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The Regulation of Pharmaceutical Compounding and the Determination of Need:

Balancing Access and Autonomy with Patient Safety

Rebecca J. Riley

Class of 2004

Paper Due: April 2004

This paper is submitted in satisfaction of the course requirement

and the third-year written work requirement


Pharmaceutical compounding, the creation and dispensing of custom-made medications, is the root of the pharmacy profession often symbolized by the mortar and pestle. The practice involves mixing, measuring, and making safe, elegant pharmaceutical dosage forms. It is an important practice for many patients who cannot take traditional medication such as pediatric patients, hospice patients, and patients with allergies to common dyes and fillers. Compounding has come under increasing regulatory scrutiny over the past ten to fifteen years due to risks involved in the practice. Traditional FDA regulation of compounding practice is impracticable given the time and resources necessary for drug approval. Yet FDA has statutory authority and discretion to regulate the practice in this manner. New regulation, withdrawing compounding from traditional FDA regulation, is necessary to protect patient access to this important practice. Additionally, pharmacists need clear guidelines for appropriate practice and patients need assurances of product safety. This paper examines the history, need, and risks of pharmaceutical compounding, Congressional, state, and FDA attempts to fairly regulate the practice, and proposes guidelines for appropriate regulation by federal and state authorities as well as professional pharmacy organizations.


Pharmaceutical compounding is the creation and dispensing of FDA approved drug products in dosage delivery forms not available from manufacturers. It is the root of the pharmacy profession, symbolized by the mortar and pestle, and historically recognized as the mixing, measuring, and making of safe, elegant pharmaceutical dosage forms.

This vital, important part of pharmacy practice, however, has come under increasing regulatory scrutiny over the past ten to fifteen years. One critic described Congressional legislation regulating the practice as a return to “the “snake oil” era of the late nineteenth century.”[1] Others describe the estimated 3000 pharmacies that compound prescriptions “unnecessary”[2] or “substandard.”[3] In contrast, supporters describe the practice as “an important component of pharmacy practice” that “virtually all practicing pharmacists will be involved with . . . at some point in their career—and most practitioners engage in . . . each week of practice.”[4] Additionally, FDA describes compounding as a “valuable medical service that is an integral part of our modern health care system”[5] and the Supreme Court has recognized that the “Government has an important interest . . . in permitting the continuation of the practice of compounding so that patients with particular needs may obtain medications suited to those needs.”[6]

The FDA and the Supreme Court are correct: pharmaceutical compounding is an important part of healthcare and pharmacy practice. While safety concerns often cited by critics are valid, the safety risks are justified. Many patients, whose needs are not met by manufactured products, rely on the skills of the compounding pharmacist to compound a medication in a dosage form they can utilize. Further, safety risks can be minimized through pharmacist knowledge, training, skill, and care. Additionally, all medical treatment bears a certain level of risk. Patients must decide whether the potential benefits of any treatment justify the potential risks. This exercise of autonomy is central to our belief that each individual should choose what happens to his or her body. Autonomy in healthcare decisions should be allowed in the compounding context, so long as compounding risk is minimized through appropriate regulation of the practice.

Traditional regulation of compounding practice is impracticable given the time and resources necessary for drug approval. Compounded prescriptions are, by definition, patient-specific. Thus the revenues derived from any particular product could not adequately fund the research necessary for FDA approval. Currently, compounding is regulated by both FDA and state authorities. FDA believes that its authority to regulate new drugs provides authority to regulate compounded products. Likewise, states and pharmacy organizations argue that jurisdiction to regulate pharmacy practice gives them regulatory authority over pharmacy compounding. This overlapping and sometimes conflicting regulatory jurisdiction has caused controversy and uncertainty for both regulators and pharmacy professionals.

To address this regulatory uncertainty, Congress passed legislation withdrawing FDA jurisdiction from the regulation of traditional compounding activities.[7] This legislation, however, was struck down by the Supreme Court based on a provision that the Court held was an unconstitutional restriction on free speech.[8] The single unconstitutional provision rendered the entire compounding provision of the statute unconstitutional. Thus the decision returned compounding to the previous regulatory scheme of both federal and state regulation and renewed uncertainty within the profession.

Pharmacists need clear guidelines for appropriate practice and patients need assurances of product safety. Regulatory schemes that take into consideration the value of access and autonomy are currently in place for both dietary supplements and off-label prescribing. Similar considerations should apply to the regulation of pharmaceutical compounding given the drastic consequences that would result from strict, traditional FDA regulation.

Patient need must be determined by a practitioner and patient, working together with a pharmacist. Need should be defined in a general manner, not as an absolute. Improved therapy, reduced side-effects, and increased patient compliance are all legitimate reasons for prescribing a traditional medication and should similarly justify prescribing a compounded product.

Most regulation over traditional compounding practice should rest with states and professional pharmacy organizations. FDA should maintain regulatory authority over manufacturing. Appropriate differentiation of manufacturing from compounding is therefore necessary for this regulatory scheme. Regulatory efforts should focus on the practitioner/patient/pharmacist triad relationship rather than mere volume to differentiate the practices. The triad protects patients and limits compounding practice to those circumstances in which it is necessary. This limitation is important given the risks involved in the practice.

This paper proposes regulatory tools such as an advertising restriction limited only to patient advertising, commercial-scale equipment limitations, anticipatory compounding restrictions, and wholesale distribution bans. These proposals focus on maintaining the practitioner/patient/pharmacist triad without hindering legitimate compounding practice. In contrast, this paper argues that volume and percent-volume limits are inappropriate. Volume and percent volume limitations undermine the legitimate interests of regulators of safe compounded products because they limit those pharmacists with appropriate knowledge, skills, and training from compounding large percentages of the prescriptions they dispense. Further, volume is not a determinative factor. Some compounders specialize in compounding and therefore dispense a large number or large percentage of compounded medications. Likewise, some manufacturers distribute smaller volumes of medications but ignore practitioner/patient/pharmacist determinations of need. This practice, though small in volume, is not legitimate compounding practice.

Additional FDA regulation might be appropriate to ensure safety without significantly hindering legitimate compounding practice. These regulations could focus on products demonstrably difficult to compound, labeling requirements, good manufacturing practices for sterile compounding, and adverse event reporting.

States and professional pharmacy organizations, if given primary regulatory authority, must work together to protect patient safety in the regulation of pharmacy compounding. States could use certification or training requirements, randomized testing and inspections, and specific compounding guidelines to protect patient safety without substantially hindering access or autonomy.

Part I introduces the practice of pharmacy compounding, its history, uses, and risks. Part II examines traditional regulation of compounding practice, the FDA’s statutory authority, Congress’s attempt to protect the practice, and the subsequent Supreme Court decision invalidating the Congressional regulatory scheme. Part III discusses the current state of compounding regulation, FDA guidance documents, enforcement actions, state and professional organization initiatives, and recent Congressional debate regarding appropriate regulation. Part IV proposes guidelines for appropriate regulation of compounding practice by federal and state authorities as well as professional pharmacy organizations.

I. Background

A. A Brief History of Compounding in Pharmacy Practice

Pharmacy compounding has been a central part of the practice of pharmacy for over 4000 years.[9] One source asserts “the art of selecting, extracting, preparing and compounding medicines from vegetable, animal, and mineral substances, is an acquirement that must have been almost as ancient as man himself on earth.”[10] Some of the oldest known prescription records are written in “hieratic writing” of ancient Egypt.[11] A prescription on a stone tablet instructs a pharmacist to prepare a vapor for inhalation.[12] There is also a document known as the Ebers Papyrus that translates as a sort of “recipe book” for compounded medications.[13] It is thought to date back to 1552 B.C.[14]

The mortar and pestle, a tool used to grind substances used in compounding, and a commonly recognized symbol of the pharmacy profession, has been used by members of many ancient civilizations. The first known mortar and pestle can be traced back to the ancient Egyptians.[15] Ancient Romans used the mortar and pestle to compound medications using earthenware mortars and wood pestles.[16] Pharmacists of the seventeenth century used metallic mortars inscribed with dates and names to indicate ownership.[17] This ancient tool is still used in compounding practice today.

The first pharmacopoeia was published in the United States in 1820.[18] Up until the First World War, pharmacists in the United States compounded most prescriptions.[19] In the 1920’s a “broad knowledge of compounding” was still necessary for eighty-percent of prescriptions dispensed.[20] After World War II, compounding practice fell to levels below manufactured prescriptions.[21] The practice declined steadily until the 1980s when it experienced a resurgence, during which compounding companies such as the Professional Compounding Centers of America (“PCCA”) and supply companies such as Gallipot, Paddock Labs, and Spectrum grew.[22]

Today, compounding is defined by a professional pharmacy organization in the following manner:

“Compounding” means the preparation of Components into a Drug product (i) as the result of a Practitioner‘s Prescription Drug Order or initiative based on the Practitioner/patient/Pharmacist relationship in the course of professional practice, or (ii) for the purpose of, or as an incident to, research, teaching, or chemical analysis and not for sale or Dispensing. Compounding includes the preparation of Drugs or Devices in anticipation of receiving Prescription Drug Orders based on routine, regularly observed prescribing patterns.[23]

This definition encompasses the currently accepted vision of compounding as a practice centered on the practitioner/patient/pharmacist triad. Each part of the triad plays an important role in the determination of patient need for a compounded product. This need defines the scope and function of pharmacy compounding practice today.

B. The Need and Utilization of Pharmaceutical Compounding

The need and utilization of pharmaceutical compounding is derivative of the suitability and availability of proprietary medications for patient use. Compounding is necessary only when manufacturers’ products are unsuitable for a particular patient. There is currently limited data regarding actual utilization of the practice. Estimates of current compounding volume range from one-percent to-ten percent of all prescriptions dispensed.[24]

There are many patient populations that require compounded prescriptions. For example, pediatric patients often need smaller doses of medications that are not available from manufacturers. Some sources estimate that up to forty-percent of all pediatric prescriptions must be compounded.[25] In addition, traditional routes of medication administration can be difficult for small children. Pediatric patients who cannot swallow pills may need a liquid,[26] lozenges made from a dissolvable base,[27] or a rectal suppository[28] to deliver the drug product to their systems.

Hospice patients often have a legitimate need for a compounded product. Many patients in hospice care no longer have traditional routes of medication administration available. They sometimes cannot swallow pills, are nauseous and cannot take any oral medication, or have veins that have been overused. A compounding pharmacist can make alternative forms of medication such as a topical gel containing medication that is absorbed directly into the bloodstream,[29] a suppository,[30] or a liquid medication.[31] Additionally, appropriate doses of pain medications required to alleviate the suffering of those patients in hospice care are not always available from manufacturers.[32] A compounding pharmacist can compound medications in appropriate dosages for this use.

Dermatologists often prescribe compounded products due to the importance of the medication base and the unavailability of certain medication combinations. A compounding pharmacist can compound drug products or combinations or drug products in ointments, creams, gels, and pastes based on specific patient needs.[33]

Recent reports regarding the safety of traditional hormone replacement therapy for menopausal women have led doctors and patients to look to pharmacy compounding as a source of a potentially safer product. Compounding pharmacists, working together with patients and practitioners, can create a bio-identical hormone combination that contains hormone levels equivalent to those previously available in a woman’s body.[34] Compounded hormone replacement therapy is sometimes also warranted for other uses such as adolescents, young women, and male patients.[35] Some doctors and patients believe this formulation is more natural and consequently safer based on the unique formulation for each patient and the drug structure of the hormones used.[36] A compounding pharmacist can create an individualized combination of estrogens including estradiol, estrone, and estriol combined with progesterone and an androgen such as DHEA or testosterone.[37] The combination can be topically applied as needed to treat symptoms.[38] Manufacturers generally will not create bio-identical hormone products since the chemical structure is not unique and thus cannot be patented.[39] Thus, compounding is currently the only source for some products.[40]

Hospitals compound routinely. Total parenteral nutrition (“TPN”) is the mixture of amino acids, dextrose, fats, vitamins and minerals administered to patients unable to consume enough food to support their bodies.[41] Compounding of TPNs is necessary because doctors prescribe specific combinations of components based on body weight and patient need.[42] In addition, these combinations must be compounded because proteins and sugars break down rapidly when placed together and thus suited for manufacture.[43] Intravenous therapy (“IV”) is also sometimes compounded to administer the appropriate amount of drug or drug combinations at the appropriate rate.[44] Specificity and stability are again factors necessitating use of a compounded product. Small-volume injectables must also be compounded.[45] These injections are compounded for injection directly to an organ, lesion, muscle, or nerve, or to avoid the first-pass effect of the liver.[46] Finally, cytotoxic drugs used in chemotherapy must often be compounded for patient use.[47] Medications used in chemotherapy are generally extremely toxic and must be administered at a dose high enough to have effect but low enough to minimize toxicity.[48] The appropriate level of administration is determined by patient weight, the type of tumor, the location of the tumor, and other factors.[49] This specificity requires compounding by a pharmacist.

Some patients have allergies to certain dyes, preservatives, or fillers commonly used in medications. A compounding pharmacist can create capsules that use alternate fillers, or are dye and preservative free for this patient. Finally, some proprietary medications are not available due to manufacturing shortages. This problem can be solved by a compounding pharmacist who can compound the medication until the shortage ends.

C. Safety Risks Involved in Compounding

Although compounding is a vital and necessary practice, there are potentially significant risks presented when a pharmacist compounds an individualized prescription. The FDA is aware of over two-hundred adverse events between the years of 1990 and 2003.[50] Seventy-one different compounded products were involved in these events.[51] While this number is actually quite low given the length of time and the number of prescriptions compounded on a daily basis, these safety risks cannot be ignored. Compounding risks include bacterial or fungal contamination, calculation errors, unsafe combinations of products, flawed delivery systems, and stability problems.

