## Facts

- Jeanne Schaerrer was prescribed fenfluramine and phentermine (“fen-phen”) by her physician, Dr. Jeffrey W. Johnson, for weight loss.
- After initially using separate tablets/capsules filled at another pharmacy, Schaerrer switched to Stewart’s Plaza Pharmacy based on information about a “one-a-day” fen-phen capsule.
- Between November 1996 and June 1997, Dr. Johnson wrote five prescriptions for a once-daily capsule containing sixty milligrams of fenfluramine and twenty milligrams of phentermine; he assumed the pharmacy had determined the product’s safety and did not independently investigate it.
- Stewart’s pharmacist-owner, Stewart Koeven, compounded the once-daily capsule from raw fenfluramine, phentermine powder, methylcellulose (time-release agent), and lactose (filler).
- Koeven distributed samples of the compounded capsule to local physicians and then filled prescriptions for it; neither Koeven nor the pharmacy tested the product’s safety or efficacy.
- Schaerrer developed symptoms including nausea, chest pains, and dizziness, stopped taking fen-phen in mid-July 1997, and later underwent open-heart surgery to repair two damaged heart valves.
- Schaerrer sued multiple defendants and asserted strict products liability claims against Stewart’s based on failure to warn and on Stewart’s alleged status as a manufacturer of the compounded drug.

## Issues

1. Whether a compounding pharmacy that formulates a once-daily prescription capsule from bulk ingredients and provides samples to physicians is a “manufacturer” subject to strict products liability under Utah law.
2. Whether strict products liability (including failure-to-warn theory) applies to a compounding pharmacy’s dispensing of a physician-prescribed compounded drug.

## Decision

- The Utah Supreme Court affirmed dismissal of Schaerrer’s strict products liability claims against Stewart’s Plaza Pharmacy and Stewart Koeven.
- The court held Stewart’s was not subject to strict products liability as a manufacturer or seller under the circumstances.
- Because Stewart’s did not fall within Utah’s strict-liability category of commercial manufacturers/sellers, strict liability theories (including failure to warn) were unavailable against it.

## Legal Principles

- Utah strict products liability targets entities engaged in the business of manufacturing or selling products placed into the stream of commerce; it generally does not extend to providers whose furnishing of products is ancillary to professional health-care services.
- Compounding and dispensing prescription medication pursuant to a physician’s order is treated as part of pharmacy practice and the physician–pharmacist–patient therapeutic relationship, not as entry into industrial drug manufacturing.
- Marketing compounded medications to physicians, including distribution of samples, does not by itself convert a compounding pharmacy into a strict-liability manufacturer when distribution to patients remains mediated by physician prescriptions.
- When strict products liability does not apply, any duty-related theories concerning warnings or professional conduct must proceed, if at all, under negligence or malpractice rather than strict liability.

## Conclusion

The court concluded that a pharmacy’s compounding and dispensing of a customized, physician-prescribed dosage form—even when promoted to physicians through samples—does not make the pharmacy a strict-liability manufacturer or seller under Utah law, so strict products liability claims for alleged defects or failure to warn were properly dismissed.


Schaerrer v. Stewart's Plaza Pharmacy, Inc., 79 P.3d 922 (Utah 2003)