Last week, the House Energy & Commerce Subcommittee on Oversight & Investigations (O&I) and the Senate Health, Education, Labor & Pensions (HELP) Committee held hearings investigating the recent outbreak of fungal meningitis linked to contaminated lots of methylprednisolone acetate produced by the New England Compounding Center (NECC). The hearings — considering both the tone and content of Congress' inquiries and witness testimony — offer important insight into how Congress will address this situation in the short term.

  • Frustration with FDA may influence legislative proposals: As has been widely covered by national and trade media, U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg had an extremely tough two days on Capitol Hill. Although Dr. Hamburg repeatedly asserted that the agency did not have clear oversight authority over NECC and that her agency is currently working "very hard" to understand what caused the massive breakdown in communication among federal, state and local public health officials, members on both sides of the aisle found her responses to questions unconvincing and unsatisfactory. In both chambers, members were visibly frustrated with Dr. Hamburg's inconclusive responses when asked how Congress might better clarify FDA's authority. Members were more receptive to the testimony of Dr. Lauren Smith, Interim Commissioner for the Massachusetts Department of Public Health, who readily admitted the shortcomings of her agency and offered suggestions for how Congress may eliminate the "gray area" in oversight of compounding pharmacies among state health departments, boards of pharmacies and federal agencies.
    • IMPACT: Frustration with FDA's refusal to accept responsibility for its role and its current inability to propose specific reforms will lead to future hearings and legislation in the near future. Stakeholders involved with compounded products will also find their customers, suppliers or their own businesses under increased regulatory scrutiny.
  • Questions over FDA authority to regulate illicit compounding pharmacies remain: Several Republicans — in particular, Reps. Mike Burgess (R-TX) and Tim Murphy (R-PA) — asserted that FDA had ample authority to shut down NECC and should have acted. However, many Democrats — including Reps. Diana DeGette (D-CO) and Kathy Castor (D-FL) — argued that recent court decisions created confusion and allowed compounders to challenge the agency's ability to enforce existing regulations. During an exchange with Sen. Pat Roberts (R-KS) at a HELP Committee hearing, David G. Miller of the International Academy of Compounding Pharmacy and Dr. Kasey K. Thompson of the American Society of Health-System Pharmacists agreed that NECC was behaving as a manufacturer rather than a compounder, but that FDA's authority to act may not have been clear since there is no clear process for identifying compounders or bad actors and therefore regulating them. Arguments about possible lack of FDA authority were undercut by FDA's 2006 warning letter to NECC for much the same conduct and the current inspection and enforcement focus on NECC.
    • IMPACT: It is likely that Congress will pass more specific legislation regulating compounding pharmacies.

Additionally, at least one state board of pharmacy has already responded to the outbreak and federal investigation by this week circulating an advisory memo to its pharmacies and pharmacists drawing a bright line between compounding and manufacturing — the memo explicitly prohibits compounding unless done for an individual patient pursuant to a prescription, and makes no exceptions for drug shortages, as has been suggested in legislation proposed by Rep. Ed Markey (D-MA).

  • IMPACT: It is likely other state boards will shortly issue new guidelines for compounding pharmacies. Stakeholders should track such changes and determine the business impact. Hospital and other stakeholders are moving quickly to evaluate their current compliance programs and to modify them in light of new state and federal direction.
  • Bipartisan, bicameral legislation anticipated early next year: Members overwhelmingly called upon their committee leaders to act expeditiously to consider bipartisan, bicameral legislation to address the regulatory gaps brought to light by the outbreak. For example, HELP Committee Chairman Tom Harkin (D-IA), Ranking Member Enzi (R-WY) and Sen. Roberts (R-KS) committed to continued attention to the matter and agreed there is an urgent need for regulation to ensure "bad actors cannot take advantage of patients."
    • IMPACT: It is likely any proposed legislation will seek to draw a bright line between traditional compounding and manufacturing. How that legislation is drafted is up for debate, with at least three possible approaches being considered: better define and subject "interstate activity" to FDA jurisdiction; define and subject "large-scale manufacturing" to FDA authority; and define and subject "single-patient compounding" to FDA authority.
  • Enforcement Action is highly likely: FDA has already inspected NECC, issued a lengthy inspection report and started a criminal investigation. The CEO of NECC "pled the Fifth" when called to testify before Congress. The state has revoked NECC's license and more action is expected. These enforcement actions, together with the already pending lawsuits, will keep this issue in front of the public and Congress.

BOTTOM LINE: There are two key conclusions from the current NECC controversy:

  • Neither Congress nor FDA will ignore this issue. There will be more hearings, publicity and legislation. Once there is new legislation, FDA will start implementation, including issuing draft guidelines. Stakeholders — including hospitals and health systems, providers, industry, academia and patient advocacy organizations — will want to closely follow this process and provide Congress and FDA with thoughtful comments to inform and shape the final provisions.
  • The NECC situation will probably increase FDA's overall vigilance and conservatism across all product areas (including drugs, devices, and food) — particularly inspections and enforcement. FDA has been roundly criticized for its perceived failure to inspect, re-inspect and take more aggressive enforcement action. This criticism will push FDA to take faster and more rigorous enforcement action in other cases. The NECC situation, together with other recent political developments, will support a more pro-regulation and pro-enforcement mindset within FDA. 

FaegreBD Consulting's health and biosciences practice team and Faegre Baker Daniels' health law practice, having advised and advocated on behalf of a number of clients concerned with patient safety, has deep policy, program development, regulatory and legal expertise in this complex space. Our team will be engaged throughout the legislative and implementation process on these key issues and can support stakeholders of all types to help shape key policies, regulations and guidelines and navigate the process within Congress and federal agencies.