Prescription Drugs
State and Federal Oversight of Drug Compounding by Pharmacies Gao ID: GAO-04-195T October 23, 2003Drug compounding--the process of mixing, combining, or altering ingredients--is an important part of the practice of pharmacy because there is a need for medications tailored to individual patient needs. Several recent compounding cases that resulted in serious illness and deaths have raised concern about oversight to ensure the safety and quality of compounded drugs. These concerns have raised questions about what states--which regulate the practice of pharmacy--and the Food and Drug Administration (FDA) are doing to oversee drug compounding. GAO was asked to examine (1) the actions taken or proposed by states and national pharmacy organizations that may affect state oversight of drug compounding, and (2) federal authority and enforcement power regarding compounded drugs. This testimony is based on discussions with the National Association of Boards of Pharmacy (NABP) and a GAO review of four states: Missouri, North Carolina, Vermont, and Wyoming. GAO also interviewed and reviewed documents from pharmacist organizations, FDA, and others involved in the practice of pharmacy or drug compounding.
A number of efforts have been taken or are under way both at the state level and among pharmacy organizations at the national level that may strengthen state oversight of drug compounding. Actions among the four states reviewed included adopting new regulations about compounding and conducting more extensive testing of compounded drugs. For example, the pharmacy board in Missouri is starting a program of random testing of compounded drugs for safety, quality, and potency. At the national level, industry organizations are working on standards for compounded drugs that could be adopted by the states in their laws and regulations, thereby potentially helping to ensure that pharmacies consistently produce safe, high-quality compounded drugs. While these actions may help improve oversight, the ability of states to oversee and ensure the quality and safety of compounded drugs may be affected by state-specific factors such as the resources available for inspections and enforcement. FDA maintains that drug compounding activities are generally subject to FDA oversight, including its authority to oversee the safety and quality of new drugs. In practice, however, the agency generally relies on states to regulate the limited compounding of drugs as part of the traditional practice of pharmacy. In 1997, the Congress passed a law exempting drug compounders that met certain criteria from key provisions of the Federal Food Drug and Cosmetic Act (FDCA), including the requirements for the approval of new drugs. These exemptions, however, were nullified in 2002 when the United States Supreme Court ruled part of the 1997 law to be an unconstitutional restriction on commercial speech, which resulted in the entire compounding section being declared invalid. Following the court decision in 2002, FDA issued guidance to indicate when it would consider taking enforcement actions regarding drug compounding. For example, it said the agency would defer to states regarding "less significant" violations of the Act, but would consider taking action in situations more analogous to drug manufacturing.
GAO-04-195T, Prescription Drugs: State and Federal Oversight of Drug Compounding by Pharmacies
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Testimony:
Before the Committee on Health, Education, Labor, and Pensions, U.S.
Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 10:00 a.m.
Thursday, October 23, 2003:
Prescription Drugs:
State and Federal Oversight of Drug Compounding by Pharmacies:
Statement of Janet Heinrich:
Director, Health Care--Public Health Issues:
GAO-04-195T:
GAO Highlights:
Highlights of GAO-04-195T, a testimony to the Committee on Health,
Education, Labor, and Pensions, U.S. Senate
Why GAO Did This Study:
Drug compounding”the process of mixing, combining, or altering
ingredients”is an important part of the practice of pharmacy because
there is a need for medications tailored to individual patient needs.
Several recent compounding cases that resulted in serious illness and
deaths have raised concern about oversight to ensure the safety and
quality of compounded drugs. These concerns have raised questions
about what states”which regulate the practice of pharmacy”and the Food
and Drug Administration (FDA) are doing to oversee drug compounding.
GAO was asked to examine (1) the actions taken or proposed by states
and national pharmacy organizations that may affect state oversight of
drug compounding, and (2) federal authority and enforcement power
regarding compounded drugs.
