[Senate Hearing 108-378]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-378

  FEDERAL AND STATE ROLE IN PHARMACY COMPOUNDING AND RECONSTITUTION: 
              EXPLORING THE RIGHT MIX TO PROTECT PATIENTS

=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   ON

EXAMINING STATE AND FEDERAL OVERSIGHT TO ENSURE THE SAFETY AND QUALITY 
  OF DRUG COMPOUNDING--THE PROCESS OF MIXING, COMBINING, OR ALTERING 
    INGREDIENTS TO CREATE A CUSTOMIZED MEDICATION FOR AN INDIVIDUAL 
                         PATIENT--BY PHARMACIES

                               __________

                            OCTOBER 23, 2003

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions



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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  JUDD GREGG, New Hampshire, Chairman

BILL FRIST, Tennessee                EDWARD M. KENNEDY, Massachusetts
MICHAEL B. ENZI, Wyoming             CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
CHRISTOPHER S. BOND, Missouri        BARBARA A. MIKULSKI, Maryland
MIKE DeWINE, Ohio                    JAMES M. JEFFORDS (I), Vermont
PAT ROBERTS, Kansas                  JEFF BINGAMAN, New Mexico
JEFF SESSIONS, Alabama               PATTY MURRAY, Washington
JOHN ENSIGN, Nevada                  JACK REED, Rhode Island
LINDSEY O. GRAHAM, South Carolina    JOHN EDWARDS, North Carolina
JOHN W. WARNER, Virginia             HILLARY RODHAM CLINTON, New York

                  Sharon R. Soderstrom, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                  (ii)

  




                            C O N T E N T S

                               __________

                               STATEMENTS

                       THURSDAY, OCTOBER 23, 2003

                                                                   Page
Bond, Hon. Christopher S., a U.S. Senator from the State of 
  Missouri.......................................................     1
Ensign, Hon. John, a U.S. Senator from the State of Nevada.......     2
Heinrich, Janet, DrPH, RN, Director of Health Care-Public Health 
  Issues, U.S. General Accounting Office; and Steven Galson, 
  M.D., MPH, Deputy Director, Center For Drug Evaluation and 
  Research, U.S. Food and Drug Administration....................     4
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......     7
Sellers, Sarah L., PHARM.D, Executive Director, The Center For 
  Pharmaceutical Safety; Daniel A. Herbert, RPh, President Elect, 
  American Pharmacists Association; Kevin Kinkade, Executive 
  Director, Missouri Board of Pharmacy; and William Kennedy, 
  owner, Nephron Pharmaceuticals Corporation.....................    17

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Janet Heinrich...............................................    31
    Steven K. Galson, M.D........................................    38
    Steven F. Hotze, M.D.........................................    45
    Sarah L. Sellers.............................................    46
    Daniel A. Herbert............................................    54
    Kevin Kinkade................................................    58
    William P. Kennedy...........................................    73
    American Society of Health-System Pharmacists................    77
    Letter to the Committee on Health, Education, Labor, and 
      Pensions, dated Oct. 23, 2003, from L.D. King, IACP 
      Executive Director.........................................    80
    Letter to Senator Gregg, dated Oct. 30, 2003, from L.D. King, 
      IACP Executive Director....................................    83
    American Pharmacists Association.............................    85
    Response to questions of Senator Gregg from John A. Gans.....    89
    Letter to Food and Drug Administration, dated November 3, 
      2003, from John A. Gans....................................    94
    Response to questions of Senator Kennedy from Janet Heinrich.   130
    Response to questions of Senator Kennedy from Kevin Kinkade..   133
    National Association of Chain Drug Stores....................   136
    Response to questions of Senator Kennedy from Sarah Sellers..   137
    Roger L. Williams, M.D.......................................   140
    Response to questions of Senator Kennedy from William Kennedy   143

                                 (iii)

  

 
  FEDERAL AND STATE ROLE IN PHARMACY COMPOUNDING AND RECONSTITUTION: 
              EXPLORING THE RIGHT MIX TO PROTECT PATIENTS

                              ----------                              


                       THURSDAY, OCTOBER 23, 2003

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in Room 
430, Dirksen Senate Office Building, Senator Bond, presiding.
    Present: Senators Bond, Roberts, Ensign, and Reed.
    Senator Bond. Good morning. The meeting of the Senate 
Health, Education, Labor and Pensions Committee will come to 
order.
    This is a very busy day in the Senate, and many of my 
colleagues who wanted to be here have other commitments. I know 
Senator Roberts has a great interest in this issue. He has to 
be on the Floor, so I'm taking the liberty of starting ahead of 
his arrival. I am hoping that others will be able to join us.
    But as you all know who have followed the Senate, this is a 
time when so many important measures are going on. There is an 
Environment and Public Works markup down the hall that I may 
have to go down to join to make a quorum, and most other 
members face the same challenges I do.

                   Opening Statement of Senator Bond

    Senator Bond. Today we are going to be exploring the 
question of Federal and State roles in pharmacy compounding and 
reconstitution: exploring the right mix to protect patients. 
When people get sick, they want to know that their medicine is 
safe and effective, and most importantly, they want to know 
that it is just what the doctor ordered. That is why we are 
here today.
    This hearing is not intended to be an attack on the 
practice of compounding. The committee recognizes and 
appreciates the vital role that compounded drugs play in the 
delivery of health care. Compounding ensures that medications 
are available to meet many individualized patient needs. Many 
pediatric patients, for example, require flavoring to be added 
to mask the bitter taste of some medications. Some patients 
have difficulty swallowing a capsule and require a special 
dosage form. And some patients are allergic to a preservative 
or dye in a manufactured product and require a dye-free or 
preservative-free dosage. There is no question that compounding 
provides patients critical access to medications that are not 
commercially available.
    However, recent media coverage and significant adverse 
events have brought to our attention a significant number of 
very real problems caused by compounded drugs. We have received 
reports of nonsterile eye drops causing blindness, spinal 
injections contaminated with bacteria and/or fungus, resulting 
in hospitalization and, in some cases, death, and children 
poisoned as a result of pharmacy compounding errors.
    Based on voluntary reporting, media reports and other 
sources, the Food and Drug Administration has become aware of 
over 200 adverse events involving 71 compounded products since 
about 1990. These incidents have heightened concern about the 
safety and quality of compounded drug. Yet, when these types of 
tragedies occur, there are very few State laws and no Federal 
law requiring that the events be reported. Unlike drug 
manufacturers, who are required to report adverse events 
associated with the drugs they produce, the Food and Drug 
Administration does not require pharmacies or any other body to 
report adverse events associated with compounded drugs.
    Because oversight and surveillance of pharmacy compounding 
at the State and Federal level is limited, at best, little is 
known about how widespread the practice of compounding is, the 
ability of States and the Federal Government to regulate 
compounding, and how compounding impacts public health and 
safety.
    Today's hearing is designed to address those very important 
issues. As our population continues to age, and the demand for 
pharmaceuticals continues to grow, we have to make sure that 
appropriate safeguards are in place to protect patients from 
substandard, contaminated, subpotent or superpotent drugs, so 
that we can ensure the highest standard of care.
    My goal, our goal, is not to federalize the oversight of 
pharmacies and compounding pharmacists, or institute additional 
needless and burdensome paperwork and regulatory requirements. 
But the issue at hand is clear. We have a responsibility to 
ensure that patients and doctors are receiving safe and 
accurate dosages of compounded drugs. This morning, as we 
examine issues surrounding pharmacy compounding, the safety of 
patients must always be our guiding force. I look forward to 
the testimony of our panels.
    Before introducing the two distinguished members of the 
first panel, I will call on my colleague, Senator Ensign, for 
any comments he wishes to make.
    Senator Ensign.

                  Opening Statement of Senator Ensign

    Senator Ensign. Thank you, Mr. Chairman. Thanks for 
bringing this important issue to light.
    I wanted to share a few things with the committee--just 
some personal experiences as a practicing veterinarian and 
working in the medical fields. Likewise, I have a lot of 
friends who are physicians.
    One of the things that I hope, and you mentioned it in your 
opening statement, that you didn't want to go too far with what 
you are trying to do, while at the same time protecting 
patients. Compounding pharmacists, I believe, play a vital role 
in the United States. As a veterinarian, there were certain 
things we just could not do without compounding pharmacists. We 
don't want them to get to where they are only taking different 
things and grinding them up. They have to be able to perform 
the way that they were trained to perform, and in so doing, 
you're always going to have some problems. There are mistakes 
made sometimes and there are always bad actors, just like there 
are in any profession.
    What I don't want to see happen when we're doing this is 
for us to, as the old saying goes, ``throw the baby out with 
the bath water.'' We don't want to see a very valuable 
profession hurt to the point where they cannot operate. As a 
practicing veterinarian, there were products that they could 
produce for us that we couldn't get anyplace else. We needed 
that service, and physicians are the same way, especially when 
either these pharmacists are on the cutting edge of the 
industry, or when we as practitioners develop a relationship, 
especially with certain compounding pharmacists, that are 
incredibly valuable. Further, oftentimes when drugs quit being 
made, that is the time when compounding pharmacists have to 
come into play.
    I know you have had some experience with the dilution of 
drugs and things like that, and frankly, those people are in 
jail--and they should be. But at the same time, we don't want, 
at least from my perspective, to go and have this law of 
unintended consequences. We have got to make sure we don't end 
up with a law that when we're trying to fix one problem ends up 
causing problems in other areas.
    I appreciate you having the hearing. I won't be able to 
stay probably for about another 15 or 20 minutes, but I 
appreciate you having this hearing. Thank you.
    Senator Bond. Thank you very much, Senator Ensign. We value 
your expertise as a practicing veterinarian. You and Senator 
Wayne Allard have given me very valuable medical advice when I 
couldn't track down Senator Frist on the Floor, to get advice. 
Senator Allard was the one who warned me when I had a hip 
replacement, that the dogs whose hips he replaced usually ran 
around too much and dislocated their hip, so I took that advice 
to heart.
    Seriously, on the question in front of us, I certainly 
share your concerns. We don't want to make it impossible or 
very difficult or unduly burdensome to compound, but we had a 
tragedy in Kansas City where a now criminally-prosecuted and 
convicted pharmacist produced 4,200 phony compounds. There was 
no regulation. Do you know how he was found? He was discovered 
because a drug salesman noticed that he was not buying enough 
drugs to be filling the prescriptions that he was writing.
    Now, the free enterprise system works, but I would hate to 
have to rely on the drug salesmen to tell us if a compounding 
pharmacist is grossly in error.
    We have asked two expert agencies to testify today. Dr. 
Janet Heinrich, Director of Health Care and Public Health 
Issues of the U.S. General Accounting Office, and Dr. Steve 
Galson, Deputy Director, Center of Drug Evaluation and 
Research, the Food and Drug Administration.
    Dr. Heinrich, would you please begin. We will make your 
full statements a part of the record. We appreciate you being 
here.

  STATEMENTS OF JANET HEINRICH, DrPH, RN, DIRECTOR OF HEALTH 
CARE-PUBLIC HEALTH ISSUES, U.S. GENERAL ACCOUNTING OFFICE; AND 
  STEVEN GALSON, M.D., MPH, DEPUTY DIRECTOR, CENTER FOR DRUG 
   EVALUATION AND RESEARCH, U.S. FOOD AND DRUG ADMINISTRATION

    Ms. Heinrich. Mr. Chairman and members of the committee, I 
am pleased to be here today as you consider State and Federal 
oversight to ensure safety and quality of compounded 
prescription drugs.
    Compounding, the process of mixing, combining or altering 
ingredients to create a customized medication for an individual 
patient is, as you say, an important part of the practice of 
pharmacy. It is regulated by State Pharmacy Practice Acts which 
are enforced by State Boards of Pharmacy.
    At the Federal level, the FDA, which oversees the 
introduction of new drugs into the marketplace under the Food, 
Drug and Cosmetic Act, maintains the compounded drugs are 
generally subject to this Act.
    The quality and extent of drug compounding have surfaced as 
important issues in recent years. You described several 
serious, adverse events in your remarks. In addition, concerns 
have been raised that some pharmacies are going beyond 
traditional drug compounding and selling large quantities of 
drugs without meeting safety requirements for new manufactured 
drugs. However, the extent of this problem is unknown.
    Because of these issues, you asked us to address the 
actions taken or proposed by States and national pharmacy 
organizations that may affect State oversight of drug 
compounding, and to look at Federal authority and enforcement 
power regarding compounding drugs.
    In our review, we found several efforts at the State level 
and among national pharmacy organizations to strengthen State 
oversight of compounding. We selected four States for in-depth 
review, based on their geographic location and variation in 
regulations. Actions among these States included adopting new 
regulations, mandatory adverse event reporting, and random 
testing of compounded drugs.
    At the national level, industry organizations are working 
on standards for compounded drugs that could be adopted by 
States in their laws and regulations. According to experts, 
uniform standards could help ensure that pharmacies across 
States consistently produce safe quality products. While these 
actions have the potential to improve oversight, the ability of 
States to provide this oversight may be affected by available 
resources. State pharmacy board officials in three of the four 
States we reviewed reported that resources were limited for 
inspections.
    While FDA has oversight responsibility regarding drug 
compounding activities, it generally relies on the States to 
regulate the traditional practice of pharmacy, including the 
compounding of drugs for the needs of individual patients.
    In recent years, Congress has attempted to clarify the 
extent of the Federal authority and enforcement power regarding 
compounding, and in 1997 Congress passed a law that exempted 
drug compounders from key portions of the Food, Drug and 
Cosmetic Act, if they met certain criteria. These efforts, as 
you know, were nullified in 2002 when the U.S. Supreme Court 
struck down a portion of the law's drug compounding section as 
an unconstitutional restriction on commercial speech, which 
resulted in the entire compounding section being declared 
invalid.
    Subsequently, FDA issued a compliance policy guide to 
provide the compounding industry with an explanation of its 
enforcement policy, which included a list of factors the agency 
would consider before taking enforcement actions against drug 
compounders.
    Some representatives of the pharmacist associations and 
others have expressed concern that the compliance policy guide 
creates confusion regarding when FDA enforcement authority will 
be used. For example, they State that terms such as ``very 
large quantities'' are not clearly defined. On the other hand, 
FDA officials State that the guide allows the agency the 
necessary flexibility to respond to a wide variety of 
situations where there are public health and safety concerns.
    In conclusion, at least some States are taking steps to 
strengthen oversight, and national organizations are developing 
standards that may strengthen State level efforts. However, the 
effectiveness of these measures is unknown, and factors such as 
available resources may affect the extent of oversight 
activities.
    While FDA has authority over the safety and quality of new 
drugs, it generally relies on States to regulate drug 
compounding. Given State resources, we may need to look even 
more to FDA in the future.
    Mr. Chairman, this completes my prepared statement. I am 
happy to answer any questions you or other members may have.
    Senator Bond. Thank you, Dr. Heinrich.
    [The prepared statement of Ms. Heinrich may be found in 
additional material.]
    Senator Bond. We will go to Dr. Galson for his opening 
statement, and then we will have an opportunity for questions 
and answers.
    Dr. Galson. Thank you, Mr. Chairman, and members of the 
committee. I am Steve Galson, Captain and medical officer in 
the U.S. Public Health Service, and Acting Director of the 
Center for Drug Evaluation and Research at FDA. I am pleased to 
be here today to discuss the public health issues related to 
pharmacy compounding.
    Pharmacy compounding, as you know, is the combining, mixing 
or altering of ingredients to create a customized medication 
for an individual patient in response to a licensed 
practitioner's prescription. I have brought along some charts 
here, and if you look at the first one there, in the left 
column, you see that pharmacy compounding has obvious health 
benefits. The patient may have an allergy to a dye or a 
preservative, or the patient may be a child or an elderly 
individual who has difficulty swallowing. The pharmacist can 
convert the drug to a suspension or some other form that is 
more useful to the patient. In these cases, pharmacy 
compounding serves a clear public health need.
    On the other side of the chart, though, we have become 
aware of instances involving compounding in which the risks of 
obtaining a product of substandard quality may outweigh the 
benefits of obtaining the drug. These risks can include 
problems with quality, adverse events, and drugs that just 
don't work. For example, a compounded narcotic analgesic 
``lollipop'' dispensed without the labeling packaging and other 
patient safety features required by the agency for that product 
could have posed a safety hazard to children.
    In another instance, a contaminated injectable steroid drug 
that had been compounded by a pharmacy without adequate 
controls resulted in serious infections in a number of 
patients, one of whom died.
    In addition to these cases, we have seen abuses such as 
large-scale drug manufacturing operating under the guise of 
pharmacy compounding. Sometimes compounding appears to occur 
for economic reasons rather than genuine medical need.
    We believe that most pharmacists are well trained and well 
equipped to safely compound certain medications. However, in 
some cases, compounders may lack equipment, training, testing, 
or facilities to ensure the right quality of the drug. In 
addition, compounding large quantities of drugs and copying 
commercially available approved products circumvents the 
important public health requirements of the FDA. This type of 
compounding undermines the drug approval process, the evidence-
based system of drug review that consumers and health 
professionals rely on for their safe and effective drugs.
    On the next chart, in 2001, FDA conducted a limited survey 
of drugs compounded by 12 pharmacies. The drug products sampled 
included hormonal products, antibiotics, steroids and drugs to 
treat glaucoma, asthma, iron deficiency anemia, and erectile 
dysfunction. Ten of the 29 products we sampled failed one or 
more standard quality tests that we perform. Nine with failing 
analytical results failed potency testing, and some had less 
than 70 percent of their declared potency.
    I want to emphasize that this was not a comprehensive 
scientific survey. It was a small sample size. But it does 
nonetheless demonstrate the seriousness of the problem.
    By comparison, on the other side of the chart, each year 
FDA routinely samples and analyzes drug products made by 
commercial manufacturers. Since 1996, we have analyzed more 
than 3,000 samples of these products, and of these 3,000, only 
four failed potency tests.
    Over the years, FDA has conducted enforcement activity 
against inappropriate pharmacy compounding, and my written 
testimony details some of our very recent enforcement cases.
    We work cooperatively with our State partners, and I would 
like to give you an inside look at some of the problems that 
the State of Florida uncovered in a compounding pharmacy in the 
photos that are being shown there. Again, these photos are not 
representative of compounding pharmacies, but they are just to 
be illustrative examples of what can go wrong.
    The first photo shows empty, uncapped vials used to 
compound respiratory therapy products. These vials are located 
in an uncovered box on the floor, and in bags on the upper 
shelves of a lavatory storage area.
    The next photo shows an uncovered box of uncapped unit dose 
vials on the floor of a bathroom next to a toilet. The next 
photo shows an uncovered, unprotected flask of albuterol 
sulfate, a drug for asthma, located in the pharmacy's 
refrigerator next to some food. Again, we don't think these are 
representative, but they do clearly occur and the public health 
requires that we take steps to address them.
    My written statement describes our statutory and regulatory 
authority over compounding. It covers the compounding 
provisions in section 127 of the FDA Modernization Act and the 
decision of the Western States versus Shalala case. Since that 
decision, FDA issued a compliance policy guide in May, 2002, 
that addresses how we will exercise our enforcement discretion 
under current law.
    We respect the role of the States in matters that relate to 
pharmacy regulation. We also believe that there are areas where 
the Federal role is appropriate. These include maintaining a 
list of drugs that are inappropriate for compounding because 
they've been withdrawn from the market for safety reasons; two, 
overseeing the quality of bulk drug substances that are used in 
compounding; third, in conjunction with the States, 
investigating allegations of poor quality compounded drugs; and 
finally, determining when a pharmacy crosses the line between 
appropriate pharmacy compounding and manufacturing.
    In closing, Mr. Chairman, I want to assure you that the 
agency's efforts to address pharmacy compounding issues are 
designed to balance the legitimate forms of pharmacy 
compounding with the need for Federal regulation when pharmacy 
compounding threatens to compromise public health.
    I am happy to answer any questions, of course.
    Senator Bond. Thank you very much, Dr. Galson.
    [The prepared statement of Dr. Galson may be found in 
additional material.]
    Senator Bond. We have been joined by Senator Roberts. I 
will call on him for any statements he wishes to make.

                  Opening Statement of Senator Roberts

    Senator Roberts. I apologize to the witnesses and my 
colleagues for being late. I think they did a study around here 
at one time showing we're supposed to be at two places at the 
same time.
    Senator Bond, I want to thank you for your leadership and 
for your sponsorship of the amendment to the Medicare bill. I 
am glad to join you in holding this hearing on an important 
topic that has been simply brought to light over the last 2 
years, and is gaining even more momentum. I think that most in 
the audience, and I know most in Washington, have been reading 
the Washington Post series this week on pharmaceutical safety, 
and that series of articles raises valid concerns with the 
safety of prescription drugs and that market and protecting 
patients. I think our committee can play a lead role in 
consumer protection. Again, I want to thank you for your 
leadership in this area.
    As has been said, today's hearing will focus on examining 
the overall practice of compounding pharmacies and where the 
industry is headed in really trying to address patient 
protection. I believe that Senator Bond and I have the same 
goal. We want to look at ways that those who enter the 
compounding pharmacy are entering into that profession are 
properly trained and we want to ensure that the proper checks 
are in place to protect patients. We have looked at recent 
cases such as the Med 4-Home Pharmacy in Kansas City that have 
helped to illustrate the need for greater oversight.
    Med 4-Home did not follow proper recall and notification 
procedures for a batch of solutions that it had compounded. The 
product was an inhalant solution that was distributed 
nationwide and used to treat a variety of pulmonary disorders--
and I'm talking about such things as asthma. Thousands of 
patients were contacted about the recall of these vials. I know 
that Kevin Kinkade of the Missouri State Board of Pharmacy is 
here with us today and he can speak about this event.
    I fully recognize the benefits of compounding pharmacy. 
There's no question about that. They fill an important niche in 
the health care delivery system. However, many questions need 
to be answered. How do we define manufacturing versus 
compounding? What are we doing at the State level to enforce 
regulations currently on the books? How can we get States that 
do not have adequate regulation on the books to improve, and 
are those who are inspecting properly trained? Should we have a 
means to test products once they have been compounded to ensure 
they are safe and accurate doses? Are schools of pharmacy 
properly training individuals to compound and what steps should 
they take to do so safely? Why is there not a system of adverse 
event reporting?
    We have, and have had, two outstanding panels. I hope that 
they will be able to assist us in answering these questions. 
I'm sure they will.
    In addition, Mr. Chairman, I have received comments from a 
compounding pharmacist, Dr. Steven Hotze of the Hotze Health 
and Wellness Center in Katy, TX. I have met with Dr. Hotze and 
he was eager to provide the committee with his input on this 
important topic. I would like to submit Dr. Hotze's testimony 
for the record at this point.
    Senator Bond. Senator Roberts, without objection, it will 
be so admitted to the record.
    [The prepared statement of Dr. Hotze may be found in 
additional material.]
    Senator Bond. I have been advised that I am needed to make 
a quorum to vote on the chemical safety measure before the EPW 
Committee. I will ask Senator Ensign to ask five minutes of 
questions, and then Senator Roberts, if you would then ask 
questions, and should I be tied up, if you would continue with 
the introduction of witnesses.
    Senator Roberts. I will be more than happy to do so.
    Senator Ensign. Thank you, Mr. Chairman.
    I normally don't take witnesses to task, Dr. Galson, but I 
do want to take you to task on something. You're a scientist, 
and to present nonscientific data studies--and I'm glad you 
mentioned that it wasn't--is problematic. You have to remember, 
you're not talking to scientists up here. You can influence 
public policy. We look at you as an expert, and you presented 
that in a fashion that is misleading. Senators look at that as 
a scientific study. That's irresponsible and you really 
shouldn't do that, especially as a representative of a 
governmental body.
    We are trying to set public policy. You can create almost 
any information like that and call for a Federal Government 
regulation. For example, I think of how often we see frivilous 
malpractice cases in States, and I could build an incredible 
case and use statistics and then say we should have Federal 
licensing of physicians. But nobody is calling for that.
    We have problems out there, and there are bad actors. There 
are mistakes that are made, and there will always be mistakes. 
There will always be bad actors no matter what the laws are.
    For example, what Senator Bond talked about--that man was 
breaking the law. That's the bottom line. There were existing 
laws already being broken.
    One of the problems that we have with pharmaceutical costs 
in this country is that we hear a lot from everybody throughout 
the medical field that the FDA is already overburdened and that 
the drugs take too long to get to market as it is.
    Now, to put an extra burden on the FDA, and let's say we 
decide to do this, could the FDA handle it, and do you have an 
idea about how much it would cost?
    Ms. Heinrich. Not related to the work that we did here on 
compounding, GAO recently did a review of the time it takes FDA 
to review new drugs. Actually, their review time has come down 
rather dramatically over the last, say, 5 years. But having 
said that, there is no question that it is costly to bring new 
drugs to market.
    What you have here in drug compounding is something quite 
different, and that is----
    Senator Ensign. I know what drug compounding is. My point 
is that the FDA already has difficulty doing its primary job 
function. Now adding something else on top, will this hurt your 
primary job function and do you have an estimate of the cost?
    Ms. Heinrich. In our discussions with FDA officials--and 
certainly Dr. Galson can speak for himself--but people did say 
that they are stretched now to cover their ongoing inspection 
requirements, and that to do more inspections in the area of 
compounding would be difficult.
    Senator Ensign. Dr. Galson?
    Dr. Galson. Senator, I definitely appreciate your 
perspective, and as you said, I wasn't trying to present these 
as scientific data. Most notably, I wasn't trying to use them 
to urge or call for a new Federal regulation. It was merely to 
provide a few illustrative examples of what can happen.
    We are stretched thin. We have extremely important public 
health responsibilities across the area--drugs, food, 
veterinarian drugs. So for us to embark on any new program in 
this area would require additional resources. But again, we're 
not calling for that and we haven't taken that position.
    Senator Ensign. The only other comment I want to make on 
this--and I understand we may have some different viewpoints--
but because of my experience in the medical field, I remember, 
we painted a great case up here for patient privacy, and then 
we got HIPPA. If you have heard anything about the 
implementation of HIPPA, health care professionals all over 
this country explain how ridiculous some of this stuff has 
become.
    That is my fear, that when we try to fix something, we make 
a lot more things worse. That happens time after time after 
time up here. There is a problem out there, and I freely admit 
that. But is the fix going to be worse than the problem? HIPPA 
is a good example of where the fix is probably worse than the 
problem ever was. I just don't want us to end up in that 
situation.
    Mr. Chairman, I appreciate you indulging me with this, but 
it is something that I have been pretty frustrated with. That 
is, watching where we try to over regulate medicine, which is a 
very inexact science, as we all know. Compounding will never be 
completely as precise as the machines. Because you have human 
errors that can get involved. We have to be able to take that 
kind of information into account.
    Thank you, Mr. Chairman.
    Senator Roberts. [presiding]. I think the Senator has made 
an excellent point. I am extremely aware of the HIPPA 
regulations. When we had our first hearing before the full HELP 
committee on HIPPA, it was this Senator who waved the 
regulations around and indicated that I didn't think any 
Senator had really read all the regulations. I'm not sure if 
that's possible, in terms of a full understanding.
    But I knew darned well that every hospital administrator in 
America had to read the regulations, had to hire people to read 
the regulations and interpret the regulations. Now we're into 
what is called the ``law of unintended effects''. So you make a 
good point.
    It is important to pass legislation, but it is also 
extremely important to prevent bad legislation or counter-
productive legislation from passing. I don't think Senator Bond 
or myself or anybody who wants questions answered--and I know 
the two witnesses want these questions answered as well--is 
proposing that the Federal Government impose a regulatory 
scheme that will pose problems for the FDA and any pharmacist 
throughout the country. So your caution is well taken and I 
thank you for the comment.
    Senator Reed has joined us. I will yield to Senator Reed 
for any statement he would like to make and, for that matter, 
any questions he would like to raise at this point.
    Senator Reed. Thank you, Mr. Chairman. I have no opening 
statement so I will just get right to questions.
    One area of concern is jurisdictional, between the State 
Boards of Pharmacy and the FDA. Apparently the FDA guidance is 
rather amorphous. The FDA will let the State boards take ``less 
significant'' cases and they will take ``more significant 
cases.''
    Dr. Galson and Dr. Heinrich, can you comment on that? Does 
it make sense that one approach to this issue is to try to 
clarify more specifically the breakdown of responsibility 
between the FDA and the local boards?
    Dr. Galson. We don't really think lack of clarity between 
the State and Federal Government in this particular area has 
been a problem. When we become aware of egregious cases or 
other specific issues, we work closely with the States to 
assist them, and when the States want our help about something 
they find out about on their own, there hasn't really been a 
problem in defining who has which role.
    Senator Reed. Do you have any ongoing technical assistance 
to the States in terms of this issue, where you are advising 
State Boards of Pharmacy on a regular basis about emerging 
issues of compounding abuses?
    Dr. Galson. We're in constant collaboration with them on 
compounding issues, as well as other outside groups.
    Senator Reed. Dr. Heinrich, do you have any comments?
    Ms. Heinrich. In our review, certainly we heard from 
pharmacists, pharmacy organizations, that they do believe there 
is a lack of clarity. Indeed, when FDA states that they do have 
overall authority under the Food, Drug and Cosmetic Act, that 
overlaps with State boards, there is ambiguity.
    I think where we come out on this is that maybe we need to 
live with that because, with State resources being what they 
are, we may need to look to FDA even more in the future.
    Senator Reed. Thank you.
    It is my understanding that pharmacists are not required to 
report adverse medical effects with compounded drugs, is that 
correct?
    Dr. Galson. That's correct.
    Senator Reed. Would it be helpful to have such a 
requirement in order to pinpoint more precisely the abuses 
before they become widespread?
    Dr. Galson. We haven't taken a position on that. Right now, 
with the traditionally manufactured drugs, the manufacturers 
have the legal responsibility to report those adverse events to 
us. As you know, there isn't really a system for the 
manufacturers to find out about the problems with drugs that 
they are compounding, and the compounders to find out about the 
adverse events related to the drugs that they're prescribing. 
But that is certainly something we could consider.
    Senator Reed. Dr. Heinrich?
    Ms. Heinrich. We might want to look at the experience of 
some States that, in fact, have required adverse event 
reporting. For example, in our review, we found that North 
Carolina does require adverse event reporting, and it would be 
good to look at their experience.
    Senator Reed. Very good.
    I might have missed this in your statements, but is there 
any sort of trend in terms of compounding that should alarm us, 
or at least make us more concerned? Is this going on with 
increased frequency or is it something that is happening at a 
steady rate?
    Dr. Galson. I don't think we have good data, because there 
isn't really comprehensive registration and monitoring of the 
system. We have seen a constant stream over the last few years 
of violations in other specific areas where we're concerned 
about public health, where we have taken action. But the trend 
data just isn't very good.
    Senator Reed. Thank you. Thank you both.
    Thank you, Mr. Chairman.
    Senator Bond. [presiding]. Thank you very much, Senator 
Reed.
    Dr. Heinrich, in your written testimony you mentioned that 
the extent of drug compounding is unknown but appears to be 
increasing in the U.S. Can you give us an idea of the 
difficulties that GAO faced in attempting to capture the number 
of prescription drugs that are compounded in the U.S., as well 
as the number of adverse events?
    Ms. Heinrich. Yes. That was one of the issues that you 
really asked us to look into. We looked at information that we 
could glean from the Food and Drug Administration, trying to 
identify whether they could track the amount of bulk purchases 
of ingredients, and we found that that data system wasn't good, 
either, because you didn't have a common unit of analysis.
    We went to pharmacy boards, we went to major compounders, 
the industry itself, and asked them if they could provide us 
that information, and nowhere could we get reliable data.
    It is interesting that there are estimates that people have 
put out there. They say from one percent to ten percent of all 
prescription drugs are compounded, but when we really dug into 
that, there is really no basis for those estimates.
    Senator Bond. Frankly, that's surprising, and 
disappointing.
    In surveying the different States, I notice that you said 
Missouri and North Carolina have adverse event reporting 
systems, and in North Carolina, it has to really be adverse. I 
believe they only call ``death'' an adverse event. I think 
there are a lot of other things short of that that could be 
adverse.
    Elsewhere, other than these two States, are there any other 
mandatory adverse reporting systems that you know of?
    Ms. Heinrich. Not that we were able to identify, but we 
could look into that further if you would like.
    Senator Bond. Dr. Galson, don't you think that injuries and 
deaths from pharmacy compounding is a health issue that FDA 
needs to be more aggressive in addressing?
    Dr. Galson. We are very concerned about adverse events 
related to compounding. There is no question that that's one of 
the areas that concerns us the most. We spent a lot of money, 
upwards of $8 million per year, monitoring adverse events 
currently for traditionally manufactured drugs. That could be 
expanded. It is a cost issue.
    Senator Bond. But right now, you get information 
anecdotally, really?
    Dr. Galson. That's right.
    Senator Bond. Do you think the current system of State 
oversight of pharmaceutical compounding by State boards of 
pharmacy is adequate and would meet the standards that FDA 
would establish?
    Dr. Galson. We think it's doing a reasonable job with us 
assisting the States, when that is necessary. As you know, 
there are different standards and different circumstances in 
each State.
    We are working with the State boards of pharmacy and other 
organizations to create consensus type standards that would 
enable States to more carefully measure what's happening in 
their particular pharmacies against those standards, which will 
increase the compliance.
    Senator Bond. I gather, in answer to the question from 
Senator Reed, you didn't think there's any problem with the 
lack of clarity with an uneven patchwork of the State-based and 
Federal system. Not only do I not see clarity, I don't see a 
system.
    Dr. Galson. I'm not saying there aren't, from time to time, 
problems. But lack of clarity hasn't stopped us from getting 
involved when we've seen a problem. That's really what I meant 
to convey.
    Senator Bond. I guess a first step is reporting adverse 
events. Would that be the logical first step? There are too 
many anecdotal reports of serious adverse events, death, fraud, 
simple errors, that mean that some patients who receive 
compounded pharmaceuticals are not getting what the doctor 
ordered, and in some instance are receiving a product 
contaminated with dangerous bacteria and fungus.
    What do we do about it? What role can we play so you and 
the States boards of pharmacy can do a better job?
    Dr. Galson. Certainly what we have mentioned about adverse 
events is one option, although we haven't taken a position on 
it. The Administration is continuing to work on developing a 
position on whether more legislative authority, regulatory 
authority, would be beneficial. We don't have a position to 
announce or to discuss with you right now.
    We do think there is a lot of traction to be gained by the 
professional organizations and the other organizations working 
to develop standards, and then working with the States to make 
sure those standards are followed.
    Senator Bond. Well, I would hope that this hearing is a 
wake up call to all of us, to know that the system is not 
working, and in many places I don't see a system. We want to 
involve all of the groups who will be represented here today, 
the associations, the government, the State boards.
    But my urgent message to you and the administration is 
let's get with it, because Senator Roberts and I are getting to 
the age where we're going to need more compounded drugs. 
[Laughter.]
    Seriously, there are many, many people who depend upon 
compounded drugs, who I know benefit in large measure by 
compounding. There is no question about that. We have got to 
keep the ability of small businesses, small pharmacies, to 
compound. It is vitally important.
    But there has to be some reasonable assurance that, if 
somebody is making an error, or if there is a grossly inept 
situation like the Med 4-Home, or there's a criminal act like 
Dr. Courtney in Kansas City, somebody has got to catch them. 
And we're not going to depend upon a drug salesman saying, ``By 
the way, I have done my own research and found out that he 
isn't buying enough to develop the potency of drugs that he's 
been prescribing.'' That is not good enough.
    Senator Roberts, do you have questions?
    Senator Roberts. I have some questions for the GAO.
    Registered pharmacies obviously vary greatly from State to 
State. In the States that you surveyed, what was the range of 
proportion of out-of-State pharmacies versus in-State? The 
reason that I'm asking that is there are three concerns:
    Were there any differences in the registration requirements 
between in- and out-of-State pharmacies, and I think the answer 
to that is yes. How often did the experts you interviewed 
really believe that pharmacies should be inspected? And 
finally, considering there are such dramatic variations from 
State to State in their ability to inspect pharmacies due to a 
lack of inspectors and obviously the budget holes that our 
States find themselves in, is there a concern with the 
registration and certification process for registering out-of-
State pharmacies? Out-of-State inspections don't seem to be 
very realistic.
    Would you care to comment on that? I have probably strung 
together four questions, but feel free to answer all of them.
    Ms. Heinrich. As you said, there is great variability. It 
is difficult enough for many States to do the in-State 
inspections. It is much more difficult to monitor the out-of-
State pharmacies, and oftentimes you get some of the 
international drugs there as well, to say nothing of what goes 
on with the Internet.
    The States said consistently that oftentimes it's all they 
can do to follow up on complaints, that then they are unable to 
do the routine inspections. They would like to be able to do 
some every 2 years, every 4 years.
    The other issue there is that the individuals who do the 
inspections may or may not have training that would help them 
provide oversight of compounding. I think only two of the 
States we looked at actually had pharmacists that were doing 
the inspections. The others were done by law enforcement. So 
that's an issue as well.
    Senator Roberts. You mentioned the Internet pharmacy, which 
has become sort of a tidal wave in regards to consumers who are 
looking for cost-effective products--and I emphasize the cost.
    Mr. Chairman, there has been a tidal wave, as you know, 
every 2 years, when we have these things called elections, you 
have candidates making trips and taking senior citizens to 
Mexico or Canada to purchase various products, and then coming 
back home and holding up the difference in cost.
    And now, on the Internet, as evidenced by the Washington 
Post series--and I don't want to give them all the credit, but 
certainly they are doing a good job in that five-part series--
you have a tidal wave here now of people ordering drugs over 
the Internet.
    Do you have any comment about that in regards to what you 
have found, and how on Earth you could provide any reasonable 
inspection so that people are actually getting what they think 
they're getting? Feel free, Dr. Galson, to jump in here, if you 
would like.
    Dr. Galson. Right. We're extremely concerned about this. 
There is a flood of drugs coming into the country by various 
routes, including the Internet route, and there is really no 
system of assuring the safety of those drugs. You don't know 
where they're coming from, even they are ordered from a website 
that has Canada in the name. You don't really know if they're 
coming from there or they have come from some Asian country 
where the quality isn't checked.
    We have no way to intercept and monitor the packages. There 
are millions coming in. It's just impossible for each of these 
packages to be examined and looked at. So we are very concerned 
that this is escaping the really excellent system of 
maintaining the safety and efficacy of the U.S. drug supply.
    Senator Roberts. I'm chairman of the Senate Select 
Committee on Intelligence, and also the subcommittee chairman 
on emerging threats. About four or 5 years ago I got interested 
in the food security challenge and danger. We now have that in 
the top ten of things that we're worried about.
    It seems to me that any terrorist organization or, for that 
matter, any organized crime organization, could latch on to 
this and do great harm to the American public. I even identify 
this as a possible and probable area of concern in regards to 
the global war on terrorism. Now, maybe that is stretching it a 
little bit, but I don't really think so.
    I think if you wanted to do great harm to a community or an 
area in the United States, particularly an area affected in 
regards to a senior population and the certain maladies that we 
all get as we're older, it is a cause of concern.
    You stated in your testimony there were difficulties in 
interpreting some of the guidelines in the 2002 policy 
guidance. Do you intend on clarifying those provisions in the 
guidance, and when are you planning on updating that guidance?
    Dr. Galson. What we try to do is, when specific situations 
of interpretation come up, we do our best to clarify. At this 
moment, we believe this is as clear as we can be. Although we 
are continuing to think about improvements, we don't have a 
specific product or a date to point to when we're going to have 
further clarification or further details right now.
    Senator Roberts. How do you define small versus large 
compounding?
    Dr. Galson. The major way we distinguish between acceptable 
and unacceptable compounding is if the compounding is being 
done for medical need, a legitimate medical need, where there 
is a relationship between the physician and the patient and the 
pharmacist. We consider that legitimate compounding.
    When the compounding looks more like small or large scale 
manufacturing, that's when we become concerned, when large 
batches of product are made in advance of receipt of 
prescriptions. When copies of legitimate drugs are being 
prepared, when third parties are involved in reselling the 
drugs as well, we consider that large.
    I just got a note here that we are working on a revised 
compliance policy guide based on public comments that are in 
our docket. I just don't have a time for when we're going to 
issue those.
    Senator Roberts. I understand that.
    How do you determine who to inspect and who not to?
    Dr. Galson. We inspect for cause, basically, when we hear 
about situations that raise concerns, or when information comes 
to us from States or some other source of information that lets 
us know that there may be a problem, we do an inspection and 
work with the States.
    Senator Roberts. What do you deem as acceptable or is an 
acceptable variance before a recall occurs?
    Dr. Galson. Numerically, you're asking?
    Senator Roberts. Yes, sir. If you can pin that down, I know 
that's a----
    Dr. Galson. Yeah. I think I can't give you one number. We 
look at the product, we look at whether the product meets our 
criteria for quality, which are somewhat different, depending 
on the type of product--is it a pill, is it an inhalation, an 
injectable kind of drug. We make a call on that based on the 
public health risk involved with the product that we discover.
    Senator Roberts. Mr. Chairman, I want to thank both 
witnesses for taking the time to come. I think this has been 
very educational. I have no further questions.
    Senator Bond. Thank you very much to our witnesses. We will 
call the second panel.
    Dr. Galson, if perhaps you could have you assistant turn 
that display panel around, so that those who are here may see 
the pictures that you took of the compounding pharmacy in 
Florida. Also, if you will allow the next witnesses to come 
forward, we thank you very much.
    In the meantime, since several people have referred to 
newspaper articles on this, I am asking unanimous consent to 
include in the record a reprint of a three-part special report 
that appeared October 6-8, 2002, in the Kansas City Star, which 
has an excellent summary of this.
    [The report referred to may be found in the Kansas City 
Star, October 6-8, 2002.]
    Senator Bond. The second panel we would like to welcome and 
ask to come forward, please. Dr. Sarah Sellers, Executive 
Director of the Center for Pharmaceutical Safety a nonprofit 
public safety organization. She has a decade of experience as a 
pharmacist and she is completing a master of public health at 
Johns Hopkins, and serves on the FDA's advisory committee.
    Daniel Herbert is president-elect of the American 
Pharmacists Association. A 1966 graduate of the Medical College 
of Virginia's School of Pharmacy, he owns three innovative 
community pharmacies in Richmond, VA which are involved in 
developing economical ways to deliver pharmaceutical care.
    I am also pleased to welcome Kevin Kinkade from my home 
State of Missouri, a graduate of the State College of Pharmacy, 
a licensed pharmacist, and who has served as Executive Director 
of the Missouri State Board since 1984.
    Also, very importantly, Dr. Bill Kennedy, a professional 
pharmacist registered in Florida and South Carolina, who for 20 
years compounded pharmaceuticals in a retail pharmacy and 
national mail order respiratory pharmacy. He has invested 
millions of dollars in building a sterile, FDA-approved 
manufacturing facility.
    So these witnesses will give us good, new perspectives on 
this situation. As I have indicated, you full statements will 
be made a part of the record. We would ask you to try to 
summarize them in about five minutes.
    I would call first on Dr. Sellers.

