Compounding Reform: Practical Implications and the Ripple Effect

Will Compounding Pharmacies Survive?

by Allison Murphy

Legislative Director

Alliance for Natural Health USA

When Congress passed the Drug Quality and Security Act in 2013, a major overhaul of the drug compounding industry was set in motion, and the US Food and Drug Administration (FDA) was given broad new powers. As the FDA releases more and more rules and regulations implementing the new law, patients, doctors, and pharmacists are starting to feel the practical implications of these reforms. Of greatest concern is the fact that the new rules have created a ripple effect, spreading to states, insurance companies, and the US Pharmacopeial Convention. Drug compounding as we know it is in grave danger.

The ability of medical professionals to tailor a treatment to an individual patient’s needs – to fine-tune dosages or compound a custom formula from existing medications – is a critical part of the doctor–patient relationship. It empowers individuals to seek treatments that will be the most beneficial to their health and well-being. With compounding at risk, doctors and pharmacists will no longer be able to create medications that are the exact strength, dosage, and ingredient mix best suited to treat an individual patient. Without medical treatment customized to an individual’s allergies, age, weight, medical history, and even flavor and delivery preferences, American consumers will be left with a one-size-fits-all approach to medicine.

It will be an uphill battle to effectuate change, but doctors, patients, and the entire compounding community – including my organization, the Alliance for Natural Health USA (ANH-USA) – are coming together to fight for continued access to compounded medications.

Background

In 2012, contamination at a large, industrialized plant, the New England Compounding Center, caused an outbreak of fungal meningitis, killing dozens of people and sickening many more. The NECC contamination was an isolated incident exacerbated by poor FDA oversight, but the pharmaceutical industry and the FDA used it as an excuse to attack the entire compounding industry.

Congress responded in 2013 with passage of the Drug Quality and Security Act, which created a new regulatory regime to be enforced by the FDA. In July 2014, the FDA released rules, guidance documents, and other documents implementing the new law. Compounding pharmacies are now regulated on both the state and federal level and are divided into two categories – Section 503A of the Food, Drug, and Cosmetic Act covers smaller, traditional pharmacies; section 503B covers large “outsourcing facilities.”

Generally, state pharmacy boards are the primary regulators of 503A establishments, i.e., state-licensed pharmacies that compound drugs. The FDA also retains some control over 503A pharmacies, regulating such areas as the adulteration or misbranding of compounded drugs, or false or misleading statements in the labeling or advertising of such drugs.

Large outsourcing facilities, on the other hand, are regulated on the federal level. They must maintain compliance with current Good Manufacturing Practices (cGMPs), complete satisfactory FDA inspections, report all adverse events, and provide the FDA with certain information about the products they compound.

Problems with the New Rules

Several sections of the new rules will hurt doctors, patients, and compounding pharmacists. The area that has the potential to be most harmful is “office use.”

“Office use” is when a physician, in his or her office or other treatment area, administers a compounded medicinal preparation directly to a patient for the immediate treatment of a problem. In these instances, a doctor would need to have a reserve supply of compounded drugs on hand without a prescription. Pharmacies might be called upon to repackage manufactured drugs to produce various compounded formulations in advance of a prescription – especially if they know they have a standing order on certain formulations.

Now the FDA is repressing office use and pharmacy repackaging. A patient-specific prescription is being required for all drugs compounded (with a narrow exception if the compounding is based on an established relationship with the patient), and the FDA will bring action against traditional compounders that do not require prescriptions. This conflicts with state laws governing the pharmacist–prescriber relationship and impinges on the doctor–patient relationship. Keeping a supply of medications for office use allows doctors to respond quickly to patients in need of treatment, ensure patient compliance, and monitor physical reactions. Limiting office use does nothing to improve patient safety and instead limits doctors’ ability to do what is best for their patients.