This testimony is based on discussions with the National Association
of Boards of Pharmacy (NABP) and a GAO review of four states:
Missouri, North Carolina, Vermont, and Wyoming. GAO also interviewed
and reviewed documents from pharmacist organizations, FDA, and others
involved in the practice of pharmacy or drug compounding.
What GAO Found:
A number of efforts have been taken or are under way both at the state
level and among pharmacy organizations at the national level that may
strengthen state oversight of drug compounding. Actions among the four
states reviewed included adopting new regulations about compounding
and conducting more extensive testing of compounded drugs. For
example, the pharmacy board in Missouri is starting a program of
random testing of compounded drugs for safety, quality, and potency.
At the national level, industry organizations are working on standards
for compounded drugs that could be adopted by the states in their laws
and regulations, thereby potentially helping to ensure that pharmacies
consistently produce safe, high-quality compounded drugs. While these
actions may help improve oversight, the ability of states to oversee
and ensure the quality and safety of compounded drugs may be affected
by state-specific factors such as the resources available for
inspections and enforcement.
FDA maintains that drug compounding activities are generally subject
to FDA oversight, including its authority to oversee the safety and
quality of new drugs. In practice, however, the agency generally
relies on states to regulate the limited compounding of drugs as part
of the traditional practice of pharmacy. In 1997, the Congress passed
a law exempting drug compounders that met certain criteria from key
provisions of the Federal Food Drug and Cosmetic Act (FDCA), including
the requirements for the approval of new drugs. These exemptions,
however, were nullified in 2002 when the United States Supreme Court
ruled part of the 1997 law to be an unconstitutional restriction on
commercial speech, which resulted in the entire compounding section
being declared invalid. Following the court decision in 2002, FDA
issued guidance to indicate when it would consider taking enforcement
actions regarding drug compounding. For example, it said the agency
would defer to states regarding ’less significant“ violations of the
Act, but would consider taking action in situations more analogous to
drug manufacturing.
What GAO Recommends:
www.gao.gov/cgi-bin/getrpt?GAO-04-195T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Janet Heinrich at
(202) 512-7119.
[End of section]
Mr. Chairman and Members of the Committee:
I am pleased to be here today as you consider state and federal
oversight to ensure the safety and quality of compounded prescription
drugs. Drug compounding--the process of mixing, combining, or altering
ingredients to create a customized medication for an individual
patient--is an important part of the practice of pharmacy. Common
examples of compounded drugs include tailor-made medications for
patients who are allergic to an ingredient in a manufactured drug. Drug
compounding is part of pharmacy education and, like other aspects of
pharmacy practice, it is regulated by state pharmacy practice acts,
which in turn are enforced by state boards of pharmacy. All 50 states
describe drug compounding in their state laws and regulations on
pharmacy practice, although specific statutes or regulations vary
across states. At the federal level, the Food and Drug Administration
(FDA), which oversees the introduction of new drugs into the
marketplace under the Federal Food, Drug and Cosmetic Act
(FDCA),[Footnote 1] maintains that compounded drugs are generally
subject to the act.
While drug compounding is an important part of ensuring that
medications are available to meet individual patient needs, the quality
and extent of drug compounding have surfaced as important issues in
recent years. For example, several compounding cases in the past
several years have resulted in serious illnesses and deaths, raising
concern about oversight to ensure the safety and quality of compounded
drugs. In addition, concerns have been raised by FDA and others that
some pharmacies are going beyond traditional drug compounding for
individual patients by, for example, compounding and selling large
quantities of drugs without meeting safety and other requirements for
new manufactured drugs. Because both states and the federal government
have oversight responsibilities, you asked us to address (1) the
actions taken or proposed by states and national pharmacy organizations
that may affect state oversight of drug compounding, and (2) federal
authority and enforcement power regarding compounded drugs.
