NOTE: Last year, compounding became major news when approximately 55 people died and 740 became ill after receiving injections of a drug prepared at a Massachusetts compounding pharmacy—and we've continued to see compounding issues in the headlines. Last month, seven infections were tied to steroid injections from a Tennessee compounding pharmacy, and the U.S. Department of Justice revoked the permit of a New Jersey compounding pharmacy after discovering that some of its products were contaminated with mold. What regulation is likely to come? Find out in Manatt's new article, just published in Pharmaceutical Executive, "Pharmacy Compounding: What Lies ahead for Manufacturers?" You can read the summary below—and click here to read the full article.

Compounding pharmacies are currently regulated at the state level. Although some states have been working to tighten regulations—including Massachusetts, New Jersey and Florida—shrinking budgets leave them ill-equipped to regulate compounding facilities, many of which act more like manufacturers.

There was an attempt at federal regulation of compounders in 1997 under the FDA Modernization Act (FDAMA). A provision in the law prohibiting soliciting prescriptions and advertising any particular compounded drug led to a challenge, however, that the Supreme Court upheld in 2002. While the Supreme Court agreed that the soliciting and advertising restrictions were not permissible, it did not rule on other key portions of the law, including prohibitions preventing compounders from acting as manufacturers and from copying FDA-approved products. As a result, the decision of the Ninth Circuit (which had heard the case prior to the Supreme Court appeal) to strike down the compounding regulations became the standard.

In 2008, the Fifth Circuit took up the issue and decided that the compounding regulations not related to advertising were enforceable. This new conclusion, however, applied only in states within the Fifth Circuit—Texas, Louisiana and Mississippi. For the rest of the country, the FDA's authority over compounders is detailed in a compliance policy guide, issued after the Supreme Court case in 2002.

What's Next for Federal Regulation?

On May 15, 2013, the FDA, public health officials and members of the Senate Health, Education, Labor and Pensions Committee introduced the Pharmaceutical Compounding Quality and Accountability Act. The proposed legislation creates a new class of compounders called "compounding manufacturers," that prepare drugs for interstate commerce. The proposed law:

  • Prohibits compounding manufacturers from producing copies of FDA-approved drugs
  • Requires compounding manufacturers to register with the FDA and pay establishment fees starting at $15,000 in 2015
  • Clarifies that compounded products are new drugs subject to the Federal Food, Drug and Cosmetic Act (FDCA) and specifies the applicable provisions
  • Holds compounding manufacturers to FDA standards and requires them to report adverse events

Who Is at Risk in Product Liability Claims?

When patients are harmed by a compounded product, the compounding pharmacy can be sued for product liability. In some states, however, liability can extend to the manufacturer, if the compounder is declared insolvent. Drug manufacturers who provide active ingredients to compounders also could be at risk.

The Debate Continues…

With compounding pharmacies in the news, the debate around the proper level of oversight is likely to continue. While the passage of federal legislation remains uncertain, it is probable that we will see both new state regulations and increased FDA focus.