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From the Townsend Letter
July 2014

A Compounding Dilemma: New Laws and Regulations Threaten Compounded Drugs and Practitioner Freedom
by Gretchen DuBeau, Esq.
Executive and Legal Director of the Alliance for Natural Health USA
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Practitioner, Patient, and the FDA Makes Three
If you're a physician, the federal government thinks that your prescription pad needs a cosigner. New congressional legislation – strategically named the Drug Quality and Security Act of 2013, which amends current law, the Food Drug and Cosmetic Act (we'll refer to it simply as "the Act")covers compounded medications and injects the FDA into the patient–physician relationship.1 It seems likely that, once the FDA completes its regulations concerning the new law, practitioners will be increasingly limited in what medications they can prescribe.
And it could have been much, much worse.
In my six years as executive director of the Alliance for Natural Health USA (ANH-USA), a nonprofit that protects the rights of natural-health consumers and practitioners, I've seen the integrative-health community weather a number of Category 5 legislative and regulatory hurricanes. The storm over compounding pharmacies and medications fully qualifies as one of them.
This bill is now in the regulatory phase, which means that the FDA is translating the compounding law into new rules for doctors and industry. Although this process has not been completed, the regulations that have been proposed thus far are alarming. Over the long run, the most chilling effects of the new law won't be what's written into regulations, but rather what plays out in practice.

The Act on Paper: What We Know Now
The Act distinguishes between traditional compounding pharmacies and the newly coined term "outsourcing facilities." Under section 503A of the Act, traditional compounding pharmacies will only be able to compound drugs that have a USP monograph, are part of an FDA-approved drug, or are on a "preapproved" FDA list.2 For the most part, traditional compounders will need an individualized prescription for each drug produced, with limited capacity to provide drugs in advance for office use.3 Furthermore, and unless a state has a "memorandum of understanding" with the FDA (read: special federal permission), every traditional pharmacy may only send 5% of its total prescriptions out of state.4
By comparison, outsourcing facilities can distribute out of state without restrictions and won't require individualized prescriptions.5 However, they will only be able to produce drugs that are on a FDA-approved list – a list that we anticipate will be extremely limited.6

Intended Consequences: Quietly Strangling Access to Compounded Medicines
Frankly, the regulations are dry reading. But they have consequences that are not always immediately apparent. Over the past several months, my organization has spoken to a number of physicians and compounders about how, in "real life," the regulations will affect them. An alarming picture emerges.
Take, for example, the regulatory differentiation between traditional and outsourcing pharmacies: because traditional pharmacies will produce products on a smaller scale and have more freedom in what they can compound, they'll be more likely to carry the unique drugs that your patients need.
But many communities don't have immediate access to a compounding pharmacy and are forced to source from out of state. Given the 5% out-of-state limit, and the fact that they'll need an individualized prescription in advance, practitioners may be severely delayed in acquiring the drugs their patients need – if they're able to obtain them at all.
It's also likely that, given the new laws and regulations, large outsourcing facilities may prove too competitive for smaller, local pharmacies. Your local compounder may be put out of business, forcing you to work with large compounders that offer only a few products. Already, a growing number of doctors are reporting that they've been directed to outsourcing facilities and told by traditional pharmacies that their orders can't be filled. It seems that traditional compounders are hesitant to fill prescriptions out of fear of FDA reprisal and hesitancy to act without completed regulations.
Preserving traditional pharmacies' ability to compound drugs with USP monographs was one of ANH-USA's hard-won amendments to the FD&C Act. These drugs should be protected. But since the FDA has yet to issue its final regulations on the drugs that pharmacies will be allowed to compound, and given the FDA's history of hostility toward, for example, chelation and bioidentical estriol, we can't be completely sure which individual drugs will be in danger.
As of now, we are particularly concerned about compounded nutrients delivered intravenously, especially since drug companies have all but stopped producing most IV nutrients. If doctors can no longer acquire IV nutrients via compounding pharmacies, where will they get the treatments that their patients need?
Although, as noted, we won't know the full impact of the new compounding law until its corresponding regulations are completed, it's likely that a physician's powers to prescribe whatever medications and nutrients she or he thinks best for the patient have already been severely curtailed, in favor of pharmaceutical industry interests.
Why now? you may be asking. Where did this tidal wave of new regulations come from? After all, over the years, the FDA and the pharmaceutical industry have taken a number of swipes at safe, compounded medications, only to have their attempts beaten back by consumers, practitioners, and watchdog groups such as ANH-USA.
The catalyst for seismic change came in 2012, when a tragedy slammed the compounding world. And in the pharmaceutical industry's vocabulary, tragedy is just another word for opportunity.

