Compounding Pharmacies Likely to Face Heightened Scrutiny and Increased Regulation

Compounding pharmacies have seen increased government investigations in recent years, and are likely to face heightened scrutiny from state and/or federal authorities in the near future. Coupled with heightened scrutiny of health care providers in general, compounding pharmacies should carefully review their operations for compliance with law.

Incidents involving providers of compounded medications, most notably the recent meningitis outbreak in Massachusetts, in which contaminated drug products from one compounder were linked to 257 meningitis infections in 16 states, have spurred new legislative initiatives that may result in increased regulation of these businesses. In the wake of the meningitis outbreak, the Massachusetts Department of Public Health has already issued new regulations to provide for more oversight of compounding pharmacies.

Additionally, Senator Ed Markey, a Democrat from Massachusetts, has introduced legislation last week on Capitol Hill to give the FDA broader oversight of compounding pharmacies:

Under the existing regulatory model, both the U.S. Food and Drug Administration (“FDA”) and the boards of pharmacy in individual states regulate compounding pharmacies, but the scope of the authority of these entities is not clearly defined. It is clear, however, that the FDA’s oversight of compounding pharmacies is more limited than its oversight of traditional pharmaceutical manufacturers. Unlike the traditional drug manufacturers, compounding pharmacies are exempt from the standard drug approval process and requirements dictated by the Food, Drug and Cosmetic Act. However, compounding pharmacies can potentially cross this regulatory threshold when they engage in activities, such as producing large quantities of particular compounded drugs on a commercial scale. These activities can trigger FDA oversight, which materially enhances the measures necessary for a compounding pharmacy to comply with federal law. Additional confusion in the oversight of compounding pharmacies arises when a compounding pharmacy’s operations extend beyond the bounds of a single state, thereby implicating the individual laws for each state in which it engages in operations. Therefore, the exact nature of a compounding pharmacy’s legal exposure is tied to the geographic range of its commercial activities.

Compounding pharmacies may find themselves subject to new requirements in order to continue to provide compounded pharmaceutical products. It is possible that in the future compounding pharmacies may have to undergo some type of accreditation or licensing process in order to continue their operations. Currently, the Pharmacy Compounding Accreditation Board (“PCAB”) accredits compounding pharmacies on a voluntary basis.

Although the regulatory effect of any future legislation is as yet unknown, it is clear that compounding pharmacies are under more scrutiny than ever. Therefore, it is imperative that pharmacies ensure that they are cognizant of and complying with applicable federal and state laws. Such entities would be well advised to seek counsel to review their operations and to ensure compliance with all relevant regulations.

For more information, please contact Adrienne Dresevic, Esq., or Clinton Mikel, Esq., at (248) 996-8510 or visit the HLP website.

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