Veterinary compounding out of FDA’s jurisdiction, judge rules

September 13, 2011
By: Jennifer Fiala
For The VIN News Service

The U.S. Food and Drug Administration (FDA) overstepped its authority when it tried to end a veterinary compounding pharmacy accused of violating federal laws by selling adulterated and misbranded drugs.

That’s the opinion of Judge Timothy J. Corrigan, who issued an 80-page ruling on Monday in United States of America v. Franck’s Lab, Inc., filed in U.S. District Court for the Middle District of Florida.

The precedent-setting decision came in response to a motion for summary judgment filed by the pharmacy. Owned by Paul Franck, the Florida-based pharmacy compounds and distributes a variety of compounded medications for animals and humans across the country. Franck’s has valid pharmacy licenses with regulatory boards in 47 states.

(The FDA did not challenge Franck’s business compounding human medications but focused on its veterinary market. Forty percent of the company’s total sales are comprised of animal medications; Franck's fills roughly 37,000 prescriptions for animals annually.)

Lawyers for both sides could not be reached for comment. When asked whether the FDA might appeal the ruling, a spokeswoman for the FDA declined to answer the question.

“We are still reviewing the decision and have no comment at this time,” stated Laura Alvey, deputy director of communications, FDA Center for Veterinary Medicine.

The ruling culminates a lengthy court battle between the FDA and Franck’s. At the lawsuit’s core, the FDA sought to cement its jurisdictional power over compounded medications, requiring that they meet the agency’s safety and efficacy standards.

The FDA's case against Franck's marks the first time the agency attempted to end a compounding pharmacy's business. The FDA has argued that compounding pharmacies “manufacture" drugs and therefore should be subject to the same regulatory approval processes that large pharmaceutical companies navigate. Though it’s illegal for compounding pharmacies to create and sell mimics of FDA-approved drugs that are commercially available, many observers say the practice is rampant.

The FDA bolstered its stance against Franck’s by referencing the April 2009 deaths of 21 polo horses that were injected with a supplement created by the compounding pharmacy just before a U.S. Open Polo Championship match in West Palm Beach, Fla. Franck’s admitted that the medication had been mixed improperly.

Proponents of compounding maintain that the centuries-old practice of mixing bulk chemicals to create tailored medications for individual patients should be left to the purview of state pharmacy board regulators. What's more, compounding is invaluable, supporters say, because the animal health arena often will not bear enough users of a compounded drug to support an application for the FDA’s approval.

By definition, compounding is intended to serve the needs of small patient groups. Judge Corrigan supports that assessment:

“On the one hand, legitimate state-licensed pharmacists have long held the right to bulk compound drugs to fill individual prescriptions, and the desirability and acceptance of that practice has been recognized in various ways by Congress and the FDA. On the other, the FDA needs to be able to enforce against manufacturers masquerading as pharmacy compounders,” the judge wrote in his decision.

However, the FDA provides “a poor method for drawing the line between those two interests,” he added.

Based on previous legal arguments, it's clear the FDA does not agree. During a hearing on the case in February, the FDA made two strong assertions:

•    All veterinary preparations compounded from bulk ingredients and sold over state lines are “new animal drugs” and subject to the FDA’s full regulatory oversight under the Federal Food Drug and Cosmetic Act (FDCA). The agency made no distinction between single compounded preparations and those mass produced.
•    Any preparation compounded using bulk API (active pharmaceutical ingredients) is a new drug, per the FDCA. If the compounded preparation is not submitted for review, it is not only unapproved, it is illegal.

The judge rejected those claims in the ruling, stating that Congress did not give the FDA jurisdictional authority to take enforcement action against a compounding pharmacy when it enacted the FDCA in 1938.

Furthermore, he stated that the FDA erred in its claim that regulations in the Animal Medicinal Drug Use Clarification Act (AMDUCA) gave federal regulators the authority to ban the use of bulk API’s in veterinary compounding.

“Even if Congress had implicitly delegated authority to the FDA to regulate traditional pharmacy compounding of animal medications, the FDA has never promulgated regulations to this effect through notice-and-comment rule-making,” the ruling stated. “… The agency has instead utilized non-binding Compliance Policy Guides (CPG), such as the 1996 and 2003 guides, to assert its authority.”

In his opinion, Judge Corrigan stated that banning the use of bulk APIs in compounding for non-food producing animals doesn’t make sense considering that such compounded medications are allowed for humans.

He also noted that the size and scope of a compounding pharmacy’s business does not mean it can be characterized as a manufacturer.

Adding to his list of criticisms, the judge aired concerns about the FDA’s "maximalist" use of current laws in an attempt to enjoin compounding, rather than map new, comprehensive regulations regarding the practice.

“Even if Congress had implicitly delegated authority to the FDA to regulate traditional pharmacy compounding of animal medications, the FDA has never promulgated regulations to this effect through notice-and-comment rule-making,” Corrigan wrote. “... The agency has never attempted to test its views concerning bulk compounding for non food-producing animals by notice and comment review.”

That “failure” has caused “consternation to numerous Congressmen and Senators” who repeatedly have asked the agency to more clearly define the conditions that prompt the FDA to crack down on compounding pharmacies that are perceived to be crossing into manufacturing.

“The FDA has not taken the necessary steps to find the facts, explain its rationale and allow for public discourse on the issue,” Corrigan wrote. “Had the FDA done what it said it would do or, even better, gone through formal rulemaking, it might have been able to develop criteria for determining whether a large, interstate compounding pharmacy such as Franck’s is engaging in impermissible manufacturing or permissible, traditional compounding.”

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