State and Federal laws govern the availability of compounded unapproved drugs. While the FDA reserves the right to inspect compounding pharmacies; restricted resources limit the FDA’s ability to inspect most compounding pharmacies. When FDA receives a complaint about a compounded medication it typically refers the complaint to the appropriate state’s board of pharmacy.
Compounding is ONLY appropriate when:
- There is no FDA-approved drug for a patient’s ailment.
- An individual patient has an allergy to an ingredient used
in an FDA-approved medication.
- A pediatric patient requires a medication for which there is
no suitable formulation.
- The FDA-approved drug is not currently available
Drug safety is important to both drug compounders and FDA-approved manufacturers. The FDA document titled, The Special Risks of Pharmacy Compounding (link), the FDA provides examples of situations where patients have been injured by compounded drugs. More examples are provided on a page of this website titled, Helpful Links. The FDA asks that adverse events experienced with FDA-approved and compounded medications be reported to FDA MedWatch (link).
The FDA and Medicare can impose criminal charges and significant fines against a physician who is convicted of using illegally imported or illegally compounded drugs. Medicare Part B will pay for compounded (non-FDA-approved) drugs when they meet the criteria for coverage. However, it is considered Medicare fraud to bill for a drug that is non-approved or illegal. The Centers for Medicare and Medicaid Services (CMS) have taken an aggressive position in recent years to prevent fraud. Under the Federal False Claims Act (FCA), any person who knowingly submits a false or fraudulent claim to Medicare or Medicaid is liable to the Federal Government for three times the amount of the Federal Government's damages plus penalties of $5,000 to $10,000 for each claim. This is evidenced by the aforementioned 2005 case where the penalized physician was mandated to pay $150,000 restitution under the False Claims Act. In the case, the physician billed Medicare for 62 procedures, all of which Medicare refused payment because the drug utilized was non-approved. Under the Federal False Claims Act, persons who report fraudulent claims to the U.S. Government are entitled to a reward equal to 15% to 25% of the recovery of Federal damages. This provides tremendous incentive to persons who have exposure to Medicare or Medicaid billing to report any activity that may be deemed as false. A fraud conviction can be very costly for a physician, as the penalties are paid out-of-pocket unless the physician has supplemental insurance specifically for Medicare fraud.
Has the US government performed hearings about the issues associated with drug compounding?
Yes, in 2003 hearings were held. The link below will take you to a review of those hearings:
Has the FDA ever quantified quality control issues related to compounded drugs?
There are many significant issues associated with compounded medications. These issues can affect unapproved drug efficacy and patient safety.
- A sterile compounding environment - The lack of a sterile manufacturing area can compromise the ingredients used to make medicine.
- Unknown drug stability - It is common for compounded drugs
(non-FDA-approved) to come without an expiration date and after potency has diminished.
- Supra-potency - The strength of the compounded medication is higher than the labeling indicates.
- Low-potency - The strength of the compounded medication is lower than the labeling indicates.
In 2002 and 2006 the FDA evaluated medications supplied by compounding pharmacies.
An overview of the FDA’s 2006 finding can be found here.
medications?Among 198 samples gathered during 2006, 125 were active pharmaceutical ingredient (API) and 73 were compounded (non-FDA-approved) finished drug products. All 125 API samples passed analysis. Of the 73 compounded (non-FDA-approved) finished drug products, two-thirds (66%) either couldn’t be tested or failed analytical testing.
Yes, in 2002 the FDA re-issued guidance on pharmacy compounding. The following are unacceptable criteria:
- Compounding drug products that are commercially available
in the marketplace or that are essentially copies of commercially
available FDA-approved drug products. In certain circumstances,
it may be appropriate for a pharmacist to compound a small quantity
of a drug that is only slightly different than an FDA-approved drug
that is commercially available. In these circumstances, FDA will
consider whether there is documentation of the medical need
for the particular variation of the compound for the particular patient.
- Compounding of drugs in anticipation of receiving prescriptions,
except in very limited quantities in relation to the amounts of drugs compounded after receiving valid prescriptions.
- Using commercial scale manufacturing or testing equipment for compounding drug products.
- Compounding drugs that were withdrawn or removed from
the market for safety reasons.
- Compounding finished drugs from bulk active ingredients that
are not components of FDA approved drugs without an FDA
sanctioned investigational new drug application (IND) in accordance
with 21 U.S.C. § 355(i) and 21 CFR 312.
- Receiving, storing, or using drug substances without first obtaining
written assurance from the supplier that each lot of the drug substance
has been made in an FDA-registered facility.
- Receiving, storing, or using drug components not guaranteed
or otherwise determined to meet official compendia requirements.
- Compounding drugs for third parties who resell to individual
patients or offering compounded drug products at wholesale to
other state licensed persons or commercial entities for resale.
- Failing to operate in conformance with applicable state law regulating the practice of pharmacy.
You may hear that compounded (non-FDA-approved) medications are less expensive than FDA-approved medications. This may not always be true. The expense of any given medication can be measured numerous ways. It is important that physicians know if there is a suitable FDA-approved drug available before prescribing or using a compounded (non-FDA-approved) drug. Physicians may also want to determine if a patient’s insurance company will pay for compounded medications before touting a compounded (non-FDA-approved) medication as less expensive than an FDA-approved drug and insurance carriers frequently do not reimburse the cost of compounded (non-FDA approved) medication.
of medication and sell it?
The manufacturing standards applied to compounding pharmacies and FDA-approved drug manufacturers are different. All FDA-approved medications are required to show quality control analyses, while compounding pharmacies are not held to the same, if any, standards. Many drug compounding pharmacies may make medications in a clean environment, there are no controls enforced regarding drug stability and sterility. It is impossible for a physician or patient to know the duration of stability for a compounded product, whereas, all FDA-approved drugs are supplied with an expiration date and lot number. An FDA-approved drug’s expiration date helps ensure that the product is used at a time when it’s known to contain the desired amount of medication. Having a lot number helps ensure the medication is always traceable if a recall was ever required. Since it is illegal for compounding pharmacies to make large (bulk) quantities of drug lot numbers are not used thus it may not be traceable. Additionally, the stability profile of compounded (non-FDA-approved) drugs is unknown.