Compounding Regulations: FDA Efforts to Regulate the Compounding Industry

Compounding Photo from

Compounding Photo from

By Chivas Owle

Recently the compounding industry has been in the news due to the outbreak of meningitis from a contaminated lot of methylprednisolone injectables (MPA) produced at New England Compounding Center (NECC). The Food and Drug Administration (FDA) has been criticized for failing to act to prevent this tragedy from occurring. Is this criticism fair and deserved?

In many ways the NECC reflects the historical trend of legislation being prompted by sentinel events. FDA itself came to be after the deaths of about 100 people from the use of diethylene glycol in a preparation. Additional responsibilities were granted to FDA after thalidomide caused birth defects in Europe (interestingly FDA successfully prevented such birth defects in the US even before the Kefauver-Harris Amendment of 1962 was passed). An intrauterine device injured thousands of woman spurring the passing of Medical Device Amendments of 1976. The scope of the meningitis outbreak is on par or greater than these historical misfortunes with about 50 deaths and over 700 injuries in 23 states.

The NECC was founded in 1998. Since it’s inception it has been given numerous warnings by FDA as well as the Massachusetts Board of Pharmacy (BOP). In an interesting bit of foreshadowing the very drug that caused the most recent outbreak, MPA, was discovered to be contaminated about 10 years prior in 2002. At that time only 2 cases of meningitis were reported and the extent of contamination is unclear.

Most of the NECC’s repeated violations centered on behaviors more consistent with manufacturing than compounding. Within 10 months of opening NECC was reported to be distributing prescription blanks to prescribers, a practice that violated Massachusetts law. This practice continued for the next 10 years. It would appear the strongest action ever taken against NECC for this was a warning sent to NECC in a private non-disciplinary advisory letter by the Massachusetts BOP.

The NECC had a special license that allowed it to specialize in compounding medications rather than be a full service pharmacy. The company was still required to have a specific prescription for a specific patient. Massachusetts state law also required the pharmacy to be in compliance with USP 797, though NECC was repeatedly cited for being out of compliance.

In 2002 FDA and Massachusetts jointly investigated NECC after receiving a report from a physician about a contaminated betamethasone preparation. The investigation found a startling lack of proper book keeping. There were no records of the lot of betamethasone ever being produced, quality tested, or of its sell or return (which the physician confirmed).

FDA inspections revealed many less than optimum manufacturing procedures. FDA took the position that the BOP was better equipped to handle NECC than FDA was (the logic for this position is unclear). An FDA memo to the BOP urged the BOP to reclassify NECC in a manufacturer role rather than a compounding one and to not allow any more production at NECC until such a time as NECC could demonstrate Good Manufacturing Processes. The BOP’s ability to do so (rather than FDA) is unclear.

FDA has received much criticism for a perceived lack of action against NECC in the decade prior to the current meningitis outbreak. Some have even questioned if FDA was perhaps waiting for such a thing to happen in order to more firmly establish the need for FDA to assert more authority in the compounding industry.

In truth FDA’s efforts in regulating compounding are spotty at best. In 1997 congress attempted to clarify FDA’s role in regulating compounding with FDA Modernization Act. However the Supreme Court struck down section 503A of the act which dealt with marketing (the Supreme Court ruled that it limited free speech). Though this did not invalidate other provisions in the act FDA has historically meet with strong resistance whenever it attempts to assert its authority over compounders.

The compounding industry is a 2 billion dollar industry. Its advocacy groups, such as the National Community Pharmacists Association (NCPA) and the International Academy of Compounding Pharmacists (IACP), assert that there are adequate regulations in place to protect consumers and that BOP’s are the sole authority in regulating compounders (historically true). FDA’s attempts to coordinate with and defer to BOPs may be interpreted as an attempt to preserve this historical role rather than a cynical desire to wait for a sentinel event to prompt for stronger statutory authority over compounders.

USP 979 has driven many of the smaller compounders and hospitals to quit compounding at all and instead rely on others to do their compounding for them. This has resulted in the consolidation of compounding and in essence “raised the stakes” for entities such as NECC. This may have contributed to how wide spread the meningitis outbreak became. This would certainly be a result of the law of unintended consequences – the express purpose of USP 797 is to protect the patient!

While it may not have been directly related to this incident, FDA has also indicated they do not plan to protect manufacturers from compounders who violate copyright patents. There are several very interesting cases where FDA’s failure to intervene on this issue has caused undue hardship on manufacturers and given compounders an unfair advantage. Because the effect of that policy on this particular outbreak is unclear, this article will not focus on specific examples and instead encourage the reader to research this topic if it is of interest.