An unsterile compounded prescription product is a serious problem that can result in injury and even death. Although serious contamination of compounded products is rare, the consequences have been tragic. In Pittsburgh, bacterial contamination of compounded indomethacin eye drops caused infections in twelve patients and the loss of an eye in two patients.[52] In Nebraska, a hospital compounded a contaminated cardioplegic solution that caused the deaths of four patients.[53] More recently, three patients in California died from bacterial meningitis caused by a compounded betamethasone injection and in North Carolina, one woman died and three others became ill with fungal meningitis from a contaminated compounded methylprednisolone injection.[54]

In addition, errors made in both simple and complex compounding calculations have the potential to create significant safety problems. Pharmaceutical calculations are part of most pharmacy practice, required for both compounding and more complex dosing of proprietary medications. Many pharmacy schools teach an entire course on pharmaceutical calculations.[55] But with calculation comes the risk of human error. The misplacement of a single decimal point can have drastic consequences, including death. According to one report, a pharmacist miscalculated the appropriate amount of clonidine for a pediatric patient, resulting in a toxic overdose.[56] Clonidine, an anti-seizure medication sometimes used to treat attention deficit disorder in children, has a narrow therapeutic index, meaning dosages must be precisely calculated in order to provide effective treatment while avoiding toxicity.[57] In this case, the pharmacist created a liquid clonidine dosage form labeled .05 mg/5 mL.[58] When calculating the appropriate amount of drug substance, the pharmacist substituted milligrams for micrograms, a simple error, but one with dramatic consequences.[59] One milligram is equivalent to 1000 micrograms. The patient received a dosage 1000 times stronger than what was appropriate.[60]

Other types of calculations are necessary to safely compound medications. Many calculations involve scale conversions from the English system to metric equivalents.[61] Compounding also often requires expanding or reducing formulas and mixing products of different strengths.[62] Finally, compounding pharmacists must consider more complex characteristics of products such as the osmolarity of a solution[63] or the volume of liquid necessary to create a particular pH.[64] Although calculations are necessary to the appropriate dosing of compounded medications, these calculations create a risk of error.

Some combinations of drugs can cause serious medical problems. For example, fenteramine and phenfluramine, prescribed together for weight loss (“fen-phen”), cause significant heart damage.[65] Similarly, Baycol, an anti-cholesterol statin, was found to cause liver problems when prescribed in combination with gemfibrozil, another cholesterol-lowering medication.[66] Compounding pharmacists sometimes compound combination products to increase patient compliance. This practice does have many benefits as lack of patient compliance causes a large percentage of treatment failures, but the combinations of drugs can themselves be dangerous.

For example, some pharmacists compounded fen-phen before the combination was pulled off of the market by the FDA.[67] While fen-phen combinations were prescribed regularly by practitioners, they were generally prescribed as two prescription products to be taken together. Compounded products were likely utilized to increase compliance and ease of use. While the combination of the medications in their compounded form were no more dangerous than when prescribed separately, the compounding of a combination product increased the likelihood of patient use of the product in combination. The resulting injuries illustrate how certain combinations of drugs can cause serious medical problems.

Some compounded products pose risks due to the technical nature of their delivery system. For example, compounding a sustained-release product requires a high level of knowledge and skill.[68] The danger of a poorly-compounded sustained-release product is high because error could result in the entire dose of drug entering the patient’s system at once, causing toxicity.[69] Alternatively, but potentially equally as dangerous, the dose may never reach the patient’s system.[70] In addition, compounding pharmacists can create transdermal gels or patches for consistent drug delivery through the skin. Yet the consistent control of drug delivery from these products, much like sustained release capsules or tablets, is dependent on the sophistication and technology of the compounded product.[71] The risks inherent in a poorly-compounded product are identical to those inherent in sustained-release products: release that is either too fast, too slow, or product that is never adequately absorbed.

Finally, the effectiveness of compounded drug products can vary depending on the stability of the drug product in the new matrix. A drug product can degrade and be rendered ineffective or even change and become toxic.[72] For example, some drug products are only stable within a small pH range.[73] This can be particular problematic when pharmacists flavor antibiotic liquids. Flavorings can change the pH of the liquid which can then cause the breakdown of the active ingredient.[74] Other factors such as heat, light, oxygen, carbon dioxide, and humidity can also affect stability.[75]

The dangers involved in compounding are significant. However, these risks are justified given the difficulty of providing adequate medical care to patient populations whose needs are not met by proprietary products. Regulation is the most appropriate way to decrease safety risks involved in compounding. Appropriate regulation should focus on the practitioner/patient/triad which provides a layer of protection to patient safety while also recognizing the importance of access to compounding practice for patient health.

II. Regulation

  1. Traditional Regulation of Pharmaceutical Compounding

Traditionally, state boards of pharmacy regulated the practice of pharmacy compounding through their general jurisdiction to regulate pharmacy practice.[76] After Congress enacted the Food, Drug and Cosmetic Act in 1938, FDA did not regulate compounded medications as new drugs. The FDA considered compounding a part of pharmacy practice, which was not a part of their regulatory jurisdiction. The regulation of pharmaceutical compounding, consequently, was left in the hands of the states in their capacity to license and regulate professional practices.

FDA’s deference to state regulation of pharmacy compounding continued for over fifty years. In 1992, however, an FDA inspector reinterpreted the FDA’s regulatory authority over new drugs to include jurisdiction over compounded drugs.[77] The inspector sent a letter to a Georgia pharmacist stating: “In simple terms, the practice of pharmacy does not include the compounding or dispensing of an unapproved new drug. Stating it another way, a drug product compounded in a pharmacy without FDA’s approval is an unapproved new drug subject to all provisions” of the Food, Drug and Cosmetic Act. [78]

This interpretation shocked the pharmacy community. Pharmacy compounding was the root of the pharmacy profession. It had been an integral part of pharmacy practice for over four-thousand years. The mortar and pestle used in compounding was the most easily recognizable symbol of the profession.

Further, the consequences of a classification of compounded medications as “new drugs” under the FDCA would have been the virtual end of compounding practice. The FDA new drug approval process was not created with the specificity and small market of compounded prescriptions in mind. Rather, the process was created for mass manufacturers who had both a definitive product and the financial resources necessary to support a single drug through the long and costly drug approval process. Compounding pharmacists, in contrast, created a unique product suitable for individual patients. This type of product could not be anticipated and its potential revenue would not be sufficient to support it through drug approval. Further, no individual pharmacist would have enough incentive to put a product through FDA approval since no one pharmacist could realistically capture an entire market for an individualized compound. The compounding pharmacist produces a product that is not available from manufacturers precisely because it is not regularly needed. It is neither economically, nor practically feasible for manufacturers to pursue FDA approval for this type of product. Likewise, it is not economically or practically feasible for a pharmacist to obtain FDA approval for a compounded drug which would only be compounded for a small number of patients.

The FDA’s reinterpretation of its statutory authority triggered panic amongst pharmacists, especially those pharmacists who engaged in compounding as a primary part of their business. The Atlanta warning letter evidenced a shifting view of compounding practice within the FDA. Even though newly promulgated enforcement guidelines insisted the agency would not go after traditional compounding, it was clear the FDA viewed some compounding practices as non-traditional and thus within their statutory authority.[79]

One of FDA’s primary concerns was that some pharmacist’s compounding activities more closely resembled those of a manufacturer, and thus the regulatory exemptions granted to compounders were not as necessary or justifiable. A manufacturer produces quantities of products large enough to justify the research and expenditures necessary for traditional drug approval and substantial enough to justify imposition of good manufacturing practices.

One pharmacy that drew FDA attention was Baxter Healthcare Corporation. Baxter diluted and reconstituted large quantities of chemotherapeutic products and antibiotics and then shipped these products to hospitals for use.[80] While many advocates of pharmaceutical compounding argue that reconstitution is not compounding at all, the FDA associated this practice with compounding and the risks of high quantity compounding practices. In a suit brought by Baxter, the FDA argued that Baxter violated the adulteration and misbranding provisions of the FDCA and also failed to meet the good manufacturing practice requirements.[81] To be in violation of these provisions, the court would have to decide that the reconstituted products were “new drugs” subject to these FDCA provisions.[82] Yet the products at issue were manufactured by pharmaceutical companies in a form that had to be reconstituted or diluted for use in a hospital.[83] Baxter argued that its compounding facilities were equivalent to those in hospital admixture programs and likewise not subject to the new drug requirements of the FDCA.[84] The court held that the FDA did not approve compounds manufactured by Baxter when it approved the active ingredients in them and that the company was subject to the requirements of the new drug approval process.[85] This decision essentially reaffirmed that FDA’s interpretation that compounding could be regulated under the traditional new drug authority was valid.

In response to the uncertainty regarding the regulation of pharmacy compounding, the FDA issued a Compliance Policy Guide for the “Manufacture, Distribution, and Promotion of Adulterated, Misbranded, or Unapproved New Drugs for Human Use by State-Licensed Pharmacies.”[86] This policy guide purported to reflect “longstanding FDA policy that has been articulated in related CPGs [compliance policy guides], warning letters, and federal court decisions.”[87] The guide first recognized traditional compounding practice as a legitimate part of pharmacy practice.[88] The guide then went on to describe in broad language the type of compounding the FDA felt was illegitimate. This included compounding in anticipation of a prescription of anything other than “very limited quantities” and dispensing to third-parties for resale to individual patients.[89] The guide also laid out factors, not meant to be exclusive, that the FDA would consider in determining the legitimacy of a compounding practice.[90] These factors included advertising specific drug products or classes of drugs, compounding “inordinate amounts” of products that are essentially commercially available medications, using commercial scale manufacturing equipment, and distributing “inordinate amounts” of compounded products out of state.[91] Finally, the guide asserted that FDA may exercise enforcement discretion for “significant violations” of new drug, adulteration, and misbranding provisions, thereby implying that FDA believed compounding could generally be regulated under those statutory provisions.[92]

Unfortunately, this compliance guide did little to clarify the FDA’s position on the appropriate use of pharmaceutical compounding. Terms like “inordinate amounts,” “very limited quantities,” and “significant violations” remained undefined and FDA maintained full discretion in choosing to prosecute what it believed to be illegitimate compounding practice. Pharmacists had little guidance regarding what compounding activities were legitimate and what compounding activities would subject them to FDA regulatory authority.

B. FDA’s Statutory Authority

The FDA’s position on pharmacy compounding rested on a reinterpretation of the Federal Food, Drug, and Cosmetic Act (“FDCA”), the FDA’s primary source of regulatory authority. The FDCA was originally passed by Congress in response to tragedy caused by a manufactured product. In 1938, a company sought to produce its new antibiotic in liquid form.[93] A scientist working for that company found that a solvent known as diethylene-glycol effectively dissolved the drug and had a mild, sweet taste.[94] The company produced the new drug, known as Elixir Sulfanilamide, and shipped it across the country.[95] What the company did not realize is that the solvent was extremely toxic. Diethylene-glycol is today better known as anti-freeze. Many patients who ingested the liquid died immediately.[96] Had the company done safety testing prior to marketing, this tragedy could have been avoided. In response, Congress passed the Federal Food, Drug, and Cosmetic Act (“FDCA”) to protect the public from unsafe prescription drugs.[97]

Subsequent amendments to the Act were also triggered by tragedy. In 1960, a company presented an application for a new sedative and morning-sickness medication called “thalidomide.”[98] The company had no data on how the drug might affect pregnant women.[99] Fortunately, a cautious FDA official refused to approve the drug for use in the United States because it was soon discovered that the drug caused serious birth defects.[100] Thousands of babies were born in Europe with a condition described as “seal limbs.”[101] The babies did not have arms or legs but rather had hands and feet attached to the trunk of the body. In response, Congress enacted the Kefauver-Harris amendments, which required more extensive safety testing based on valid scientific data.[102]

Likewise, safety concerns, described supra , triggered attention to the regulation of compounded drug products. Rather than wait for Congress to respond, however, the FDA chose to reinterpret its regulatory authority. Under the Federal Food, Drug, and Cosmetic Act, the FDA has statutory authority to regulate new drugs.[103] The definition of “new drug” includes approved drug substances in new formulations, two approved drugs in combination, approved combinations in new proportions, new doses, new uses, and new methods of administration.[104] Compounded products technically meet this definition. Pharmacists compound drugs that are FDA approved, but create new methods of administration, formulations, dosage sizes, and new combinations.

Once a drug falls under the statutory definition of “new drug” it must meet other requirements under the FDCA. The statute explicitly prohibits adulteration and misbranding of drug products.[105] A drug is adulterated if it does not meet standards for strength, purity, or is otherwise contaminated.[106] A drug is considered misbranded if its labeling is false or misleading.[107] The misbranding provisions also require that the drug product bear adequate directions for use and adequate warnings.[108] The statutory definitions did not contain exemptions for compounded prescription products. Under a strict interpretation of the law, consequently, compounded products could be regulated like manufactured products.[109]

Thus based on the text of the statute, FDA’s interpretation of its regulatory authority was legitimate. Recognizing a gap in the law and the resultant potential for the FDA to use its statutory authorization and enforcement discretion to curtail legitimate pharmacy compounding, members of Congress sought to introduce new legislation to protect the practice. In 1995, Congressman Bill Brewster, a pharmacist from Oklahoma, introduced the “Pharmacy Compounding Preservation Act of 1994.”[110] The bill was referred to committee but never passed. In 1997, Congressman Richard Burr introduced the “Pharmacy Compounding Act” but it too was referred to committee and never passed.[111] Finally, in 1997, Congress passed the Food and Drug Administration Modernization Act (“FDAMA”), with a provision meant to regulate and protect the practice of pharmaceutical compounding.[112]

C. The Compounding Provision of the FDAMA

When Congress passed the 1997 FDA Modernization Act, it included a provision on pharmacy compounding. This compounding provision made broad statutory exemptions to the FDCA for compounded products. The Act exempted compounded products from the new drug provisions of the FDCA, thereby creating a compounding exception to the lengthy and costly drug-approval process.[113] The Act also created an exemption for pharmacy compounding excluding it from the misbranding provisions which required labeling and adequate directions for use as well as the adulteration requirement and good manufacturing practices.[114] These exemptions guaranteed most compounding pharmacists that their practice would not be subject to the extensive new drug regulations. The exemptions, however, were qualified by requirements intended to differentiate traditional compounding from manufacturing under the guise of compounding and to exclude the latter from the statute’s benefits.

