Tuesday, November 4, 2014

NORTH CAROLINA BOARD OF PHARMACY Annual Report. October 1, 2013 - September 30,2014 Details New Compounding Rules and Compounding Issues such as kickbacks and referral fees and trumped up clinical trials of topical compounded medications

Last year's report detailed the Board of Pharmacy's intensive response to the New
England Compounding Center tragedy. The report noted that the Board's Pharmacy
Compounding Working Group was drafting proposed rule amendments aimed at further
clarifying compounding pharmacy standards and ensuring conformity with H.R. 3204,
the Drug Quality and Safety Act ("DQS A"), à federal statute signed into law in late
November 2013.
The DQSA represents a fundamental shift in federal-state regulation of pharmacy
compounding. The Board's Executive Director, Jay Campbell, authored a two-part
7arlicle, published by the National Association of Boards of Pharmacy,that has become
one of the chief references for regulators and practicing pharmacists. Part I is found here:
www.nabp.net/system/rich/rich_files/rich_files/000/000 l56l loriginal/august20 I 4nabpne
wsletter,pdf. Part II is found here: www.nabp.net/system/rich/rich_ files/rich_
files/000/00 0 I 5 5 6 I original/september2} I 4nabpnewsletter.pdf
The Board is approaching the final stages of a significant overhaul of its
compounding rules designed to improve patient safety and comport with the DQSA. The
Board voted to approve the amendments at its October 2014 meeting. Barring unforeseen
delays during Rules Review Commission review, the amendments should become
effective January l, 2015.

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Compounding Pharmacy Issues
Last year's report described in detail the renewed focus on compounding
pharmacy enforcement priority. All of the activities described in that report continue
apace. Moreover, the Board of Pharmacy has been a national leader in establishing
cooperative enforcement and monitoring efforts with the federal Food and Drug
Administration,
During FY2013-14, Board staff alerted to a new type of compounding pharmacy
scheme involving the payment of kickbacks or other "referral fees" to prescribers in
exchange for prescribing various compounded topical products. Such kickback schemes
flatly violate North Carolina law, which provides: "A health care provider shall not
frnancially compensate in any manner a person, firm, or corporation for recommending or
securing the health care provider's employment by a patient, or as a reward for having
made a recommendation resulting in the health care provider's employment by a patient.
No health care provider who refers a patient of that health care provider to another health
care provider shall receive financial or other compensation from the health care provider
receiving the referral as a payment solely or primarily for the referral," NCGS Section
90-401 (emphasis added). Variations of the scheme involve trumped up "clinical trials"
of topical compounded products.

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)
the Occupational Licensing Board
The Board may undertake rulemaking on the following topics during FY2015:
Amendments to Board rules governing pharmacy compounding. These
amendments will harmonize state requirements with federal requirements
under the Drug Quality and Security Act.

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