Regulation of Drug Compounding

Introduction

Drug compounding is a practice that has been in existence for several decades. It involves taking two or more ingredients and mixing them to create a specific drug to treat a particular disease. Drug compounding is necessary in exceptional cases where a patient may not use drugs approved by the Food & Drug Administration (FDA). Such situations arise due to allergic reactions to specific components of a drug or difficulty in administering particular forms of medications to patients.

For instance, a patient might take a certain drug in its liquid form to avoid allergic reactions to the same medication in pill form. If the liquid form of medicine is not available commercially, a pharmacist can compound a usable form for the patient. Mostly, compounded drugs do not receive approval from the FDA. Instead, the agency requires approval for the core drugs used in the compounding. Pharmacies, hospitals, and outsourcing facilities usually conduct compounding processes.

Despite the FDA’s failure to approve the efficiency of compounded drugs, several policies have been established to regulate the same. The rules include the Drug Quality and Security Act of 2013, sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act. Besides, the Pharmacy Compounding Advisory Committee provides scientific and technical advice to the FDA on issues concerning drug compounding. While compounding has been the bedrock of pharmacy from ancient times, the rise of drug manufacturing has significantly reduced compounding practices. Besides, health effects associated with compounded drugs have led to stricter regulation on compounding.

The inability of manufacturers to meet all the specific patient needs in the administration of drugs means compounding practices continue to flourish. Compounding is a complicated process due to the diverse patient needs and medicines to use. Therefore, it is difficult for FDA and state governments to examine every case of drug compounding. The prevalence of drug compounding is raising ethical issues such as whether large-scale compounding is comparable to manufacturing, how to harmonize regulations on compounding, and how to ensure patient safety. Laws on drug compounding do not adequately address the risks associated with the process.

History of Drug Compounding

Compounding drugs is a practice that has existed for thousands of years. Compounding predates commercial manufacturing of medicines that transformed pharmacists from the preparers of medications to drug dispensers. ¹In the past, pharmacists or physicians used to prepare drug mixtures for their patients using a variety of ingredients. According to Soderlund1, examples of compounded drugs in early times include ointments, balms, and oils. A pharmacist would use plant extracts to make concoctions for use in treating their patients. Compounding was patient-specific for better treatment of the patient.

Another popular compounding mixture was coal tar used for treating skin conditions. Pharmacists also used petroleum jelly, quinine alkaloids, and opium to prepare medications for treating their patients. ²The pharmacists depended on their experience, scientific knowledge, and intuition to make the compounded medications. Pharmacists exclusively practiced drug compounding in pharmacies to treat patients in the 19th century. Most pharmacies would have a specialized pharmacist responsible for compounding drugs. ³Before the 19th century, there were no regulations governing compounding practices.

In the century, compounding professionals began to establish rules. ⁴The first regulation bodies included the societies of apothecaries, National Formulary, and the United States Pharmacopeia. The practice of publishing compounding procedures began as the Dispensatory of the United States of America, Martindales, and Remingtons came into circulation. ⁵Pharmacists also began using sweeteners in compounded drugs to make them palatable. Also, they started compounding medications in easy-to-consume formulations such as syrups instead of pills.

The compounding pharmacists began pharmaceutical factories to mass-produce drugs. Some of the pharmaceutical firms include Merck, Eli Lilly, and Sandoz. ⁶Mass production of compounded medications eased the strenuous work of compounding pharmacists who no longer needed to spend hours preparing medications. The compounding pharmacist slowly became a dispenser of drugs and training on compounding began to decline. Manufacturing reduced pharmacy compounding to around 5% of all medicines sold in the 1960s. ⁷From the 1980s, pharmacists began to resume compounding in a bid to address various patient needs.

