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Federal Court Strikes Down Compounding Regulations

Linda R. Harteker

One member of the Food and Drug Administration (FDA) Pharmacy Compounding Advisory Committee was "flabbergasted"; other pharmacists were merely surprised by the February 6 decision of the 9th U.S. Circuit Court of Appeals declaring the compounding provisions in the FDA Modernization Act of 1997 (FDAMA) unconstitutional. In so ruling, the appeals court upheld the earlier District Court decision that the restrictions against advertising a compounding service and soliciting that type of business violated the free speech clause of the First Amendment. The appeals court went one step farther, declaring that the advertising and solicitation stipulations could not be severed from the rest of the compounding provisions. As a result, the entire compounding section was invalidated (see the box at the end of this article for details).

The next move is up to FDA, and for the moment the staff at the agency’s Center for Drug Evaluation and Research refuses to comment on possible actions. The agency faces several decisions, the most pressing of which is whether to appeal the recent ruling to the U.S. Supreme Court. FDA has until April 30 to file an appeal; other decisions may be put on hold until a new FDA commissioner is appointed.

No "safe haven." The compounding provisions, also known as section 127 of FDAMA, gave FDA, in the interest of protecting the public safety, responsibility for setting limits on legal compounding activities of pharmacists and physicians. Many pharmacy organizations, including ASHP, participated in developing the provisions and viewed their enactment as an important clarification of FDA’s regulatory authority over compounding.

The scope of the agency’s authority over compounding, however, continued to generate controversy. Pharmacy professionals expressed concern that the 1997 law and any regulations developed to implement it might unduly restrict a pharmacist’s authority or prohibit routine functions, such as diluting medications for intravenous administration. FDA was fine-tuning the language for these and other matters covered in the compounding provisions, with the intention of issuing the regulations this spring, when the appeals court announced its decision.

While differences of opinion remain, the advisory committee members interviewed for this article generally concurred on several points. One point of accord is that FDA action in the control of compounding was inevitable; another is that this interest will not die with the appeals court’s decision. Committee members also seemed to be saying that section 127 represented a decent compromise—one that responded to FDA’s concerns about upholding its responsibility for the public safety but did not infringe on legitimate pharmacist activity.

"When the legislation was in place, we had points of closure," said Carmen Catizone, executive director of the National Association of Boards of Pharmacy and a member of the advisory committee. "Now we’re going to have to go back to square one on many of the issues."

Catizone’s colleagues on the committee agreed. "Some people thought that FDA’s interest in compounding would die a natural death in the early 1980s," said William J. Rusho, clinical coordinator for i.v. admixture services at the University of Utah Hospital and Clinics and clinical professor at the state’s pharmacy school. "Compounding has had a big resurgence. Even though section 127 has been struck down, there is a good possibility that more legislation will be forthcoming. And that could be much more stringent than the current law."

Both FDA and the pharmacy world in general, Rusho said, have a far greater awareness of the scope of compounding activity as a result of discussions regarding section 127. When the talks resume, he said, there may be some new players at the table, such as the Pharmaceutical Research and Manufacturers of America. As for any future developments and the debates they spark, Rusho joked that it is a matter of "the devil you know and the devil you don’t know."

FDA advisory committee chair Randy P. Juhl also lamented the invalidation of section 127. According to Juhl, dean of the University of Pittsburgh’s pharmacy school, section 127 created a much-needed "safe haven" for legitimate compounding pharmacists. Under it, pharmacists could prepare a product for a particular patient upon receipt of a prescription order. They could also prepare limited quantities of drug products before the receipt of an order—if there was a history of such prescriptions from a prescriber—without fear of prosecution by the federal government for creating a new drug. Absent section 127, that haven no longer exists.

"Some organizations are taking great glee in the fact that they slew the dragon…that they beat FDA," Juhl said. In his view, it was a victory in the courts only. "Now we’re back to where we started from."

