Federal Authority to Regulate the
Compounding of Human Drugs
Andrew Nolan
Legislative Attorney
April 12, 2013
Congressional Research Service
7-5700
www.crs.gov
R43038
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Federal Authority to Regulate the Compounding of Human Drugs
Summary
In light of the 2012 fungal meningitis outbreak, believed to have been caused by a contaminated
compounded steroid injection, the regulation of human drug compounding has received
significant attention. Drug compounding in its traditional form is the process of combining,
mixing, or altering ingredients in order to create a medication for a particular patient. However, as
illustrated by the entity that created the steroid medication linked with the meningitis outbreak,
concerns have been raised about compounding pharmacies producing drugs on a larger scale.
While drug compounding has historically been the focus of state governments through their
regulation of pharmacies, questions have arisen regarding the extent the federal government can
regulate the practice of compounding through the Food, Drug, and Cosmetic Act (FDCA).
Federal authority over compounding largely stems from the FDCA, enacted in 1938, and its
subsequent amendments, including the Food and Drug Administration Modernization Act
(FDAMA) of 1997, which added compounding specific provisions to the FDCA in Section 503A.
A First Amendment challenge to Section 503A’s advertising provisions and a resulting Supreme
Court decision has created a split amongst the federal courts regarding whether Section 503A has
any legal effect. The legal uncertainty regarding Section 503A, coupled with Section 503A’s basis
in the FDCA’s “new drug,” “adulteration,” and “misbranding” provisions lends to an examination
of the scope of federal authority under the base statute. Courts appear to agree that the federal
government can regulate compounding activity that is akin to manufacturing, and courts have
afforded deference to the FDA’s interpretation of when a compounder is acting like a
manufacturer. However, uncertainty remains regarding the possible limits to the FDA’s power to
regulate traditional compounding activities. This report will examine the FDA’s regulation of
drug compounding and will discuss relevant legal authorities. The report will conclude by
discussing potential limits to the FDA’s authority to regulate human drug compounding.
Congressional Research Service
Federal Authority to Regulate the Compounding of Human Drugs
Contents
Background ...................................................................................................................................... 1
Federal Regulation of Compounded Drugs ..................................................................................... 2
Compounding Before the 1938 Food, Drug, and Cosmetic Act ................................................ 2
The 1938 Food, Drug, and Cosmetic Act .................................................................................. 2
Kefauver-Harris Drug Amendments of 1962 ............................................................................ 5
Food and Drug Administration Modernization Act of 1997 and Compounding ....................... 5
FDAMA and Federal Authority After
Thompson v. Western States Medical Center ................. 6
Limits on Federal Authority to Regulate Compounded Drugs ........................................................ 9
Tables
Table 1. Factors Guiding Whether the FDA Will Take Action Against a Compounder of
Human Drugs ................................................................................................................................ 8
Contacts
Author Contact Information........................................................................................................... 13
Congressional Research Service
Federal Authority to Regulate the Compounding of Human Drugs
Background
Drug compounding traditionally refers to the process in which a pharmacist combines, mixes, or
alters various ingredients to create a medication that is “tailored to the needs” of an individual
patient.1 Compounding is generally used to prepare medications that are not commercially
available, such as a drug in a lower dosage for a child, or a drug without a dye or a preservative in
response to a patient allergy.2
Recent events have refocused attentions on compounding and the federal role in regulating drug
compounding. In the fall of 2012, the Food and Drug Administration (FDA) and the Centers for
Disease Control and Prevention (CDC) identified the presence of bacterial and/or fungal
contamination in steroid injections from a New England compounding pharmacy.3 The
contamination has been linked with a multistate fungal meningitis outbreak that resulted in over
50 deaths.4
As a consequence, questions have arisen regarding the safety of compounded drugs and the role
of federal and state governments in regulating compounded drugs and compounding pharmacies.
Congressional hearings held by the Energy and Commerce Committee of the U.S. House of
Representatives and the Health, Education, Labor, and Pensions Committee of the U.S. Senate
probed the current policy and legal questions prompted by the meningitis outbreak.5 One of the
issues raised at these hearings was the extent of federal authority over compounding.6 During
these hearings, the Commissioner of the FDA noted the need for clarification and strengthening
of the FDA’s authority to “prevent” contaminations caused by compounding from occurring in the
future,7 while other representatives of professional associations contended that existing FDA
authorities were adequate to have prevented the 2012 outbreak.8 Thus, in the wake of the 2012
1
See Thompson v. W. States Med. Ctr., 535 U.S. 357, 360-61 (2002).
2
Id. at 361.
3 Centers for Disease Control and Prevention,
Multistate Fungal Meningitis Outbreak Investigation—Current Case
Count, http://www.cdc.gov/hai/outbreaks/meningitis.html.
4 Centers for Disease Control and Prevention,
Multistate Fungal Meningitis Outbreak Investigation—Current Case
Count, http://www.cdc.gov/hai/outbreaks/meningitis-map-large.html (noting that as of March 25, 2013, 730 cases of
fungal infections had been linked to steroid injections, resulting in 51 deaths).
5
See U.S. Congress, House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations,
The
Fungal Meningitis Outbreak: Could It Have Been Prevented, 112th Cong., 2nd sess., November 14, 2012;
see also U.S.
Congress, Senate Committee on Health, Education, Labor, and Pensions,
Pharmacy Compounding: Implications of the
2012 Meningitis Outbreak, 112th Cong., 2nd sess., November 15, 2012, http://www.help.senate.gov/hearings/hearing/?
id=5f5def0d-5056-a032-5297-eab57634d209.
6 U.S. Congress, Senate Committee on Health, Education, Labor, and Pensions,
Pharmacy Compounding: Implications
of the 2012 Meningitis Outbreak, 112th Cong., 2nd sess., November 15, 2012, http://www.help.senate.gov/hearings/
hearing/?id=5f5def0d-5056-a032-5297-eab57634d209.