My testimony today is based in part on discussions with the National
Association of Boards of Pharmacy (NABP), as well as a review we
conducted of four states: Missouri, North Carolina, Vermont, and
Wyoming. We selected these states based on their geographic location
and variation in compounding regulations. Two of the states came to our
attention as having taken unique steps with regard to oversight of
compounded drugs, and the other two had each adopted new regulations on
drug compounding. For each of the four states, we reviewed state
statutes and regulations, interviewed officials from the state board of
pharmacy, and reviewed relevant documents such as pharmacy inspection
forms. In addition to examining state-level actions, we examined
national industry efforts by interviewing officials from the American
Pharmacists Association, the International Academy of Compounding
Pharmacists, the American Society of Health-System Pharmacists, the
National Association of Chain Drug Stores, and Professional Compounding
Centers of America, which provides training to pharmacists and also
sells bulk ingredients for drug compounding. We also contacted and
obtained information from the United States Pharmacopeia (USP), which
is a nonprofit agency that develops standards for pharmaceuticals.
Finally, to examine federal authority and enforcement power, we
reviewed federal statutes, FDA compliance policy guides, court
decisions, and other relevant documents, and interviewed FDA officials
and industry experts. We conducted our work from August 2003 to October
2003 in accordance with generally accepted government auditing
standards.
In summary, efforts at the state level and among pharmacy organizations
at the national level have been taken or are under way to potentially
strengthen state oversight of drug compounding. Actions among the four
states we reviewed included adopting new statutes and regulations about
compounding, such as requirements for facilities and equipment, and
conducting more extensive testing of compounded drugs. For example, the
pharmacy board in Missouri is starting a program of random testing of
compounded drugs for safety, quality, and potency. At the national
level, industry organizations are working on standards for compounded
drugs that could be adopted by the states in their laws and
regulations, thereby helping to ensure that pharmacies consistently
produce safe, high-quality compounded drugs. While these actions may
help improve oversight, the ability of states to oversee and ensure the
quality and safety of compounded drugs may be affected by state-
specific factors such as the resources available for inspections and
enforcement. For example, in three of the four states we reviewed,
pharmacy board officials indicated that resource limitations affected
their ability to conduct routine inspections.
FDA maintains that drug compounding activities are generally subject to
its oversight, including its authority to oversee the safety and
quality of new drugs. In practice, however, the agency generally relies
on states to regulate the compounding of drugs as part of the
traditional practice of pharmacy. In 1997, the Congress passed a law
exempting drug compounders that met certain criteria from key FDCA
provisions, including safety and efficacy requirements for the approval
of new drugs. However, the entire section of the law dealing with drug
compounding was nullified in 2002 after the United States Supreme Court
ruled that part of it was an unconstitutional restriction on commercial
speech. Following the court decision in 2002, FDA issued guidance to
indicate when the agency would consider taking enforcement actions
regarding drug compounding. For example, it said the agency would
generally defer to the states for "less significant" violations of the
FDCA but would consider taking action in situations more analogous to
drug manufacturing.
Background:
For most people and many pharmacies, filling a prescription is a matter
of dispensing a commercially available drug product that has been
manufactured in its final ready-to-use form. This has been particularly
true in the United States since the rise of pharmaceutical
manufacturing companies. In addition to meeting federal safety and
efficacy requirements before a new drug is marketed, the drugs
manufactured by these companies are routinely tested by FDA after
marketing. According to FDA, the testing failure rate for more than
3,000 manufactured drug products sampled and analyzed by FDA since
fiscal year 1996 was less than 2 percent. Drug manufacturers are also
required to report adverse events associated with their drugs, such as
illness and death, to FDA within specified time frames.
Drug compounding, which has always been a part of the traditional
practice of pharmacy, involves the mixing, combining, or altering of
ingredients to create a customized medication for an individual
patient. According to the American Pharmacists Association, some of the
most commonly compounded products include lotions, ointments, creams,
gels, suppositories, and intravenously administered fluids and
medication. Some of these compounded drugs, such as intravenously
administered chemotherapy drugs, are sterile products that require
special safeguards to prevent injury or death to patients receiving
them. For example, sterile compounding requires cleaner facilities than
nonsterile compounding, as well as specific training for pharmacy
personnel and testing of the compounded drug for sterility.
