March  2026
Compound and Off-Label Prescribing

Increasing demand for GLP-1 agonists like Ozempic and Wegovy has led to widespread off-label prescribing and reliance on compounding pharmacies. Originally developed to treat type 2 diabetes, the medication’s dramatic weight loss effects have fueled a surge in demand that has outpaced pharmaceutical supply chains, pushing patients and the providers who serve them into riskier territory.

For insurance professionals, that risk gap represents a meaningful and growing liability concern. The liability exposures are varied: prescribers practicing outside their specialty, patients turning to unvetted online pharmacies, and compounding facilities with inconsistent quality controls all represent meaningful risk events. And as the legal landscape around GLP-1 agonists continues to evolve, with manufacturers filing suits against clinics and compounders alike, the exposure for insureds is real and growing.

ProAssurance Senior Risk Management Consultants Joanne Simmons and Kelly Riedl guide us through the risk continuum facing healthcare providers today, from straightforward on-label prescribing to the legally complex world of compounded medications.

Risk Categories

Healthcare providers face a spectrum of prescribing risk that extends well beyond the act of writing a prescription. Those who understand where they are operating on this spectrum are better positioned to protect their patients; those who do not may find themselves exposed in ways they did not anticipate. For insurance professionals, understanding where a provider sits on that continuum is essential to accurately assessing liability exposure.

On-Label Use

On-label prescribing means using a medication in a way that is fully consistent with its FDA-approved labeling—the clearest and lowest-risk position for any prescriber. Prescribing Ozempic for type 2 diabetes, for example, is straightforward on-label use with well-established safety and efficacy data behind it. As Riedl puts it, “from a clinical standpoint, we have to think about these drugs just like any other we might prescribe”—meaning sound patient selection, a clear understanding of risks and benefits, and thorough documentation are the baseline expectation regardless of the drug in question.

“Scope Creep” in Prescribing Authority

Risk increases when physicians prescribe medications outside the conditions typically managed within their training. The growing demand for GLP-1 medications for weight loss has drawn prescribers from a wide range of clinical backgrounds, some of whom may have limited experience in metabolic disease or obesity management. This trend raises flags from a liability standpoint, notes Simmons. “When prescribing moves beyond the provider’s usual clinical scope, the training and experience needed to appropriately evaluate candidates, manage potential complications, and counsel patients on the full range of risks may not always align with the treatment being offered,” she says. “This misalignment can create liability exposure even when the prescribing decision itself is technically appropriate.” For insurers, this is a pattern worth watching: When a prescriber’s specialty has no obvious connection to the condition being treated, the risk profile of that insured changes.

Off-Label Use

Using a medication for unapproved indications, in unapproved dosages, or by unapproved methods, known as “off-label prescribing,” is legal and sometimes clinically appropriate, but it shifts greater responsibility onto the prescriber. Without FDA-approved labeling to lean on, the burden of informed consent, patient education, and documentation falls more squarely on the provider.

Use of Compounding Pharmacies

Compounded medications represent the highest-risk category in this continuum. The FDA does not approve compounded drugs, meaning they have not been evaluated for safety, effectiveness, or quality. For GLP-1 agonists specifically, FDA concerns are substantial: contaminants can be introduced during the compounding process, quality control standards vary widely across facilities, and dosing accuracy cannot be guaranteed. Counterfeit products have also been discovered within the supply chain.

The online marketplace compounds these risks further. According to the National Association of Boards of Pharmacy (NABP), nearly 95 percent of websites offering prescription drugs operate illegally. Riedl notes that while legitimate online pharmacies do exist, they represent only about 5 percent of what patients encounter—meaning the odds are heavily stacked against patients who shop for these medications on their own. “The good news is that an online search tool exists within NABP, which allows consumers to see whether a pharmacy meets patient safety or practice standards, adding a layer of safety when someone is looking for a drug,” Riedl added.

State-level prohibitions add another layer of complexity. Some states have moved to ban the compounding of semaglutide outright, and the regulatory landscape continues to shift. Simmons recommends that prescribers verify their state’s current rules before writing any prescription that could be filled at a compounding pharmacy.

Legal pressure is mounting as well. Pharmaceutical manufacturers are filing lawsuits against compounding pharmacies, medical spas, and weight-loss clinics for trademark infringement. As Riedl explains, these actions “seem to be in an attempt to improve patient safety,” yet they carry an important downstream implication for prescribers: “The manufacturers will say, ‘well, no, we sufficiently put all the warnings on the label,’ meaning the duty to warn the patient falls back on the prescriber.”