Compounding companies such as Professional Compounding Centers of America began operations. Currently, compounding has been on the rise due to multiple factors such as children who require lower dosages than available from the manufacturer, routes of administration, allergic reactions to drug components. Hospitals routinely practice drug compounding. However, recent regulations by the FDA have made it difficult for hospitals to efficiently compound drugs. As a result, outsourcing centers that exclusively compound drugs have been multiplying. ⁸The centers are allowed to operate based on positive manufacturing practices. Compounding is not without risks. ⁹

According to Riley, between 1990 and 2003, the FDA recorded over 100 events where patients suffered severe effects. The risks can arise from bacterial or fungal infections, errors in the calculation of dosage, poor combinations, drug stability, and poor delivery. If a compounded product is unsterile, it can result in serious complications. ¹⁰ For instance, indomethacin eye drops, a compounded drug, was contaminated with bacteria causing twelve deaths in Pittsburg. In another instance, four patients in Nebraska hospital lost their lives to the contaminated cardioplegic solution. ¹¹In 2012, a compounded drug from a Massachusetts pharmacy contained fungal contamination that caused fungal meningitis in 750 people, of whom 60 died. Cases of adverse effects from drug compounding have resulted in increased regulations in the last 15 years.

Until recently, state boards of pharmacies exclusively regulated pharmacy compounding. From 1992, the FDA began to raise concerns on compounding practices in outsourcing centers, which mimicked manufacturing. The FDA then passed a Compliance Policy Guide for unapproved manufacture of compounded drugs requiring a license to process the products. However, the guide failed to reduce the number of unlicensed parties practicing the production. In 1997, Congress passed the FDA Modernization Act that worked to exclude compounding the drug from misbranding provisions. ¹²

Further, the compounded drugs should adhere to the United States Pharmacopeia rules that include a ban on advertising of compounded medications, and the creation of an advisory committee. However, pharmacists challenged the Modernization act in court and won, leading to the removal of restrictions on advertising and the dissolution of the advisory committee. The FDA continued to maintain various policy guidelines on compounding. ¹³

Also, the National Association of Boards of Pharmacy, United States Pharmacopeia, the American Society of Health-System Pharmacists have been regularly publishing guidance on the practice of compounding. Most compounding regulations focused on differentiating compounding from manufacturing. It was in favor of patient-specific compounding instead of large-scale compounding. ¹⁴However, the critical focus on management should be patient safety. Currently, pharmacy boards in different states inspect the pharmacies manufacturing compounded drugs in conjunction with the FDA. The state boards focus on pharmacies not listed as outsourcing facilities while the FDA does inspect both pharmacies and outsourcing facilities that compound drugs on a large scale. Outsourcing facilities are subject to good manufacturing practice (GMP) requirements. ¹⁵

According to Goldman, the Drug Quality and Security Act of 2013 created section 503B in the Federal Food, Drug, and Cosmetic Act. The section defines an outsourcing facility as a facility engaged in the compounding of sterile drugs; has elected to register as an outsourcing facility, and complies with all of the requirements of section 503B. Currently, there are over 70 outsourcing facilities registered with the FDA.

Economic Interests Overshadow the Process of Regulating Drug Compounding.

Outsourcing facilities that compound drugs on large-scale serve hospitals and other pharmacies that are unable to compound medications regularly. The outsourcing facilities serve a niche market in drug compounding. They have a business interest in compounding drugs. To further push the importance, outsourcing facilities and pharmacies began to advertise compounded medications. Congress passed the FDA Modernization Act of 1997 that outlawed advertising for compounded drugs. According to the Act, compounders would not solicit for clients. Instead, they would only compound medication when needed.

The FDA was also concerned about large-scale compounding perceiving it as a form of drug manufacturing that was exempt from the FDA drug approval process. The FDA saw outsourcing facilities as manufacturers that were benefiting without paying the costs of approval to the FDA.

Thompson v. Western States Medical Center

In response to the advertising restrictions in the FDA Modernization Act of 1997, pharmacists challenged the provisions of the Modernization Act in court claiming it violated the First Amendment of the United States Constitution. ¹⁶U.S. CONST. Art. VII, cl. 2 reads as follows, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” The district court ruled to remove the advertising provision from the Modernization Act. ¹⁷

After appeal, the ninth Court Circuit upheld the lower court’s decision on the illegality of the advertising provision but further struck down the compounding provision of the Modernization Act. ¹⁸On the case of Thompson v. Western States Medical Center (01-344) 535 U.S. 357 (2002), the Ninth circuit court affirmed that the Court of Appeals’ judgment that the speech-related provisions of FDAMA §503A are unconstitutional. The ruling withdrew jurisdiction of the FDA over compounding allowing state boards of pharmacies to continue regulating compounding practices. Pharmacies and outsourcing facilities were free to keep advertising compounded drugs, which would potentially increase their revenues from the method.