Proposed Legislation

The VALID Compounding Act, proposed by Rep. Edward Markey (D-MA) in 11/2012, attempts to prevent a future health care event like the meningitis outbreak. It proposes, in part, that:

Compounded drugs be labeled as such with the notation that the drug has not been approved by FDA.

The distinction between pharmacies compounding and manufacturing be clarified.

The Secretary of HHS is to provide a list of drugs that are not to be compounded and to prohibit the copying of commercially available drugs.

Strictly speaking much of the language of the bill could be described as grand standing. The first proposal would do nothing to prevent an outbreak. It is reasonable to believe that patients will take a medication prescribed by a physician and prepared by a pharmacist. It is doubtful that most patients are unaware of when they are taking a compounded medication and even if more attention is paid to educating patients about that fact, how prepared are patients to critically evaluate the dangers of taking compounded medications vs going untreated or alternative treatments?

The legal distinctions between compounder and manufacturer can be improved and this section of the bill could potentially do the most to prevent future public health crisis’s. However the real challenge is in enforcing those distinctions. As long as BOPs have the authority to grant compounding licenses how will FDA (or any other agency) control who enters the marketplace or what they produce? As long as BOPs solely have this authority it is up to them to protect the public health.

The final provision is the least helpful. The Secretary of HHS will not put any medications on the proposed list that would prevent patients from receiving life-saving or critical access medications and these will continue to be the highest risk medications to compound. Furthermore copyrights are already protected by federal law so additional legislation in this area is unlikely to produce the intended results. It is unclear how much this contributed to the contaminated MPA in the first place.

Lastly the bill grants ‘exceptions’. While it is probably a political reality that any legislation would need to contain such a provision, it is unclear the exact extent of the exceptions, however it seems quite likely that as long as there are exceptions (or “loopholes”) people will find a way to continue unsafe compounding practices.

FDA needs more statutory authority to regulate compounding and specifically needs to be able to distinguish between compounding and manufacturing. The contaminated lot of MPA from NECC contained over 17,000 doses – a far cry from anything resembling a traditional compounder! This could be prevented in the future if FDA is empowered to revoke compounding licenses directly or require additional licensing for large scale compounding (perhaps a new classification between manufacturer and ‘traditional’ compounder). A new designation that FDA would be statutorily responsible for designating and overseeing could go a long way towards protecting the public from manufacturers that would bill themselves as compounders.


  • Regulation of Compounding Pharmacies: A State or Federal Matter? Michael R. Hugo.
  • The New England Compounding Center and the Meningitis Outbreak of 2012: A Failure to Address Risk to the Public Health. Committee Staff Report.
  • Pharmacies push back on call for regulations after ’60 Minutes’ report. Megan R. Wilson.
  • Lobbyists weigh in on pharmacy oversight. Kimberly Kindy and Lena H. Sun.
  • FDA inspections reveal ugly truth. Agency reports on inspections of NECC.
  • VALID Compounding Act to regulate compounding pharmacies is introduced. Pharmaceutical Commerce.
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3 Responses to “Compounding Regulations: FDA Efforts to Regulate the Compounding Industry”

  1. Mr. Bean says:

    BOP is totally useless. It’s a bunch of incompetent pharmacists overseeing other incompetent pharmacists. I have witnessed their inspection efforts in last year after the NECC incident and found the level of concern and lack of understanding on the part of board inspectors quite embarrassing. We need higher level oversight of these pharmacies and competent inspectors with appropriate background. A pharmacy degree alone should not qualify one to be an inspector/investigator.

  2. Chivas Owle – We did a special Pharmacy Podcast Show interview with Christian Hartman PharmD, MBA – who was appointed by Massachusetts Governor Patrick – and he convened the Special Commission to Make an Investigation into and Study of the Oversight of Compounding Pharmacies (the “Commission”) in the Commonwealth in response to the tragic events of the multi-state meningitis outbreak that has been attributed to products from Massachusetts-based New England Compounding Center.

    The Commission was chaired by Christian A. Hartman, an expert in pharmacy practice and patient safety. Here’s his interview:

    The Commission undertook an intensive and focused study of compounding practices in Massachusetts, relying on perspectives from pharmacists, regulators, physicians, epidemiologists, health law practitioners and legislators to protect the public and to minimize the risk of drug shortages. The findings and recommendations put forward by the Commission offer a framework within which policy changes should be contemplated and further studied.