The Regulation of Compounding Pharmacies Under Scrutiny Once Again

Oct 23, 2012   

The recent nationwide outbreak of fungal meningitis has pushed compounding pharmacies back into the public spotlight. The cases of fungal meningitis have been traced to contaminated injections produced by a compounding pharmacy in Framingham, Massachusetts. This outbreak has been linked to 15 deaths and 230 confirmed cases of fungal meningitis in 15 states. (For the most up-to-date information on the number of confirmed fungal meningitis cases in the United States, please visit the website for the Centers for Disease Control and Prevention here.) Over the past month, the number of confirmed cases has steadily risen, prompting calls by the public for better oversight and tighter regulation of compounding pharmacies.

Compounding pharmacies have historically been an important part of the pharmaceutical landscape. Unlike their mass-market manufacturing counterparts, compounding pharmacies typically prepare small batches of medications to meet a prescribing doctor’s requirements for dosages or combinations of ingredients that would otherwise be unavailable from commercial manufacturers. In particular, compounding pharmacies have been critical in filling prescriptions for patients who need solutions, creams and other medicines customized to, for example, alter dosage forms or remove ingredients that cause allergies. Due to drug shortages over the past few decades, the market for compounding pharmacies has substantially expanded. Today, over half of the nation’s pharmacies engage in some form of drug compounding and account for roughly one to three percent of the overall $300 billion U.S. prescription market. (For more statistics about drug compounding, please visit the International Academy of Compounding Pharmacists here.)

News of the deadly meningitis outbreak has led many to question what the difference is between a compounding pharmacy and a drug manufacturer. Generally, the operations of compounding pharmacies are regulated by State Boards of Pharmacy, whereas drug manufacturers are regulated by the U.S. Food and Drug Administration (FDA). Consequently, drugs produced by compounding pharmacies are not subject to premarket review by the FDA or any other regulatory body, unless state laws so require. The activities of the compounding pharmacy in this case, which appear to have involved the manufacture and shipping of drug products across the country, appear to be much more akin to traditional notions of drug manufacturing than compounding. Unfortunately, at least at the federal level, there are no statutes or regulations in place to help us understand where, exactly, compounding ends and manufacturing begins.

In an effort to provide some guidance on the regulation of compound pharmacies, the FDA issued a compliance policy guide (CPG) in 1992 that outlined the FDA’s enforcement policy on pharmacy compounding. This CPG remained in effect until the enactment of the Food and Drug Administration Modernization Act (FDAMA) in 1997. (For the full text of FDAMA, please click here.) FDAMA amended the federal Food, Drug, and Cosmetic Act (FDCA) by adding section 503A, which stated that drug products compounded by a pharmacist were entitled to exemptions from three provisions of the FDCA:

  1. The adulteration provision of section 501(a)(2)(B) (concerning the good manufacturing practice requirements);
  2. The misbranding provision of section 502(f)91) (concerning the labeling of drugs with adequate directions for use); and
  3. The new drug provision of section 5005 (concerning the approval of drugs under new drug or abbreviated new drug applications).

FDAMA went into effect in November of 1998; however, several provisions of section 503A were challenged as a violation of commercial speech. In 2001, in Western States Medical Center v. Shalala, the Ninth Circuit Court of Appeals declared section 503A invalid in its entirety for violating commercial speech, a decision that was affirmed by the Supreme Court in 2002. However, the Supreme Court did not address the Ninth Circuit’s holding that the commercial speech provisions could not be severed from the rest of section 503A. As a result, in at least the Ninth Circuit, all of section 503A is invalid. Since 2002, no other federal laws have been enacted to replace the regulatory void left by the invalidation of section 503A.

