US Pharm. 2006;11:84-88.

American pharmacists emerged victorious, at least for the time being, in a case involving the right of pharmacists to compound medications without approval by the FDA.1 Whether the result will stand against the doubtless appeals that will follow is anyone's guess. Keep in mind that this decision is but a small part of a firestorm that has been brewing between pharmacists and the FDA for nearly two decades. A bit of history will help emphasize the significance of this controversial decision.

Sometime around the mid- to late 1980s, the FDA embarked on a course to eliminate pharmacy compounding, based on the notions that (1) the compounded drugs were not safe and effective; (2) these newly created products were not being produced in accordance with the FDA's Current Good Manufacturing Practices; and (3) they were being made by individuals operating as manufacturers without a manufacturer's license issued by the FDA.

In the early 1990s, some of the large, brand-name drug manufacturers that belong to the Pharmaceutical Research and Manufacturers of America (PhRMA) lobbied the FDAto eliminate or significantly curtail pharmacy compounding. This organization decided that community pharmacists should not be permitted to compound drugs that are available in commercial preparations. While wearing its public protection hat, the FDA claimed that many retail pharmacies were purchasing large quantities of bulk drug substances and combining those substances into specific drug products before ever receiving any valid prescriptions. The FDA speculated that these pharmacies engaged in this large-scale compounding to circumvent the new drug adulteration and misbranding provisions of the Food, Drug, and Cosmetic Act (FDCA) of 1938 that regulate the manufacture of drugs.

Note the inconsistency of this position: It's OK for pharmacists to compound drug products that are not available in commercial preparations, but it is unlawful to compound a product that is available in commerce. The only purpose this upside down logic serves is to prevent competition with PhRMA drugs that might be prepared by a pharmacist. If it looks like the FDA was being used as a mouthpiece for the big drug companies, don't act surprised. Forget the fact that in the 50 or so years after enactment of the FDCA, pharmacists regularly compounded products without applying to the FDA for a new drug approval (NDA) before selling them to patients. In actuality, during in this period, compounding activities were regulated exclusively by the state governing agencies.

The FDA explained the juxtaposition of its reasoning by claiming unapproved compounds could be a dangerous threat to public health. It also reasoned that the availability of commercial products that had been through a rigorous NDA process could satisfy the needs of the vast majority of patients, and pharmacist compounding was no longer necessary. While all of this might be true, it did not matter to the FDA that some patients might have unique needs that commercial preparations could not address.

Perhaps it was the case that the FDA won against a manufacturer in 1990 that created the momentum to go after compounding pharmacies.2 A court of appeals decision held that manufacturers are not allowed to produce new formulations of approved drugs without going through the NDA process. As a more skeptical alternative, perhaps the PhRMA position on the issue was given more preferential attention in the hallways of the FDA, because in 1992, Congress enacted a law identified as the Prescription Drug User Fee Act (PDUFA).3 This is the law that moved the FDA from being a taxpayer-supported agency to one that is funded primarily by the commercial manufacturers who are subject to its regulations. As might be imagined, PhRMA members are dedicated supporters of PDUFA and fully support restrictions on pharmacist compounding.

In order to implement its newly developed position that very same year, the FDA issued Compliance Policy Guide 7132.16, which was a putative guideline comprising nine factors that could be used by FDA field officers to determine if an individual pharmacy was engaged in illegal manufacturing, as opposed to "normal" compounding. One factor was whether the pharmacy advertises compounding services or solicits from physicians prescriptions requiring compounding for commercially available products. This factor will come back to haunt the FDA.4 That same year, the FDA commenced several enforcement actions against small pharmacies that were taking care of one patient at a time. Of course, the FDA also went after some of the bigger operations that solicited prescriptions from across state lines and compounded large batches of medications in anticipation of receiving prescriptions.

Soon after the guideline went into effect, a group representing pharmacies engaged in widespread compounding activities sued the government to prevent its enforcement. In 1995, a federal court of appeals affirmed a lower court finding that the FDA was well within its authority to use the guidelines in the manner it chose.5 In the court's view, the Compliance Policy Guide does not change the PDUFA law; it simply announces factors for deciding when pharmacies have overstepped the authority to compound.

During this same time period, Congress engaged in hearings to reform other FDA practices. This effort culminated in the Food and Drug Administration Modernization Act of 1997 (FDAMA). This act, among other things, added a new section to the existing FDCA to accommodate the FDA's need to prevent unsafe products from being marketed and, at the same time, to prevent the agency from overreaching into the normal practice of pharmacy. A majority of the factors contained in the Compliance Policy Guide were incorporated into FDAMA. The statute states, in essence, that pharmacist-compounded drugs are exempt from the FDCA's standard drug-approval requirements, as long as the pharmacies refrain from advertising or promoting particular compounded drugs. Again, note the inconsistency: It is OK for a pharmacy to compound if it does not advertise or solicit business for compounded drugs, but it is illegal to engage in those same exact activities if the pharmacy does advertise or solicit business.

Just before the law was scheduled to take effect, another group of pharmacies specializing in compounding services sought an injunction to prevent its enforcement. They claimed that the advertising ban violates the Constitution's free speech guarantee in the First Amendment. Both the district court and the court of appeals found the statute unconstitutional.6 The U.S. Supreme Court decided to hear the FDA's appeal and rendered its decision in 2002. With a narrow majority of five justices agreeing over the vigorous opposition of the four justices in the minority, the Supreme Court agreed with the lower courts that the entire statute is unconstitutional, because it infringes on commercial speech rights.7 Or, at least, that is what most people understood.