First, the act defined “compounded drug” very specifically.[115] The statute limited compounding to bulk substances that comply with existing monographs in either the United States Pharmacopoeia (“USP”) or the National Formulary (“NF”).[116] The product was also required to comply with the USP chapter on pharmacy compounding.[117] If a drug product was not defined by these sources, it had to be either approved by the secretary or listed by the secretary through the regulations required by the statute.[118] Other ingredients in the compounded product had to comply with either the USP or NF monograph if available and the USP chapter on pharmacy compounding.[119]

The statute also prohibited compounding drugs that have been removed from the market due to safety or efficacy concerns.[120] In addition, it prohibited compounding what is “essentially” the copy of a commercially available product “regularly or in inordinate amounts.”[121] The provisions of the statute also gave the secretary power to prohibit compounding of drugs that present “demonstrable difficulties for compounding that reasonably demonstrate an adverse effect on the safety or effectiveness” of the drug product.[122]

After narrowly designating what compounded drugs were, the statute laid out requirements for the states. The states were required to either enter into a memorandum of understanding (“MOU”) with the FDA to address the distribution of “inordinate amounts of compounded drug products interstate” and provide state investigation for complaints derived from these products or have pharmacies in that state limited to interstate distribution of only five percent of prescriptions dispensed by a pharmacy.[123]

The most contentious portion of the statute was the advertising provision. Congress passed a provision that prohibited the pharmacist from advertising or promoting compounding for any “drug, drug class, or drug type.”[124] The statute did permit pharmacy advertising of compounding services.[125] This limitation severely hindered pharmacists who hoped to educate both doctors and patients about the types of services they could provide. Generalized promotion of compounding services was considered inadequate because most doctors did not know about or understand the types of products that could be compounded. Compounding pharmacists, therefore, had traditionally used advertising to help educate this population thereby increasing patient access to compounded medications when necessary.

Finally, the statute created a compounding advisory committee.[126] This committee was to promulgate regulations required by the statute such as those that identify drug substances that may not be used in compounding.[127] The statutory language also required promulgation of regulations “necessary to protect the public health.”[128]

The compounding provision of the Modernization Act represented an attempt by Congress to balance protection of public health with protection of patient access to legitimate pharmacy compounding practice. Although the statute did explicitly exempt compounding from the FDCA new drug, adulteration, and misbranding provisions, it maintained a fair amount of FDA jurisdiction over the practice. The statutory definitions gave the FDA jurisdiction to prohibit both specific drug products and specific types of compounded products.[129] It also required states to either enter into MOUs with the FDA regarding interstate distribution or face strict limitations on the practice.[130] Notably, the MOU itself defined “inordinate amounts” as either distribution greater than twenty percent of the total number of prescriptions dispensed or distributed or distribution of one particular drug product at a level greater than five percent of the total prescriptions.[131] Finally, the statute gave the FDA power to promulgate, through the advisory committee, regulations “necessary to protect the public health” thus giving FDA final authority to regulate compounding if deemed necessary.[132]

Despite considerable FDA jurisdiction over the practice, most compounding pharmacists viewed the statute as a victory. The statute formally recognized compounding practice and provided statutory guidelines for its regulation, a significant improvement from the previous regulatory scheme that relied on the good-will and enforcement discretion of the FDA. The statute also gave regulatory control back to the states for most legitimate compounding practice. This essentially gave more regulatory influence to pharmacy professionals and professional organizations who generally had more input in state regulation of professional practice.

Pharmacists, however, did have concerns regarding what seemed to be arbitrary limitations on legitimate practices. First, the compounding advisory committee had considerable discretion to ban a wide range of products and dosage delivery forms. Second, the memorandum of understanding contained language that severely restricted interstate distribution of compounding, but unless states signed the agreement, distribution would be more severely limited. Pharmacists were also concerned with the extremely vague language found in both the statute and the compliance guidelines promulgated by FDA.

Finally, and most importantly, pharmacists believed that the advertising provision of the Act violated the First Amendment of the United States Constitution. Based upon that belief, a group of pharmacists brought a suit against the Secretary of Health and Human Services and the Acting Commissioner of the FDA, challenging the constitutionality of the advertising provision of Section 503A of the FDAMA.

D. The Western States Decision

Frustrated by limitations imposed by the advertising provisions of the statute, pharmacists challenged the compounding provision of the FDAMA in federal district court claiming the provision violated the First Amendment of the United States Constitution.[133] The advertising provision challenged in Western States v. Shalala made it impermissible for pharmacists to advertise or promote specific drugs, drug classes, or drug types.[134] The provision did permit advertising of compounding services.[135] The District Court applied the Central Hudson test, the current Supreme Court test for commercial speech.[136] Under Central Hudson , a regulation may permissibly restrict advertising so long as: (1) the advertisement is lawful and not misleading; (2) the government interest is substantial; (3) the regulation advances the asserted government interest; and (4) the regulation is no more extensive than necessary to serve that government interest.[137] The District Court held that the advertisement was not misleading but that the government interest as alleged was not substantial, the statute did not directly advance the government interest, and the regulation was more extensive than necessary.[138] The court consequently enjoined the provision of the statute that restricted advertising.[139] The District Court, however, did not hold that the entire compounding provision of the statute was unconstitutional.[140] Instead the court decided the advertising provision was severable from the remaining parts of the statute.[141]

On appeal, the Ninth Circuit affirmed the lower court’s finding that the advertising provision of the statute was unconstitutional.[142] The Circuit Court, however, reversed the lower court’s finding of severability and consequently struck down the entire compounding provision of the statute.[143]

After granting certiorari, the Supreme Court reviewed the Ninth Circuit decision and affirmed.[144] Unlike the District Court, the majority held that the government interests in protecting the drug approval process and protecting access to compounded medications were substantial.[145] However, the Court still held that the provision was unconstitutional because the statute was not narrowly tailored to serve this interest.[146] The parties did not appeal the severability of the provision and thus the compounding provision of the statute in it its entirety was held unconstitutional.[147]

The opinion strongly supported the continuing protection of pharmacy compounding. The majority outlined two important government interest involved in the regulation of pharmaceutical compounding: (1) the interest in preserving the “effectiveness and integrity” of the FDA’s drug approval process; and (2) the interest in protecting the practice of pharmacy compounding so that patients’ unique needs could be met.[148] In recognizing these government interests as substantial, the Court made a strong statement in support of compounding practice.

The majority opinion also outlined a number of non-speech based alternatives to justify the unconstitutionality of the advertising provision stating “we have made clear that if the Government could achieve its interests in a manner that does not restrict speech, or that restricts less speech, the Government must do so.”[149] These alternatives included bans on commercial-scale equipment, limitations on anticipatory compounding, prohibitions of wholesale distribution, and strict volume-based restrictions.[150]

The dissent in Western States argued that the majority “seriously undervalues” the importance of protecting public health and that the advertising restriction did directly advance this government interest.[151] The dissent emphasized that, in addition to compounding under the guise of manufacturing, the statute should exclude from protection compounded drugs that are not “clearly” needed by patients;[152] when the drug is a “convenience, not a necessity.”[153]

Further, the dissent countered the majority’s regulatory alternatives arguing that the alternatives merely restricted the volume of compounding which is not an accurate differentiator of compounding from manufacturing.[154] The dissent argued that the focus should be on the practitioner/patient/pharmacist triad and the determination of patient need.[155] Absolute need was central to the dissent’s formulation of the appropriate use of compounding.

Finally, the dissent recognized that the majority applied an excessively strict version of the commercial speech doctrine. Justice Breyer argued that this overly rigid commercial speech doctrine “will transform what ought to be a legislative or regulatory decision about the best way to protect the health and safety of the American public into a constitutional decision prohibiting the legislature from enacting necessary protections.”[156]

This decision was both a victory and a loss to the pharmacy profession. The majority opinion strongly supported the continued protection of compounding practice. Further, the decision gave pharmacists the right to advertise compounded products as well as compounding services, the aim of the initial challenge to the statute. But the Court struck down the entire compounding provision of the Modernization Act, a provision that was primarily a victory for compounding pharmacists because it withdrew regulation of the practice from FDA jurisdiction. It returned compounding regulation to a state of uncertainty and gave FDA renewed discretion to regulate compounding under statutory provisions initially designed for the regulation of new drugs.

III. Compounding Regulation after the Western States Decision

A. FDA Authority

After the Western States decision, the regulation of pharmacy compounding returned to a state of uncertainty. The FDA regained the power to enforce the new drug, adulteration, and misbranding provisions against compounding pharmacists and the point at which they would do so was again unclear. The FDA was forced to terminate its compounding advisory committee, a group that was making progress in the appropriate regulation of the practice.[157] The FDA then issued a set of Compliance Guidelines to inform pharmacists of the enforcement policy the agency would follow.[158]

The compliance guidelines maintain that the FDA will continue to defer to state authorities for “less significant violations” but would consider serious enforcement action when the “scope and nature” of compounding activities raise concerns ordinarily associated with drug manufacturing.[159] The FDA then listed a number of factors it will consider in determining whether to initiate action. Those factors include compounding in anticipation anything except in “very limited quantities” based on amounts typically compounded after receiving valid prescriptions, compounding drugs withdrawn from the market, compounding from bulk drugs not approved by FDA, using commercial scale manufacturing or testing equipment, compounding for third parties, making essential copies of proprietary products, and other factors relating to the receipt and storage of drug substances and components.[160] The FDA maintained that the list is not exhaustive.[161]

The guidance document provides little certainty to compounding pharmacists. It is not binding on FDA, but rather merely reflects current agency enforcement policy. Recent enforcement actions by FDA illustrate the reach of FDA’s current jurisdiction over compounding regulation as well as its interpretation of its role in regulation.

In December 2003, FDA sent a warning letter to a pharmacy compounding in anticipation of receiving prescriptions and shipping the product to customers without reconciling the shipment with a prescription.[162] Based on these two factors, the FDA determined that the pharmacy was actually operating as a manufacturer and as such was required to comply with laws for biologics.[163] This enforcement action focuses on the lack of the practitioner/patient/pharmacist triad that defines compounding. This pharmacist was both compounding in anticipation of prescriptions and shipping product without making sure a prescription was on file thus minimizing or ignoring the practitioner’s role in determining appropriate need and utilization of compounded products.

Fentanyl lollipops, a candy-like form of a narcotic analgesic, have been the subject of two recent enforcement actions. In October 2003, FDA sent a warning letter to a pharmacy that compounded combination fentanyl/naloxone/midazolam and fentanyl/naloxone lollipops without appropriate packaging or labeling.[164] In May 2003, FDA sent a warning to a New Hampshire pharmacy that compounded fentanyl lollipops in dosages only slightly different from those commercially available.[165] FDA asserted that the lollipops were not adequately packaged or labeled and that the product was essentially a copy of a proprietary product and therefore should not be compounded.[166] These products are highly toxic if ingested by children, thus requiring, in the view of FDA, the extra precautions for packaging and labeling.[167] These enforcement actions illustrate FDA’s definition of essential copies of commercial products as well as its view that it can enforce labeling and packaging requirements in some instances.

In September 2002, FDA sent a warning letter to a pharmacy that produced an albuterol solution contaminated with bacteria.[168] The FDA determined that this pharmacy was manufacturing rather than compounding due to the following findings: (1) use of commercial scale equipment; (2) compounding in anticipation of prescriptions; and (3) making large quantities of drugs for shipment across the state and out-of-state.[169] This enforcement action illustrates FDA’s quantity-based determinations of manufacturing.

FDA’s enforcement activities do reflect recognition of the importance of the triad-relationship in compounding. But some enforcement has extended to requirements beyond those described in the compliance guidelines. Labeling and packaging requirements are traditionally regulated under the misbranding provisions of the FDCA. The labeling and packaging enforcement action represents a return to a traditional interpretation of FDA jurisdiction to that which encompasses traditional new drug provisions such as adulteration and misbranding, rather than a regulatory scheme that recognizes traditional compounding as a practice exempt from these requirements.

B. State Board Initiatives

State legislatures and state boards of pharmacy have instituted a number of new laws and regulations for pharmacy compounding practice. The Missouri State Board of Pharmacy has taken one of the most aggressive approaches by mandating randomized testing of compounded products to determine potency and sterility, when appropriate.[170] This testing program will focus on the potency of both sterile and non-sterile products and the sterility and pyrogenicity of sterile compounds.[171] Missouri also recently amended its compounding regulations to require better recordkeeping, drug monitoring systems, and adverse reaction reports.[172] California has also taken a relatively proactive approach, requiring pharmacies that compound injectable sterile drug products to obtain a specialty license from the state board unless the pharmacy is already accredited by the Joint Commission on Accreditation of Healthcare Organizations (“JCAHO”), the Accreditation Commission on Healthcare, or Community Health Accreditation Program.[173] This requirement applies both to in-state pharmacies and out-of-state pharmacies that ship compounded sterile products into California.[174] Sterile compounders are also required to comply with specific regulations promulgated by the board of pharmacy.[175] California is also considering board regulations that would require specialized equipment and procedures for sterile compounding as well as training requirements for both pharmacists and technicians.[176] Many other states have adopted or are in the process of considering new legislation and regulation to protect compounding and patient safety.[177]

C. National Pharmacy Organization Initiatives

There are also currently updated compounding guidelines from national pharmacy organizations including the National Association of Boards of Pharmacy (“NABP”), the American Society of Health-System Pharmacists (“ASHP”), and the United States Pharmacopoeia (“USP”) and National Formulary (“NF”). NABP publishes model rules for pharmacy state boards.[178] At least fifteen states have adopted the compounding provisions of the NABP model rules. [179] ASHP publishes guidelines for use in hospitals including seven different guideline documents applicable to pharmacy compounding.[180] The USP recently revised its chapter on compounding sterile preparations.[181] This new chapter, titled “Pharmaceutical Compounding – Sterile Preparations” can be enforced by state boards of pharmacy that incorporate it into their regulations and cited by FDA and other accreditation officials.[182] It is legally enforceable to determine adulteration under the FDCA since it is now in the General Tests and Assays section of USP but FDA still maintains considerable enforcement discretion.[183] USP also contains other chapters applicable to pharmacy compounding that are not directly enforceable under the adulteration provision of the FDCA but can provide practitioners guidance for appropriate compounding practice.[184]

Additionally, NABP, USP, and the American Pharmaceutical Association (“APhA”) recently created a committee to create standardized national guidelines for compounding.[185] Proposals include accreditation, certification, and industry standards for safe and effective medications.[186]