A Tragedy Exploited
In 2012, about 14,000 patients received spinal injections for back pain using steroids from Massachusetts's New England Compounding Center (NECC). Due to poor quality controls, the batch became contaminated with fungal meningitis. Hundreds of patients became sick; over 30 people died.7
Eventually, it became clear that FDA inaction facilitated the outbreak. The FDA had received multiple complaints about the NECC, but took no action beyond a warning letter.8 In response to media coverage of the tragedy, FDA Commissioner Margaret Hamburg called for a consistent set of safety regulations that would require compounding pharmacies to report any problems associated with their drugs.
Drug companies were pleased; for years, they had enviously eyed the market share of compounded drugs. This was their opportunity to exploit tragedy to legislate cost-effective compounded drugs out of existence.
To this end, pharmaceutical companies formed the so-called Working Group on Pharmaceutical Safety (WGPS) to shape any compounding legislation before Congress.9 This group is headed by Tommy G. Thompson, former US Secretary of Health and Human Services (HHS) and current chairman of TherapeuticsMD, a founding member of WGPS. In addition, another founding member of WGPS, KV Pharmaceuticals, has repeatedly attempted to persuade the FDA to ban the inexpensive, compounded 17P (a progesterone-based drug to prevent premature births) in order to achieve market exclusivity for its high-priced version, Makena.10 In other words, the WGPS has a direct financial interest in legislation that would allow the FDA to shut down vital compounded medications.
This isn't a Beltway insider secret, but something that WGPS members freely acknowledge.
For example, my organization obtained a document in which TherapeuticsMD, pitching itself to potential investors, describes the safety and efficacy of bioidentical hormones.11 It also gives its investors some statistics on the bioidentical HRT market, reveals that well over three-quarters of the market is currently held by compounding pharmacies – and states that this is the market it is going after. If this isn't a smoking gun, we don't know what one would look like.

The Initial Compounding Bill:
A Dream Come True for the Drug Industry, a Nightmare for Physicians

Thanks in part to the pharmaceutical industry's intense lobbying campaign, the first draft of its compounding legislation, released in April 2013 by the Senate Committee on Health, Education, Labor, and Pensions (HELP), did little to increase the safety of compounded medicines or improve facility inspections.12 Instead, it expanded FDA powers to ban many compounded drugs altogether. It's also worth noting that Pfizer gave campaign contributions to 8 of the 22 members of the HELP Committee.13
This first bill was a disaster. It broadly empowered the FDA to remove most compounded medications from the market – eliminating bioidentical hormones and clearing the way for more expensive patented drugs such as Makena. Further, this initial bill required that a practitioner certify on the prescription that the compounded variation produces a "significant difference from the marketed drug version." This would have violated practitioner freedom by placing prescriptions directly under federal scrutiny.
The bill also gave the FDA the power to disallow entire categories of drugs that could be compounded, including extended release products. This threatened such drugs as complete, desiccated thyroid release compounds. Worse yet, the bill outlined a standard for compounded drug safety and efficacy that could have required double-blind, randomized, controlled trials. Although these are considered the "gold standard" for many drugs, such trials are unsuitable for compounded drugs, which by their very nature are individualized. What were practitioners to do – run drug trials on individual patients?
From May to November 2013, the bill went through several alarming, special-interest-fueled iterations, and at one point ballooned to 189 pages.14,15 During these six months, ANH-USA was asked to provide guidance to the bill's Senate sponsors, and when the House introduced its own version of the bill in September 2013, ANH-USA was again instrumental in addressing consumer and practitioner concerns. For instance, we met with members on both sides of the aisle to explain the legislation's potentially disastrous impact on physician freedom, as well as on the consumers who rely on compounded medications every day. Meanwhile, ANH-USA's consumer members sent hundreds of thousands of messages to their legislators.

The Final Compounding Bill: Successes and Concerns
The compounding bill was in the end replaced with an entirely new version, which passed on November 18, 2013.16 Worryingly, it bars doctors from prescribing compounded nutrients delivered intravenously. It also bans compounded drugs from traditional compounding pharmacies unless they are on a preapproved list, have a USP monograph, or are components of FDA-approved drugs. As noted above, it also institutes the new category of outsourcing facilities, which can distribute out of state without restrictions and won't require individualized prescriptions but are restricted to drugs on a FDA-approved list. This means that compounded drugs will be less available, and consumers' access may be seriously curtailed.
However, we were able to win many positive changes to the final language. The troubling elements of the original legislation that we were able to improve include:

  • Protecting compounded drugs that have USP monographs. This makes it much more likely that medications such as estriol will remain available for the millions who rely on them each day.
  • Ensuring that compounding pharmacies could continue to make nonstandardized dosages of drugs, thus maintaining consumer access to individualized dosages.
  • Removing specific language that targeted extended-release products. While the final language still permits the FDA to disallow entire categories of drugs (so desiccated thyroid compounds may still be in jeopardy), the specific reference to time-released compounds has been removed.
  • Removing a "safety and efficacy" requirement that could have forced compounders to perform randomized, controlled trials (RCTs). RCTs are not only inappropriate for individualized medicine but are prohibitively expensive (a single RCT comes with a price tag of millions of dollars). This provision was simply a backdoor approach to banning compounded medications.
  • Removing language that would have mandated physician reporting within a few days. This gives doctors more time and flexibility to treat patients as they see fit.

What's Next, and How You Can Help
Because the bill is still in the regulatory phase, we still have opportunities for action and comment. The bad news is that the FDA is no stranger to perverting congressional intent, and may try to ban many more compounded drugs than lawmakers envisioned.
Our goal throughout this process will be to ensure access to safe compounded medications, given the confines of the recently passed legislation. For example, we recently submitted comments on what drugs should be included in the "legal to compound" list, and we'll weigh in on what drugs the FDA decrees are "difficult to compound" (many restrictions may be placed on the drugs on this list).
It's also important to remember that on Capitol Hill, bad legislation never truly dies. My organization will continue to vigilantly monitor proposed legislation, some of which may be intentionally hidden in unrelated bills, that may have an impact on integrative practitioners and compounded medications.
In the meantime, please visit Here you'll find a quick and easy way to send the FDA a message about how the rules will affect your access to vital compounded medicine.
We also recommend that you subscribe to our weekly e-newsletter, The Pulse of Natural Health. It's through the Pulse that we alert grassroots activists to troubling laws and regulations, and provide opportunities for action. Believe me, this strategy works – after all, it was our grassroots activists who helped win so many concessions in the final compounding bill. To subscribe to the Pulse, please visit

ANH-USA: Fighting for Your Rights
At its core, ANH-USA is a grassroots consumer advocacy organization. This means that we carefully track proposed legislation and regulations, tell consumers and doctors about how it can affect them, and offer them a means to take action.
ANH-USA is the only grassroots advocacy organization working to protect compounding pharmacies by engaging directly with congressional decision-makers. However, we also work on a plethora of other issues, including protecting access to dietary supplements, as well as organic and natural foods; monitoring the Codex process; promoting GMO labeling; and protecting integrative practitioners from predatory state medical boards and private trade groups.

1.   Drug Quality and Security Act, H.R. 3204. 113th Cong. (2013–2015). Available at
2.   Section 503A(b)(1)(A)(i) of the Federal Food Drug & Cosmetic Act. Available at
3.   Section 503A(a). Ibid.
4.   Section 503A(a)(3)(B)(i). Ibid.
5.   Section 503B(a)(2)(A)(i). Drug Quality and Security Act, H.R. 3204. 113th Cong. (2013–2015).
6.   Section 503B(d)(4)(A)(i). Ibid.
7.   Lupkin S. Fungal meningitis: anatomy of an outbreak [online article]. ABC News.    
8.   Stein R. Lawmakers clash with FDA over meningitis outbreak [blog entry]. NPR.
9.   About us [Web page]. Working Group on Pharmaceutical Safety.
10. ANH-USA. How the FDA turned a $10 treatment into a $30,000-per-pregnancy pharmaceutical money-maker [online article]. March 2, 2011.             
11. Jefferies Global Healthcare Conference. TherapeuticsMD. June 2013. Available at
12. Don't empower the FDA to take away your access to compounded medications [online article]. ANH-USA. May 7, 2013.
13. Pfizer Inc. [Web page].
14. Compounding pharmacy bill: third draft, still some major problems – and no time to lose! [online article]. May 21, 2013. ANH-USA.
15. Urgent action alert! revised compounding bill vote possible tomorrow! [online article]. ANH-USA. July 30, 2013.
16. Drug Quality and Security Act, H.R. 3204. 113th Cong. (2013–2015).

With offices in the UK; Atlanta, GA; and the Washington, DC, metro area, ANH-USA is the largest natural-health-focused consumer group in the world. We are dedicated to protecting and promoting sustainable health care, and freedom of choice in health care, through good science and good law. ANH-USA protects the right of natural health practitioners to practice, and the right of consumers to choose the health-care options that they prefer. We hope that you will join us in this vital mission.

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