Rx & The Law

Compounding Pharmacists Should be Aware of New Federal Law

by Donald McGuire, R.Ph., J.D.
Professional Claims Attorney
Pharmacists Mutual Insurance Company

For the last few years, one of the major debates in pharmacy has been what constitutes compounding and what constitutes manufacturing. It was difficult to define one to the exclusion of the other. Federal and state laws were unclear and often conflicted. Starting in November, 1998, the definition becomes clearer, when the newly added pharmacy compounding section of the Federal Food, Drug and Cosmetic Act (FDCA) takes effect. Although Congress passed the FDA Modernization Act of 1997 in November of last year it had an effective date in November 1998. Contained within this act is a section defining pharmacy compounding and its practice.

Compounded products are exempted from certain FDCA provisions regarding adulteration, misbranding, and most requirements of "New Drugs." A manufactured product is still subject to these provisions. It remains important to know what is considered compounding to avoid these manufacturing requirements. Compounded prescriptions require that there be an established relationship between the prescriber, the pharmacist and the patient. Compounding must be in response to an individual prescription, although in limited quantities the pharmacist may compound additional amounts in anticipation of future prescriptions based on past prescribing habits. The law does not define the amount considered limited or how far in the future prescriptions may be anticipated.

The new law also spells out which ingredients may be used in compounding. Bulk drug substances that comply with a USP or NF monograph may be used. If it does not have an official monograph, a substance may be used if it is a component of an approved drug or appears on a list of approved substances developed by the Secretary of Health and Human Services. This list is currently being developed through the Pharmacy Compounding Advisory Committee with input from practitioners. Compounded positron emission tomography drugs or radiopharmaceuticals are exempted from the new compounding section of the FDCA.

Limitations on compounding are also contained in the Act. It is prohibited to compound a drug product, which is on a list of products which have been withdrawn or removed from the market because they were unsafe or ineffective. This limitation is clear. The next limitation is not so clear. It is prohibited to compound a drug product which is listed as one with demonstrable difficulty for compounding. This is a product for which it can be shown that compounding has an adverse effect upon the safety or efficacy of the finished compound. It is also prohibited to compound, regularly and in inordinate amounts, drug products which are a essentially a copy of commercially available products. What constitutes regularity and inordinate amounts is unknown at this time. A drug product is not considered a copy of a commercially available product if a change is made for a particular patient and the prescriber determines that this change makes a significant difference for that patient. How much change or what type of change to the commercial product will make a significant difference to the patient remains to be seen.

The new law also contains some regulation of the interstate sale of compounded prescriptions. Individual states may enter into a memorandum of understanding with the Secretary of Health and Human Services wherein they agree to address and investigate the distribution of inordinate amounts of compounded drug products from their state to other states. The drafting of a model memorandum is ongoing at this time through the Pharmacy Compounding Advisory Committee. In states which do not enter into such an agreement, interstate distribution of compounded products would be limited to 5% of the total prescriptions filled by that particular pharmacy.

Advertising will also be controlled by this statute. Practitioners could advertise and promote that they engage in compounding. It may be prohibited, however, to advertise that a particular drug, class of drug, or type of drug is compounded.

As with any new law, accompanying regulations are being drafted in preparation of the November 21, 1998 effective date. These regulations may define some of the ambiguous terms in this law. Other terms will be defined on a case by case basis through the courts. Final evaluation of what this law means to pharmacists and compounding will have to wait for those interpretations. With this law, the line between compounding and manufacturing is becoming sharper and more distinct. Whether the line is where pharmacists want it to be remains to be seen.

This article discusses general principles of law and risk management. It is not intended as legal advice. Pharmacists should consult their own attorneys and insurance companies for specific advice. Pharmacists should be familiar with the policies and procedures of their employers and insurance companies, and act accordingly.