The extent of drug compounding is unknown, but it appears to be
increasing in the United States. While industry representatives, the
media, and others have cited estimates for the proportion of
prescription drugs that are compounded ranging from 1 percent to 10
percent of all prescriptions, we found no data supporting most
estimates.[Footnote 2] FDA does not routinely collect data on the
quantity of prescriptions filled by compounded drugs. Similarly, we
found no publicly available data, either from FDA or from industry
organizations, on the amount of bulk active ingredients and other
chemicals that are used in drug compounding in the United States.
However, many state officials, pharmacist association representatives,
and other experts we interviewed reported that the number of compounded
prescriptions, which had decreased when pharmaceutical manufacturing
grew in the 1950s and 1960s, has been increasing over the past decade.
Problems have come to light regarding compounded drugs, some of which
resulted in death or serious injury, because the drugs were
contaminated or had incorrect amounts of the active ingredient. Unlike
drug manufacturers, who are required to report adverse events
associated with the drugs they produce, FDA does not require pharmacies
to report adverse events associated with compounded drugs. Based on
voluntary reporting, media reports, and other sources, FDA has become
aware of over 200 adverse events involving 71 compounded products since
about 1990. These incidents, including 3 deaths and 13 hospitalizations
following injection of a compounded drug that was contaminated with
bacteria in 2001, have heightened concern about compounded drugs'
safety and quality. In addition, a limited survey conducted by FDA's
Division of Prescription Drug Compliance and Surveillance in 2001 found
that nearly one-third of the 29 sampled compounded drugs were
subpotent--that is, they had less of the active ingredients than
indicated.
FDA and others have also expressed concern about the potential for harm
to the public health when drugs are manufactured and distributed in
commercial amounts without FDA's prior approval. While FDA has stated
that traditional drug compounding on a small scale in response to
individual prescriptions is beneficial, FDA officials have voiced
concern that some establishments with retail pharmacy licenses might be
manufacturing new drugs under the guise of drug compounding in order to
avoid FDCA requirements.
Actions Taken or Under Way by States and National Organizations to
Strengthen State Oversight of Drug Compounding, but Affect Likely to
Vary from State to State:
We found efforts at the state level and among national pharmacy
organizations to potentially strengthen state oversight of drug
compounding. Actions among the four states we reviewed included
adopting new drug compounding regulations and random testing of
compounded drugs. At the national level, industry organizations are
working on standards for compounded drugs that could be adopted by
states in their laws and regulations. According to experts we
interviewed, uniform standards for compounded drugs could help ensure
that pharmacists across states consistently produce safe, quality
products. While these actions may help improve oversight, the ability
of states to oversee and ensure the quality and safety of compounded
drugs may be affected by their available resources and their ability to
adopt new standards and enforce penalties.
Four States Reviewed Have Taken a Variety of Approaches to Strengthen
Oversight:
The four states we reviewed have taken a variety of approaches to
strengthen state oversight.
* Missouri. The pharmacy board in Missouri has taken a different
approach from other states: it is in the process of implementing random
batch testing of compounded drugs. No other state has random testing,
according to an NABP official. Random testing will include both sterile
and nonsterile compounded drugs and the board plans on testing
compounded drugs for safety, quality, and potency. A Missouri pharmacy
board official said testing will include random samples of compounded
drugs in stock in pharmacies in anticipation of regular prescriptions,
random selection of prescriptions that were just prepared, and testing
of compounded drugs obtained by undercover investigators posing as
patients. The official added that random testing will help to ensure
the safety and quality of compounded drugs and is also intended to
serve as a deterrent for anyone who might consider purposely tampering
with compounded prescriptions.