D. Congressional Action

An amendment to the Medicare Act of 2003 renewed Congressional attention to the regulation of pharmacy compounding.[187] Although the amendment did not make it into the final law passed by both the House and the Senate, the debate surrounding the amendment illustrates the continued disagreement regarding the appropriate regulation and utilization of compounding practice.[188]

While considering the amendment, the Senate Committee on Health, Education, Labor, and Pensions requested a United States General Accounting Office (“GAO”) report addressing current state and federal regulation of pharmacy compounding.[189] The GAO reported increased regulatory efforts by both state boards of pharmacy and national pharmacy organizations but noted that a lack of resources could hinder state efforts to effectively regulate the practice.[190]

The Committee also requested testimony of the following people: Steven Galson, MD, MPH, Deputy Director of FDA’s Center of Drug Evaluation and Research; Sarah Sellers, PharmD, Executive Director of the Center for Pharmaceutical Safety; Daniel A. Herbert, RPh, President Elect of the American Pharmaceutical Association; Kevin Kinkade, RPh, Executive Director of the Missouri Board of Pharmacy; and William Kennedy, RPh, Owner of Nephron Pharmaceuticals Corporation.[191]

Most of the testimony acknowledged the importance of compounding practice. But each speaker brought different concerns to the committee. Galson stated that some pharmacies are advertising that certain compounded products are “better” than proprietary medications despite a lack of data supporting the claims. [192] His major concern was that these pharmacists are compounding for economic reasons rather than true medical need.[193] Mr. Galson also outlined practical problems for compounding pharmacists such as lack of skill, equipment, training, testing, or appropriate facilities.[194]

Sellers, a former member of FDA’s compounding advisory committee, took a rather negative view of compounding practice. She noted that compounded drugs do not meet federal requirements [established for new drugs] for safety, efficacy, manufacturing, or labeling for safe use.[195] In contrast to the GAO report, Sellers stated that she believed state regulation was inadequate to protect public health. [196] She testified that states lacked both the resources and will to appropriately regulate compounding and that professional standards were not consistently applied.[197] Some of the risks outlined in Sellers’s testimony include lack of information regarding risks of compounded products, lack of balanced information in advertising, and the allure of financial gains from non-medically necessary compounding.[198] She also argued that pharmacists lack the expertise to compound and that compounded drugs sometimes are infected with bacteria or viruses, are sometimes ineffective, and sometimes contain calculation errors.[199]

Daniel Herbert, President of the American Pharmaceutical Association framed the issue as how to distinguish compounding from manufacturing, how to improve the quality of the practice, and how to stop “bad actors.”[200] He emphasized the importance of compounding noting that most pharmacists will compound at some point in their career and with most engaging in some form of compounding every week.[201] He testified that if compounding were stopped there would be a “direct, immediate, negative impact on the ability of health care providers to provide care to patients.”[202]

Kevin Kinkade, the Director of the Missouri Board of Pharmacy, testified about regulatory efforts in his state to protect patient health and the practice of pharmacy compounding and William Kennedy testified about his transition from compounder to registered manufacturer.[203]

Both Galson and Sellers outlined areas where they believed a federal role is necessary. Galson’s suggestions largely mirrored the regulation formerly given to the FDA compounding committee under the FDAMA: (1) drugs withdrawn from the market because of safety concerns; (2) quality of bulk drug substances used in compounding; (3) investigation of poorly compounded drugs; and (4) when a pharmacy crosses the line from compounding to manufacturing.[204] Sellers made the following proposals: (1) FDA should require disclosure to both patients and practitioners that compounded drugs are not FDA approved; (2) compounded drugs should be labeled with a warning that the drug product is neither FDA approved nor produced in a facility that meets good manufacturing practices; (3) FDA should require that pharmacists notify prescribers when they dispense a compounded product; (4) regulatory authorities should prohibit compounding of some drugs that are too difficult to compound; and (5) FDA should impose strict requirements for the chemicals used in compounding.[205]

IV. Regulatory Issues and Proposals

The regulation of pharmaceutical compounding has been in question for almost fifteen years. Clear, effective, but fair regulation that protects patient access to compounded drugs while minimizing safety risks is necessary. Pharmacists need to know what type of compounding practice is okay and regulators need effective tools with which to protect public health.

Much of the past compounding regulation has focused on the distinction between compounding and manufacturing. But that focus misses the main goal of regulation: protecting patient safety. While there is some reason to believe that higher volume compounding practices may pose a greater risk to patient health, this risk is not the most direct one. Higher volume practices may, in fact, be safer because other risk factors are eliminated such as lack of training, equipment, facilities, and knowledge. A more effective regulatory scheme should focus on regulation designed to increase the competence of compounding practice and eliminate inherently risky practices. This does not mean that those pharmacists manufacturing under the guise of compounding should escape regulation, it only means that volume should not be the primary trigger for investigation. Those pharmacists trying to bypass FDA regulation of manufactured products should be required to register as manufacturers. But these pharmacists are in the minority of a dedicated group of practitioners. The goal of regulation should be to guide these practitioners who compound prescription medications with good intentions and to eliminate practitioners who use compounding exceptions to bypass the law. Compounding is a vital and important part of pharmacy practice and healthcare in general. In order to protect it, we must maintain high standards so as to eliminate fears that compounding is too dangerous for regular use.

A. Who Should Regulate Compounding Practice?

1. Traditional FDA Regulation of Compounding is Not Appropriate or Necessary

Traditional FDA regulation of drug products is not practicable for regulation of compounding practice. Compounding, by definition, is the creation of a specialized product for a patient with a specific need. The need for a particular product cannot be anticipated far enough in advance to pass through traditional FDA regulation. It also is not economically feasible to fund studies of drug products used for such a small number of patients.

Given the practical barriers to traditional regulation of compounding, Congress and the FDA should create an exception in the FDCA for pharmacy compounding and provide for a different regulatory scheme. Congress and FDA sometimes exempt certain categories of products from traditional drug approval regulation based on factors that make regulation burdensome or other considerations that ensure products safety. For example, FDA does not require drug approval for off-label prescribing.[206] The FDA does not require new drug approval for off-label prescriptions because it considers off-label prescribing part of the professional practice of medicine, which it does not have the authority to regulate.[207] Similarly, Congress exempts dietary supplements from the traditional drug approval process. Under the Dietary Supplement Health and Education Act of 1994, Congress instituted a minimal regulatory scheme for dietary supplements stating: “[C]onsumers should be empowered to make choices about preventive health care programs based on data from scientific studies of health benefits related to particular dietary supplements.”[208] After a dietary supplement manufacturer meets basic regulatory requirements, DSHEA shifts the burden of proof from the manufacturer to the government trying to show that a dietary supplement is unsafe.[209] This is a dramatic departure from the traditional regulation of medications under the FDA wherein the manufacturer bears a significant burden to prove to FDA that the product is sufficiently safe.[210]

The justifications for minimal FDA regulation of off-label prescribing and dietary supplements also apply to compounded prescriptions. Like off-label prescribing, pharmacy compounding is the combination of an FDA approved drug product and professional judgment that altered use is appropriate. Like dietary supplement regulation, traditional drug approval would severely hinder, if not eliminate, patient access to useful medical treatments. Finally, the importance of both professional and patient autonomy, recognized in the context of both off-label prescribing and dietary supplement use, is equally applicable to the utilization of pharmaceutical compounding.

Pharmacy compounding is a professional practice wherein a pharmacist and practitioner apply professional judgment to determine that currently approved dosage forms of proprietary products are inadequate for patient treatment and that a compounded product would enhance treatment outcomes. Like off-label prescribing, compounding uses an FDA approved drug product in a manner, although not specifically FDA approved, determined both necessary and appropriate according to professional judgment. This application of judgment of two medical professionals combined with the utilization of an FDA approved drug, albeit in a new form, justifies decreased regulation of pharmacy compounding.

Pharmacists are highly educated professionals. They must obtain six years of education, spend substantial time in clinical practice, and pass the pharmacy board exam to qualify for licensure.[211] The six-year curriculum focuses on the actions of drugs in the human body. Pharmacists are experts in drug delivery and study extensively the absorption, distribution, metabolism, and excretion of drug products. Pharmaceutics courses focus on drug delivery mechanisms used for both proprietary medications and those available for compounded medications. In addition, many students spend a year in a compounding lab, gaining expertise in compounding everything from creams, gels, and other topicals to suppositories, troches, and capsules. Students generally train in sterile compounding practices in clinical rotations at hospital sites where sterile compounding is necessary for everyday practice.

The pharmacist’s expertise is combined with that of the practitioner. Thus two different medical professionals applying professional judgment are necessary to determine appropriate need and utilization of compounded prescriptions. Like off-label use of FDA-approved medications, compounding introduces certain risks. These risks are justified, however, based on a professional determination of need for a drug delivery vehicle or indication not available due to a manufacturer decision that the delivery vehicle or indication would not be profitable enough to justify the time and expense of the traditional FDA approval process.[212]

Patient access and autonomy are additional justifications for limited FDA regulation of compounded products. FDA approved indications and product form are dictated by manufacturers who make an economic determination based on potential product base. This determination is not based on patient health; it is based on potential patient demand. But some patients’ needs are unique and thus do not provide financial justification for the expenditures necessary for FDA approval. Those unique patient needs can be met, however, through compounding or off-label prescribing. But strict regulation would severely hinder patient access.

Like compounded prescriptions, off-label prescribing provides access to useful treatments not otherwise approved by FDA. For example, Aspirin is not FDA approved for the prevention of strokes or heart attacks. Yet this is a common off-label use for the medication. If FDA were to prohibit utilization of the medication for this purpose absent special approval, patients would be hurt by lack of availability of a medication we know is approved for safety in other contexts. Similarly, while there are some risks in changing the vehicle such as compatibility, stability, calculation, these risks are justified given specific patient needs. If FDA required approval of compounded drugs, the practice would be severely hindered and patients would be deprived of a potentially useful drug product that we know is sufficiently safe in at least one drug delivery form because it passed FDA approval in that form.

Limited regulation of dietary supplements is also justified on the basis of patient access and autonomy. Traditional regulation of dietary supplements would severely limit, if not eliminate, the availability of natural drug products useful for patient treatment.[213] Although dietary supplements sometimes mimic the drug structure and activity of proprietary medications and bear many of the same risks,[214] under DSHEA, Congress chose to allow patients and healthcare professionals weigh the risks and benefits of a potential dietary supplement and make an autonomous choice.[215] Patients are ensured access, absent a showing that a product is unsafe.[216] The language of the statute itself recognizes consumer empowerment to determine treatment choices based on scientific studies.[217] The regulatory decision represented an evolving recognition of the importance of access and autonomy in medical treatment. The importance of consumer choice and access should similarly justify the minimal FDA regulation of compounded products.

Congress and the FDA should acknowledge the drastic consequences of significant FDA regulation of compounded products and propose regulation, like that passed for dietary supplements and recognized for off-label prescribing, that acknowledges the importance of the autonomy of patients and prescribers as well as patient access to this type of medical treatment and recognizes the additional sources of protection of patient safety in compounding practice.

2. States, Together with National Pharmacy Organizations, have the Expertise Necessary for Effective Compounding Regulation

Compounding is a professional practice most appropriately regulated at the state and professional level. Doctors, lawyers, dentists, and other professionals are licensed by state regulatory bodies and must follow state regulations in order to maintain licensure and good standing.[218] These regulatory authorities can discipline at a professional level or at a criminal level based on the type of violation at issue. These professionals are also generally guided by professional organizations such as the American Medical Association, American Bar Association, and the American Dental Association.[219] Likewise, pharmacists have traditionally been regulated by the states that license them. State pharmacy boards have the power to discipline by fine or other similar penalty, license revocation, or criminal prosecution.[220]

As noted in the GAO report, State Boards of Pharmacy and professional pharmacy organizations have made great strides in improving their regulation of compounding practice, in many instances, going beyond what FDA would likely be able to impose nationwide. With individual state regulations, pharmacy boards can tailor regulations to the needs of their particular state and provide individual testing grounds for the most appropriate means by which to regulate the practice. For example, the Missouri program of randomized testing might be too burdensome if imposed nationwide, but provides that state with an effective means through which to gather compounding data which could be used by other state bodies and regulatory authorities and also to screen products for use in that state. Other states are instituting different regulatory requirements such as certification in California. If the program is successful, other states and professional organizations could adopt similar regulations.

In addition, as noted above, USP, NABP, and ASHP, as well as other accreditation bodies have adopted standards for sterile compounding that are required for certification and can be adopted by states looking for regulatory guidance. These organizations have relatively greater expertise than FDA when it comes to pharmacy practice. It is more efficient and likely more acceptable to the pharmacy community to self-regulate. In addition, NABP, ASHP, and APhA are currently working together to propose potential certification, education, or other requirements to help ensure compounding safety. Absent demonstrated failure of these organizations working with states to institute appropriate regulation, regulatory power should remain at the professional and state level where it is more informed, more specialized, and more acceptable to the pharmacy profession.

There are many resources to facilitate safe compounding practice. Many colleges of pharmacy teach pharmacy compounding to students and can provide education to current practitioners. In addition, publications such as Guide to Contemporary Pharmacy Practice,[221] The Art, Science, and Technology of Pharmaceutical Compounding,[222] Trissel’s Stability of Compounded Formulations,[223] and Remington: The Science and Practice of Pharmacy[224] provide detailed, scientific, and practice-based guidance for pharmacy professionals. In addition, pharmacy journals such as the Journal of the American Pharmacists Association,[225] Journal of American-Health-Systems Pharmacists,[226] and the International Journal of Pharmaceutical Compounding[227] provide up to date guidance on the safe compounding of specific drug products. Finally, professional organizations such as the International Academy of Compounding Pharmacists[228] and the Professional Compounding Centers of America[229] provide consultation services, training seminars, and other support for compounding pharmacists in practice.

Finally, the pharmacy profession has great incentive for self-regulation. Tragedies resulting from compounding errors are generally highly publicized and threaten the legitimacy of compounding practice in the eyes of the public.[230] A single contaminated product can ruin a business and can potentially harm the entire profession. Protection and promotion of compounding practice and the pharmacy profession, generally, is most helped by avoiding these problems.