The FDA has Registered Few Wins Against Compounding Offenders

The drug compounding industry is growing fast. ¹⁹According to Levine, Oyster, and Williams, the industry had a market size of $8.9 billion and 2.3% market growth in the last five years. Despite the rapid growth, the FDA has lagged in pursuing comprehensive regulation on drug compounding. While previous laws have given the agency broad powers to regulate outsourcing facilities, the FDA is yet to stop the occurrence of an error in drug compounding.

There have been several cases of permanent disabilities and other health effects on patients who use compounded drugs. Though the FDA regularly issues warnings and even files court cases, the non-adherence in drug compounding continues to claim lives. FDA has been resorting to filing court cases against offenders. And though FDA has won some of the cases, they are few compared to the extent of illegal drug compounding. An example of a situation where the FDA won is the United States of America v. Ranier’s R.X. Laboratory, Inc.

United States of America v. Ranier’s RX Laboratory, Inc.

²⁰The Western District of Pennsylvania court entered a consent with the defendant. The defendant would cease any drug adulteration due to unsanitary conditions. The FDA had filed a complaint with the court alleging the company failed to follow the Federal Food, Drug, and Cosmetic Act by causing deterioration of compounded drugs due to insanitary preparation areas. ²¹The company agreed to cease compounding until the time when they will comply with the requirements of the injunction. The requirements include a work plan, certification, and high standards of hygiene.

FDA Regulations Promote Illegal Compounding Practices

Compounding allows pharmacists to avail drugs to patients in a form that is not available commercially. It will enable patients to get lower dosages or forms of a drug that are more effective. Compounding is, in some instances, a cheaper alternative to more expensive drugs that are not affordable by some patients. Athenex Inc. is an outsourcing facility that was producing a compounded form of Vasostrict (Vasopressin), a drug manufactured by Endo International. ²²

The manufactured type of the drug is expensive, way above $ 2,000 for 10ml. But the outsourcing facility was making the drug at a fraction of the cost. The FDA failed to establish a clinical need for the compounding of the drug on a large scale at an outsourcing facility, making it illegal for Athenex to continue compounding the medicine). Athenex filed a case in the united states district court for the District of Columbia challenging the FDA decision.²³

In the case of Civil Action, no: 1:19-cv-00603 (APM), the District Court supported the FDA decision of not including Vasopressin in the list of bulk substances that outsourcing facilities can use. In the court case, Athenex argued that Vasopressin contained an allergen Chlorobutanol that made the drug unsuitable for all patients. However, the FDA showed that there was a Chlorobutanol-free form of medicine. After the ruling, Athenex vowed to pursue alternative options, including appeal. ²⁴While the court suspended the compounding practices for the drug, the demand for the drug would likely stimulate illegal compounding since there was no provision for a cheaper alternative. Patients who cannot afford the manufactured medication and who lack a proper option may result in using back channels to acquire the treatment. This case shows that FDA regulations can have potential effects of stimulating illegal compounding practices.

There are Inadequate FDA Regulations for Pharmacy Compounding

Pharmacies not registered as outsourcing facilities do not have sufficient oversight from the FDA. ²⁵Besides, the State boards of pharmacies provide inconsistent control and do not have adequate resources to monitor compounding practices. ²⁶The gap in regulation means the pharmacies may lack to follow safety guidelines, which puts the patients at risk. The pharmacies follow compounding procedures from the United States Pharmacopeia (USP). ²⁷However, the USP is a private group without powers to enforce its guidelines. ²⁸The USP procedures do not require reporting or records of compounding activities. ²⁹

The regulation gap means a large portion of compounding practices go unmonitored. While compounding is a critical part of the pharmacy profession, the increase in the number of pharmacies and patients means there is a shift of motives far from treating to economic benefits. Several pharmacies have been overcharging patients and health insurance agencies for compounded drugs. Some compounders overcharge government programs such as Medicare and Medicaid, and Tricare. The costs go to taxpayers who suffer at the hands of criminal compounders. Other compounders also defraud government programs by claiming extreme amounts of money for compounded drugs. Because the drugs are not from manufacturers. It is difficult to determine the accurate pricing for compounded medications. Compounders have the freedom of deciding the price to charge customers.

