When the FDA removed GLP-1s from the shortage list, many were unsure whether compounded versions could still be prescribed. In this episode, hosts Brad and Michael share the story of a medical weight loss clinic and the fallout after these drugs were removed from the shortage list. Tune in to learn how regulatory shifts, misinformation, and risk management collide in modern medicine. Find out how practices can navigate evolving regulations and avoid pitfalls when prescribing compounded weight loss drugs.
Listen to the full episode using the player below, or by visiting one of the links below. Contact ByrdAdatto if you have any questions or would like to learn more.
Transcript
*The below transcript has been edited for readability.
Intro: [00:00] Welcome to Legal 123s with ByrdAdatto, legal issues simplified through real client stories and real-world experiences, creating simplicity in three, two, one.
Brad: [00:13] Well, welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host, Michael Byrd.
Michael: [00:19] As business attorneys for health care practices, we meet a lot of interesting people and learn their amazing stories. This season’s theme is the “Business of Medicine Today.” Gone, Brad, are the days of grandpa’s medical practice, with paper charts and old-school treatments. We’re going to confront the business and health care issues faced by the modern medical practice.
Brad: [00:42] Although I still think it’d be fun to talk about some of the compliance issues that, you know, our grandpa’s medical practice is probably looking at. But speaking of old school and old-school treatments, that reminds me of some college stories that I might share today about some of my fellow TCU students.
Michael: [01:01] Oh, man.
Brad: [01:02] And it may make them sound, Michael, a little less than law-abiding.
Michael: [01:07] The moment you said college, I knew it was bad. Like, I don’t know whether to call your college friends, and tell them that you’re about to rat them out and break the code, or, should I call your mom, now or at least after the episode, to let her know that Bradford Ellis Adatto is not behaving?
Brad: [01:27] First, this really was not me, but picture this: TCU campus, Christmas season, local tree lot mysteriously loses dozens of Christmas trees. Turns out some fraternity decided their holiday spirit needed a little extra, extra, extra greenery.
Michael: [01:47] Please tell me that you were not involved with this, Brad.
Brad: [01:50] I plead the Fifth. No, no, really, I was not involved, but let’s just say I actually knew where the trees went, and apparently they looked really good in the backyard of some TCU student’s house until the cops arrived, and after that wasn’t enough the same group may have later stolen a Big Boy statue, you know, the old classic American hamburger mascot?
Michael: [02:13] Oh, yeah
Brad: [02:13] And left it on a sorority house lawn, like some kind of, like, you know, fast food Santa gift that they dropped off.
Michael: [02:19] Well, I don’t doubt your capabilities of doing many things, and I may know of some things that you’ve confessed to doing in college, but thievery is not one of them. So I’m glad to hear you were not involved with that. But I guess, you know, do all the TCU students’ college resume include stealing trees and, you know, what we used to call it in Dallas was Kip’s Big Boy, stealing that mascot?
Brad: [02:48] Nope. Nope, not all. But that might be why I became a lawyer, to defend some of my fellow Horned Frogs. But here’s the kicker: I just read about a group in Pennsylvania who stole a Ronald McDonald statue right off its bench. You know, no Big Macs just the big, big missing mascot, and police are calling it a McRobbery.
Michael: [03:09] Uh hu, are the police calling it a McRobbery? Because this smells like a Brad joke.
Brad: [03:16] No, it is not a handcrafted Brad joke, but the police did come up with it, cause I believe they have a good sense of humor, too. But unfortunately, Michael, at this time, no ransom note has been delivered, and this means that the staff is not McLoving it.
Michael: [03:30] Oh, there it is. Okay.
Brad: [03:33] You’re welcome, America.
Michael: [03:34] Yeah. I’m seeing a pattern. Mascots everywhere are living in fear because of people like you, Brad.
Brad: [03:40] Hey, I’ve retired from any alleged mascot liberations, but Michael, be honest, do you have any similar stories from your college days?
Michael: [03:49] What did you say a few minutes ago about pleading the Fifth? My wild side was, um, kids, I hope you’re listening, studying late at the library.