3. Congress Should Draw a Clear Line between State and Federal Regulation of Pharmaceutical Compounding

Congressional legislation should draw a clear line between FDA and state jurisdiction over compounding regulation. Absent clear jurisdictional mandates, conflicts in between state and federal requirements could hamper the efficient regulation of pharmacists engaged in compounding. A clear delineation of duties between the FDA and the states promotes certainty and consistency in regulation for pharmacists engaged in compounding practice.

Congress is the appropriate body to draw lines between state and federal regulation. Absent some statutory amendment similar to that in the first part of the compounding provision of the Modernization Act, FDA would retain discretion to enforce the new drug, adulteration, and misbranding provisions of the FDCA against compounding pharmacists. Uncertainty regarding the utilization of that discretion must be rectified. Compliance guidelines that state FDA will not go after traditional compounding do not go far enough. Those compliance guidelines are not binding on the FDA and do not take away the capacity to use its statutorily granted power in a manner that would essentially eliminate the practice of pharmaceutical compounding. It was likely not the intention of those who passed the original FDCA to regulate compounding practice like new drugs from manufacturers. It is essential to the protection of pharmacy compounding that Congress fix the gap in the FDCA through legislation. They should exempt compounded medications from the new drug, adulteration, and misbranding provisions of the FDCA.

FDA should be granted continuing authority to regulate those pharmacists engaged in pharmacy practice more appropriately defined as manufacturing. Drug manufacturing has always been under the regulatory authority of the FDA. Pharmacists who choose to continue a manufacturing practice may register under FDA and comply with good manufacturing practices. The regulatory challenge will be to differentiate legitimate compounding practice from manufacturing. Congress should pass legislation based on the constitutional portions of the compounding provision of the Modernization Act and the guidance of the Supreme Court in the Western States decision. This legislation should contain clear guidelines for pharmacists to determine whether their practice is state or federally regulated.

Additionally, FDA jurisdiction could be supplemented with minimally intrusive regulation such as prohibitions on dispensing products deemed demonstrably difficult to compound, labeling requirements, good-manufacturing practices for sterile compounding based on those already in effect under the enforceable provisions of the USP, and adverse event reporting.

B. Defining When Need for a Compounded Product is Sufficient

The practice of pharmaceutical compounding is considered important and legitimate because certain patients need specialized products that are not available from traditional drug manufacturers. The term “need,” however, can be defined in dramatically different ways. Generally, in medical therapy, need is defined according to a practitioner and patient in consultation with a pharmacist. Although a patient may not have a strict medical “need” for a particular drug product, a physician will choose to prescribe it because she and the patient believe the product will either improve the patient’s health or her quality of life. While there is often no strict medical “need” for prescription anti-depressants, they are commonly prescribed and dispensed for patients because it is believed they will improve that patient’s health and quality of life. Similarly, while there are effective anti-hypertensive medications on the market that have been used and tested for years, sometimes a physician and patient will decide to use a newer, inherently riskier product to avoid some uncomfortable side effects of the older, safer medication.[231]

In contrast to this broad, generally recognized definition of need, the dissenting Justices in Western States proposed a relatively narrow view of need for compounded prescription medications.[232] The Justices were primarily concerned that if compounding pharmacists were allowed to advertise, patients will request compounded products that they do not actually need.[233] However, the magnitude of this risk is relatively small given the nature of compounding practice. Compounding pharmacies with the equipment, knowledge, and resources to compound many products are smaller in number and generally less convenient than ordinary retail pharmacies. Additionally, compounded products are not always paid for by insurance companies so patients are forced to pay for the medications out of pocket.[234] Based on inconvenience and cost, it is unlikely that a patient will request a compounded product for no reason at all. Further, it is not the government’s job to decide what reasons are good enough to warrant a different medication for medical treatment. The government can educate the public about potential risks involved in compounding, but it should not be able to severely limit access to information about products to avoid patient use.

The examples that the dissent uses to illustrate lack of true need are a liquid medication for a child, a skin cream with an enhanced penetration rate, and an allergy medication or anti-inflammatory that does not have sedative effects.[235] However none of these compounding needs are illegitimate. In fact, they go to the very purpose of pharmacy compounding. If a parent has a child who is unable to swallow pills, putting the medication in liquid form dramatically improves compliance and ease of use for that parent and child. If a skin cream has an enhanced penetration rate, it may be more effective and thus reasonably necessary. This is certainly a legitimate reason for choosing a product. Finally, many patients may have very legitimate reasons for needing a medication that lacks sedative effects. Medication-induced sedation can be dangerous for people when driving or operating other machinery and can hinder general productivity and quality of life, all very legitimate reasons for choosing an alternative product.

The dissent’s definition of need is one of absolute need, not relative need. But under that definition, most prescription products, which are inherently risky due to side effects and unknown long-term effects, would not be prescribed because most are not absolutely necessary under the dissent’s definition of need. Hormone-replacement-therapy, for example, has recently come under a lot of scrutiny due to evidence of increased cancer risks.[236] Some experts believe that compounded replacement therapies are safer because they more closely mimic the actual hormone levels that were previously present in the woman’s body and the hormones used are bio-identical to those found in the body.[237] This belief, of course, is certainly debatable. But a doctor and patient working together with a pharmacist should be allowed to make a choice regarding treatment choice based on available scientific resources.

The FDA’s role is to ensure basic safety, not absolute safety. Individuals are willing to accept various levels of risk in exchange for some perceived benefits. They should be allowed to make that choice.[238] All drug therapy has inherent risks but need is not as narrowly defined despite these risks for ordinary prescribing. Perhaps this is justified because of the intensive FDA approval process required for these products. But off-label prescribing is also permitted absent absolute need despite the fact that medications when used for off-label indications are not tested for those uses. A certain level of personal autonomy and professional judgment is accorded ordinary medical care; the same respect should be accorded determinations of medical need for pharmaceutical compounding.

C. Differentiating Manufacturing from Compounding

Manufacturing should fall under FDA regulation. Clear guidelines to exempt legitimate compounders are necessary to protect the practice.

FDA believes that some pharmacists use the compounding loophole to bypass the new drug approval process, drug labeling requirements, as well as other regulations regarding how a product is manufactured. The FDA’s drug approval process is rigorous, but justifiably so. The prevention of a mass thalidomide tragedy in the United States similar to the one in Europe is consistently held out as an illustration of the importance of the FDA’s role in drug approval.[239] The exemption from stringent regulation for pharmaceutical compounding is justified based on the impracticability of putting all potential compounded products through the rigorous testing required for FDA approval. But when a pharmacy compounds a product in mass quantities unrelated to the traditional prescriber/patient/pharmacist triad central to compounding, its activity is more akin to that of a drug manufacturer and the traditional justifications for exempting compounding from new drug regulation become less persuasive. If a pharmacist compounds a single product in mass quantities, that product seems well-suited to the drug approval process. There is sufficient quantity to justify the commitment of time and resources for drug approval and likely future revenues.

Appropriate compounding is defined by the practitioner/patient/pharmacist triad. The professional judgment of two medical professionals combined with the patient’s need partially justifies the decreased regulation of the practice. In contrast, compounding for unknown patients without specific prescriber direction seems more like manufacturing practice and should be regulated as such. Differentiation of the two practices should focus on this triad, rather than mere quantity.

The compounding provision of the Modernization Act, held unconstitutional by the Justices in Western States , sought to differentiate compounding from manufacturing in two primary ways: an advertising restriction and a restriction of distribution of compounded products interstate.[240] FDA guidance documents and the Western States decision also include additional factors that can be used to differentiate the practices. While some of the factors utilized in past regulatory efforts might be appropriate, those that focus on mere quantity are inappropriate. New regulation should focus on the triad relationship rather than mere quantity to differentiate the practices. Potential regulations could include an advertising restriction that allows practitioner advertising but not patient advertising, as well as equipment limitations, limits on anticipatory compounding, and restrictions on wholesale distribution.

1. Pure Volume Restrictions are Inappropriate Given the Specialized Nature of Compounding Practice

Restrictions based purely on quantity are inappropriate for compounding regulation. The Modernization Act contained a provision that limited pharmacist’s compounding for interstate distribution by strict percentages.[241] Unless a state entered into a memorandum of understanding with the FDA, pharmacists in that state could only distribute five-percent of their total prescription orders out-of-state if they were compounded.[242] The FDA’s MOU, in turn, used a higher percentage, but still limited pharmacists to a twenty-percent maximum for compounded products distributed out-of-state with a five-percent limitation on the interstate distribution of any single drug product.[243] This rule did create a clear, bright-line rule for pharmacists who need to know what type of compounding practice was considered legitimate. It also likely would have hindered the practices of those pharmacists that are more similar to manufacturing since large distribution of products interstate may be an indicator of manufacturing-type practice. But the rule was both over and under-inclusive and likely hindered patient access to safe, effective compounded medications.

Although many manufacturers distribute large quantities of drugs, some distribute small quantities but do not focus on the practitioner/patient/pharmacist triad which is central to protection of patient safety. Similarly, many compounding pharmacists specialize in the practice or a type of compounding practice and thus dispense large quantities of medications but base their practice on triad-based determinations of need. Thus, by focusing merely on distribution percentages, the rule hindered legitimate compounding while allowing some manufacturing activities to maintain protection under compounding exemptions.

The most important rationale for regulation of compounding is the protection of patient safety. Yet the quantity restriction undercut this end. Many of the safety and efficacy risks of compounded prescription medications can be minimized if pharmacists are well-trained, knowledgeable, and have appropriate equipment to safely compound. But the necessary training, resources, and equipment are expensive and time-consuming. Only a small number of pharmacists committed to compounding practice can afford or choose to prioritize the resources necessary for safe compounding practice. Further, even those who do specialize in compounding may only specialize in certain types of compounded products due to lack of training, equipment, or other resource necessary to compound a safe, effective product.

Thus, by limiting those pharmacists who specialize in compounding a particular product to five-percent of total sales, when selling out-of-state, the rule under the Modernization Act undercut its own regulatory end: safe compounded medications. The rule had the potential to force patients who need a particular prescription to go to another, perhaps less competent, pharmacist in order to obtain a particular medication simply because the original pharmacist specializes in that particular product. This outcome is not sensible. The pharmacist who specializes in a compounded product likely has superior skills, training, and equipment to safely compound that drug. By forcing patients to go elsewhere, the FDA potentially forced patients to go to pharmacists who had less skill, training, or knowledge and thus increased risk of unsafe products. Further, some pharmacies, especially those in more remote areas or those located near the border of a state serve a broader geographic area, one that certainly could include a large number of out-of-state customers. By limiting these pharmacies to a twenty-percent maximum when compounding out-of-state, the rule again hindered patient access to safe compounded prescriptions.

The individualized need determination is the most important factor that differentiates pharmacy compounding from manufacturing. Any volume restriction necessarily ignores this factor hindering legitimate compounding practices while ignoring manufacturing under the guise of compounding.

  1. The Advertising Restriction Should be More Appropriately Tailored to Restrict Manufacturing without Hindering Legitimate Compounding

The original advertising provision, struck down by the Supreme Court, contained a restriction that prohibited advertising of any particular compounded drug, drug class, or drug type.[244] This restriction would likely hinder drug manufacturing by limiting the means by which those pharmacists manufacturing could market their products. Without a large customer base, presumably created through advertising, it would be difficult for pharmacists to continue a business manufacturing of drugs for sale.

Under the traditional definition of compounding, focused on the practitioner/patient/pharmacist triad, the advertising restriction theoretically would not hinder legitimate compounding practice because need, rather than advertising, should inform the decision to use a compounded product. Congress should create a modified version of the advertising restriction that maintains the same ends of the original legislation, but does so in a manner more appropriately tailored to the protection of legitimate compounding practice. An advertising restriction that permits practitioner advertising but limits consumer advertising appropriately limits the demand for prescriptions compounded in a manner that is more consistent with manufacturing since it limits the potential buyers of those prescriptions, while protecting patient access by allowing compounding pharmacists to educate practitioners, an important arm of the compounding triad.

The original advertising restriction hindered pharmacists’ efforts to educate practitioners about the availability of compounding to meet their patients needs and consequently hurt legitimate compounding because practitioners were not able to prescribe compounded medications when needed because they were not aware of the availability of specific types of products suited for their patients’ needs.

The major complaint of pharmacists was not that patients could not access information, but rather that pharmacists could not educate practitioners about their compounding practices and capabilities. Compounding pharmacy is a diverse and complex specialty. It requires specialized equipment, training, and knowledge. Many compounding pharmacists specialize in certain types of compounding due to these barriers to a more broad-based practice. Yet the original advertising restriction would not allow these pharmacists to advertise the type of products they could provide for patient use.

The dissenting Justices in Western States argued that the advertising restriction was justified because practitioners could get compounding information easily.[245] But this argument is simply incorrect. In a 1999 study on the need and utilization of pharmacy compounding, doctors surveyed overwhelming acknowledged their lack of knowledge regarding compounding practice.[246] Most pharmacists and almost all pharmacists who specialized in compounding also indicated that they believed practitioners lacked adequate compounding information.[247] This education gap is not met through traditional means. Medical education generally does not including training on the availability and types of compounded prescription drugs. Published medical research tends to focus on safety and efficacy of types of drug therapies, not various means of administration. Continuing education tends to be sponsored by drug companies who write programs designed to educate doctors about proprietary products.

Thus the most efficient and effective means through which practitioners can be educated about compounding is through advertising and promotion of pharmacists who specialize in the practice. These pharmacists are the most knowledgeable source of compounding knowledge and also have incentive to educate practitioners, similar to the incentive obviously motivating drug companies in massive sales campaigns for new drugs. Doctors could get information about new drugs from medical journals. But the law allows drug advertising because it increases overall information despite inherent risks. Products compounded by pharmacists rather than manufactured by large pharmaceutical companies should not be treated differently.