The United States v. Thomley. Criminal no. 2:18-CR-18-KS-MTP

Hope Thomley admitted to charges of conspiracy to commit health care fraud, money laundering, and tax evasion. ³⁰The defendant participated in a $200 million scheme to defraud health care benefit programs. Hope, along with others, stole millions of dollars from a healthcare program by marketing compounded drugs for Advantage pharmacy. Hope helped to obtain prescriptions from people without regard for their health needs. ³¹Her scheme involved collecting prescribers’ signatures on blank prescription forms and then filling the forms with other Tricare beneficiary names. The defendant also participated in money laundering and tax evasion. This case and others prove that drug compounders manage to manipulate the healthcare regulations to obtain large sums of money from unsuspecting clients, the government, and insurers. The FDA needs to do more to tame the wave of fraud surrounding compounded drugs.

Conclusion

Existing regulations on drug compounding have not adequately addressed the risks associated with the process. Though the practice of drug compounding has existed for thousands of years, there are no laws that appropriately guide the method. Most pharmacists continue to compound drugs without the knowledge of health regulators. This occurs due to the inadequate laws governing drug compounding and the FDA’s insufficient oversight of the process.

Non-licensed drug compounding can lead to health complications due to improper regulations on the quantities of the compound mixture. The occurrence of severe health effects related to drugs in recent decades has forced various health agencies and legislators to make policy guidelines. The policies have focused on controlling the large-scale drug-compounding by outsourcing facilities leaving most pharmacies under the inspection of state boards. Most of the court cases have been in response to failure by outsourcing facilities to follow FDA guidelines. However, outsourcing facilities often get away with a warning from the FDA.

Further, pharmacies not registered as outsourcing facilities continue to compound drugs with limited oversight from state boards. The boards lack the resources to pursue meaningful compliance. The FDA also focuses on outsourcing facilities leaving compounding facilities on their own. The rise of fraud related to compounded drugs shows that FDA regulations are not fully effective in streamlining operations of compounding facilities.

It is necessary for the FDA and other agencies at federal and state levels to formulate new rules. Having comprehensive compounding regulations will ensure patients do not get exposed to dangerous compound drugs. New rules will also protect the government from fraud and taxpayers from illegitimate burdens. In that way, the consumer can be protected from improper drug mixture that can result in detrimental health issues.

References

Marriott, John F et al. Pharmaceutical Compounding and Dispensing. 2nd ed., Pharmaceutical Press, 2010, pp. 4.

Soderlund, Bill. “Soderlund Drugstore Museum: History of Compounding”. Drugstoremuseum. 2020. Web.

Feldschuh, Mark. Compounding In Community Pharmacy. 2008. Web.

Soderlund, Bill. “Soderlund Drugstore Museum: History of Compounding”.

AdamsDrugs. “The History of Compounding – Adams Drugs, Your Local Montgomery, Alabama Hometown Pharmacy”. Adamsdrugs. 2020. Web.

Riley, Rebecca J. “The Regulation of Pharmaceutical Compounding and the determination Of Need:”. Dash. Harvard. Edu, 2004. Web.

FDA. “Compounding and the FDA: Q & A“. U.S. Food and Drug Administration, 2020.

Rebecca J. Riley,”The Regulation of Pharmaceutical Compounding and the determination Of Need”.

Judith M. Glassgold, Compounded drugs. Congressional Research Service, 2013:5.

Agata Dabrowska, “Drug Compounding: FDA Authority And Possible Issues For Congress”. Fas. 2018. Web.

Rebecca J. Riley, “The Regulation of Pharmaceutical Compounding and the determination Of Need”.

T.R. Goldman, “Regulating Compounding Pharmacies.” Healthaffairs. 2014.

National Constitution Center. “The Constitution – Full Text | The National Constitution Center”.

Rebecca J. Riley, “The Regulation of Pharmaceutical Compounding and the determination Of Need”.

Legal Information Institute. “Thompson V. Western States Medical Center”. Law. Cornell. Edu, 2002. Web.

Levine G., Oyster J., Williams R., Outsourcing Facilities Face Rising Drug Compounding Risks. 2019:1.

US Department of Justice. “District Court Enters Permanent Injunction Against Pennsylvania Compounding Pharmacy and Its Owner to Prevent Adulteration of Drugs“. Justice. 2019.

FDAnews. “United States Of America V. Ranier’s Rx Laboratory, Inc.”. Fdanews. 2019. Web.

Brennan, Zachary. “FDA Wins Court Case on Vasopressin in Bulk Substances List“. Raps. 2019. Web.

