of drugs and selling them to a hospital or a clinic and that clinic is accepting those drugs without prescription, and then providing the prescriptions after the fact. So, they’ll administer the drugs to the patients and then give them names, you know, down the line somewhere to satisfy this legal requirement.


The other way, as we saw in this case, that they’re getting around that requirement is just making false prescriptions. And so, in this case, we saw prescriptions written for, you know, silly sounding names like Mickey Mouse and Edgar Allen Poe, Filet O’ Fish. I mean, they would just write anything in there because they were making so many drugs, they were acting as a drug manufacturer, not a pharmacy. And that’s what we’re talking about here is that that legal kind of loophole that exists in the nation’s drug safety laws is allowing bad actors to come in and exploit that and operate as a non-FDA approved drug manufacturer. And so, they’re making the quantities of drugs that a manufacturer is, but they’re doing it under the legal guise of a pharmacy. And that’s where we get into trouble. And that’s where a lot of these disasters, like I chronicle in this book, happen.


HEFFNER: Jason, at what point did the scientific investigators or the legal authorities become suspicious that this was a manmade disease, that this was a crime committed by these pharmacists?


DEAREN: Yeah. One of the best parts of reporting this book was learning more about the public health system. And it just so happened that learning a lot about the public health system would turn out to be a great area in which to be reporting because of the COVID disaster. But what happened was, people started showing up first in Tennessee with a meningitis of an unknown origin. Doctors couldn’t figure it out, usually it’s a bacteria, or a virus that causes meningitis well, in this case, it was neither of those. And so they were, they were stumped. And so, what they had to do, epidemiologists at CDC and with the states, they had to trace every single medical product used on these mystery patients coming forward, who were not only experiencing symptoms of meningitis, but suffering from these bizarre, rare, deep-brain strokes that were quickly killing them. And so, you had patients coming in terribly ill. And so they started tracing the supply chain of every single medical product that these people had gotten. One of those was a steroid produced by a place called the New England Compounding Center, a compounding pharmacy in Massachusetts that had been shipping its drugs around the country, which compounding pharmacies are legally allowed to do. And they traced it to this shop. Unfortunately, the owners of this compounding pharmacy, when the CDC and others questioned them about whether they’d had any problems in their sterile lab or anything like that they said they hadn’t, they ran a topflight. And so that’s the problem with not having oversight. There was nobody there who had been inside, who had had her eyes on it, who had written a report or investigated, and who were able to challenge that assertion, which proved to be false and very deadly. And it would be weeks until scientists were able to figure out exactly what was happening, identify the microbe, which was a rare fungus that usually only attacks plants, never known to attack people and their central nervous system. And you know, it was a big mys… a medical mystery that that they were able to solve because of good medical detective work.


HEFFNER: Jason, tell us about the criminality here. What were the different layers of criminality? What was the intent, motivation, unwitting or winning?

DEAREN: Well, in this particular case that I write about in the book, there were a number of layers of fraud, racketeering, and then the pharmacists were actually charged with murder, which was a really interesting kind of legal tactic that the federal government took that was novel. So, the fraud happened because the compounding pharmacy, while operating outside of FDA jurisdiction, was going around telling hospitals and clinics that it was making these injectable drugs under the highest of sterility standards. Well, we come to find out afterwards, after they killed a bunch of people and the FDA was allowed to go in, after the fact, to react to a terrible situation, rather than be proactive and go in and do the type of oversight it does with the Pfizers of the world, the big Pharma companies, that that was not the case. There was mold growing in their clean room. Clean room is like the sterile lab where they make the drugs. There was there were bugs, mice, other critters that the pharmacy techs regularly saw. And the other thing is, if any inspector would have shown up outside this facility, it was operating next to the recycling plant and right outside the door, less than, you know, a few yards away was a huge pile of refuse, including old mattresses and other types of garbage. And so it was, they were making drugs that would be injected into people’s spines in this type of facility. So that was one layer: the fraud. The racketeering came from since they were operating as the government alleged as a criminal organization, kind of like you know, the mafia, these, these laws, the racketeering laws were created in the seventies to deal with the mob. They charged them as a criminal organization. And then because people died as a result of that criminal behavior, they argued for murder. But the success of that with the jury, didn’t, didn’t go over very well. And you can obviously read about that in the book.


HEFFNER: Right. So were the executives aware of the egregious conditions and was the complicity understood, it was not just it was knowing, it was negligence.