 STATEMENTS OF SARAH L. SELLERS, PHARM.D, EXECUTIVE DIRECTOR, 
 THE CENTER FOR PHARMACEUTICAL SAFETY; DANIEL A. HERBERT, RPh, 
   PRESIDENT ELECT, AMERICAN PHARMACISTS ASSOCIATION; KEVIN 
 KINKADE, EXECUTIVE DIRECTOR, MISSOURI BOARD OF PHARMACY; AND 
  WILLIAM KENNEDY, OWNER, NEPHRON PHARMACEUTICALS CORPORATION

    Mrs. Sellers. Thank you. Mr. Chairman and members of the 
committee, thank you for the opportunity to speak with you 
today about the serious public health implications of pharmacy 
compounding. I am Sarah Sellers, a licensed pharmacist, with 
expertise in sterile compounding and public health. In 1998, I 
began serving on the FDA's Advisory Committee on Pharmacy 
Compounding.
    It is unsettling that at a time when we are concerned about 
the quality of drugs accessed outside our borders because they 
may not meet our Federal regulatory standards, that we have a 
flourishing, unregulated drug industry within our own borders.
    I began my career in a small, home care pharmacy that 
provided pharmacy compounded injections to patients for 
administration on their homes. When I asked permission to 
substitute the compounded drugs with FDA-approved products 
because of safety concerns, I was cautioned that it would be 
less profitable for the pharmacy. These compounded dosage forms 
did not undergo a validated sterilization procedure, were not 
tested for potency or purity, and the risks of using such a 
product were not identified, analyzed, or communicated to 
physicians or their patients.
    This practice concerned me for both medical and ethical 
reasons. Patients were unknowingly exposed to drugs that did 
not meet strict Federal standards for safety and efficacy, 
manufacturing or labeling, to ensure safe use.
    Based on my study of what is happening with pharmacy 
compounding, I believe there are four critical factors that 
need to be addressed. One, pharmacy compounded drugs do not 
meet our Federal safety requirements.
    Two, as you heard from the GAO this morning, accurate, 
complete and unbiased information about the size and scope of 
the compounding industry in the United States is not available.
    Three, current State compounding regulations are in some 
cases inadequate to protect public health and safety, and to 
prevent individual patient exposures to unacceptable risks.
    Four, lack of oversight of the compounding industry has 
created new avenues to introduce commercial quantities of 
unapproved drugs into the marketplace through wholesale 
transactions.
    Pharmacists are trained in pharmacy school to convert 
tablets to liquids and to make topical formulations to meet 
exceptional medical needs that cannot be met with approved 
products. But this practice, based on medical necessity, is 
very different from contemporary compounding. Contemporary 
compounding exploits current lapses in the law and resource 
constraints with regulators. This has resulted in the emergence 
and growth of a substandard industry.
    Because pharmacists are not required to detect or report 
problems associated with drugs they compound, the known cases 
of deaths, injuries, exposures and recalls of dangerous 
products are considered tip of the iceberg by public health 
experts.
    Pharmacy compounded products have been associated with 
other injuries and deaths throughout the Nation. Last year, the 
CDC warned physicians and health systems to consider 
substandard compounded drug exposures in cases of unexplained 
infections following intraspinal injections, after an outbreak 
of fungal meningitis was associated with compounded products. 
CDC further warned that health systems may not even realize 
that they are purchasing compounded drugs.
    In my opinion, the amendment to the Senate version of the 
Prescription Drug and Medicare Improvement bill, offered by 
Senators Bond and Roberts, to establish an FDA Advisory 
Committee on Compounding, is a critical first step, but it is 
only a first step. I believe new Federal legislation is 
necessary to protect patients and preserve the integrity of our 
current Federal system of drug regulation which is respected 
around the globe.
    This legislation should consider the following:
    One, there should be full disclosure to patients and 
prescribers when a prescription is filled with a compounded 
drug.
    Two, compounding of drugs that are too difficult to make in 
a pharmacy setting should be prohibited and large-scale 
manufacturing of any drug product should be regulated by the 
FDA.
    Three, there should be a strict paper trail for all 
chemicals used in compounding and reporting of any adverse 
events related to compounded products by pharmacists.
    The basic assurances to public health and safety provided 
by the Federal Food, Drug and Cosmetic Act, that all citizens 
of this country rely on, should not be undermined. 
Unfortunately, I believe the unchecked growth and expansion of 
pharmacy compounding is threatening the Act's integrity.
    I thank you for your time and would be pleased to answer 
any questions you may have.
    Senator Bond. Thank you very much, Dr. Sellers.
    [The prepared statement of Ms. Sellers may be found in 
additional material.]
    Senator Bond. Now we will invite Mr. Herbert for his 
testimony
    Mr. Herbert. Good morning, Mr. Chairman.
    Members of the committee, thank you for the opportunity to 
appear before you today and present the views of the American 
Pharmacists Association. I am Dan Herbert, a pharmacist, and 
president-elect. I have been in practice for 37 years and 
currently own three community pharmacies in Richmond, VA.
    I have been involved in compounding throughout that entire 
career, and have been involved in a hospital setting, hospice, 
home infusion therapy, and community practice.
    APhA represents the largest group of pharmacies in any 
association in the country who practice in virtually every 
practice setting. APhA supports the committee goal that 
patients receive safe and effective medication. As pharmacists, 
we rely upon quality as the first step in our work to help 
patients get the most of their medication therapy. When 
providing a quality product involves tailoring a medication for 
an individual patient, we use our scientific training and 
education to compound the medication to meet the patient's 
needs.
    My goal today is to share with you my experience with 
pharmacy compounding, the value it can bring when performed for 
the right reasons and in the right way. I compound 10 to 20 
times per day in my practice, and while it is challenging to 
quantify the actual number of APhA members who regularly 
compound, I think it is safe to say that virtually every 
pharmacist is involved in compounding at some point in their 
career, and many on a daily basis.
    The committee has so eloquently stated many of our 
positions in your opening statements that I am going to skip 
over the justification of why we need to preserve compounding. 
You have already acknowledged that it is a vital patient care 
service and that keeping it available to the public is an 
important thing to do.
    We fully recognize the need for pharmacy compounding to 
conform to high professional standards. The question that you 
have already asked and that plagues the profession and our 
regulators, the State boards of pharmacy, is how to distinguish 
between what I do, compounding, and manufacturing. It has been 
a difficult distinction to implement because of the complexity 
and range of legitimate compounding activities. The key element 
in making any such distinction is the existence of a 
pharmacist-prescriber-patient relationship.
    Furthermore, compounded drugs are not for resale but, 
rather, are personal and responsive to a patient's immediate 
needs. My compounding practice is for those patients that I 
serve every day, and their physicians.
    APhA is undertaking several activities to advance and 
improve pharmacist compounding, such as publishing resources 
for pharmacists to improve the practice. Also, I am chairing an 
APhA committee setting strategic directions for the profession, 
including proposing steps for advancing compounding quality.
    One aspect of our committee's work to date is the 
preliminary categorization of compounding to distinguish 
between the types of compounding a pharmacist can provide based 
on his basic pharmacy education and that type of compounding 
that may require additional specialized training, and perhaps 
even certification or accreditation. Because compounding 
encompasses a broad scope of activities, this categorization is 
important in focusing quality improvement efforts and 
resources.
    Finally, in collaboration with the National Association of 
Boards of Pharmacy and the United States Pharmacopeia, APhA has 
recommended exploring the value of voluntary programs to 
improve compounding activity in certain categories. Improving 
our efforts to provide quality compounded products will require 
collaborative efforts of consumers, the profession, the boards 
of pharmacy, and the FDA. Each stakeholder has an expertise 
that is essential in assuring the continued availability of 
this practice with the quality patients deserve.
    The profession must take the lead in guiding the regulatory 
agencies on how to draw the line between compounding and 
manufacturing, and in developing guidelines to make those 
standards real in everyday practice. The State boards of 
pharmacy should maintain their primary regulatory role of 
pharmacy practice, including compounding, and will likely be 
tasked with new initiatives to enhance the current regulatory 
efforts. Pharmacists and APhA are ready to partner with 
stakeholders to develop effective strategies to continue to 
improve the quality of compounding practices.
    Thank you for the opportunity
    Senator Bond. Thank you very much, Mr. Herbert. We 
certainly look forward to working with you when we have the 
results of your recommendations.
    [The prepared statement of Mr. Herbert may be found in 
additional material.]
    Senator Bond. Now I turn to Mr. Kinkade and find out what 
is going on in Missouri since we last talked. Welcome.
    Mr. Kinkade. Good morning.
    Mr. Chairman, members of the committee, thank you for the 
invitation to speak here today on a matter that is very 
important to consumers and regulators, as well as the medical 
and pharmacy professions.
    While not all pharmacies practice the art of compounding, 
those that do provide a time-honored and valued service to 
their patients. Just as in the past, there are situations today 
where only compounded drug products can fulfill the need that 
some patients have for effective drug therapies.
    As technology and science increase our ability to 
manufacture new drugs, so do these same elements have an impact 
on the practice of compounding. This places new and complex 
challenges before State boards of pharmacy, who are charged 
with the protection of public health and safety on a State 
level.
    A number of cases around the Nation have brought national 
attention to the practice of compounding. The Robert Courtney 
case in Kansas City, which was an example of outrageous and 
demoralized conduct, certainly brings to light what great harm 
to others a single criminal can do. Other cases of incompetent 
acts or actions that resulted in errors that have harmed or 
even caused the death of patients have also garnered attention. 
Our primary concern must always be for the health and safety of 
our citizens who receive health care, and concerning today's 
subject, compounded products.
    My written testimony outlines in more detail the major 
changes and regulations and processes that have been made in 
Missouri in order to maintain adequate minimum standards of 
practice in pharmacies that compound.
    We have also reviewed our inspection process in all areas 
in order to ensure that our field staff of the board of 
pharmacy are functioning with the latest knowledge base 
possible.
    Whether or not the issue is criminal fraud against 
consumers, or it is a matter of incompetent or negligent 
practices, we must be in a position to act quickly and 
effectively. Resources for the proper inspection of pharmacies, 
as well as the ability to respond timely to consumer complaints 
through the use of investigations, must be the first priority. 
Additionally, appropriate quality assurance practices, both in 
pharmacies that practice compounding as well as with the boards 
of pharmacy that regulate them, must be included as well.
    As an example, the Missouri Board of Pharmacy has chosen to 
test samples of compounded drugs from State-licensed pharmacies 
on a random, unannounced basis. Once a sample is obtained, it 
will be tested using certified laboratory procedures that will 
also include full chain of custody controls for each item 
tested. Pharmacies will be reimbursed for their cost for 
whatever samples that are selected.
    All States have in place a voluntary compliance program 
that utilizes State inspectors to review standards of practice 
in pharmacies. Missouri utilizes this approach, when possible, 
to seek any corrective actions that may be necessary within a 
particular practice setting. However, when necessary, in 
Missouri we use discipline power as well as authority to seek 
relief in State courts to halt unsafe practices through 
restraining orders and permanent injunctions.
    Legislation was introduced this last year that would have 
provided additional authorities to the Board. Some of these 
included embargo authority, the provision of a specific class 
of license for pharmacies that compound, and to allow expedited 
procedures against licensees that the Board believes are 
practicing pharmacy in an unsafe manner. The bill that was 
introduced in both the House and the Senate did not pass due to 
some differences between the State association and the Board. 
If we are successful in the next legislative session, such 
authorities will further enhance our ability to act effectively 
when situations warrant such use of those powers.
    Finally, Federal agencies such as the FDA can work with 
various States and the National Association of Boards of 
Pharmacy to develop national definitions and guidelines to 
maintain an appropriate balance between State and Federal 
regulatory responsibilities. An improved definition of 
compounding versus manufacturing on the Federal level would 
help define the role of State and Federal agencies as well.
    The Missouri Board of Pharmacy again wishes to thank the 
committee for this opportunity to testify, and is certainly 
available to work with Congress and Federal agencies on 
improving oversight over compounding practices.
    Thank you.
    Senator Bond. Mr. Kinkade, obviously I'm very proud of the 
way that Missouri has responded. We had a horrible tragedy, and 
several others, and I hope other States can learn a positive 
lesson without having to go through the very real problems that 
were caused in our State. The response, given the State of 
knowledge, seems to be outstanding and perhaps a model, and we 
welcome comments on it. But I want to commend you and the State 
Board for being very, very aggressive and we look forward to 
seeing how the system continues to work in Missouri.
    [The prepared statement of Mr. Kinkade may be found in 
additional material.]
    Senator Bond. With that, let me turn now to the testimony 
from Mr. Kennedy. Thank you so much for being here and for 
sharing your experience on both the compounding and 
manufacturing side.
    Mr. Kennedy. Thank you.
    Mr. Chairman and members of the committee, thank you 
sincerely for your efforts to shed public light on the 
phenomenon in the country today of pharmacists boldly 
compounding massive quantities of prescription drugs. I believe 
that I am uniquely qualified to speak to you on this topic.
    I am both a licensed pharmacist who was involved in a 
large-scale compounding, and I am now the owner of an FDA-
approved manufacturing facility in Orlando, FL. We produce 
sterile product, oral inhalation solutions, so most of my 
comments are going to be toward the inhalation market. The drug 
albuterol has already been mentioned, and the term Med 4-Home 
has been mentioned earlier about Missouri, so a lot of my 
comments are related to oral inhalation.
    Since we have been an FDA-approved plant, we have been able 
to win a contract from the Veterans Administration, the VA 
contract, which is one of the largest contracts in the country 
for being able to provide albuterol and ipratropium. We were 
selected by the Government and we won it on quality and we won 
it on price, to be able to provide all of the albuterol and 
ipratropium that is manufactured that VA hospitals and patients 
at home use in their nebulizers.
    The public is at risk, an alarming great risk, and you are 
to be commended for your interest in and pursuit of non-FDA 
compliant compounding.
    At this time I would like to point out that I agree fully 
with what other pharmacists are saying, what Mr. Herbert said, 
as the president of the American Pharmacists Association. If 
that model is followed, I don't think we have that great a 
problem. I think the problem becomes all of a sudden when you 
have the independent pharmacy who is compounding items and 
doing a great job for the community--like if you go to your 
local pharmacists in any town in America and get a product 
compounded, whether it be a veterinarian who has written a 
prescription, or your general practice doctor, or your dentist, 
in which your prescription needs to be altered so that your 
medication is more usable for you, every American citizen 
deserves that.
    My contention and my problem is when we try to do something 
like this as a pharmacist and try to do it on a large, massive 
scale, and compound or manufacture whatever the FDA wants to 
call it, millions of doses per month. For example, Med 4-Home 
as was mentioned earlier. So I think the problems come in when 
you try to do it on a massive scale and you're not a 
manufacturer.
    You have large companies, you have public companies, you 
have large private companies that are hiding behind the 
auspices of a compounding pharmacy that should be considered 
manufacturing due to the scale of product and number of 
prescriptions they are producing on a monthly basis.
    I would like to give you my history and background and show 
sort of my relationship that I have had with the FDA.
    In 1972, I purchased my own retail drug store, Thayer's 
Colonial Pharmacy, Inc., located in Orlando, FL. This drug 
store had been in Orlando for many years, with a reputation for 
finding unique prescription drugs and compounding various 
discontinued formulations. Included in this were many 
combinations of two or more drugs. It could be dermatology 
products, it could be respiratory products, it could be gastric 
products, it could be changing formulations for pediatrics so 
that they wouldn't have adverse side effects.
    But in the mid-1880s at Thayer's, we began compounding 
various respiratory medications on a broader scale. This 
business grew rapidly, including a large portion of mail order 
transactions. We attracted much attention from the industry 
because of the size we grew to in a short period of time.
    Around 1990, the FDA paid us a visit. Their mission was to 
investigate my compounding pharmacy. After 2 weeks of intense 
scrutiny, they determined that I should be labeled a 
manufacturer and ordered that I cease and desist this 
compounding division of Thayer's, the part in which we were 
doing massive respiratory drugs, not the part of doing 
dermatological preparations or individual compounds where you 
have the physician-patient-pharmacist relationship that Mr. 
Herbert spoke of.
    The FDA representative said, ``If you want to be in the 
manufacturing business, then you must have an FDA-approved 
manufacturing facility.'' Of course, the back room of my drug 
store did not qualify, okay? We're talking 1990, and today 
we're talking, of course, 2003.
    In 1991, following the FDA's instruction, I set out to 
secure the approvals and financing necessary to open a proper 
manufacturing facility. Although I was a bit naive at the 
outset, I soon learned that I was involved in a daunting 
process. In my case, it took over 6 years, 6 years, to secure 
approval for my first generic drug product, which is an ANDA, 
Abbreviated New Drug Application, in my plant. It was arduous, 
capital intensive, and certainly the most challenging endeavor 
of my career in health care. However, I now understood the 
rules and knew this was necessary to begin providing 
prescription drugs on a large scale to the public.
    How did I know this? I knew this because the FDA had told 
me so.
    In 1997, Nephron Pharmaceuticals was up and running as an 
FDA-approved and registered facility. Our focus is oral 
inhalation solutions to treat asthma, bronchitis, and Chronic 
Obstructive Pulmonary Disease. And by the way, COPD is the 
fourth leading cause of death in this country today, and is 
fast becoming the third leading cause of death. So this is a 
big field, oral inhalation solutions, for these patients. As 
you can see in my written testimony, I have six different 
ANDAs.
    Now, by national pharmaceutical standards, Nephron is a 
little guy. We are very small. Even so, I just want to show you 
what it entails to manufacture drugs as a small manufacturer.
    Our 76,000 square foot facility is designated for full FDA 
compliance. Our production room design houses controlled 
environment rooms, based on the 1997 ISPE sterile manufacturing 
facilities guidelines and was developed with the help of FDA.
    I also have some exhibits in my package which show you the 
different parts of our plant, the sterility part, the water 
system, and what we have to go through.
    Senator Bond. Mr. Kennedy, those will all be accepted in 
the record. We very much appreciate that.
    Mr. Kennedy. Thank you.
    One other thing I would like to quickly mention is that in 
this facility, just to show you the number of people that it 
requires to be FDA approved for a small plant the size of a 
gnat, compared to a large company.
    In our regulatory department we have four people that are 
responsible for nothing but FDA compliance and reporting. We 
have a quality assurance department that consists of 41 people 
that do nothing but handle document control for the FDA--
validation, batch records. We have nine degreed chemists that 
work in our lab, and they have technicians. We have 19 degreed 
microbiologists and technicians who continually monitor the 
environment of the plant. We have 117 production personnel, and 
we have specialists that do blow, fill and seal, which is the 
type of technology we use to manufacture. These personnel 
operate at the facility in compliance with the regulations.
    Now, just to talk about some of the standards, called 
standard operating procedures.
    Senator Bond. Mr. Kennedy, we have a time deadline, and 
actually you have answered and I will take that off my 
questioning time. But you have answered the questions about the 
costs. We are very interested in that. But if you could wrap it 
up and submit as much of your testimony as possible, we would 
appreciate it.
    Mr. Kennedy. OK.
    Perhaps to attack this problem, the FDA instituted a rule 
that all oral inhalation drugs have to be sterile. That was in 
May of 2002. There still seems to be some discussion within the 
FDA and the industry where this applies to compounding pharmacy 
or not for oral inhalation.
    However, in my trips around the country marketing my 
products, I encounter time after time non-FDA approved 
companies that are actually compounding millions and millions 
of doses of these products per month.
    Thank you.
    Senator Bond. Thank you very much, Mr. Kennedy.
    [The prepared statement of Mr. Kennedy may be found in 
additional material.]
    Senator Bond. Let me go back to Mr. Kinkade. As I 
indicated, Missouri is the first State to institute random 
testing. What do you think the merits are, what is the status 
of implementation, what are the problems? This was one of the 
first things that we discussed, I think, when I met with you 
and representatives of pharmacies and prescribing physicians. 
How does the system work and what is the status of 
implementation?
    Mr. Kinkade. Well, the status at this point is that we are 
receiving bids in from various laboratories that will be 
contracted with to do the actual testing of the drugs. Missouri 
requires that on this type of system, or to expend this much 
money out of State budgets, you are required to have a bidding 
process. So that is a fairly time-consuming process that we are 
about to conclude, and we expect to start testing next month.
    Along with that, of course, I might want to add here that 
not only will the Board be doing its random testing, but our 
new standards, our new regulations will require pharmacies to 
do their own testing of certain lots of products that they 
produce and have those results on hand.
    The testing that the Board will do primarily was in the 
area of how samples would be collected. There are various ways 
to do that, depending on whether the product has a shelf life 
or whether it is the type of product that is compounded and 
then used or administered immediately. There will be methods to 
be able to take material in both of those cases, as well as 
situations where we may receive public complaints and actually, 
in a few cases, have to go or use undercover operations in 
order to take a random test. But we are setting up procedures 
for all of those types of scenarios that we find exist in the 
marketplace, with the type of compounds that are being made.
    I also emphasize here that we are not just talking about 
sterile products, although that is our primary concern, because 
in addition to potency issues are products that we will be 
testing for, with sterile products, we will also be testing for 
such things as sterility and pyrogenicity in these products, to 
make sure that they do, in fact, meet the claims and standards 
that they are supposed to when compounded.
    Senator Bond. Thank you very much, Mr. Kinkade. We 
obviously would be interested to learn how the system works 
when it gets implemented.
    Let me go back to Dr. Sellers. You mentioned loopholes that 
the contemporary pharmacy compounders are taking advantage of. 
You gave us four very good ideas for legislation. Are there any 
other things that you see need to be addressed?
    Mrs. Sellers. I think it's very important that both 
physicians and patients are apprised of the risks that may be 
associated with compounded drugs. Typically, physicians 
outsource the information on the risks associated with 
compounded drugs to pharmacists, and if there is not a 
requirement for the pharmacist to disclose those risks, it 
becomes very difficult to make an autonomous decision about a 
prescription medication that is in the best interest of a 
patient. So I think there needs to be a balanced reporting of 
both benefits and risks for these products.
    Senator Bond. Let me ask one question. I assume we're all 
going along with this, but if you have any comments on it, let 
me ask for your comments.
    No. 1, does anybody think we should not have a mandatory 
Federal system of reporting adverse events? Anyone? Mr. 
Herbert.
    Mr. Herbert. APhA would support voluntary reporting.
    Senator Bond. Voluntary, not mandatory.
    Mr. Herbert. Voluntary, nonpunative.
    Senator Bond. Would you support mandatory reporting at the 
State level?
    Mr. Herbert. I think so. I'm not sure what we're talking 
about. The nature of compounding itself is such that we don't 
often have the information to report any adverse effects. I'm 
not sure you would get anything. Mandating you to report 
something that you would hardly ever know about, you would 
always be reporting something after the fact. As you are 
describing, you would be reporting deaths, and they seldom 
happen. But I'm not sure what the value of that reporting is. 
So you are creating a bureaucracy that reports something that 
I'm not sure does anything.
    Mrs. Sellers. I would also like to comment, that before you 
can report a problem, you need to detect the problem. If we are 
not looking for problems with the medications that we are 
making, we are not going to be able to report them.
    Senator Bond. A good point.
    Any comments, Mr. Kinkade, Mr. Kennedy?
    Mr. Kinkade. I would make the comment that, at least from 
our standards that we have in Missouri now, we have included 
requirements not only for recalls, when necessary, but the type 
of information that is required and who is to be contacted on 
the type and seriousness of the recall.
    One of the things we learned in the Med 4-Home case was 
that that particular facility had received some complaints from 
patients that we weren't aware of. So one of the new standards 
that we have implemented in Missouri is that all compounding 
pharmacies maintain files so that inspectors can review those 
files on any complaints that patients would provide a licensee 
on a compounded product.
    In addition to that, any adverse reactions, again recalls 
on infection rates on any types of compounded products, do have 
to be reported to the Board now.
    Senator Bond. One other item. I thought I heard agreement 
that if a pharmacy is making quantities of compounded drugs--
not compounding for the individual prescription written by a 
doctor for a specific patient--should this be an FDA regulated 
manufacturing pharmacy? Mr. Kennedy, I think that was your 
point.
    Mr. Herbert?
    Mr. Herbert. I would say quantity, in and of itself, is not 
the best indicator, but the existence of a relationship that 
you are filling the order pursuant to a physician's order for a 
specific person--but you could do that for many patients. So 
it's not just the quantity; it is the relationship.
    Senator Bond. Is it a specific doctor prescribing for a 
patient or patients. If one doctor has 20 patients that need a 
compounded drug----
    Mr. Herbert. Exactly.
    Senator Bond. --then that pharmacist is compounding for 
those patients.
    Mr. Herbert. Exactly. So the quantity alone is not the 
indicator. It is the relationship that exists, and are you 
doing it to meet a medical need. It is not just creating it to 
put on the shelf and go out and market the stuff.
    Senator Bond. Any other comments on that?
    Mr. Kinkade. Just briefly, we have run into some pharmacies 
who, perhaps due to a shortage of a manufactured drug on the 
market, have attempted to sell compounded products on a 
wholesale basis--in other words, outside the prescription/
patient/prescriber relationship. In those cases, it is 
certainly our interpretation that we feel the Federal law is 
clear, that that is manufacturing and not the practice of 
pharmacy.
    Senator Bond. Sounds reasonable to me.
    At this point I am going to turn the rest of the hearing 
over to Senator Roberts, because I have a commitment that I 
have to keep. I thank all of our witnesses today. It has been 
very helpful.
    I am asking unanimous consent that we will include in the 
record the statement of the American Society of Health-System 
Pharmacists, and testimony from the International Academy of 
Compounding Pharmacists.
    [The statements of the American Society of Health-System 
Pharmacists and the International Academy of Compounding 
Pharmacists may be found in additional material.]
    Senator Bond. We will keep the record open for a week for 
further comments. I think we have raised some questions, and 
maybe we have some misunderstandings, so if you wish to submit 
something to clarify those, we would appreciate your doing it 
within a week. We may have some additional questions, and other 
members of the committee may have some questions. We would 
appreciate if you would try to respond to those promptly.
    Finally, as we are all looking at what we should introduce 
on the Federal level, whether we should introduce it on a 
Federal level, we would appreciate receiving your advice by 
January 15th on whether you think the time is ripe for some 
kind of reporting, if some kind of regulation is necessary. If 
you would report to us by that time, we would very much welcome 
your input.
    Again, our sincere thanks for enlightening us. It is a 
complicated subject, and obviously, I have got to learn more. 
But I thank you for your guidance.
    I will turn the gavel over to Senator Roberts.
    Senator Roberts. [presiding]. Thank you, Mr. Chairman. 
Again, I want to thank you for your leadership. I am very happy 
to cosponsor our amendment.
    I might say at the outset that when we meet with the 
Finance Committee staff as of this next week to try to work out 
the amendment as part of the overall bill, that the first step 
is what Dr. Sellers indicated, i.e., at least an advisory 
board.
    We gave a lot of leeway to the Secretary to make sure that 
all groups are represented, and if we get this right, we are 
talking about the National Association of Boards of Pharmacy, 
the pharmacy groups, the physician groups, the hospital groups, 
the consumer and patient advocate groups, law enforcement 
agencies, which are very important, victims of unsafe or 
diluted compound drugs or their families, and those that would 
be determined appropriate by the Secretary. So we haven't 
really defined the universe yet, but we want to make sure that 
it is comprehensive and that all groups and all advice and 
counsel would be considered in the advisory process.
    I'm going to ask Mr. Kennedy a question because it gets to 
the Hobson's choice or the Catch-22, or what Senator Ensign was 
talking about, in an effort to try to bring some degree of 
control and safety to this whole issue.
    You went through 6 years, six long years with the FDA, and 
as you have indicated in your statement, you have, in order to 
comply with the FDA, to maintain your business, which now has 
FDA approval, of course, four people responsible for all FDA 
compliance, 41 people in regards to document control--that 
sounds like ``Dr. K'' over in Iraq--quality control, nine 
degreed chemists, 19 degreed microbiologists, 117 production 
personnel, four blow, fill, seal specialists--I don't know what 
that means, but I will take it for granted that they are 
necessary--and 22 production equipment assistance and ``one 
partridge in an FDA regulatory tree.'' [Laughter.]
    Mr. Kennedy. Correct.
    Senator Roberts. Dr. Sellers, you have given excellent 
testimony, and you have had an experience associated with your 
home care pharmacy in compounding experience. You are the duty 
expert here on the panel in regards to this universe that we 
really haven't got our arms around.
    How on Earth can we make progress without getting into a 
regulatory nightmare and having a manufacturer having to go 
through 6 years of a gauntlet in regards to FDA? I'm not trying 
to pick on the FDA. They have their requirements as well. But 
that seems to me to be a real problem area.
    Mrs. Sellers. Yes, sir. There are other countries that have 
dealt with this issue by creating small manufacturers licenses 
to produce drugs that are not commercially manufactured. That 
may be one option to explore as a potential solution. There may 
be State licensed facilities that may be able to fill this role 
as well.
    I think we should incentivize small businesses that can 
meet those needs and do it in a manner that produces uniform 
quality products that are needed by specific patient 
populations.
    Senator Roberts. This 6 years business and all of this 
employment, all that's involved is the cost driver, that 
basically is one of the causes that we have a problem with. It 
is going to be a real challenge for us.
    Talking to Dr. Sellers, what actions did you take after 
wrestling with the medical and ethical issues associated with 
your home care pharmacy compounding experience, and what was 
the outcome of your course of action?
    Mrs. Sellers. I initially contacted the State Board of 
Pharmacy in Florida, and they took no action one compounding in 
the State of Florida. I left that practice and went to other 
practices in my community and found the same type of 
compounding existed in those pharmacies as well. That is when I 
decided to start studying the issue more fully and began 
efforts to gain more education in public health.
    Senator Roberts. Well, you actually answered my next 
question. You stated you quickly learned that your compounding 
experience was not unique. How did you learn this, and you have 
already addressed that. And then what action did you take upon 
learning this, and your action was your current capacity.
    What do you believe are the loopholes, the major loopholes, 
in regards to the contemporary pharmacy compounders, that 
they're really taking advantage of?
    Mrs. Sellers. I think there is overlapping regulatory 
authority which creates a situation where there is a 
questionable role in State and Federal regulation that can be 
exploited. I have seen where there have been difficulties when 
the FDA has attempted to go in and regulate a pharmacy that the 
FDA believes is actually manufacturing, and they have been 
denied entry into pharmacies, denied access to inspect, because 
the pharmacy has stated that they are regulated by the State. 
So perhaps it's a better way to State that the overlapping 
authorities and the unclear mandates between the Federal and 
State Governments creates a situation where it is very 
difficult to have effective oversight.
    The infrastructure for oversight is further complicated by 
the fact that pharmacies are not registered with the FDA, so, 
in fact, the FDA may not know where mass manufacturing is going 
on or where unsafe practices exist. On the State level, because 
we have limited resources and so few inspectors who may not be 
trained to look for public health problems, we may not be 
identifying problems.
    Senator Roberts. Mr. Herbert, that leads me to the question 
I wanted to ask you. What can we do to work with the schools of 
pharmacy to improve their curriculum, and then, obviously, you 
get into a better training situation?
    Mr. Herbert. To work with the schools of pharmacy?
    Senator Roberts. Yes, sir.
    Mr. Herbert. I'm not sure I can answer that. The schools of 
pharmacy, for the most part, are not teaching compounding these 
days. It is not part of the curriculum in many schools of 
pharmacy in the country. Whether you have the ability to 
require that is something I can't answer.
    Having standards for what the practice is about may back in 
that process. If you have to meet standards when you're 
practicing, then you would have to learn them somewhere, and 
that may precipitate the reinstitution of training programs in 
schools of pharmacy. But, frankly, it is not part of the 
curriculum in most of them today.
    Senator Roberts. It occurs to me that I should have asked 
you, basically, do you feel that the schools of pharmacy are 
providing adequate training for pharmacy compounding, and the 
answer to that is probably no.
    Mr. Herbert. The answer to that is no.
    Senator Roberts. Some pharmacy technicians are allowed to 
compound. Do you feel they have the proper training to 
compound, and I would guess the answer to that is no.
    Mr. Herbert. I don't know that I would agree with that. I 
think they can be trained to properly compound.
    Senator Roberts. Obviously, I think they should be required 
to have some minimum requirements in terms of training and 
education.
    What is your opinion about States licensing or, at the 
minimum, registering a pharmacy technician?
    Mr. Herbert. Registering a pharmacy technician?
    Senator Roberts. Yes, sir.
    Mr. Herbert. I think it should be done.
    Senator Roberts. All right.
    Mr. Herbert. It is done in our State.
    Senator Roberts. That concludes the questions I had. I want 
to associate myself with the remarks of the distinguished 
chairman, and would ask if any member of the panel would like 
to add anything at this point before we conclude the hearing.
    Mr. Kennedy. Yes, sir, I would like to add one point.
    With the present enforcement of the FDA in compounding, and 
as I talk about the quantity and size of the compounding, of 
the commercialization of the compounding going on, I don't 
understand why, even with the regulations and rules that are on 
the books today for the FDA, why there cannot be more of a 
determination of whether a company is a manufacturer or a 
compounder. I think they have the ability to do that, but for 
some reason, I think that is being overlooked.
    Senator Roberts. That doubtlessly should be a priority 
issue for the advisory board, if we can get that first step 
done.
    Thank you for taking the time out of a very busy schedule 
to come and testify on a growing national health concern.
    This hearing is concluded.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

               Prepared Statement of Janet Heinrich, GAO
                           Prescription Drugs

State and Federal Oversight of Drug Compounding by Pharmacies

Why GAO Did This Study
    Drug compounding--the process of mixing, combining, or altering 
ingredients--is an important part of the practice of pharmacy because 
there is a need for medications tailored to individual patient needs. 
Several recent compounding cases that resulted in serious illness and 
deaths have raised concern about oversight to ensure the safety and 
quality of compounded drugs. These concerns have raised questions about 
what States--which regulate the practice of pharmacy--and the Food and 
Drug Administration (FDA) are doing to oversee drug compounding. GAO 
was asked to examine (1) the actions taken or proposed by States and 
national pharmacy organizations that may affect State oversight of drug 
compounding, and (2) Federal authority and enforcement power regarding 
compounded drugs.
    This testimony is based on discussions with the National 
Association of Boards of Pharmacy (NABP) and a GAO review of four 
States: Missouri, North Carolina, Vermont, and Wyoming. GAO also 
interviewed and reviewed documents from pharmacist organizations, FDA, 
and others involved in the practice of pharmacy or drug compounding.

What GAO Found

    A number of efforts have been taken or are under way both at the 
State level and among pharmacy organizations at the national level that 
may strengthen State oversight of drug compounding. Actions among the 
four States reviewed included adopting new regulations about 
compounding and conducting more extensive testing of compounded drugs. 
For example, the pharmacy board in Missouri is starting a program of 
random testing of compounded drugs for safety, quality, and potency. At 
the national level, industry organizations are working on standards for 
compounded drugs that could be adopted by the States in their laws and 
regulations, thereby potentially helping to ensure that pharmacies 
consistently produce safe, high-quality compounded drugs. While these 
actions may help improve oversight, the ability of States to oversee 
and ensure the quality and safety of compounded drugs may be affected 
by State-specific factors such as the resources available for 
inspections and enforcement.
    FDA maintains that drug compounding activities are generally 
subject to FDA oversight, including its authority to oversee the safety 
and quality of new drugs. In practice, however, the Agency generally 
relies on States to regulate the limited compounding of drugs as part 
of the traditional practice of pharmacy. In 1997, the Congress passed a 
law exempting drug compounders that met certain criteria from key 
provisions of the Federal Food Drug and Cosmetic Act (FDCA), including 
the requirements for the approval of new drugs. These exemptions, 
however, were nullified in 2002 when the U.S. Supreme Court ruled part 
of the 1997 law to be an unconstitutional restriction on commercial 
speech, which resulted in the entire compounding section being declared 
invalid. Following the court decision in 2002, FDA issued guidance to 
indicate when it would consider taking enforcement actions regarding 
drug compounding. For example, it said the Agency would defer to States 
regarding ``less significant'' violations of the Act, but would 
consider taking action in situations more analogous to drug 
manufacturing.
    Mr. Chairman and Members of the Committee: I am pleased to be here 
today as you consider State and Federal oversight to ensure the safety 
and quality of compounded prescription drugs. Drug compounding--the 
process of mixing, combining, or altering ingredients to create a 
customized medication for an individual patient--is an important part 
of the practice of pharmacy. Common examples of compounded drugs 
include tailor-made medications for patients who are allergic to an 
ingredient in a manufactured drug. Drug compounding is part of pharmacy 
education and, like other aspects of pharmacy practice, it is regulated 
by State pharmacy practice acts, which in turn are enforced by State 
boards of pharmacy. All 50 States describe drug compounding in their 
State laws and regulations on pharmacy practice, although specific 
statutes or regulations vary across States. At the Federal level, the 
Food and Drug Administration (FDA), which oversees the introduction of 
new drugs into the marketplace under the Federal Food, Drug and 
Cosmetic Act (FDCA),\1\ maintains that compounded drugs are generally 
subject to the act.
---------------------------------------------------------------------------
    \1\ See 21 U.S.C.  355.
---------------------------------------------------------------------------
    While drug compounding is an important part of ensuring that 
medications are available to meet individual patient needs, the quality 
and extent of drug compounding have surfaced as important issues in 
recent years. For example, several compounding cases in the past 
several years have resulted in serious illnesses and deaths, raising 
concern about oversight to ensure the safety and quality of compounded 
drugs. In addition, concerns have been raised by FDA and others that 
some pharmacies are going beyond traditional drug compounding for 
individual patients by, for example, compounding and selling large 
quantities of drugs without meeting safety and other requirements for 
new manufactured drugs. Because both States and the Federal Government 
have oversight responsibilities, you asked us to address (1) the 
actions taken or proposed by States and national pharmacy organizations 
that may affect State oversight of drug compounding, and (2) Federal 
authority and enforcement power regarding compounded drugs.
    My testimony today is based in part on discussions with the 
National Association of Boards of Pharmacy (NABP), as well as a review 
we conducted of four States: Missouri, North Carolina, Vermont, and 
Wyoming. We selected these States based on their geographic location 
and variation in compounding regulations. Two of the States came to our 
attention as having taken unique steps with regard to oversight of 
compounded drugs, and the other two had each adopted new regulations on 
drug compounding. For each of the four States, we reviewed State 
statutes and regulations, interviewed officials from the State board of 
pharmacy, and reviewed relevant documents such as pharmacy inspection 
forms. In addition to examining State-level actions, we examined 
national industry efforts by interviewing officials from the American 
Pharmacists Association, the International Academy of Compounding 
Pharmacists, the American Society of Health-System Pharmacists, the 
National Association of Chain Drug Stores, and Professional Compounding 
Centers of America, which provides training to pharmacists and also 
sells bulk ingredients for drug compounding. We also contacted and 
obtained information from the United States Pharmacopeia (USP), which 
is a nonprofit agency that develops standards for pharmaceuticals. 
Finally, to examine Federal authority and enforcement power, we 
reviewed Federal statutes, FDA compliance policy guides, court 
decisions, and other relevant documents, and interviewed FDA officials 
and industry experts. We conducted our work from August 2003 to October 
2003 in accordance with generally accepted government auditing 
standards.
    In summary, efforts at the State level and among pharmacy 
organizations at the national level have been taken or are under way to 
potentially strengthen State oversight of drug compounding. Actions 
among the four States we reviewed included adopting new statutes and 
regulations about compounding, such as requirements for facilities and 
equipment, and conducting more extensive testing of compounded drugs. 
For example, the pharmacy board in Missouri is starting a program of 
random testing of compounded drugs for safety, quality, and potency. At 
the national level, industry organizations are working on standards for 
compounded drugs that could be adopted by the States in their laws and 
regulations, thereby helping to ensure that pharmacies consistently 
produce safe, high-quality compounded drugs. While these actions may 
help improve oversight, the ability of States to oversee and ensure the 
quality and safety of compounded drugs may be affected by State-
specific factors such as the resources available for inspections and 
enforcement. For example, in three of the four States we reviewed, 
pharmacy board officials indicated that resource limitations affected 
their ability to conduct routine inspections.
    FDA maintains that drug compounding activities are generally 
subject to its oversight, including its authority to oversee the safety 
and quality of new drugs. In practice, however, the Agency generally 
relies on States to regulate the compounding of drugs as part of the 
traditional practice of pharmacy. In 1997, the Congress passed a law 
exempting drug compounders that met certain criteria from key FDCA 
provisions, including safety and efficacy requirements for the approval 
of new drugs. However, the entire section of the law dealing with drug 
compounding was nullified in 2002 after the U.S. Supreme Court ruled 
that part of it was an unconstitutional restriction on commercial 
speech. Following the court decision in 2002, FDA issued guidance to 
indicate when the Agency would consider taking enforcement actions 
regarding drug compounding. For example, it said the Agency would 
generally defer to the States for ``less significant'' violations of 
the FDCA but would consider taking action in situations more analogous 
to drug manufacturing.

                               BACKGROUND

    For most people and many pharmacies, filling a prescription is a 
matter of dispensing a commercially available drug product that has 
been manufactured in its final ready-to-use form. This has been 
particularly true in the U.S. since the rise of pharmaceutical 
manufacturing companies. In addition to meeting Federal safety and 
efficacy requirements before a new drug is marketed, the drugs 
manufactured by these companies are routinely tested by FDA after 
marketing. According to FDA, the testing failure rate for more than 
3,000 manufactured drug products sampled and analyzed by FDA since 
fiscal year 1996 was less than 2 percent. Drug manufacturers are also 
required to report adverse events associated with their drugs, such as 
illness and death, to FDA within specified time frames.
    Drug compounding, which has always been a part of the traditional 
practice of pharmacy, involves the mixing, combining, or altering of 
ingredients to create a customized medication for an individual 
patient. According to the American Pharmacists Association, some of the 
most commonly compounded products include lotions, ointments, creams, 
gels, suppositories, and intravenously administered fluids and 
medication. Some of these compounded drugs, such as intravenously 
administered chemotherapy drugs, are sterile products that require 
special safeguards to prevent injury or death to patients receiving 
them. For example, sterile compounding requires cleaner facilities than 
nonsterile compounding, as well as specific training for pharmacy 
personnel and testing of the compounded drug for sterility.
    The extent of drug compounding is unknown, but it appears to be 
increasing in the U.S. While industry representatives, the media, and 
others have cited estimates for the proportion of prescription drugs 
that are compounded ranging from 1 percent to 10 percent of all 
prescriptions, we found no data supporting most estimates.\2\ FDA does 
not routinely collect data on the quantity of prescriptions filled by 
compounded drugs. Similarly, we found no publicly available data, 
either from FDA or from industry organizations, on the amount of bulk 
active ingredients and other chemicals that are used in drug 
compounding in the U.S. However, many State officials, pharmacist 
association representatives, and other experts we interviewed reported 
that the number of compounded prescriptions, which had decreased when 
pharmaceutical manufacturing grew in the 1950s and 1960s, has been 
increasing over the past decade.
---------------------------------------------------------------------------
    \2\ A 2001 draft report of a study contracted by FDA included an 
estimate that about 6 percent of all prescriptions were compounded but 
cautioned that there was considerable uncertainty around this estimate 
due to limited data. The report acknowledged that definitive statistics 
on compounding activities were not available. Eastern Research Group 
Inc., Profile of the Pharmaceutical Compounding Industry, draft final 
report prepared for the Food and Drug Administration, August 27, 2001.
---------------------------------------------------------------------------
    Problems have come to light regarding compounded drugs, some of 
which resulted in death or serious injury, because the drugs were 
contaminated or had incorrect amounts of the active ingredient. Unlike 
drug manufacturers, who are required to report adverse events 
associated with the drugs they produce, FDA does not require pharmacies 
to report adverse events associated with compounded drugs. Based on 
voluntary reporting, media reports, and other sources, FDA has become 
aware of over 200 adverse events involving 71 compounded products since 
about 1990. These incidents, including 3 deaths and 13 hospitalizations 
following injection of a compounded drug that was contaminated with 
bacteria in 2001, have heightened concern about compounded drugs' 
safety and quality. In addition, a limited survey conducted by FDA's 
Division of Prescription Drug Compliance and Surveillance in 2001 found 
that nearly one-third of the 29 sampled compounded drugs were 
subpotent--that is, they had less of the active ingredients than 
indicated.
    FDA and others have also expressed concern about the potential for 
harm to the public health when drugs are manufactured and distributed 
in commercial amounts without FDA's prior approval. While FDA has 
stated that traditional drug compounding on a small scale in response 
to individual prescriptions is beneficial, FDA officials have voiced 
concern that some establishments with retail pharmacy licenses might be 
manufacturing new drugs under the guise of drug compounding in order to 
avoid FDCA requirements.