7
See Margaret A. Hamburg, Testimony before U.S. Congress, Senate Health, Education, Labor and Pensions
Committee,
Pharmacy Compounding: Implications of the 2012 Meningitis Outbreak, 113th Cong., November 15, 2012,
http://www.help.senate.gov/imo/media/doc/Hamburg3.pdf (“As described above, FDA’s ability to take action against
compounding that exceeds the bounds of traditional pharmacy compounding and poses risks to patients has been
hampered by gaps and ambiguities in the law, which have led to legal challenges to FDA’s authority to inspect
pharmacies and take appropriate enforcement actions.”)
8
See, e.g., David Miller, International Academy of Compounding Pharmacists, Testimony before U.S. Congress,
Senate Health, Education, Labor and Pensions Committee,
Pharmacy Compounding: Implications of the 2012
Meningitis Outbreak, 113th Cong., November 15, 2012, http://www.help.senate.gov/imo/media/doc/Miller8.pdf (“From
(continued...)
Congressional Research Service
1
Federal Authority to Regulate the Compounding of Human Drugs
meningitis outbreak, a central issue that this report explores is the nature and scope of federal
authority to regulate entities that compound drugs for humans.
Federal Regulation of Compounded Drugs
Compounding Before the 1938 Food, Drug, and Cosmetic Act
At the inception of the modern federal drug law, compounding was practiced extensively and
widely regulated by the states.9 On June 30, 1906, Congress enacted the Pure Food and Drug
Act,10 the first significant drug legislation that attempted to address the problems of drug safety
and effectiveness. However, the Pure Food and Drug Act, which was passed with the purpose to
“secure the purity of food and drugs and to inform purchasers of what they are buying,”11 did not
mandate a federal premarket approval or notification system for new drugs, let alone attempt to
substantively regulate drug compounding. Instead, the 1906 act was concerned with false labeling
of food and drugs, and as long as a drug compounder made no false or misleading claims with
regard to the ingredients in a product, the compounder’s actions would not run afoul of the Pure
Food and Drug Act.12 The advent of modern federal regulation of drugs arrived 22 years later
when Congress enacted the Food, Drug, and Cosmetic Act (FDCA).13
The 1938 Food, Drug, and Cosmetic Act
The Food, Drug, and Cosmetic Act of 1938 established a complex and comprehensive scheme for
regulating drugs that are distributed in interstate commerce.14 While the 1938 act on its face is
silent with respect to compounding,15 three provisions are particularly relevant to the subject.
First, the act defines a “new drug” as “[a]ny drug ... not generally recognized ... as safe ... for use
under the conditions prescribed, recommended, or suggested in the labeling thereof.”16 The
statute forbids introducing any “new drug” into interstate commerce without FDA approval.17
Under current law, to obtain FDA approval, the sponsor must submit an extensive application to
(...continued)
the federal standpoint, the FDCA’s existing inspection provision, section 704, allows FDA oversight when a pharmacy
is not operating in conformity with governing state laws, or akin to a drug manufacturer.”)
9
See Joint Session of Am. Pharm. Ass’n, et al., 17 J. Am. Pharm. Ass’n 1000, 1010-13 (1938).
10 P.L. 59-384, 34 Stat. 768 (1906).
11
United States v. Antikamnia Chem. Co., 231 U.S. 654, 665 (1913)
12
See James Harvey Young,
The Toadstool Millionaires: A Social History of Patent Medicines in America Before
Federal Regulation 9, 243-44 (Princeton Univ. Press. 1961).
13 P.L.75-717, 52 Stat. 1057 (1938).
14
See generally CRS Report R41983,
How FDA Approves Drugs and Regulates Their Safety and Effectiveness, by
Susan Thaul.
15
United States v. Franck’s Lab, Inc., 816 F. Supp. 2d 1209, 1254 n.7 (M.D. Fl. 2011) (noting that the FDCA is “silent
on the topic” of compounding).
16 21 U.S.C. §321(p)(1). The “new drug” provision of the FDCA contains a “grandfather clause” that excludes drugs
subject to regulation under a 1906 federal statute, if the labeling is appropriate.
Id. The FDCA broadly defines the term
“drug” to include “articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in man
or other animals.” 21 U.S.C. §321(g)(1)(B).
17 21 U.S.C. §§331(d), 355(a).
Congressional Research Service
2
Federal Authority to Regulate the Compounding of Human Drugs
the FDA containing data that demonstrate that the new drug is both safe and effective for its
intended uses in humans and that it will be manufactured such that the drug will preserve its
identity, strength, quality, and purity.18
In addition to the act’s “new drug” provisions, the current version of the FDCA has “adulteration”
provisions that deem a drug to be “adulterated” if, among other things, the drug and the methods
used in its creation do not conform with “current good manufacturing practices” that ensure the
product’s safety and quality.19 The FDA has promulgated regulations that describe current good
manufacturing practices.20 Those regulations include, for example, requirements that the
equipment used in the manufacturing of drugs be cleaned or sterilized at certain times21 and that
records related to manufacturing practices be maintained for at least a year after the expiration
date of a batch of drugs.22
Third, the 1938 act contains provisions that discuss when a drug is “misbranded.”23 In relevant
part, a drug can be “misbranded” if the drug’s labeling24 fails to bear “adequate directions for
use.”25 FDA regulations generally define “adequate directions for use” as directions under which
a layperson can use a drug “safely and for which it is intended.”26 Federal regulations further note
several examples of when a direction may be “inadequate,” such as the omission of “all” purposes
for which the drug is intended27 or the incorrect specification of the time of administration of a
drug.28
Section 301 of the FDCA prohibits an individual from introducing or delivering into interstate
commerce (1) a “new drug” without prior FDA approval,29 (2) an “adulterated” drug,30 or (3) a
18 21 U.S.C. §§355(a)-(d). The FDCA has specific provisions that discuss the role of new animal drugs. Specifically,
“new animal drugs” that have not been approved by the FDA are “unsafe” and “adulterated.”