Risk Reduction Strategies

The increasing demand for GLP-1 agonists for weight management has created significant risks for both patients and prescribers. “While FDA-approved options exist for both diabetes management and weight loss, the proliferation of compounded alternatives and online sources poses serious safety and legal concerns,” says Simmons. “Prescribers must remain vigilant about state regulations, understand the distinction between approved and compounded medications, and prioritize patient safety through proper education and medication sourcing.”

Patient Selection and Safety

Effective risk reduction begins before a prescription is ever written. Prescribers should establish clear criteria for patient selection, ensuring that GLP-1 agonists are appropriate for the individual before moving forward. Central to that process is making sure patients genuinely understand what they are being prescribed—specifically, whether the medication is FDA-approved or compounded, and what that distinction means for their safety. “There have been several lawsuits alleging manufacturers of these medications have downplayed the risks of side effects, which can include gastrointestinal issues like gastroparesis,” Riedl said. “Plaintiffs in these cases argue that companies promote these drugs as effective weight loss solutions without sufficiently informing or warning consumers and healthcare providers about the risks of serious and sometimes debilitating side effects.”

When approved alternatives exist, patients should be counseled directly on the risks of turning to compounded versions. Resources like the FDA’s BeSafeRx program can help reinforce the dangers of sourcing medications online.

Regulatory Compliance

The regulatory landscape around GLP-1 compounding is active and uneven across states. Before prescribing, providers should verify their state’s current rules and check State Medical Board guidance specific to compounded GLP-1 agonists. Some states have already moved to prohibit semaglutide compounding entirely. All prescriptions should be directed to state-licensed pharmacies, and providers practicing via telemedicine need to be especially attentive to requirements when prescribing across state lines, where rules can differ significantly.

Compounding Pharmacy Interactions

Prescribers should exercise extreme caution when approached by compounding pharmacies looking to establish a prescribing relationship for GLP-1 agonists. The risks are both clinical and legal. “Drawing up medications into pre-filled syringes, for instance, may itself constitute compounding—a practice that can introduce dosing errors and sterility issues regardless of intent,” says Simmons. Beyond the patient safety implications, compounding patented medications exposes prescribers to serious legal liability, particularly as pharmaceutical manufacturers continue to pursue litigation against clinics and providers participating in these arrangements.

“Unsafely sourcing these drugs can lead to extreme consequences—for prescriber and patient alike,” says Riedl.

Adverse Event Reporting

When problems arise, timely reporting is essential. Adverse events should be reported promptly to the FDA’s MedWatch program, and any quality issues related to GLP-1 agonists should be documented thoroughly. Providers should also maintain detailed patient records that include the source of the medication—a step that becomes critically important if a patient is harmed and the origin of the drug comes into question.

The increasing demand for GLP-1 agonists for weight management has created significant risks for both patients and prescribers. While FDA-approved options exist for both diabetes management and weight loss, the proliferation of compounded alternatives and online sources poses serious safety and legal concerns.

Prescribers must remain vigilant about state regulations, understand the distinction between approved and compounded medications, and prioritize patient safety through proper education and medication sourcing.

“By following evidence-based prescribing practices and maintaining awareness of regulatory requirements, healthcare providers can minimize risks while optimizing patient outcomes,” says Simmons.

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Off-Label Prescribing

The use of off-label medications, devices, and treatments for certain conditions has become more prevalent in recent years, and Ketamine is one such option. Beyond its use as a general anesthetic for surgical procedures, the drug has been administered to treat conditions like treatment-resistant depression, anxiety, and chronic pain. Studies have shown improvements in depressive symptoms in patients taking intranasal esketamine, which is an FDA-approved therapy, and with intravenous ketamine, the off-label option. In fact a study by Mass General Brigham published in fall 2025 of 153 adult patients showed a 39.55 percent reduction in depression scores (by the end of the treatment course) in patients receiving intranasal esketamine and a 49.22 percent reduction for those administered IV ketamine. A Cleveland Clinic study of a comprehensive clinical pain program revealed that a ketamine infusion protocol helped 20 percent to 46 percent of patients achieve improvements in pain management, as well as daily functioning and sleep. 