* North Carolina. North Carolina is the only state in the country that
requires mandatory adverse event reporting involving prescription
drugs, including compounded drugs, according to an NAPB official.
Regulations in North Carolina require pharmacy managers to report
information to the pharmacy board that suggests a probability that
prescription drugs caused or contributed to the death of a patient.
This reporting system, which does not extend to incidents of illness or
injury, allows the board to investigate all prescription-drug-related
deaths and determine whether an investigation is warranted.
* Vermont. The pharmacy board in Vermont overhauled the state's
pharmacy rules in August 2003 to address changes in pharmacy practice,
including the increase in Internet and mail-order pharmacies, according
to the pharmacy board chairman. For example, the chairman reported that
prior to the adoption of the new rules, Vermont had no definition of
out-of-state pharmacies and no requirements for these pharmacies to
have a Vermont license to do business in the state. The board chairman
said that the new rule requiring licensing for out-of-state pharmacies
would provide a mechanism to monitor pharmacies that ship prescription
drugs, including compounded drugs, into the state. In addition, he
added that the board revised the rules for compounding sterile drugs by
including specifics on facilities, equipment, and quality assurance
measures.
* Wyoming. Prior to March 2003, Wyoming did not have state laws or
rules that established specific guidelines for drug compounding, aside
from a definition of drug compounding, according to a pharmacy board
official. The new rules include requirements for facilities, equipment,
labeling, and record keeping for compounded drugs, as well as a
specific section on compounding sterile drugs. In addition, under the
new rules, the official added that pharmacy technicians-in-training are
no longer allowed to prepare compounded drugs, including sterile
products, which is a more complex procedure requiring special equipment
to ensure patient safety.
Efforts of National Organizations May Help States Strengthen Oversight
of Drug Compounding:
At the national level, industry organizations are working on uniform
practices and guidelines for compounded drugs and a committee of
national association representatives recently began work on developing
a program that would include certification and accreditation for drug
compounding that could be used for state oversight. Groups such as the
NABP concluded that state oversight of drug compounding would be
strengthened if the states had uniform standards and other tools that
could be adopted to address the quality and safety of compounded drugs.
Several experts that we spoke with said national standards for
compounding drugs that could be incorporated into state laws and
regulations could help to ensure the quality and safety of compounded
drugs. One expert noted that an advantage to incorporating compliance
with national compounding standards into state laws is that it would be
easier for states to keep up with updated standards without going
through the process of legislative changes.
NABP developed and updated a Model State Pharmacy Act that provides
standards for states regarding pharmacy practice. Recently revised in
2003, the model act includes a definition of drug compounding and a
section on good drug compounding practices. According to the executive
director of NABP, many states have incorporated portions of the model
act into their state pharmacy statutes or regulations by including
similar definitions of drug compounding and components of NABP's good
drug compounding practices. For example, officials in Missouri and
Wyoming reported using the model act's good drug compounding practices
as a guideline for developing their drug compounding regulations. In
addition, USP has established standards and guidelines for compounding
nonsterile and sterile drug products, both of which are being updated
by expert committees. An official told us that these revisions would be
completed early in 2004.
In addition, recognizing that there is no coordinated national program
to oversee compounding practices and that states' oversight may vary,
NABP recently began working with other national organizations,
including the American Pharmacists Association and USP, to create a
steering committee to develop a national program to provide a national
quality improvement system for compounding pharmacies and the practice
of compounding. The committee, which held its second meeting in October
2003, is developing a program that is anticipated to include (1) the
accreditation of compounding pharmacies, (2) certification of
compounding pharmacists, and (3) requirements for compounded products
to meet industry standards for quality medications. To strengthen state
oversight of drug compounding, these accreditations, certifications,
and product standards, once developed, could be adopted by the states
and incorporated into their requirements for compounding pharmacists
and pharmacies.