Brad: [04:00] Yeah, I’m sure that’s what you were doing. I’m not buying it. I know too many of your college day stories.
Michael: [04:07] I think what you meant to say, Brad, is that you and I have a nuclear option against each other. I know your stories, too, and we have a pact. I mean it wasn’t a blood oath, but I think that we have a pact. So hopefully, the police will find the McRobbers and bring order to this mascot kidnapping.
Brad: [04:30] Exactly. I feel bad for this mascot. And speaking of order, let’s jump into today’s topic before the police show up and, you know, start knocking on my door, asking me questions about this McRobbery.
Michael: [04:41] Okay. Well, what do you have for us today on our story?
Brad: [04:44] All right. Our story today starts with a nurse practitioner working at a wellness clinic that had a, a large medical weight loss practice. We’ll call the clinic, the Christmas Clinic, and we’ll call the nurse practitioner, McNurse, and she was one of many providers at the Christmas Clinic.
Michael: [05:01] Okay, very predictable and acceptable, given the stories you just shared. But serious question: Did McNurse own the Christmas Clinic?
Brad: [05:12] No, she was just an employee of the practice but was one of their leading experts on medical weight loss, including prescribing weight loss drugs, like semaglutides, also sometimes called GLP-1s.
Michael: [05:23] Yes, and audience for those who haven’t been watching the news the last couple of years, these GLP-1s, you hear the most common brand name you’ll hear is Ozempic, but there’s also Wegovy, Mounjaro, and Zepbound, and more seem to be coming outand more are coming out. Um, and these are, you know, commonly used by wellness and longevity clinics for weight loss. So Brad, you said, “prescribing weight loss drugs.” Was McNurse using the name brands that we just talked about, or was she prescribing compounded weight loss drugs?
Brad: [06:10] Well, the Christmas Clinic first started on prescribing weight loss drugs, they exclusively were prescribing compounded drugs.
Michael: [06:19] Yeah, and I, I think, you know, what you’re alluding to, for those who’ve been listening to us talk about this for the last two years, is it has been a rollercoaster. Would that be the right way to describe it?
Brad: [06:31] Yes.
Michael: [06:31] On this whole idea of whether or not you can, can compound these GLP-1s. And so it was, I mean, that’s what everybody was doing until late 2024, and then for sure by early 2025. You know, kind of at a high level, the legal issue that we’ve covered in depth in prior episodes is that this was in such demand that there was a shortage. And when there was a shortage that allows, you know, through the FDA, allows for this process for you to compound these drugs. And so the controversy and the changes started happening when, you know, the pharmaceutical companies said that they, you know, claimed that there was no longer a shortage, and ultimately, the FDA agreed. And so these were removed from the shortage list, and that, you know, kind of created this, you know, this change in, you know, where, you know, what’s the regulatory landscape for compounding? And so that’s kind of, I’m guessing where you’re headed with your statement, is that they used to exclusively do it, and so I’m wondering what they’re doing now.
Brad: [07:55] Yeah, I agree. And the shift by the FDA has caused lots of shifts in the wellness and longevity clinics on what they were prescribing.
Michael: [08:06] Yeah, and I speak Brad, so I think you mean, Brad, prescribing compounded versus prescribing the name brands.
Brad: [08:15] Correct, yes. Many clinics stopped prescribing compounded as they thought, uh, with this shortage over, which is where we are now, they could no longer prescribe weight loss drugs.
Michael: [08:25] Yeah, and it was fascinating, cause, I mean, you know, there’s a lot of different things out there that made created this fear factor, but it’s not exactly true. That is not to say there isn’t risk that we’ll, you know, talk about, but, you know, the main thing is that the FDA does not control the practice of medicine. And we’ve talked about that a bunch in prior episodes.
Brad: [08:52] Yeah, and that’s correct. Right. And, well, the Christmas Clinic, had conducted more research and learned first what you just said, that the FDA does not control the practice of medicine, and then they learned that their providers could still prescribe compounded GLP-1s during, this drug only if all these elements are met: one, that it was documented medical necessity; two, there was a significant difference between the compounded… Sorry, the commercial product and the compounded product; and three, the prescription is patient-specific. Oh and if you noticed, of those three I just listed, not one of them is for cost-saving alone. It’s not a valid reason.