Also troublesome is the “5% Rule.” Traditional compounders (as opposed to large outsourcing facilities) are now allowed to send no more than 5% of their sales out of state. This is an arbitrary limit on the movement of compounded drugs that has no impact on the health and safety of patients. The only plausible benefit of the rule would be for large drug companies, which wish to limit access to compounded medications. Note also how nonsensical a small percentage limitation like this is. How can pharmacies possibly know how much 5% really amounts to until the end of the year? By then they may have already violated the rule!

The FDA has also asked for nominations for “bulk ingredient” lists, which will delineate what drugs may be used by traditional compounders and outsourcing facilities – and which may not. Pharmacies and medical professionals have attempted to nominate the most important compounding ingredients for the lists; however, the FDA has asked for information to be included in the nomination process that is extremely difficult to compile, especially given the limited time frame for comment.

For example, in the legislation Congress stated that to be on the approved list, there must be a “clinical need” for the bulk drug substances. The FDA interpreted this as indicating a higher standard than what a physician feels is necessary for a patient. Accordingly, FDA has asked that nominations include:

• a list of other drugs that could treat the same symptoms;
• an explanation of why a compounded drug product is necessary;
• an estimate of the size of the population that would need a compounded drug product;
• a bibliography of safety and efficacy data for drugs compounded using the nominated substance; and
• an explanation of why the drug to be compounded must be compounded using bulk ingredients instead of the FDA-approved drug product.

Ripple Effect of the New Regulations

Since the NECC incident in 2012, Congress has blamed the FDA for failing to properly oversee the facility. According to a report from the House Energy and Commerce Committee chronicling “the FDA’s missed opportunities to protect public health,” the FDA became aware of problems at that facility as early as 2002, a full decade before the incident, and had several opportunities to prevent the disaster that occurred. The FDA, on the other hand, has said that responsibility for the problems should be shared with the Massachusetts public health department and the state’s pharmacy board.

As a result, states have felt compelled to act as well, in addition to the more stringent federal regulations already noted, creating a double barrier to accessing compounded medications. For example, Georgia now requires that a specific license be on file for any out-of-state compounder shipping its product to Georgia. The license costs thousands of dollars, and is such an administrative burden that many simply refuse to ship to Georgia rather than obtain that license. Virginia requires that any compounder who ships into the state be registered with the state board of pharmacy and designate a pharmacist licensed in Virginia to be in charge of compliance. North Carolina says that office use compounding is permitted – but only insofar as it conforms with federal law which, as we note above, may be very little, or not at all.

Insurance companies are also limiting access to compounded medications. In November 2014, three compounding pharmacies filed suit against Express Scripts Inc., a pharmacy benefit manager (PBM). PBMs are companies that process prescriptions for insurance companies and corporations, and use their size to negotiate low prices with drug makers and pharmacies. Express Scripts has been denying claims for compound pharmaceutical medications, in violation of federal law – the company has blocked coverage of approximately 1,000 ingredients for compounding without providing any reasonable justification.

Under federal law, a claims handler must disclose the specific reasons for a claim decision, including specific references to the health plan provisions upon which a “not covered” claim is allegedly based. Internal documents from Express Scripts revealed that they chose to deny coverage in an effort to cut spending on compound pharmaceuticals by 95%; however, letters to the patients cited spurious rationale, such as unspecified changes in the compounded medications and a lack of FDA approval for compounded medications. Other PBMs such as Optum RX, CVS Caremark, and Catamaran, have also placed restrictions on compounding ingredients.

In addition, new rules from the US Pharmacopeial Convention (USP) could also threaten access to compounded drugs. The USP is a nonprofit that sets quality standards for foods, drugs, dietary supplements, and compounded medications. The USP actually predates the FDA, and the two work closely together – many USP standards have been adopted in federal law. Recently, the USP announced that it will create new standards for the handling of hazardous drugs.