  ACTIONS TAKEN OR UNDER WAY BY STATES AND NATIONAL ORGANIZATIONS TO 
 STRENGTHEN STATE OVERSIGHT OF DRUG COMPOUNDING, BUT AFFECT LIKELY TO 
                        VARY FROM STATE TO STATE

    We found efforts at the State level and among national pharmacy 
organizations to potentially strengthen State oversight of drug 
compounding. Actions among the four States we reviewed included 
adopting new drug compounding regulations and random testing of 
compounded drugs. At the national level, industry organizations are 
working on standards for compounded drugs that could be adopted by 
States in their laws and regulations. According to experts we 
interviewed, uniform standards for compounded drugs could help ensure 
that pharmacists across States consistently produce safe, quality 
products. While these actions may help improve oversight, the ability 
of States to oversee and ensure the quality and safety of compounded 
drugs may be affected by their available resources and their ability to 
adopt new standards and enforce penalties.

 FOUR STATES REVIEWED HAVE TAKEN A VARIETY OF APPROACHES TO STRENGTHEN 
                               OVERSIGHT

    The four States we reviewed have taken a variety of approaches to 
strengthen State oversight.
     Missouri. The pharmacy board in Missouri has taken a 
different approach from other States: it is in the process of 
implementing random batch testing of compounded drugs. No other State 
has random testing, according to an NABP official. Random testing will 
include both sterile and nonsterile compounded drugs and the board 
plans on testing compounded drugs for safety, quality, and potency. A 
Missouri pharmacy board official said testing will include random 
samples of compounded drugs in stock in pharmacies in anticipation of 
regular prescriptions, random selection of prescriptions that were just 
prepared, and testing of compounded drugs obtained by undercover 
investigators posing as patients. The official added that random 
testing will help to ensure the safety and quality of compounded drugs 
and is also intended to serve as a deterrent for anyone who might 
consider purposely tampering with compounded prescriptions.
     North Carolina. North Carolina is the only State in the 
country that requires mandatory adverse event reporting involving 
prescription drugs, including compounded drugs, according to an NAPB 
official. Regulations in North Carolina require pharmacy managers to 
report information to the pharmacy board that suggests a probability 
that prescription drugs caused or contributed to the death of a 
patient. This reporting system, which does not extend to incidents of 
illness or injury, allows the board to investigate all prescription-
drug-related deaths and determine whether an investigation is 
warranted.
     Vermont. The pharmacy board in Vermont overhauled the 
State's pharmacy rules in August 2003 to address changes in pharmacy 
practice, including the increase in Internet and mail-order pharmacies, 
according to the pharmacy board chairman. For example, the chairman 
reported that prior to the adoption of the new rules, Vermont had no 
definition of out-of-state pharmacies and no requirements for these 
pharmacies to have a Vermont license to do business in the State. The 
board chairman said that the new rule requiring licensing for out-of-
state pharmacies would provide a mechanism to monitor pharmacies that 
ship prescription drugs, including compounded drugs, into the State. In 
addition, he added that the board revised the rules for compounding 
sterile drugs by including specifics on facilities, equipment, and 
quality assurance measures.
     Wyoming. Prior to March 2003, Wyoming did not have State 
laws or rules that established specific guidelines for drug 
compounding, aside from a definition of drug compounding, according to 
a pharmacy board official. The new rules include requirements for 
facilities, equipment, labeling, and record keeping for compounded 
drugs, as well as a specific section on compounding sterile drugs. In 
addition, under the new rules, the official added that pharmacy 
technicians-in-training are no longer allowed to prepare compounded 
drugs, including sterile products, which is a more complex procedure 
requiring special equipment to ensure patient safety.

EFFORTS OF NATIONAL ORGANIZATIONS MAY HELP STATES STRENGTHEN OVERSIGHT 
                          OF DRUG COMPOUNDING

    At the national level, industry organizations are working on 
uniform practices and guidelines for compounded drugs and a committee 
of national association representatives recently began work on 
developing a program that would include certification and accreditation 
for drug compounding that could be used for State oversight. Groups 
such as the NABP concluded that State oversight of drug compounding 
would be strengthened if the States had uniform standards and other 
tools that could be adopted to address the quality and safety of 
compounded drugs. Several experts that we spoke with said national 
standards for compounding drugs that could be incorporated into State 
laws and regulations could help to ensure the quality and safety of 
compounded drugs. One expert noted that an advantage to incorporating 
compliance with national compounding standards into State laws is that 
it would be easier for States to keep up with updated standards without 
going through the process of legislative changes.
    NABP developed and updated a Model State Pharmacy Act that provides 
standards for States regarding pharmacy practice. Recently revised in 
2003, the model act includes a definition of drug compounding and a 
section on good drug compounding practices. According to the executive 
director of NABP, many States have incorporated portions of the model 
act into their State pharmacy statutes or regulations by including 
similar definitions of drug compounding and components of NABP's good 
drug compounding practices. For example, officials in Missouri and 
Wyoming reported using the model act's good drug compounding practices 
as a guideline for developing their drug compounding regulations. In 
addition, USP has established standards and guidelines for compounding 
nonsterile and sterile drug products, both of which are being updated 
by expert committees. An official told us that these revisions would be 
completed early in 2004.
    In addition, recognizing that there is no coordinated national 
program to oversee compounding practices and that States' oversight may 
vary, NABP recently began working with other national organizations, 
including the American Pharmacists Association and USP, to create a 
steering committee to develop a national program to provide a national 
quality improvement system for compounding pharmacies and the practice 
of compounding. The committee, which held its second meeting in October 
2003, is developing a program that is anticipated to include (1) the 
accreditation of compounding pharmacies, (2) certification of 
compounding pharmacists, and (3) requirements for compounded products 
to meet industry standards for quality medications. To strengthen State 
oversight of drug compounding, these accreditations, certifications, 
and product standards, once developed, could be adopted by the States 
and incorporated into their requirements for compounding pharmacists 
and pharmacies.

   FACTORS SUCH AS AVAILABLE RESOURCES MAY AFFECT STATES' ABILITY TO 
                        OVERSEE COMPOUNDED DRUGS

    Although there are several efforts by States and national 
organizations that may help strengthen State oversight, some States may 
lack the resources to provide the necessary oversight. State pharmacy 
board officials in three of the four States reported that resources 
were limited for inspections, for example:
     The Missouri pharmacy board director reported that 
pharmacy inspections typically occur every 12 to 18 months; however, an 
increase in complaints has resulted in less frequent routine pharmacy 
inspections, because investigating complaints takes priority over 
routine inspections.
     North Carolina has six inspectors for about 2,000 
pharmacies, which the State pharmacy board director said are inspected 
at least every 18 months. The director added that it is difficult to 
keep up with this schedule of routine inspections with the available 
resources while also investigating complaints, which take first 
priority.
     In Vermont, the pharmacy board chairman reported that, for 
a period of about 8 years until January 2003, pharmacy inspectors were 
only able to respond to complaints and not conduct routine inspections 
because of a shortage of inspectors. Vermont now has four full-time 
inspectors that cover the State's 120 pharmacies; however, in addition 
to routine pharmacy inspections, the inspectors are also responsible 
for inspecting other facilities such as nursing homes and funeral 
homes. The chairman added that the board would like to have pharmacies 
inspected annually but it is difficult to keep up with the current 
schedule of inspections once every 2 years.
    Since drug compounding may occur in mail-order and Internet 
pharmacies, the compounding pharmacy may be located in a State 
different from the location of the patient or prescribing health 
professional. Three of the four States we reviewed had a large number 
of out-of-state pharmacies that were licensed to conduct business in 
those States, and inspection and enforcement activities may differ for 
these pharmacies. For example, Wyoming has 274 licensed out-of-state 
pharmacies, which is nearly twice as many as the number of in-state 
licensed pharmacies. The four States we reviewed said that they have 
authority to inspect out-of-state pharmacies licensed in their states 
but because of limited resources, they generally leave inspections to 
the State in which the pharmacy is located. Regarding enforcement 
authority, all four States reported having authority to take 
disciplinary action against out-of-state pharmacies licensed in their 
States.
    While the pharmacy boards in all four States we reviewed can 
suspend or revoke pharmacy licenses or issue letters of censure, 
enforcement mechanisms vary. For example, Missouri and North Carolina 
are not authorized to charge fines for violations; however, Wyoming can 
fine a pharmacist up to $2,000 and Vermont can fine a pharmacy or 
pharmacist $1,000 for each violation. Further, not all State pharmacy 
boards have the authority to take enforcement action independently. For 
example, in Missouri when attempting to deny, revoke, or suspend a 
license through an expedited procedure, the pharmacy board must first 
file a complaint with an administrative hearing commission. Only after 
the commission determines that the grounds for discipline exist may the 
board take disciplinary action.
    Pharmacy board officials reported relatively few complaints and 
disciplinary actions involving drug compounding. For example, of the 
307 complaints received and reviewed by the board of pharmacy against 
pharmacies and pharmacists in Missouri in fiscal year 2002, only 5 were 
related to drug compounding.\3\
---------------------------------------------------------------------------
    \3\ The State pharmacy board officials that we spoke with reported 
that most complaints and disciplinary actions cover dispensing errors 
related to manufactured drugs, such as incorrectly counting the number 
of pills for a prescription.
---------------------------------------------------------------------------

  FDA ASSERTS OVERSIGHT AUTHORITY UNDER FDCA BUT GENERALLY RELIES ON 
                  STATES TO REGULATE DRUG COMPOUNDING

    FDA maintains that drug compounding activities are generally 
subject to FDA oversight, including the ``new drug'' requirements and 
other provisions of the FDCA. In practice, however, the Agency 
generally relies on the States to regulate the traditional practice of 
pharmacy, including the limited compounding of drugs for the particular 
needs of individual patients. In recent years, the Congress has 
attempted to clarify the extent of Federal authority and enforcement 
power regarding drug compounding. In 1997, the Congress passed a law 
that exempted drug compounders from key portions of the FDCA if they 
met certain criteria. Their efforts, however, were nullified when the 
Supreme Court struck down a portion of the law's drug compounding 
section as an unconstitutional restriction on commercial speech, which 
resulted in the entire compounding section being declared invalid.\4\ 
In response, FDA issued a compliance policy guide to provide the 
compounding industry with an explanation of its enforcement policy, 
which included a list of factors the Agency would consider before 
taking enforcement actions against drug compounders.
---------------------------------------------------------------------------
    \4\ Thompson v. Western States Medical Center, 535 U.S. 357 (2002).
---------------------------------------------------------------------------
    FDA ASSERTS JURISDICTION TO REGULATE DRUG COMPOUNDING UNDER FDCA

    FDA maintains that FDCA requirements, such as those regarding the 
safety and efficacy requirements for the approval of new drugs, are 
generally applicable to pharmacies, including those that compound 
drugs. The Agency recognized in its brief submitted in the 2002 Supreme 
Court case that applying FDCA's new drug approval requirements to drugs 
compounded on a small scale is unrealistic--that is, it would not be 
economically feasible to require drug compounding pharmacies to undergo 
the testing required for the new drug approval process for drugs 
compounded to meet the unique needs of individual patients. The Agency 
has stated that its primary concern is where drug compounding is being 
conducted on a scale tantamount to manufacturing in an effort to 
circumvent FDCA's new drug approval requirements. FDA officials 
reported that the Agency has generally left regulation of traditional 
pharmacy practice to the States, while enforcing the act primarily when 
pharmacies engage in drug compounding activities that FDA determines to 
be more analogous to drug manufacturing.

    FDA MODERNIZATION ACT EXEMPTED DRUG COMPOUNDERS FROM SOME FDCA 
                 REQUIREMENTS BUT WAS DECLARED INVALID

    Federal regulatory authority over drug compounding attracted 
congressional interest in the 1990s, as some in the Congress believed 
that ``clarification is necessary to address current concerns and 
uncertainty about the Food and Drug Administration's regulatory 
authority over pharmacy compounding.'' \5\ The Congress addressed this 
and other issues when it passed the FDA Modernization Act of 1997 
(FDAMA), which included a section exempting drugs compounded on a 
customized basis for an individual patient from key portions of FDCA 
that were otherwise applicable to manufacturers.\6\ According to the 
congressional conferees, its purpose was to ensure continued 
availability of compounded drug products while limiting the scope of 
compounding so as ``to prevent manufacturing under the guise of 
compounding.'' \7\
---------------------------------------------------------------------------
    \5\ S. Rep. No. 105-43, at 67 (1997).
    \6\ These portions covered ``adequate directions for use'' 
labeling, manufacturing, and new drug approval requirements. See former 
21 U.S.C.  353a(a). Pub. L. No. 105-115, 111 Stat. 2296, former 
section 503A.
    \7\ H.R. Conf. Rep. No. 105-399, at 94 (1997).
---------------------------------------------------------------------------
    In order to be entitled to the exemption, drug compounders had to 
meet several requirements, including one that prohibited them from 
advertising or promoting ``the compounding of any particular drug, 
class of drug, or type of drug.'' \8\ This prohibition was challenged 
in court by a number of compounding pharmacies and eventually resulted 
in a 2002 Supreme Court decision holding that it was unconstitutional. 
As a result, the entire drug compounding section was declared 
invalid.\9\ However, the Court did not address the extent of FDA's 
authority to regulate drug compounding.
---------------------------------------------------------------------------
    \8\ See former 21 U.S.C.  353a(c).
    \9\ Both the district and appellate courts held that the 
prohibition was unconstitutional. However, the district court held that 
the prohibition was ``severable'' and that the rest of the pharmacy 
compounding section remained good law. While the appellate court agreed 
with the district court on the constitutional question, it disagreed on 
the severability issue and invalidated the entire section. The Supreme 
Court agreed with both courts on the constitutional issue, but because 
the severability decision was not challenged, the Court did not rule on 
it, and left it in place. See Thompson v. Western, States Medical 
Center, 69 F. Supp. 2d 1288 (D. Nev. 1999), aff'd in part and rev'd in 
part, 238 F. 3d 1090 (9th Cir. 2001), aff'd, 535 U.S. 357.
---------------------------------------------------------------------------
  CURRENT FDA ENFORCEMENT FOCUSES ON DRUG COMPOUNDING OUTSIDE OF THE 
                    TRADITIONAL PRACTICE OF PHARMACY

    FDA issued a compliance policy guide in May 2002, following the 
Supreme Court decision, to offer guidance about when it would consider 
exercising its enforcement authority regarding pharmacy 
compounding.\10\ In the guide, FDA stated that the traditional practice 
of drug compounding by pharmacies is not the subject of the guidance. 
The guide further stated that FDA will generally defer to State 
authorities in dealing with ``less significant'' violations of FDCA, 
and expects to work cooperatively with the States in coordinating 
investigations, referrals, and follow-up actions. However, when the 
scope and nature of a pharmacy's activities raise the kinds of concerns 
normally associated with a drug manufacturer and result in significant 
violations of FDCA, the guide stated that FDA has determined that it 
should seriously consider enforcement action and listed factors, such 
as compounding drug products that are commercially available or using 
``commercial scale manufacturing or testing equipment,'' that will be 
considered in deciding whether to take action.\11\
---------------------------------------------------------------------------
    \10\ This guide was similar to an earlier compliance policy guide 
published by FDA in 1992. After the drug compounding section of FDAMA 
was declared invalid, FDA determined that it needed to issue new 
guidance to the compounding industry on what factors the Agency would 
consider in exercising its enforcement discretion regarding drug 
compounding.
    \11\ ``Compliance Policy Guide: Compliance Policy Guidance for FDA 
Staff and Industry'', Chapter 4, Sub Chapter 460, May 2002.
---------------------------------------------------------------------------
    Some representatives of pharmacist associations and others have 
expressed concern that FDA's compliance policy guide has created 
confusion regarding when FDA enforcement authority will be used. For 
example, some pharmacy associations assert that FDA's guidance lacks a 
clear description of the circumstances under which the Agency will take 
action against pharmacies. In particular, they pointed to terms in the 
guide, such as ``very limited quantities'' and ``commercial scale 
manufacturing or testing equipment'' that are not clearly defined, and 
noted that FDA reserved the right to consider other factors in addition 
to those in the guide without giving further clarification. FDA 
officials told us that the guide allows the Agency to have the 
flexibility to respond to a wide variety of situations where the public 
health and safety are issues, and that they plan to revisit the guide 
after reviewing the comments the Agency received, but did not have a 
time frame for issuing revised guidance.
    In several reported court cases involving FDA's regulation of drug 
compounders, the courts have generally sided with FDA. Two cases we 
identified involved drug compounders engaged in practices that were 
determined to be more analogous to drug manufacturing. In a district 
court case decided this year, the court upheld FDA's authority to 
inspect a pharmacy specializing in compounding, noting that it believed 
that FDA's revised compliance policy guide was a reasonable 
interpretation of the statutory scheme established by FDCA.\12\
---------------------------------------------------------------------------
    \12\ In the Matter of Establishment Inspection of Wedgewood Village 
Pharmacy, Inc., 270 F. Supp. 525, 549 (D. N.J. 2003).
---------------------------------------------------------------------------
                        CONCLUDING OBSERVATIONS

    While drug compounding is important and useful for patient care, 
problems that have occurred raise legitimate concerns about the quality 
and safety of compounded drugs and the oversight of pharmacies that 
compound them. However, the extent of problems related to compounding 
is unknown. FDA maintains that drug compounding activities are 
generally subject to FDA oversight under its authority to oversee the 
safety and quality of new drugs, but the Agency generally relies on 
States to provide the necessary oversight. At the State level, our 
review provides some indication that at least some States are taking 
steps to strengthen State oversight, and national pharmacy 
organizations are developing standards that might help strengthen 
oversight if the States adopted and enforced them. However, the 
effectiveness of these measures is unknown, and factors such as the 
availability of resources may also affect the extent of State 
oversight.
    Mr. Chairman, this completes my prepared statement. I would be 
happy to respond to any questions you or other Members of the Committee 
may have at this time.

Contact and Acknowledgments

    For further information, please contact Janet Heinrich at (202) 
512-7119. Individuals making key contributions to this testimony 
included Matt Byer,Lisa A. Lusk, and Kim Yamane.

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          Prepared Statement of Steven K. Galson, M.D., M.P.H.

                              INTRODUCTION

    Mr. Chairman and Members of the Committee, I am Steve Galson, the 
Deputy Director of the Center for Drug Evaluation and Research at the 
Food and Drug Administration (FDA or the Agency). I am also the Acting 
Director of the Center while Dr. Janet Woodcock is on detail to the 
Office of the Commissioner.
    I appreciate the opportunity to discuss FDA's role with regard to 
pharmacy compounding. In my testimony, I will discuss the Agency's 
activities and strategies for addressing public health issues 
associated with pharmacy compounding. I will touch on our current 
statutory and regulatory authority, how the Agency has exercised that 
authority, and our future plans in this area.

                               BACKGROUND

    By most estimates, pharmacy compounding is a growing business. Many 
compounding pharmacies have established Internet websites to promote 
and sell their products. The Agency's strategies for addressing 
pharmacy compounding have had to evolve to respond to the public health 
challenges associated with this growing area while at the same time 
preserving the benefits that pharmacy compounding offers in meeting a 
public health need.
    FDA views traditional pharmacy compounding as the combining, 
mixing, or altering of ingredients to create a customized medication 
for an individual patient in response to a licensed practitioner's 
prescription.\1\ In its simplest form, it may involve taking an 
approved drug substance and making a new formulation to meet the 
medical needs of a specific patient. For example, it may involve 
formulating the product without a dye or preservative in response to a 
patient allergy. Or it might involve making a suspension or suppository 
dosage form for a child or elderly patient who has difficulty 
swallowing a tablet or a capsule. These traditional forms of pharmacy 
compounding are an important component of our pharmaceutical 
armamentarium. Although these products technically may be considered 
unapproved new drugs because they differ from the approved formulation 
of the drug, FDA has exercised enforcement discretion to allow these 
legitimate forms of pharmacy compounding, which are regulated under 
State laws governing the practice of pharmacy.
---------------------------------------------------------------------------
    \1\ Under the compounding-related provisions of the Food and Drug 
Administration Modernization Act, pharmacy compounding was not defined 
to include mixing or reconstituting commercial products in accordance 
with the manufacturer's instructions or the product's approved 
labeling. Reconstituting means the return, usually by adding liquid, of 
a drug previously altered for preservation and storage to its original 
state for administration to a patient. This type of manipulation, when 
done in accordance with approved labeling, should not adversely affect 
the safety or efficacy of the drug. (The provisions were struck down by 
the Supreme Court on April 29, 2002.)
---------------------------------------------------------------------------
    We believe that the vast majority of pharmacies engaging in 
pharmacy compounding provide a valuable medical service that is an 
integral part of our modern health care system. However, we have become 
aware of instances involving compounding in which the risks of 
obtaining a product of substandard quality may outweigh the benefits of 
obtaining the compounded drug. In addition, we have seen abuses, such 
as large-scale drug manufacturing under the guise of pharmacy 
compounding.
    In recent years, we have witnessed some compounding pharmacies 
creatively marketing new compounded products that they assert are 
``better'' than available therapies. We are not aware of data 
supporting these claims. Sometimes these pharmacies compound a product 
containing a form of an active ingredient that has not been approved by 
FDA, such as 4-aminopyridine, an experimental drug compounded for 
patients with multiple sclerosis. In other instances, drugs are 
compounded even though FDA has removed them from the market after 
determining that they were unsafe. We also have seen drugs compounded 
that are essentially copies of commercially available products.
    Compounding pharmacies then sell these copies for less than the 
approved commercially available product. These appear to be compounded 
for economic reasons rather than genuine medical need. In such cases, 
we believe the consumer would be better served by the commercially 
available drug, which has been determined to be safe and effective and 
manufactured under rigorous good manufacturing practice requirements.
    Although there is limited hard data on the actual amount of 
pharmacy compounding that is occurring in this country, pharmacy 
compounding appears to be a big and growing business. In April 2001, we 
commissioned a study on the compounding industry by the Eastern 
Research Group, Inc. According to their August 2001 report, over 650 
pharmacies fill more than 13 million prescriptions for compounded 
products per year.
    Although many more pharmacies compound (some estimates put the 
number at more than 3,000 compounding pharmacies) this relatively small 
number of pharmacies that specialize in compounding appear to account 
for a majority of the drugs compounded nationally. Some estimate that 
compounding represents one percent of all of the prescriptions filled 
each year. In 2003, according to one estimate, this would amount to 30 
million prescriptions for compounded products. In some cases, these 
prescriptions may be compounded in pharmacies that dispense only 
compounded medications or in other pharmacies for which compounding is 
a large percentage of their business.
    Pharmacy compounding, by definition, involves making a new drug 
whose safety and efficacy have not been demonstrated with the kind of 
data that FDA ordinarily would require in reviewing a new drug 
application.\2\ Although most pharmacists are well-trained and well-
equipped to safely compound certain medications, not all pharmacists 
have the same level of skills and equipment, and some products that are 
compounded may be inappropriate for compounding. In some cases, we have 
reason to be concerned about the quality of the drugs being compounded 
and the potential risks to patients who may take them. In some 
instances, compounders may lack sufficient controls (equipment, 
training, testing, or facilities) to ensure product quality or to 
compound difficult products such as sterile or modified release drugs. 
If compounding is done on a large scale and is not done properly, 
compounders can expose large numbers of patients to health risks 
associated with unsafe or ineffective medications. This may be of 
particular concern if patients are taking an ineffective compounded 
product in lieu of a proven therapy. In addition, compounding large 
quantities of drugs and copying commercially available approved 
products in compounding pharmacies circumvents important public health 
requirements and undermines the drug approval process--the evidence-
based system of drug review that consumers and health professionals 
rely on for safe and effective drugs.
---------------------------------------------------------------------------
    \2\ In some cases, it may simply involve taking an approved drug 
and making a new formulation.
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Recent Enforcement Activity

    The following examples of recent FDA enforcement actions against 
compounding pharmacies illustrate some of these concerns:
    Fentanyl ``Lollipops'': In August 2002, during in a joint FDA/New 
Hampshire inspection, FDA determined that a pharmacy was compounding 
Fentanyl ``Lollipops'' and dispensing them without the labeling and 
other packaging and patient safety features required by FDA for the 
approved product. Fentanyl is a narcotic analgesic that could pose a 
safety hazard to children if distributed without appropriate safety 
measures. FDA issued a ``warning letter'' to the firm and the firm 
agreed to cease distribution of this product.
    Methylprednisolone Acetate: In September 2002, a compounding 
pharmacy in South Carolina recalled all lots of its methylprednisolone 
acetate products based on reports of four patients who developed a rare 
fungal infection after taking the drug. Ultimately, a total of six 
patients were infected, and one died. A joint FDA/South Carolina 
inspection revealed that the firm did not have adequate controls over 
its compounding operations to ensure the necessary sterility. When the 
firm refused to voluntarily recall other injectable products or to 
provide FDA with a complete list of all products distributed, FDA 
issued a nationwide alert on all injectable drugs prepared by the firm. 
FDA is aware of several other cases of contamination and adverse events 
associated with compounded sterile injectable products.
    Large Volume Interstate Shipments: In September 2002, FDA issued a 
``warning letter'' to a California pharmacy after it determined during 
a joint FDA/California inspection that the firm was not operating as a 
retail pharmacy. The firm was using commercial scale manufacturing 
equipment and making large quantities of drugs for shipment across 
California and to patients in other States. In March of 2002, the firm 
issued a recall of compounded inhalation solutions due to microbial 
contamination.
    In each of these cases, as is the case in most pharmacy compounding 
actions, FDA has proceeded jointly with the State in which the pharmacy 
is located. In many of the cases, however, questions have arisen 
concerning FDA's authority over the compounding activities. In some 
cases, FDA had difficulty obtaining access to the compounding pharmacy 
to determine whether the firm was engaging in dangerous practices. The 
pharmacies argued that they were not subject to FDA regulation because 
they were compounding pharmacies. FDA had to get a warrant to obtain 
access to the facilities and records of compounding activities. One of 
these incidents is discussed in more detail below.
    Wedgewood Village Pharmacy: On July 7, 2003, a U.S. Magistrate 
Judge in the U.S. District Court of New Jersey denied Wedgewood 
Pharmacy's motion to quash FDA's warrant for administrative inspection 
of the pharmacy. The warrant application was filed after the U.S. Drug 
Enforcement Agency's (DEA) requested assistance from FDA in conducting 
an on-site inspection of Wedgewood.
    The Magistrate Judge held, in part, that (1) FDA had authority to 
apply for a warrant to inspect the pharmacy; (2) it is not FDA's burden 
to prove that the entity it seeks to inspect is not entitled to the 
pharmacy-related exemptions from FD&C Act; and (3) the Compliance 
Policy Guide stating that FDA would not attempt to regulate traditional 
pharmacy compounding practices was a reasonable interpretation of the 
FD&C Act. The pharmacy owner appealed to the District Court Judge the 
magistrate's order denying the motion to quash the administrative 
inspection warrant. The District Court held a hearing on October 16, 
2003. A ruling in this case is pending.
    Because FDA was not permitted to complete its inspection in this 
case and several others, the Agency has been delayed, from obtaining 
the evidence needed to assess whether drug manufacturing is occurring 
under the guise of compounding or if compounding practices that raise 
public health concerns are present.

                   STATUTORY AND REGULATORY AUTHORITY

    Although compounding was widespread when the FD&C Act was first 
enacted in 1938, there were no provisions specifically dedicated to 
compounding, as distinguished from manufacturing of drugs. After the 
1962 amendments to the Act expanded the universe of drugs that require 
FDA pre-market approval to include drugs that are not already generally 
recognized by experts as effective, courts have interpreted expansively 
the Act's provisions to require pre-market approval of virtually all 
prescription drugs. It is widely recognized, however, that compounded 
drugs could not meet the approval requirements, in part because they 
traditionally are made in small amounts for individual patients 
according to a prescription. In addition, it is usually not feasible to 
study them in clinical trials to establish their safety and efficacy or 
prepare new drug applications for all of the different types of 
compounded products that might be prescribed.
    Several of the Act's provisions that pertain to drugs generally 
include compounded drugs. The specific statutory provisions that may 
apply to compounded drugs are: (1) the definition of ``drug'' (section 
201 (g) of the Act); (2) the misbranding and adequate directions for 
use requirements for drugs (section 502 of the Act); (3) the 
adulteration and current good manufacturing practice (cGMP) 
requirements for drugs (section 501(a)(2)(B) of the Act); and (4) the 
new drug approval provisions (section 505 of the Act). Literal 
application of these statutory drug authorities could mean that, 
technically, virtually all compounded drugs violate the Act, despite 
the long history of allowing certain types of compounding and the 
important public health benefits provided by such compounding of 
medically necessary drugs that are not otherwise available. Until the 
1997 provision discussed below, Congress had not explicitly exempted 
compounded drugs from the preceding requirements of the Act.
    Today, the Act does specifically address compounding in two 
specific provisions; the registration provisions and the inspection 
provisions. In each case, it provides an exemption that is narrowly 
tied to the specific requirements of those two provisions. Under the 
requirements for drug registration, although compounding is 
specifically included among the activities that would require an 
establishment to register with FDA (section 510(c) of the Act), an 
exemption is provided for pharmacies that, among other conditions, do 
not compound for sale ``other than in the regular course of their 
business of dispensing or selling drugs . . . at retail'' (section 
510(g)(1) of the Act). The same language limits the types of records 
that FDA may review during an inspection of a pharmacy (section 704 of 
the Act).
    Because these exemptions do not extend to other statutory 
requirements, such as pre-approval requirements that would 
significantly restrict compounding, FDA has historically exercised its 
enforcement discretion in a manner that defers to the States, as the 
regulators of the practice of pharmacy, to serve as the primary 
regulators of the practice of pharmacy compounding. FDA's focus in 
recent years has been on drug manufacturing that operates under the 
guise of pharmacy compounding. FDA also has worked cooperatively with 
the National Association of Boards of Pharmacy (NABP) and the U.S. 
Pharmacopeial Convention (USP) to address good compounding practices, 
and with the States on a case-by-case basis to address instances of 
compounding that raise public health and safety issues.

Compliance Policy Guide of 1992

    In March 1992, FDA issued a compliance policy guide (CPG), to 
delineate the Agency's enforcement policy on pharmacy compounding. This 
CPG relied on the exercise of enforcement discretion rather than legal 
exemptions from new drug and other statutory requirements. The pharmacy 
community expressed concerns about how FDA intended to exercise its 
enforcement discretion and sought legislation to clarify the boundaries 
of FDA's authority over pharmacy compounding. In 1997, Congress enacted 
the Food and Drug Administration Modernization Act of 1997 (FDAMA) to 
specifically address FDA's role in the regulation of pharmacy 
compounding.

Food and Drug Administration Modernization Act of 1997

    On November 21, 1997, the President signed FDAMA (P.L. 105-115). 
Section 127 of FDAMA added sections 503A to the FD&C Act, to clarify 
the status of pharmacy compounding under Federal Law. Under section 
503A, drug products that were compounded by a pharmacist or physician 
on a customized basis for an individual patient were entitled to 
exemptions from three key provisions of the Act: (1) the adulteration 
provision of section 501(a)(2)(B) (concerning the good manufacturing 
practice requirement, or cGMP); (2) the misbranding provision of 
section 502(f)(1) (concerning the labeling of drugs with adequate 
directions for use); and (3) the new drug provision of section 505 
(concerning the approval of drugs under new drug or abbreviated new 
drug applications). To qualify for these exemptions, a compounded drug 
product was required to satisfy several requirements, some of which 
were to be the subject of FDA rulemaking or other actions. Section 503A 
of the Act took effect on November 21, 1998, 1 year after FDAMA was 
signed into law.

Thompson v. Western States Medical Center

    In November 1998, the solicitation and advertising provisions of 
section 503A were challenged by seven compounding pharmacies as an 
impermissible regulation of commercial speech. The U.S. District Court 
for the District of Nevada ruled in the plaintiffs' favor. FDA appealed 
to the U.S. Court of Appeals for the Ninth Circuit. On February 6, 
2001, the Court of Appeals declared section 503A to be invalid in its 
entirety (Western States Medical Center v. Shalala, 238 F.3rd 1090 (9th 
Cir. 2001)). The government petitioned for a writ of certiorari to the 
U.S. Supreme Court for review of the Ninth Circuit's decision that the 
solicitation and advertising provisions of section 503A were 
unconstitutional restrictions on commercial speech. The Supreme Court 
granted the writ and issued its decision in the case on April 29, 2002.
    The Supreme Court affirmed the Ninth Circuit's decision that 
section 503A of the FD&C Act was invalid in its entirety because it 
contained unconstitutional restrictions on commercial speech (i.e., 
prohibitions on soliciting prescriptions for and advertising specific 
compounded drugs). The Court did not rule on, and therefore left in 
place, the Ninth Circuit's holding that the unconstitutional 
restrictions on commercial speech could not be severed from the rest of 
section 503A. Accordingly, all of section 503A is now invalid.

Compliance Policy Guide of May 2002

    Once the statutorily created exemptions from the new drug, 
misbranding and adequate directions for use requirements were deemed 
invalid for compounded drugs, FDA determined that it needed to issue 
guidance to the compounding industry on what factors the Agency would 
consider in exercising its enforcement discretion in this area under 
current law. In May 2002, FDA issued a Guidance for Industry--Pharmacy 
Compounding--Compliance Policy Guide, which is based on the CPG of 
March 1992.
    The guidance states that FDA recognizes that pharmacists 
traditionally have extemporaneously compounded and manipulated 
reasonable quantities of drugs upon receipt of a valid prescription for 
an individually identified patient from a licensed practitioner. This 
traditional compounding activity is not the subject of the guidance.
    However, when the scope and nature of a pharmacy's activity raise 
the kinds of concerns normally associated with a drug manufacturer and 
result in significant violations of the new drug, adulteration, or 
misbranding provisions of the FD&C Act, the guidance states that FDA 
will consider enforcement action. In determining whether to initiate 
such an action, the guidance states that the Agency will consider 
whether the pharmacy engages in any of the following acts:
    1. Compounding, except in very limited quantities, of drugs in 
anticipation of receiving prescriptions in relation to the amounts of 
drugs compounded after receiving valid prescriptions.
    2. Distributing inordinate amounts of compounded products out of 
State.
    3. Compounding finished drugs from bulk active ingredients that are 
not components of FDA-approved drugs without an FDA sanctioned 
investigational new drug application (IND) that is in effect in 
accordance with section 505(1) of the Act and 21 CFR 312.
    4. 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.
    5. Receiving, storing, or using drug components not guaranteed or 
otherwise determined to meet official compendial (USP monograph) 
requirements.
    6. Using commercial scale manufacturing or testing equipment for 
compounding drug products.
    7. Compounding drugs for third parties who resell to individual 
patients or offering compounded drug products at wholesale to other 
State-Iicensed persons or commercial entities for resale.
    8. 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.
    9. Failing to operate in conformance with applicable State law 
regulating the practice of pharmacy.
    The above list of factors is not intended to be exhaustive, as 
other factors may be appropriate for consideration in a particular 
case.
    Although the CPG was immediately effective when it was issued in 
May 2002, the Agency indicated it would be interested in receiving 
public comments on the guide. FDA received public comments and is in 
the process of revising the CPG in response to the comments. The Agency 
plans to publish a new draft of the CPG and will seek comments on it.

             LIMITED FDA SURVEY OF COMPOUNDED DRUG PRODUCTS

    Since 1990, FDA has become aware of more than 55 product quality 
problems associated with compounded products, many of which resulted in 
product recalls. In 2001, FDA's Division of Prescription Drug 
Compliance and Surveillance conducted a limited survey of drugs 
compounded by 12 compounding pharmacies that allowed compounded 
products to be ordered over the Internet. The goal of the survey was to 
gather information on the quality, purity, and potency of compounded 
drug products in the marketplace. The compounded products surveyed were 
selected from a cross-section of commonly compounded dosage forms based 
on FDA's assessment of the potential health risks resulting from 
improper compounding. FDA collected the samples via air mail order in 
the same manner a consumer would order the products over the Internet.
    The 29 products sampled included hormonal products, antibiotics, 
steroids, anesthetics and drugs to treat glaucoma, asthma, iron 
deficiency anemia, and erectile dysfunction. Five different dosage 
forms (i.e., sterile injectables, ophthalmic products, pellet implants, 
inhalation products, and oral dosage forms) were sampled.
    Ten (34 percent) of the 29 sampled products failed one or more 
standard quality tests performed. Nine with failing analytical results 
failed assay (potency) testing, with a range of 59 percent to 89 
percent of expected potency.
    Each year, FDA routinely samples drug products made by commercial 
manufacturers and analyzes these samples in FDA laboratories. More than 
3,000 products from commercial manufacturers have been sampled and 
analyzed by FDA since fiscal year 1996. The analytical testing failure 
rate for commercially produced samples has been less than 2 percent for 
all tests, but for assay (potency) tests there were 4 failures out of 
3,000. Compared to the 2 percent failure rate, the percentage of 
sampled compounded products failing analytical testing in our 2001 
survey (34 percent) was higher than expected. Although the 2001 survey 
had several limitations including a small sample size, it provided 
valuable preliminary information on the quality of selected compounded 
drug products currently marketed. We believe that these laboratory 
results need to be interpreted cautiously and should not be generalized 
beyond the particular drugs and pharmacies involved. Further, we 
believe that the results call for additional study and consideration by 
FDA, the State regulatory authorities, professional organizations, and 
pharmacies.

                          OUTREACH ACTIVITIES

    FDA has interacted on many occasions with stakeholders involved 
with pharmacy compounding. We have attended the annual meetings of the 
International Academy of Compounding Pharmacists participating on 
panels with representatives of the American Pharmacists Association 
(APhA), NABP, the USP, the National Association of Community 
Pharmacists, and others. In addition, we met separately with many of 
these stakeholders seeking to find common ground in how to approach the 
regulation of pharmacy compounding. We have participated in stakeholder 
meetings sponsored by the USP to address various initiatives including 
the accreditation of pharmacies that compound medications.

                    POSITIVE ACTIONS AND CHALLENGES

    Some of the stakeholder groups with whom we have interacted are 
engaged in activities intended to provide greater confidence in the 
quality of compounded medications. For example, the NABP has a model 
code governing pharmacy compounding that substantially has been adopted 
by 10 States. The model code provides State Boards of Pharmacy with a 
framework for developing requirements for compounding pharmacies. The 
USP has developed a new chapter in the U.S. Pharmacopeia addressing 
sterile drug compounding practices. The chapter sets standards for the 
preparation of sterile compounded drugs. The American Society of 
Health-System Pharmacists also has such guidelines. The APhA, NABP, and 
USP have been discussing the possibility of developing an accreditation 
program that would set standards for and monitor compounding 
pharmacies. All of these activities are positive steps in ensuring that 
pharmacy compounding is done with appropriate protections for patients, 
and we support them.
    FDA recognizes that States have the direct ability to regulate 
pharmacy compounding and direct access to prescription records. 
However, limited State resources and varying standards and regulatory 
requirements are factors that affect the adequacy of State regulation. 
Pharmacy self-inspection is allowed in four States, which consists of 
pharmacist self-evaluation by questionnaire of the pharmacy's 
compliance with laws and regulations. In addition, there is variability 
in commitment to regulate pharmacy compounding among the States. 
Sometimes there is conflict between State Boards of Pharmacy and Health 
Departments based on disparate regulatory philosophies.
    Clearly, when pharmacy compounding more closely approximates 
commercial manufacturing, FDA has an interest in regulating that 
practice as it does all other drug manufacturing. One difficult issue 
is where to draw that line. If the line is to be drawn based on volume, 
how much volume makes a compounder a manufacturer? There are many large 
compounding pharmacies, some of which are exclusively drug compounders. 
Similarly, there are many small drug manufacturers that snake drugs 
under approved new drug or abbreviated new drug applications. Through 
our review of these applications, we ensure that the drugs are safe and 
effective and that the processes by which the drugs are made produce 
consistently high quality products that maintain their safety and 
efficacy throughout their shelf life. This system of evidence-based 
medicine provides public health benefits to American consumers and 
health professionals because patients are able to rely with confidence 
on the medications they take and avoid ineffective therapies or those 
for which the risks do not exceed the benefits.
    It is important to ensure that the production of drugs in pharmacy 
compounding does not undermine the incentives to develop and submit new 
drug applications to FDA with evidence of the safety and efficacy. At 
the same time, we recognize that pharmacy compounding is necessary 
where there is a medical need of a particular patient for a product 
that is not commercially available in an approved form. We must 
exercise our regulatory authority in such a way as to support pharmacy 
compounding that is necessary, while curbing abuses.
    With this in mind, we can describe a few key areas where the Agency 
has taken action and where we believe a Federal role is appropriate:
     First, as a result of FDAMA, we developed a list of drugs 
that were inappropriate for compounding because they have been 
withdrawn from the market for safety reasons. In many cases, FDA 
reviewed the data concerning adverse events from our spontaneous 
reporting system and other databases and determined that the risks for 
these drugs exceeded the benefits for the uses to which they were 
approved. FDA has access to nationwide and global data concerning 
adverse events and we have the expertise to evaluate the risks of a 
therapy in relation to its benefits. Once FDA has determined that the 
risks of a therapy exceed its benefits to the extent that the drug 
should be removed from the market, it would be inappropriate to expose 
patients to the risks of the product by allowing compounding of that 
drug. FDA intends to continue to maintain this list and take action 
against pharmacies that compound unsafe products. Similarly, if FDA has 
specific information about significant potential risks associated with 
compounding a particular drug (e.g., one that was considered for but 
denied FDA approval), FDA may take action against such compounding, 
preferably in support of, or in conjunction with, the State 
authorities. Furthermore, FDA has continuing concerns about 
compounding, without an investigational new drug application in effect 
using ingredients that are ``experimental'' or not components of FDA 
approved drugs.
     Second, FDA believes it is in the best position to address 
the quality of bulk drug substances used in compounding. Many of these 
drugs are imported from abroad and individual States are unlikely to 
have the ability to conduct inspections of foreign producers and ensure 
the quality of these active ingredients in compounded products. As 
addressed in the CPG, drugs should not be compounded using active 
ingredients that were manufactured at facilities that are not even 
registered with FDA or that fail to meet accepted USP compendia) 
standards for quality.
     Third, FDA believes it is appropriate for the Agency to 
continue to investigate allegations of poor quality compounded drugs, 
in conjunction with the States, whenever possible. However, we also 
must act without States when State involvement is not forthcoming 
because of resource constraints or for other reasons. For example, an 
Internet or mail order pharmacy might be operating in a State with few 
resources for pharmacy inspections, but shipping poor quality 
compounded products nationwide. In such cases, FDA believes it plays an 
important role in addressing these dangerous practices. FDA believes 
that when issues regarding the quality of compounded drugs are 
significant enough to raise public health issues, FDA should continue 
to play a role in working with the States to address these public 
health matters, and in the event that a State is unwilling or unable to 
join FDA, then the Agency in some cases must be allowed to unilaterally 
protect the public health from compounded drugs that pose unreasonable 
risks.
     Finally, the Agency should be able to determine when a 
pharmacy crosses the line between appropriate pharmacy compounding and 
manufacturing.