In light of these treatment options, and considering the promising research supporting ketamine therapy as an option for other conditions, such as opioid use disorder, it is important to consider the risks inherent in prescribing and administering the drug, both for the patient, provider, and practice. Potential misuse, contraindications, and adverse side effects are accompanying concerns, as are questions about reimbursement and insurance coverage. There may be a lack of clarity surrounding best practices and care guidelines, with ambiguities regarding compliance, informed consent, and appropriate documentation. What are the necessary qualifications for providers administering these treatments? What kind of clinical setup and equipment are adequate for treating the patient? What about emergency response training and protocols? 

Finally, as drugs and other treatments currently considered “off label” or non-FDA-approved fly under the radar of government regulation, many providers may seek guidance on how best to operate their practice and serve their patients.

Senior Risk Management Consultant Joanne Simmons speaks with Southeast Regional Risk Manager Bradley Byrne and provides some helpful answers in our Rapid Review Podcast episode “Infusion Confusion: Sorting Out the Risks of Ketamine Therapy.” 

Medical products including drugs, devices, and biologics are regulated by the FDA. The basic steps leading to the development and ultimate approval of medical products are similar, but the process details vary within each step for drugs versus devices.^* These basic steps include:¹

1. Discovery/Concept with research beginning in the lab.
2. Preclinical Research in the lab and on animals to ensure basic safety.
3. Clinical Research on people through clinical trials to further gauge safety and effectiveness.
4. FDA Review of submitted data by teams to make approval decision.
5. FDA Post-Market Safety Monitoring after approval to ensure continued safety.

During the clinical research step, medical products are considered investigational and thus not generally available for patients who are not involved in associated clinical trials. If during the FDA review step the medical product is shown to be safe and effective for its intended use, meaning the benefits prove to outweigh the risks, the medical product will be approved for market. Part of the approval process includes labeling, which is proposed by the manufacturer and reviewed by the FDA. Upon approval, the medical product is labeled with the necessary information for clinicians and patients to ensure safe use.

While approved products used in the approved manner is the most common usage, there are exceptions:

Off-label drug prescribing is common, with an average of one in five prescriptions written for off-label use. When a medical product is used in a way that is not consistent with the FDA-approved labeling, this is considered off-label use. With regard to drugs, the FDA describes this as using the drug for a medical condition it has not been approved to treat, using the drug in a different way, or using the drug in a different dose than approved. Patient populations that are more likely to be prescribed medications off-label include children, pregnant women, and people with psychiatric disorders since they are less often eligible for clinical trials.

Compounded drug formulations are common examples of off-label drugs. These can be used for patients who need a medication but are unable to use it in the FDA-approved form. Reasons for this include allergies to certain inactive ingredients such as dyes, or inability to swallow pill formulations resulting in the need to create a liquid form. Another reason for use of compounded drug formulations is during times of drug shortages.

Emergency Use Authorization is an exception that gained familiarity during the COVID-19 pandemic. When U.S. Department of Health and Human Services declares emergency use authorization to ensure medical countermeasures are available during a public health emergency, the FDA can authorize unapproved medical products or unapproved uses of approved medical products.

Compassionate Use expands access to investigational medical products outside of clinical trials for patients with serious or immediately life-threatening medical conditions. By definition, these patients are at a stage of disease where there is a reasonable likelihood that death will occur within months without treatment.

The ProAssurance Risk Management department assists insureds with a variety of liability concerns and questions daily through the Risk Management Helpline. Off-label use of medical products is a frequent source of questions from insured physicians and underwriters, accounting for up to 44 percent of inquiries handled each month over the past year. Most recently, this has been driven by the surge in off-label prescribing, compounding, and dispensing of weight loss medications. Other questions center around use of intravenous vitamins and minerals, platelet-rich fibrin injections, and amniotic fluid products. In most instances, the physician or underwriter wants to better understand the risks of using medical products off-label, if this is or should be a covered activity under their policy, and how to lessen liability exposure in the event they adopt offering these treatments. This article intends to offer risk reduction strategies on these common questions related to the use of non-FDA-approved medical products by exploring lessons learned from closed claims.

This condensed article originated in the February 2025 release of ClaimsRx, our claims-based learning publication. Read the full publication with case studies in our ClaimsRx Library.

This selection of accounts ProAssurance bound recently is intended to give our partners tangible examples of risk classes we’ve been successful quoting and that we’d like to see more of. These examples are anonymized with final premium rounded, but otherwise present actual accounts.