Drug-Compounding Law Confounds Pharmacies and Regulators
In 2012, a pharmacy outside of Boston called the New England Compounding Center sold more than 17,000 vials of a steroid it had manufactured to treat back pain. Tainted with a fungus, the medication caused meningitis and killed 64 of those who used it.
In a rare sign of bipartisan unity around regulation, Congress passed legislation the following year to ensure that pharmacies that make drugs, through a process called compounding, use good manufacturing practices.
Four years later, the Food and Drug Administration says it doesn’t like what it’s finding and its fiscal 2017 budget request to Congress was a plea for help.
It’s unlikely to get it. Instead, Congress is demanding that the FDA scale back inspections that it believes intrude on the states’ traditional regulatory role.
But a February Pew Charitable Trusts study found wide variation in state oversight. More than half of the states, for example, do not require pharmacies to report adverse drug reactions that come to their attention.
The job of overseeing them is massive and the FDA says it has, through its broader regulatory authority, the power to police bad manufacturing practices that are brought to its attention even at corner drug stores.
While there is no national estimate of all facilities that compound drugs, Texas estimates it has 800 within its borders alone.
Gay Dodson, executive director of the Texas State Board of Pharmacy, says the board is entirely funded with fees charged to the pharmacies.
“We’re limited, I guess you might say, in how many we test based on how much money we have,” Dodson says.
Only 60 facilities nationwide have registered with the FDA as large-scale manufacturers, or outsourcers, and it’s not clear whether that reflects the true size of the industry.
Agency inspectors have discovered alarming practices at compounding facilities, the FDA said. In one, dogs were permitted to roam. Another used a toaster to sterilize equipment. In another, dead insect carcasses were in the ceiling.
“FDA needs additional resources to continue its inspection efforts and to take regulatory action, as appropriate, to protect the public health,” the request said.
In April, Rep. Earl L. “Buddy” Carter, a freshman Republican who represents a Savannah, Ga.-based district, took to the House floor to blast the agency for trying to force small drug stores that compound drugs for patients or for doctors for “office use” to meet the same manufacturing standards as larger facilities.
“This goes against all congressional intent, to allow state pharmacy boards to continue local control of their small pharmacies,” Carter said.
“Now, all state pharmacy boards that allow office use have had their powers taken away from them,” he said.
Carter speaks from experience. Prior to joining Congress he was a licensed pharmacist and owned three drug stores. He is the only pharmacist in Congress.
Compounding is the process by which pharmacists tailor a drug to a patient’s medical need. If a patient is allergic to an ingredient in a brand name or generic drug, a pharmacist can cook up a version without the ingredient. If a patient can’t swallow pills, a pharmacist can produce a liquid version.
Compounding goes back to pharmacies’ early days, when local pharmacists did almost all compounding. But what began as a practice done in corner pharmacies has become big business.
The New England Compounding Center, for instance, was essentially manufacturing a generic version of a brand name steroid and shipping it without FDA oversight that accompanies other drug manufacturers.
The 2013 law, sponsored by Michigan GOP Rep. Fred Upton and then-Iowa Democratic Sen. Tom Harkin — the chairmen of two committees with oversight of the drug industry — sought changes. It set up two classes of compounders, those making drugs for patients with a prescription and those mass producing them. The latter can, but don’t have to, register as outsourcing pharmacies. They are subject then to FDA inspection and must comply with good manufacturing practices, but they needn’t follow all the rules generic and brand-name drugmakers do. In return, they get what amounts to an FDA seal of approval.
Though voluntary, the theory was that market forces would require large-scale compounders to register. The smaller compounders remain, primarily, under the regulatory purview of state boards of pharmacy.
Still, as Carter points out, the FDA has also been conducting spot inspections of smaller drug stores, arguing that it must ensure that they are complying with the law and only compounding drugs for patients with prescriptions.
The agency says it limits these inspections to pharmacies about which patients have complained or which have otherwise come to its attention for unsafe practices. It has taken some of these pharmacies to court for violating federal drug safety laws and referred others to the state boards.
“You end up penalizing a group that does not deserve to be penalized,” Carter says.
The law left compounders confused about the new regulatory balance between the states and the FDA, says Aaron Lopez, the senior director of public affairs at PCCA, an industry group formerly known as the Professional Compounding Centers of America.
“There really isn’t anything in the law that supersedes the state necessarily in the overseeing of pharmacies,” Lopez says.
“When the law was passed I think neither Congress nor the FDA knew how many companies” would register as outsourcers, says Michael Carome, director of the Health Research Group at Public Citizen, a consumer group. Carome believes scores of large compounders have not registered with FDA.
He says the law left in place a loophole. Drugs made by compounders do not have to win FDA approval. But patients often prefer them because they are cheaper.
FDA spokesman Christopher Kelly says the agency has no official estimate of how many large-scale compounders there are. But it’s had trouble with many of those who have registered. Six recalled drugs after FDA inspectors raised concerns.
Another 16 have received warning letters from the agency. As of May 20, 14 had not been inspected at all.
John Voliva, executive vice president of the International Academy of Compounding Pharmacists, says the 60 registrations cover most, if not all, of the industry. His group has fought FDA efforts to inspect facilities that have not registered, convincing lawmakers to add warnings against overstepping to reports accompanying the FDA’s annual spending bills.
The House report for the fiscal 2017 measure, for instance, instructs the FDA to loosen its requirement that smaller compounders have prescriptions for specific patients in all cases. The agency should allow compounders to mix drugs in advance for doctors’ office use or in anticipation of new prescriptions for regular customers, the report says.
The FDA realized early on that the fees it collects from outsourcing facilities —$15,000 each with discounts for small businesses — would not be enough to adequately regulate compounding. In 2014 an FDA deputy commissioner, Sally
Howard, told an advocacy group: “If we could just call it a day by doing enforcement” at registered facilities, “that would be perfectly fine, but as everyone knows that would not be appropriate.”
The FDA has not changed its position on that, Kelly says. “Because registration as an outsourcing facility is not required,” he says, “FDA will not be able to rely on projected user fees to sustain the increased pace of inspections and investigations.”
But the agency hasn’t pressed Congress hard for extra money. In 2014, it said it needed $25 million to do the job. Congress gave it $17 million the following fiscal year. The agency’s budget request for fiscal 2017 is $18.4 million.
Last year the Government Accountability Office, which oversees agencies for Congress, added FDA oversight of drug compounding to its “high risk list.” Those are areas at risk of failure due to fraud, waste, abuse and mismanagement.