                               CONCLUSION

    In summary, FDA welcomes this committee's interest in pharmacy 
compounding and would like to assure the committee that the Agency's 
efforts to address pharmacy compounding issues are designed to balance 
the need to allow legitimate forms of pharmacy compounding with the 
need for Federal oversight when pharmacy compounding threatens to 
compromise public health.
    This concludes my testimony, Mr. Chairman. I will be glad to answer 
any questions you may have.

              Prepared Statement of Steven F. Hotze, M.D.

    Federal intervention into the practice of pharmacy, specifically 
compounding pharmacy, would prove detrimental to the health of 
Americans.
    As a physician who has used compounded pharmacy medications for 
years, and who currently owns a compounding pharmacy, I have a unique 
perspective on the need to insure that compounded drugs are readily 
available to patients who need them. It is common for a doctor to 
determine that prescription drugs off the shelf are not adequate to 
meet the medical needs of an individual patient. This is where 
compounding pharmacy helps insure the individualized treatment that 
patients both need and demand. For this reason, I am somewhat concerned 
that this important sector of medical care is not better represented on 
the formal witness panels today to address more adequately the 
questions you may have.
    The Food, Drug, and Cosmetic Act (FDCA) of 1938 established the 
authority of the Food and Drug Administration (FDA) over the 
pharmaceutical manufacturing of drugs. Pharmacies were specifically 
exempted from FDA regulation and their governance was relegated to the 
various State boards of pharmacy. At that time, all pharmacies 
practiced the compounding of medications. Pharmacies, including 
compounding pharmacies, should remain under the regulation of the 
States.
    This hearing is the result of public outcry to the actions of a 
Kansas City pharmacist who violated State laws in reconstituting 
chemotherapeutic medications, a task which is not a compounding 
pharmacy procedure. His criminal actions were uncovered. He was 
stripped of his license and is currently serving time in prison. This 
isolated incidence had nothing to do with the practice of compounding 
pharmacy and does not provide a compelling argument for a Federal 
investigation, much less Federal intervention into the practice of 
pharmacy.
    The issue is really philosophical. The FDA and its supporters 
believe that the Federal Government can ensure the public's health 
safety by acquiring jurisdictional authority over pharmacies, 
specifically compounding pharmacies. This flies in the face of the 
facts. According to an article published in the July 26, 2000 issue of 
the Journal of the American Medical Association, 106,000 individuals 
die each year in hospitals due to non-error, adverse effects of FDA 
approved, doctor prescribed medication. Fully 225,000 individuals die 
annually due to iatrogenic, treatment based, causes. This is the 3rd 
leading cause of death in America. Millions more suffer severe side 
effects from medical treatment. In these cases, the adage, that the 
``treatment is worse than the disease'', rings true.
    May I recommend that this Senate committee investigate the role of 
FDA approved drugs and iatrogenic causes leading to the deaths of 
225,000 Americans annually.
    There are others, who believe that most pharmacists, like others in 
business, realize that their self-interest is best served by operating 
their enterprises with the interests of their customers in mind. To do 
otherwise would result in a loss of business. State laws address the 
issue of fraudulent and dangerous business practices. State boards of 
pharmacy establish guidelines for safely conducting pharmacy practices 
and procedures. Ultimately, the pharmacist is responsible for his or 
her own behavior. Regulatory agencies cannot prevent an individual from 
committing a criminal act. However, regulatory agencies can, and often 
do, adversely affect the efficient, safe and productive practice of 
businesses.
    Pharmacists who specialize in compounding prepare customized 
medications in accordance with a doctor's prescription in order to meet 
the need of an individual patient. These medications, which are not 
produced by pharmaceutical companies, are prepared using FDA approved 
bulk products and are provided to meet specific patient requirements. 
Through clinical experience, a physician may decide to use alternative 
delivery systems for a specific medication, e.g., suppositories, 
creams, gels, liquids or capsules. Some compounded medications are not 
commercially available in the strength requested by the physician. In 
other cases, a patient may be allergic to the dyes, additives or 
excipients found in drugs produced by pharmaceutical manufacturers. In 
this case the solution would be the preparation of a compounded product 
without the allergy causing ingredients. Compounding pharmacy allows 
physicians and pharmacists to provide patients with alternative 
therapies otherwise not commercially available.
    The recent results of the Women's Health Initiative study 
demonstrate the danger of drug company, FDA-approved, counterfeit 
hormones. Compounding pharmacies are able to offer physicians a 
natural, safe and effective treatment for women in midlife. That 
treatment is biologically identical hormone therapy that provides women 
with the same hormones that their bodies used to produce or currently 
produce in less than adequate amounts. With the baby boomer population 
aging, there are millions upon millions of women who would benefit from 
the replenishment of these hormones, enabling them to obtain and 
maintain health and wellness, naturally.
    This is what concerns me about this hearing. The FDA has openly 
expressed its goal to regulate compounding pharmacies as manufacturers. 
At the June 2003 meeting of the International Academy of Compounding 
Pharmacists, two FDA regulators, Jane Axelrad and David Horowitz, 
clearly stated their intent to reclassify compounding pharmacies as 
manufacturers based upon the volume of prescriptions compounded. If 
this were to be implemented, then the FDA would require new drug 
applications (NDA) for compounded products in those pharmacies which 
exceeded their volume guidelines. To acquire an NDA costs hundreds of 
millions of dollars per product and the process takes 8-10 years. If 
the FDA were to be given regulatory power over compounding pharmacies, 
then they would end up classifying many large compounding pharmacies as 
manufacturers, thus driving them out of business. This would 
drastically limit the availability and affordability of compounded 
products to the public. More specifically, this would have a tragic 
effect on women in midlife who need biologically identical hormone 
therapy.
    In the broad scheme of things, compounding pharmacies are part of 
the solution in providing needed care to millions of patients. While 
regulation at the State level can be improved, we need not to lose 
sight of the fact that over regulation of the compounding pharmacy 
profession could result in the denial of the very care and well being 
of our citizens of which this committee is vitally interested.
    In summary, pharmacies, including compounding pharmacies, should 
continue to be regulated by their State boards of pharmacy.
    Thank you for giving me the privilege of presenting my written 
testimony on behalf of compounding pharmacies.

  Prepared Statement of Sarah L. Sellers, PharmD MPH Candidate, Johns 
               Hopkins Bloomberg School of Public Health

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to speak with you today about the serious public health 
implications of pharmacy compounding--a topic which has been the focus 
of my professional practice and research for the past 8 years.
    I am a licensed pharmacist with a specialization in sterile 
compounding. I have served as a member of the FDA's Advisory Committee 
on Pharmacy Compounding--a committee established to assist with the 
implementation of Federal pharmacy compounding regulations under the 
1997 FDA Modernization Act. I am currently completing my Master of 
Public Health degree at Johns Hopkins Bloomberg School of Public 
Health, with a focus on pharmacoepidemiology and drug safety within the 
Department of Health Policy and Management.
    More recently, I have established a small non-profit organization 
to study, analyze and communicate drug safety issues to concerned 
stakeholders.
    I have survived two cancers and have lived with chronic rheumatic 
disease since my early childhood. I have come to rely on the 
exceptional quality of federally regulated pharmaceuticals from both a 
personal and professional perspective--the basic assurances to public 
health and safety provided by the Federal Food, Drug, and Cosmetic Act, 
that all citizens rely on, should not be undermined.
    Over a decade ago, I began my career as a community pharmacist with 
a homecare pharmacy that provided injections to patients for 
administration in their homes. The pharmacy was making purportedly 
sterile injections from scratch using non-sterile ingredients. When I 
asked permission to order and substitute FDA-approved products because 
of safety concerns, I was cautioned that it would be less profitable 
for the pharmacy. At that time, a sterile drug for continuous 
intraspinal infusion had an acquisition cost of approximately $400.00. 
However, using non-sterile, raw chemical ingredients the drug could be 
made for less than $10.00. Although Medicare reimbursed close to 
$1,000.00 for the drug at the time under Medicare Part B, profits could 
be maximized by making the drugs from scratch. The compounded dosage 
forms did not undergo a validated sterilization procedure, were not 
tested for potency or purity, and the risks of using such a product 
were not identified, analyzed or communicated to physicians or their 
patients. This emerging practice concerned me for both medical and 
ethical reasons--patients were unknowingly exposed to drugs that did 
not meet strict Federal standards for safety and efficacy, 
manufacturing or labeling to ensure safe use. I quickly learned that my 
experience was not unique--the practice was becoming ``standard of 
care'' in certain medical settings.
    In 1998 I was appointed to the FDA's Advisory Committee on Pharmacy 
Compounding. During the implementation process, a group of compounding 
pharmacies challenged advertising restrictions in the new law, which 
led to a U.S. Supreme Court ruling that ultimately resulted in the 
nullification of Section 503a of FDA Modernization Act and the return 
of pre-FDAMA enforcement discretion on the part of the FDA. The absence 
of Federal compounding regulations has created vulnerabilities in our 
gold standard system for pharmaceutical regulation. Currently, 
compounding regulations are disparate and minimally enforced at the 
State level. Moreover, FDA simply does not have the information or 
resources to track down violative pharmacy compounding operations.

What is Traditional Pharmacy Compounding?

    On a practical level, pharmacists are trained during their tenure 
in pharmacy school to convert tablets to liquids and to make topical 
formulations to meet exceptional medical needs that cannot be met with 
approved products. For instance, a 2-year-old transplant patient may 
require an anti-rejection medication that is only available in tablet 
form. In such a case, the tablet may be reformulated into an oral 
liquid for administration--such a medication would be considered life-
sustaining and the expected benefits would likely outweigh risks 
associated with the use of an unlicensed product.

What is Contemporary Pharmacy Compounding?

    Contemporary pharmacy compounding represents an emerging, 
substandard drug industry that exploits the traditional role of 
compounding by taking advantage of current loopholes in the law and 
resource constraints with regulators. The industry is supported and 
driven by profiteering distributors that supply chemicals (including 
active and inactive ingredients), equipment (including industrial size 
mixers, capsule and tablet machines), recipes, training and marketing 
tools for compounding pharmacists. This has resulted in the emergence 
and growth of a substandard industry of unregulated drug manufacturing, 
marketing, promotion and sales throughout the U.S. Recently, Reuters 
Health reported an estimate of 3,000-4,000 compounding pharmacies 
nationwide \2\--some of which dispense over 100 unregulated, compounded 
prescriptions per day. In some instances, compounding pharmacies have 
begun to attempt the tactics of mainstream drug manufacturers, and are 
seeking to employ sales representatives that would detail doctors about 
the availability and supposed benefits of their products.

What Are the Benefits and Risks of Contemporary Pharmacy Compounding?

    The claimed benefits of contemporary compounding include creating 
patient specific and individualized dosage forms to meet any dosing 
requirement; providing varying strengths, sizes and shapes, dye-free, 
preservative free, and lactose free dosage forms; providing custom 
flavoring, and the provision of unavailable, unformulated and 
discontinued items; and providing increases in profitability for 
pharmacies and medical practices. Such benefits are broadly marketed 
through advertisements over the Internet, directly to physicians 
through professional detailing, and through the media. But such 
advertisements do not meet Federal requirements for presenting balanced 
information on risks. Pharmacists, through such advertisements, misuse 
the public trust in pharmacy and place patients and prescribers at a 
significant disadvantage for selecting safe and effective treatments. 
Physicians have come to expect products to be uniform in quality and 
may not appreciate the risks that are enhanced or created with 
compounded agents.\3\
    The full range of risks associated with the use of compounded drugs 
have not been identified, analyzed or communicated to patients or 
prescribers. Section 502(n) of the FD&C Act requires that a 
manufacturer include a summary of risks in advertising--all materials 
and statements, including press materials, oral statements, and sales 
materials for managed care organizations and hospitals must meet FDA 
requirements for truthfulness, fair balance and full disclosure.\6\ 
Compounded drugs do not meet such requirements--promotional information 
for drugs made by pharmacists is devoid of risk information.
    The true benefits of contemporary compounding may be financial. In 
a recent Medicare fraud case involving the mass manufacturing of 
adulterated and misbranded respiratory drugs an underlying reason for 
compounding was explained by a witness who said ``it is cheaper to make 
a compound solution and sell this medication than to buy an industrial 
product from an authorized supplier, it is much more expensive, so the 
profit you are going to obtain with a brand is much less than the one 
you are going to obtain with compounding. That is the reason for 
compounding, it is only profit.'' \7\ In an article examining the 
acquisition cost of respiratory drugs which appeared in the homecare 
trade journal HME News, a compounding supplier noted that ``providers, 
especially small ones, will risk compounding before losing that kind of 
money'' and further acknowledged that ``it's illegal, but profitability 
often overrules what's legal and illegal.'' \8\ The article further 
notes that compounding would be difficult to detect because of how 
Medicare is billed ``Hence, there's no way for the FDA to know whether 
a provider is using the premixed drug or compounding the two drugs 
themselves.'' The financial incentives to compound drugs raise serious 
concerns regarding conflict of interest for compounding pharmacists who 
promote their use. If physician self-referral is constrained under the 
Stark laws, so too should compounding pharmacist self referral be 
penalized and restrained. In a debate appearing in the Journal of the 
American Academy of Child and Adolescent Psychiatry, physicians 
disputed the rationale for compounded hormone treatments for use in 
adolescent patients and questioned the proprietary interests of 
compounding pharmacists who promoted their use.\9\ \10\ \11\

What Are the Public Health Implications of Contemporary 
                    PharmacyCompounding?

    In 1996, former FDA Commissioner David Kessler, MD warned that 
exempting pharmacy compounding from provisions of the Food, Drug, and 
Cosmetic Act would create a shadow industry of unapproved drug 
manufacturing thus undermining the FDA's authority to protect the 
public from ineffective or unsafe products.\12\
    Compounded drugs are produced outside our Federal regulatory 
framework and carry risks of subpotency, superpotency and/or 
contamination. Complete and unbiased information on the size and scope 
of the industry has not been generated--we cannot estimate with 
accuracy the exposures of patients to unapproved, pharmacy made drugs 
and the associated effects on morbidity and mortality.
    The ability of States to adequately protect the public from 
substandard drug exposure may be confounded by discrepant, over-lapping 
and in some cases non-existent State regulations, a lack of resources 
and lack of will. Professional standards for sterile compounding have 
not been consistently applied,\14\ \15\ and newly introduced, 
enforceable standards issued by the United States Pharmacopeia are 
optional for State boards to adopt and enforce.\15\

Pharmacists Are Drug Experts, Not Manufacturing Experts
    A recent letter to the American Journal of Health System 
Pharmacists noted that pharmacy curricula do not give attention to 
sterile compounding procedures, and that this deficit is more 
pronounced in the U.S. than in Europe.\16\ Pharmacists who compound 
drugs may not understand the complex system of drug regulations that 
provide public health protections. For instance, a pharmacist may not 
know that a raw bulk chemical that has been manufactured for use in an 
oral dosage form may not meet specifications for use by the intravenous 
or intraspinal route of administration. Pharmacists may generalize that 
a particular filter will sterilize any solution, independent of the 
properties of the solution or potential adulterants present. John 
Perrin Ph.D., professor emeritus from the University of Florida 
confirms that ``Technology has been downplayed in pharmacy schools for 
the last 25 years; we are not training pharmacists to make value 
judgments on what can and cannot be compounded and yet compounding is 
the fastest growing branch of the profession.'' \17\ Indeed, a 
compounding pharmacy advertises ``No longer are you limited to 
`standard' medicine. Your choices now include new routes of 
administration, dosage strengths, pharmaceutical combinations and the 
ability to develop new, potentially helpful compounds. Medicine can be 
as large as your imagination.'' \18\ In other words, if a physician can 
imagine it, a compounding pharmacist can make it--without prior 
approval for safety or efficacy, without adherence to current Good 
Manufacturing Practices and without adhering to labeling, marketing or 
advertising requirements.

Analyses of Compounded Drugs
    How well do pharmacists exact specific dosages? A recent study of 
prescription dispensing errors found that pharmacy compounding errors 
had significantly more serious outcomes and that children are 
``particularly at risk because of the increased potential for error in 
the preparation and use of liquids.'' \19\ Such concerns have been 
heightened by a recent FDA survey of compounded drugs which found a 34 
percent failure rate for drugs analyzed for potency and/or purity--of 
those drugs that failed potency tests, more than half contained less 
than 70 percent of their labeled content.\20\ An analysis of a 
pharmacy-compounded remedy for treating ulcer disease concluded that 
the mixture was not stable and would undergo hydrolysis rendering it 
partially inactive immediately after mixing.\21\ Other published 
reports and studies have found super and sub-potency, unacceptable 
levels of microbial contamination and the presence of impurities in 
pharmacy-compounded drug products.\22\ \23\ Of great concern, as of 
today over a million doses of pharmacy-compounded drug products 
distributed throughout the U.S. have been recalled for bacterial or 
fungal contamination.\24\ \25\ These risks of pathologic contamination 
are particularly disturbing when one considers that the compounding 
industry targets respiratory and parenteral routes of administration, 
and particularly to the home care market which largely serves a 
vulnerable and immunocompromised elderly population.

Quality of Chemicals Used in Compounding
    The quality of raw bulk chemicals used in compounding is suspect. 
Pharmacists generally do not have the ability to test chemicals for 
identity, potency, purity and/or contamination. Because the 1987 
Prescription Drug Marketing Act's Pedigree Requirements have not been 
implemented, the ability to trace the raw chemicals used in compounding 
back to original manufacturers for information on quality, packaging, 
storage and shipment conditions is demonstrably difficult.
    A 2000 hearing before the House E&C Committee chaired by the 
Honorable Fred Upton cited compounding pharmacies as a primary route of 
entry for counterfeit bulk drugs: ``Lured by high prices and potential 
profits in the U.S., counterfeit bulks can get into our prescription 
drugs in several ways: (1) as imported ingredients to U.S. 
manufacturers; (2) as imported ingredients to pharmaceutical 
compounders; and (3) as source ingredients for Internet pharmacies 
marketing to the U.S. The counterfeiters use sophisticated methods such 
as preparing false labeling, containers, seals and certificates of 
analysis, or using a manufacturing process that differs from the filed 
manufacturing process.'' \26\ This problem has also been recognized by 
authorities in Canada--a notice was recently sent to pharmacies 
alerting pharmacists that non-compliant, raw bulk chemicals were being 
offered for sale to pharmacies for compounding.\27\ A letter from the 
Commerce Committee requesting information from former FDA Commissioner 
Jane Henney, MD which preceded the hearing, cautioned that counterfeit 
bulk drugs: ``pose a real or potential health hazard because their 
manufacturer is often unknown'' \28\ and that the ``impurity profile is 
[also] unknown, and the age, the storage, the manufacturing 
environment, or the synthesis of the product cannot be determined'' 
\28\ creating a situation where ``no amount of finished product testing 
can build quality into the product.''\28\ In the U.S., although 
surveillance is limited, large quantities of chemicals for use in 
compounding have been recalled because bulk drug packages contained the 
wrong chemical ingredient, and for potential contamination or failed 
purity tests.\29\
    Compounding pharmacists have also expressed concerns regarding the 
quality of bulk chemicals available for compounding. A Kansas City, 
Missouri compounding pharmacy's website notes that ``inexpensive 
chemicals that are past or near expiration, with no independent 
verification, are available, but unacceptable to O'Brien 
Pharmacy.''\30\ The same pharmacy however, has marketed a narcotic 
morphine sulfate injection for intraspinal administration that exceeds 
the physical solubility for the chemical under normal storage 
conditions.\31\

At Risk Populations
    Certain patient populations may be exposed to unapproved, 
compounded drugs more than others. Marketing and advertising for 
compounded drugs targets special populations including pediatric 
patients for which reflavoring is often suggested to make medicines 
more palatable, respiratory care patients who require treatments with 
nebulizers, elderly patients and hospice patients who may require 
alternate dosage forms, women to whom specialized hormone treatments 
are marketed, and men for sexual dysfunction treatments. Compounded 
drugs are also marketed directly to physicians' offices to improve 
profit margins for providing in-office injections.
    Much attention has been focused on the long term safety of hormone 
replacement treatments--recent epidemiologic studies have found 
increased risks for certain cancers. This new risk information is now 
communicated to prescribers and patients for weighing therapeutic 
options and in order to manage risks. Compounding pharmacies are using 
this new information to promote alternative, unapproved hormone 
treatments--a compounding pharmacy claimed: ``Women are no longer 
willing to accept the risks associated with synthetic hormones, and are 
searching for safer alternatives. An estimated two million women are 
now benefiting from natural `plant-derived bio-identical' estrogens and 
progesterone.'' \32\ There is no scientific substantiation for such 
claims. In fact, the hormone treatments marketed by compounding 
pharmacies may share similar or even greater risks--women are 
unknowingly receiving unproven, experimental therapies that may harm 
them in the absence of informed consent.

Adverse Events
    The use of unregulated, pharmacy-compounded dosage forms has been 
associated with morbidity and mortality throughout the nation:
     An outbreak of bacterial meningitis in California was 
associated with compounded spinal injections--three patients died and 
eight were hospitalized.
     CDC warned physicians and health systems to consider 
substandard, compounded drug exposures in cases of unexplained 
infections following intraspinal or intra-articular injections after an 
outbreak of fungal meningitis was associated with compounded drugs--CDC 
further cautioned that health systems may not be aware that they are 
purchasing compounded drugs, thus actually requiring vigilance to 
prevent compounded drugs from inadvertently entering supply chains.
     Compounded spinal injections were associated with 
neurologic complications including paralysis in an epidemiologic cohort 
study of patients who received unapproved, pharmacy-compounded 
continuous intrathecal infusions.\23\
     Three cases of poisonings in children have been associated 
with unapproved drugs compounded for Attention Deficit Hyperactivity 
Disorder.\35\ \36\
     A 5-year-old died as a direct result of receiving an 
unapproved compounded drug for bed-wetting.\37\
     Two patients developed septicemia and were hospitalized 
after receiving compounded vitamin injections contaminated with 
bacteria.\38\
     Three patients were hospitalized in critical condition 
after receiving compounded thyroid remedies.\39\
     A cancer patient died after receiving a compounded 
injection of herbal tea.\40\
     A patient became blind after using compounded eye-drops 
that were not sterile.\20\
     A study comparing a compounded prostaglandin dosage form 
with a licensed product found a higher incidence of cesarean delivery 
associated with the compounded drug.\41\
     An estimated 4,000 cancer patients received diluted, sub-
therapeutic chemotherapeutic agents compounded in Missouri.\31\
    The above mentioned cases are considered the ``tip of the iceberg'' 
by public health experts because pharmacists, unlike licensed 
manufacturers, are not required to detect or report problems associated 
with compounded drugs they make. These problems have come to the 
attention of the public only when the numbers of persons affected by a 
single incident or the severity of an incident have been significant 
enough to gain the attention of the media--not through surveillance and 
vigilance.

Surveillance
    Compounded drugs are hard to trace making it difficult to measure 
or assess overall efficacy and safety. A 1998 report in Drug Topics 
examined 285 clonidine poisonings that were reported to the Kentucky 
Regional Poison Center during a 6-year period. Clonidine was primarily 
prescribed for ADHD with the largest demographic age group of 1-3 years 
(99 children).\42\ Because a pediatric dosage form for clonidine did 
not exist, much of what was being administered was likely compounded. 
Of serious concern, pharmacy compounded, sustained-release clonidine 
dosage forms have been marketed to prescribers--a physician's practical 
guide states: ``it has been recommended to substitute the usual 
nighttime clonidine dosing with a pharmacy-compounded clonidine 
sustained release form, made by compounding clonidine with a hydroxyl-
propylmethylcellulose extended-release polymer or with guanfacine'' 
\43\ The erratic and unpredictable release from a pharmacy-compounded, 
purportedly sustained-release dosage form or from simple calculation 
errors may contribute to observed cases of clonidine toxicity--such 
dosage forms have not been tested to confirm extended-release and 
pharmacokinetic profiles. Three cases appearing in the medical 
literature have associated pharmacy-compounded clonidine preparations 
with clonidine poisonings in children,\35\ \36\ but such associations 
are difficult to make without adequate surveillance.

Cost

    Pharmacists make more money when they dispense unapproved, 
compounded formulations.\44\ The average gross profit for a compounded 
prescription is estimated at $31.50 based on 1998 figures. According to 
Thomas Kaye RPh, MBA with Blue Cross Blue Shield of Oklahoma, the 
frequency of prescribing and reimbursement claims for compounded drugs 
has been increasing for many plans in recent years--he cautions that 
incidents associated with the use of such unapproved products ``add to 
overall patient cost, as well as morbidity and mortality.''\45\

State Oversight

    State Boards of Pharmacy oversight of pharmacy compounding is 
discrepant and regulations are minimally enforced. While some States 
have adopted compounding rules that provide some public health 
protections, other States permit unrestricted distribution of 
compounded drugs that are not dispensed pursuant to an authorized, 
unsolicited prescription.

New Federal Regulations Are Necessary

    It is ironic that so much concern is currently focused on the 
importation of drugs from other countries that may not match our gold 
standard system of regulation for pharmaceuticals, while we have within 
our own borders a flourishing, unregulated drug industry that 
manufactures, markets, and sells substandard products throughout the 
U.S.
    If we do not act in the interest of public health and safety now, 
the history of substandard drug exposures and the related morbidity and 
mortality that led to the Kefauver-Harris Drug Amendments of 1962 will 
be relived through contemporary pharmacy compounding.

Recommendations To Protect the Public From the Hidden Risks of 
                    Unregulated, Pharmacy Compounded Drugs

    1. Disclosure to prescribers and patients that compounded drugs are 
not FDA-approved and consumers should be advised of alternative FDA 
approved products.
    2. Disclaimer on all compounded drug containers: THIS DRUG HAS NOT 
BEEN TESTED OR REVIEWED BY THE FOOD AND DRUG ADMINISTRATION (FDA) FOR 
SAFETY OR EFFECTIVENESS AND HAS NOT BEEN PRODUCED IN A FACILITY MEETING 
GOOD MANUFACTURING PRACTICES GUIDELINES.
    3. Requirement that prescribers be notified before a compounded 
product is dispensed.
    4. Prohibition against the compounding of drugs too difficult to 
compound for safety reasons.
    5. Strict pedigree requirements for all chemicals used in 
compounding.

Summary of Testimony

    1. Pharmacy-compounded drugs do not meet Federal requirements for 
establishing safety and efficacy (21 U.S.C.  355), for manufacturing 
(21 U.S.C.  351(a)(2)(b)) or labeling for safe use (21 U.S.C.  
352(0(1)).
    2. Accurate, complete and unbiased information about the size and 
scope of the compounding industry in the U.S. is not available.
    3. Federal compounding regulations (1997 FDA Modernization Act 
Section 503a) were nullified through a U.S. Supreme Court ruling in 
2002. Current State compounding regulations are inadequate to protect 
public health and safety and to prevent individual patient exposures to 
unacceptable risks.
    4. Lack of oversight of the compounding industry has created 
avenues to introduce commercial quantities of unapproved drugs into the 
market place through wholesale transactions.\1\
    5. Morbidity and mortality associated with compounded drugs has 
been observed but because pharmacists are not required to detect or 
report problems associated with drugs they compound, the known cases of 
deaths, injuries, exposures and recalls of dangerous products are 
considered ``tip of the iceberg'' by public health officials.\20\ \23\ 
\31\ \33\ \34\ \35\ \36\ \37\ \38\ \39\ \40\ \41\
    6. To address this issue, Senator's Bond and Roberts have offered 
an amendment to the Senate version of the Prescription Drug and 
Medicare Improvement bill (S. 1) to establish an advisory committee 
within the FDA to examine whether patients are receiving necessary, 
safe, and accurate dosages of compounded drugs. This is a critical 
first step in examining the public health risks associated with this 
newly emerging industry.
    7. New Federal legislation for pharmacy compounding is necessary to 
protect patients and preserve the integrity of our Federal system of 
regulation for drug approval, manufacturing, and safety.

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    46. Department of Health and Human Services Food and Drug 
Administration WARNING LETTER to Carneys Drug May 27, 2003.
    47. Department of Health and Human Services Food and Drug 
Administration WARNING LETTER to Med-Mart Pulmonary Services September 
30, 2002.
    48. American Society of Health-System Pharmacists Board of 
Directors. ASHP Report ASHP Guidelines on managing drug product 
shortages. Am J Health-Syst Pharm 2001; 58:14451450.
    49. Harlow S. Missouri officials begin tracking contaminated drug. 
The Kansas City Star March 13, 2003.
    50. Erickson SJ, Duncan A. Clonidine poisoning: an emerging 
problem: epidemiology, clinical features, management and prevention 
strategies. J Paediatr Child Health 1998; 34:280-82.

                Prepared Statement of Daniel A. Herbert

    Good morning. Thank you for the opportunity to appear before you 
today and present the views of the American Pharmacists Association. I 
am Dan Herbert, a pharmacist and the President-elect of APhA. I have 
been in practice for 37 years and currently own three community 
pharmacies in Richmond, Virginia. Founded in 1852 as the American 
Pharmaceutical Association, we are the largest national pharmacist 
organization in the United States, representing more than 53,000 
practicing pharmacists, pharmaceutical scientists, student pharmacists 
and pharmacy technicians. APhA members practice in virtually every area 
of pharmacy practice, including independent and chain community 
pharmacy, hospital pharmacy, nuclear pharmacy, long term care pharmacy, 
home health care and hospice.
    Let me first provide APhA's support of the Committee's goal that 
patients receive safe and effective medications. As pharmacists, we 
rely upon quality products as the first step in our work to help 
patients make the best use of their medications. When providing a 
quality product involves tailoring a medication for an individual 
patient, we use our scientific training and education to compound the 
medication.
    Compounding medications is an important component of pharmacy 
practice-mine and that of my colleagues. While it is challenging to 
quantify the actual number of APhA's members who engage in drug 
compounding activities on a regular basis, virtually all practicing 
pharmacists will be involved with compounding activities at some point 
during their career-and most practitioners engage in some element of 
compounding in each week of practice. APhA has a compelling interest in 
helping pharmacists, in collaboration with practicing physicians, 
compound drug formulations to meet the needs of patients. Our 
compounding activities are a critical component of the American health 
care system, allowing physicians to prescribe medication therapy to 
best meet the needs of their patients.
    My comments today will provide a brief history of pharmacist 
compounding, a description of the important role it plays in our health 
care system, the challenging task of distinguishing between compounding 
and manufacturing, and ways in which we can attempt to appropriately 
protect our patients by improving the quality of practice and 
identifying and stopping ``bad actors''.

       COMPOUNDING: A TRADITIONAL COMPONENT OF PHARMACY PRACTICE

    Compounding is a traditional component of pharmacy practice; only 
the drugs, dosage forms, and equipment or techniques have changed as 
pharmacy practice has advanced. As noted in the Chronicles of Pharmacy, 
``[p]harmacy, or the art of selecting, extracting, preparing and 
compounding medicines from vegetable, animal, and mineral substances, 
is an acquirement that must have been almost as ancient as man himself 
on earth.'' The early practice of pharmacy required the compounding of 
virtually all medications, because there were few, if any, commercially 
available products. The need for compounded products has diminished 
with the founding of pharmaceutical companies, although the need for 
this practice still exists today. Because the preparation of an 
extemporaneous pharmaceutical dosage form is not a trivial exercise, 
our position is that when an FDA-approved, commercially available 
product can meet a patient's needs, it should be employed as the 
preferred course of action. However, when a patient's particular 
situation obviates the use of commercial products, the knowledge and 
skills of a compounding pharmacist can be extremely valuable, even 
lifesaving.
    It is a fundamental responsibility of the pharmacy profession to 
extemporaneously compound quality prescription products for patients 
who have unique medication needs. Through their education and 
licensure, pharmacists assume an ethical obligation to the public to 
maximize the intended benefits of drug therapy while minimizing the 
unintended side effects and adverse reactions. Some states require 
licensed pharmacies to offer compounding services [see 49 Pa. Code ' 
27.18(p)(2) (2003);
    W. Va. Code St. R. ' 15-1-19.4 (2003)]. Compounding enables 
pharmacists to use their knowledge and expertise of medication use to 
produce individualized medications that meet patient needs and improve 
health outcomes. Without compounding, pharmacists and physicians would 
be limited to a ``one size fits all'' strategy, which would have a 
direct, immediate, negative impact on the ability of health care 
providers to provide care to patients.

                COMPOUNDING NECESSARY FOR MANY PATIENTS

    As I stated earlier, it is challenging to quantify the actual 
number of pharmacists who engage in drug compounding activities on a 
regular basis, virtually all practicing pharmacists will be involved 
with compounding activities at some point. The unique knowledge and 
skill set of pharmacists enables them to extemporaneously compound 
medications to individualize patient care through the preparation of 
patient-specific products.
    Compounding allows pharmacists and physicians to address the health 
care needs of patients who do not fall within the range of commercially 
available dosage strength and formulations. Patient needs vary from 
extremely small doses and specific combinations of drugs, to 
preservative-free products, to liquid dosage forms, to delivery systems 
that are not commercially available. In many situations, large-scale 
manufacturers are unable to tailor-make a medication in a cost 
effective manner. Without compounding, many patients would not have 
access to the correct combination of ingredients, the appropriate dose 
and dosage form, or the best delivery system.
    In addition to unique patient needs, manufacturing and market 
limitations may require medications to be compounded. For example, some 
therapies, such as hyaluronidase injection (used as an adjunct to 
ophthalmologic surgery) must be compounded because the therapies 
generate insufficient revenue to pharmaceutical companies to justify 
large-scale manufacturing. Other medications, such as radioactive drugs 
used to diagnose or treat cancers or other diseases, must be compounded 
because they do not have sufficient ``shelf life'' to withstand the 
commercial distribution process and therefore need to be prepared at 
the time of dispensing. And finally, many manufactured ``finished 
pharmaceutical'' products are only ``finished'' in the sense of being 
ready to ship and then store in the pharmacy. These products must still 
be compounded, or in some cases merely reconstituted, by the pharmacist 
to provide a dosage form suitable for a patient's treatment.
    Compounding involves different activities in different pharmacy 
practice settings. It may mean the preparation of oral liquids, 
topicals, or suppositories; the conversion of one dose or dosage form 
into another; the preparation of specific dosage forms from bulk 
chemicals; the preparation of intravenous admixtures, parenteral 
nutrition solutions, or pediatric dosage forms from adult dosage forms; 
the preparation of radioactive isotopes; or the preparation of 
cassettes, syringes, and other devices with drugs for administration in 
the home setting. Examples of some of the most common compounded 
products include lotions, ointments, creams, gels, suppositories, 
intravenously administered fluids and medications, total parenteral 
nutrition products, and oral suspensions.
    Although compounding may be required in any pharmacy practice 
setting and for any type of disease, there are concentrations of 
compounding practice. For example, due to the nature of the care they 
provide, hospital pharmacies have historically had a strong compounding 
component to their practice. And due to the nature of the disease and/
or the patient size or age, compounding frequently occurs for patients 
with cancer, for pediatric care, and for hospice care.
    Compounding in the hospital setting is a vital service that 
addresses the unique needs of patients requiring highly individualized 
medications. The primary compounding activity in hospitals is the 
preparation of intravenous admixtures ranging from simple fluid 
replacement to the delivery of complicated, individualized chemotherapy 
regimens. Because daily intravenous therapy is provided through 
compounding of medications, nearly every person who has ever been 
admitted to a hospital -and those who will be admitted today and likely 
in the future- has received a compounded medication. In fact, the 
immediate availability of extemporaneous compounding by a pharmacist 
provides the hospital physician with literally any form or strength of 
medication needed for a patient's specific needs.
    Cancer patients frequently benefit from compounding pharmacists' 
knowledge and skills. Almost all chemotherapy involves drugs and drug 
combinations that are compounded, or at least reconstituted, by 
pharmacists. It is imperative that a patient receive the correct drug 
dosage based upon the patient's body size, the type of cancer, the size 
and type of tumor, and the clinical condition of the patient including 
their kidney and liver function. This can often only be accomplished by 
using compounded, patient-specific medication preparations.
    The compounding of pediatric dosage forms has also been an area of 
extensive activity, because many drugs used to treat children are only 
available in adult dosage forms. As the Committee is aware, finding the 
right drug, dose and dosage form to treat sick children is a 
complicated task. This Committee has made great strides in establishing 
incentives to improve the utility of manufactured products in treating 
children, but frequently, compounding is the only available avenue to 
achieve the desired clinical outcomes. Commercially manufactured 
products for adult use must be modified and compounded for use in 
children. It has been estimated that more than 40% of doses given in 
pediatric hospitals require compounding to prepare a suitable dosage 
form. Indeed, utilization of compounded medications is essential for 
the provision of medical care to hospitalized children.
    As the Committee is aware, hospice programs provide care for 
patients near the end of their lives who can no longer benefit from 
curative treatment and generally have a life expectancy of six (6) 
months or less. Patients suffering from incurable cancer have very 
special needs. Relief of pain near the end of life is an important 
element of maintaining the dignity and comfort of a dying patient and 
their loved ones. Hospice pharmacists often use compounded medications 
to alleviate pain and to control nausea and vomiting for patients in 
the hospice setting. A problem for many hospice patients is that pain 
medications are not manufactured in the required dosages. If commercial 
products that provide the precise dose(s) required are not available, 
the hospice pharmacist can often remedy the situation by 
extemporaneously preparing an individualized product. Additionally, 
some patients are not physically capable of swallowing the number of 
commercially manufactured tablets or capsules required or cannot take 
medications orally. A pharmacist can address these issues by either 
compounding a stronger product, by transforming tablets or capsules 
into a liquid, or by creating a preparation that can be applied 
topically or delivered rectally.

                     CONTINUOUS QUALITY IMPROVEMENT

    Pharmacy compounding conforming to the highest possible 
professional standards is essential to optimal patient care. But 
maintaining quality and advancing practice requires the profession to 
be vigilant, and continually improve our professional standards and 
regulatory efforts. One question that continues to plague the 
profession and our regulators-the state boards of pharmacy-is how to 
distinguish between compounding and manufacturing; with one practice 
regulated by state boards of pharmacy and the other process, by the 
Food and Drug Administration.
    Compounding has traditionally been characterized by the triad 
relationship of the physician, pharmacist and patient; working together 
to individualize care for maximum patient benefit. Pharmacy compounding 
is performed in response to a prescription from a licensed prescriber, 
or in preparation for a reasonably anticipated prescription, based upon 
prior experience and expected needs of individual patients.
    APhA supports the National Association of Boards of Pharmacy's 
(NABP) definition of compounding, which states:

        Compounding--The preparation, mixing, assembling, packaging, or 
        labeling of a drug or device (i) as the result of a 
        practitioner's Prescription Drug Order or initiative based on 
        the pharmacist/patient/prescriber relationship in the course of 
        professional practice or (ii) for the purpose of, as an 
        incident to research, teaching, or chemical analysis and not 
        for sale or dispensing. Compounding also includes the 
        preparation of drugs and devices in anticipation of 
        Prescription Drug Orders based on routine, regularly observed 
        patterns. [emphasis added] (Good Compounding Practices 
        Applicable to State Licensed Pharmacies, Subpart A. Park Ridge, 
        IL:NABP, 1993.)

    The profession's definition of compounding does not encompass the 
preparation of massive amounts of a drug product with the contemplation 
of distribution to a mass market of unknown users in unknown venues. 
Rather, the definition supports our assertion that the purpose of 
pharmacist compounding is to prepare an individualized drug treatment 
for a patient based on an order from a duly licensed prescriber.
    Manufacturing, on the other hand, is defined by NABP as follows:

        Manufacturing--The production, preparation, propagation, 
        conversion or processing of a Drug or Device, either directly 
        or indirectly, by extraction from substances of natural origin 
        or independently by means of chemical or biological synthesis, 
        and includes any packaging or repackaging of the substance(s) 
        or Labeling or relabeling of its container, and the promotion 
        and marketing of such Drugs or Devices. Manufacturing also 
        includes the preparation and promotion of commercially 
        available products from bulk compound for resale by pharmacies, 
        Practitioners, or other Persons. (Id.)

    As clear as this difference may seem to the profession of pharmacy, 
it has been a difficult distinction to implement because of the 
complexity and range of legitimate compounding activities. In public 
comments, even the Food and Drug Administration has suggested that the 
difference between compounding and manufacturing is better represented 
by the intersection of two jagged jigsaw puzzle pieces rather than a 
straight line.
    The fundamental difference between compounding and manufacturing, 
and the key element in making any such distinction, is the existence of 
a pharmacist/prescriber/patient relationship. This triad should control 
the preparation of a drug product. Furthermore, compounded drugs are 
not for resale, but rather, are personal and responsive to a patient's 
immediate needs. Conversely, drug manufacturers produce batches 
consisting of millions of tablets or capsules at a time for resale, 
while utilizing many personnel and large scale manufacturing equipment, 
without knowledge of the specific patient who will ultimately consume 
them.
    There are numerous factors to consider in distinguishing the FDA-
regulated practice of manufacturing from the state-regulated practice 
of compounding. Such factors-though none is exclusive-include the 
volume of compounding by a particular pharmacist or pharmacy, the 
number of different products being compounded, the scope of the 
pharmacist's and pharmacy's practice, and of course, the presence of 
individual prescriptions for each compounded product.