DEAREN: Yes. in testimony during the trial and in multiple emails that I obtained from the criminal records, the owner, co-owner Barry Cadden and chief pharmacist, Glenn Chin, both were aware of the daily goings on. In fact, they had an environmental monitoring staffer, wasn’t required to do that job had no, you know, kind of microbiology background, but would go around the clean room with little sponges and take samples of surfaces, and then try to grow those in a Petri dish, right, to see if that there was contaminants. Multiple times throughout the year, prior to the outbreak, while they were making thousands and thousands of fake prescriptions, they got mold hits in that room. And so that meant that they knew that there was a mold problem months before this happened. And they didn’t just didn’t do enough, obviously, to keep people safe. And that’s, again, I think the takeaway from my reporting and from working on this story for so long is that when you allow a business that makes products, whether it be food or drugs or anything that goes into the human body, when you allow those businesses to self-regulate, to not have any sort of government accountability or oversight, these are the types of things that can happen. Because I think you asked what the motivation was before, too. What we know is that they were the growth of a profit in this country was doubling and tripling year over year, as they continued to make more and more drug, even though they didn’t have the staffing or experience to do that. And they were lying about, of course, their capabilities, but there was nobody there to stop them or to, to call them on it, right, and so that, that’s what we’re talking about here is the safety system that set up for like the folks who are, for example, making our vaccines, they undergo so much onerous oversight really, just, I mean, if you saw the level of regulation that something like this goes through, even in an emergency situation like we have here, it’s incredible. These other, this other side of the industry, this kind of shadow world of compounding pharmacies, they have none of that. Some states do a little bit of a better job than others. But for example, in this case, in 2012, the state of Massachusetts had three inspectors and 1500 pharmacies to inspect. And there were, none of them were certified to be able to go into the type of sterile laboratory that NECC was operating. And that’s still the case in a lot of states in the country, yet these places can ship their drugs from state to state.


HEFFNER: Have those legal loopholes been rectified, Jason?


DEAREN: That was another big question I asked myself when I set out on this, on the journey of writing this book, as you know, is this a problem that’s been solved? And unfortunately, the answer is no, unlike in the 1930s and the sulfonamide disaster, which I mentioned earlier and FDA, there was you know law passed the Food Drug and Cosmetic Act that completely revolutionized drug safety in the United States. That type of disaster happened again in 2012. And another law called the Drug Quality and Security Act was passed in 2013. But unfortunately on its way through Congress, lobbying, lobbying from the compounding industry and others was successful in weakening the law to an almost purely voluntary standard. And so by the end of it, as one of the Senate Health Committee staffers, who I interviewed for the book told me they really didn’t change anything. And so even on the other side of this terrible disaster, we had a law that was kind of a law in name only and didn’t make compounding safer. Bad actors can still operate with these same kind of legal loopholes in which to worm through.


HEFFNER: How do you think differently about the pandemic having now authored this book, in terms of drugs, pharmaceutical manufacturing, and of course, legal liability and specifically, as someone Jason who’s covered the pandemic and the injury it’s caused human beings, especially in the United States, you must think about the liability of the government and its ineptitude and negligence in not providing the protective equipment and not providing expeditiously treatment and vaccinations. So how did the writing the book and the course of researching the book affect or change the way you view the pandemic?


DEAREN: Yeah, I mean, such an important question. It’s totally changed the way that I see our healthcare system. And there’s two important things to say about this. First is the public health infrastructure in this country, which has been, we’ve seen divestment in public health departments across the nation. And it was the public health infrastructure that saved countless lives in the incident that I write about in my book. It was working, it was, you know, a much smaller version of what it should have been, but it was working. An epidemiologist in Tennessee recognized strange cases, reported it up to CDC, asked for help, ask for more expertise. They coordinated with other states. This happened in 23. These, these drugs went to 23 different states, 76 different clinics, 17,000 vials. So, I mean, they were spread around with contaminants. So the public health system helped investigate that, identify it, and lessen its impact on public health. So that’s, that’s number one is that the public health infrastructure that since 2012 has continued to see divestment in states, especially in States like Florida and the south. You see a lot of these big populous states that have less public health infrastructure and when we saw a pandemic like that, we hadn’t seen in a century hit us, we weren’t as ready as we should have been. The other thing you mentioned was drug safety. And what I learned reporting this book is that what the FDA system of oversight of drugs, while imperfect, is still guarantees safety almost you know, for injectable drugs, especially what we call higher risk drugs, drugs that are you’re injecting into your central nervous system, into your heart, into your eyes. If you get an FDA approved product, you are guaranteed that that has been made in a facility that’s been inspected. And that it’s a recipe. You know, the has been approved by the FDA. That is not the same for compounded drugs. And what shocked me is that doctors that I spoke with, many doctors to this day, if you ask them, do you know if a drug that you’re prescribing to your patient is compounded or not? Most of them will say no. They just expect that all the drugs that the hospital pharmacist or anyone is providing to them to give to the patients is an FDA approved drug. And so, what I learned about this is that if it is FDA approved, you know, like the vaccines, that is something I have high confidence in, that was made under strict scrutiny. And that’s all we can ask for is that there’s scrutiny that people look at the process and they judge it and they fix problems as they occur.