Michael: [09:35] Was it a valid reason, like, as an exception, if you got your hands on, like, a Ronald McDonald statue or some other mascot?
Brad: [09:43] I’ll have to address that with counsel first.
Michael: [09:47] I mean, that may be why that’s happening. Maybe they think they can prescribe. So how did this impact the Christmas Clinic?
Brad: [09:56] The Christmas Clinic, what they had to do was, which a lot of clinics were doing, they had to update all their standard operating procedures, and that if a patient did meet the above three elements we described, they could still prescribe, this compounded GLP-1s. But again, those three elements need to be in existence.
Michael: [10:16] Yeah, so SOPs, I think that’s a vocabulary word for today standing operating procedures.
Michael: [10:21] So, you know, this is kind of your processes and your consents that the patients end up signing that become really important, and depending on how you go about it when you’re trying to meet these three elements and prescribe compounded. So where are you going with the story, Brad?
Brad: [10:45] Well, so we had already one NP was, obviously McNurse, but this one, we have a different one, and we’re going to call this other NP at the Christmas Clinic Nurse Big Boy.
Michael: [11:00] Mm.
Brad: [11:01] And Nurse Big Boy, did not like the practice, because he did not like what the practice was doing here because he believed they were not following these new FDA, quote-unquote, his words, “laws.”
Michael: [11:14] Yeah, I mean, that kind of speaks to what we experienced with just you know, a lot of noise out there and real changes. I don’t want to, you know, undersell that part of it, but there was some that had that hardline position or reaction that this law prevented it.
Brad: [11:40] Correct. Yeah, so what happened is, Nurse Big Boy, because he didn’t like these, you know, this way what the practice was going, decided he would reach out to the state nursing board to get a better clarification if an NP, so again, just nurse practitioner, could still prescribe compounded GLP-1s with the change in these FDA laws.
Michael: [12:02] Well you never know what you’re going to get. That’s really interesting. You know some nursing boards can be super helpful, and can’t be, and sometimes you don’t know the difference. I’m curious, what did he learn?
Brad: [12:19] Well, Nurse Big Boy spoke with a registered nurse that worked for the nursing board. This registered nurse working for the nursing board told Nurse Big Boy that if it was illegal to still prescribe any compounded GLP-1s, now that the FDA had changed the shortage status of the drugs, that NPs could only prescribe branded drugs now.
Michael: [12:43] Well, I have to admire the clarity and conviction of this nursing board representative.
Brad: [12:49] Yes. So, Nurse Big Boy told the Christmas Clinic that this update that he learned, and demanded that they cease prescribing compounded GLP-1s. The Christmas Clinic was thrown off by the nursing board’s position, as it was counter to what the actual FDA laws said. So additionally, McNurse here had spent a lot of time in educating herself on the exception to the rule and didn’t understand why the nursing board would take this type of position. So, she called the nursing board and spoke with a registered nurse that worked for the nursing board and asked the exact same question that Nurse Big Boy did, and as part of their conversation, actually explained the FDA exception. Michael, guess what happened?
Michael: [13:36] I’m guessing that there may not have been the same conviction and clarity from before. What, she got a different answer than Nurse Big Boy?
Brad: [13:46] Correct. Now, the Christmas Clinic and all the NPs were confused, as the nursing board has stated two responses which actually countered each other.
Michael: [13:57] And audience, this is actually not that uncommon to have, you know, when you reach out to a board, to have something like this happen, where you get inconsistent answers, or that they don’t even know the answer. So I’m curious, Brad, is this when we were involved?
Brad: [14:16] No, not yet, and understand, a lot of people probably at this point are trying to wonder what’s the risk here. It’s difficult really to walk through risk because we weren’t on the calls, and the nursing board had obviously recommended countering best practices.
Michael: [14:35] Yeah. Okay, well, so when did we get involved?
Brad: [14:38] Not yet. The Christmas Clinic and McNurse felt comfortable that they were following the FDA exception, and they decided that they could still continue to prescribe compounded drugs.