            ONGOING ACTIVITIES; OPPORTUNITIES FOR THE FUTURE

    As professionals, pharmacists continually strive to provide the 
best patient care possible, including continuous review of practices 
and taking steps to improve medication use and advance patient care. 
While some may assert that little is being done to advance and improve 
pharmacist compounding, they are mistaken. APhA publishes resources for 
pharmacists to improve the practice, including The Art, Science and 
Technology of Pharmaceutical Compounding and Trissel's Stability of 
Compounded Formulations. And I am currently chairing an APhA committee 
setting strategic directions for the profession-including compounding. 
In our year of meetings, we have proposed some steps for advancing 
compounding practice as part of our commitment to providing safe and 
effective pharmaceutical care to the citizens of this country.
    One aspect of our committee's work to date is the preliminary 
categorization of compounding to distinguish the types of compounding a 
pharmacist should be prepared to provide based on our pharmacy 
education and training, from the types of compounding that may require 
enhanced education or perhaps accreditation or certification processes. 
Because compounding encompasses a broad scope of activities-from the 
preparation of rather simple lotions for application to the skin to the 
preparation of radiopharmaceuticals for injection imaging, this 
categorization is important in focusing quality improvement efforts and 
resources. Our committee is also considering a proposal that 
pharmacists identify all compounded products for patients, so that 
patients understand that they will be using a non-commercially 
available product prepared specifically for their needs.
    Other groups are pursuing efforts to improve pharmacy compounding 
practice as well. The United States Pharmaceopeia (USP), the official 
drug standard setting body for our country, has a long history of 
addressing pharmacy compounding, especially in the area of sterile 
preparations. Various state boards of pharmacy are exploring changes in 
statute and regulation to more clearly articulate the boundaries of 
practice for pharmacists in their jurisdiction. In my home state of 
Virginia, legislation passed in the 2003 session made changes to our 
compounding requirements. Specifically, the legislation clarified that 
compounded products be prepared and dispensed pursuant to a 
prescription and in the context of a bona fide practitioner-patient-
pharmacist relationship; or in expectation of receiving a valid 
prescription based on observed prescribing patterns. All compounded 
products must be labeled and include a beyond-use date. In addition, a 
pharmacist is required to maintain and comply with a policy and 
procedure manual if their practice involves compounding products that 
are at high risk for contamination, radiopharmaceuticals, or dose-
critical or specialized preparation dosages.
    And APhA and other representatives of the profession of pharmacy 
are evaluating the issue and proposing solutions as well. In 
collaboration with the National Association of Boards of Pharmacy and 
the United States Pharmacopeia, our groups have recommended exploring 
the value of voluntary programs to improve compounding activity in 
certain categories. For example, should pharmacists engaged in 
compounding complex sterile products-such as those prepared from non-
sterile bulk chemicals-have their pharmacy practice complete a site 
accreditation process to assess the policies and procedures employed? 
Should pharmacists engaged in other complex compounding activities 
complete specific training and education programs, or even an 
individual certification process to demonstrate their knowledge and 
skills? While this work is early in development, we are making progress 
and will continue our work to assure that patients get the compounded 
medications they need, at the level of quality they should expect.
    Improving our efforts to provide quality compounded products will 
require collaborative efforts of consumers, the profession, state 
boards of pharmacy, and the FDA. Each stakeholder has an expertise that 
is essential in assuring the continued availability of this practice 
with the quality patients deserve. Consumers must play a role in all of 
our efforts, as we are pursuing this work for them. The profession must 
take the lead in guiding the regulatory agencies in how to draw the 
line between compounding and manufacturing, and in developing 
guidelines and voluntary accreditation or certification processes to 
demonstrate compliance with those guidelines. The state boards of 
pharmacy, responsible for regulating the profession, should maintain 
their primary regulatory role of pharmacy practice, including 
compounding, and will likely be tasked with new initiatives to enhance 
current regulatory efforts. The FDA has a role in regulating 
manufacturers, as well as defining some broad guidance, such as the 
identification of substances that should not be used in manufacturing 
or compounding because the substances have been withdrawn from the 
market for safety and efficacy concerns. All of these efforts require 
collaboration, coordination, and ongoing communication.
    Through compounding, pharmacists fulfill a legitimate and essential 
need -providing patients with medications tailored to their needs. The 
professional education and training of pharmacists provides the unique 
knowledge and skills necessary to fulfill this health care need. The 
profession continues to research the most stable and appropriate 
mechanisms to produce compounded products, utilizing available and 
emerging technologies. By working together, prescribers and pharmacists 
help patients access otherwise unavailable therapies such as cream for 
breast cancer patients' radiation burns, or anticonvulsants in a 
suppository form when patients' veins are not accessible for injection. 
Without compounding, many physicians, pharmacists and patients would 
lose access to valuable treatments.
    APhA supports the Committee's efforts to discuss this important 
issue. Pharmacist compounding improves patients' lives every day, but 
we must continually improve our practices to provide the best patient 
care. Pharmacists are ready to partner with stakeholders to develop 
effective strategies to improving the quality of compounding practices. 
APhA appreciates the opportunity to share the perspective of 
pharmacists on this issue.

                  Prepared Statement of Kevin Kinkade

    Mr. Chairman, and Members of the Committee: I am pleased to be here 
today to be able to discuss with you the important issues surrounding 
the proper regulation of the role of pharmacists in the areas of 
compounding of pharmaceutical products. As I am sure all of you know, 
the art of compounding has been a traditional part of the practice of 
pharmacy for centuries. In fact, until after World War II when drug 
manufacturing became more prominent, compounding was one of the 
principal practices used to provide needed drugs to patients. While the 
need for compounding of products has changed since then, the importance 
of compounding certain products by prescription is still a very 
important and necessary part of the practice of pharmacy. Many 
physicians and patients across the United States depend on pharmacists 
to compound products that they need. This need may stem from different 
factors such as allergies to a commercial product, availability of the 
needed drug delivery system or the lack of the availability of the drug 
commercially. In any case, present day compounding has taken on a 
larger role through the use of new technologies and in some cases can 
be successful in meeting the special healthcare needs of patients.
    What regulators must realize is that due to the increased practice 
by some pharmacies of compounding medicines and due to the complexity 
of some of these compounds, state law and resources can be challenged. 
State standards for compounding must be maintained as broad enough to 
encompass all areas of compounding that can occur yet also remain 
specific as to what requirements must be met in order to ensure safe 
and effective products are always provided to consumers.

                       MISSOURI BOARD OF PHARMACY

    The board of pharmacy is comprised of seven members. Five members 
are full time practicing pharmacists from various practice settings 
within the state. One member, by law, must be a full time pharmacist 
employed in an institutional setting such as a hospital or long term 
care facility. One member is a consumer with no ties to the 
pharmaceutical industry. The board licenses and regulates pharmacists, 
pharmacies, drug distributors (wholesalers, manufacturers) and 
registers technicians. The field staff consists of seven inspectors who 
are all licensed pharmacists. The executive director, who is also a 
licensed pharmacist, is responsible for the operation of the board 
which includes the execution and management of all policy decisions 
made by the board. The practice act for pharmacy in Missouri is Chapter 
338 RSMo.

               MISSOURI REGULATIONS GOVERNING COMPOUNDING

    The Board of Pharmacy of the state of Missouri has regulated and 
enforced standards for the compounding of drugs through the 
promulgation of rules since their effective date of February of 1993 
for sterile pharmaceuticals (4CSR 220-2.200) and April of 1996 for 
general compounding practices (4CSR 220-2.400). A need for such 
regulations was observed by the board due to 1) an increase in the 
number of pharmacies that were engaging in various forms of compounding 
which translated into an increase in the number of prescriptions being 
written and dispensed for such products and 2) the complexity of some 
of the compounded products and the concern for competent practices and 
standardization of formulas and procedures in pharmacies.
    Several issues have warranted that the board review present 
standards again. The Robert Courtney case which was a criminal case of 
diluting compounded products for profit made headlines in Kansas City 
and all over the nation and had consumers, physicians and regulators 
wondering about the safety of the drug distribution system. While this 
case received tremendous publicity, it should not be considered the 
driving force that caused the board to change existing rules on 
compounding. Working on a major overhaul of the rules was already being 
considered. Proposals that had been either drafted or finalized by 
national organizations such as the United States Pharmacopoeia (Chapter 
797) and the American Society of Health System Pharmacists were 
reviewed. Concerns over the competency of personnel preparing 
compounded products as well as adequate quality assurance measures 
within compounding practices was of chief concern. In addition, there 
was observed an increase in inter-state marketing and selling of 
compounded products by some pharmacies which seemed to border on 
manufacturing practices that would fall within the federal food, drug 
and cosmetic laws.
    The standards for general compounding practices (4 CSR 220-400) 
were amended to include stricter definitions to better differentiate 
between the practice of compounding vs. manufacturing. Record 
requirements for compounded products were updated to include methods 
for compounding of the particular product and to track the source, lot 
number and the beyond use date of each drug product/ingredient used. A 
new section on the management of compounding was added that includes 
requirements for ensuring that products are pure and must be 
individually inspected before release to a patient. Pharmacies must 
also now have in place, a drug monitoring program that will evaluate 
compounding services through the monitoring of adverse reaction 
reports, infection rates, incidence of recalls and the tracking of 
complaints from prescribers and consumers. Recalls must be initiated 
when a product is deemed to be misbranded or adulterated. Prescribers 
of the product must be notified along with adequate information to take 
any corrective actions necessary. Patients must be notified when the 
recalled product could present a danger to patient health or safety. 
The board of pharmacy must be notified in the case of all recalls 
within three business days.
    Standards for sterile product compounding were much more sweeping 
and required that the present rule be rescinded and a new, updated rule 
be promulgated in its place. Due to the complex and, in some cases, 
costly changes that the rule will require pharmacies to undergo, the 
effective date for compliance was selected as July 1st 2004. Strict 
definitions governing the equipment as well as the environment that 
such compounds are made in will require any pharmacy attempting to mix 
or create sterile compounds adhere to the highest standards of practice 
available in the present marketplace. The type of product produced as 
well as the storage time will govern the type of quality assurance 
procedures (process validation and testing of product) that must be 
included with every batch of product produced. Products that are 
compounded and considered to be of a low ``risk'' potential for adverse 
or untoward effects will require process validation. Those products 
considered to have a high risk potential in addition to process 
validation will need to be quarantined and tested by the pharmacy for 
sterility, pyrogenicity and potency. Examples of such products could 
include ophthalmic preparations and cardioplegic solutions. Depending 
on the expected shelf life of a product, pharmacies will have to 
arrange for an instrumental analysis of a product for a guarantee of 
potency.

        MISSOURI TO BEGIN RANDOM TESTING OF COMPOUNDED PRODUCTS

    Missouri has experienced several episodes of serious compounding 
misfortunes. As noted previously, the Robert Courtney case was of 
criminal conduct by one pharmacist to intentionally dilute compounded 
products that brought serious harm to cancer patients. Such conduct was 
blatant and willful and is, as far as the profession of pharmacy is 
aware, the first case of its kind. Even so, state agencies responsible 
for the protection of consumers must be willing to consider changes in 
how standards are derived and enforced. In cases such as Courtney's, it 
is doubtful that any kind of state or federal inspection as we know 
today would uncover this type of criminal conduct. No amount of record 
reviews, inventory counts and reviews or equipment analysis would 
provide information that would lead to a discovery of this type of 
criminal conduct. Audits of drug inventories vs. usage have been 
suggested by some. However, the time and effort to audit the number of 
drugs in most pharmacies is simply not within the resources of any 
state or federal program.
    This is where an idea for a system of randomized quality assurance 
can be of use. This past session of the Missouri legislature saw tight 
budgets and withholding of portions of agency appropriations in order 
to meet a constitutional requirement for a balanced budget. In this 
backdrop, the board was able to secure several areas of newly funded 
items, one of which, were funds for the testing of drug products that 
are compounded by state licensed pharmacies. Funding of approximately 
$159,000 was secured for this purpose. Such funds became available to 
the board on July 1st of this year.
    Missouri law requires a bidding process to be completed in order to 
award an exclusive contract to a laboratory for the testing of 
compounds. Both sterile and non-sterile products will be tested for 
potency. Sterile products will also be tested for sterility and 
pyrogencicity.
    While the amount of funds appropriated will not allow for 
consistent testing of the multitude of all compounded products provided 
to consumers, it will provide for randomized testing of products to 1) 
establish the level of competent practice patterns within a pharmacy or 
with a specific product class across a number of pharmacies and 2) in 
the remote chance that any pharmacist or pharmacy operation would 
contemplate a fraud on consumers, the randomization of the testing 
program would help dissuade such activities.
    Funds from the appropriation will be used to pay a laboratory for 
testing of product samples and for reimbursing pharmacies for samples 
retrieved. Results of tests will be reviewed and, in most cases, shared 
with the pharmacy. When a test result is reported to be below existing 
standards for that product then a determination by the board will be 
made as to a course of action. This could include one or more of the 
following scenarios: 1) Retrieve more samples for further testing to 
see if multiple lots of the product are affected; 2) Should the result 
of a test reflect a potential harm if used by a consumer then explore 
what corrective actions to be executed on a voluntary basis by the 
pharmacy or by the board through discipline of the license or by 
restraining/injunctive court orders.
    Over time, accumulated data could be analyzed to see if certain 
types of compounds do not meet the claims or benefits made for the 
products or that a specific pharmacy may not provide adequate services 
in order to competently compound a specific product or set of products.
    The board does not believe that the system of testing described 
here will, by itself, guarantee that all products provided to consumers 
will be safe and effective. However, random testing and a thorough 
review of pharmacy compounding operations of pharmacies through 
adequate inspections will improve the chances that relevant standards 
for compounding of drugs are in place in those pharmacies that choose 
to provide such products. Anyone contemplating criminal fraud of 
consumers will have to consider these new policies and procedures as a 
real deterrent to offering or selling misbranded or adulterated 
products.
    In summary, the board of pharmacy supports measures to secure 
additional resources to further voluntary compliance activity at the 
state level. Effective laws and sufficient appropriations need to be 
pursued in order to ensure adequate enforcement of state and federal 
drug laws. All fifty states maintain a board of pharmacy with the 
mandate of providing for the proper enforcement of laws in order to 
provide consumers with adequate minimum standards of practice. The 
profession of pharmacy should not be indicted for the outrageous and 
demoralizing acts of one individual. Criminal behavior must be dealt 
with separately from the enforcement of administrative laws over 
professional practice standards. While criminal acts within the 
profession are rare, they cannot be ignored. Measures that afford 
effective and random checks to licensees need to be the focus of boards 
of pharmacy who are in the best position to initiate and maintain 
adequate inspections of state licensed facilities. In addition, FDA 
should pursue by amendments to federal law or through the provision of 
an updated compliance guide, a strict definition of what is compounding 
vs. manufacturing and provide assistance in enforcement when violations 
of the act occur within interstate commerce.
    In this regard, we would also urge the FDA to continue to work with 
the National Association of Boards of Pharmacy (NABP) in developing 
these definitions to maintain the appropriate balance of state and 
federal regulatory responsibilities and facilitate the implementation 
of the definitions across all states. Other components of state 
regulation of pharmacy compounding can be developed through NABP, 
working with the FDA, USP and other stakeholders. Incorporating these 
new definitions into NABP's Model State Pharmacy Act and Model Rules, 
which includes Good Compounding Practices Applicable to State Licensed 
Pharmacies, would also be encouraged as the Model Act has served as a 
useful guide to the states in the area of regulating compounding.
    Thank you again for the opportunity to address this important issue 
today.

























       Prepared Statement of William P. Kennedy, Owner, Nephron 
Pharmaceuticals Corporation FDA-Approved Manufacturing Facility/Orlando

    Mr. Chairman and Members of the Committee, thank you sincerely for 
your efforts to shed public light on the phenomenon in the country 
today of pharmacies boldly compounding massive quantities of 
prescription drugs. I believe that I am uniquely qualified to speak to 
you on this topic. I am both a licensed pharmacist who was involved in 
large scale compounding and I am now the owner of an FDA-approved 
manufacturing facility in Orlando, Florida. I know this issue inside 
out. The American public is at risk and you are to be commended for 
your interest in and pursuit of non-FDA compliant compounding.
    In 1966 I graduated from the University of South Carolina's College 
of Pharmacy and became a registered pharmacist in that State. A year 
later, I moved to Florida and began to pursue my career in pharmacy in 
earnest.
    In 1972 I purchased my own retail drugstore, Thayer's Colonial 
Pharmacy, Inc., located in Orlando, Florida. This drugstore had been in 
Orlando for many years with a reputation for finding unique 
prescription drugs and compounding various discontinued formulations. 
Included in this were many combinations of two or more drugs. For 
example, dermatological preparations and respiratory drugs were 
commonly compounded.
    In the mid-1980's we began compounding various respiratory 
medications on a broader scale. This business grew rapidly, including a 
large portion of mail order transactions. We attracted much attention 
within the industry.
    Around 1990, the FDA paid us a visit. Their mission was to 
investigate my compounding pharmacy. After 2 weeks of intense scrutiny, 
they determined that I should be ``labeled'' a manufacturer, and 
ordered that I cease and desist this compounding division of Thayer's. 
The FDA representatives said, ``If you want to be in the manufacturing 
business, then you must have an FDA-approved manufacturing facility''. 
Of course, the back room of my drug store did not qualify.
    In 1991, following the FDA's instruction, I set out to secure the 
approvals and financing necessary to open a proper manufacturing 
facility. Although I was a bit naive at the outset, I soon learned that 
I was involved in a daunting process. In my case, it took over 6 years 
to secure approval for my first new drug product, and my plant. It was 
arduous, capital intensive and certainly the most challenging endeavor 
of my career in health care. However, I now understood the rules and 
knew this was necessary to begin providing prescription drugs on a 
large scale to the public. I knew this because the FDA had told me so.
    In 1997 Nephron Pharmaceuticals was up and running as an FDA-
approved and registered facility. Our focus is oral inhalation 
solutions used to treat asthma, bronchitis and Chronic Obstructive 
Pulmonary Disease. Nephron owns six approved Abbreviated New Drug 
Applications (ANDA's) for prescription drugs:
     Albuterol Sulfate Inh. Sol., 0.083 percent
     Albuterol Sulfate Inh. Sol., 0.5 percent
     Ipratropium Bromide Inh. Sol., 0.02 percent
     Isoetharine Inh. Sol., 1 percent
     Metaproterenol Sulfate Inh. Sol., 0.4 percent
     Metaproterenol Sulfate Inh. Sol., 0.6 percent
    Now, by national pharmaceutical standards, we are little guys. Even 
so, here is what is entailed in the manufacture of our drugs:
    Our 76,000 square foot facility is designed for full FDA 
compliance. Our production room design houses controlled environment 
rooms, based on the 1997 ISPE Sterile Manufacturing Facilities 
Guideline that was developed with the help of the FDA.
     Main Room classified as ``Pharmaceutical'' ``D Grade'', 
Class 100,000 in operation;
     Gown Room, Class 100,000
     Mix Room, Class 10,000
     Filling Room, Class 10,000 with Class 100 HEPA Shrouded 
fill nozzle systems
     All rooms use positive pressure, cascading air filtration 
systems.
    The attached exhibits show the design of this facility (Attachment 
#1), the structured materials flow chart (Attachment #2), the complex 
HVAC system required (Attachments #3 and #4), and one of the Water for 
Injection systems required for operation (Attachment #5).
    In this facility we have the following Departments/Personnel 
required to comply with drug manufacturing regulations (21 CFR  210/
211)
     Regulatory Department: 4 people responsible for all FDA 
compliance/reporting
     Quality Assurance Department: 41 people involved in 
document control, validation, training, batch record review and 
production line control;
     Quality Control: 9 degreed chemists/technicians to analyze 
all active and inactive ingredients and finished product stability 
studies; 19 degreed microbiologists/technicians who do environmental 
monitoring of all clean room, samples of WFI and Pure Steam condensate, 
sampling of raw materials and production components;
     Production Department: 117 production personnel;
     Engineering Department: 4 Blow/Fill/Seal specialists whose 
technology requires no human contact with the product or its immediate 
container during filling and is recognized by the US Pharmacopoeia 
(USP) as an advanced technology for the manufacture of liquid solution 
in unit-dose forms; 22 production equipment assistants.
    And these personnel operate at this facility in compliance with 
Federal Regulations (21 CFR  210/211), which requires the following:
     517 Production Standard Operating Procedures (SOP's);
     30 Microbiology SOPs;
     47 Chemistry SOPs;
     29 Microbiology Validated Test Methods;
     20 Chemistry Validated Test Methods;
     219 Equipment Installation/Operation Qualification 
Procedures;
     310 Performance Qualifications/Validated Processes.
    As you can see, this is a highly complex industry. The FDA 
requirements, which are incredibly demanding, seem never-ending. 
However, as a manufacturer, I have the comfort of knowing that all FDA-
approved facilities are subject to the same sets of regulations and 
requirements. These rules are not frivolous; they are there for a 
purpose. And that is to protect the public by insuring a uniform 
standard of integrity in the prescription drugs produced in our 
country.
    Let me give you an example. We have to test the raw ingredients 
used in the manufacture of a batch of drugs at the beginning of the 
batch and at the end of the batch. If the composition of the raw 
ingredients does not meet their predefined specifications at the end of 
the batch, all the drugs in that batch MUST BE DESTROYED.
    And yet, while these high standards are uniform with the FDA 
facilities, there is another sphere of drugs, in my case, inhalation 
drugs, which are produced throughout the country today with no similar 
level of accountability. Pharmacies, like Thayers, are producing drugs 
that should be identical to those produced by my company, but fall far 
short.
    I have attached four reports (Attachments #6 to #9), of pharmacy-
produced products sent to my chemistry lab at Nephron for analysis. As 
you can see, they miss the mark on potency and quantity. A recent study 
by the FDA itself showed a failure rate of more than 34 percent. These 
failures result from inadequate facilities as well as inadequate 
testing of raw ingredients.
    Perhaps to attack this problem, the FDA instituted a rule that all 
oral inhalation drugs have to be sterile. Initially, receipt of this 
ruling reconfirmed to me that I had made the correct decision in 1991 
to pursue FDA certification. However, in my trips around the country 
marketing my products, I encounter time after time non-FDA approved 
companies in the inhalation drug market willfully mass compounding 
their products. Let me assure you, their product is rampant. I know. I 
ran a similar operation in the 80's. I can tell you there is no 
comparison to the way I produced Albuterol in the back room at Thayers 
to the way Albuterol is now produced at Nephron.
    Which brings us to the importance of the hearing you are holding 
today. Americans across the country believe that the drugs they 
purchase to fill a doctors prescription are the same . . . the same 
chemistry, the same sterility, the same integrity. This is certainly 
the ideal toward which the FDA and its registered manufacturers work. 
However, this is far from the reality. The consumer is at risk and does 
not even know it. The consumers do not know how to protect themselves 
from non-FDA drugs, or that they even do.
    Clearly, the integrity of the prescription drug market in this 
country is under siege. Companies and individuals are willfully 
breaking the rules and regulations long established by the FDA. Given 
my background, and I find this situation is stunning. The consumer, 
however, should find it frightening. As you know from documented press 
stories, the result of this mass compounding outside the FDA arena can 
be lethal.
    Again, thank you for providing this public forum to discuss this 
crisis. I am confident that with your attention, the double standard 
prevalent in the inhalation drug market will no longer be tolerated. I 
would be happy to answer any questions you might have.











      Prepared Statement of the American Society of Health-System 
                           Pharmacists, ASHP

    The American Society of Health-System Pharmacists (ASHP) is pleased 
to submit this statement for the record of the Senate Health, 
Education, Labor, and Pensions Committee hearing on pharmacy 
compounding. ASHP is the 30,000-member national professional 
association that represents pharmacists who practice in hospitals, 
long-term care facilities, home care, hospice, health maintenance 
organizations, and other components of health care systems.
    ASHP is as concerned as this committee about inappropriate and 
fraudulent behaviors that have placed patients at risk of harm from 
their medications. One must distinguish however, between an intentional 
criminal act and pharmacy compounding.
    ASHP has a long history of promoting safe medication use and has 
developed practice standards for pharmacy compounding in hospitals and 
other components of health systems. We foster the application of those 
standards through various articles published in our peer-reviewed, 
professional practice journal, and through educational sessions 
featured at our clinical meetings.
    In an effort to help assure patients receive safe and appropriate 
medications, ASHP recognizes the need to collect additional information 
about all medication distribution systems, including compounded 
preparations. It is important to fit this examination into the proper 
regulatory framework.
    ASHP strongly supports the current regulatory system, with State 
boards of pharmacy regulating pharmacy compounding and the FDA 
regulating the manufacturing of drug products. This regulatory 
framework is consistent with the way other health professions are 
regulated and is effective.
    Throughout this testimony we will look at the nature and extent of 
pharmacy compounding and the system for regulating this practice. We 
will also examine ways to continue to improve the safety of the 
medication system.

                ORIGINS OF THIS HEARING NOT COMPOUNDING

    It is important to note that the origins of this hearing stem not 
from the practice of compounding as described below, but rather from 
the fraudulent and criminal acts of a Kansas City pharmacist who 
intentionally diluted the potency of chemotherapy drugs for his own 
economic gain. This pharmacist's actions were inexcusable, 
indefensible, and an embarrassment to the profession. His actions are 
not representative of the necessary, accurate, and admirable 
compounding that pharmacists perform everyday for patients in hospitals 
and health systems.
    As the committee assesses the adequacy of current regulatory 
framework, it must not overlook this fact. The current justice and 
regulatory system is well-designed to deal with criminal action.

                       PHARMACY COMPOUNDING TODAY

    The practice of compounding is an important and long-standing 
component of the pharmacy profession. In the early days of medicine, 
compounding frequently occurred because there were few commercially 
available products. Today, compounding allows pharmacists to customize 
manufactured products to meet individual patient needs or to create 
necessary alternatives to commercially available products.
    Compounding occurs when a medication is prepared by combining, 
mixing, or altering two or more ingredients, or components, for a 
patient based on the receipt of a valid prescription or in anticipation 
of prescriptions based on the medication order history from the 
pharmacist-physician-patient relationship.
    Pharmacists in health system settings generally prefer not to 
compound if there is a viable product commercially available, since 
compounding requires extra time, staff training, proper equipment, and 
other important quality control measures. However, proper patient care 
requires the compounding of certain medications. In fact, in hospitals, 
many commercially available products require compounding processes to 
prepare them for administration.
    It is impossible for manufacturers to meet every conceivable 
patient need. For example, the variety of doses needed for geriatric 
and pediatric patient populations or the customization of intravenous 
fluids needed to correct a given patient's blood-chemistry 
deficiencies.
    Further, manufacturers cannot manufacture certain items. The 
classic example of this is a sterile fluid for intravenous feeding of 
patients (``parenteral nutrition''). While manufacturers covet this 
large potential market, they have not been able to manufacture a stable 
product. The moment the necessary concentration of glucose and protein 
are mixed together, the ingredients begin to decompose. Parenteral 
nutrition has been an established therapy for 35 years, but 
manufacturers have not been able to resolve this chemical stability 
problem and provide a usable product to the health systems caring for 
these patients. Hence, pharmacists (for example in hospitals and home 
care) must do the compounding. For many patients, this is literally 
life-saving therapy.
    Medications are also compounded when a prescriber determines, in 
his or her professional judgment, that the use of a compounded 
preparation is necessary. For example, when a patient cannot use a 
commercially available product due to an allergy to one of the 
ingredients--sensitivity to the dye used for coloring, lactose, or 
other excipients used in many classes of drugs. Or, when a patient 
cannot swallow tablets or capsules and the drug can be transformed into 
a liquid, lozenge, suppository, or other form.
    The compounding of medications that would not have been otherwise 
available has saved many lives. This is thanks to the dedication, 
skill, and professional judgment of pharmacists. It is clearly within 
the public interest to preserve this important practice.
    regulatory oversight of pharmacy compounding is well established
    The Federal Food, Drug, and Cosmetic Act of 1938 (FDCA) was created 
to regulate drug manufacturing, marketing, and distribution, not 
compounding or pharmacy practice. The Food and Drug Administration 
Modernization Act of 1997 (FDAMA), which ASHP worked with Congress to 
develop, reinforced the legitimacy of pharmacy compounding as a State 
regulated activity and clarified the inapplicability of the FDCA to 
compounding. Although the compounding provision of FDAMA was overturned 
by the Supreme Court in 2002 due to its constraints on advertising, 
this should not eliminate the line between Federal and State 
jurisdiction.
    The oversight of pharmacy practice by State regulatory authorities 
is well established. States, through their boards of pharmacy, 
determine the education and licensure requirements of pharmacists, as 
well as licensure requirements for pharmacies. State boards of pharmacy 
have the authority to take disciplinary action, including license 
revocation or suspension, against pharmacists for misconduct or failure 
to abide by State laws or regulations, including those pertaining to 
pharmacy compounding. This is equivalent to the way physicians and 
other health care professionals are regulated.
    The role of enforcing the application of specific quality assurance 
standards in pharmacy practice is one that is well established in law 
and in practice for State boards of pharmacy. The FDA recognized this 
in its December 28, 1998, draft ``Memorandum of Understanding on 
Interstate Distribution of Compounded Drug Products.'' In that document 
the agency states that ``the standard MOU also reflects FDA's policy to 
defer to State and local officials for the regulation of the day-to-day 
practice of pharmacy, to the extent permitted under the Federal Food 
Drug and Cosmetic Act.''
    The State boards of pharmacy are admittedly at different stages in 
their efforts to regulate compounding practice, with some States 
aggressively addressing good compounding practice. California, for 
example, has adopted regulations establishing standards for compounding 
injectable preparations, requiring special licenses for those who 
prepare sterile formulations, and increasing investigation of 
compounding pharmacies.
    Other States may need to continue to strengthen their regulatory 
authority of pharmacy compounding. Over the past few years, public 
awareness of pharmacy compounding has grown and many States are in the 
process of addressing the issue. The National Association of Boards of 
Pharmacy (NABP), in a continued effort to provide guidance to the 
States, has strengthened its model practice act on compounding.
    The United States Pharmacopeia (USP) has also promulgated a revised 
chapter on the compounding of sterile products, known as General Tests 
and Assays Chapter 797 or ``Pharmaceutical Compounding--Sterile 
Preparation.'' Beginning January l, 2004, this chapter could be 
enforced by State boards of pharmacy if adopted by State statute or 
regulation and cited during visits by FDA and accreditation personnel. 
This chapter provides a standard for sterile compounding. The USP also 
provides a similar standard on non-sterile compounding.

           BUILD UPON THE CURRENT FEDERAL--STATE PARTNERSHIP

    Much can be done to build upon the existing Federal--State 
partnership to ensure patient safety. For example, ASHP strongly 
supports the development and widespread distribution of minimum 
standards and appropriate guidance for pharmacists and others on 
pharmacy compounding. While ASHP believes State boards of pharmacy are 
the appropriate body to enforce compounding standards, the FDA has a 
role to play in ensuring that the State boards fulfill this 
responsibility through the State adoption of uniform standards. ASHP 
believes that it is appropriate for the FDA to suggest to State boards 
the standards that the States should apply. This will foster the 
establishment of a national quality assurance standard for compounding 
in all pharmacy settings, rather than 50 different standards. The use 
of both the USP chapters and ASHP guidelines on sterile and non-sterile 
compounding, as well as the latest scientific knowledge in the 
literature, would provide the assurance the committee is seeking for 
the safety and effectiveness of these preparations.
    The FDA could also play an important role in bolstering State 
enforcement efforts. State boards have limited resources to hire 
inspectors and to train them properly. The FDA could offer a training 
program for State inspectors enforcing the minimum national standards 
for compounding practice. This could be run similar to the Federal 
program whereby States receive dollars to help maintain their roads 
when the State chooses to enforce the 65 mile per hour speed limit. The 
FDA should also have clear procedures for State inspectors to call in 
the FDA when activities seem to border on manufacturing.
    Finally, it would be beneficial if there was more clarity and 
consistency in the definitions of compounding and manufacturing. When 
section 127 of FDAMA was overturned, this became less clear. In the 
policy compliance guide on pharmacy compounding issued by the FDA in 
June 2002, the FDA identified nine factors that it would use 
collectively to determine when the scope and nature of activities raise 
the kinds of concerns normally associated with drug manufacturing. In 
the FDA's revision of the compliance policy guide, it may be helpful if 
the FDA provides a definition of what actually constitutes 
manufacturing rather than just providing examples of what oversteps the 
bounds of ``traditional pharmacy compounding.'' The USP in its draft 
chapter 1075, ``Good Compounding Practice,'' also provides a definition 
for compounding and manufacturing. The FDA and USP should be encouraged 
to coordinate finalization of their respective compliance guides and 
chapters so that their definitions and criteria for compounding and 
manufacturing are consistent.

                               CONCLUSION

    The existing Federal--State partnership provides a good framework 
for regulating medication distribution, including compounded 
preparations. This committee should build on the existing framework in 
the ways suggested above rather than adding additional Federal 
regulatory oversight.
  International Academy of Compounding Pharmacists 
                                            (IACP),
                                   Sugar Land, Texas 77487,
                                                  October 23, 2003.
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

    Mr. Chairman and Members of the Committee: The International 
Academy of Compounding Pharmacists (IACP) appreciates the opportunity 
to present this written discussion of pharmacy compounding. IACP's 
mission includes increasing awareness of the importance of compounding 
by providing accurate information. on the benefits of compounding and 
providing assistance to pharmacists in improving their compounding 
practices. In this capacity, IACP wishes to address a number of issues 
relevant to this hearing. IACP submits these comments on behalf of its 
1,800 member compounding pharmacists and their pall patients, who 
benefit from compounded medications.

The Importance of Compounding

    Compounding of medication for patient use has been a fundamental 
component of pharmacy practice and healthcare since ancient times. 
Compounding is the origin of the practice of pharmacy and has continued 
to be a vital element of healthcare throughout the evolution of 
pharmacy and medicine.
    Pharmacy compounding is traditionally characterized by a physician/
pharmacist/patient relationship, in which professionals work, together 
to customize or individualize medications for a patient. Compounding is 
performed under the supervision of a pharmacist, who is trained in the 
unique knowledge and skill required for compounding during pharmacy 
education and is subsequently licensed by State Boards of Pharmacy.
    Compounding is defined by the National Association Boards of 
Pharmacy (NABP) Model Pharmacy Act as:
    Compounding--The preparation, mixing, assembling, packaging, or 
labeling of a drug or device (I) as the result of a practitioner's 
Prescription Drug Order or initiative based on the pharmacist/patient/
prescriber relationship in the course of professional practice or (ii) 
for the purpose of, as an incident to research, teaching, or chemical 
analysis and not for sale or dispensing. Compounding also includes the 
preparation of drugs and devices in anticipation of Prescription Drug 
Orders based on routine, regularly observed prescribing patterns.
    Every State authorizes pharmacists to compound.
    Compounding may involve a variety of different activities in 
different practice settings. Examples of compounding activities include 
the preparation of oral liquids, topical ointments, and suppositories; 
the conversion of one dosage form into another; the flavoring of 
medication to make the medication palatable for a patient; and the 
preparation of pediatric dosage forms from adult dosage forms.
    Physicians and pharmacists recognize that some individual 
healthcare needs cannot be met by commercially available, manufactured, 
mass-produced drug products, produced in limited formulations and 
strengths. Many patients need customized medications to address 
specific medical problems. Manufacturers are unable to tailor-make a 
customized medication for a single patient or a small group of patients 
in an efficient and cost effective manner. Without compounding in these 
cases, patients would be forced to forego their medications or to 
substitute a product that may not meet their medical heeds.Compounding 
pharmacists work in their communities, alongside the physicians who 
write prescriptions for compounded medications, as problem solvers to 
meet these unique needs.
    Compounding provides life-saving therapy to many classes of 
patients who would otherwise be unable to obtain necessary medications. 
Pediatric or geriatric patients may need extremely small dosages. The 
American Pharmacists Association (APhA) has reported an. estimate that 
more than 40 percent of doses given in pediatric hospitals require 
compounding to prepare a suitable dosage form. Further, compounding 
pharmacists provide therapy for many hospice patients nearing the end 
of their lives, who can no longer benefit from curative treatment and 
generally have a life expectancy of six (6) months or less. Many of 
these patients can no longer swallow their pills; for others, 
commercial doses are inadequate. Compounding pharmacists help to 
develop drug therapy programs that minimize pain and symptoms for 
hospice patients and work to enhance the quality of life for hospice 
patients in their final days. In addition, patients may be allergic to 
specific ingredients in a commercially available product. Compounding 
pharmacists can work with physicians to alleviate this problem by 
omitting the problematic ingredient in a formulation or by customizing 
a similar medication to meet the patient's need.
    In sum, compounding is a critical component of pharmacy and 
healthcare. Indeed, just last year the U.S. Supreme Court, in the 
Thompson v. Western States Medical Center case, acknowledged the 
importance of compounding.

How Does Compounding Differ From Manufacturing?

    The NABP Model Pharmacy Act defines manufacturing as:
    Manufacturing--The production, preparation, propagation, conversion 
or processing of a Drug or Device, either directly or indirectly, by 
extraction from substances of natural origin or independently by means 
of chemical or biological synthesis, and includes any packaging or 
repackaging of the substance(s) or Labeling or relabeling of its 
container, and the promotion and marketing of such Drugs or Devices. 
Manufacturing also includes the preparation and promotion of 
commercially available products from bulk compound for resale by 
pharmacies, Practitioners, or other Persons.
    The fundamental difference between compounding and manufacturing is 
the presence of a physcian/pharmacist/patient relationship, which 
controls the preparation and distribution of a compounded drug 
medication. Pharmacy compounding is performed at the pharmacy site for 
nearly immediate dispensing or administration to the patient. 
Compounded medications are not offered for resale, but instead are 
customized to meet a patient's specific medical needs. The profession's 
definition of compounding does not encompass the preparation of massive 
amounts of a drug product with the purpose of distribution to a mass 
market of unknown users in unknown venues. Instead, the pharmacist 
directly interacts with the patient and is available to advise patients 
on characteristics and use of a compounded medication. Pharmacists, 
unlike drug manufacturers, offer counseling to patients. Based on this 
relationship between pharmacist and patient, a pharmacist may often 
monitor a patient's reaction to a compounded medication and advises 
patients to immediately report adverse reactions.
    This relationship between the compounding pharmacist and the 
practitioner provides an appropriate system of checks and balances to 
ensure that the patient's health is protected and served. A legally 
compounded medication by a pharmacist is authorized by a prescription 
from a physician. The pharmacist acts as a valuable resource for 
determining the customized elements of a compounded medication such as 
dosage formulation, drug compatibility, etc., to meet the patient's 
needs and to facilitate prescribe-intended outcomes. The pharmacist may 
also refuse to dispense a prescription that requires compounding of a 
drug which is not appropriate for that patient or cannot be compounded. 
The relationship between physician, pharmacist, and patient likewise 
provides an appropriate level of checks and balances to ensure patient 
care.
    Manufacturing, on the other hand, involves the production of 
batches of drug products consisting of millions of dosage units, such 
as tablets or capsules, for resale. Manufactured products are 
distributed through the normal chains of interstate commerce to 
individuals unknown to the company. Manufacturers are not required to, 
and do not, monitor individual patients' response to medications or 
answer patient questions.

The Robert Courtney Case

    It is important to note that reconstitution, the pharmacy practice 
engaged in by Robert Courtney, is a practice that is generally not 
considered to be compounding. The oversight actions initiated by 
Senators Bond and Roberts, including this hearing, stem from 
understandable concerns about the criminal activity and professional 
misconduct of Robert Courtney, a former pharmacist in Kansas City, MO. 
Courtney intentionally diluted the potency of cancer drugs over a 
sustained period of time for profit and, as a result of these criminal 
activities, has been convicted and imprisoned. IACP condemns the 
actions of Courtney. However, we strongly believe that Courtney's 
actions cannot be extrapolated to represent the profession of pharmacy 
in general, or more importantly, compounding pharmacy, While Courtney's 
actions were reprehensible, it is important to note that his actions 
were the actions of one individual and should not be used to judge the 
thousands of pharmacists that practice in this country. Pharmacists are 
highly committed to the care of their patients and compliance with high 
professional and ethical standards. The Courtney case should not prompt 
Congress to challenge the integrity or oversight of the profession of 
pharmacy.
    Reconstitution of a commercial product according to the 
manufacturer's FDA-approved instructions, a routine practice virtually 
every hospital and the action performed by pharmacist Robert Courtney 
in preparing chemotherapy products, is not considered to be 
``compounding.'' Congress, in the Food and Drug Administration 
Modernization Act of 1997 (FDAMA), specifically exempted from its 
definition of compounding ``reconstituting . . . that [is] performed in 
accordance with directions contained in approved labeling provided by 
the product's manufacturer and other manufacturer directions consistent 
with that labeling.'' Further, the FDA's current approach to oversight 
of compounding practices, its Pharmacy Compounding Compliance Policy 
Guide (CPG), does not address reconstitution. According to broadly 
accepted definitions, Robert Courtney's criminal activities would not 
be identified as compounding. Courtney's illegal acts in no way provide 
justification for imposing new restrictions on compounding.

How is Compounding Regulated?

    Since compounding is a traditional component of the practice of 
pharmacy, compounding is appropriately regulated by State Boards of 
Pharmacy. The State Boards of Pharmacy and standard-setting 
organizations such as the U.S. Pharmacopeia (USP) and the National 
Association of Boards of Pharmacy (NABP) have effectively regulated the 
practice of. compounding pharmacy for many years.
    A majority of the State Boards of Pharmacy have regulations in 
place that specifically address compounding practices. In addition, 
many States have recently revised or are currently updating their 
compounding regulations. As part of its Model Pharmacy Act, NABP also 
has made model Good Compounding Practices (GCPs) available to State 
Boards of Pharmacy as a template for compounding regulations. Further, 
the United States Pharmacopeia has recently revised four guidance 
chapters on pharmacy compounding: Chapter 795, Pharmaceutical 
Compounding--Nonsterile Preparations; Chapter 797, Pharmacy 
Compounding--Sterile Preparations; Chapter 1075, Good Compounding 
Practices; and Chapter 1161, Pharmaceutical Calculations in 
Prescription Compounding.
    In 1997, Congress addressed the practice of pharmacy compounding in 
the Food and Drug Administration Modernization Act (FDAMA). In this 
Act, Congress recognized compounding as a vital healthcare service that 
must be preserved, leaving the role of the State boards as its 
regulators intact. The subsequent decision by the Supreme Court to void 
the Act was premised on the lack of a severability clause and the 
unconstitutionality of constraints on commercial free speech. In view 
of the Court's decision, FDA is now in the process of refining its CPG, 
which would articulate its views on Federal jurisdiction.