The new standards are intended to protect healthcare workers from exposure to hazardous drugs; however, the new standards are very aggressive and will severely affect compounding pharmacies, particularly small traditional pharmacies which will have difficulty complying. For example, the new standards would require that hazardous drugs be unpacked in negative-pressure rooms, which many facilities would not be able to build; purchasing the necessary equipment and building the additional rooms could cost hundreds of thousands of dollars. The added costs could ultimately stop many traditional pharmacies from providing compounded medications deemed hazardous, including estriol and thyroid medications. The new rules should be balanced with the actual level of risk involved, and there is no evidence that many of these drugs are hazardous to healthcare personnel – there have been no incidents precipitating the need for additional regulation.

Earlier this year, the FDA announced the formation of the Pharmacy Compounding Advisory Committee, a fourteen-member panel that will advise the FDA on the scientific, technical, and medical issues surrounding drug compounding. However, stakeholders were given no input on the composition of the board, and nominations made by members of the compounding community were largely ignored. This means the very population who know the most about compounding will be without a voice on the committee that will govern it. This also means that the current regulatory approach will be able to proceed unchallenged.

Current Status in Congress

Fortunately, some members of Congress have remained committed to creating sound compounding policy. According to Rep. Morgan Griffith (R-VA), the FDA’s treatment of office use is of “grave concern.” Griffith said he will continue to work on the issue with other members such as Reps. Gene Green (D-TX) and Diana DeGette (D-CO). Sen. Lamar Alexander (R-TN) has criticized the FDA for failing to communicate with doctors, patients, and pharmacists during the implementation process.

Sen. Alexander is not the only member to question the FDA’s actions. During last year’s budget process, language was included in a Senate Appropriations Committee report stating that “oversight of FDA has not kept pace with the growth in the agency’s regulatory authority or funding.” Likewise, the House Appropriations Committee said it would continue monitoring the FDA’s oversight of compounding pharmacies to make sure it adheres to congressional intent, which was not to eliminate office use or create unrealistic burdens for protecting compounded ingredients. The committee also said that state pharmacy boards should continue to have primary oversight of traditional compounding pharmacies – not the FDA.

Taking Action

In December 2014, a stakeholder group that included physicians, pharmacists, and patient advocates such as ANH-USA sent a letter to Congress and the FDA calling on lawmakers to “address the concerns with office-use and repackaged compounded medications legislatively as soon as possible so that providers and patients can have access to these essential treatments and/or work with FDA on a responsible regulatory approach.” It is now imperative that the compounding industry continue to communicate with legislators about the need for a legislative fix to halt further damaging regulations.

Congress and the FDA should examine the issue in hearings or some other public forum that would allow all stakeholders an equal opportunity to express their concerns. Hearings will also bring more transparency to the rulemaking process. Many groups have also called on the FDA to reopen their regulations for public comment so that stakeholders may weigh in on the practical consequences of the regulations.

Visit www.SaveCompounding.org to get more information on compounding and find a quick and easy way to tell the FDA how the rules will affect your access to vital compounded medicine. We hope you – not to mention the doctors, patients, and pharmacists of your acquaintance – will share the link and encourage everyone in their own social networks to take action immediately.

ANH-USA: Fighting for Your Rights

At its core, the Alliance for Natural Health USA is a grassroots consumer advocacy organization. We carefully track proposed legislation, explain to consumers and practitioners how it can affect them, and offer them a means to take meaningful action. ANH-USA and its allies will continue to fight for integrative practitioners and compounded medications, carefully monitoring FDA activity and advocating for sound policy.

We work on a plethora of issues in addition to compounding, including protecting access to dietary supplements, and organic and natural foods; monitoring the Codex process; promoting GMO labeling; and protecting integrative practitioners from predatory state medical boards and private trade groups.

We invite you to subscribe to our weekly e-newsletter, the Pulse of Natural Health. It’s through the Pulse that we alert our network of grassroots activists to troubling laws and regulations, and provide opportunities for direct action. This strategy works extremely well – 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 www.ANH-USA.org.