See 21 U.S.C.
§§351(a)(5) & 360b(a)(1)(A).
19 21 U.S.C. §351(a)(1)(B). The precursor to the modern language regarding “good manufacturing practices” in the
1938 Act were provisions that broadly deemed a drug to be “adulterated” if it had been “prepared, packed, or held
under insanitary conditions ...”
See P.L.75-717, §501(a)(2). The provision on “good manufacturing practices” resulted
from the Kefauver-Harris Drug Amendments of 1962.
See infra.
20
See 21 C.F.R. parts 210, 211, 225, and 226.
21
See 21 C.F.R. §211.67.
22
See 21 C.F.R. §211.180.
23
See 21 U.S.C. §352.
24 Labeling is defined under the FFDCA to include “all labels and other written, printed, or graphic matters (1) upon
any article or any of its containers or wrappers, or (2) accompanying such article.” 21 U.S.C. §321(m). The Supreme
Court, in
Kordel v. United States, broadly interpreted the phrase “accompanying such article” to include materials that
supplement or explain the product. 335 U.S. 345, 349 (1948).
25 21 U.S.C. §352(f)(1). The statute does allow the Secretary to promulgate regulations exempting a drug if providing
“adequate directions for use” are not necessary for the “protection of public health.”
Id. 21 C.F.R. §201.122 exempts
from the FDCA’s “adequate directions for use” requirement drugs in bulk form intended for processing, repackaging or
use in the “manufacture of another drug” if the bulk drug contains labeling that indicates its proper use.
Id. However,
the exemption only extends to a drug where an approved new drug application or new animal drug application or new
animal drug index listing is affiliated with the production.
See 21 C.F.R. 201.122(a)-(c).
26 21 C.F.R. §201.5.
27 21 C.F.R. §201.5(a).
28 21 C.F.R. §201.5(e). For example, a drug label could be inadequate if it incorrectly specifies that the drug should be
taken with food.
Id. 29 21 U.S.C. §301(d).
30 21 U.S.C. §301(a).
Congressional Research Service
3
Federal Authority to Regulate the Compounding of Human Drugs
“misbranded” drug.31 That same section also prohibits the “adulteration” or “misbranding” of a
drug in interstate commerce,32 the “receipt in interstate commerce of” an adulterated or
misbranded drug, and the manufacturing of any adulterated or misbranded drugs.33 The FDCA
authorizes the United States to seek injunctive relief in federal court to restrain any violations of
Section 301,34 and the law subjects individuals who have violated the FDCA’s prohibitions to
civil fines and criminal penalties.35 Furthermore, Section 304 of the FDCA allows the United
States to proceed against and seize mislabeled or adulterated drugs.36
The breadth of the FDCA’s “new drug,” “adulteration,” and “misbranding” provisions, on their
face, have the potential to touch on local, traditional compounding efforts.37 However, for nearly
50 years following the passage of the FDCA, the FDA did not use the FDCA’s “new drug,”
“adulteration,” or “misbranding” provisions as a means to regulate the practice of compounding.38
Instead, the “FDA generally left regulation of compounding to the States,” and “[p]harmacists
continued to provide patients with compounded drugs without applying for FDA approval of
those drugs.”39 The rationale for the FDA’s initial approach toward drug compounding was that it
is widely recognized that compounded drugs could not meet the FDCA’s “new drug”
requirements.40 As the Supreme Court has noted, subjecting compounding pharmacies to the
statute’s approval requirements “would as a practical matter, eliminate the practice of
compounding, and thereby eliminate availability of compounded drugs for those patients who
have no alternative treatment.”41 This is because FDA approval requires “proof of the safety and
effectiveness of a new drug ... [as] established by rigorous, scientifically valid clinical studies,” a
process that is extremely time consuming and costly.42 As the Court observed, it is neither
medically practicable nor “economically feasible” to subject compounded medications to the type
of testing required by the FDCA for a new drug approval;43 “requiring such testing would force
pharmacists to stop providing compounding drugs.”44
31 21 U.S.C. §301(a).
32 21 U.S.C. §301(b).
33 21 U.S.C. §301(c).
34 21 U.S.C. §332(a).
35
See 21 U.S.C. §333.
36 21 U.S.C. §334(a).
37
See Medical Ctr. Pharm. v. Mukasey, 536 F.3d 383, 395 (5th Cir. 2008) (noting the language of the FDCA’s new
drug definition to be “both plain and expansive”);
United States v. Franck’s Lab, Inc., 816 F. Supp. 2d 1209, 1237
(M.D. Fl. 2011) (noting that the FDCA’s provision if “read literally” would apply to bulk compounding).
38
See W. States, 535 U.S. at 362.
39
Id. 40 Statement of Steven K. Galson, Acting Director, Center for Drug Evaluation and Research, U.S. Food and Drug
Administration, before the Senate Committee on Health, Education, Labor and Pensions, Hearing on “Federal and State
Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients,” (October 23, 2003).
See also Western States, 535 U.S. at 369 (“…it would not make sense to require compounded drugs created to meet the
unique needs of patients to undergo the testing required for the new drug approval process. Pharmacists do not make
enough money from small-scale compounding to make safety and efficacy testing of their compounded drugs
economically feasible, so requiring such testing would force pharmacists to stop providing compounded drugs.”)
41
W. States, 535 U.S. at 369.
42
Id. at 368-69.
43 21 U.S.C. §355.