Loyd V. Allen, Jr., a member of the FDA advisory committee and of the United States Pharmacopeial Convention (USP) Expert Advisory Panel on Pharmacy Compounding Practices, also supported section 127. "The nice thing about section 127," he said, "was that it gave pharmacists an exemption to new-drug-application requirements, as long as they meet the requirements set forth in the act. . . . Now, it’s back to the pre-1997 era for compounding."

An interim action plan. With section 127 declared unconstitutional, where do compounding pharmacists look for that necessary safe haven? FDA staff told ASHP’s Government Affairs Division (GAD) that the pre-FDAMA "compliance policy guidelines" for hospital compounding no longer apply; they were rescinded after the enactment of FDAMA. The best course of action for the time being, FDA indicated to GAD, is to keep abreast of state laws, many of which were changed in response to FDAMA. The agency is expected to continue to assert authority over a compounding activity when it crosses the line into manufacturing. Because no definitive line exists, GAD staff recommends that pharmacists not expand their compounding activities too far beyond the terms laid out in FDAMA.

Committee members’ recommendations run the gamut. NABP’s Catizone said the single best thing state authorities can do on this matter is to ensure that their guidelines clearly distinguish between compounding and manufacturing. Also, when any question about this distinction arises, compounding pharmacists should talk with FDA.

Juhl said the best course is to "follow section 127, even though it is currently in a state of suspended animation." The guidelines it presented concerning compounding are sound, he said. The fact that the section was declared unconstitutional, Juhl added, reflects an inadvertent oversight in the stipulations relating to advertising and solicitation. But this, he said, does not negate the validity of other components of section 127 (for example, the list of bulk drug substances available for compounding, the list of drugs withdrawn for safety reasons, the list of products that are difficult to compound, and the prohibition on making copies of products that are commercially available). "I would continue to consider section 127 as a standard of practice. After all, the major pharmacy organizations and the FDA were all at the table when 127 was crafted."

Rusho and Allen suggested that pharmacists seeking guidance look to existing standards, technical bulletins, and similar documents developed by USP and ASHP. For sterile products, pharmacists should consult chapter 1206 in The United States Pharmacopeia and The National Formulary (USP/NF) and the "ASHP Guidelines on Quality Assurance for Pharmacy-Prepared Sterile Products." USP chapter 795, titled "Pharmacy Compounding," covers nonsterile compounded products. That chapter, Allen explained, is enforceable by state boards of pharmacy. USP chapter 1206 remains a guideline at this point.

Progress within the profession. Allen, who is professor emeritus at the University of Oklahoma pharmacy school, said it is important for pharmacists to understand that professional and scientific organizations have been "pushing to increase the level of awareness of quality control and documentation that need to be part of pharmacy compounding." As one indication of this progress, he pointed to compounding formulas that now appear in USP/NF. Fifteen such formulas have already been published, and four more will appear soon, he said, with dozens more awaiting testing or further consideration. Use of these formulas will help ensure the standardization and quality of pharmacist-prepared products, Allen said. Change is also afoot on campuses. Many pharmacy schools are returning compounding to their curricula, he said.

For Rusho, these changes cannot come soon enough. Compounding has become an "orphan child," he said. The topic is not routinely covered in mainstream pharmacy journals and is neglected by pharmacy schools. As interest in the topic resurfaces, "people who teach compounding are in extremely high demand."

Another sign of progress, cited by Allen, is that some state boards of pharmacy have boosted compounding requirements. For example, Texas now requires that pharmacists complete 20 contact hours of training in sterile product preparation before being permitted to compound.

Among the quality-control options being discussed is creation of a Board of Pharmaceutical Specialties (BPS) certification in compounding. Such discussions are in preliminary stages at this point, said BPS Executive Director Richard J. Bertin, who is not a member of the FDA advisory committee. Certification has become an acknowledged means of validating specialized expertise in other areas of the pharmacy profession. The first challenge, said Bertin, would be for proponents of the certification to document that compounding meets BPS-established criteria for recognition as a specialty.

