Pharmacy Law CE Column

By Laura Carpenter, RPh, JD, attorney and pharmacist, founder Carpenter Law Firm PC

Compounding: Basic law primer

Origins of federal law impacting pharmacy compounding

When Congress enacted the Federal Food, Drug, and Cosmetic Act, or FDCA, in 1938, it required New Drug Applications or NDAs for all new drugs. At the time, approximately half of the drugs in this country were compounded, not manufactured. Today, while the percentage of compounded prescriptions has significantly dropped, millions of compounded drugs are dispensed each year. One unresolved legal question has been whether the NDA requirements apply to compounded drugs.

Historically, state boards of pharmacy regulated prescription compounding. However, over the past twenty years, the Food and Drug Administration has moved into the arena. The FDA's interest started in 1989 after several nationally publicized cases where patients were severely injured or died after using contaminated compounded products. This led to the FDA releasing a compliance policy guide on March 16, 1992, that stated:

"The FDA believes that an increasing number of establishments with retail pharmacy licenses are engaged in manufacturing, distributing and promoting unapproved new drugs for human use in a manner that is clearly outside the bounds of traditional pharmacy practice and that constitutes violations of the Food and Drug Administration Act."

This 1992 guidance also stated that these "unapproved drugs" would need FDA approval in the same manner that any pharmaceutical manufacturer would need to obtain approval for a new drug.

Following the release of this compliance policy guide, Congress enacted the Food and Drug Administration Modernization Act of 1997, or FDAMA, to define the differences between compounding and manufacturing¹. In doing so, FDAMA exempted certain compounded products from the "new drug" requirements for manufactured products². Specifically, the law explained that the FDA manufacturing requirements would not apply to a compounded prescription if:

1. The prescription was compounded for an identified individual patient by a licensed pharmacist;
2. Bulk drug substances manufactured by an establishment registered with the FDA were used;
3. The prescription was for a drug that had not been found to be unsafe or not effective; and
4. The compounded product was not a copy of a commercially available drug product.

In addition to differentiating between "compounding" and "manufacturing," FDAMA prohibited pharmacies and pharmacists from promoting or advertising the compounding of any particular drug, class of drug, or type of drug³. While pharmacists clearly welcomed FDAMA's clarification of what was compounding, some were not happy with the anti-advertising provisions and brought lawsuits alleging that it violated their First Amendment free speech rights.

Conflicting court cases

In 2001, the Ninth Circuit (which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam and the Northern Mariana Islands) found that the anti-advertising provisions violated pharmacies' and pharmacists' commercial free speech rights⁴. However, the Court also found that subsection C, which related to promotion and advertising of compounded products, could not be severed from the rest of the compounding statute. Consequently, the entire compounding section of FDAMA was ruled unconstitutional.

In response to this case, the FDA released a new Compliance Policy Guide⁵ stating that it had "determined that it needs to issue guidance to the compounding industry and FDA staff on what types of compounding might be subject to enforcement action under current law."

In 2008, the Fifth Circuit (which includes Louisiana, Mississippi and Texas) ruled that the unconstitutional anti-advertising subsection could be removed from FDAMA without invalidating the rest of the compounding law.⁶

This decision increases the confusion over the legal status of compounding. Pharmacists in the Ninth Circuit cannot claim protection by section FDAMA, while pharmacists in the Fifth Circuit can. The FDA has stated, however, that pharmacists may compound pursuant to the 2002 Compliance Policy Guide, which is discussed below.

FDA's compliance policy guide for compounding

Under the FDA Compliance Policy Guide, Section 460.200: Pharmacy Compounding, the FDA makes it clear that it will continue to defer to state authorities regarding compounding. Under the Guide, individual prescriptions for a specific patient may be compounded with ingredients that have not been withdrawn from the market for safety reasons. The FDA, however, will consider enforcement action if a pharmacy:

1. Compounds drugs in anticipation of receiving prescriptions, except in very limited quantities;
2. Compounds drugs that were withdrawn or removed from the market for safety reasons;
3. Compounds finished drugs from bulk active ingredients that have not been approved by the FDA;
4. Uses ingredients that do not meet official compendia requirements or that are not from an FDA-registered facility;
5. Uses commercial scale manufacturing or testing equipment for compounding drug products;
6. Compounds drugs for third parties to resell those products;
7. Compounds drug products that are commercially available in the marketplace or that are essentially copies of commercially available FDA-approved drug products.

The American Pharmacists Association and other trade groups have argued that the FDA's inconsistent policy creates confusion and access inequities, and that the FDA should refrain from taking enforcement action against pharmacies that compound pursuant to a valid prescription until all pending litigation is resolved. However, the FDA continues to enforce the guidance where it determines it has not been followed.

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