44
W. States, 535 U.S. at 370.
Congressional Research Service
4
Federal Authority to Regulate the Compounding of Human Drugs
Kefauver-Harris Drug Amendments of 1962
The Kefauver-Harris Drug Amendments of 1962 (Drug Amendments), enacted in the wake of the
thalidomide crisis of the early 1960s, constituted the first mentioning of compounding in federal
drug law.45 In relevant part, the Drug Amendments required manufacturers and others to register
their establishments and strengthened the ability of the FDA to conduct on-site inspections.46 The
Drug Amendments, however, exempted “pharmacies ... which do not ... compound, or process
drugs for sale other than in the regular course of their business of dispensing or selling drugs at
retail” from registration requirements47 and from enhanced inspections of a pharmacy’s books and
records.48 Case law interpreting the Drug Amendments of 1962, however, has held that federal
authorities have the right to enter establishments involved in the production of drugs to inspect
equipment, materials, containers, and labeling used in the production process.49
Food and Drug Administration Modernization Act of 1997 and
Compounding
In 1997, Congress amended the FDCA through the Food and Drug Administration Modernization
Act (FDAMA).50 The amendment contained provisions on drug compounding that resulted, in
part, from a growing concern that an “increasing number of establishments with retail pharmacy
licenses [were] engaged in manufacturing and distributing unapproved new drugs for human use
in a manner that was clearly outside the bounds of traditional pharmacy practice.”51 Put another
way, the FDA was concerned that “some pharmacists were manufacturing and selling drugs under
the guise of compounding,” as a way of avoiding the FDCA’s “new drug,” “adulteration,” and
“misbranding” provisions.52 Accordingly, the intent of the FDAMA’s compounding provisions
was “to clarify the application of the [FDCA] to professional practice of pharmacists’
compounding of drug products.”53
To do so, the FDAMA explicitly deems that three provisions of the FDCA are inapplicable to
drug compounding that complies with various requirements.54 The three provisions are the
45 P.L. 87-781, 76 Stat. 780 (1962) (current version as amended at 21 U.S.C. §§301-392).
46
Id.;
see generally Bryan Christopher Moody, “Prescription Medication and Consumer Protection: A Time for
Reform,”
The Journal of Pharmacy & Law, vol. 5 (1996), p. 21 (“Additionally, the Drug Amendments of 1962
required the following: that drug companies register with the FDA and be inspected by the FDA every two years, that
all drug company records be made available for inspection, that adverse drug reactions be transmitted to the FDA, that
the FDA be given full authority to regulate the advertising of prescription drugs and all advertising must relate to the
adverse effects and contraindications to consumer, and that investigational drug studies require informed patient
consent prior to trials on humans.”)
47
See 21 U.S.C. §360(g)(1).
48
See 21 U.S.C. §374(a)(2)(A).
49
See Wedgewood Vill. Pharm., Inc. v. United States, 421 F.3d 263, 269 (3d Cir. 2005) (holding that a compounder
was not exempt from non-record inspections under 21 U.S.C. §374(a)).
50 P.L. 105-115, 111 Stat. 2296 (1997). The FDAMA was a product of a 1992 FDA Compliance Policy Guide that
outlined the agency’s policies regarding drug compounding.
See W. States., 535 U.S. at 362-64 (“Congress turned
portions of this policy into law when it enacted the FDAMA in 1997).
51 CPG §7132.16 (Mar. 1992).
52
W. States, 535 U.S. at 362.
53 S.Rept. 105-43, Committee on Labor and Human Resources, p. 67 (July 1, 1997).
54
See 21 U.S.C. §353a(a).
Congressional Research Service
5
Federal Authority to Regulate the Compounding of Human Drugs
FDCA’s provisions on (1) the sale of a “new drug,” (2) adulteration and the need to adhere to
“good manufacturing practices,” and (3) misbranding and the need to provide “adequate
directions for use” on a drug.55 With respect to requirements for compounding, the law requires
that compounding be done by a licensed pharmacist or physician in response to a valid
prescription for an identified individual patient, or, if prepared before the receipt of such a
prescription, the drug be made in only “limited quantities” and in response to a history of the
licensed pharmacist’s or physician’s receipt of valid prescription orders for that drug product
within an established relationship between the pharmacist, the patient, and the prescriber.56
Additionally, the law requires that the compounded drug be made from approved ingredients that
meet certain standards, and the compounded drug may not appear on an FDA list of drug products
that have been withdrawn or removed from the market because they were found to be unsafe or
ineffective.57 The FDAMA also prohibits the compounding of drugs in “inordinate amounts” such
that the drugs are “essentially copies of a commercially available drug product.”58 The law also
allows the FDA to identify certain drug products that present “demonstrable difficulties” for
compounding in terms of safety or effectiveness, prohibiting the compounding of such articles.59
In states that have not entered into an agreement with the FDA addressing the distribution of
“inordinate amounts” of compounded drugs in interstate commerce, the pharmacy, pharmacist, or
physician compounding the drug may not distribute compounded drugs out of state in quantities
exceeding 5% of that entity’s total prescription orders.60
FDAMA and Federal Authority After Thompson v. Western States
Medical Center
The FDAMA also included a ban on advertising by compounders.61 However, in 2003, the
Supreme Court in
Thompson v. Western States Medical Center invalidated the FDAMA’s
advertising provisions on First Amendment grounds.62 Generally, if a part of a law is held to be
unconstitutional, the unconstitutional provision is “severable” or “dropped” from what remains of
a law unless it is “evident that the Legislature would not have enacted” the remaining provisions
independently of the unconstitutional provision.63 In the wake of
Western States, a split has
emerged amongst the federal circuit court of appeals about whether the remaining provisions of
the FDAMA are “severable” from the advertising provision at issue in the
Western States case.64
55
Id. (citing Sections 501(a)(2)(B) (adulteration), 502(f)(1) (misbranding), 505 (new drugs)).
56 21 U.S.C. §353a(a).
57 21 U.S.C. §§353a(b)(1)(A)-(C).
58 21 U.S.C. §353a(b)(1)(D). The definition of the term “inordinate amounts” is delegated in the statute to the Secretary
of Health and Human Services.