Michael: [14:51] Okay, makes sense. They took their position with this conflicting, you know, information. What happened next?
Brad: [14:59] So Nurse Big Boy believed the initial call with the nursing board was the correct course of action, best practices, because he had spoken with other NPs in the community, and they agreed with Nurse Big Boy. So this was where we encountered the police, they came busting in, into the Christmas Clinic.
Michael: [15:19] Okay. Brad, I have to call BS on that. I mean, police came in? No, I mean, surely that’s not what happened.
Brad: [15:31] No, it didn’t happen-
Michael: [15:31] Okay.
Brad: [15:31] … but it sounded more dramatic, didn’t it?
Michael: [15:33] It did, yes.
Brad: [15:34] Okay, yeah. I should have added that the police found the McDonald statue, the Ronald McDonald statue at the Christmas Clinic. Would that help?
Michael: [15:42] Oh, because of the exception?
Brad: [15:43] Yeah.
Michael: [15:43] Yeah. Now what really happened, Brad?
Brad: [15:45] Nurse Big Boy was so upset with the Christmas Clinic and McNurse, who were not following his interpretation of the nursing board/FDA laws, that he went home and, over email, resigned that night, as he felt like the Christmas Clinic was jeopardizing his license. So he just did not return to the clinic.
Michael: [16:08] Okay, I will say this: I mean, he may have been acting on some misinformation, but it looks like he took his license seriously.
Brad: [16:18] Yeah.
Michael: [16:18] We can at least say that about him. So what happened next?
Brad: [16:23] Well, approximately 90 days after Nurse Big Boy resigned from the Christmas Clinic, McNurse and the Christmas Clinic received a complaint filed with the nursing board, that they were jeopardizing patient safety by prescribing compounded GLP-1 drugs. The complaint listed several Christmas Clinic patients, all of which McNurse had been treating.
Michael: [16:47] Okay, well, now it sounds like Nurse Big Boy took it to another level. It wasn’t just, you know, protecting his own license, but I’m assuming that he felt the obligation, and he was the person behind it. But maybe we’ll go into commercial and discuss legal applications that we’ve learned from the story today and find out what happened with the Christmas Clinic and McNurse.
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Brad: [17:49] Welcome back to Legal 123 with ByrdAdatto. I’m your host, Brad Adatto, still here with my co-host, Michael Byrd. Now, Michael, as a reminder, this season our theme is “The Business of Medicine Today,” and we just had a really interesting story about the Christmas Clinic.
Michael: [18:05] Yeah, we have three main characters. We have the Christmas Clinic, as you mentioned. We have McNurse, and then we have Nurse Big Boy, when the changes in the laws happened with the GLP-1s and the compounding confusion.
Brad: [18:24] Yeah.
Michael: [18:24] And, you know, a lot of the confusion was kind of even enhanced by two different phone calls to the nursing board trying to seek clarity, and they got the exact opposite of that.
Brad: [18:36] Yes.
Michael: [18:37] And, Nurse Big Boy, believing that what he heard from the nursing board was right, quit. And immediately, once, you know, the Christmas Clinic was continuing to prescribe compounded GLP-1s. And so we left off kind of with the hanging question I pose is, you know, was Nurse Big Boy the one who actually filed it?
Brad: [19:01] Yeah. Yes, your assumption was correct. Nurse Big Boy had filed it. He actually had taken names of some of the patients and added their names to the complaint, meaning that the patients were not the ones complaining, but Nurse Big Boy was the one who had filed it with the nursing board. And before we pick up where we left off in the story, Michael, let’s actually take a step back here, and let’s discuss some of the aspects of the story that, you know, that we kind of started talking about a little bit but during the commercial break, that seemed kind of vague to what was happening.
Michael: [19:32] Okay, well, before I start, please tell me, Brad, that we don’t have to have HIPAA talk.
Brad: [19:37] Uh, for you, we’ll skip it.
Michael: [19:39] Okay.
Brad: [19:39] Just focus on the multiple calls to the nursing board and not the nurse that Nurse Big Boy took from the practice that he wasn’t even probably treating.