Constitutionally, this more narrow restriction might be acceptable. The Court in Western States agreed that protecting patient access to prescriptions and protecting patient safety were both legitimate government interests.[248] The problem with the restriction was that it was too broad. This new restriction protects patient safety by limiting potential unnecessary demand by patients for compounded products while protecting practitioner information, the key to adequate access to compounded products. This limited type of restriction also addresses the concern, central the Western States dissent, that patients will be affected by advertisement and request products they do not need while providing information and education for practitioners who often lack adequate knowledge about compounded products.[249]

Commercial speech, the type of speech at issue here, is protected by the First Amendment, but at a different level than ordinary speech. In 1976, the Supreme Court held that the First Amendment protects pharmacists’ rights to advertise the prices of prescription drugs.[250] The Court recognized the importance of the free flow of information but refused to extend full First Amendment protection to commercial speech.[251] There are important differences between commercial speech and other forms of speech that justify the difference in protection.[252] Appropriate regulation is less likely to chill commercial speech since advertising is directly linked to profits.[253]

This more narrow restriction on speech is unlikely to harm legitimate compounding practice. A patient needs a practitioner to prescribe a compounded product based on need. If pharmacists are able to educate practitioners, practitioners can educate patients about compounded products, when necessary. However, this limited advertising restriction will hinder manufacturing under the guise of compounding because it will essentially limit pharmacists’ potential customers to those individually treated by a practitioner. Manufacturers need a large, wide source of customers, one likely developed through advertisement. Restricting advertisement in this manner would restrict the ability of compounding pharmacists to cross over into manufacturing.

  1. Factors Proposed in Compliance Guidelines and the Western States Decision that do not Focus on Mere Quantity May Be Appropriate for Differentiation of Compounding and Manufacturing

Some factors that do not directly utilize a volume-based limit may be appropriate to determine whether a practice is compounding or manufacturing. The Court in Western States examined some of these factors. The Court suggested that the FDA ban the use of commercial-scale manufacturing or testing equipment for compounding drugs, a prohibition on compounding more drugs in anticipation of receiving prescriptions than in response to prescriptions already received, and a ban on pharmacists offering compounded drugs at wholesale to other state licensed persons or commercial entities for resale.[254] The opinion then suggested limiting the number of compounded drugs by volume or number that a pharmacist could sell out-of-state or capping the amount of any particular compounded drug by volume, number of prescriptions, gross revenue, or profit.[255] These suggestions were primarily drawn from the 1992 Compliance Policy Guide used by FDA to differentiate compounding from manufacturing.[256] Current FDA guidelines contain similar factors.[257]

The two restrictions limiting quantity, either for out-of-state distribution or in total are inappropriate for the reasons discussed supra .[258] However the other restrictions may be appropriate because they would be less likely to hinder legitimate compounding practice than volume-only restrictions.

A restriction on commercial-scale manufacturing or testing equipment would decrease a pharmacist’s ability to compound large quantities of any given product at one time. Appropriate compounding is patient-specific. Thus commercial-scale manufacturing equipment should not be necessary, even given large-quantity compounding. A restriction on equipment would not hinder a pharmacist for whom compounding is his or her primary business. It also would not hinder pharmacists who specialize in a specific type of compound unless all patients require the exact same drug strength, drug combinations, or drug base. Thus this limitation would hinder manufacturing without hindering most legitimate practice.

A prohibition on compounding in excess of prescriptions ordinarily received also seems like an appropriate regulation. Compounding is defined by the practitioner/patient/pharmacist relationship. A practitioner’s prescription is thus an important indicator of appropriate practice. Those compounders creating products for which they do not have a prescription are exactly the ones who should be targeted by manufacturing regulation.

Finally, a ban on wholesale sales of products also seems appropriately focused on the triad relationship necessary for appropriate compounding. When a pharmacist compounds a product for wholesale distribution, he or she is not creating a product for a specific patient under a specific physician’s care. The safety protections derived from this combination of professional judgment is thus lacking. It therefore seems appropriate to limit this type of sale to those pharmacists willing to be regulated as manufacturers.

D. Additional Proposals for Federal Regulation

There are also several minimally-intrusive federal programs that could be instituted to protect patient safety without substantially hindering pharmaceutical compounding practice. Options include limitations on compounding for products demonstrably difficult to compound, labeling requirements, good manufacturing practices for sterile compounding, and adverse event reporting requirements.

Limitations on pharmacy compounding for products demonstrably difficult to compound were part of the original FDAMA and should continue to be part of current regulation. FDA should have the power to ban products that routinely cause adverse events, much like they have the power to ban dietary supplements that have been shown to pose danger to public health. Like dietary supplements, the burden of proof should rest with the FDA. Products should not be banned absent a showing of significant safety risk.

One way to minimize fears that patients will not understand the risks inherent in using a compounded product would be to require labeling that states that the product is not FDA approved. This program would be similar to the one used for dietary supplements. Although dietary supplements are not required to go through the rigorous FDA new drug approval process, their label must state: “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.”[259] The labeling informs consumers that the dietary supplement is not approved in the same manner as other medications but still allows patients to make the choice to assume any risk involved in using this type of product. A similar label for a compounded product could state: “This drug formulation has not been tested and approved by the FDA. It is a compounded product created especially for you by a pharmacist.” This warning would inform patients that the product is not FDA approved and allow them to engage in the risk of taking a medication compounded by a pharmacist rather than mass-produced by a pharmaceutical company.

Another regulatory option would be to create a Good Manufacturing Practices (“GMP”) equivalent for sterile compounding. Drug manufacturers are required to meet certain standards, GMPs, when producing new drugs.[260] Pharmacies are explicitly exempt from these standards under the FDCA.[261] While manufacturing standards for all compounded products would likely be too burdensome for both the regulators and the pharmacists, standards for sterile compounding make sense. Sterile compounding is arguably the riskiest, but most necessary form of pharmaceutical compounding. Sterile compounding occurs on a daily basis in most hospitals. But bacterial or fungal contamination of a sterile product can seriously harm patients. Many of the compounding tragedies that have spurred criticism of the practice have been bacterial or fungal contamination of sterile products. USP revised its sterile compounding chapter and made it enforceable by FDA.[262] FDA should require adherence to the USP guidelines for sterile compounding to ensure that this important, but dangerous practice is done with the utmost care.

Finally, the FDA could mandate reporting of all adverse events caused by compounded products. The benefits of this type of system would be twofold. First, the system would generate data useful to evaluate the need for further federal regulation. The data would be specific and could guide regulators to institute regulation only where necessary. For example, if the reporting system showed that adverse events were most often the result of improper sterile compounding, regulators could increase the regulatory requirements for that type of compounding without affecting compounding that does not cause many if any adverse events. Second, the data could be used to help FDA determine whether some products or delivery systems are too difficult to compound and should be disallowed. While bans of any product or product-type should be generally avoided, a strong statistical showing of risk could justify a ban absent overwhelming need for that compound.

Currently, there are several voluntary reporting systems. The federal government has a reporting system for adverse effects of medications called MedWatch.[263] Most adverse event reporting to MedWatch is voluntary and can be done by either healthcare professionals or consumers.[264] Some reporting is mandated by statute.[265] USP has also established a voluntary reporting system for medication errors.[266] The system is anonymous which likely increases participation.[267] The organization publishes an annual report based on the data collected that can be used by health professionals to decrease risk of error.[268] A mandatory reporting requirement for certain types of compounding adverse events could be instituted for either data collection system.

E. Options for State Regulation

If states are granted continuing substantial jurisdiction over pharmacy compounding, they must institute satisfactory regulations to ensure safety of the practice and products. There are several regulatory options that states could utilize to protect patient safety without severely limiting patient access to compounded medications. Several regulatory mechanisms include: mandatory compounding certification or training, randomized inspections of compounded products, and specific practice regulations.

One option would be to require compounding certification or training for those pharmacists who compound relatively difficult and/or risky products. This requirement likely should not apply to basic compounding such as mixing two creams or making a basic mouthwash but rather to more difficult tasks such as making capsules, troches, suppositories, and sterile compounding. To require certification for even basic compounding would unnecessarily limit availability of relatively safe compounded products. While requiring a higher level of skill for more difficult or dangerous compounding protects directly protects patient safety without limiting those pharmacists skilled in compounding practice. The American Pharmaceutical Association has created a preliminary list of compounding practices that all pharmacists should be able to provide and a list of compounding practices that potentially require more advanced training.[269] This list, when finalized, could serve as a guide to states categorizing types of products requiring additional training or certification.

Two possible means of certification are possible. A state could institute a program of voluntary certification and allow market forces to encourage pharmacists to obtain this certification or it could make certification mandatory. Pharmacists truly committed to the practice of pharmacy compounding likely participate in regular education and training either in hands-on classes or through pharmacy journals. Most would likely be happy to receive official recognition, and perhaps market exclusivity, for their training. It likely would elevate the professionalism element of the practice and increase its legitimacy in the medical community.

Alternatively, certification could begin at the college level. Compounding training has been eliminated in many schools, although there has been a recent resurgence.[270] Currently, the Accreditation Council for Pharmacy Education’s standards require that graduating pharmacy students be able to “accurately and safely compound drugs in appropriate dosage forms.”[271] But colleges incorporate these requirements to varying levels. Pharmacist, Professor, and Editor-in-Chief of the International Journal of Pharmaceutical Compounding, Loyd V. Allen has himself suggested that there should be an “increase in the training required in sterile products, high technology dosage forms and drugs derived from biotechnology.”[272] Granting certification to students who receive appropriate training might encourage pharmacy schools to reincorporate compounding training into the curriculum, which would benefit the practice generally. Additionally, compounding training centers such as the one run by PCCA could provide an additional means of training students.[273]

At least one state has already instituted a similar certification requirement for all pharmacists who engage in sterile compounding, a dangerous but essential form of pharmacy compounding. California requires pharmacists practicing sterile compounding inside the state and those who ship sterile compounded products into the state to obtain certification either through the California State Board of Pharmacy or other accreditation organizations.[274] This requirement is not unduly burdensome as most pharmacists who engage in sterile compounding do so in medical institutions and are already certified by hospital accreditation organizations. The requirement ensures that those pharmacists not regulated by another organization meet a similar standard of care.

Another way states could regulate compounding practice is through inspection and testing of compounded products. State boards already inspect pharmacies for other types of violations. This program would merely expand some inspections to encompass actual compounded products rather than just compounding facilities. Regular testing could help detect products that are contaminated or sub-potent, potentially directly protecting patient safety and guiding pharmacists engaged in practice whose products do not meet standards. It also would give pharmacists additional incentives to compound products properly. Although most pharmacists likely apply due care to their compounding practices, additional incentives to maintain a high standard of care should motivate those pharmacists, in a minority, whose practices are sub-standard. Finally, data derived from the inspections would provide regulators with information to guide future regulatory initiatives. Appropriate regulation should focus on the source of safety and potency problems. This data would guide regulators to ensure regulation is not too strict for products or practices that tend to meet a high standard of care but would more efficiently focus on practices that cause problems.

The Missouri State Board of Pharmacy recently instituted this type of program.[275] Although the testing requirements was instituted in response to the Kansas City pharmacist who intentionally diluted chemotherapy medications in order to make extra money, the results will likely raise the standard of care used by legitimate compounding pharmacists.[276] In addition, the data derived from this testing will guide Missouri regulators in determining whether more extensive regulation is necessary to ensure safe, effective products or whether compounding pharmacists are producing high-quality compounds and the problems are rare exceptions.

Inspection of pharmacies that engage in compounding could take several forms. Automatic testing and inspection should be done for any pharmacy that is the subject of consumer complaints or adverse effect reports. Beyond this automatic trigger, inspection could be randomized, like the Missouri program. A randomized process places pressure on all pharmacies to maintain the highest levels of care at all times. It also recognizes that any pharmacist who compounds can potentially be doing so at an inadequate standard of care. Alternatively, factors that cause more concern, such as the difficulty of compounding engaged in or the number of prescriptions compounded could trigger inspections. This approach would target those pharmacies most likely to have safety or potency problems, due to either the difficulty or the sheer quantity of compounding and thus more efficiently utilize sparse resources.

Finally, states should continue to institute specific compounding guidelines. California requires sterile compounders to comply with very specific regulations.[277] It is also considering regulations that would outline equipment, procedure, and training requirements for sterile compounding.[278] States can look to each other and to professional pharmacy organizations for guidance regarding the most effective mechanisms by which to increase patient safety while protecting patient access.


Compounding pharmacy is an important part of the healthcare system. Patients often have needs not met by manufacturers who produce products for a mass-market. A compounding pharmacist can create a specialized dosage form thus closing that gap. Although there are safety risks inherent in compounding, appropriate attention to training, equipment, and skill can decrease these risks.

Recognition of the importance of access to compounded medications and patient autonomy over healthcare decisions supports a regulatory scheme for compounding pharmacy that differs from that of proprietary medications. Currently both dietary supplements and off-label prescriptions are regulated in a manner recognizing the importance of these interests. Many of the justifications for exceptions to traditional FDA approval of both dietary supplements and off-label prescriptions also apply to compounded products.

Appropriate regulation of pharmacy compounding should rest with the states and national pharmacy organizations which have more expertise about the nature and importance of this highly specialized practice. FDA should continue to regulate compounders whose activities resemble those of a manufacturer but should not have main authority over compounding. Congress must pass legislation exempting traditional compounding from the requirements of the FDCA. In doing so, Congress should reinstitute factors to help pharmacists and the FDA determine which activities will be considered manufacturing and which activities will be considered compounding. Potential factors include an advertising restriction focused only on patients as well as traditionally posed factors such as restrictions on compounding products deemed demonstrably difficult to compound, bans on commercial-scale equipment, limits on anticipatory compounding, and prohibition of wholesale distribution. Volume-based restrictions undermine the ultimate goal of safety by limiting pharmacists with appropriate skills, expertise, and knowledge from compounding most of their dispensed prescriptions and should therefore be eliminated. Congress could also institute minimally intrusive federal requirements for compounders to protect patient safety such as labeling, good manufacturing practices for sterile compounding, and adverse event reporting.

Finally, in order for this regulatory scheme to be effective, states, working together with professional pharmacy organizations, must carefully consider appropriate guidelines for compounding pharmacists. Potential regulations could require training or certification, institute randomized inspections, or focus on specific compounding practices and require specific equipment or procedures, as necessary.