Id. FDA regulations have not yet formally defined the term “inordinate amounts.”
See
21 C.F.R. §216.23
et seq. 59 21 U.S.C. §353a(b)(3)(A).
60 21 U.S.C. §353a(b)(3)(B).
61 21 U.S.C. §353a(c).
62 535 U.S. at 360.
63
See Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 684 (1987) (internal quotations and citations omitted).
64
Compare W. State Med Ctr. v. Shalala, 238 F.3d 1090, 1096-98 (9th Cir. 2001),
aff’d on other grounds, 535 U.S. 357
(2002),
with Medical Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 401(5th Cir. 2008). The Supreme Court in
Western
States declined to rule on the issue of severability. 535 U.S. at 366 (“Because neither party petitioned for certiorari on
the severability issue, we have no occasion to review that portion of the Court of Appeals decision.”) For a more in
depth discussion on these two cases and the resulting circuit split,
see CRS Report R40503,
FDA’s Authority to
Regulate Drug Compounding: A Legal Analysis, by Jennifer Staman.
Congressional Research Service
6
Federal Authority to Regulate the Compounding of Human Drugs
As a consequence, within the states within the Ninth Circuit,65 the controlling precedent renders
the remaining provisions of the FDAMA inoperable.66 The opposite is true in the Fifth Circuit,67
and the legal effect of the FDAMA is unresolved in the rest of the country.68 The FDA noted in
2002, prior to the Fifth Circuit’s decision, that in light of the Supreme Court decision, the
FDAMA “is now invalid,”69 and instead, the FDA “outlined the criteria”70 it would use to assess
“what types of compounding might be subject to enforcement under current law” (i.e., the
FDCA)71 in a 2002 Compliance Policy Guide (CPG).72 In the wake of the Fifth Circuit’s decision,
the FDA has taken the position73 that the agency “will apply the non-advertising provisions of
section 503A to entities covered by this provision that are located within the jurisdiction of the
Fifth Circuit ... as well as to the plaintiffs that brought the
Medical Center case.”74
The 2002 CPG was issued out of a “need for immediate guidance” for “the compounding industry
on what factors the [FDA] will consider in exercising its enforcement discretion regarding
pharmacy compounding.”75 The policy guidance generally notes while the FDA “will continue to
defer to state authorities regarding less significant violations of the [FDCA] related to pharmacy
65 The Ninth Circuit Court of Appeals covers the states of Alaska, Arizona, California, Idaho, Montana, Nevada,
Oregon, Washington, and Hawaii.
See 28 U.S.C. §41.
66
W. State Med Ctr., 238 F.3d at 1096-98.
67
Medical Ctr. Pharmacy, 536 F.3d at 401. The Fifth Circuit’s jurisdiction is limited to the states of Louisiana,
Mississippi, and Texas.
See 28 U.S.C. §41.
68 An unpublished federal district court decision in Colorado, faced with both parties in agreement that the FDAMA’s
advertising provisions were severable from the rest of the act, opined that the Fifth Circuit’s decision with respect to
severability was not “so palpably incorrect that applying its rule would be clearly be error.”
See United States v. Bader,
No. 07-CR-338, 2009 WL 2219258 at *9 (D. Colo. July 23, 2009),
aff’d 678 F.3d 858 (11th Cir. 2012). On appeal to the
Tenth Circuit, the appellate court found the Fifth Circuit’s decision to be inapplicable to the case at hand as the case did
not implicate any provisions of the FDAMA. 678 F.3d at 888-89 (“Consequently,
Medical Center Pharmacy is
inapposite.”)
69 Compliance Policy Guide §460.200 (May 29, 2002).
70
Wedgewood Vill. Pharm., Inc. v. United States, 421 F.3d 263, 272 (3d Cir. 2005).
71
Bader, 678 F.3d at 888 (noting that the “overarching premise of [the 2002 CPG on compounding] was that,
generally, the FDA had maintained some degree of regulatory authority over pharmacy compounding both before
Western States ... and the FDAMA”).
72 CPG §460.200 (May 29, 2002)
; see generally United States v. Livdahl, 459 F. Supp. 2d 1255, 1263 (S.D. Fla. 2005)
(noting that “in the wake of
Western States, the FDA issued a new [CPG] dealing with compounded drugs [similar to
the one codified in the FDAMA] ... [t]his new policy is unaffected by the decision in
Western States).
73
See Food and Drug Administration, “Medical Center Pharmacy v. Mukasey,” press release, May 6, 2009,
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm134919.htm (“In
the meantime, FDA will follow the court’s decision in the Fifth Circuit and with respect to the plaintiffs covered by the
decision. Elsewhere, the agency will continue to follow the enforcement approach reflected in the Compliance Policy
Guide (CPG) section 460.200 [Pharmacy Compounding] issued by FDA on May 29, 2002.”);
see also Letter from
Alonza E. Cruse, Director, Los Angeles District, U.S. Food and Drug Administration, to Ari S. Schafer, Civic Center
Pharmacy (December 16, 2008),
available at http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2008/
ucm1048048.htm;
see also Letter from Alonza E. Cruse, Director, Los Angeles District, U.S. Food and Drug
Administration, to Charles T. Bonner, Steven’s Pharmacy (November 12, 2008),
available at http://www.fda.gov/
ICECI/EnforcementActions/WarningLetters/2008/ucm1048074.htm.
74 The practical effect of whether the FDAMA’s compounding provisions apply or whether the CPG applies is not
readily apparent, as both the compounding provisions of the FDAMA and the CPG are rooted in authority provided by
the FDCA.
Compare 21 U.S.C. §503A(a) (stating that Sections 501(a)(2)(B), 502(f)(1) and 505 of the FDCA do not
apply to certain compounding activity)
with CPG §460.200 (May 29, 2002) (providing guidance on “what types of
compounding might be subject to enforcement action under current law”).
75 CPG §460.200 (May 29, 2002)
.