Michael: [19:51] Perfect. Well, I’ll start with this: any call to the nursing board, you need to hold loosely whatever information you get from them. It’s not uncommon that you’ll get anything ranging from, you know, “We won’t offer legal opinions, you need to talk to your attorney,” to giving you an answer. What you have to realize is that you’re not really hearing from the nursing board, you’re hearing from someone who works at the nursing board, and so that’s not going to really end up being the official position of the nursing board. And so, um, you know, again, you got to be really careful with it. Now, I will say this, if you get an answer, like the second answer that says, “You can do it,” and you get that, especially if you get that in writing, it is helpful because you can use that later if they come after you to say, “Look, I relied on this,” and that usually does help you. It doesn’t mean you won’t have to change if they don’t agree with it, but it may, you know, minimize you getting in trouble and getting your fines. But you have to just be really careful. Official nursing board or board positions usually is going to be something that’s in writing or from their general counsel.
Brad: [21:11] Yeah, and to your point, if it’s directed to a particular practice or to a particular nurse, I know in other states like Florida, where people want to do certain things, if they will ask the nursing board for permission, or in Arizona, they’ll ask it. And if they respond to you and say yes, then you’re golden. Now, other people might try to rely on it, but understand that unless they officially release it to all nurses, nursing board, it’s a position for a particular person. In this particular case, what complicated the matter was that neither party stopped to ask for additional guidance from the board, and to your point, it none of it was in writing. It was all, you know, a conversation, a call. They both fell back on their, their theory that it must be true because it followed what they believe to be best practices.
Michael: [22:02] Yeah, I mean, I would, I would even add, you know, that what they failed to do was at that time, was reach out to health care counsel and get some guidance on that because you, you have to understand how are they going to know what to do with that information they’re getting with the nursing board unless they get some professional guidance?
Brad: [22:23] Yeah, and then, you know, to your guidance the nurse practitioners started reaching out to their friends to gather similar talking points as to, you know, what was the word in the street as it relates to prescribing compounded GLP-1s.
Michael: [22:36] Well, to be fair, I would probably rather call some friends on the street than you, Brad.
Brad: [22:40] That’s very fair.
Michael: [22:41] I mean, although that didn’t work out very well. I mean, and seriously, you know, there’s great danger in the locker room talk. We’ve talked about that on other episodes. It’s going to happen again. You know, just because other people do it, doesn’t mean it’s right, and because you don’t know where they’re getting their information from. And so, you know, you can have this kind of, you know, pocket of non-compliance, where you have a bunch of people doing it one way, and they never even got the right guidance on it, and it just compounds itself, no pun intended.
Brad: [23:20] Wow! Good for you, Michael.
Michael: [23:22] Mm-hmm.
Brad: [23:22] I’m so proud of you.
Michael: [23:23] I know my audience.
Brad: [23:24] You know, taking that next step is, beside the risk from the nursing board, a lot of the communities in clinics were talking about these nasty letters they started receiving from the manufacturers that they were sent to the clinics saying that, “Hey, you know, it’s illegal, basically, to prescribe compounded drugs,” and because of the, being off the shortage, so now you have that noise that’s happening out there too at the same time, Michael.
Michael: [23:51] Yeah, I mean the pharmaceutical companies, they hire big law, and they sent these big, scary letters. I’m sure there’s many in the audience listening, nodding their heads right now, cause they’ve seen it or heard about them. And they’re intimidating, because, you know, you’ve got a big, fancy law firm writing these letters, citing to, you know, everything under the sun to try to get you to stop, including, I think, like South Africa law.
Brad: [24:22] And Australia.
Michael: [24:23] Yeah and you know, what we’ve assessed is it looked like that they were just kind of throwing everything against the wall to see what would stick. And, you know, what we’ve also observed is that there hasn’t been any real, you know, meaningful, direct enforcement against the practices of these letters at this point. There has been some, but you know, most of it has been, you know, at least kind of a first shot across the bow. And you know, if practices are hiring counsel to engage in that and respond to it, you know, so far nothing really has materialized.