The Roles of State and Federal Regulatory Bodies in Compounding and 
                    Manufacturing

    Drug manufacturers are regulated, among other entities, by the U.S. 
Food and Drug Administration (FDA) under the authority of the Food, 
Drug, and Cosmetic Act of 1938 (FDCA). The provisions of the FDCA have 
been designed to prevent the production of ineffective or dangerous 
manufactured drugs and their introduction into commerce.
    The FDCA and the processes it requires were designed to address 
situations where a drug product would be developed, approved as to its 
safety and efficacy, marketed throughout the United States, and 
ultimately dispensed to patients with whom the manufacturer has had no 
contact. There is an obvious distinction between a manufactured drug 
and a compounded medication. A compounded medication is one that is 
formulated for a specific patient need, such as an allergy to an 
ingredient, that cannot be met by a mass manufactured drug.
    In short, FDA regulates manufacturing of medications, while State 
Boards of Pharmacy regulate pharmacy practices, including the 
compounding of medications. FDA should work with State Boards of 
Pharmacy and pharmacy organizations to develop the distinction between 
pharmacy compounding and manufacturing. However, compounding 
pharmacists must not be subject to regulation by FDA under the FDCA and 
must, instead, remain within the regulatory control of State Boards of 
Pharmacy. There has been no evidence shown to support federalization of 
pharmacy oversight.

Quality Assurance for Compounded Medications

    The quality of compounded medications can be assured through 
adequate State and self-regulation of compounding practices, training 
and other mechanisms. While there have been some compounding pharmacies 
that have had significant quality problems they represent a small 
minority. The overwhelming majority of compounded medications meet 
these quality standards. Nevertheless, IACP and the pharmacy profession 
arc committed to improving quality and training.
    Initially, we must assist State Boards of Pharmacy in assuring that 
they have regulations that address the practice of compounding. Most 
States already have regulations in place or are in the process of 
developing regulations. However, we must assist the few Boards of 
Pharmacy that do not have regulations for pharmacy compounding in 
either adopting the NABP Good Compounding Practices (GCPs) or in 
crafting their own regulations. Further, we must ensure that State 
Boards of Pharmacy have the funding required to monitor compounding 
practices in their States and to enforce compounding regulations. 
Providing necessary resources and fiscal support to State Boards of 
Pharmacy is essential for assuring the quality of compounded 
medications.
    In addition, the United States Pharmacopeia has developed 
guidelines that help to ensure the quality of compounding medications. 
Pharmacists' knowledge of and adherence to the guidelines will result 
in continuous quality improvement of compounded preparations.
    Personnel education is also an essential factor in compounded 
medication quality. In recent years, there has been tremendous growth 
in the availability of American Council of Pharmaceutical Education 
(ACPE) accredited education programming related to quality compounding 
pharmacy practice. We must work together to increase and enhance such 
programs.
    Finally, IACP is currently leading efforts to develop profession-
driven, comprehensive standards of practice for compounding with the 
goal of educating compounding pharmacists on best practices and 
processes that can be used to ensure quality compounded medications for 
patients. We are also developing an accreditation program for 
pharmacies where compounding occurs. Such an accreditation program 
would assess and improve compliance to standards of practice.
    These combined factors will effectively address the quality of 
compounded medications.
    IACP appreciates the opportunity to share this testimony with the 
Senate HELP Committee. If we can be of any assistance, or if you have 
any questions, please do not hesitate to contact me at (281) 933-8400.
            Respectfully submitted,
                                                 L.D. King,
                                           IACP Executive Director.
                                 ______
                                 
  International Academy of Compounding Pharmacists,
                                      Sugar Land, TX 77487,
                                                  October 30, 2003.
Hon. Judd Gregg,
Chairman,
Committee on Health, Education, Labor and Pensions ,
U.S. Senate,
Washington, DC 20510.

    Dear Chairman Gregg: During the Thursday, October 23 hearing, 
``Federal and State Role in Pharmacy Compounding and Reconstitution: 
Exploring the Right Mix to Protect Patients,'' hearing chairman Senator 
Kit Bond indicated his intent to keep the record open to receive 
supplemental remarks. The International Academy of Compounding 
Pharmacists (IACP) would greatly appreciate your incorporating the 
following into the hearing record.
    Mr. Chairman, you are likely to have been aware of our concerns 
about the witnesses invited to testify and the committee's need to 
receive a balanced viewpoint. Several witnesses were predictably 
hostile toward compounding; however, most notable were the comments of 
others. The General Accounting Office (GAO) observed ongoing efforts at 
the State-level (through State boards of pharmacy) and national-level 
(through professional organizations) that should provide confidence to 
the committee that significant steps are underway to strengthen 
oversight of compounding. The Food and Drug Administration, while 
chastised for its use of a limited survey to convey anecdotal 
information critical of compounding, nonetheless acknowledged continued 
deference to the States' enforcement. While we may disagree on some of 
the specific statements they made, we are heartened by both agencies' 
acknowledgement of the unique and beneficial role that pharmacy 
compounding plays in the Nation's health care.
    Three areas of discussion at the hearing, however, require IACP's 
supplemental comments:
    1. Reference was made to a provision in pending Medicare drug 
benefit legislation that would create an advisory committee at FDA to 
examine pharmacy compounding. We continue to oppose this provision and 
note that the hearing produced little evidence to alter this 
perspective. If anything, acknowledgement of the predominant States' 
role and efforts underway to improve regulation at the State level call 
for continued deference to the States and not, as the amendment 
suggests, imposition of Federal authority over what has been the 
States' task. As the GAO pointed out, a number of States also have new 
initiatives to tighten regulations. The examples cited by the GAO are 
not unique, for example, California recently implemented new 
regulations and Texas is in the process of adopting new regulations. 
Further, IACP believes that the advisory committee is an inefficient 
use of FDA resources and energies, particularly when there has been 
little justification for Federal intervention. This is particularly 
true at a time when FDA needs to expend its resources regulating 
illegal internet pharmacies and drug diversions. FDA should not divert 
its resources to pharmacy practices that are already licensed and 
regulated by the States.
    2. IACP asks the committee to take note of the relatively limited 
number of adverse events (GAO estimates 200 over the past several 
years) compared to the 30 million estimated compounded prescriptions 
dispensed each year. While we are concerned about the adverse events 
that have occurred and are taking steps to prevent future occurrences, 
it is also important to note that compounding pharmacy has a strong 
overall safety record. All observers have acknowledged the paucity of 
hard data relating to compounding. Regulatory bodies (State or Federal) 
would have to redirect energies and resources at a ``problem'' where no 
analytic data exists to show a troubling incidence of unreported 
events. While we believe compounding can be improved, and we are 
working toward that goal, the low incidents of adverse events do not 
justify requiring a new reporting system.
    IACP believes that adverse event reporting is better accomplished 
by the national professional organizations who have an ability to 
assess information and then develop informational and educational 
resources to address any problematic trends that are identified. IACP 
would direct your attention to a voluntary reporting system established 
by U.S. Pharmacopeia (USP) in the 1990s--``MedMaRX.'' This adverse 
reporting mechanism exists today, although it would require greater 
visibility and participation by professional pharmacists. IACP views 
this or a comparable system developed by national professional 
organizations as a credible alternative. We hasten to add that any 
system must be voluntary, primarily because it is critical for 
pharmacists, physicians, and patients first to assess whether an 
adverse event has in fact occurred. The routine, mandatory and 
uncritical reporting of all possible such events will inundate the 
system, which will become so overloaded with raw data that it would 
have little practical value.
    Further, capturing adverse events is an issue that the entire 
pharmaceutical industry is working to address. It is commonly 
understood throughout all of healthcare that we must do a better job of 
capturing data related to adverse events. Likewise, compounding 
pharmacy practice is not unique in this venue.
    3. Several Senators and witnesses commented on whether there is a 
lack of clarity on FDA's regulatory authority. For example, some asked 
if there should be a ``bright line'' separating compounding from 
manufacturing. Also, others noted areas within the Compliance Policy 
Guide (CPG) that are seen as overly vague.
    IACP believes that there is a process within FDA that is entirely 
appropriate to resolve these criticisms. Let us note for the record 
that IACP has been a stern critic of the current CPG. We have sought 
substantial change. We are, however, willing to let this process 
continue. At the hearing, FDA committed to responding to the comments 
it had received. We believe that FDA's internal review process should 
be completed before Federal legislation is contemplated.
    Mr. Chairman, IACP greatly appreciates your consideration of our 
views. We look forward to working with you constructively in developing 
the appropriate balance between Federal and State jurisdiction.
            Sincerely,
                                                 L.D. King,
                                           IACP Executive Director.
                                 ______
                                 
       Prepared Statement of the American Pharmacists Association

    Good morning. Thank you for the opportunity to appear before you 
today and present the views of the American Pharmacists Association. I 
am Dan Herbert, a pharmacist and the President-elect of APhA. I have 
been in practice for 37 years and currently own three community 
pharmacies in Richmond, Virginia. Founded in 1852 as the American 
Pharmaceutical Association, we are the largest national pharmacist 
organization in the United States, representing more than 53,000 
practicing pharmacists, pharmaceutical scientists, student pharmacists 
and pharmacy technicians. APhA members practice in virtually every area 
of pharmacy practice, including independent and chain community 
pharmacy, hospital pharmacy, nuclear pharmacy, long term care pharmacy, 
home health care and hospice.
    Let me first provide APhA's support of the committee's goal that 
patients receive safe and effective medications. As pharmacists, we 
rely upon quality products as the first step in our work to help 
patients make the best use of their medications. When providing a 
quality product involves tailoring a medication for an individual 
patient, we use our scientific training and education to compound the 
medication.
    Compounding medications is an important component of pharmacy 
practice--mine and that of my colleagues. While it is challenging to 
quantify the actual number of APhA's members who engage in drug 
compounding activities on a regular basis, virtually all practicing 
pharmacists will be involved with compounding activities at some point 
during their career--and most practitioners engage in some element of 
compounding in each week of practice. APhA has a compelling interest in 
helping pharmacists, in collaboration with practicing physicians, 
compound drug formulations to meet the needs of patients. Our 
compounding activities are a critical component of the American health 
care system, allowing physicians to prescribe medication therapy to 
best meet the needs of their patients.
    My comments today will provide a brief history of pharmacist 
compounding, a description of the important role it plays in our health 
care system, the challenging task of distinguishing between compounding 
and manufacturing, and ways in which we can attempt to appropriately 
protect our patients by improving the quality of practice and 
identifying and stopping ``bad actors''.

Compounding: A Traditional Component of Pharmacy Practice

    Compounding is a traditional component of pharmacy practice; only 
the drugs, dosage forms, and equipment or techniques have changed as 
pharmacy practice has advanced. As noted in the Chronicles of Pharmacy, 
``[p]harmacy, or the art of selecting, extracting, preparing and 
compounding medicines from vegetable, animal, and mineral substances, 
is an acquirement that must have been almost as ancient as man himself 
on earth.'' The early practice of pharmacy required the compounding of 
virtually all medications, because there were few, if any, commercially 
available products. The need for compounded products has diminished 
with the founding of pharmaceutical companies, although the need for 
this practice still exists today. Because the preparation of an 
extemporaneous pharmaceutical dosage form is not a trivial exercise, 
our position is that when an FDA-approved, commercially available 
product can meet a patient's needs, it should be employed as the 
preferred course of action. However, when a patient's particular 
situation obviates the use of commercial products, the knowledge and 
skills of a compounding pharmacist can be extremely valuable, even 
lifesaving.
    It is a fundamental responsibility of the pharmacy profession to 
extemporaneously compound quality prescription products for patients 
who have unique medication needs. Through their education and 
licensure, pharmacists assume an ethical obligation to the public to 
maximize the intended benefits of drug therapy while minimizing the 
unintended side effects and adverse reactions. Some Sates require 
licensed pharmacies to offer compounding services [see 49 Pa. Code  
27.18(p)(2) (2003);W. Va. Code St. R.  15-1-19.4 (2003)]. Compounding 
enables pharmacists to use their knowledge and expertise of medication 
use to produce individualized medications that meet patient needs and 
improve health outcomes. Without compounding, pharmacists and 
physicians would be limited to a ``one size fits all'' strategy, which 
would have a direct, immediate, negative impact on the ability of 
health care providers to provide care to patients.

Compounding Necessary for Many Patients

    As I stated earlier, it is challenging to quantify the actual 
number of pharmacists who engage in drug compounding activities on a 
regular basis, virtually all practicing pharmacists will be involved 
with compounding activities at some point. The unique knowledge and 
skill set of pharmacists enables them to extemporaneously compound 
medications to individualize patient care through the preparation of 
patient-specific products.
    Compounding allows pharmacists and physicians to address the health 
care needs of patients who do not fall within the range of commercially 
available dosage strength and formulations. Patient needs vary from 
extremely small doses and specific combinations of drugs, to 
preservative-free products, to liquid dosage forms, to delivery systems 
that are not commercially available. In many situations, large-scale 
manufacturers are unable to tailor-make a medication in a cost 
effective manner. Without compounding, many patients would not have 
access to the correct combination of ingredients, the appropriate dose 
and dosage form, or the best delivery system.
    In addition to unique patient needs, manufacturing and market 
limitations may require medications to be compounded. For example, some 
therapies, such as hyaluronidase injection (used as an adjunct to 
ophthalmologic surgery) must be compounded because the therapies 
generate insufficient revenue to pharmaceutical companies to justify 
large-scale manufacturing. Other medications, such as radioactive drugs 
used to diagnose or treat cancers or other diseases, must be compounded 
because they do not have sufficient ``shelf life'' to withstand the 
commercial distribution process and therefore need to be prepared at 
the time of dispensing. And finally, many manufactured ``finished 
pharmaceutical'' products are only ``finished'' in the sense of being 
ready to ship and then store in the pharmacy. These products must still 
be compounded, or in some cases merely reconstituted, by the pharmacist 
to provide a dosage form suitable for a patient's treatment.
    Compounding involves different activities in different pharmacy 
practice settings. It may mean the preparation of oral liquids, 
topicals, or suppositories; the conversion of one dose or dosage form 
into another; the preparation of specific dosage forms from bulk 
chemicals; the preparation of intravenous admixtures, parenteral 
nutrition solutions, or pediatric dosage forms from adult dosage forms; 
the preparation of radioactive isotopes; or the preparation of 
cassettes, syringes, and other devices with drugs for administration in 
the home setting. Examples of some of the most common compounded 
products include lotions, ointments, creams, gels, suppositories, 
intravenously administered fluids and medications, total parenteral 
nutrition products, and oral suspensions.
    Although compounding may be required in any pharmacy practice 
setting and for any type of disease, there are concentrations of 
compounding practice. For example, due to the nature of the care they 
provide, hospital pharmacies have historically had a strong compounding 
component to their practice. And due to the nature of the disease and/
or the patient size or age, compounding frequently occurs for patients 
with cancer, for pediatric care, and for hospice care.
    Compounding in the hospital setting is a vital service that 
addresses the unique needs of patients requiring highly individualized 
medications. The primary compounding activity in hospitals is the 
preparation of intravenous admixtures ranging from simple fluid 
replacement to the delivery of complicated, individualized chemotherapy 
regimens. Because daily intravenous therapy is provided through 
compounding of medications, nearly every person who has ever been 
admitted to a hospital--and those who will be admitted today and likely 
in the future--has received a compounded medication. In fact, the 
immediate availability of extemporaneous compounding by a pharmacist 
provides the hospital physician with literally any form or strength of 
medication needed for a patient's specific needs.
    Cancer patients frequently benefit from compounding pharmacists' 
knowledge and skills. Almost all chemotherapy involves drugs and drug 
combinations that are compounded, or at least reconstituted, by 
pharmacists. It is imperative that a patient receive the correct drug 
dosage based upon the patient's body size, the type of cancer, the size 
and type of tumor, and the clinical condition of the patient including 
their kidney and liver function. This can often only be accomplished by 
using compounded, patient-specific medication preparations.
    The compounding of pediatric dosage forms has also been an area of 
extensive activity, because many drugs used to treat children are only 
available in adult dosage forms. As the committee is aware, finding the 
right drug, dose and dosage form to treat sick children is a 
complicated task. This committee has made great strides in establishing 
incentives to improve the utility of manufactured products in treating 
children, but frequently, compounding is the only available avenue to 
achieve the desired clinical outcomes. Commercially manufactured 
products for adult use must be modified and compounded for use in 
children. It has been estimated that more than 40 percent of doses 
given in pediatric hospitals require compounding to prepare a suitable 
dosage form. Indeed, utilization of compounded medications is essential 
for the provision of medical care to hospitalized children.
    As the committee is aware, hospice programs provide care for 
patients near the end of their lives who can no longer benefit from 
curative treatment and generally have a life expectancy of 6 months or 
less. Patients suffering from incurable cancer have very special needs. 
Relief of pain near the end of life is an important element of 
maintaining the dignity and comfort of a dying patient and their loved 
ones. Hospice pharmacists often use compounded medications to alleviate 
pain and to control nausea and vomiting for patients in the hospice 
setting. A problem for many hospice patients is that pain medications 
are not manufactured in the required dosages. If commercial products 
that provide the precise dose(s) required are not available, the 
hospice pharmacist can often remedy the situation by extemporaneously 
preparing an individualized product. Additionally, some patients are 
not physically capable of swallowing the number of commercially 
manufactured tablets or capsules required or cannot take medications 
orally. A pharmacist can address these issues by either compounding a 
stronger product, by transforming tablets or capsules into a liquid, or 
by creating a preparation that can be applied topically or delivered 
rectally.

Continuous Quality Improvement

    Pharmacy compounding conforming to the highest possible 
professional standards is essential to optimal patient care. But 
maintaining quality and advancing practice requires the profession to 
be vigilant, and continually improve our professional standards and 
regulatory efforts. One question that continues to plague the 
profession and our regulators--the State boards of pharmacy--is how to 
distinguish between compounding and manufacturing; with one practice 
regulated by State boards of pharmacy and the other process, by the 
Food and Drug Administration.
    Compounding has traditionally been characterized by the triad 
relationship of the physician, pharmacist and patient; working together 
to individualize care for maximum patient benefit. Pharmacy compounding 
is performed in response to a prescription from a licensed prescriber, 
or in preparation for a reasonably anticipated prescription, based upon 
prior experience and expected needs of individual patients.
    APhA supports the National Association of Boards of Pharmacy's 
(NABP) definition of compounding, which states:
    Compounding--The preparation, mixing, assembling, packaging, or 
labeling of a drug or device (i) as the result of a practitioner's 
Prescription Drug Order or initiative based on the pharmacist/patient/
prescriber relationship in the course of professional practice or (ii) 
for the purpose of, as an incident to research, teaching, or chemical 
analysis and not for sale or dispensing. Compounding also includes the 
preparation of drugs and devices in anticipation of Prescription Drug 
Orders based on routine, regularly observed patterns. [emphasis added] 
(Good Compounding Practices Applicable to State Licensed Pharmacies, 
Subpart A. Park Ridge, IL:NABP, 1993.)
    The profession's definition of compounding does not encompass the 
preparation of massive amounts of a drug product with the contemplation 
of distribution to a mass market of unknown users in unknown venues. 
Rather, the definition supports our assertion that the purpose of 
pharmacist compounding is to prepare an individualized drug treatment 
for a patient based on an order from a duly licensed prescriber.
    Manufacturing, on the other hand, is defined by NABP as follows:
    Manufacturing--The production, preparation, propagation, conversion 
or processing of a Drug or Device, either directly or indirectly, by 
extraction from substances of natural origin or independently by means 
of chemical or biological synthesis, and includes any packaging or 
repackaging of the substance(s) or Labeling or relabeling of its 
container, and the promotion and marketing of such Drugs or Devices. 
Manufacturing also includes the preparation and promotion of 
commercially available products from bulk compound for resale by 
pharmacies, Practitioners, or other Persons. (Id.)
    As clear as this difference may seem to the profession of pharmacy, 
it has been a difficult distinction to implement because of the 
complexity and range of legitimate compounding activities. In public 
comments, even the Food and Drug Administration has suggested that the 
difference between compounding and manufacturing is better represented 
by the intersection of two jagged jigsaw puzzle pieces rather than a 
straight line.
    The fundamental difference between compounding and manufacturing, 
and the key element in making any such distinction, is the existence of 
a pharmacist/prescriber/patient relationship. This triad should control 
the preparation of a drug product. Furthermore, compounded drugs are 
not for resale, but rather, are personal and responsive to a patient's 
immediate needs. Conversely, drug manufacturers produce batches 
consisting of millions of tablets or capsules at a time for resale, 
while utilizing many personnel and large scale manufacturing equipment, 
without knowledge of the specific patient who will ultimately consume 
them.
    There are numerous factors to consider in distinguishing the FDA-
regulated practice of manufacturing from the State-regulated practice 
of compounding. Such factors--though none is exclusive--include the 
volume of compounding by a particular pharmacist or pharmacy, the 
number of different products being compounded, the scope of the 
pharmacist's and pharmacy's practice, and of course, the presence of 
individual prescriptions for each compounded product.

Ongoing Activities; Opportunities for the Future

    As professionals, pharmacists continually strive to provide the 
best patient care possible, including continuous review of practices 
and taking steps to improve medication use and advance patient care. 
While some may assert that little is being done to advance and improve 
pharmacist compounding, they are mistaken. APhA publishes resources for 
pharmacists to improve the practice, including The Art, Science and 
Technology of Pharmaceutical Compounding and Trissel's Stability of 
Compounded Formulations. And I am currently chairing an APhA committee 
setting strategic directions for the profession--including compounding. 
In our year of meetings, we have proposed some steps for advancing 
compounding practice as part of our commitment to providing safe and 
effective pharmaceutical care to the citizens of this country.
    One aspect of our committee's work to date is the preliminary 
categorization of compounding to distinguish the types of compounding a 
pharmacist should be prepared to provide based on our pharmacy 
education and training, from the types of compounding that may require 
enhanced education or perhaps accreditation or certification processes. 
Because compounding encompasses a broad scope of activities--from the 
preparation of rather simple lotions for application to the skin to the 
preparation of radiopharmaceuticals for injection imaging, this 
categorization is important in focusing quality improvement efforts and 
resources. Our committee is also considering a proposal that 
pharmacists identify all compounded products for patients, so that 
patients understand that they will be using a non-commercially 
available product prepared specifically for their needs.
    Other groups are pursuing efforts to improve pharmacy compounding 
practice as well. The United States Pharmacopeia (USP), the official 
drug standard setting body for our country, has a long history of 
addressing pharmacy compounding, especially in the area of sterile 
preparations. Various State boards of pharmacy are exploring changes in 
statute and regulation to more clearly articulate the boundaries of 
practice for pharmacists in their jurisdiction. In my home State of 
Virginia, legislation passed in the 2003 session made changes to our 
compounding requirements. Specifically, the legislation clarified that 
compounded products be prepared and dispensed pursuant to a 
prescription and in the context of a bona fide practitioner-patient-
pharmacist relationship; or in expectation of receiving a valid 
prescription based on observed prescribing patterns. All compounded 
products must be labeled and include a beyond-use date. In addition, a 
pharmacist is required to maintain and comply with a policy and 
procedure manual if their practice involves compounding products that 
are at high risk for contamination, radiopharmaceuticals, or dose-
critical or specialized preparation dosages.
    And APhA and other representatives of the profession of pharmacy 
are evaluating the issue and proposing solutions as well. In 
collaboration with the National Association of Boards of Pharmacy and 
the United States Pharmacopeia, our groups have recommended exploring 
the value of voluntary programs to improve compounding activity in 
certain categories. For example, should pharmacists engaged in 
compounding complex sterile products--such as those prepared from non-
sterile bulk chemicals--have their pharmacy practice complete a site 
accreditation process to assess the policies and procedures employed? 
Should pharmacists engaged in other complex compounding activities 
complete specific training and education programs, or even an 
individual certification process to demonstrate their knowledge and 
skills? While this work is early in development, we are making progress 
and will continue our work to assure that patients get the compounded 
medications they need, at the level of quality they should expect.
    Improving our efforts to provide quality compounded products will 
require collaborative efforts of consumers, the profession, State 
boards of pharmacy, and the FDA. Each stakeholder has an expertise that 
is essential in assuring the continued availability of this practice 
with the quality patients deserve. Consumers must play a role in all of 
our efforts, as we are pursuing this work for them. The profession must 
take the lead in guiding the regulatory agencies in how to draw the 
line between compounding and manufacturing, and in developing 
guidelines and voluntary accreditation or certification processes to 
demonstrate compliance with those guidelines. The State boards of 
pharmacy, responsible for regulating the profession, should maintain 
their primary regulatory role of pharmacy practice, including 
compounding, and will likely be tasked with new initiatives to enhance 
current regulatory efforts. The FDA has a role in regulating 
manufacturers, as well as defining some broad guidance, such as the 
identification of substances that should not be used in manufacturing 
or compounding because the substances have been withdrawn from the 
market for safety and efficacy concerns. All of these efforts require 
collaboration, coordination, and ongoing communication.
    Through compounding, pharmacists fulfill a legitimate and essential 
need --providing patients with medications tailored to their needs. The 
professional education and training of pharmacists provides the unique 
knowledge and skills necessary to fulfill this health care need. The 
profession continues to research the most stable and appropriate 
mechanisms to produce compounded products, utilizing available and 
emerging technologies. By working together, prescribers and pharmacists 
help patients access otherwise unavailable therapies such as cream for 
breast cancer patients' radiation burns, or anticonvulsants in a 
suppository form when patients' veins are not accessible for injection. 
Without compounding, many physicians, pharmacists and patients would 
lose access to valuable treatments.
    APhA supports the committee's efforts to discuss this important 
issue. Pharmacist compounding improves patients' lives every day, but 
we must continually improve our practices to provide the best patient 
care. Pharmacists are ready to partner with stakeholders to develop 
effective strategies to improving the quality of compounding practices. 
APhA appreciates the opportunity to share the perspective of 
pharmacists on this issue.
            American Pharmacists Association, APhA,
                                 Washington, DC 20037-2985,
                                                  January 15, 2004.
Hon. Judd Gregg,
Chairman,
Health, Education, Labor, & Pensions Committee,
U.S. Senate,
Washington, DC 20510.

RE: October 23, 2003 Hearing, ``On Federal and State Role in Pharmacy 
        Compounding and Reconstitution: Exploring the Right Mix to 
        Protect Patients''

    Dear Chairman Gregg: Thank you for providing the American 
Pharmacists Association (APhA) the opportunity to present its views at 
the October 23, 2003 Health, Education, Labor, and Pensions (HELP) 
Committee hearing on Pharmacy Compounding. At the hearing, interested 
parties were invited to provide additional input on several questions 
by January 15, 2004. This letter responds to those questions and 
further details AMA's support for quality pharmacy compounding.
    The practice of compounding is an important and long-standing 
component of the pharmacy profession. It has always been a basic part 
of pharmacy practice, beginning with the early practice of pharmacy, 
which required the compounding of virtually all medications because 
there were few, if any, commercially manufactured products. The need to 
compound continues. Today, pharmacists compound alternatives to 
commercially available products or modify a manufactured product by 
adjusting the dose, changing the form of the drug (e.g., tablet to a 
liquid), or preparing an alternative that does not contain offending 
preservatives, dyes, or other allergens. Compounding allows a 
pharmacist to tailor a medication to an individual patient's needs.

    Question 1. How does one define the line between compounding and 
manufacturing? Regarding that defining line, what inspection and 
enforcement authorities does the U.S. Food and Drug Administration 
(FDA) need?
    Answer 1. APhA supports compounding, pursuant to or in anticipation 
of a prescription or diagnostic preparation order, as an essential part 
of health care. A patient/physician/pharmacist triad is the essential 
element distinguishing between compounding and manufacturing. Pharmacy 
compounding is performed in response to a prescription from a licensed 
prescriber, or in preparation for a reasonably anticipated prescription 
based upon prior experience and expected needs of individual patients.
    State Boards of Pharmacy must continue their role as the regulatory 
authority for pharmacy practice. When and if a State Board, through its 
own investigative process, determines that a pharmacy is manufacturing, 
then the FDA should get involved. The FDA's current inspection and 
enforcement authority is sufficient.

    Question 2. Is there large-scale compounding that warrants more 
active regulation by the FDA? If so, would you recommend regulation 
short of regulations as a manufacturer? And if so, what would you 
recommend?
    Answer 2. The primary factor distinguishing compounding from 
manufacturing is the existence of a physician/patient/pharmacist triad 
that includes a prescription or the expectation of a prescription based 
on prior experience with the pharmacist's patient base. For example, a 
pharmacy may serve a large population requiring a certain type of 
medication, but a proportion of that same population may also be 
allergic to a specific ingredient in the commercially available 
product. By responding to the individual patients' needs, the 
pharmacist may have a high volume of compounding, but that activity is 
performed on a case-by-case basis in response to a prescription. 
Manufacturing, by contrast, involves the mass production of thousands 
of dosage forms with no connection between the producer of the 
medication and the ultimate user. No volume of compounding warrants 
more active regulation by the FDA, as all compounding in response to a 
specific patient prescription, within the physician/patient/pharmacist 
triad remains within the realm of pharmacy practice.

    Question 3. Dr. Sellers included a proposal of Federal legislation 
enhancing the regulation of compounding. Please comment on her 
proposal. What portion of her proposal do you believe must be 
accomplished at the Federal level and what portion can safely be 
achieved at the State level?
    Answer 3. Dr. Sellers' proposal includes the following 
recommendations: disclosure to prescribers and patients that compounded 
drugs are not FDA-approved and advise consumers of alternative FDA-
approved products; include a disclaimer on all compounded drug 
containers; require that prescribers be notified before a compounded 
product is dispensed; prohibit compounding of drugs too difficult to 
compound because of safety reasons; and require strict pedigree 
requirements for all chemicals used in compounding.
    APhA recommends that pharmacists communicate with patients about 
their use of compounded medications, and that the compounded product 
should be designated as such on the product label. For example, 
pharmacists could include the statement, ``This medication was 
specifically compounded for your use at the direction of your doctor.'' 
Such a requirement could be incorporated into State law. We do not 
support Federal legislation requiring pharmacists to inform patients of 
alternative FDA-approved products. Pharmacists compound only at the 
request of a prescriber, in response to a prescription for an 
individual patient (or in anticipation of a prescription based upon the 
pharmacist's experience). The prescriber, through the specifications of 
the prescription they issue, is aware that the pharmacist will need to 
compound the special formula; it is through their direction that the 
compounding is performed. Because the preparation and dispensing of the 
compounded product is driven by the patient/prescriber/pharmacist 
relationship, the evaluation of alternative, commercially manufactured 
products has already occurred.
    Similarly, a Federal law requiring notification of the prescriber 
before a compounded product is dispensed is redundant and unnecessary. 
Compounding is performed at the direction of the physician or other 
prescriber, and is directed by that practitioner's prescription. 
Prescriptions for a commercially available manufactured product may not 
be randomly converted by pharmacists to prescriptions for compounded 
medications. Enactment of a Federal regulation prohibiting this 
practice would not change that reality.
    The development of a list of medications that should not be 
compounded maybe appropriate, although the list must be developed 
through a collaborative process of stakeholders, including patients and 
pharmacists: Additionally, the list would need to be updated 
periodically to reflect advances in technology and compounding pharmacy 
practice.
    The pedigree recommendation is intriguing, and may be appropriate. 
As outlined in our November 3, 2003 comments to the FDA on their Anti-
Counterfeit Drug Initiative (Attachment A), APhA recognizes the value 
of requiring documentation of prescription drug distribution 
transactions and agrees that pedigrees, in concept, may be an 
appropriate tool to track prescription drugs from manufacturer, to 
wholesaler/distributor, to pharmacist. Recognizing the need: for 
enhanced technology to assure the validity of such a pedigree and to 
protect against the opportunity to counterfeit a paper pedigree, we 
would support a pedigree system for products used in compounding where 
the benefit of such a system is documented.

    Question 4. Is it legitimate for a pharmacist to dispense a 
compounded drug if the prescriber has not indicated in the prescription 
that a specially compounded drug is required by the patient, or if the 
pharmacist has not verified with the prescriber that it is appropriate 
to dispense a compounded product?
    Answer 4. No. This question appears to assume that compounding 
occurs absent prescriber direction. Pharmacists compound within the 
physician/patient/triad, in response to a prescriber's request. When a 
physician prescribes a medication and designates that a certain 
ingredient be excluded because of a patient's allergy, for example, the 
physician is indicating the need for a compounded product. By 
indicating a need for a product that differs from the commercially 
available product, the prescriber is aware that the pharmacist will 
have to create a compounded product. If the pharmacist must change the 
prescription due to a review of the patient's medication profile, the 
pharmacist must contact the prescriber to modify the prescription 
before the medication is dispensed. This is a daily part of the 
practice of pharmacy and involves not just compounded products but also 
medication adjustments among commercially available products to avoid 
drug/drug interactions, other potential adverse events, or compliance 
with third-party payor formulary requirements.

    Question 5. Do you believe that a pharmacist who compounds drugs 
that are distributed interstate is in fact a manufacturer? Can a 
pharmacist who distributes drugs interstate truly have a pharmacist/
prescriber/patient relationship? Can a pharmacist who is not licensed 
in a State lawfully dispense compounded drugs to patients in that 
State? Do you believe that interstate distribution of compounded drugs 
should itself be grounds for regulation by the FDA?
    Answer 5. The places to which a pharmacist distributes its 
compounded products does not convert their activity from compounding to 
manufacturing. The elements used to determine whether a pharmacist is 
compounding include whether or not a physician/patient/pharmacist 
relationship exists and whether the compounding is in response to a 
prescription or in expectation of prescriptions based upon their 
patient population and experience. The distribution of the compounded 
product interstate is a function of where the patient resides as 
compared with where they secure their health care services. A 
relationship among prescribers, pharmacists and patients can exist 
across State lines, and such relationships exist every day, for 
example, in the Washington DC metropolitan area. Although a patient may 
reside in the Commonwealth of Virginia, they may choose to use a 
physician and pharmacist located in Washington DC. Similarly, patients 
from Massachusetts who move to Florida for the winter may prefer to 
maintain their health care services from Massachusetts. And with the 
advances of telemedicine, distance no longer precludes the development 
and maintenance of relationships between health care professionals and 
their patients. Distribution of compounded medications in interstate 
commerce does not convert compounding to manufacturing.

    Question 6. What can Congress do to encourage the States to 
regulate pharmacy compounding more thoroughly?
    Answer 6. Congress has already taken positive steps to encourage 
State Boards of Pharmacy to review their compounding regulations and 
improve their oversight of the practice. By holding the successful 
hearing last October, the profession and State regulators were again 
reminded of our important role in improving the quality of this 
practice. To underscore the messages from the hearing, APhA will be 
sending a copy of the GAO report/testimony from the October hearing to 
the individual State Boards of Pharmacy with a letter encouraging the 
State regulatory bodies to examine their current compounding 
regulations and determine if they should be revised or strengthened. 
State Boards of Pharmacy take their responsibility of regulating the 
profession and protecting patients very seriously and we expect them to 
respond appropriately.

    Question 7. Do you believe that the National Association of Boards 
of Pharmacy Model Act which includes voluntary guidelines are being 
adopted and implemented or is there a need for mandatory regulations?
    Answer 7. The National Association of Boards of Pharmacy's (NABP) 
Model Act serves as an appropriate baseline model for regulating 
pharmacy compounding, and is particularly helpful because it is updated 
periodically. Compounding continues to be important to State Boards of 
Pharmacy and many Boards have reviewed (or are reviewing) their 
regulations to make sure that they meet today's standard of pharmacy 
practice. It is not necessary to mandate regulations.

    Question 8. Do you support a system of batch testing?
    Answer 8. APhA supports quality improvement processes in pharmacy 
practice, including the incorporation of both internal and external 
batch testing for compounding conducted at a certain level. The 
preparation of a few topical products for a few patients would likely 
not benefit from such testing, nor would it be feasible when very 
limited quantities are prepared. In other situations, however, periodic 
batch testing in appropriately regulated labs could be beneficial. 
Appropriate internal and external batch testing improves the quality of 
the practice, and documenting such activity and the results provides 
State regulators with important information.

    Question 9. Should there be a system of credentialing pharmacy 
compounders and if so, where is the APhA in developing the 
credentialing system?
    Answer 9. APhA supports a voluntary system of accrediting pharmacy 
sites where a specified level of compounding practice occurs. Other 
practices should meet minimum site standards, personnel should have 
appropriate education, and the environments must support quality 
compounding practice.
    AMA's Strategic Directions Committee prepared a preliminary 
categorization of compounding practice to distinguish the compounding a 
pharmacist should be prepared to provide based on pharmacy education 
and training from the compounding that may require enhanced education 
or accreditation or certification processes. Because compounding 
encompasses a broad scope of activities--from the preparation of rather 
simple lotions for application to the skin to the preparation of 
radiopharmaceuticals for injection imaging--this categorization is 
important in focusing quality improvement efforts and resources. We are 
continuing our work with stakeholders to develop this site 
accreditation process for certain compounding activities. Efforts to 
coordinate involvement are continuing, and we should have a process 
underway by the end of this year.

    Question 10. Do you feel that schools of pharmacy are providing 
adequate training for pharmacy compounding? If not, what should be done 
to work with schools of pharmacy to improve their curriculum?
    Answer 10. Pharmacy education, including formal curricula and 
experiential rotations in the final year of pharmacy school, provides a 
base level of training and skill development in pharmacy compounding. 
Part of our Strategic Directions Committee's activity and the 
stakeholder work on accreditation involves articulating the level of 
compounding at which all student pharmacists. should be trained. This 
information will be valuable to schools and colleges of pharmacy and 
help guide their curriculum development and clerkship rotations.

    Question 11. Some pharmacy technicians are allowed to compound. Do 
you feel they have the proper training to compound? Should they be 
required to have some minimum education requirements? Should pharmacy 
technicians be required to have State licenses or at minimum be 
registered?
    Answer 11. Pharmacy technicians fulfill a valuable role in pharmacy 
practice, and should be allowed to compound under the supervision of a 
compounding pharmacist. The scope of that activity, however, should fit 
within two parameters: it should not exceed the level of compounding 
for which the supervising pharmacist is trained nor exceed the level 
for which the technician has been trained. Technicians who compound 
need adequate training and education, and there are numerous programs 
to provide such training. Additionally, external programs should be 
supplemented by on-site training to assure familiarity with facility 
procedures and quality control mechanisms.
    APhA supports technician certification by the Pharmacy Technician 
Certification Board as a mechanism to document the technician's 
knowledge. APhA supports registration of pharmacy technicians by State 
Boards of Pharmacy as a mechanism to monitor technician activity and 
provide appropriate information to supervising pharmacists. 
Technicians, regardless of their credentials, work under the direct 
supervision of a pharmacist.

    Question 12. What is your position on reporting adverse events from 
compounded products?
    Answer 12. APhA supports medical error and adverse event reporting 
systems that are voluntary, confidential, and non-punitive. These 
systems should include all medical adverse events including errors and 
adverse events related to compounded products. In the context of 
current Congressional debate, we support S. 720, the Patient Safety and 
Quality Improvement Act, a bill designed to encourage a culture of 
safety and quality in the United States health care system by providing 
for legal protection of information voluntarily reported to support 
quality improvement and patient safety efforts.

    Question 13. What is the role of the FDA?
    Answer 13. Pharmacists rely on the FDA for strong, consistent 
regulation of pharmaceutical manufacturing. When activity goes beyond 
the patient/physician/pharmacist triad and is thus manufacturing, we 
rely on the FDA to assure that these processes yield a safe and 
effective product, when those medications are used appropriately. We 
agree with the General Accounting Office's (GAO) testimony at the 
October hearing, which delineates the FDA's role in regulating 
considered manufacturing (although we do not agree with the GAO's 
labeling of this activity as ``compounding''):
    . . . The Agency has stated that its primary concern is where drug 
compounding is being conducted on a scale tantamount to manufacturing 
in an effort to circumvent FDA's new drug approval requirements. FDA 
officials reported that the Agency has generally left regulation of 
traditional pharmacy practice to the States, while enforcing the act 
primarily when pharmacies engage in drug compounding activities that 
FDA determines to be more analogous to drug manufacturing.\1\
---------------------------------------------------------------------------
    \1\ United States General Accounting Office, Testimony Before the 
Committee on Health, Education, Labor, and Pensions, U.S. Senate, 
October 23, 2003, page 10.
---------------------------------------------------------------------------
    In addition, the FDA could provide a list of active ingredients 
that should not be used to compound, specifically those active 
ingredients removed from the market for safety reasons. Many States 
prohibit compounding using any drug that the FDA has identified as 
withdrawn or removed from the market for safety reasons. We encourage 
State boards of pharmacy to include this restriction in their 
regulations if they have not already done so.

    Question 14. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are safe and effective.
    Answer 14. The pharmaceutical literature is replete with evidence 
of the value of pharmacy compounding, as well as efforts to improve the 
quality of the practice. We have enclosed representative copies of the 
APhA peer-reviewed publication Journal of the Pharmaceutical Sciencies 
(JPharmSci) and the International Journal of Compounding Pharmacy. At 
your request, we would be pleased to provide copies of APhA textbooks 
in this area (including Trissel's Stability of Compounded Formulations 
and The Art, Science and Technology of Pharmaceutical Compounding) as 
well as resource books from other publishers.
    Anecdotal evidence of the safety and effectiveness of compounded 
medications comes from the positive patient outcomes occurring every 
day as--a result of compounding in hospitals, community pharmacies, 
hospice programs, and myriad other environments. These practices are 
described in the attached amicus brief (Attachment B), submitted to the 
Supreme Court for their consideration last year in the Western States 
case.

    Question 15. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are not safe or effective.
    Answer 15. As part of quality improvement activities in any 
profession, identification of practices or procedures that yield 
questionable results is important. Recommendations for identifying and 
addressing those practices are published in the same literature cited 
in the previous question.

    Question 16. If the balance of evidence does not clearly indicate 
that compounded drugs are safe and effective, how should that affect 
our decisions about the sort of regulation that is required, even 
taking into account the acknowledged need for compounded drugs?
    Answer 16. The balance of evidence supports the understanding that 
compounded medications are safe and effective. Although the quantity of 
patient use of compounded medications is, appropriately, very small 
when compared with patient use of manufactured medications, it is 
estimated that thousands of patients successfully use compounded 
medications. And as with manufactured medications, problems can occur. 
The profession continues our work to identify the root causes of such 
problems and improve practice to decrease or eliminate those problems. 
And as we stated above, APhA supports the reporting of all medication-
related adverse events as long as the process is voluntary, non-
punitive, and can serve as an educational tool within the profession of 
pharmacy to improve compounding practice and our efforts to improve 
medication use and advance patient care.

    Question 17. If the balance of evidence indicates that problems of 
safety or effectiveness of compounded drugs are infrequent or isolated 
and not systemic, and considering the acknowledged need for compounded 
drugs, how should that affect our decisions about the sort of Federal 
regulation required?
    Answer 17. The balance of evidence shows that problems with 
compounded medications are limited. But even with infrequent or 
isolated problems, those problems must be addressed by the profession 
and State regulators. APhA continues to support State efforts to assure 
the safety of compounded practices, and to support the profession's 
efforts to improve the quality of this work. Any Federal regulation 
should focus on the FDA's role in regulating manufacturing and the 
Agency's collaboration with State regulators when distinguishing 
compounding from manufacturing.