Congressional Research Service
7
Federal Authority to Regulate the Compounding of Human Drugs
compounding of human drugs,”76 the agency will focus on “concerns normally associated with a
drug manufacturer and result in significant violations of the new drug, adulteration, or
misbranding provisions of the Act.”77 In determining whether to take an enforcement action
against a compounding entity, the CPG notes nine non-exhaustive factors that will guide
regulators.78 The factors are summarized in
Table 1.79
Table 1. Factors Guiding Whether the FDA Will Take Action
Against a Compounder of Human Drugs
If yes, is the FDA more likely to assert its
Is the compounding ... ?
regulatory authority?
... done in anticipation of receiving prescriptions?
No
... involving a drug that was withdrawn or removed from the
Yes
market for safety reasons?a
... based from bulk active ingredients?
Yes (if not from a FDA-approved drug or without a
FDA sanctioned New Drug Application)
... done without obtaining written assurance from the supplier
Yes
that the drug substances were made in an FDA-registered
facility?
... not in compliance with official compendia requirements?
Yes
... using commercial scale manufacturing or testing equipment? Yes
... done for third parties who will resell the drugs?
Yes
... of drug products that are commercially available in the
Yes
marketplace or essentially copies of commercially available
drugs?
... failing to comply with applicable state law?
Yes
Source: Prepared by CRS
Notes: Derived from FDA Compliance Policy Guide §460.200 (May 29, 2002).
a.
See 21 C.F.R. §216.24 (list of drug products withdrawn or removed from the market for reasons of safety
or effectiveness).
In 2003, the FDA issued guidance with regard to veterinary compounding.80 Similar to its 2002
guidance on human compounding, the FDA noted its concerns regarding compounding that is
“clearly outside of the bounds of traditional pharmacy practice” and is “intended to circumvent
[the FDCA’s] drug approval process and provide for the mass marketing of products that have
been produced with little to no quality control or manufacturing standards to ensure the purity,
potency, and stability of the product.”81 The 2003 CPG announced that while the FDA will
“generally” “defer to state authorities regarding the day-to-day regulation of compounding by
76
Id. 77
Id.
78
Id. 79 For a more in depth discussion on the 2002 FDA CPG on compounding,
see CRS Report R40503,
FDA’s Authority
to Regulate Drug Compounding: A Legal Analysis, by Jennifer Staman.
80
See CPG §608.400 (July 14, 2003). The FDAMA’s provision on compounding addressed human, not animal, use.
See 21 U.S.C. §353a(a).
81
See CPG §608.400 (July 14, 2003).
Congressional Research Service
8
Federal Authority to Regulate the Compounding of Human Drugs
veterinarians,” federal authority will be asserted when the activities in question raise the “kinds of
concerns normally associated with a drug manufacturer” and “result in significant violations of
the new animal drug, adulteration, or misbranding provisions” of the act.82 In determining
whether to take an enforcement action against a compounding entity, the CPG on animal drug
compounding notes 13 non-exhaustive factors that will guide regulators.83 The factors largely
mirror the concerns illustrated in the 2002 CPG for human drug compounding and include
concerns common to both human and animal drug compounding.84 For example, the FDA noted
that the volume of drugs being compounded or whether the compounding used commercial scale
manufacturing equipment would be used by federal officials when determining whether to take an
enforcement action against an animal drug compounder.85
Both the 2002 and 2003 CPGs on drug compounding make clear that the FDA, as a matter of
public policy, will focus its enforcement efforts on compounding efforts that are akin to
“manufacturing” and will defer to state governments with respect to “traditional compounding.”86
As a matter of law, the FDA does not attempt, in the two CPGs, to limit its authority under the
FDCA. Instead, the CPGs note that the FDCA does not “distinguish compounding from
manufacturing”87 and deem violations of the FDCA that do not relate to manufacturing to be a
concern of “state authorities.”88
Limits on Federal Authority to Regulate
Compounded Drugs
The legal uncertainty about the validity of the compounding provisions of the FDAMA, coupled
with the FDA’s renewed reliance on the FDCA’s new drug, adulteration, and misbranding
provisions as the source of the federal authority to regulate drug compounding, has prompted
considerable discussion with respect to the extent of the FDA’s authority under the 1938 act.
Moreover, even if the FDAMA’s compounding provisions still have legal effect, the provisions
are based on blanket exemptions for certain compounding activity from the FDCA’s new drug,
82
Id. The “new animal drug” provisions of the FDCA are similar, but not identical, to the provisions for human drugs.
Pursuant to Section 512 of the FDCA, absent FDA approval, a “new animal drug” is “deemed unsafe, which, in turn,
renders the drug “adulterated” under Section 501(a) and “misbranded” under Section 502(f) unless the drug bears
“adequate directions for use.”
See 21 U.S.C. §360b. Hence, similar “to human drugs, any drug ... the composition of
which has not already been approved by the FDA constitutes a ‘new animal drug’ within the meaning of the statute.’”
See Medical Ctr. Pharm., 536 F.3d at 407 (internal citations omitted).
83
See CPG §460.200 (May 29, 2002)
; see also CPG §608.400 (July 14, 2003).
84
Id. 85
Id. While animal drug compounding is beyond the scope of this report, the overlap in the legal framework for human
and animal drugs,
see supra footnote
82
, make the FDA’s 2003 guidance useful to gauge the agency’s general approach
toward the regulation of drug compounding.
86
Id. 87
Id. 88
See CPG §460.200 (May 29, 2002)
. The CPG, as a general policy statement, as opposed to a rule that affords the
public notice and an opportunity to comment on the rule, does not have the force of law,88 and does not receive the
fullest deference from courts of law.
See United States v. Mead Corp., 533 U.S. 218, 229 (2001). Instead, a CPG
“merely provide[s] guidance for FDA agents in determining possible violations, within their discretion.”