Factors Such as Available Resources May Affect States' Ability to
Oversee Compounded Drugs:
Although there are several efforts by states and national organizations
that may help strengthen state oversight, some states may lack the
resources to provide the necessary oversight. State pharmacy board
officials in three of the four states reported that resources were
limited for inspections, for example:
* The Missouri pharmacy board director reported that pharmacy
inspections typically occur every 12 to 18 months; however, an increase
in complaints has resulted in less frequent routine pharmacy
inspections, because investigating complaints takes priority over
routine inspections.
* North Carolina has six inspectors for about 2,000 pharmacies, which
the state pharmacy board director said are inspected at least every 18
months. The director added that it is difficult to keep up with this
schedule of routine inspections with the available resources while also
investigating complaints, which take first priority.
* In Vermont, the pharmacy board chairman reported that, for a period
of about 8 years until January 2003, pharmacy inspectors were only able
to respond to complaints and not conduct routine inspections because of
a shortage of inspectors. Vermont now has four full-time inspectors
that cover the state's 120 pharmacies; however, in addition to routine
pharmacy inspections, the inspectors are also responsible for
inspecting other facilities such as nursing homes and funeral homes.
The chairman added that the board would like to have pharmacies
inspected annually but it is difficult to keep up with the current
schedule of inspections once every 2 years.
Since drug compounding may occur in mail-order and Internet pharmacies,
the compounding pharmacy may be located in a state different from the
location of the patient or prescribing health professional. Three of
the four states we reviewed had a large number of out-of-state
pharmacies that were licensed to conduct business in those states, and
inspection and enforcement activities may differ for these pharmacies.
For example, Wyoming has 274 licensed out-of-state pharmacies, which is
nearly twice as many as the number of in-state licensed pharmacies. The
four states we reviewed said that they have authority to inspect out-
of-state pharmacies licensed in their states but because of limited
resources, they generally leave inspections to the state in which the
pharmacy is located. Regarding enforcement authority, all four states
reported having authority to take disciplinary action against out-of-
state pharmacies licensed in their states.
While the pharmacy boards in all four states we reviewed can suspend or
revoke pharmacy licenses or issue letters of censure, enforcement
mechanisms vary. For example, Missouri and North Carolina are not
authorized to charge fines for violations; however, Wyoming can fine a
pharmacist up to $2,000 and Vermont can fine a pharmacy or pharmacist
$1,000 for each violation. Further, not all state pharmacy boards have
the authority to take enforcement action independently. For example, in
Missouri when attempting to deny, revoke, or suspend a license through
an expedited procedure, the pharmacy board must first file a complaint
with an administrative hearing commission. Only after the commission
determines that the grounds for discipline exist may the board take
disciplinary action.
Pharmacy board officials reported relatively few complaints and
disciplinary actions involving drug compounding. For example, of the
307 complaints received and reviewed by the board of pharmacy against
pharmacies and pharmacists in Missouri in fiscal year 2002, only 5 were
related to drug compounding.[Footnote 3]
FDA Asserts Oversight Authority Under FDCA but Generally Relies on
States to Regulate Drug Compounding:
FDA maintains that drug compounding activities are generally subject to
FDA oversight, including the "new drug" requirements and other
provisions of the FDCA. In practice, however, the agency generally
relies on the states to regulate the traditional practice of pharmacy,
including the limited compounding of drugs for the particular needs of
individual patients. In recent years, the Congress has attempted to
clarify the extent of federal authority and enforcement power regarding
drug compounding. In 1997, the Congress passed a law that exempted drug
compounders from key portions of the FDCA if they met certain criteria.
Their efforts, however, were nullified when the Supreme Court struck
down a portion of the law's drug compounding section as an
unconstitutional restriction on commercial speech, which resulted in
the entire compounding section being declared invalid.[Footnote 4] In
response, FDA issued a compliance policy guide to provide the
compounding industry with an explanation of its enforcement policy,
which included a list of factors the agency would consider before
taking enforcement actions against drug compounders.