This holding flies in the face of the FDA's position that community pharmacists cannot be trusted to safely compound drugs, even those that might be available from other FDA-licensed manufacturers. It certainly questions the FDA's integrity when it claims that the ban on advertising these products is necessary to prevent the public from demanding drugs they do not otherwise need and pressuring doctors who cannot resist prescribing them.

Writing for the majority, (the now retired) Justice Sandra Day O'Connor seemed genuinely perplexed by the FDA's position that it is perfectly fine for compounded drugs that have not undergone safety and efficacy testing to be sold by compounding pharmacies that do not advertise, but not all right if the products or services are advertised. She went on to conclude that there are many other, less intrusive ways of controlling pharmacy compounding than an outright ban on advertising.

To most students of jurisprudence, this should be the end of the story. The FDA cannot suppress all compounding activities by pharmacists, and it cannot decide if a pharmacy is acting like a manufacturer by simply telling patients and physicians that compounding services are available. It seems so simple. The only problem with this reasoning is that the PhRMA and FDA are incapable of believing that the FDA cannot regulate pharmacy compounding, even after the Supreme Court decision. 

At some point between the 2002 Supreme Court decision and 2004, the FDA and PhRMA again tried to figure out a legal way to impede pharmacist compounding and competition with commercially available products manufactured by PhRMA member companies. Instead of accepting the Supreme Court's conclusions, the FDA, with no doubt more than a little help from PhRMA, decided the Supreme Court did not mean what it said when it announced that the whole compounding statute in the FDAMA law is invalid because it violates the U.S. Constitution's ban on restricting commercial speech.

Within just weeks after the Supreme Court's rebuke of the FDA, the administration issued a press release indicating that it would adopt a new compliance policy guide on pharmacy compounding.8 The statement suggested that the FDA will generally continue to defer to state authorities to regulate pharmacy compounding. However, this "new" guidance document will set forth the factors that the FDA will consider when determining whether to pursue enforcement action. The interesting thing about this new policy is that it looks just like the older version, except the soliciting and advertising factors are removed. It was predicted that given the FDA's longstanding interest in limiting pharmacists' ability to compound, the profession should expect more of the same.9

Unfortunately, this prediction came to fruition in 2004 when the FDA threatened new legal actions against some pharmacies that compound drugs. In September of that year, 10 pharmacies in Texas sued the FDA in a federal court for an injunction to prevent the FDA from banning pharmacists from compounding medications without the required FDA manufacturing license and a premarketing endorsement from the FDA. It also sought to bar the FDA from making inspections of pharmacies that engage in compounding. This is a mechanism used by the government to enforce its objectives by intimidation of pharmacies with threats of long and expensive inspections.

In an opinion issued in early September 2006, a federal district judge in Texas ruled that the FDA cannot prevent pharmacies from participating in compounding activities.10 The written opinion indicates that the FDA enforcement agents overstepped the agency's jurisdiction by attempting to inspect the records of pharmacists in good standing with state regulators. The judge stated that legislation passed by Congress exempts compounding pharmacies from such detailed FDA inspections and that it demonstrates Congress' intent to carve out a niche for compounded drugs. The ruling also stated that unless pharmacies disobey local laws or dispense compounded drugs without a doctor's prescription written for an individual patient, the FDA can conduct only "limited" inspections of such items as equipment, materials, and labels.

Analysis
The battle for the right of pharmacists to compound drugs without the approval of the FDA has once again resulted in a "win" for pharmacies. The ruling might not be as broad as some segments of the profession might want. The ruling is fairly specific: Pharmacists may compound drugs when they are doing so for an individual patient with a prescription issued by a authorized prescriber. This is at least the third or fourth time that courts have ruled this way. Is the FDA ever going to get the point? Don't count on it. Not as long as PhRMA pays the bills.

References
1.Medical Center Pharmacy v. Gonzales, Slip Op No MO-04-CV-130 (August 30, 2006), USDC WD Texas, Midland-Odessa, U.S. Dist. Lexis 65427.
2. United States v. Baxter Healthcare, 901 F.2d 1401; 1990 U.S. App. Lexis 7356 (1990, 7th Cir.) Rehearing and Rehearing En Banc Denied, 1990 U.S. App. Lexis 9550.
3. 102-571, 106 Stat. 4491.
4. Thompson v. W. States Med. Ctr., 535 U.S. 357, 360-61, 122 S. Ct. 1497, 152 L. Ed. 2d 563 (2002).
5. Professionals and Patients for Customized Care v. Shalala, 56 F.3d 592; 1995 U.S. App. Lexis 14781 (1995, 12th Cir).
6. Western States Med. Ctr. v. Shalala, 238 F.3d 1090 (2001, 9th Cir).
7. See Note 4, supra.
8. Compliance Policy Guideline 460.200, effective May 29, 2002. Available at:www.fda.gov/ora/
compliance_ref/cpg/cpgdrg/cpg460-200.html. Accessed October 31, 2006.
9. Vivian JC. Compounding and the Supreme Court. US Pharm. 2002;27:07.
10. See Note 2, supra.

To comment on this article, contact editor@uspharmacist.com.