    Question 18. If an active ingredient or the indication for an 
active ingredient is patented, how does compounding a drug using the 
active ingredient or using the active ingredient for the indication 
affect the rights of the patent owner?
    Answer 18. Compounding should not involve the production of 
significant quantities of exact copies of commercially available 
products--the only situation where compounding activity could be 
perceived to violate the rights of the patent owner.

Summary

    The profession of pharmacy is focused on improving medication use 
and advancing patient care, including improving the use of compounded 
medications. State regulatory authorities regulate the profession to 
protect the public health, and the profession works continually to 
improve the quality of our service to our patients. States require the 
licensure of both the professional (the pharmacist) and the place of 
practice (the pharmacy). States determine the licensure requirements of 
pharmacists, as they do with physicians and other health care 
professionals. State Boards of Pharmacy have the authority to take 
disciplinary action, including license revocation or suspension, 
against pharmacists for misconduct or failure to abide by State laws or 
regulations. States also work in cooperation with Federal authorities 
with violations of the Federal Food, Drug and Cosmetic Act.
    State regulatory authorities are capable of monitoring and 
regulating the pharmacy profession as they do with other health care 
professionals, and we urge State legislative bodies to provide 
sufficient resources to conduct these vital activities. Rather than 
developing a net new set of Federal regulations and enforcement 
structure, patients would be better served by a focus on ensuring that 
these State agencies are adequately funded to perform their regulatory 
activities that assure the delivery of quality health care.
    We appreciate this opportunity to expand upon our initial comments 
and to answer some of the specific questions raised during the hearing. 
We look forward to continuing to work with you and your staff to ensure 
that patients receive safe medications that meet their specific needs. 
Please contact Kristina Lunner; APhA's Director of Federal Government 
Affairs, with any additional questions. She may be reached at 202/429-
7507 or at [email protected] And if you or your staff would like to 
meet directly with pharmacists to discuss this issue, we would be happy 
to arrange such a meeting. Thank you for your interest in this 
important issue.
            Sincerely,
                                              John A. Gans,
                                  PharmD, Executive Vice President.

                                 ______
                                 
                  American Pharmacists Association,
                                 Washington, DC 20037-2985,
                                                  November 3, 2003.
Division of Dockets Management (HFA-305),
Food and Drug Administration,
630 Fishers Lane, Room 1061,
Rockville, MD 20852.

Docket No. 2003N-0361

    Dear Sir/Madam: The American Pharmacists Association (APhA) is 
pleased to submit comments on the Food and Drug Administration's (FDA) 
Anti-Counterfeit Drug Initiative as published in the September 5, 2003 
Federal Register. APhA, founded in 1852 as the American Pharmaceutical 
Association, is the largest national professional society of 
pharmacists in the nation, representing more than 53,000 practicing 
pharmacists, pharmaceutical scientists, student pharmacists, and 
pharmacy technicians.
    The protection of our medication supply is obviously of vital 
interest to pharmacists, including efforts to prevent the introduction 
of counterfeit products into the system and the quick identification 
and elimination of such products from the system if the medication 
supply is infiltrated. Pharmacists rely upon a safe and pure medication 
supply to help patients make the best use of their medications. APhA 
applauds the efforts by the FDA to stem these illegal activities which 
are straining our regulatory system and are putting American patients 
at risk. The FDA's report that since the year 2000 counterfeit drug 
investigations have increased to an average of over 20 per year 
indicates a need to strengthen our regulatory system.
    These comments address questions raised in the September 5, 2003 
Notice of Public Hearing as well as those questions raised in the FDA 
Counterfeit Task Force Interim Report in four basic areas: the 
advantages and disadvantages of various anti-counterfeit technologies; 
regulatory and legislative challenges; public education needs and 
strategies; and the role that pharmacists will play in implementing new 
anti-counterfeit activities. APhA sees value in enhancing our efforts 
to combat counterfeiting through advanced technologies and coordination 
of efforts by all interested parties including manufacturers, 
wholesalers, pharmacists, and patients. APhA's support is only tempered 
by the reality that we are working with limited resources and therefore 
must look at both the costs and benefits of any new activity prior to 
its implementation.

Technology Cost--Benefit Analysis
    Technology advances present an opportunity to strengthen the safety 
of our drug supply. However, it is important to recognize that these 
advances do not come without a cost. As some of these technologies will 
be implemented at the pharmacy level, pharmacists and pharmacies will 
bear some of the additional costs necessary to employ new anti-
counterfeit technologies. Depending on the technology and the necessary 
equipment, this may involve a substantial financial contribution. While 
providing an anticounterfeit benefit, the burdens associated with 
infrastructure upgrades must be taken into account as the Agency 
develops its policies around anti-counterfeit technologies. The 
benefits of anti-counterfeit technologies should not become overly 
burdensome, financially or administratively, for the health care 
practitioners providing patient care.

Numbers & Types of Technology
    In determining the number and types of anti-counterfeiting 
technologies that should be used on packaging and labeling, one 
overriding consideration is involved: are the technologies sufficient 
to protect against counterfeiting? Anti-counterfeiting initiatives must 
be continuously reviewed and updated to keep ahead of counterfeiters. 
However, we recognize the resource limitations of the Agency and 
interested parties. In an ideal world with unlimited resources, we 
would have a sophisticated anticounterfeit system for every drug--but 
resources are limited. We recommend that the Agency focus its efforts 
on those drugs most likely to be counterfeited. We recognize that this 
list of drugs may change, given the activities of the counterfeiters, 
and recommend that the Agency equip itself with mechanisms that will 
allow it to rapidly respond to new counterfeit efforts.
    To assist in the identification of these priority products, APhA 
recommends that the Agency develop criteria for determining what drugs 
are most likely to be counterfeited. Ideally, that list of criteria 
would include anything that would stimulate a counterfeiter to 
counterfeit. We agree that at a minimum, that list should include the 
following criteria from the Interim Report: potential impact on public 
health if the product was counterfeited; any history of or potential 
for counterfeiting, tampering, or diversion of the product; volume of 
the product sold; the dosage form of the product; approved and 
unapproved uses of the product; current and potential misuse or abuse 
of the product; and other products in the class with a history of being 
counterfeited. It is also important to consider a product's cost when 
developing this list. But considering drug cost has its limitations. 
Cost becomes a much less important factor when a counterfeiter is 
focused on harming a patient population. In that circumstance, they 
might counterfeit a less expensive medication with a higher potential 
to cause harm to a broad population.
    When considering covert and overt technologies, APhA recommends 
using a combination of these technologies. Counterfeiters have proven 
themselves sophisticated and adaptable to advances in technology and 
changes in anti-counterfeiting efforts. While overt technologies, such 
as specific colors and fonts for labels, can provide pharmacists 
helpful clues about the validity of the drug they are dispensing, 
instituting only overt technologies could provide the counterfeiter a 
``blue print'' on how to circumvent the system. While each type of 
anti-counterfeit technology, alone, provides a benefit, creating a 
system builds upon the strength of each technology and helps create a 
less penetrable system, because advantages and disadvantages exist with 
each type of technology. For example, bar codes, a type of track and 
trace technology, are often discussed as an anti-counterfeiting 
technology that should be adopted industry-wide. Incorporating bar 
codes may provide many benefits beyond simply assisting in anti-
counterfeit efforts, such as inventory control, reducing medication 
errors, identifying theft and diversion, and implementing recalls. The 
value of bar codes to anti-counterfeiting initiatives, however, must 
consider the ease of copying bar codes and circumventing the 
protections by creating fake bar codes. While still an important option 
for a base-line anti-counterfeit strategy, no single technology will 
prevent counterfeiters. Sophisticated criminal activities require 
sophisticated countermeasures.

Unit-of-Use Packaging
    Many of the Report's technology-related questions focused on unit-
of-use packaging. APhA supports adoption of unit-of-use packaging as 
the industry standard \1\. Unit-of-use packaging may enhance patient 
safety, patient compliance, and efficiencies in drug distribution. 
While most other groups will focus on the manufacturers' and re-
packagers' role in unit-of-use packaging, it is important to consider 
the role of the pharmacist, and the accompanying revisions to state law 
that may be necessary to fully implement the concept. In current 
practice, pharmacists receive prescriptions for many different 
quantities--for 28-, 30- or 31-day supplies--supplies that may not 
match unit-of-use packaging. For effective implementation of unit-of-
use packaging, pharmacists must be permitted to modify prescribed 
quantities to correspond with commercially available unit-of-use 
packages. Without such authority, pharmacists will bear the burden of 
contacting prescribers to amend the prescription, not for clinical 
concerns but to comply with available packaging.
---------------------------------------------------------------------------
    \1\ The following policy statement was adopted in 2003 by the APhA 
House of Delegates: Unit-of-Use Packaging: APhA advocates for the 
adoption of ``unit of use'' packaging as the industry standard to 
enhance patient safety, patient compliance, and efficiencies in drug 
distribution. APhA shall collaborate with the pharmaceutical industry, 
third party payors, and appropriate federal agencies to affect the 
changes necessary for the adoption of ``unit of use'' packaging as the 
industry standard. APhA encourages the enactment of legislation and 
regulations to permit pharmacists to modify prescribed quantities to 
correspond with commercially available `` unit of use'' packages.
---------------------------------------------------------------------------
    Establishing standards for unit-of-use packaging is another 
necessary element to successful implementation. Expanding the scope of 
unit-of-use packaging provides an opportunity to create more consumer-
friendly packaging and help pharmacists and patients improve medication 
use. Allowing for a number of different unit-of-use formats, however, 
could actually stimulate patient and pharmacist confusion. For example, 
one drug's unit-of-use packaging could be designed in a circle, 
requiring a patient to take tablets in a clockwise fashion, and another 
drug's unit-of-use packaging could be designed in a rectangle, with the 
patient taking pills from left to right, moving from the top row to the 
bottom. While arguably self-evident to a patient using just one 
medication, a patient using multiple medications must then also master 
multiple types of packaging and presentation of the medication.
    Setting standards for unit-of-use packaging could also help address 
some of the shelf space issues at the pharmacy. Pharmacies are 
challenged with stocking a multitude of drug products in a limited 
space. Efficiencies in space are created when product boxes are similar 
in size. Without standards, manufacturers could greatly vary the box 
sizes of their products, creating inefficiencies and impacting the 
ability of pharmacies to stock all products. Standards could preclude 
great variations in box sizes and therefore could assist pharmacies as 
they work to appropriately stock pharmacy shelves.

Direct Shipment to End-Users
    While an interesting option to solving the challenges created by 
having too many intermediaries in the supply system, direct shipments 
to pharmacies and other end-users may pose additional problems. In 
current practice, multiple pharmaceutical manufacturers deal with a 
relatively small number of wholesalers and large purchasers, and the 
wholesalers and large purchasers then distribute products to 
pharmacies. This system provides efficiencies to both the manufacturer 
and the pharmacy by allowing each end of the distribution system to 
work with a smaller number of distributors. A direct-shipment-to-end-
user system that removes the wholesaler function would require 
pharmacies to work with multiple manufacturers, and manufacturers to 
work with tens of thousands of pharmacists and pharmacies, creating 
administrative challenges for all participants in the distribution 
system.
    In an effort to limit those administrative burdens, manufacturers 
could choose to ship their products only to large pharmacy operators 
and leave smaller pharmacies and their patients without access to 
medications. All pharmacies must have access to all medications to 
ensure that patients may conveniently receive their medications from 
their pharmacist of choice and in doing so, take advantage of the 
pharmacist-provided consumer protections against drug interactions, 
adverse events, etc. Additionally, an end-user distribution system 
assumes that the pharmacy is the last stop in the medication 
distribution system. In some circumstances, a pharmacy may provide 
medications to another pharmacy, such as when there is a shortage of a 
particular medication. This is an important element of providing 
patients timely access to necessary medication. Although it is 
impossible to predict the impact of such a dramatic change in our drug 
distribution system, it is clear that current efficiencies in the 
central wholesaler system would be lost, or at least compromised, with 
a direct-to-end-user system.

Managing the System
    The FDA must play a strong role in reviewing the use of various 
anti-counterfeiting technologies, whether in the form of special 
packaging, taggants incorporated into the product, or track and trace 
technologies. To better ensure an effective security system, the FDA 
should be a leader in managing the system. We would support having some 
anti-counterfeiting technologies identifiable only by the manufacturer 
and/or the FDA, as well as efforts to limit the number of persons/
entities with access to any anti-counterfeiting-related data. Entities 
other than the FDA who desire access to this data must demonstrate 
clear need. As such, the FDA should, at a minimum, set a baseline for 
industry to meet for all anti-counterfeit activities.
    In addition to setting a baseline, the FDA should play a strong 
role in guiding the industry through this process. In particular, the 
FDA could help the process of establishing this new system by 
clarifying the role of each interested party within the new system. One 
often misunderstood area is the intersection of authority between the 
FDA and state regulators, such as the state Boards of Pharmacy. State 
Boards of Pharmacy play a significant role in regulating pharmacies, 
pharmacists, and wholesale distributors. The new system would benefit 
from a coordinated, consistent approach from the FDA and other 
regulators, and including this type of information as part of the 
industry guidance document.

Regulatory and Legislative Issues--Prescription Drug Marketing Act
    In our June 30, 2000, comments on the Agency's final rule 
implementing the Prescription Drug Marketing Act of 1987 (PDMA) as 
amended, APhA expressed concerns that the changes to the wholesale 
distribution of prescription medications would erect barriers adversely 
impacting pharmacists' ability to obtain prescription drugs. APhA's 
concerns included creating two categories of drug distributors 
(authorized and unauthorized), each with their own regulatory 
requirements, and requiring unauthorized wholesale distributors to 
provide a drug origin statement or paper ``pedigree'' detailing each 
previous transaction of the drug upon each subsequent sale or trade of 
the drug.
    APhA recognizes the value of requiring a trail of transactions for 
a prescription drug and agrees that pedigrees, in concept, may be an 
appropriate tool to track prescription drugs from manufacturer, to 
wholesaler/distributor, to pharmacist. However, our concerns with a 
paper-based system have not dissipated since our 2000 comments, 
although our confidence in the distribution system has changed 
dramatically. A paper pedigree system could negatively impact the 
security of our drug distribution system by creating a false sense of 
security when the mere presence of a paper pedigree could be proof of 
little. The value of a paper-based system is reduced by the ease of 
counterfeiting paper pedigrees. A paper-based pedigree system may 
provide a track record of the product movement, or simply provide a 
counterfeit record of the product movement-a trail as fake as the 
product it accompanies. If an entity is sophisticated enough to 
counterfeit the product, the same entity would be equally capable of 
counterfeiting a paper pedigree.
    Proposals to issue an electronic, universal pedigree address our 
concerns regarding PDMA's affect on drug availability. Early iterations 
of PDMA implementation created a two-tiered system by developing a 
system of authorized and unauthorized distributors. It is highly 
unlikely that a manufacturer would provide an unauthorized distributor 
with a pedigree when it is not required to--and forcing unauthorized 
distributors to construct a pedigree is an insurmountable burden that 
would likely reduce the number of legitimate distributors in the 
system. Fewer legitimate distributors could lead to a decrease in 
competition, an increase in prescription drug prices, and a disruption 
in drug distribution. Because of these concerns, APhA supports a 
carefully constructed, electronic universal pedigree.
    We continue to support a pedigree requirement in concept and 
recommend that the Agency consider alternative formats, such as an 
electronic pedigree system or other approaches less likely to be 
falsely produced by counterfeiters. As with any new system, such steps 
should be implemented after a costbenefit analysis has been conducted.

Access to Quality, Regulated Drugs
    APhA firmly believes that one of the greatest risks to patients 
receiving counterfeit drugs is personal importation of medications from 
outside the U.S. Importation, particularly personal importation, raises 
patients' risk of receiving a substandard or fake medication 
substantially by making the world a patient's pharmacy--a drug provider 
that is often unregulated or at least regulated very differently. 
Members of Congress and state policymakers, in an effort to increase 
access to medications for their constituents, have begun efforts to 
facilitate and/or legalize this unsafe practice. Simply strengthening 
existing regulatory enforcement to address importation would reduce the 
risk of patients receiving a counterfeit medication.
    Over the last year, so-called storefront operations have popped up 
around the country to facilitate personal importation of 
pharmaceuticals. These facilities are clearly participating in the 
delivery of medications to patients. State Boards of Pharmacy, with 
whom enforcement of the practice of pharmacy lies, find themselves 
struggling with jurisdictional issues when trying to close down these 
storefront operations. Often walking the fine line of ``practicing 
pharmacy'', these storefronts occasionally fall in a regulatory vacuum. 
Any changes necessary to directly address these entities--thereby 
providing either federal or state regulators the authority to shut down 
these operations--must be made. In addition, APhA supports the proposal 
to increase penalties for counterfeiting medications. Such action would 
send a strong message to counterfeiters that we do not condone this 
illegal, unsafe, and unscrupulous practice.

State Pharmacy Practice Acts
    As stated previously, personal importation is the greatest risk to 
patients receiving counterfeit drugs and State Boards of Pharmacy are 
struggling with jurisdictional issues when trying to regulate 
``storefront'' operations. Therefore, APhA would support efforts to 
enhance the ability of state Boards of Pharmacy to regulate all 
entities engaging in pharmacy practice, including so-called 
storefronts. Additionally, APhA supports strengthening wholesaler 
regulations, such as requiring a site visit to a wholesaler before 
issuing a license. This step would enhance regulators' efforts to 
ascertain that the wholesalers seeking licensure are legitimate 
businesses.

Education & Communication--Role of the Public
    Patients play a very important role in identifying and reporting 
suspected counterfeit drugs. Occasionally, counterfeit drugs may be 
identified only through patient experience with medications--only after 
the drug interacts with a human body. But for patients to fulfill this 
role of reporter, they first need to be aware of the importance of 
reporting. Second, patients must know where to report--that they should 
tell their pharmacist when a drug looks, smells, feels, or tastes 
different than what they had previously experienced or expected. Even 
if the change in appearance or effect is not related to a counterfeit 
medication, this conversation may help limit adverse drug events or 
side effects, it may help improve medication use and advance patient 
care. Third, patients also need to understand how easily drugs can be 
counterfeited and how difficult it is to detect counterfeit drugs. 
Without such education, patient may not consider an odd effect the 
result of a counterfeit drug and may assume that the pharmacist would 
have ``seen'' (with the naked eye) whether a drug was counterfeit. 
Neither assumption is true and should be clarified. A call to action 
and consumer tips on what to watch for will help patient reporting of 
suspected counterfeit medications. APhA consumer tips are posted on our 
website (http://www.pharmacyandyou.org/InternetPharmacy.html) and are 
attached for your information.

Messaging
    Effective and efficient notification of counterfeit medication 
requires a consistent message in a consistent format. Inconsistent, 
conflicting messages will only perpetuate unnecessary chaos. 
Notification should take place in priority order as well, with an 
optimal situation notifying the pharmacy community first, with 
immediate subsequent notification of the public and the rest of the 
health care system. By communicating first with the pharmacy 
community--both pharmacies and pharmacists--the Agency helps prepare 
the community most likely to receive questions about the situation, and 
the community most likely to have the information necessary to 
proactively contact affected patients. Organizations such as APhA can 
play an integral role in these emergency communications.
    Messages to pharmacists should focus on information the pharmacist 
needs to address their patient population, such as: name of the 
product, lot number, specifics about identifying the counterfeit 
product, and information on the risks to patients. This type of 
information will allow the pharmacist to determine the likelihood that 
their drug supply was infiltrated by the particular product in question 
and to immediately notify the affected patients.

Collaboration
    APhA recommends that the Agency collaborate with private 
stakeholders in designing communication strategies among stakeholders. 
This public/private partnership could facilitate efforts to standardize 
anti-counterfeit communications and to augment and coordinate 
communication systems. APhA specifically recommends utilizing our 
website of resources for pharmacy professionals, www.Pharmacist.com to 
deliver FDA messages about counterfeiting. Pharmacist.com is the 
singlesource site for the professional resources that are vital to the 
continuous professional development needs of pharmacists, student 
pharmacists, and pharmacy technicians. Pharmacist.com, a collaborative 
effort of APhA and the National Association of Boards of Pharmacy, 
assembles in one place the resources pharmacists need. As a medium 
developed by pharmacy for pharmacy, Pharmacist.com provides information 
in a useful format. Pharmacist.com could be used to link to MedWatch to 
facilitate pharmacists reporting suspected counterfeits. In addition to 
Pharmacist.com, APhA has another internet-based communication tool that 
could be used to send information about counterfeit medication events. 
Pharmacist.com Focus is a weekly publication that is emailed to more 
than 65,000 pharmacists and student pharmacists and could be easily 
used to focus the attention of this audience on anticounterfeit 
activities. However, Pharmacist.com Focus is not restricted to a weekly 
distribution schedule. In a crisis, APhA has the ability to send 
special alerts to Pharmacist.com Focus subscribers--an invaluable tool 
during an emergency situation. An advantage of these systems is that 
they already exist, and it is more efficient to augment a currently 
existing system than to create a net new one that must be introduced to 
pharmacists. Pharmacists are already familiar with these systems and 
will be responsive to their information as they are seen as fair and 
unbiased resources for information.
    Creating efficient and effective public/private collaborations is a 
challenge when trying to meet the needs of a wide spectrum of 
interested parties. Involving interested parties early in the process 
can assist in these efforts. A common understanding of how systems will 
work will better prepare everyone to handle an emergency situation, and 
the creation of templates supports efforts to ensure that messages stay 
consistent. Having as much of a ``system'' in place prior to an event 
is an effective way to manage a situation. Creating consistency before 
an emergency helps prevent unnecessary mishaps.

Industry and Health Professional Issues--Role of the Pharmacist
    As the medication experts on the health care team and the health 
care practitioners with the most comprehensive set of drug information 
for the patients they serve, pharmacists should take a leadership role 
in identifying counterfeits, preventing their introduction into the 
distribution chain, and educating consumers about counterfeits and how 
to address a suspected counterfeit medication.
    Pharmacists have the responsibility of partnering with patients to 
share information about medication use, to ask patients to report 
anything different about their medication. Patients need to know, for 
example, that a drug that stings when injected could, in a rare 
situation, be counterfeit, or, more commonly, that they could be 
suffering an adverse reaction. Pharmacists are essential in efforts to 
help patients make the best use of their medications.
    Pharmacists must also play a reporting role, and need education to 
focus them on the most efficient reporting procedures. While 
pharmacists better understand the ease of counterfeiting medications, 
many have not dealt directly with the situation. Pharmacists need 
information about how and to whom they should report suspected 
counterfeit medications: reporting to FDA and the pharmaceutical 
manufacturers. APhA supports efforts to increase the understanding by 
pharmacists of the role that they play in preventing counterfeit 
medications from reaching patients, and has published a continuing 
education piece on protecting the integrity of the prescription 
medication supply, which will be distributed to more than 120,000 
pharmacists in the November, 2003 issue of Pharmacy Today.
    In addition, the profession can address the practice of safe drug 
distribution by developing best business practices for buying 
medications. These guidelines could then be widely distributed to 
pharmacists to assist them in preventing the introduction of 
counterfeit medications in their pharmacy and to facilitate the 
identification of counterfeit drugs.
    Finally, APhA commends the Task Force for recognizing that this 
effort must go beyond our own borders and must include the 
international pharmacist community. In devising international 
activities, APhA recommends that the Task Force work with the 
International Pharmaceutical Federation (FIP), a world-wide federation 
of national pharmaceutical (professional and scientific) associations. 
FIP has expressed concerns regarding the proliferation of counterfeit 
medications. At its 2003 World Congress in Sydney, Australia, the FIP 
Council adopted a Statement of Policy on Counterfeit Medicines, which 
can be accessed at http://www.fip.org/pdf/counterfeitmedicines2003.pdf
    APhA is pleased that the FDA is addressing this important issue. 
This review of current policies and systems is timely, given recent 
increases in counterfeit medications and importation by individual 
patients. As the FDA considers the steps to limit drug counterfeiting, 
the analysis must consider the costs associated with the 
recommendations--costs in terms of both time and money. Pharmacists and 
other members of the pharmaceutical supply system are ready to invest 
in appropriate measures, but we should invest wisely in those 
strategies that will provide the best value for the cost. APhA urges 
the FDA to consider our recommendations as they finalize their anti-
counterfeit drug initiative. Thank you for the opportunity to share our 
thoughts on this issue. If you need additional information, please 
contact Susan Bishop, APhA's Senior Manager of Regulatory Affairs and 
Political Action, at 202-4297538 or [email protected].
            Sincerely,
                                      John A. Gans, PharmD,
                                          Executive Vice President.
                                 ______
                                 
           About Importing Medications and Internet Phamacies

    The American Pharmaceutical Association (APhA), the national 
professional society of pharmacists, addresses consumer questions 
regarding the importation of medications and offers helpful advice on 
the risky practice.

What does ``importation'' refer to?
    Importation refers to patients obtaining medications outside of the 
United States . It is the practice of bringing medications from one 
country to another.

Why would a person engage in the practice?
    Consumers-feeling the financial pressures of expensive prescription 
drugs-look for alternative ways of obtaining the medication they need. 
However, importing medications only offers short-term cost savings, 
because if the medication is wrong or used incorrectly it can cause 
greater harm to the patient, thus resulting in higher long-term costs.

Importing drugs sounds illegal. Can just anyone bring drugs from one 
        country to another?
    Just as bringing fruit from a foreign country into the U.S. is 
illegal, importing medications is also illegal. Under federal law, only 
the manufacturer of a drug may import prescription medications, because 
the federal government regulates the manufacturing of prescription and 
nonprescription medications. The federal government has processes to 
ensure the safety of products manufactured according to its rules but 
not an imported product brought in from another country by an 
individual.
    In using the fruit analogy, the U.S. prohibits a person from 
bringing fruit from a foreign country into the U.S. because the fruit 
may be contaminated and potentially bring disease and devastation to 
our nation's harvest. In similar terms, neither the pharmacist nor the 
public has assurance that imported products are effective, safe, or 
have been produced under U.S. quality control requirements. Imported 
products may be subpotent (contain too little active ingredient) or 
superpotent (contain too much active ingredient). In the worst cases, 
imported medications may be contaminated, which can harm or permanently 
damage the body, causing paralysis, organ malfunction, or even death.

        SAFEGUARD YOURSELF WITH KNOWLEDGE & CONSIDER THIS ADVICE

    1. Are you getting what you ordered? Once a product leaves the U.S. 
regulatory system, the product is at risk of becoming contaminated. 
Understand that other distributors are not held to certain storage 
standards or product labeling. You could be consuming a product that 
has become faulty due to temperature conditions or one that is simply 
the wrong product.
    2. Do your local doctors and pharmacists know what you are taking? 
Drug interactions with other medications are something doctors and 
pharmacists consider before prescribing and dispensing prescription 
medications to patients. You may be taking a medication that will 
become ineffective

    OR CAUSE HARM WHEN TAKEN IN CONJUNCTION WITH ANOTHER MEDICATION.

    Patients often see different doctors for different examinations, 
creating the potential for drug interactions. To protect against this 
risk, patients should use ONE pharmacy for their medication needs. 
Pharmacists ensure that a patient receives the right medication in the 
right dose. Pharmacists also check for interactions by maintaining a 
patient's medication history, thus protecting the patient from 
receiving the wrong medication. If you choose to import your 
medications, be sure to discuss those medications with your doctor and 
pharmacist.
    In addition, some web sites offer medications for sale without the 
patient receiving a physical examination. Bypassing direct contact with 
a doctor or pharmacist puts the patient at higher risk to receive 
inappropriate medications.
    3. Are you getting the most from your medication? Medications are 
powerful technology and are only safe when used appropriately. 
Appropriate medication use involves more than just getting the product; 
it also requires understanding how to use the medication, including 
monitoring for unwanted side effects and potential interactions with 
other medications. Pharmacists are the patient's partner in making the 
best use of medications.

             WHAT YOU SHOULD KNOW ABOUT INTERNET PHARMACIES

    There is a portion of our population for whom Internet Pharmacies 
offer valuable benefits. Some patients may feel more comfortable 
communicating personally sensitive health information to a pharmacist 
via the Internet. There are two important points patients must be aware 
of when selecting any pharmacy:

               MEDICATIONS ARE SAFE--WHEN USED CORRECTLY

    As part of that correct use of medications, patients should keep 
the following things in mind when choosing a pharmacy whether a local 
pharmacy, mail order pharmacy, or an Internet pharmacy.
    Preferably, patients should use only ONE pharmacy source. Using 
just one pharmacy decreases the possibility of patients suffering a 
harmful drug interaction because they've gotten their medications from 
multiple sources such as an Internet pharmacy and their community 
pharmacy.
    If getting acute prescription medications (like an antibiotic) from 
a local pharmacy, the patient should alert the local pharmacist about 
other medications they are already taking.
    Patients should always have access to a pharmacist. All patients 
should have a telephone number to contact their pharmacist, whether 
they use a local pharmacy, mail order pharmacy, or Internet pharmacy. 
This is particularly significant for patients using a mail order 
pharmacy or an Internet pharmacy. They do not have the option of 
visiting the pharmacist to ask questions about their medications in 
person.

 SOME SERVICES PROVIDED BY YOUR LOCAL PHARMACIST CANNOT BE TRANSMITTED 
                              OVER A MODEM

    Patients choosing to use an Internet Pharmacy should consider the 
following:
    1. With current technology, an Internet pharmacist cannot check the 
patient's blood pressure or blood cholesterol level to help the patient 
monitor his drug therapy. Unless the Internet Pharmacy and consumer 
both have video teleconferencing capabilities, allowing the patient and 
pharmacist to see one another as they interact, pharmacists will not be 
able to observe signs or behaviors that may be important indicators of 
symptoms and potential adverse responses to drug therapy.
    2. Are Internet pharmacies licensed to serve patients in my State? 
Assuming the internet pharmacy is located in the United States , 
individual state boards of pharmacy license pharmacists and pharmacies 
and establish the regulatory framework for protecting the public 
health.
    The National Association of Boards of Pharmacy (NABP) developed a 
system to verify licensure of Internet Pharmacies-the Verified Internet 
Pharmacy Practice Site TM (VIPPS) certification. NABP is located in 
Park Ridge , Illinois . The organization can be reached by telephone at 
(847) 698-6227. Their Internet Site URL is http://www.nabp.net.
    3. Will I have access to a pharmacist to answer my questions about 
medication use? Regardless of the type of pharmacy, patients should 
select a pharmacy that has a pharmacist available to answer questions. 
In order to help make the best use of their medications, patients 
should consult a pharmacist to make sure that they receive the RIGHT 
medication, in the RIGHT dose, with the RIGHT information.



























































      Response to Questions of Senator Kennedy From Janet Heinrich

    Question 1. I would like your views about how the line between 
compounding and manufacturing should be drawn. However you would 
propose it be drawn, please describe what inspection and enforcement 
authorities the U.S. Food and Drug Administration would need to enforce 
the definitional line.
    Answer 1. During our work for the committee's October 23, 2003, 
hearing on pharmacy compounding, a number of officials reported a 
variety of opinions on how to draw the line between pharmacy 
compounding and manufacturing. These included state pharmacy board 
officials in four states; national pharmacy association officials, 
including the National Association of Boards of Pharmacy; FDA 
officials; and pharmacy experts. Several sources commented that they 
believed that a triad relationship among prescribing health care 
practitioner, patient, and pharmacist (including a prescription) 
distinguishes drug compounding from manufacturing. Others commented 
that FDA should provide further clarification on the line between 
compounding and manufacturing. One pharmacy expert, who was the former 
Chair of the FDA Pharmacy Compounding Advisory Committee, said he 
believed that, if available, commercial products should be used rather 
than a compounded drug.
    Regarding FDA inspection and enforcement authorities, a few 
officials we interviewed said that states regulate compounding and FDA 
regulates manufacturing and that states may notify FDA when they 
suspect a pharmacy is manufacturing. FDA officials said that FDA's 
longstanding position has been that all compounding is technically a 
violation of the Federal Food Drug and Cosmetic Act (FDCA), although 
FDA will generally defer to state authorities in dealing with ``less 
significant'' violations.
    Further, several officials we interviewed said that the former 
compounding section in FDAMA \1\ provided the clarification they 
thought was needed to distinguish between legitimate compounding and 
manufacturing and also defined the role of FDA regarding oversight of 
compounding. Many officials, including state pharmacy board and 
pharmacy association officials, added that they would support similar 
legislation, for example, language similar to the compounding section 
that was in FDAMA without the advertising provisions.

    \1\ In 1997, Congress passed the FDA Modernization Act of 1997 
(FDAMA), which exempted drug compounders that met certain criteria from 
key provisions of the FDCA, including the requirements for the approval 
of new drugs. These exemptions, however, were nullified in 2002 when 
the United States Supreme Court ruled part of the 1997 law to be an 
unconstitutional restriction on commercial speech, which resulted in 
the entire compounding section being declared invalid.

    Question 2. However you might define compounding, might there 
nonetheless be large-scale compounding that warrants more active 
regulation by the Food and Drug Administration? If so, would you 
recommend regulation short of regulation as a manufacturer, and if so, 
what would you recommend?
    Answer 2. Concerns have been raised by FDA and others that some 
pharmacies are going beyond traditional drug compounding for individual 
patients by, for example, compounding and selling large quantities of 
drugs without meeting safety and other requirements for new 
manufactured drugs. FDA maintains that FDCA requirements, such as those 
regarding the safety and efficacy requirements for the approval of new 
drugs, are generally applicable to pharmacies, including those that 
compound drugs. FDA officials reported that the agency has taken action 
with pharmacy compounders that they believe have become small 
manufacturers and where there is a genuine public health threat. State 
pharmacy board officials in two of the states we reviewed told us that 
they have worked with FDA officials in compounding investigations 
involving both large and small quantities of compounded drugs.

    Question 3. Dr. Sellers included a proposal for Federal legislation 
enhancing the regulation of compounding. Please comment on her 
proposal. What portion of her proposal do you believe must be 
accomplished at the Federal level and what portion can safely be 
achieved at the State level?
    Answer 3. This question is beyond the scope of the work we 
conducted for the committee's October 23, 2003, hearing.

    Question 4. Is it legitimate for a pharmacist to dispense a 
compounded drug if the prescriber has not indicated in the prescription 
that a specially compounded drug is required by the patient, or if the 
pharmacist has not verified with the prescriber that it is appropriate 
to dispense a compounded product?
    Answer 4. This question is beyond the scope of the work we 
conducted for the committee's October 23, 2003, hearing.

    Question 5. Do you believe that a pharmacist who compounds drugs 
that are distributed interstate is in fact a manufacturer? Can a 
pharmacist who distributes drugs interstate truly have a pharmacist-
prescriber-patient relationship? Can a pharmacist who is not licensed 
in a State lawfully dispense compounded drugs to patients in that 
State? Do you believe that interstate distribution of compounded drugs 
should itself be grounds for regulation by the Food and Drug 
Administration?
    Answer 5. Since drug compounding may occur at mail-order and 
Internet pharmacies, the compounding pharmacy may be located in a 
different state from the patient or prescribing health professional. 
Three of the four states we reviewed reported having a large number of 
out-of-state pharmacies licensed to conduct business in their states, 
and inspection and enforcement activities may differ for these 
pharmacies. For example, Wyoming reported having 274 licensed out-of-
state pharmacies, which is nearly twice as many as the number of in-
state licensed pharmacies. Officials in the four states we reviewed 
said that they have authority to inspect out-of-state pharmacies 
licensed in their states but because of limited resources, they 
generally leave inspections to the state in which the pharmacy is 
located. Regarding enforcement authority, all four states reported 
having authority to take disciplinary action against out-of-state 
pharmacies licensed in their states.
    Regarding the triad relationship among prescribing health care 
practitioner, patient, and pharmacist (including a prescription), one 
pharmacy expert we interviewed, the Chairman of the United States 
Pharmacopeia (USP) Pharmacy Compounding Expert Committee, commented 
that, as long as a pharmacy does not ship a drug before receiving a 
prescription, the triad relationship is intact.

    Question 6. What can Congress do to encourage the States to 
regulate pharmacy compounding more thoroughly?
    Answer 6. State pharmacy board officials we interviewed reported 
that state resources for pharmacy inspections were limited, which 
affected their ability to oversee pharmacies that compound drugs. 
Officials did offer some suggestions to improve oversight. For example, 
one pharmacy board official said that states could become more 
proactive in ensuring the quality of compounded drugs if FDA could 
appropriately contract with state boards of pharmacy to collect and 
test samples of compounded drugs. Another pharmacy board official 
suggested that FDA could provide a central lab for states to use for 
testing and that states and FDA could share the expense. The official 
added that this could provide FDA with a database of compounded drugs, 
which could be a good resource for state pharmacy boards.

    Question 7. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are safe and effective.
    Answer 7. While conducting our work for the committee, we did not 
identify scientific evidence regarding the overall safety and 
effectiveness of compounded drugs. Although anecdotal evidence suggests 
that compounded drugs are not always safe and effective, we did not 
find data to determine the frequency of problems related to compounded 
drugs. The extent of drug compounding is unknown, and therefore a 
comprehensive figure on the relative frequency of adverse events is not 
available. Estimates for the proportion of prescription drugs that are 
compounded range from 1 percent to 10 percent of all prescriptions, but 
we found no data supporting most estimates.

    Question 8. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are not safe or are not 
effective.
    Answer 8. As we reported in October, problems have come to light 
regarding compounded drugs, some of which resulted in death or serious 
injury, because the drugs were contaminated or had incorrect amounts of 
the active ingredient. Based on voluntary reporting, media reports, and 
other sources, FDA has become aware of over 200 adverse events 
involving 71 compounded products since about 1990. These incidents, 
including 3 deaths and 13 hospitalizations following injections of a 
compounded drug that was contaminated with bacteria in 2001, have 
heightened concern about compounded drugs' safety and quality.
    Although we are not aware of any comprehensive scientific evidence 
on the safety and efficacy of compounded drugs, we did identify one FDA 
report titled Limited FDA Survey of Compounded Drug Products. This 
report summarizes the results of a limited survey conducted by FDA's 
Division of Prescription Drug Compliance and Surveillance in 2001 that 
found that nearly one-third of the 29 sampled compounded drugs were 
subpotent--that is, they had less of the active ingredient than 
indicated.
    In addition, officials and experts we interviewed reported that the 
risk levels for compounded drugs differ depending on the type of drug. 
For example, sterile compounded drugs have a higher risk level than 
nonsterile drugs and involve a more complex procedure and require 
special equipment to prepare.

    Question 9. If the balance of evidence does not clearly indicate 
that compounded drugs are safe and effective, how should that affect 
our decisions about the sort of regulation that is required, even 
taking into account the acknowledged need for compounded drugs?
    Answer 9. Although FDA and others have expressed concern about the 
potential for harm to public health when drugs are manufactured and 
distributed in commercial amounts without FDA's prior approval, FDA and 
other pharmacy experts we interviewed have stated that traditional drug 
compounding on a small scale in response to individual prescriptions is 
beneficial. In addition, some state pharmacy board officials and 
pharmacy experts reported that testing compounded drugs for safety and 
quality could help in the oversight of compounded drugs; however, 
officials reported that resources to implement testing are an issue.

    Question 10. If the balance of evidence indicates that problems of 
safety or effectiveness of compounded drugs are infrequent or isolated 
and not systemic, and considering the acknowledged need for compounded 
drugs, how should that affect our decisions about the sort of Federal 
regulation required?
    Answer 10. While conducting our work for the committee, we did not 
find data to determine the relative frequency of problems related to 
compounded drugs. Unlike drug manufacturers, who are required to report 
adverse events associated with the drugs they produce, FDA does not 
require pharmacies to report adverse events associated with compounded 
drugs. While the FDA has become aware of over 200 adverse events 
involving 71 compounded drugs since about 1990, the number of 
prescription drugs that are compounded remains unknown. As a result, 
the relative frequency of adverse events associated with compounded 
drugs cannot be determined.

    Question 11. If an active ingredient or the indication for an 
active ingredient is patented, how does compounding a drug using the 
active ingredient or using the active ingredient for the indication 
affect the rights of the patent owner?
    Answer 11. Our work for the committee's October 23, 2003, hearing 
did not include a review of patent rights.

      Response to Questions of Senator Kennedy From Kevin Kinkade

    Question 1. I would like your views about how the line between 
compounding and manufacturing should be drawn. However you would 
propose it be drawn, please describe what inspection and enforcement 
authorities the U.S. Food and Drug Administration would need to enforce 
the definitional line.
    Answer 1. There are several areas that can be addressed to 
establish differences between compounding and manufacturing. First, it 
should be clear that compounding is limited to where a prescription is 
provided for a specific patient. The product is to be compounded due to 
the lack of an available commercial product or some other therapeutic 
reason that justifies providing a compounded product in lieu of a 
manufactured one. Secondly, volume can be a vehicle to address this 
issue. If a pharmacy is providing a compounded product by prescription 
and the amount of product available within its inventory reflects the 
amount of product used over a specified period of time, then this could 
be used as a tool to measure whether the pharmacy is compounding 
products that are used on a timely basis or whether there is an excess 
of product that is held in inventory for longer periods of time where 
concern for stability and potency would be an issue. As an example, in 
Missouri, we require that limited quantities be maintained within an 
inventory based on prescription history of the product. No more then a 
supply reflective of a three month need is allowed. Any situations/
inventory beyond this is defined as hatching which is a practice 
considered to be manufacturing.
    Connected with volume as well, is the practice of some pharmacies 
to provide compounded drugs across state lines. Interstate marketing 
and sales of products to patients that are geographically distant 
usually require large inventories of drugs. This could be an area where 
federal authorities could enforce standards due to the fact that such 
compounded products have truly entered interstate commerce.

    Question 2. However you might define compounding, might there 
nonetheless be large-scale compounding that warrants more active 
regulation by the Food and Drug Administration? If so, would you 
recommend regulation short of regulation as a manufacturer, and if so, 
what would you recommend?
    Answer 2. I see no benefit to another class of provider, whether 
through a state or federal regulatory scheme. State boards of pharmacy, 
as with other health professions, regulate the practice of pharmacy. 
Taking into account, the responses made to question #1, a clear line 
needs to be drawn between compounding and manufacturing with the FDA 
enforcing manufacturing standards when that line has been crossed. It 
should not be lost within the debate that many physicians are 
compounding products for their patients as well. In most cases, they 
have not attempted to compound drug products that enter into any of the 
areas described in my response to question #1. However, to my 
knowledge, most state boards of medicine are not conducting any reviews 
or inspections concerning the quality of products that are provided in 
this manner.