Professionals
& Patients for Customized Care v. Shalala, 847 F. Supp. 1359, 1365 (S.D. Tex. 1994). For a lengthier discussion of the
legal effect of the CPG,
see CRS Report R40503,
FDA’s Authority to Regulate Drug Compounding: A Legal Analysis,
by Jennifer Staman.
Congressional Research Service
9
Federal Authority to Regulate the Compounding of Human Drugs
adulteration, and misbranding requirements, all of which are based on the assumption that broad
federal authority to regulate drug compounding exists.89 With this backdrop, a debate has arisen
regarding the limits of federal authority under the FDCA with respect to the regulation of drug
compounding.
The FDA maintains the position that pharmacy-compounded drugs are “new drugs” or “new
animal drugs” within the meaning of the FDCA,90 and, therefore, the entire practice of
compounding is “under FDA scrutiny.”91 According to the agency, as a “matter of discretion” the
FDA has “historically declined” to take “enforcement action against pharmacies engaged in
traditional drug compounding.”92 Pharmacists, in response, have disputed the reach of the FDA’s
authority, finding “cold comfort in the FDA’s promised self-restraint.”93 Instead, those who
oppose the FDA’s theory of its authority to regulate compounding contend that the practice of
compounding was widespread at the time of the 1938 act, and Congress would not have intended
to expand the FDA’s regulatory authority to make compounding activities covered by the act’s
new drug, adulteration, and misbranding provisions,94 regulations that, if enforced literally, would
functionally prohibit traditional compounding.95
Courts that have examined the issue have all agreed that the FDA has
some authority to regulate
compounding.96 Specifically, case law appears to find that the FDCA does provide the federal
government with the authority to prohibit pharmacists from manufacturing under the guise of
compounding.97 According to one recent court decision, “[t]o the extent that a pharmacist’s bulk
compounding activity moves beyond the bound of traditional compounding and begins to
approximate the ‘manufacturing’ of unapproved drugs, there seems little question that this
activity is squarely within the crosshairs of the FDCA.”98 Moreover, courts have interpreted the
89 21 U.S.C. §353a(a) (exempting certain compounding activities from the reach of the FDCA Sections 501(a)(2)(B)
(adulteration), 502(f)(1) (misbranding), 505 (new drugs));
but see Medical Ctr. Pharm., 536 F.3d at 405 (noting that
because Congress started from a default premise that the FDCA’s “adulteration, misbranding, and new drug provisions
apply to –and thereby restrict – all drugs created by any means,” including compounding, that the FDCA must reach
compounding). However, it can be argued that the understanding of a future Congress regarding previously enacted
legislation will “rarely override a reasonable interpretation of a statute that can be gleaned from its language.”
See
Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 118 n.13 (1980).
90 Brief of the Appellant United States,
United States v. Franck’s Lab, Inc., 11-15350-BB (11th Cir 2012). at pg. 26.
91 Food and Drug Administration, “Is It Really FDA Approved?,” press release, February 20, 2009,
http://www.fda.gov/downloads/ForConsumers/ConsumerUpdates/UCM143301.pdf.
92 Brief of the Appellant United States,
United States v. Franck’s Lab, Inc., 11-15350-BB (11th Cir 2012). at pg. 26;
see
also Professionals & Patients for Customized Care v. Shalala, 56 F.3d 592, 593-594 (5th Cir. 1995).
93
Medical Ctr. Pharm., 536 F.3d at 399.
94
Id. 95
See W. States Med. Ctr., 535 U.S. at 369 (“[R]equiring such testing would force pharmacists to stop providing
compounded drugs.”)
96
See generally Franck’s Lab, 816 F. Supp. 2d at 1235-1239 (discussing the cases that have examined the scope of the
FDA’s authority with respect to compounding).
97
Id.; see also Med. Ctr. Pharm., 536 F.3d at 399 (“Construing the FDCA to give the FDA authority over
compounding would thus not necessarily ‘lead to a result so bizarre that Congress could not have intended
it.’”)(internal citations omitted);
In re Wedgewood Vill. Pharmacy, 270 F. Supp. 2d 525, 549 (D.N.J. 2003) (“Congress
intended that the FDCA, both in its original form and as amended, allow the FDA broad enforcement powers to fulfill
its mandate that it protect the public from unsafe medication.”)
98
Franck’s Lab, 816 F. Supp. 2d at 1246.
Congressional Research Service
10
Federal Authority to Regulate the Compounding of Human Drugs
FDA’s 2002 CPG as a reasonable means by which the FDA can gauge whether an entity is
engaged in manufacturing.99
However, a question remains as to whether a so-called “maximalist” interpretation of the FDA’s
authority exists, such that any “traditional compounding” is “
per se unlawful under the
FDCA.”100 In favor of the maximalist interpretation of the FDA’s authority over compounding is
the plain language of the FDCA.101 Specifically, the FDCA’s “new drug” provisions broadly state
that no person can “introduce or deliver for introduction into interstate commerce any new drug,
unless an approval of an application filed” pursuant to the statute with the FDA has occurred with
respect to the drug.102 Moreover, Section 501 of the FDCA broadly deems a drug to be
“adulterated” if it “is a drug and the” way it was manufactured, processed, packaged, or held does
not conform with good manufacturing practices that ensure its quality and purity.103 The FDCA’s
misbranding provisions are equally broad, in that the statute deems a drug to be “misbranded” if
its labeling does not bear “adequate directions for use.”104 In none of the three aforementioned
provisions does the FDCA’s plain language exempt traditional compounding activity from the
act’s reach. As one court has noted, “[c]ompounded drugs are, after all, drugs,”105 and therefore,
the plain language of the statute would seem to indicate that compounding activities are within
the purview of the FDA’s authority under the act.106 Moreover, the maximalist interpretation is
supported by the argument that because exemptions exist under the FDCA’s provisions for other
types of drugs, such “investigational drugs,”107 one can presume from Congress’s refusal to create
a general exemption for traditional compounding an implicit extension of federal authority over
all forms of compounding.108
On the other hand, given the “ubiquity of pharmacy compounding at the time Congress passed the
FDCA,” it can be argued that it would be absurd for Congress to have taken the “unprecedented”
action to implicitly regulate compounded drugs through the 1938 act.109 This argument is
buttressed by Supreme Court case law on statutory interpretation that generally holds that it
should not be assumed that Congress “alter[s] the fundamental details of a regulatory scheme in
99
See Wedgewood Vill. Pharm, 421 F.3d at 272 (“We agree that the factors set forth in the CPG are reasonable and that
they reflect the FDA’s ‘careful consideration ... over a long period of time.”) (internal citations omitted).