HEFFNER: Jason, one of the major problems during the course of this pandemic has been the testing failures. And we have hosted on The Open Mind podcast, a number of medical professionals and a few courageous voices like Michael Mina of Harvard University, who said that the FDA’s failure to approve at-home testing, that was proven to be safer than other testing that had been approved at the beginning of the pandemic, the failure to do that resulted in lives lost, resulted in tens of thousands, maybe hundreds of thousands of deaths that were unnecessary. You’re an investigative reporter. Your beat is the FDA. Did they get something wrong here with testing and still the fact that families and individuals can’t get 10 at home tests mailed to them, so that they know that they’re not at a risk if they’re going out, even if they’re socially distancing.


DEAREN: There is no doubt from the facts that the United States from the get-go had a problem with testing and, and testing is so key to getting for epidemiologists, to get data, to direct their recommendations and guidelines and get their arms around a pandemic. And that wasn’t just FDA, remember in February of 2020, the CDC also created a test that didn’t work. This is an agency that, you know, I write about in my book that did a great job in this outbreak, but they failed in their labs and admitted so. As far as FDA approving tests, yes. I mean, everybody, I think would agree that we needed more testing. We needed it faster. We still do. But on the other side of that, you don’t want to approve products that are inaccurate or that don’t get the job done and put bad data into the system. And so, I also understand from a regulator’s point of view, during a pandemic and emergency the type we haven’t seen in so long, that there’s going to be some fear to approve products before they’ve, you know, been able to be proven as accurate. And so, I think, I think what you saw, there were real mistakes that were made that had been chronicled by myself and others by CDC, by FDA. Also, with just the challenge of this pandemic, which was so monumentally difficult and still is…


HEFFNER: Understood, but to be frank, Jason, I just haven’t seen the scrupulous investigative reporting on FDA and its so-called black box. Michael Mina talks about a black box of unknowns associated with their approval process. Whereas the vaccination is rather transparent. We have three authorized in this emergency setting. We know Moderna, Pfizer, J and J. With the testing, Michael argues, and I urge all of our viewers to listen to the podcast with Michael Mina, that the process has been completely closed and not transparent at all.


DEAREN: Yeah. I mean, you know, I, I’m not going to argue with Michael Mina. He knows a lot more about this than I do, and it is a subject expert. What I can tell you is that we saw in in my own reporting, from not only FDA, but HHS, its parent organization, lots of questionable decisions being made about medical devices and studies to fund. I wrote one story about a study that they approved millions of dollars to study Pepcid to see if that was a COVID-19 drug when all of the scientists that we spoke to from inside the government recommended against that. So, this money needs to go towards perhaps a better testing kit, right? Something like this, millions of dollars are going towards, and also giving, you know, millions of dollars, hundreds of thousands of dollars to an inventor of a of a medical product that never proved to work from 2000 to try to see if it would work in terms of helping with blood transfusions. There are lots of questionable decisions made during this disaster, especially during the last year. And you know, and FDA was no different. I mean, I think what you see with testing is there was also a flood of new products to look at, and that takes time. So, I mean, I, you know, if I’m going to provide the kind of the other side of this, I guess from their point of view, I mean, I’ve written lots of critical articles, articles of FDA, HHS, CDC, but I will say that, you know, when you’ve got a flood of these products, you can’t just throw them out there and see what works.


HEFFNER: Understood.


DEAREN: They, they have to go through the boxes and that takes time.


HEFFNER: Jason, thank you for writing this book, “Kill Shot: A Shadow Industry, a Deadly Disease,” the untold story of the most contaminated drug crisis in US history. Thank you. I urge our viewers to check it out and to read it, appreciate your insight today and your diligent reporting on this beat.


DEAREN: Thank you so much. It was really fun.


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