Compounding pharmacy is the root and the symbol of the pharmacy profession. The practice is vital and necessary for patients whose needs are not met through readily available proprietary products. Regulators should consider the importance of access and autonomy when guiding compounding pharmacy professionals. Both pharmacists and regulators agree that patient safety is of the utmost importance. A mutually acceptable regulatory scheme that protects patient safety without hindering legitimate compounding practice should be the ultimate goal.

[1] See Statement Before the Food and Drug Administration’s Pharmacy Compounding Advisory Committee Detailing Problems with its Regulation of Pharmacy Compounding (1998) (statement of Larry D. Sasich, Public Citizen Health Research Group) available at http:/www.citizen.org/publications//release.cfm?ID=6661.

[2] See J.H. Perrin, Comments on Drugs Difficult to Compound and the Quality of Chemicals to be used in Compounding, available at http://www.fda.gov/ohrms/dockets/dockets/98d0272/c000005.pdf.

[3] Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003) (statement of Sarah Sellers, PharmD, Executive Director, The Center for Pharmaceutical Safety) [hereinafter Sellers testimony].

[4] See Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003) (statement of Daniel A. Herbert, RPh, President Elect, American Pharmaceutical Association) [hereinafter Herbert testimony].

[5] Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003) (statement of Steven Galson, MD, MPH, Deputy Director, Center of Drug Evaluation and Research, Food and Drug Administration) [hereinafter Galson testimony].

[6] See Thompson v. Western States, 122 S. Ct. 1497, 1505 (2002).

[7] See Food and Drug Administration Modernization Act of 1997, 21 U.S.C. § 503A (1997) [hereinafter FDAMA].

[8] See Western States, supra note 6.


[10] See Herbert testimony, supra note 4 (quoting CHRONICLES OF PHARMACY ).

[11] See LAWALL supra note 9 at 2.

[12] Id. at 2-3.

[13] Id.

[14] Id. at 4.

[15] Id. at 10.

[16] Id. at 61.

[17] Id. at 292.

[18] Id. at 485.

[19] James A. Sundberg, Extemporaneous Compounding in the Hospital Pharmacy, 1 INTERNATIONAL JOURNAL OF PHARMACEUTICAL COMPOUNDING 314 (1997).


[21] David W. Newton, Compounding Paradox: Taught Less and Practiced More , 7 INTERNATIONAL JOURNAL OF PHARMACEUTICAL COMPOUNDING 399 (2003).

[22] Id.

[23] See Model State Pharmacy Act and Model Rules of the National Association of Boards of Pharmacy, at 203 (June 2003), available at http://www.nabp.net. NABP defines manufacturing as: ““Manufacturing” means the production, preparation, propagation, conversion, or processing of a Drug or Device, either directly or indirectly, by extraction from substances of natural origin or independently by means of chemical or biological synthesis. Manufacturing includes the packaging or repackaging of a Drug or Device or the Labeling or relabeling of the container of a Drug or Device for resale by pharmacies, Practitioners, or other Persons.” Id. at 9.

[24] See Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions, 108th Cong. (2003) (statement of Janet Heinrich, Director, Health Care – Public Health Issues, GAO) [hereinafter Heinrich testimony]. The FDA recently did a limited study of compounding practice in the United States. The results of that study estimate that six-percent of all prescriptions dispensed were compounded. See id.

[25] See Herbert testimony, supra note 4.


[27] See id. at 25.1.

[28] See id. at 31.1.

[29] See id. at 30.2 (describing one of the uses of ointments, creams, gels, and pastes as a vehicle for medication delivery for systemic effect). One example of a medication commonly used topically for systemic effect is a nitroglycerin ointment to treat angina. Id.

[30] See id. at 31.1. Rectal and vaginal suppositories can be used for either local or systemic effect. Id. Patients who are unconscious, vomiting, having seizures, or have other gastrointestinal obstructions are commonly administered medication through this route. Id.

[31] See id. at 28.1.

[32] See Herbert testimony, supra note 4.

[33] See THOMPSON , supra note 26 at 30.1-30.2.


[35] See id. at 140.

[36] See id. at 138.

[37] Id. at 140.

[38] Id.

[39] Id.

[40] Manufacturers can patent drug delivery devices. Id. Proprietary bio-identical estradiol-only products are on the market under the brand names Climara, Estraderm, and Vivelle. Id.

[41] See THOMPSON , supra note 26 at 33.1

[42] See id. at 33.2-33.4.

[43] See Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight before the Senate Comm. on Health, Education, Labor, & Pensions, 108th Cong. (2003) (statement of American Society of Health-System Pharmacists).

[44] See THOMPSON , supra note 26 at 32.1

[45] See id. at 32.1-32.3.

[46] See id.

[47] See Herbert testimony, supra note 4.

[48] See id.

[49] See id.

[50] See Heinrich testimony, supra note 24 at 4.

[51] Id.

[52] See Janice L. Feinberg, Broad Definitions May Threaten Pharmacist Compounding Activities , THE CONSULTANT PHARMACIST , June 1992, at 622.

[53] See id.

[54] See Donna Young, Outsourced Compounding Can Be Problematic: Community Pharmacies Linked to Contaminated Injectables , AMERICAN JOURNAL OF HEALTH -SYSTEM PHARMACY , December 2002, at 2261.

[55] See University of Toledo College of Pharmacy, Entry Level Doctor of Pharmacy, at http://www.utpharmacy.org/entryphd.htm. The University of Toledo requires a calculations course in the third-year and a “Biopharmaceutic & Pharmacokinetic” course in the fourth year. Id. See also Campbell University, Doctor of Pharmacy Curriculum, at http ://www.campbell.edu/pharmacy/programs/PharmD/PharmDCurriculum.htm (requiring calculations in the first professional year); Creighton School of Pharmacy, Pharmacy Curriculum, at http://www.creighton.edu/Registrar/Bulletin/SPHP_05/PHCurriculum.htm (requiring calculations in the first professional year); Samford University Professional Pharmacy Curriculum, at http://www.samford.edu/schools/pharmacy/curricul.htm (requiring calculations in the first professional year).

[56] Michael J. Romano, MD & Ann Dinh, MD, A 1000-Fold Overdose of Clonidine Caused by a Compounding Error in a 5-Year-Old Child with Attention-Deficit/Hyperactivity Disorder , PEDIATRICS , August 2001, at 471.

[57] Id.

[58] Id.

[59] Id.

[60] Despite this substantial overdose, the patient did survive. Id.


[62] Id. at 61-63.

[63] Id. at 67.

[64] Id. at 71. Note that this list is merely illustrative, not exhaustive.

[65] See Food and Drug Administration, Center for Drug Evaluation and Research, FDA Analysis of Cardiac Valvular Dysfunction with Use of Appetite Suppressants, available at , http://www.fda.gov/cder/news/slides/index.htm.

[66] See Food and Drug Administration, FDA Talk Paper, Bayer Voluntarily Withdraws Baycol (August 8, 2001), available at http://www.fda.gov/bbs/topics/ANSWERS/2001/ANS01095.html.

[67] See e.g., Schaerrer v. Stewart’s Plaza Pharmacy, 79 P.3d 922 (Utah 2003) (finding a compounding pharmacist exempt from liability in product liability action regarding compounded fen-phen).

[68] See Perrin, supra note 2.

[69] Id.

[70] Id.

[71] Mark R. Prausnitz, Samir Mitragotri, & Robert Langer, Current Status and Future Potential of Transdermal Drug Delivery , NATURE REVIEW DRUG DISCOVERY (Feb. 2004).

[72] ALLEN , supra note 61, at 43.

[73] See id.

[74] See Perrin, supra note 2.

[75] ALLEN , supra note 61, at 44.

[76] All fifty states describe compounding as part of pharmacy practice in their regulations. See Heinrich testimony, supra note 24.

[77] See Michael F. Conlan, Compounding vs. Manufacturing, Where is the Line? , DRUG TOPICS , October 12 1992 at 46.

[78] See id. (quoting Letter from John H. Turner, Director, FDA Atlanta District, to Marx R. Gaines, R. Ph, Trumarx Drugs (1992)).

[79] Food and Drug Administration Compliance Policy Guide 7132.16, Subject: Manufacture, distribution and promotion of adulterated, misbranded, or unapproved new drugs for human use by state-licensed pharmacies. FDA Office of Enforcement, Division of Compliance Policy, March 16, 1992 [hereinafter “1992 Compliance Policy Guide”].

[80] See United States v. Baxter Healthcare Corp., 712 F. Supp. 1352, 1354 (N.D. Ill. 1989), aff’d 901 F.2d 1401 (7th Cir. 1990).

[81] See id. at 1356.

[82] See infra pp. 22-24.

[83] See Baxter, supra note 80 at 1354.

[84] See id.

[85] See id. at 1360.

[86] See 1992 Compliance Policy Guide, supra note 79.

[87] Id.

[88] Id.

[89] Id.

[90] Id.

[91] Id.

[92] Id.


[94] See id. at 90.

[95] See id.

[96] See id. at 92.

[97] Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301, et. seq. (2004) [hereinafter FDCA].

[98] See id. at 150.

[99] See id.

[100] See id. at 152.

[101] See id. at 154.

[102] FDCA, supra note 97 at § 355(d) & (e).

[103] Section 201(p) of the Act defines a “new drug” as: “(1) Any drug (except a new animal drug or an animal feed bearing or containing a new animal drug) the composition of which is such that such drug is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof, except that such a drug not so recognized shall not be deemed to be a ''new drug'' if at any time prior to the enactment of this Act it was subject to the Food and Drugs Act of June 30, 1906, as amended, and if at such time its labeling contained the same representations concerning the conditions of its use; or (2) Any drug (except a new animal drug or an animal feed bearing or containing a new animal drug) the composition of which is such that such drug, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized, but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions.” FDCA Supra note 97 at § 321(p).

[104] The regulations define new drug as:

“(g) New drug substance means any substance that when used in the manufacture, processing, or packing of a drug, causes that drug to be a new drug, but does not include intermediates used in the synthesis of such substance.

(h) The newness of a drug may arise by reason (among other reasons) of:

(1) The newness for drug use of any substance which composes such drug , in whole or in part, whether it be an active substance or a menstruum, excipient, carrier, coating, or other component.

(2) The newness for a drug use of a combination of two or more substances , none of which is a new drug.

(3) The newness for drug use of the proportion of a substance in a combination, even though such combination containing such substance in other proportion is not a new drug.

(4) The newness of use of such drug in diagnosing, curing, mitigating, treating, or preventing a disease, or to affect a structure or function of the body, even though such drug is not a new drug when used in another disease or to affect another structure or function of the body.

(5) The newness of a dosage, or method or duration of administration or application , or other condition of use prescribed, recommended, or suggested in the labeling of such drug, even though such drug when used in other dosage, or other method or duration of administration or application, or different condition, is not a new drug.” 21 C.F.R. § 310.3 (2003) (emphasis added).

[105] See FDCA, supra note 97 at § 331.

[106] Id. at § 351.

[107] Id. at § 352.

[108] Id. at § 352(f).

[109] In contrast, the FDCA does contain exemptions to its manufacturing provisions for pharmacies. The statute exempts pharmacies from the registration and inspection requirements of manufacturers provided they meet certain requirements. Id. at § 360(g)(1), 374(a)(1). Both the registration and inspection exemptions contain limitations including that the pharmacy “not manufacture, prepare, propagate, compound, or process drugs or devices for sale other than in the regular course of their business of dispensing or selling drugs or devices at retail.” Id. The exemption, however, protects a broad range of compounding practices from the traditional regulatory requirements of manufacturers.

[110] Pharmacy Compounding and Preservation Act of 1994, H.R. 598, 104th Cong. (1995).

[111] Pharmacy Compounding Act, H.R. 1060, 105th Cong. (1997).

[112] FDAMA, supra note 7 at § 503A.

[113] Id. at § 503A(a)

[114] Id.

[115] Id. at § 503A(b).

[116] Id. at § 503A(b)(1)(A)(i)(I).

[117] Id.

[118] Id. at § 503A(b)(1)(A)(i)(II) & (III).

[119] Id. at § 503A(b)(1)(B).

[120] Id. at § 503A(b)(1)(C).

[121] Id. at § 503A(b)(1)(D).

[122] Id. at § 503A(b)(3)(A). Notably, the statute specifically exempted mixing, reconstituting, or other such acts performed in accordance with directions contained in approved labeling provided by the manufacturer” from the definition of compounding. See id. at § 503A(f).

[123] Id. at § 503A(b)(3)(B)(i) & (ii).

[124] Id. at § 503A(c).

[125] Id.

[126] Id.. at § 503A(d)(1).

[127] Id.. at § 503A(d)(2).

[128] Id. at § 503A(d)(1).

[129] FDAMA, supra note 7, at § 503A(b)(1)(C), § 503A(b)(3)(A), § 503A(d)(2).

[130] Id. at § 503A(b)(3)(B)(i) & (ii).

[131] Memorandum of Understanding on Interstate Distribution of Compounded Drug Products Between the [State Agency] and the U.S. Food and Drug Administration, draft, December 1998, available at http://www.fda.gov/cder/pharmcomp/2142dft.pdf [hereinafter MOU].

[132] FDAMA, supra note 7, at § 503A(d)(1).

[133] Western States v. Shalala, 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 122 S. Ct. 1497 (2002) [hereinafter Western States Dist. Ct.].

[134] FDAMA, supra note 7 at § 503A(c).

[135] Id.

[136] Western States Dist. Ct., supra note 133, at 1297.

[137] Central Hudson Gas v. Public Service Comm’n, 447 U.S. 557, 563-64 (1980).

[138] Western States Dist. Ct., supra note 133, at 1301-03, 1307-08.

[139] Id. at 1310.

[140] Id.

[141] Id.

[142] Western States v. Shalala, 238 F.3d 1090, 1098 (9th Cir. 2001), aff’d 122 S. Ct. 1497 (2002).

[143] Id.

[144] Thompson v. Western States, 122 S. Ct. 1497, 1509 (2002).

[145] Id. at 1505.

[146] Id. at 1508-09.

[147] Id. at 1509.

[148] Id. at 1505.

[149] Id. at 1506.

[150] See id. at 1506.

[151] Id. at 1510 (Breyer, J., dissenting).

[152] Id.

[153] Id.

[154] Id. at 1513.

[155] Id.

[156] Id. at 1515.