FDA Asserts Jurisdiction to Regulate Drug Compounding Under FDCA:
FDA maintains that FDCA requirements, such as those regarding the
safety and efficacy requirements for the approval of new drugs, are
generally applicable to pharmacies, including those that compound
drugs. The agency recognized in its brief submitted in the 2002 Supreme
Court case that applying FDCA's new drug approval requirements to drugs
compounded on a small scale is unrealistic--that is, it would not be
economically feasible to require drug compounding pharmacies to undergo
the testing required for the new drug approval process for drugs
compounded to meet the unique needs of individual patients. The agency
has stated that its primary concern is where drug compounding is being
conducted on a scale tantamount to manufacturing in an effort to
circumvent FDCA's new drug approval requirements. FDA officials
reported that the agency has generally left regulation of traditional
pharmacy practice to the states, while enforcing the act primarily when
pharmacies engage in drug compounding activities that FDA determines to
be more analogous to drug manufacturing.
FDA Modernization Act Exempted Drug Compounders from Some FDCA
Requirements but Was Declared Invalid:
Federal regulatory authority over drug compounding attracted
congressional interest in the 1990s, as some in the Congress believed
that "clarification is necessary to address current concerns and
uncertainty about the Food and Drug Administration's regulatory
authority over pharmacy compounding."[Footnote 5] The Congress
addressed this and other issues when it passed the FDA Modernization
Act of 1997 (FDAMA), which included a section exempting drugs
compounded on a customized basis for an individual patient from key
portions of FDCA that were otherwise applicable to
manufacturers.[Footnote 6] According to the congressional conferees,
its purpose was to ensure continued availability of compounded drug
products while limiting the scope of compounding so as "to prevent
manufacturing under the guise of compounding."[Footnote 7]
In order to be entitled to the exemption, drug compounders had to meet
several requirements, including one that prohibited them from
advertising or promoting "the compounding of any particular drug, class
of drug, or type of drug."[Footnote 8] This prohibition was challenged
in court by a number of compounding pharmacies and eventually resulted
in a 2002 Supreme Court decision holding that it was unconstitutional.
As a result, the entire drug compounding section was declared
invalid.[Footnote 9] However, the Court did not address the extent of
FDA's authority to regulate drug compounding.
Current FDA Enforcement Focuses on Drug Compounding Outside of the
Traditional Practice of Pharmacy:
FDA issued a compliance policy guide in May 2002, following the Supreme
Court decision, to offer guidance about when it would consider
exercising its enforcement authority regarding pharmacy
compounding.[Footnote 10] In the guide, FDA stated that the traditional
practice of drug compounding by pharmacies is not the subject of the
guidance. The guide further stated that FDA will generally defer to
state authorities in dealing with "less significant" violations of
FDCA, and expects to work cooperatively with the states in coordinating
investigations, referrals, and follow-up actions. However, when the
scope and nature of a pharmacy's activities raise the kinds of concerns
normally associated with a drug manufacturer and result in significant
violations of FDCA, the guide stated that FDA has determined that it
should seriously consider enforcement action and listed factors, such
as compounding drug products that are commercially available or using
"commercial scale manufacturing or testing equipment," that will be
considered in deciding whether to take action.[Footnote 11]
Some representatives of pharmacist associations and others have
expressed concern that FDA's compliance policy guide has created
confusion regarding when FDA enforcement authority will be used. For
example, some pharmacy associations assert that FDA's guidance lacks a
clear description of the circumstances under which the agency will take
action against pharmacies. In particular, they pointed to terms in the
guide, such as "very limited quantities" and "commercial scale
manufacturing or testing equipment" that are not clearly defined, and
noted that FDA reserved the right to consider other factors in addition
to those in the guide without giving further clarification. FDA
officials told us that the guide allows the agency to have the
flexibility to respond to a wide variety of situations where the public
health and safety are issues, and that they plan to revisit the guide
after reviewing the comments the agency received, but did not have a
time frame for issuing revised guidance.