100
See Franck’s Lab, 816 F. Supp. 2d at 1239.
101 The plain language of a statute is the starting point for statutory interpretation, and if a statute’s terms are “plain,”
the Supreme Court has noted that a court should look no further and enforce the law “according to its terms.”
See
Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000).
102 21 U.S.C. §355(a).
103 21 U.S.C. §351(a)(1)(B).
104 21 U.S.C. §352(f)(1).
105
Medical Ctr. Pharm., 536 F.3d at 395.
106
Id.;
see also United States v. 9/1 Kg. Containers, 854 F.2d 173, 176 (7th Cir. 1988) (holding, with respect to the
misbranding provisions of the FFDCA, “Congress gave the FDA comprehensive powers to license the manufacture of
drugs and limit theirs sales,” leaving it to the discretion of the FDA to regulate bulk compounding);
United States v.
Algon Chemical, Inc., 879 F.2d 1154, 1163 (3d Cir. 1989) (concluding that Congress did not intend that bulk drug
compounding “be excluded from the Act’s labeling requirements”).
107 21 U.S.C. §360b(j).
108
Medical Ctr. Pharm., 536 F.3d at 395;
but see Franck’s Lab, 816 F. Supp. 2d at 1244 (“However, if we were to
presume a delegation of power from the absence of an express withholding of such power, agencies would enjoy
virtually limitless hegemony”) (internal citations and quotations omitted).
109
Id. at 398 (summarizing the pharmacists’ position);
see also Franck’s Lab, 816 F. Supp. 2d at 1243-44.
Congressional Research Service
11
Federal Authority to Regulate the Compounding of Human Drugs
vague terms or ancillary provisions.”110 Moreover, the legislative history of the FDCA appears to
support the view that manufacturers were the intended target of the regulatory scheme imposed
by the 1938 act.111 For example, the then-President of the American Pharmaceutical Association
testified before a Senate subcommittee in 1938 in support of the legislation that while the
“regulations governing ... the practice of pharmacy are very strict ... the privileges of unlicensed
persons operating outside of pharmacies are so extensive that the public enjoys little
protection,”112 evincing that Congress’s central concern with the FDCA was manufacturing, not
traditional pharmacy compounding. Legislative history can guide a court in assessing the correct
interpretation of the scope of the FDA’s authority under the act.113
The current limits of federal authority to regulate traditional drug compounding have been
discussed by very few courts, and each court that has approached the issue did so from a unique
factual setting that colored the eventual outcome of the case.114 As a consequence, the precise
limit to federal authority with respect to drug compounding remains uncertain, although Congress
could arguably expand the scope of the FDCA to reach traditional compounding.115 As a matter of
policy, the FDA has generally declined to test the current limits of its authority to regulate
compounding,116 preferring to defer to state governments with respect to the regulation of
“traditional compounding.”117
As a result, absent further congressional action, the limits of the
FDA’s authority to regulate all forms of compounding will likely continue to be unresolved.118
With respect to enforcement efforts clearly within the FDA’s broad discretion, such as combating
compounding that is akin to large-scale manufacturing, courts will likely provide considerable
deference to the FDA.119
110
See Whitman v. American Trucking Assoc., 531 U.S. 457, 458 (2001) (“[Congress] does not, one might say, hide
elephants in mouseholes”);
see also FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (“[W]e are
confident that Congress could not have intended to delegate a decision of such economic and political significance to
an agency in so cryptic a fashion.”)
111
Franck’s Lab, 816 F. Supp. 2d at 1245-46.
112 Food, Drugs and Comsetis: Hearings Before a Cubcomm. of the Comm. on Commerce, 74 Cong. 100, 102 (1935)
(statement of Robert P. Fischelis, president American Pharmaceutical Ass’n).
113
See generally Crandon v. United States, 494 U.S. 152, 160 (1990).
114
See generally Franck’s Lab, 816 F. Supp. 2d at 1235-1239 (discussing the cases that have examined the scope of the
FDA’s authority with respect to compounding).
115
See Gonzales v. Raich, 545 U.S. 1, 22 (2005) (holding that the authority under the Commerce Clause extends such
that Congress can regulate activities when, taken in the aggregate, substantially affect interstate commerce).
116
But see Franck’s Lab, 816 F. Supp. 2d at 1214 (“[T]he FDA has taken the bright-line position that
any compounding of animal medications from bulk substances violates ... the FDCA ...”)
117
See CPG §460.200 (May 29, 2002)
; see also CPG §608.400 (July 14, 2003).
118 This lack of resolution could be a considerable burden on traditional compounders, whose conduct could be in
violation of federal law. As one court noted, “it remains no small burden for compounding pharmacists ... to ‘live in
sin,’ [as] their livelihood [has] no greater assurance than the FDA’s good graces.”
See Medical Ctr. Pharm., 536 F.3d at
399-400.
119
See, e.g., Wedgewood Vill. Pharm., 421 F.3d at 272-73.
Congressional Research Service
12
Federal Authority to Regulate the Compounding of Human Drugs
Author Contact Information
Andrew Nolan
Legislative Attorney
anolan@crs.loc.gov, 7-0602
Congressional Research Service
13