Brad: [25:03] Yeah, and this is different than those who are utilizing… There’s a marketing spree that they were using their names and stuff on the website. This has to do with on the practice side, the practice of medicine side, saying, “You can’t be practicing medicine this way,” which again, Big Law is trying to, as you said, intimidate. However, we did start seeing some medical boards take positions, and we were talking about that earlier on compounding medical weight loss drugs. So, the state of Mississippi was one of the first ones out there that actually came out and said, “It is outside the standard of care in Mississippi to prescribe compounded weight loss drugs.” And not only that, they actually went further, and they said, “If you are prescribing weight loss drugs, it must be on label to prescribe it.”
Michael: [25:49] Yeah, so we’ve talked about on-label versus off-label in, in prior episodes, and you know, when a drug is approved by the FDA, it is approved for a purpose. And so, as an example, Ozempic is actually approved on label for diabetes treatment. And so, in your example of Mississippi, if someone prescribed Ozempic, for weight loss, that would be an off-label use. Now, there are other name brands that are for weight loss that would be on label use.
Brad: [26:28] Yeah. So, the risk associated, understand, audience members, on compounding GLPs has now shifted over to the actual providers. They now must have to take a position as to why are they still prescribing the compounded weight loss drugs? And we talked about earlier, with the term of art is, is it a medically justified reason? Remember those three elements we talked about. And that they must do a very good job if they are doing that, to document it clearly why it is.
Michael: [27:00] Yeah, and I’ll say, you know, that when you say risk shift, I mean, think of it like you have the practice, but you also have the pharmacy that fills these prescriptions. And so, if you or the doctor are relying on these, these exceptions that you’ve mentioned, Brad, that, uh, to your point, they’re making a medical decision, and so the pharmacy’s just carrying out, you know, what the, what the provider has prescribed. And so, there is this r- this risk shift element that, that has happened that many of the, the practices maybe not fully appreciate. I’m curious, Brad, what happened with the Christmas Clinic and McNurse?
Brad: [27:42] Lucky for them, this particular state nursing board had not taken a position at this time that nurse practitioners could not prescribe compounded GLP-1s. As such, the Christmas Clinic and McNurse provided copies of their patient consents, evidence that each patient did have the option to actually buy name brands and these consents when they were sending compounded prescriptions, that it was based on an individual basis on the medical necessity of it.
Michael: [28:10] All right. That’s a better outcome than we could have hoped for, Brad.
Brad: [28:17] Yep.
Michael: [28:17] What are your final thoughts?
Brad: [28:20] This is an interesting time to be practicing medicine. I mean, hence the theme, but the technology of medicine is moving faster than most medical, nursing, and pharmacy boards really keep up. Each board can take a variety of different positions, so you could be up being compliant with one board and being non-compliant with another. So, every single particular practice, it’s important for you to slow down, spend some time better understanding if you are adding a new service line or the laws change, what are going to be the best practices in your state based on your particular license. Michael, with our last minute here, what’s your final thought?
Michael: [28:58] Yeah, and I’ll echo… I mean, you really homed in on the risk, Brad. It’s at your state level. What- FDA doesn’t regulate practice of medicine. So far, the pharmaceutical companies are not really coming after practices, so it’s homed in on the state, and to your point, you know, your actual license or your board. If you’re clear from a risk perspective, you know, what are the things to do? You want to make sure you document well if you’re prescribing compounded, and you want to make sure your charts reflect the exception, and you want to make sure that you have the appropriate patient consents for compounded. And perhaps most importantly, check with your malpractice carrier to make sure that they will cover, you know the prescription of compounded drugs under your malpractice policy, cause a lot have taken a position against that.
Brad: [29:51] Right. Excellent. Well, good job, Michael. Next Wednesday’s show, we are back, and we’ll continue down this journey of “The Business of Medicine Today,” when we examine the benefits and utilization of use of staff for promos.
Brad: [30:00] Thanks again for joining us today, and remember, if you liked this episode, please subscribe. Make sure to give us a five-star rating and share with your friends.
Michael: [30:11] You can also sign up for the ByrdAdatto newsletter by going to our website at byrdadatto.com.
Outro: [30:17] ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Please consult with an attorney on your legal issues.