Following the Supreme Court’s decision in Western States Medical Center, the FDA released a compliance policy guide that explains how the FDA will determine whether a pharmacy’s operations constitute compounding or cross the line into drug manufacturing. This CPG has been the primary basis upon which the FDA has relied in making its decisions regarding whether or not to take federal enforcement action against compound pharmacies. According to the CPG, the “FDA will continue to defer to state authorities regarding less significant violations of the [FDCA] related to pharmacy compounding of human drugs.” Nevertheless, the FDA will take into account several factors when determining whether “the scope and nature of a pharmacy’s activities raise the kinds of concerns normally associated with a drug manufacturer.” For example, the FDA will consider whether the pharmacy compounds drugs in anticipation of receiving prescriptions, compounds drugs from active ingredients that are not components of FDA-approved drugs, or uses commercial-scale manufacturing or testing equipment to compound drugs. (For the full text of the FDA’s CPG, please click here.)

In spite of the FDA’s 2002 CPG, serious questions about the ambiguous compounding pharmacy “regulations” have continued to arise, and the FDA and individual states have received criticism for their lack of oversight. In a briefing on October 11, 2012, Deborah Autor, a deputy commissioner at the FDA, stated that “[t]he world has changed a lot since the days of the mortar and pestle, and this is the time for pharmacists, for lawmakers, for regulators, for doctors, to sit down and grapple with this new model and come up with a regulatory scheme that appropriately controls the risk.” (See National Public Radio’s article, “Meningitis Outbreak Puts Doctors, Regulators In New Territory“.) The trail of incidences of infection and death resulting from the poor oversight of compound pharmacies is “not a trend that’s popped up overnight.” In fact, questions about the regulation of compound pharmacies span back as far as the 1990s.

For example, in September 2005, three patients died and several others were sickened in Virginia after being given contaminated medications made at a compounding pharmacy in Maryland. In March 2007, two patients in Washington and Oregon died after receiving doses of intravenous pain medication that were measured improperly by a compounding pharmacy in Texas. In 2009, Frank’s laboratory, a compounding pharmacy in Florida, mistakenly produced contaminated drugs that killed over two dozen polo ponies and, in another incident, provided solutions that damaged the vision of 33 eye surgery patients. In March 2011, nine patients died after receiving contaminated nutritional supplements prepared by a compounding pharmacy in Alabama. Most recently, FDA officials raided the Framingham, Massachusetts pharmacy linked to the widespread fungal meningitis outbreak to investigate whether the sterility of its products had been compromised. (For more examples, you can read USA TODAY’s article here, and the Washington Post’s article here related to the regulation of compounding pharmacies.)

In many of these cases, the FDA has issued a recall of medications and conducted investigations that revealed practices which violated the FDCA. Pursuant to its enforcement authority, and in consideration of the factors outlined in the CPG, the FDA has issued over 40 Warning Letters to compounding pharmacies, over half of which were issued in the last three to four years. These Warning Letters have cited pharmacies for producing banned compounds, distributing drugs that were adulterated or contaminated, and selling medication in improper dosages or without accurate labels.

It is important to emphasize that health issues associated with compounding pharmacies are in no way new. The FDA, lawmakers, courts and industry have been well-aware of these issues for nearly two decades. As a result of the recent meningitis outbreak, however, calls for regulation in this area seem to have gained renewed political traction. In particular, Senator Edward Markey has called on Congress, demanding that the Legislature address the gaps in the piecemeal regulatory system and reconcile varying standards and requirements in state regulations. (For more information about Senator Markey’s push to fix the regulation of compounding pharmacies, see the Boston Globe’s article here.) At this point, it is uncertain how far the Senator’s initiative will go, given that previous attempts to introduce new legislation in this area have largely failed.

In sum, health scares like the meningitis outbreak will continue to provide reminders of the remaining inefficiencies and problems with the current regulatory and enforcement scheme. It is difficult to discern whether the fundamental problem is a complex systematic failure to regulate or monitor the compound pharmacy industry, or whether these adverse incidences are merely representative of the small minority of noncompliant pharmacies whose violative practices have caught national media attention. Even though the public continues to put pressure on lawmakers to take a closer look at the regulatory structure on both a federal and state level, it remains unclear how”or even if”Congress will respond.

Fuerst Ittleman David & Joseph, PL will continue to monitor any developments in the regulation of compounding pharmacies. For more information, please feel free to email our offices at or by phone at (305) 350-5690.