A stronger role for state boards? At a time when section 127 is off the books and concern over compounding practices is growing, state boards of pharmacy will take center stage. NABP’s Catizone reported there is a great deal of uncertainty among state board officials, as well as among pharmacists, since the appeals court’s ruling. Adding to this uncertainty is the recent change in federal administration. If President Bush were to lean toward an activist stance for FDA, the new commissioner would undoubtedly seek new legislation, Catizone said. If not, the federal government may leave it to the states.

Catizone stressed that for several years the state boards have been working with FDA on the many issues related to compounding. Some of these were at least temporarily resolved by section 127; others were not. States have also been revising their regulations on compounding and creating new ones.

Allen said many state boards are responding well to the challenges related to compounding. He cited Texas, Oklahoma, and New Jersey as among the states that have strengthened their compounding regulations by enacting adherence to USP chapter 1206 or by adopting or adapting the general legal standards covering compounding that NABP recently added to its Model Pharmacy Practice Act.

Juhl and Rusho, however, said that the state boards of pharmacy need to take a greater leadership role.

Juhl pointed to "abhorrent practices" in his own state of Pennsylvania and elsewhere that have not been met with appropriate responses by the state boards of pharmacy. "In fairness to the state boards," he continued, they are hampered by the lack of a universally accepted set of standards. With the exception of the preparation of sterile products, there are no comprehensive practice standards for compounding that state boards can adopt and use for enforcement purposes. Juhl suggested a cooperative effort by pharmacy organizations to develop specific compounding standards for pharmacy practice, to be conducted under the aegis of an organization such as the Joint Commission of Pharmacy Practitioners.

Rusho called for stepping up the training of state inspectors. "FDA," he said, "requires that its people undergo rigorous training before they are sent out to the field." But the federal agency is not equipped to inspect on a broad level, nor should it be, Rusho said. "State boards need to be more aware of what’s going on out there. There are not enough people doing inspections," he said.

Overview of the Appeals Court Ruling 

In Western States Medical Center v. Shalala, a group of pharmacies charged that section 127 of the Food and Drug Administration Modernization Act of 1997 (FDAMA) unfairly limited their right to advertise. A U.S. District Court in Nevada heard the case in 1999. The court’s ruling was appealed by the federal government to the 9th U.S. Circuit Court of Appeals, which issued its ruling on February 6.

The appeals court upheld the lower court’s decision that the advertising restrictions violated the plaintiffs’ right of free speech. (The compounding provisions permitted advertising of general compounding services but did not allow a pharmacy, a pharmacist, or a physician to advertise or promote the compounding of a particular drug, drug class, or drug type.) The lower court based its ruling on a preexisting four-part test for determining the constitutionality of government restrictions on commercial speech. According to that test, the court must determine, for example, whether the speech is misleading or concerns an unlawful activity, whether the government has a substantial interest in regulating such speech, and whether the restriction is more extensive than necessary to achieve the government’s interest. The lower court found that the government had not made a sufficiently strong case on the basis of these criteria. For example, the government had not proved that a lower demand for compounded drugs would enhance the public welfare. The lower court also noted that, even without the advertising restrictions, there would still be sufficient safeguards on compounding to protect the public.

Reversing the District Court’s ruling, the 9th U.S. Circuit Court of Appeals found that the restrictions on advertising and solicitation could not be cleanly separated from section 127. The appeals court stated that, when Congress passed FDAMA, the legislators intended to exempt compounding pharmacists from the Food, Drug, and Cosmetic Act requirements for new drugs only if those practitioners would not be allowed to promote their compounding of specific drugs. Congress would not have passed the section, the court emphasized, had restrictions on advertising not been included.

As a result of the appeals court’s decisions that the provisions restricting advertising are unconstitutional and that the advertising restrictions are not severable from the rest of the compounding provisions, section 127 of FDAMA was rendered invalid.