[157] Termination of Two Food and Drug Administration Advisory Committees: Medical Imaging Drugs Advisory Committee and the Pharmacy Compounding Advisory Committee, Notice, 67 Fed. Reg. 225 (Nov. 21, 2002).

[158] Food and Drug Administration Compliance Policy Guide 460.200, Subject: Pharmacy Compounding. FDA Office of Regulatory Affairs, Center for Drug Evaluation and Research (May 2002) [hereinafter 2002 Compliance Policy Guide]. Compliance Guidelines are enforceable by the FDA, but are not subject to the notice and comment provisions of the Administrative Procedure Act (“APA”) and are also not binding on the agency. See Professionals and Patients for Customized Care v. Shalala, 56 F.3d 592 (5th Cir. 1995) (holding 1992 Compliance Policy Guide for Pharmacy Compounding is not subject to APA notice and comment requirements).

[159] See 1992 Compliance Policy Guide, supra note 79.

[160] Id.

[161] Id.

[162] Letter from Steven A. Masiello, Director, Office of Compliance and Biologics Quality, to Mark W. Shinabery, P.D., Director of Pharmacy Operations, Custom Compounding Centers (December 23, 2003), available at http://www.fda.gov/foi/warning_letters/g4474d.htm.

[163] Id.

[164] Letter from Michael A. Chappell, Director, FDA Dallas District, to John R. Rains, R. Ph, CEO, Plum Creek Pharmaceuticals, Inc. (October 7, 2003), available at http://www.fda.gov/foi/warning_letters/g4340d.htm.

[165] Letter from Gail T. Costello, District Director, FDA New England District, to William J. Keefe, Owner, Carneys Drug (May 27, 2003), available at http://www.fda.gov/foi/warning_letters/g4057d.htm. The pharmacy compounded dosages from 800 mcg to 4000 mcg. Id. There are commercially available products available in 200 mcg, 400 mcg, 600 mcg, 800 mcg, 1200 mcg, and 1600 mcg strengths. Id.

[166] Id.

[167] See id.

[168] Letter from Dennis K. Linsely, Director, FDA San Francisco District, to Peter B. Kelly, President and Chief Executive Officer, Med-Mart Pulmonary Services (September 30, 2002), available at http://www.fda.gov/foi/warning_letters/g3527d.htm.

[169] Id.

[170] See Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003) (statement of Kevin Kinkade, RPh, Executive Director, Missouri Board of Pharmacy) [hereinafter Kinkade testimony].

[171] Id.

[172] Id.

[173] CA BUS. & PROF . § 4127.1 (2004).

[174] Id. at § 4127.2.

[175] CAL . CODE REGS . Tit. 16, § 1751 (2004).

[176] See id. (proposed Feb. 21, 2003)

[177] An April 2004 Westlaw search for recent compounding proposals revealed legislation or proposals in: Arizona, Texas, North Dakota, Virginia, Iowa, Mississippi, New Mexico, Montana, Georgia, New Jersey, Delaware, and West Virginia.

[178] See National Association of Boards of Pharmacy, at http://www.nabp.net. The following Guidelines include provisions of pharmacy compounding: Model Rule for Pharmaceutical Care , Good Compounding Practices Applicable to State Licensed Pharmacies , and Model Rules on Sterile Preparations . See id.

[179] See Cheryl A. Thompson, USP Publishes Enforceable Chapter on Sterile Compounding , AMERICAN JOURNAL OF HEALTH -SYSTEM PHARMACY , September 15, 2003 at 1814.

[180] See American Society of Health-System Pharmacists, ASHP Policy Positions, Statements, and Guidelines, available at http://www.ashp.org/bestpractices/index.cfm?cfid=795850&CFToken=74956333. The available ASHP Compounding Guidelines are: Minimum Standard for Pharmacies in Hospital , Minimum Standard for Pharmaceutical Services in Ambulatory Care , Technical Assistance Bulletin on Compounding Nonsterile Products in Pharmacies , Technical Assistance Bulletin on Quality Assurance for Pharmacy-prepared Sterile Products , Technical Assistance Bulletin on Handling Cytotoxic Hazardous Drugs , and Technical Assistance Bulletin on Pharmacy-prepared Ophthalmic Products . See id.

[181] See Thompson, supra note 179.

[182] See id.

[183] See id.

[184] See The United States Pharmacopoeial Convention, Inc., Practical Application of USP to Pharmaceutical Compounding, Packaging, and Dispensing, at http://www.usp.org/education/workshops/pharmacy.html. The applicable USP Chapters are: <795> Pharmacy Compounding—Nonsterile Preparations; <797> Pharmaceutical Compounding—Sterile Preparations; <1075> Good Compounding Practices; <1146> Packaging Practice—Repackaging a Single Solid Oral Product into a Unit-Dose Container; <1160> Pharmaceutical Calculations in Prescription Compounding; <1191> Stability Considerations in Dispensing Practice; USP–NF General Notices and official compounding monographs. Id.

[185] See Heinrich, supra note 24 at 7.

[186] See id.

[187] S. 1, 108th Cong. § 626 (2003).

[188] See Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003).

[189] See Heinrich, supra note 24.

[190] See id.

[191] See Hearing Information, Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003), available at http://labor.senate.gov/bills/030_bill.html.

[192] See Galson testimony, supra note 5.

[193] Id.

[194] Id.

[195] See Sellers testimony, supra note 3.

[196] Id.

[197] Id.

[198] Id.

[199] Id.

[200] See Herbert testimony, supra note 4.

[201] Id.

[202] See id.

[203] See Kinkade, supra note 170; Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients: Hearing on Oversight Before the Senate Comm. on Health, Education, Labor, & Pensions , 108th Cong. (2003) (statement of William Kennedy, RPh, Owner, Nephron Pharmaceuticals Corporation).

[204] See Galson, supra note 5.

[205] See Sellers, supra note 3.

[206] Off-label prescribing occurs when a physician prescribes a medication for an indication for which it is not FDA-approved. See Information Sheets, Information for Institutional Review Boards and Clinical Investigators, 1998 update, at http://www.fda.gov/oc/ohrt/irbs/offlabel.html. It is permissible when the “intent is the practice of medicine.” Id.

[207] See FDCA, supra note 97 at § 396. “Nothing in this chapter shall be construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship . See id. (emphasis added).

[208] See Dietary Supplement Health and Education Act of 1994, Pub. L. No. 103-417, § 2(8) (1994)

[hereinafter DSHEA].

[209] See id. at § 4.

[210] Compare FDCA, supra note 97 at § 355(d)(2) with DSHEA, supra note 208 at § 2 (8).

[211] Accreditation Council for Pharmacy Education, Standards for Mission, Planning, and Assessment, Standard No. 9, available at http://www.acpe-accredit.org/standards/standards1.asp (requiring a minimum of four professional years which traditionally follow a two to four year pre-professional program for a Doctor of Pharmacy degree (“Pharm.D”), the only currently available licensure degree in the United States).

[212] Note that professional judgment is not required for the need determination under DSHEA. Dietary supplements are granted an exemption from traditional FDA new drug approval even without this source of protection to patient safety.

[213] Note also that both dietary supplements and pharmacy compounding were traditionally unregulated by FDA.

[214] For example, St. John’s Wort, is believed to have a mechanism of action similar to proprietary anti-depressants but may affect additional pathways. See J. F. Rodriguez-Landa & C. M. Contreras, A Review of Clinical and Experimental Observations about Antidepressant Actions and Side Effects Produced by Hypericum Perforatum Extracts , 10(8) PHYTOMEDICINE 688 (2003). It is considered a dietary supplement with “potentially significant pharmacological activity.” Id. At least one study found that St. John’s Wort’s efficacy was equivalent to fluoxetine (Prozac) in treating mild to moderate depression but that its side effect profile was superior, making it a safer choice for patients. See E. Schrader, Equivalence of St. John’s Wort Extract and Fluoxetine: A Randomized, Controlled Study in Mild-Moderate Depression , 15(2) INTERNATIONAL CLINICAL PSYCHOPHARMACOLOGY 61, (March 2000).

[215] See DSHEA, supra note 208, at § 1-8.

[216] FDA can remove a product from the market if it determines it is a threat to public health. See id. at § 4.

[217] See id. at § 2(8) (“[C]onsumers should be empowered to make choices about preventive health care programs based on data from scientific studies of health benefits related to particular dietary supplements.”).

[218] See e.g., State of Illinois, Department of Professional Regulation, at http://www.dpr.state.il.us/; State of Massachusetts, State of Massachusetts, Division of Professional Licensure, at http://www.state.ma.us/reg/home.htm.

[219] See American Medical Association, at http://www.ama-assn.org; American Bar Association, at http://www.abanet.org/home.html; American Dental Association, at http://www.ada.org.

[220] When a drug product is contaminated or determined to be otherwise unsafe, regulatory authorities have the authority to seize the product, inspect the pharmacy and sanction the pharmacist at an appropriate level. Additionally, if an inspector finds violations of good compounding practices upon inspection, it can halt compounding activities and impose other sanctions. A state could impose a non-licensure based sanction, take away a pharmacist’s license to practice, or bring criminal charges depending on the nature of the infraction.

[221] THOMPSON , supra note 26.

[222] ALLEN , supra note 61.



[225] Journal of the American Pharmacists Association, available at http://www.aphanet.org/JAPHA/japha/japha.html.

[226] JOURNAL OF HEALTH-SYSTEM PHARMACY , available at http://www.ashp.org.


[228] International Academy of Compounding Pharmacists, at http://www.iacprx.org.

[229] Professional Compounding Centers of America, at http://www.pccarx.com.

[230] See e.g., Jane Spencer & Anna Wilde Mathews, As Druggists Mix Customized Brews, FDA Raises Alarm , WALL ST . J., Feb. 27, 2004 at A1, A6; Carrie Teegardin, Probe Questions Safety of Pharmacy-Made Drugs , THE ATLANTA JOURNAL -CONSTITUTION, M ar. 30, 2001 available at , http://www.vetmed.wsu.edu/pharmacy/VM522P/compound/problems/CompNews.htm.

[231] Recent studies have shown that diuretics are as effective as newer anti-hypertensive medications. See Bruce M. Psaty et al., Health Outcomes Associated with Various Antihypertensive Therapies Used as First-Line Agents: A Network Meta-analysis , 289 THE JOURNAL OF THE AMERICAN MEDICAL ASSOCIATION 2534 (2003). Diuretics are generally thought to be safe and have been used for years but cause frequent urination. See id. Newer medications such as angiotensin-II blockers are less-tested for long-term use, but have a different side effect profile that may be preferable to some patients. See id.

[232] See Western States, supra note 6, at 1510 (Breyer, J., dissenting).

[233] See id.

[234] The Need for Compounded Medications and the Problem of Reimbursement , International Academy of Compounding Pharmacists, at http://www.iacprx.org/pdf/problem_of_reimbursement.pdf.

[235] See Western States, supra note 6, at 1512 (Breyer, J., dissenting).

[236] Garnet L. Anderson et al., Effects of Estrogen Plus Progestin on Gynecologic Cancers and Associated Diagnostic Procedures: The Women’s Health Initiative Randomized Trial , 290 JOURNAL OF THE AMERICAN MEDICAL ASSOCIATION 1739 (2003).

[237] See NORTHRUP , supra note 34, at 139-40; John R. Lee, M.D., Natural Hormone Balance and Natural HRT , at http://www.johnleemd.com/yoinsofornah.html#natural.

[238] Cf. DSHEA, supra note 208 (protecting patient autonomy in choosing dietary supplements).

[239] See HILTS , supra note 93, at 152-54.

[240] See FDAMA, supra note 7.

[241] See id. at 503(A)(b)(3)(B)(i) & (ii).

[242] See id.

[243] See MOU, supra note 131.

[244] See FDAMA, supra note 7 at 503A(c).

[245] See Western States, supra note 6, at 1515 (Breyer, J., dissenting).

[246] Seventy-one percent of doctors surveyed indicated they lacked adequate prescription compounding information. Rebecca J. Riley, Extent and Perceived Need for Compounded Prescription Products , unpublished research, The University of Toledo (June 2000).

[247] In addition, sixty-nine percent of pharmacists and ninety-three percent of pharmacists who specialize in compounding indicated that they believed doctors lacked adequate compounding information. See id.

[248] See Western States, supra note 6, at 1505.

[249] See id. at 1510 (Breyer, J., dissenting).

[250] See Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).

[251] See id. at 763, 770. The Court explicitly overruled a 1942 decision holding that the First Amendment does not protect commercial speech. See Valentine v. Chrestensen, 316 U.S. 52 (1942).

[252] See id. at 772, n. 24.

[253] See id.

[254] See Western States, supra note 6, at 1506.

[255] See id.

[256] See id.

[257] See 1992 Compliance Policy Guide, supra note 79.

[258] See 2002 Compliance Policy Guide, supra note 158.

[259] See DSHEA, supra note 208, at § 6(C).

[260] See FDCA, supra note 97, at § 360

[261] Id. at § 360(g).

[262] See Thompson, supra note 179.

[263] See Medwatch, The FDA Safety Information and Adverse Event Reporting Program, at http://www.fda.gov/medwatch/.

[264] See id.

[265] See id. at http://www.fda.gov/medwatch/report/mfg.htm.

[266] U.S. Pharmacopoeia MEDMARX, at https ://www.medmarx.com/index.jsp.

[267] See id.

[268] See id.

[269] See Herbert testimony, supra note 4.

[270] See Newton, supra note 21 at 399.

[271] Accreditation Council for Pharmacy Education, Standards for Mission, Planning, and Assessment, Standard No. 10a, available at http://www.acpe-accredit.org/standards/standards1.asp.

[272] See Loyd V. Allen, Compounding: The State of the Art , U.S. PHARMACIST 72 (Dec. 1992).

[273] In addition to its regular training courses, PCCA offers a “Pharmacy Student Compounding Boot Camp” for pharmacy students interested in intensive compounding training. See PCCA – Training, at http://www.pccarx.com/training.asp.

[274] See CA BUS. & PROF ., supra note 173, at § 4127.1.

[275] See Kinkade testimony, supra note 170.

[276] Id.

[277] See CAL . CODE REGS . Tit. 16, supra note 175, at § 1751.

[278] See id. (proposed Feb. 21, 2003).