In several reported court cases involving FDA's regulation of drug
compounders, the courts have generally sided with FDA. Two cases we
identified involved drug compounders engaged in practices that were
determined to be more analogous to drug manufacturing. In a district
court case decided this year, the court upheld FDA's authority to
inspect a pharmacy specializing in compounding, noting that it believed
that FDA's revised compliance policy guide was a reasonable
interpretation of the statutory scheme established by FDCA.[Footnote
12]
Concluding Observations:
While drug compounding is important and useful for patient care,
problems that have occurred raise legitimate concerns about the quality
and safety of compounded drugs and the oversight of pharmacies that
compound them. However, the extent of problems related to compounding
is unknown. FDA maintains that drug compounding activities are
generally subject to FDA oversight under its authority to oversee the
safety and quality of new drugs, but the agency generally relies on
states to provide the necessary oversight. At the state level, our
review provides some indication that at least some states are taking
steps to strengthen state oversight, and national pharmacy
organizations are developing standards that might help strengthen
oversight if the states adopted and enforced them. However, the
effectiveness of these measures is unknown, and factors such as the
availability of resources may also affect the extent of state
oversight.
Mr. Chairman, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of the Committee may have
at this time.
Contact and Acknowledgments:
For further information, please contact Janet Heinrich at (202) 512-
7119. Individuals making key contributions to this testimony included
Matt Byer, Lisa A. Lusk, and Kim Yamane.
FOOTNOTES
[1] See 21 U.S.C. § 355.
[2] A 2001 draft report of a study contracted by FDA included an
estimate that about 6 percent of all prescriptions were compounded but
cautioned that there was considerable uncertainty around this estimate
due to limited data. The report acknowledged that definitive statistics
on compounding activities were not available. Eastern Research Group
Inc., Profile of the Pharmaceutical Compounding Industry, draft final
report prepared for the Food and Drug Administration, August 27, 2001.
[3] The state pharmacy board officials that we spoke with reported that
most complaints and disciplinary actions cover dispensing errors
related to manufactured drugs, such as incorrectly counting the number
of pills for a prescription.
[4] Thompson v. Western States Medical Center, 535 U.S. 357 (2002).
[5] S. Rep. No. 105-43, at 67 (1997).
[6] These portions covered "adequate directions for use" labeling,
manufacturing, and new drug approval requirements. See former 21 U.S.C.
§ 353a (a). Pub. L. No. 105-115, 111 Stat. 2296, former section 503A.
[7] H.R. Conf. Rep. No. 105-399, at 94 (1997).
[8] See former 21 U.S.C. § 353a (c).
[9] Both the district and appellate courts held that the prohibition
was unconstitutional. However, the district court held that the
prohibition was "severable" and that the rest of the pharmacy
compounding section remained good law. While the appellate court agreed
with the district court on the constitutional question, it disagreed on
the severability issue and invalidated the entire section. The Supreme
Court agreed with both courts on the constitutional issue, but because
the severability decision was not challenged, the Court did not rule on
it, and left it in place. See Thompson v. Western States Medical
Center; 69 F. Supp. 2d 1288 (D. Nev. 1999), aff'd in part and rev'd in
part, 238 F. 3d 1090 (9th Cir. 2001), aff'd, 535 U.S. 357.
[10] This guide was similar to an earlier compliance policy guide
published by FDA in 1992. After the drug compounding section of FDAMA
was declared invalid, FDA determined that it needed to issue new
guidance to the compounding industry on what factors the agency would
consider in exercising its enforcement discretion regarding drug
compounding.
[11] "Compliance Policy Guide: Compliance Policy Guidance for FDA Staff
and Industry", Chapter 4, Sub Chapter 460, May 2002.
[12] In the Matter of Establishment Inspection of Wedgewood Village
Pharmacy, Inc., 270 F. Supp. 525, 549 (D. N.J. 2003).
