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Pharmacy Compounding Under Greater Scrutiny from FDA

FDA has taken a relatively hands off approach to pharmacy compounding in the past, but that may all change after steroid injections from the New England Compounding Center resulted in a deadly fungal meningitis outbreak.

Under FDA’s tiered regulatory approach concerning pharmacy compounding, state boards of pharmacy regulate traditional compounding and FDA regulates nontraditional compounding.  The FDA considers “traditional pharmacy compounding” to be the “combining, mixing, altering of ingredients to create a customized medication for an individual patient in response to a licensed practitioner’s prescription.”  October 23, 2003 Statement of Steven K. Galson M.D. M.P.H., Acting Director of Center for Drug Evaluation and Research, FDA before the Senate Committee on Health, Education, Labor, and Pensions Hearing on “Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients.”  Traditional compounding is appropriate when a commercially available drug is not suitable for an individual patient.  For example, compounding is appropriate if a patient has an allergy to an ingredient in a commercially available drug or cannot swallow a solid dosage form, requiring a liquid equivalent.  “Nontraditional pharmacy compounding” is more akin to large scale drug manufacturing and has some of the same requirements as drug manufacturing.

In 1997, Congress passed the FDA Modernization Act (“FDAMA”).   The FDAMA codified compounding under the section 503A of Food, Drug, and Cosmetic Act (“FDCA”) [21 U.S.C. § 353a].  Under section 503A, certain pharmacist compounded drugs are exempt from FDCA provisions concerning drug adulteration, misbranding, and approval.   Prior to section 503A, compounded drugs were technically unapproved new drugs under the FDCA but FDA set out exceptions and rules for the practice as part of its enforcement discretion.

Shortly after section 503A became law, pharmacies challenged its advertising prohibition.  See 21 U.S.C. § 353a(c) (“A drug may be compounded . . . only if the pharmacy, licensed pharmacist, or licensed physician does not advertise or promote the compounding of any particular drug, class of drug, or type of drug.”).  The Ninth Circuit held in 2001 that the FDAMA compounding advertising restriction was unconstitutional and could not be severed from the rest of section 503A, resulting in all of section 503A being invalid.  W. States Med. Ctr. v. Shalala, 238 F.3d 1090 (9th Cir. 2001).  The Supreme Court agreed with the Ninth Circuit, holding that section 503A’s advertising prohibition violated the First Amendment.  Thompson v. W. States Med. Ctr., 122 S. Ct. 1497 (2002).  The Supreme Court, however, did not rule on whether the unconstitutional restrictions on commercial speech could be severed from the rest of the section, leaving in place the Ninth Circuit’s holding that it could not be severed and, thus, had to fall.

After Western States, Congress did not re-enact statutory authority for agency regulation of compounding.   Accordingly, FDA published a revised Compliance Policy Guide, CPG Section 460.200, in 2002 stating that all of section 503A was invalid, and explaining how FDA will enforce pharmacy compounding after Western States.  It also established a non-exhaustive list of factors FDA will take into account when deciding whether to take enforcement action against a pharmacist or pharmacy or defer to state boards of pharmacies.

In 2004, another group of pharmacies challenged FDA’s authority to regulate compounding in the Western District of Texas.  The district court held that compounded drugs were implicitly exempt from the FDCA’s “new drug” definition.  Med. Ctr. Pharmacy v. Gonzales, 451 F. Supp. 2d 854, 863 (W.D. Texas 2006).  On appeal, the Fifth Circuit disagreed with the district court.  It held that the FDCA’s “new drug” definition applies to compounded drugs.  It also held that the unconstitutional advertising provisions of section 503A were severable from the other provisions, and therefore, still valid.   Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 405 (5th Cir. 2008).  Accordingly, the court noted that although there was no categorical “implicit” exemption for compounded drugs, section  503A “carves out explicit, conditional exceptions for compounded drugs that comply with its enumerated conditions.”  Id. at 406.

Because of the conflict between the Ninth and Fifth circuits concerning whether the non-advertising provisions of section 503A remain intact, FDA has stated it will follow the Fifth Circuit’s decision within the Fifth Circuit.  Outside of the Fifth Circuit, FDA will follow the enforcement approach outlined in CPG section 460.200, and it continues to regulate pharmacy compounding as part of its broad authority over drug manufacturing.

Since the deadly outbreak of fungal meningitis tied to steroid injections compounded by the New England Compounding Center (“NECC”) that occurred last year, we have found that the FDA’s enforcement activities and scrutiny of compounding practices has been more prominent and aggressive.   FDA was criticized for not doing more to stop the NECC, and it will likely be mindful of that criticism as it examines other compounding pharmacies.

Congress is also expected to get involved at some point to resolve the circuit split by passing new legislation.  Presently there is little interest in Congress to take up this issue in light of more pressing concerns.


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