FDAblog. “Case 1:19-Cv-00603-APM In the United States Disctrict Court For The Disctrict Of Columbia”. Fdalawblog. 2019. Web.

Roy Guharoy et al. “Compounding Pharmacy Conundrum”. Chest, vol 143, no. 4, 2013, pp. 896-900. Elsevier B.V. Web.

Stella H. Kim, “The Drug Quality and Security Act Of 2013: Compounding Consistently”. Digitalcommons.Law.Umaryland. 2017. Web.

United States Government Accountability Office. “Drug Compounding“. Gao. 2016.

PEW Charitable Trust. “Best Practices for State oversight Of Drug compounding”. Pewtrusts. 2016. Web.

U.S. Attorney’s Office. “Mississippi Woman Pleads Guilty to Healthcare Fraud, Money Laundering and Tax Evasion“. Justice. 2019. Web.

Footnotes

1. Marriott, John F et al. Pharmaceutical Compounding and Dispensing. 2nd ed., Pharmaceutical Press, 2010, pp. 4.
2. Soderlund, Bill. “Soderlund Drugstore Museum: History of Compounding”. Drugstoremuseum. 2020. Web.
3. Feldschuh, Mark. Compounding In Community Pharmacy. 2008. Web.
4. Soderlund, Bill. “Soderlund Drugstore Museum: History of Compounding”.
5. Ibid.
6. AdamsDrugs. “The History of Compounding – Adams Drugs, Your Local Montgomery, Alabama Hometown Pharmacy”. Adamsdrugs. 2020. Web.
7. Riley, Rebecca J. “The Regulation of Pharmaceutical Compounding and the determination Of Need:”. Dash. Harvard. Edu, 2004. Web.
8. FDA. “Compounding and the FDA: Q & A“. U.S. Food and Drug Administration, 2020. Web.
9. Rebecca J. Riley,”The Regulation of Pharmaceutical Compounding and the determination Of Need”.
10. Ibid.
11. Judith M. Glassgold, Compounded drugs. Congressional Research Service, 2013:5.
12. Agata Dabrowska, “Drug Compounding: FDA Authority And Possible Issues For Congress”. Fas. 2018. Web.
13. Rebecca J. Riley, “The Regulation of Pharmaceutical Compounding and the determination Of Need”.
14. Ibid.
15. T.R. Goldman, “Regulating Compounding Pharmacies.” Healthaffairs. 2014.
16. National Constitution Center. “The Constitution – Full Text | The National Constitution Center”.
17. Rebecca J. Riley, “The Regulation of Pharmaceutical Compounding and the determination Of Need”.
18. Legal Information Institute. “Thompson V. Western States Medical Center”. Law. Cornell. Edu, 2002. Web.
19. Levine G., Oyster J., Williams R., Outsourcing Facilities Face Rising Drug Compounding Risks. 2019:1.
20. US Department of Justice. “District Court Enters Permanent Injunction Against Pennsylvania Compounding Pharmacy and Its Owner to Prevent Adulteration of Drugs“. Justice. 2019. Web.
21. FDAnews. “United States Of America V. Ranier’s Rx Laboratory, Inc.”. Fdanews. 2019. Web.
22. Brennan, Zachary. “FDA Wins Court Case on Vasopressin in Bulk Substances List“. Raps. 2019. Web.
23. Ibid.
24. FDAblog. “Case 1:19-Cv-00603-APM In the United States Disctrict Court For The Disctrict Of Columbia”. Fdalawblog. 2019. Web.
25. Roy Guharoy et al. “Compounding Pharmacy Conundrum”. Chest, vol 143, no. 4, 2013, pp. 896-900. Elsevier B.V. Web.
26. Stella H. Kim, “The Drug Quality and Security Act Of 2013: Compounding Consistently”. Digitalcommons.Law.Umaryland. 2017. Web.
27. Ibid.
28. United States Government Accountability Office. “Drug Compounding“. Gao. 2016. Web.
29. PEW Charitable Trust. “Best Practices for State oversight Of Drug compounding”. Pewtrusts. 2016. Web.
30. U.S. Attorney’s Office. “Mississippi Woman Pleads Guilty to Healthcare Fraud, Money Laundering and Tax Evasion“. Justice. 2019. Web.
31. Ibid.