    Question 3. Dr. Sellers included a proposal for Federal legislation 
enhancing the regulation of compounding. Please comment on her 
proposal. What portion of her proposal do you believe must be 
accomplished at the Federal level and what portion can safely be 
achieved at the State level?
    Answer 3. The portion of Dr. Sellers recommendations of providing 
warnings to patients that a compounded drug is being used within their 
prescription is not well founded. The type of warning she provides 
would do more to confuse and increase fear in patients that might not 
understand what the warning is for or its meaning. If we believe that 
compounds provided by pharmacies do, in most cases, provide needed 
therapeutic care for patients, initiatives that might decrease 
compliance such as warnings about the product do not serve a good 
purpose. In most cases, prescribers know when they are prescribing a 
compounded product vs. a manufactured one. Requiring additional 
documentation to relay that a compounded product is being used will not 
serve a real public health purpose and will only serve to increase 
technical issues on each prescription that is compounded in a pharmacy 
that does not provide a tangible benefit. An exception to this would 
include those situations where compounding in order to mimic a 
commercially available product is being done. When these situations 
occur without a specified clinical purpose then economic gain is 
usually the overriding factor. Further requirements to show appropriate 
communication with the prescriber and patient in these cases is 
important. Dr. Sellers advocates a list of drugs that are to complex to 
compound. I would agree that here, the federal government has an 
important role. In the last compounding law passed by Congress, an 
advisory panel was created within FDA that provided a list of drugs 
that were either to complex or dangerous to compound. The federal 
courts struck this law down but this portion was not the reason for the 
law to be deemed invalid by the courts. This committee or some 
mechanism on a federal level should be reinstated in order to have a 
uniform list that can be enforced by state governments. FDA should also 
be given authority to intervene and enforce the list when necessary. In 
addition, requiring a pedigree for raw ingredients used in compounding 
should be pursued as well. Pedigrees are a good idea for both 
compounded and manufactured drug products.

    Question 4. Is it legitimate for a pharmacist to dispense a 
compounded drug if the prescriber has not indicated in the prescription 
that a specially compounded drug is required
    by the patient, or if the pharmacist has not verified with the 
prescriber that it is appropriate to dispense a compounded product?
    Answer 4. I believe it is. Compounding comprises a wide array of 
different products. Many compounds are produced for administration by 
another qualified health professional. As previously mentioned, 
prescribers already are usually aware and understand the fact that the 
prescription they are providing will be compounded since most such 
products are made due to the lack of any commercial product either in 
the form or at the strength called for in the prescription. There are 
certain cases where additional communication may be warranted between 
the pharmacist, the prescriber and the patient, this type of 
interaction is of a professional discretionary nature and would be 
difficult if not impossible to mandate by law without causing more 
undue contact and technical requirements then is necessary. Again, it 
must be stressed here that when products are compounded that are 
similar to available commercial products then appropriate documentation 
for the reason to provide a compounded prescription should be required.

    Question 5. Do you believe that a pharmacist who compounds drugs 
that are distributed interstate is in fact a manufacturer? Can a 
pharmacist who distributes drugs interstate truly have a pharmacist-
prescriber-patient relationship? Can a pharmacist who is not licensed 
in a State lawfully dispense compounded drugs to patients in that 
State? Do you believe that interstate distribution of compounded drugs 
should itself be grounds for regulation by the Food and Drug 
Administration?
    Answer 5. A qualified yes. Again because of the extreme diversity 
in compounding services and products it is difficult to provide a 
simple answer. There are legitimate reasons why a pharmacist could have 
a pharmacist-prescriber-patient relationship on an interstate basis. 
The structure of how the prescription is obtained is important as well 
as the appropriate clinical need for the product. As an example, a 
medical clinic may wish to contract with a pharmacy in another state in 
order to provide very specialized forms of chemotherapy. Assuming the 
pharmacy is licensed in the state it is doing business in, that a 
patient specific prescription is received for the drug and appropriate 
communications concerning clinical and therapeutic issues are 
maintained such a relationship is possible. On the other hand, if the 
pharmacy is marketing itself directly to patients, the products it 
provides have no unique therapeutic value but mimic commercially 
available products and neither the prescriber or the patient are 
communicated with concerning the reason for the substitution of the 
product, then a general lack of a proper professional relationship 
exists in these cases.
    The nature of state regulation in most cases is to require 
licensure of any pharmacy that provides drugs into the state. The 
courts have shown concern over interference with interstate commerce 
when states have tried to require all pharmacists to be licensed. Some 
states require the pharmacist in charge of the pharmacy to be licensed 
in addition to the pharmacy itself. The FDA should have a clear role in 
protecting the health of citizens anytime drug commerce crosses state 
lines.

    Question 6. What can Congress do to encourage the States to 
regulate pharmacy compounding more thoroughly?
    Answer 6. Guidelines could be written through the federal register 
providing for certain minimum enforcement standards that states would 
need to follow if they are to retain authority over compounding of drug 
products in that state. As long as it can be shown the state is doing 
its job then the federal authorities would not play a role within 
enforcement. If a state is not maintaining its role, then perhaps after 
corrective actions are proposed by the FDA and time is given for that 
state to improve in its enforcement practices the FDA would assume any 
role necessary in that state for maintaining reasonable assurance of 
patient safety.

    Question 7. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are safe and effective.
    Answer 7. Publications such as journals published by the American 
Pharmaceutical Association, the American Society of Health System 
Pharmacists and the International Association of Compounding 
Pharmacists all contain articles within them that will cover different 
compounding issues and in some cases, studies of certain compounds and 
compounding procedures are discussed. Over the years, much has been 
written about research on the safe and effective use of various 
compounded products.

    Question 8. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are not safe or are not 
effective.
    Answer 8. The only documented evidence I am aware of is the limited 
study done by FDA last year concerning the testing of certain drug 
products that they obtained through the mail. Other articles have been 
written concerning specific episodes where compounded drugs caused harm 
to patients due to equipment malfunctions, lack of following specified 
compounding procedures or incompetence of the individual pharmacist.

    Question 9. If the balance of evidence does not clearly indicate 
that compounded drugs are safe and effective, how should that affect 
our decisions about the sort of regulation that is required, even 
taking into account the acknowledged need for compounded drugs?
    Answer 9. As stated previously, a list of drugs to complex or 
dangerous to compound is necessary. Compounding of drugs cannot be 
lumped together into one body of practices that can then be judged as 
safe or unsafe. There is simply to many types and practices of 
compounding that make such an overall judgement unfair. If the balance 
of evidence at some point can show that a specific compound or 
compounding practice requires specific knowledge and/or expertise or 
equipment then this should be required and enforced by state boards of 
pharmacy. A good example is sterile product compounding. Not all 
pharmacists are familiar with this type of compounding nor do they 
maintain the equipment to do it properly. In Missouri, the law 
presently holds pharmacists accountable for such practices. Reference 
should be made back to my response in question #6 concerning federal 
guidelines as a further response if the balance of evidence is as 
outlined.

    Question 10. If the balance of evidence indicates that problems of 
safety or effectiveness of compounded drugs are infrequent or isolated 
and not systemic, and considering the acknowledged need for compounded 
drugs, how should that affect our decisions about the sort of Federal 
regulation required?
    Answer 10. I think that within the responses provided here that the 
recommendations made for both regulation on a state level as well as 
roles for FDA have been identified and should be pursued regardless of 
the debate over how safe or effective some compounding is.

    Question 11. If an active ingredient or the indication for an 
active ingredient is patented, how does compounding a drug using the 
active ingredient or using the active ingredient for the indication 
affect the rights of the patent owner?
    Answer 11. This is a legal question I am not totally prepared to 
answer. However, if a drug is compounded using a patented ingredient 
but, the compounded product is restricted to pathways of administration 
or strengths that are not made available by the patent holder and are 
not approved by the FDA, then such compounding should be held 
legitimate when ordered for therapeutic reasons by a prescriber and 
through standards that I have outlined within this report.
    Another issue at hand here that we have observed a few times by 
large companies compounding drugs is where the company seeks and 
receives a patent on a compounded drug that is not approved by FDA. The 
patent supposedly prevents other practitioners from compounding the 
product but the patent holder becomes the sole source of the product 
and provides it in bulk within interstate commerce. Distributions are 
made sometimes by prescription, sometimes by invoice. This type of 
practice would seem to fall under the definition of manufacturing but, 
to my knowledge, no enforcement by FDA has been forthcoming. In 
addition, no data on the compound or its clinical efficacy has been 
submitted to FDA for review or analysis in these cases.

  Prepared Statement of the National Association of Chain Drug Stores

    The National Association of Chain Drug Stores (NACDS) is providing 
a written submission for the record on the hearing held on October 23, 
2003 regarding ``Federal and State Role in Pharmacy Compounding and 
Reconstitution: Exploring the Right Mix to Protect Patients.'' NACDS 
represents 210 chain pharmacy companies that operate nearly 35,000 
community retail pharmacies in the United States and provide more than 
70 percent of the approximately 3.1 billion prescriptions dispensed in 
the United States.
    Prescription compounding is a traditional function of the practice 
of pharmacy that has been and should continue to be regulated by state 
boards of pharmacy. Compounding is an important part of patient care 
because many patients need prescription products that are not made 
commercially by drug manufacturers, and compounding by pharmacists is 
the only way these products can be made available.
    The definition of what constitutes compounding is consistent from 
State to State. It generally involves mixing two or more drug 
substances together to deliver a drug to a patient that is generally 
not commercially available in the form or quantity prescribed. Most 
retail based prescription compounds are for creams, lotions, ointments, 
liquids, or suppositories that are not generally commercially 
available. Some pharmacies do more compounding than others, depending, 
for example, if they are located near dermatologists' offices.
    Pharmacists are trained to compound prescriptions and are tested on 
this competency. State boards license pharmacies after ensuring, among 
other things, that they have the proper tools and equipment to compound 
prescription products. State boards also regularly inspect pharmacies, 
including their compounding practices. The extent of compounding varies 
widely among pharmacies. Some pharmacies may only compound one or two 
products per day, while others might compound more.
    Some chain pharmacies may have a local or regional central 
compounding facility that they use to compound frequently-ordered 
products that are not commercially available, such as suppositories, 
which are then distributed to individual retail stores in that chain. 
These compounded products are being made in anticipation of 
prescriptions for these products based on historical prescribing 
patterns of physicians.
    While there may not be any specific amount of product that can be 
made before ``compounding'' becomes ``manufacturing'', the FDA's 
compounding compliance guideline serves as a good basis for making the 
distinction. Most traditional compounding is based on individual 
prescription orders for individual patients for products that are not 
commercially available, as described above. We believe that this 
standard--compounds being made in response to or in anticipation of 
prescriptions being ordered--is a good way to distinguish compounding 
from manufacturing.
    Sometimes, a physician will want a pharmacist to make a different 
dosage form of a commercially available product, or a different 
strength of a commercially available product. These functions fall 
within the scope of pharmacy compounding.
    FDA and State boards should work together to identify sites that 
are in violation of FDA's compounding compliance guideline and both 
parties should take action to stop practices that are more akin to 
manufacturing than compounding. We want to work with the committee to 
assure that only safe, effective, and quality-compounded products are 
provided to patients.

      Response to Questions of Senator Kennedy From Sarah Sellers

    Questions 1. I would like your views about how the line between 
compounding and manufacturing should be drawn. However you would 
propose it be drawn, please describe what inspection and enforcement 
authorities the U.S. Food and Drug Administration would need to enforce 
the definitional line.
    Answer 1. The line should be consistent with federal animal drug 
regulations under the Animal Medicinal Drug Use Clarification Act 
(AMDUCA). Compounding should be restricted to the traditional practice 
of manipulating FDA-approved products for the special needs of patients 
pursuant to a prescriber, patient and pharmacist relationship (referred 
to by compounding pharmacists as ``the triad''). The triad relationship 
must include full disclosure of risk to patients and prescribers and 
financial incentives for pharmacists to compound should be discussed. 
This definition of compounding is consistent with current pharmacists' 
professional training in compounding, which was admitted by the 
American Pharmacists' Association to be limited at the October 2003 
hearing. The introduction of and access to raw chemical ingredients for 
compounding has resulted in the growth and commercialization of an 
unregulated drug manufacturing industry under the guise of compounding-
it is this emerging industry which has raised important safety 
concerns.

    Question 2. However you might define compounding, might there 
nonetheless be large-scale compounding that warrants more active 
regulation by the Food and Drug Administration? If so, would you 
recommend regulation short of regulation as a manufacturer, and if so, 
what would you recommend?
    Answer 2. Yes. There are cases where large scale compounding 
warrants more active regulation by the FDA. In 2001, the FDA issued a 
warning letter to IV Systems Division of Baxter Healthcare Corp. then 
engaged in the large scale compounding and interstate distribution of 
intravenous solutions outside the scope of the approved drug labeling 
(the company extended the expiration dating on the pharmacy-mixed 
solutions). The inspection also revealed significant violations of the 
Current Good Manufacturing Practice for Finished Pharmaceuticals (CGMP) 
21, CFR 210 and 211. Such findings raise concerns regarding population 
exposures to drugs produced and labeled outside of FDA oversight that 
carry greater risks of being substandard (sub or super-potent or 
adulterated with bacterial, fungal or other contamination). For the 
case above, where the starting materials were FDA-approved dosage forms 
manipulated or mixed into final products for administration, a system 
short of federal oversight may be sufficient. Unfortunately, most state 
boards of pharmacy have little or no public health expertise. 
Pharmacists are not trained public health experts, and most Board 
inspectors are not even trained health professionals. Without very 
specifically written inspection protocols and advanced training in good 
manufacturing practices, it is doubtful that Boards could have any 
meaningful oversight of such practices. However, state health 
departments may. In some states the Boards of Pharmacy fall under the 
departments of professional regulation, while in other states the 
Boards fall under the state departments of health. The state of Florida 
has a pharmacy services division that oversees drug manufacturing 
issues for the state, works closely with the FDA, and is independent of 
the Florida Board of Pharmacy. There is likely to be greater access to 
public health experts in states where the boards fall within the 
departments of health-this may provide for more effective oversight.

    Question 3. Dr. Sellers included a proposal for Federal legislation 
enhancing the regulation of compounding. Please comment on her 
proposal. What portion of her proposal do you believe must be 
accomplished at the Federal level and what portion can safely be 
achieved at the State level?
    Answer 3. The level of regulation of compounding must be decided 
through an analysis of risk. The following framework is suggested:
Professional/State Regulation
    Formulate: To include reconstitution, and admixing (both sterile 
and non-sterile) where the starting materials are FDA-approved dosage 
forms, and approved inactive ingredients. Risk levels based on:
    + Starting materials
    +++ Environmental factors (setting, training, etc)
    ++ Dosage form
    + PK factors (liberation and absorption)
    +++ QA factors
State/Federal Regulation
    Reformulate: To include change in dosage form (both sterile and 
non-sterile) where the starting materials are FDA approved dosage 
forms, and approved inactive ingredients. Risk levels based on:
    + Starting materials
    +++ Environmental factors (setting, training, etc)
    +++ Dosage form
    +++ PK factors (liberation and absorption)
    +++ QA factors
Federal Regulation
    Manufacture: To include the de novo formulation of a dosage form 
from bulk API's and approved inactive ingredients. Risk levels based 
on:
    +++ Starting materials
    +++ Environmental factors (setting, training, etc)
    +++ Dosage form
    +++ PK factors-all
    +++ QA factors

    Question 4. Is it legitimate for a pharmacist to dispense a 
compounded drug if the prescriber has not indicated in the prescription 
that a specially compounded drug is required by the patient, or if the 
pharmacist has not verified with the prescriber that it is appropriate 
to dispense a compounded product?
    Answer 4. No. In addition, a compounded drug should not be 
dispensed if the prescriber has not specifically requested a compounded 
product, and this request should not be solely based on a solicitation 
from a compounding pharmacist. In some cases, compounding pharmacies 
are claiming certain drugs are experiencing shortages and that the only 
options are compounded versions of the FDA-approved drugs. In other 
cases, pharmacists are recommending compounded products for unconfirmed 
``allergies'' without discussing the unique risks of using compounded 
drugs with prescribers or patients. Physicians and patients who are not 
aware of the risks associated with the use of compounded drug products 
may assume that the products are uniform in standards with FDA-approved 
products when in fact they are not. This issue raises the concern over 
pharmacist self-referral and solicitation for profit at the expense of 
consumers (vulnerable, sick patients). Historically, physicians have 
identified the need for compounded drugs and have written specific 
prescriptions for the specialized dosage forms noting what specific 
ingredients to use and how the drug should be formulated. Increasingly, 
pharmacists are designing their own recipes, formulating and 
substituting compounded drugs for FDA-approved products without the 
educated and knowledgeable consent of prescribers and/or patients. This 
should not be permitted.

    Question 5. Do you believe that a pharmacist who compounds drugs 
that are distributed interstate is in fact a manufacturer? Can a 
pharmacist who distributes drugs interstate truly have a pharmacist-
prescriber-patient relationship? Can a pharmacist who is not licensed 
in a State lawfully dispense compounded drugs to patients in that 
State? Do you believe that interstate distribution of compounded drugs 
should itself be grounds for regulation by the Food and Drug 
Administration?
    Answer 5. Yes. Health professionals have suggested that patients 
receiving compounded drugs be very closely monitored for any adverse 
events (including therapeutic inefficacy) precisely because the drugs 
are unpredictable, without uniform standards, without determinations of 
safety and efficacy and produced outside GMP regulations. This requires 
both communication and observation, which cannot be done from a 
distance. If a compounded drug has been made improperly it may be very 
difficult to get a timely replacement resulting in the patient's 
delayed access to effective treatment (for example, a mixture in which 
the active drug precipitates out thus rendering it ineffective). The 
homecare industry has set up special contracts with local pharmacies 
for such emergencies which would be difficult to achieve for 
compounding pharmacies.

    Question 6. What can Congress do to encourage the States to 
regulate pharmacy compounding more thoroughly?
    Answer 6. State boards of pharmacy lack public health expertise. A 
review of the mission statements of some boards reflect an economic-
based focus with weak public health mandates. Boards in general are 
good at enforcing licensing and education requirements for 
professionals and for detecting diversion and substance abuse; however, 
they lack an appreciable understanding of public health, pharmaceutical 
regulation and risk management. The regulation of compounding requires 
an infrastructure where these subjects are well understood. It is 
reasonable to suggest such oversight include state departments of 
health, where public health expertise is concentrated.

    Question 7. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are safe and effective.
    Answer 7. By definition, compounded drugs are not ``safe and 
effective''. ``Safe and effective'' is a regulatory designation for 
drugs that have undergone the rigors of the FDA approval process-a 
system established by Congress in response to major public health 
threats from adulterated, substandard and fraudulent products that have 
had harmful health effects on consumers throughout history. The FDA 
relies on well-designed pre-clinical and clinical trials and post 
marketing surveillance for weighing whether the intended benefits of 
specific drugs in specific dosage forms outweigh potential risk of harm 
to patients. Compounded drugs should never be represented as ``safe and 
effective'', but rather with respect to risk-under very specific 
circumstances the benefits of using a compounded drug may outweigh the 
risks associated with using the unregulated, pharmacymade product.

    Question 8. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are not safe or are not 
effective.
    Answer 8. The risks of drugs are identified through scientific 
research including postmarketing surveillance, a safety system which 
compounded drugs are not subjected to. Drugs that have not undergone 
the drug approval process, which are not manufactured under Good 
Manufacturing Practices and which are not labeled for safe use are not 
``safe and effective''. To suggest otherwise misleads consumers and 
undermines the federal drug approval process. Scientific evidence 
published in the form of case reports, epidemiologic studies and 
compounded drug analyses have concluded that compounded drugs can pose 
significant health risks to patients. In addition, reports in the media 
have drawn attention to deaths, paralyses and poisonings caused by 
compounded drugs.

    Question 9. If the balance of evidence does not clearly indicate 
that compounded drugs are safe and effective, how should that affect 
our decisions about the sort of regulation that is required, even 
taking into account the acknowledged need for compounded drugs?
    Answer 9. Compounded drugs are not ``safe and effective-compounding 
should therefore be limited to the traditional practice of manipulating 
FDA-approved products according to unsolicited prescriptions from 
licensed prescribers where the intended benefit of using an unregulated 
product is likely to outweigh the inherent risks(subpotency, 
superpotency, adulteration, contamination)-such decisions must be made 
by prescribers educated in the risks of unregulated drug production and 
patients in consultation with pharmacists.

    Question 10. If the balance of evidence indicates that problems of 
safety or effectiveness of compounded drugs are infrequent or isolated 
and not systemic, and considering the acknowledged need for compounded 
drugs, how should that affect our decisions about the sort of Federal 
regulation required?
    Answer 10. The notion that problems of safety or effectiveness with 
compounded drugs are infrequent or isolated has been supported by some 
pharmacy trade groups; however, there is actually very little 
``evidence'' to support this conclusion. As the GAO pointed out at the 
hearing, there is an absence of effective oversight and surveillance of 
compounding and the use of compounded drugs. Public health experts have 
pointed out that the cases of deaths, injuries, contaminations and 
substandard drug exposures are ``tip of the iceberg cases"-because of 
the lack of surveillance, most of the problems are likely undetected. 
It is logical to assume that drugs produced outside a regulatory 
framework established to minimize population exposures to ineffective, 
adulterated and/or misbranded medications are likely to carry greater 
risks to consumers. This was suggested by the FDA survey which found a 
34% failure rate for potency and purity for compounded drugs purchased 
and shipped interstate. This study was admitted to lack 
generalizability by the FDA, though it was indeed hypothesis 
generating-it does not take a large sample size to find a big problem.

    Question 11. If an active ingredient or the indication for an 
active ingredient is patented, how does compounding a drug using the 
active ingredient or using the active ingredient for the indication 
affect the rights of the patent owner?
    Answer 11. Though I am not a patent attorney, I am familiar with 
some of the concerns represented to me by industry.
Pre-marketing,
    For some small manufacturers and biotech companies, compounders are 
competing with drugs that are still in clinical trials which may affect 
their ability to bring safe and effective, FDA-approved drugs to 
market. Direct competition with compounders may reduce the size of the 
market for ethical manufacturers, and may in fact cause greater harm to 
companies if the compounded copies of drugs in trials are unsafe and 
result in patient injuries. Compounded sustainedrelease versions of 
Acorda's 4-aminopyridine are being compounded and marketed for MS-some 
of the dosage forms analyzed have not released the drug properly which 
may result in toxicity (the drug has the potential to cause seizures). 
Compounded versions of Provensis's polydocanol injection are being 
marketed to physicians as an injectable varicose vein treatment; 
however, the raw chemical ingredient is only available as a non-sterile 
industrial grade chemical.
Marketed
    For already marketed drugs, compounding can also reduce markets 
directly and indirectly through safety concerns. The makers of the 
drugs Viagra and Oxycontin have had safety concerns associated with 
compounded copies of their drugs. For drugs reimbursed under Medicare 
Part B, drug makers have asserted large percents their markets have 
been taken over by compounders who are making inferior, unsafe 
products. Evidence to support the industry's claims exists in recalls 
and warning letters issued by the FDA (Med-Mart Pharmacy, Unique 
Pharmaceuticals, Lee Pharmacy, Med-4-Home, Urgent Care Pharmacy, Docs 
Pharmacy, Portage Pharmacy/Innovative Services).
Market Failures
    Finally, where a substantial compounding market already exists, 
manufacturers may decide not to bring a product through the approval 
process under an NDA or ANDA as is the case currently with drugs used 
in implanted spinal pumps and drugs used in nasal nebulizers.

             Prepared Statement of Roger L. Williams, M.D.

    Senator Bond, Senator Roberts, Chairman Gregg, Ranking Member 
Kennedy, and distinguished members of the Committee, my name is Roger 
L. Williams, M.D., and I am Executive Vice President and Chief 
Executive Officer of United States Pharmacopeia. USP appreciates the 
opportunity to provide its views as they relate to efforts by this 
Committee and Congress to assure the quality and safety of compounded 
drugs and to protect patients who rely on these customized medications 
to meet their medical treatment needs.
    United States Pharmacopeia is the nation's oldest and most 
respected standard-setting organization committed to advancing public 
health. Founded in 1820, this non-profit entity ensures the quality and 
consistency of medicines; promotes the safe and proper use of 
medications; verifies ingredients in dietary supplements; and focuses 
on optimal health care delivery for professionals, patients, and 
consumers.
    USP standards are developed by a unique process of public 
involvement and are accepted worldwide. The organization achieves its 
goals through the contributions of volunteers representing pharmacy, 
medicine, and other health care professions, as well as science, 
academia, the federal government, the pharmaceutical industry, and 
consumer organizations. USP provides standards for more than 4,000 
prescription and non-prescription drugs, dietary supplements, 
veterinary drugs, and health care products. These standards are 
presented in a combined text consisting of two compendia--the United 
States Pharmacopeia (USP) and the National Formulary (NF). This text is 
continuously revised to account for new therapeutic ingredients and 
products and advances in analytical procedures. Revised text appears in 
an annual edition, which becomes official in January of each year and 
two Supplements.
    Congress has repeatedly recognized USP's expertise as a standard-
setting body. Principal recognition occurs as a result of Congress's 
recognition of USP-NF as official compendia of the United States. 
Congress's Federal Food, Drug and Cosmetic Act (FDCA) makes them 
enforceable by the Food and Drug Administration (FDA). These standards 
are also recognized by state laws and are used to govern state 
practices, such as those involving pharmacy practice.
    We commend you for your leadership in convening this hearing in the 
wake of deaths and serious injuries caused by contaminated or subpotent 
compounded medications. We believe this Committee's examination of the 
quality and safety of compounded prescription drugs, as well as its 
evaluation of the extent and effectiveness of federal and state 
regulatory oversight of compounding, will result in stronger patient 
and consumer protection.
    As you undertake this inquiry beginning with today's hearing and 
continue it through future hearings, USP stands ready to assist you by 
making available our expertise and professional advice. Specifically, 
USP believes it can play a leading and helpful role, working with this 
Committee and Congress, federal and state government, compounding 
pharmacists, and other relevant organizations, in developing effective 
national standards not only for compounded preparations but also for 
the practice of compounding. USP achieves these process and product 
standards by working with involved stakeholders who create draft 
documents for public comment. USP's public comment process occurs via 
the Pharmacopeial Forum and is similar to the federal government's 
Federal Register.

            OVERVIEW AND IMPORTANCE OF PHARMACY COMPOUNDING

    Drug compounding is the process of mixing, combining, or altering 
two or more ingredients, or components, to produce a medication 
designed to meet an individual patient's need. Pharmacy compounding is 
regarded as a core component of pharmacy practice. It ranges from 
preparation of simple topical products to highly complex mixtures 
intended for parenteral administration. According to one estimate, 
compounded drugs account for between one and ten percent of all 
prescriptions written.
    The modern-day practice of pharmacy traces its roots to compounding 
in the formative years of medicine when few commercial products were 
readily available. This method was used to prepare medicines for 
thousands of years, but declined with the rise of modern pharmaceutical 
manufacturing. Despite the advent of modern, mass-produced drug 
therapies, compounding still plays a critical role in health care 
delivery. Indeed, compounding has enjoyed a resurgence in recent years 
due to product line discontinuations, shortages of manufactured 
medicines, and customization of medicines for individuals.
    Today, physicians and pharmacists turn to compounding when patient 
needs cannot be met by commercially manufactured medications produced 
for the mass market. Patients often require therapies with different 
formulations and strengths, and compounding enables physicians to 
create a ``customized'' treatment to address their specific medical 
problem. Given the added cost and effort involved in developing 
customized drug therapies for a handful of patients, it makes no 
economic sense for drug companies to produce them. For this reason, 
compounding ensures that these patients can obtain the effective drug 
treatments they need. Pharmacy compounding also provides treatment 
alternatives for patients who are allergic to commercially available 
products, as well as for administration in special cases.
    Compounded drugs are prepared by a pharmacist as authorized by a 
prescription from a treating physician. Unlike pharmaceutical 
manufacturing, which entails mass production and distribution, the 
compounding of drugs involves physicians, pharmacists, and patients in 
ensuring proper patient care, monitoring, and follow-up.

                   REGULATION OF PHARMACY COMPOUNDING

    State boards of pharmacy have traditionally regulated compounding 
as a component of pharmacy practice. Because pharmacy compounding 
results in the preparation of drug products, federal drug laws also 
apply. The provisions in the governing law, the Federal Food, Drug, and 
Cosmetic Act (FDCA), are generally directed to pharmaceutical 
manufacturers. In 1997, the FDCA was amended to include a section 
(503A) specifically governing pharmacy compounding. In 2002, however, 
this law was struck down as unconstitutional. Subsequently, FDA 
reissued a pharmacy compounding compliance policy guide, CPG 460.200 
(originally issued in 1992), which attempts to distinguish between 
pharmacy compounding and manufacturing but is not intended to provide 
uniform, specific parameters and standards to guide compounding 
practice. Currently, there is no national standard for compounded drug 
products other than the United States Pharmacopeia-National Formulary.

      USP'S ROLE IN SETTING QUALITY STANDARDS FOR COMPOUNDED DRUGS

    The United States Pharmacopeia plays a significant role in setting 
critical quality standards for compounded drugs. Its role evolved from 
its expertise and experience in formulating similar standards for 
manufactured drugs. The first USP was published in 1820 and began as a 
``recipe'' book to promote uniformity in drugs (a drug includes its 
active ingredient[s] and excipients) that were generally available in 
the United States at that time. Prior to the publication of USP, the 
quality of drugs varied between cities and regions and from apothecary 
to apothecary. In 1820, and for many years thereafter, the preparation 
of a medicine by a pharmacist or other professional, now termed 
compounding, was the order of the day. Over the last several decades, 
this practice has generally been supplanted by modern pharmaceutical 
manufacturing.
    In recognition of this transition, the USP, through the activities 
of its Council of Experts (formerly the Committee of Revision), changed 
the content of USP and reduced the recipes for the compounding 
professional and for pharmaceutical and other manufacturers to 
standards that help assure their quality, purity, and strength. These 
standards can be enforced by federal, state, and other regulatory 
bodies in the United States and are also used in many other countries. 
In 1975, USP acquired the National Formulary (NF), which contains 
standards for excipients.
    USP-NF provides monographs for ingredients and products. These 
monographs contain standards (i.e., definitions, descriptions, labeling 
and storage statements, specifications) for drugs, which include 
biologics, devices, and dietary supplements. A specification provides 
specific tests, together with procedures for the test and acceptance 
(pass/fail) criteria. USP-NF continues to contain recipes for 
compounded preparations, but these are only a small fraction 
(approximately 100) of the many monographs (approximately 4,000) in 
USP-NF. As before, the purpose of the USP-NF is to provide a single 
standard for medicines used in the United States to ensure product 
uniformity and quality. This is especially important given the number 
of manufacturers and compounding professionals who prepare drugs that 
have the same names.
    The Federal Food, Drug and Cosmetic Act (FDCA) states that drugs 
recognized in the USP-NF must adhere to compendial standards for 
quality, purity, and strength. If a drug does not meet these standards, 
it is considered adulterated, unless the final drug product is labeled 
as ``not USP'' and provides the differences from the compendia in 
quality, purity, and strength standards. The FDCA does not 
differentiate between manufactured and compounded drugs. Therefore, 
this section of the law applies to all drugs--manufactured and 
compounded--that are available in the United States. With respect to 
manufactured drugs, pharmacists who purchase drugs from reputable 
manufacturers and store them appropriately are most likely to dispense 
drugs that adhere to compendial standards. Compounded drugs prepared 
pursuant to a practitioner's prescription must also meet compendial 
requirements, if the prescription uses the compendial name. Pharmacists 
must be aware that if they prepare medications that are named in the 
USPNF, these products must meet USP-NF standards for quality, purity, 
and strength. This includes adherence to ingredient standards and/or 
recipes provided in the compendia for their preparation. Alternatively, 
if a drug product does not meet USP-NF standards, the drug label should 
include the words ``not USP'' and must state the way in which the 
product deviates from the standards in the USP-NF.
    When a physician writes a prescription for a manufactured or 
compounded drug that appears in the USP-NF the law expects the 
pharmacist to dispense the drug called for in the prescription or else 
the dispensed drug may be considered misbranded. A physician does not 
have to designate the item as USP.
    The appearance of compounding monographs in the USP-NF is one of 
several important elements to assure the good quality and benefit of a 
compounded medicine. It provides uniformity in the prescribing and 
preparation of these medicines as required by law. In recent years, 
with the resurgence of compounding, USP began adding monographs with 
formulas for preparations of specific compounded drugs and preparing 
General Chapters for compounding practice. To date, the USP-NF contains 
approximately 100 monographs that can be used in pharmacy compounding 
practice. In addition, the compendia contain two General Chapters on 
pharmacy compounding: Chapter <795> ``Pharmaceutical Compounding-
Nonsterile Preparations'' and Chapter <797> ``Pharmaceutical 
Compounding, Sterile Preparations.'' These standards and guidelines are 
being updated. Two new General Chapters are proposed--Chapter <1075> 
``Good Compounding Practices'' and Chapter <1061> ``Pharmaceutical 
Calculations'' for inclusion in the compendia.
    A prescriber who writes a prescription for a particular compound 
that appears in the USP-NF has defined the medicine to be prepared. 
Pharmacists who adhere to the compendia prepare a medicine with defined 
quality standards. Most importantly, adherence to compendial 
requirements is required by the FDCA. The benefit (safety and efficacy) 
of a compounded preparation is the responsibility of the practitioner 
who writes the prescription, subject to practice standards and 
applicable federal and state laws. When the USP-NF does not contain a 
monograph for a compounded preparation or ingredient, compounding 
professionals should use their judgment and conform to the standards of 
practice, as well as applicable laws, in compounding a medicine.
    A professional who compounds a drug that has a recipe that is 
recognized in the USP-NF must adhere to that recipe. If the compounding 
professional does not do so, he or she checks with the prescriber to 
authorize the alternative formula. Then, depending on the nature of the 
difference, the product should be labeled appropriately, either with a 
different name or by an indication that it is not USP and how it 
differs. If an ingredient appears in the USP-NF, a pharmacist should 
compound the medicine by use of ingredients that meet the compendial 
standards. A drug that appears in the USP-NF with analytical standards 
but with no formula for preparation may be compounded by a pharmacist, 
who must use his or her professional judgment, but the compounded 
product must technically meet the standards required in the monograph 
when tested with the analytical procedure in the monograph. This is 
likely to be an issue if the pharmacist prepares an inferior product 
which is subsequently shown to fall outside compendial standards.
    USP's Pharmacy Compounding Expert Committee has issued several 
recipes for the preparation of compounded products. These recipes 
appear in the USP-NF and include:
    Cefazolin Ophthalmic Solution
    Cocaine and Tetracaine Hydrochlorides and Epinephrine Topical 
Solution
    Hydralazine Oral Solution
    Indomethacin 1 % Topical Gel
    Ketoconazole Oral Suspension, Plain
    Ketoconazole Oral Suspension, Sugar-Free
    Morphine Sulfate High Potency Suppositories, PEG and FA Base
    Progesterone Suppositories, PEG and FA Base
    Rifampin 1% Oral Suspension
    Sodium Hypochlorite Topical Solution
    Suspension Structured Vehicle, Plain
    Suspension Structured Vehicle, Sugar-Free
    Tetracycline Oral Suspension, Plain
    Tetracycline Oral Suspension, Sugar-Free
    Xanthan Gum Solution
    Many more (approximately 1,000) of these recipes are needed to 
cover the types of preparations now compounded in the United States. 
The development of these recipes for USP is not easy and requires 
laboratory testing to confirm that the preparation has the quality 
attributes required by the monograph and that these attributes are 
maintained during the period of use by the patient.
    Overall, compounded preparations are generally agreed to be a 
useful element in the therapeutic armamentarium of the practitioner. 
Together, federal and state officials, USP, practitioners, consumers, 
and many others can create an environment whereby patients can receive 
wellcompounded preparations that contribute to their health and well-
being.
    USP is exploring with the American Pharmacists Association, the 
National Association of Boards of Pharmacy, and other organizations the 
development of a voluntary national program that will promote 
consistently high quality compounded medication by accrediting 
compounding pharmacies, certifying compounding pharmacists, and 
requiring adherence to USP-NF standards. This program would be a 
coordinated national program to oversee compounding practices. As part 
of this program, USP hopes to expand the availability of compounded 
preparation monographs in USP-NF and expand practice standards where 
needed. Adequate resources will be needed for the proposed program, 
just as adequate resources are needed for FDA to control pharmaceutical 
manufacturing.

                               CONCLUSION

    We appreciate the opportunity to provide our views with respect to 
concerns that have surfaced about compounded drug products in an effort 
to improve the quality and safety of these medications and protect 
patients and consumers who rely on them. Over the next several months, 
we look forward to working with you, this Committee, other members of 
Congress, FDA, stakeholders in the proposed program, and the public at 
large to develop effective solutions that will increase the quality and 
safety of compounded drugs, safeguard consumers, ensure better health 
outcomes for patients, and protect pharmacists and other healthcare 
practitioners who legally and appropriately compound medicines. Thank 
you.
     Response to Questions of Senator Kennedy From William Kennedy

    Question 1. I would like your views about how the line between 
compounding and manufacturing should be drawn. However you would 
propose it be drawn, please describe what inspection and enforcement 
authorities the US Food and Drug Administration would need to enforce 
the definitional line.
    Answer 1. I believe the FDA should have authority to regulate and 
enforce compounding regulations. Simply enforcing the regs currently on 
the books would have a huge impact on the mass compounding market 
proliferating around the country. All drug manufacturers in the United 
States must be approved and regulated/policed by the FDA. Compounding 
is manufacturing. The US consumers deserve the protection afforded by 
an active FDA. While I am not an expert on FDA enforcement, I believe 
the use of ``cease and desist'' orders by local FDA employees, as well 
as confiscation of product manufactured outside an FDA approved 
facility, would send a strong message to the industry.

    Question 2. However you might define compounding, might there 
nonetheless be large-scale compounding that warrants more active 
regulation by the Food and Drug Administration? If so, would you 
recommend regulation short of regulation as a manufacturer, and, if so, 
what would you recommend.
    Answer 2. No. I do not believe there is any acceptable role for 
large scale compounding. Manufacturing is manufacturing pure and 
simple. We have laws and regulations in this country stating that drug 
manufacturing must be subject to FDA standards. Pharmaceutical 
companies have made massive investments based on this fact. Consumers 
assume all drugs purchased in the United States are safe and produced 
under safe conditions. Mass compounding outside regulated facilities 
flies in the face of this belief.
    The only exception for compounding should be the traditional 
compounding of single prescriptions by licensed pharmacists, a service 
that should continue to be available to the public. I, myself, am a 
licensed pharmacist and a strong proponent of compounding on a 
prescription by prescription basis.

    Question 3. Dr. Sellers included a proposal for Federal legislation 
enhancing the regulation of compounding. Please comment on her 
proposal.
    Answer 3. While I have not read Dr. Sellers proposal, I will say 
that I was most impressed with her resume and her knowledge in this 
field. She brings a national reputation to this process. I would 
welcome her involvement as we seek a good outcome for the consumers of 
this country.

    Question 4. Is it legitimate for a pharmacist to dispense a 
compounded drug if the prescriber has not indicated in the prescription 
that a specially compounded drug is required by the patient, or if the 
pharmacist has not verified with the prescriber that it is appropriate 
to dispense a compounded product?
    Answer 4. NO!

    Question 5. Do you believe that a pharmacist who compounds drugs 
that are distributed interstate is in fact a manufacturer? Can a 
pharmacist who distributes drugs interstate truly have a pharmacist-
prescriber-patient relationship? Can a pharmacist who is not licensed 
in a state lawfully dispense compounded drugs to patients in that 
State? Do you believe that interstate distribution of compounded drugs 
should itself be grounds for regulation by the FDA?
    Answer 5. Yes, a pharmacist who compounds drugs distributed 
interstate is clearly a manufacturer.
    No. It should be obvious that a pharmacist who distributes drugs 
interstate does NOT have a pharmacist-prescriber-patient relationship 
that I refer to in the second part of my answer to question 2.
    If the pharmacist has a patient relationship, I believe he could 
dispense a single prescription made for the unique needs of that 
patient. If a pharmacist is licensed in Missouri and has a pharmacy in 
Kansas City and the patient comes from Kansas to have the prescription 
filled, I could accept that. This is a far cry, however, from 
documented cases in that area where literally millions of doses of 
compounded drugs have entered commerce.

    Question 6. What can Congress to encourage the States to regulate 
pharmacy compounding more thoroughly?
    Answer 6. I do not believe that the states can regulate pharmacy 
compounding. I believe you will find that the majority of the members 
of State Boards of Pharmacy are practicing pharmacists. In today's 
highly competitive pharmacy/drug store market, independent pharmacists 
are having a very difficult time making a living. Mass compounding 
becomes attractive to them as a way to help supplement income. Self 
regulation on a state by state basis will NOT work. You can cite 
example after example of this throughout the country today.

    Question 7. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are safe and effective.
    Answer 7. I am the wrong person to ask this question. I believe the 
testimony presented to the Committee has starkly displayed the dangers 
to the consumer inherent in drugs compounded in non-FDA regulated 
facilities. The most frightening aspect of this to me is the lack of 
testing of the chemical components used to make drugs BEFORE the 
manufacturing begins. In my facility I employ professional scientists 
who must test all our raw ingredients for safety and integrity before 
we begin manufacturing. In mass compounding facilities, they simply rip 
the lid off the drum and begin mixing. Untested white powder can be 
many things other than what a paper label states. Am I the only person 
frightened at this prospect?

    Question 8. Please identify the scientific evidence and the 
anecdotal evidence that compounded drugs are not safe or are not 
effective.
    Answer 8. I would point to the news paper stories from across the 
country which cite sickness and death resulting from unregulated mass 
compounding. Further, FDA surveys which randomly tested the integrity 
of compounded drugs showed a significant deficit in the integrity of 
the drugs.

    Question 9. If the balance of evidence does not clearly indicate 
that compounded drugs are safe and effective, how should that affect 
our decisions about the sort of regulation that is required, event 
taking into account the acknowledged need for compounded drugs?
    Answer 9. In the pharmaceutical industry, there is no confusion 
about mass compounded, non-FDA regulated drug manufacture and FDA 
regulated drug manufacture. The pharmacists and companies participating 
in non-conforming drug manufacture know what they are doing and they 
know they are outside the FDA lines. They are willing to risk this 
because no one is lifting a hand to stop them. It is my feeling that 
once even a small bit of enforcement begins, perhaps coupled with 
significant financial penalties, you will find the industry will begin 
to police itself. We have a desperate need to redefine the boundaries. 
Once that is done, I believe you will see the mass compounding that is 
now rampant decline.

    Question 10. If the balance of evidence indicates that problems of 
safety or effectiveness of compounded drugs are infrequent or isolated 
and not systemic, and considering the acknowledged need for compounded 
drugs, how should that affect our decisions about the sort of Federal 
regulation required?
    Answer 10. Please reference my comments in answering question 9. We 
agree that single prescriptions, patient specific, should be compounded 
by a pharmacist. What we are seeing is millions of doses being made and 
shipped across the country for use as though they were FDA approved 
products. How can anyone call this infrequent or isolated. The 
economics of private pharmacies are such that this is becoming 
systemic. The fact that classes are being offered publicly on how 
pharmacists can benefit financially from compounding should tell you 
this is systemic. The FDA must act, and soon!

    Question 11. If an active ingredient or the indication for an 
active ingredient is patented, how does compounding a drug using the 
active ingredient or using the active ingredient for the indication 
affect the rights of the patent owner?
    Answer 11. I believe this is a question better answered by an 
attorney.

    [Whereupon, at 11:45 a.m., the committee adjourned.]