This is the second of two parts. Read part 1.

In his first 22 years as a pharmacist, Irving Reitzenstein, Pharm.D., ran a traditional community drug store in greater Los Angeles. The intrusion of insurance companies drove him out.

"I was really acting more as an intermediary between patients and their insurance companies," Reitzenstein said. Low reimbursement rates drove pharmacists to try to fill more prescriptions each day to maintain their income, he said, and customers lost out: "You couldn't provide the same level of service."

The search for a more rewarding path led Reitzenstein to veterinary compounding, a pharmacy practice in which drugs are manipulated in dosage, form and/or flavor to serve the individual needs of specific patients.

Unfettered by the pressures of insurance, compounding is a cash business on the rise since the 1980s. Compounding always has been needed in veterinary medicine because fewer drugs are available specifically for animals than for people. But demand is up, following the rising regard people have toward their animal companions. If they're part of the family, they deserve health care.

Today, Reitzenstein co-owns Valley Drug and Compounding in Encino, Calif., which is devoted almost completely to the small-animal market. He calls the work fulfilling, even fun. But underlying the freedom and creativity of the job is a chronic stress and uncertainty.

The stress is born of inconsistent rules applied to the industry, and unpredictable government enforcement. The industry itself is divided over how to regard the rules. Observers warn that compounding could be shut down altogether if the industry doesn't police itself effectively.

The practice of compounding is popular not only in veterinary medicine, but in human medicine, as well. Tom Murry, Pharm.D., executive director of the Pharmacy Compounding Accreditation Board (PCAB), said demand falls into four broad categories: pain, pediatrics, post-menopausal women and pets.

How much of the market veterinary medicine claims isn't clear. Figures on the growth and value of the industry and its sectors are hard to come by. Compounding pharmacies tend to be privately held, and their main trade group, the International Academy of Compounding Pharmacists (IACP), does not calculate industry value, nor does it tally the number of compounded products prepared annually, IACP Executive Director Rod Shafer said.

The IACP does not track such information out of respect for the privacy and competitive positions of its members. "A lot of times people feel that's proprietary information," Shafer said.

Whatever the numbers, the demand for compounding has become sufficient to support single companies expanding their reach to every state. And that development fuels concern that some pharmacies are exploiting consumer demand.

Because of their specialized applications, compounded drugs do not undergo the drug-approval process required by the U.S. Food and Drug Administration (FDA) of mass-manufactured drugs. Therefore, compounded medications generally are not tested formally for safety and efficacy.

Does size matter?

Gigi Davidson, director of clinical pharmacy services at North Carolina State College of Veterinary Medicine, said the existence of outsize operations belies the responsibility of compounders to address individual needs.

"Since the early 1980s, we've seen compounding pharmacy become this institutionalized, giant force," Davidson said. "...One compounding pharmacy sending medications to all 50 states is not the (purpose) of the compounding pharmacist. Compounding pharmacies exist in all states, and almost any compounding need can be met locally. Interstate compounding commerce has been driven purely by economics and not by patient need. Shopping for compounds out of state is based purely on the bottom line."

Marcy Kelly, vice president of sales and marketing at Wedgewood Pharmacy in New Jersey, one of the nation's largest compounding pharmacies, said it is incorrect and unfair to equate size with illegal or unethical operations.

"Compounding pharmacies are responding to a prescriptive order," she said. "Whether it's one patient or 1,000 patients who have that (special) need, it's still a need that can't be met another way.

"I do not think size defines the model or the role of the health-care practitioner," Kelly continued. "We have grown because we have constantly looked for ways to make it easy for our customers to do business with us. The way we answer the phone. The speed of making sure the medication is available to them. That the preparation is consistent and the labeling is clear and appropriate. It means we have done just everything we can think of to make every experience that they have with our pharmacy a good experience. That doesn't turn us into a manufacturer."

Dr. Brett Cordes, veterinary medical director of animal health at The Apothecary Shop in Phoenix, Ariz., which sells manufactured and compounded medications nationwide, said distinctions between good and poor, ethical and unethical compounders come down to characteristics other than size.

Before Cordes joined The Apothecary Shop, he was a small-animal practitioner in Arizona. At the time, compounding was new to him, but popular in the state. As he learned more about the pharmacy practice, he noticed something interesting.

"I saw a trend with dogs I saw for second-opinion exams, taking a compounded medication for months, sometimes years, and not getting any better," Cordes recalled.

When he switched the dogs to a medication from a compounding pharmacy that was accredited by PCAB, or prescribed an FDA-approved alternative, Cordes said, the dogs always would get better.

That observation told him that all drugs — and all compounded drugs in particular — are not equal. "That capsule that somebody made, how do you know that the ingredients in there are not just cornstarch?" he asked rhetorically.

"It's like inviting friends over for a steak dinner and serving hot dogs," he said. "It is still beef, right?"

So profound was the experience that Cordes eventually took a job building veterinary business for The Apothecary Shop, one of 66 compounding pharmacies accredited by PCAB.

Industry attempts to police itself

The accreditation body was created in 2004 to raise the quality and awareness of compounding. It is the pharmacy industry's attempt to police itself and to bring order and consistency where gaps exist in government laws and regulations, said its Executive Director Murry.

"We want to take care of our patients," Murry said. "If the FDA wants to help us do this, we'll work with the FDA. If the (state) Boards of Pharmacy want to do this, we'll work with them. PCAB's trying to help address the concerns that everybody has. If there's a lack of consistency coming from state and federal regulators, that doesn't do us any good. We've got to have some clarity."

Earning accreditation is not easy. Murry said the process takes from a few months up to a year. The board has 200 applications pending, amounting to about 10 percent of the marketplace, Murry said. "We've had a few denials, and I would also say that every pharmacy can improve," he said. "That is what PCAB is here to do, to help good pharmacies become great pharmacies."

PCAB's reputation for high standards is building confidence among groups and individuals who have been critical of trends in compounding.

The American Association of Equine Practitioners (AAEP), for example, has been outspoken against unethical compounding behavior, such as selling mimics of commercially available FDA-approved medications. Two years ago, the association tried to exclude such businesses from the trade show at its annual convention by requiring exhibitors to sign a statement confirming that their activities followed federal law and FDA guidelines on veterinary compounding.

"Even after that, there were still players outside the rules," said Dr. Kenton Morgan, chair of AAEP's Biologic and Therapeutic Agents Committee.

The AAEP next considered excluding all compounding pharmacies until it realized that some compounders sell both compounded and FDA-approved products. So it settled on a prohibition against advertising of compounded products and compounding services. That ban remains in place for this year's convention in December.

Next year, a new policy takes effect. Starting in 2010, AAEP will require all convention exhibitors who promote or sell compounded products or compounding services to be accredited by PCAB. "It was the decision of the ... leadership that rather than us going around our convention area to determine if the compounding pharmacies were playing by the rules, we would ask them to belong to an organization with high standards and one which addresses the issue of compliance," Morgan said.

The creation and operation of PCAB, however, has not settled controversies and divisions within the industry. Some pharmacies that are not accredited are pushing for changes in some PCAB principles.

Kelly at Wedgewood, for example, objects to the principle that accredited pharmacies not dispense compounded products to practitioners for resale to clients. While federal guidelines for compounding prohibit resale, some states appear to allow it, whether explicitly or by not specifically prohibiting it. The trade group IACP and many individual compounding pharmacies do not accept FDA authority over compounding.


"What's at issue here is that (PCAB) goes beyond what state law says," Kelly said. "While we support and adhere to the quality standards and the concept of accreditation, until we can support (all) the principles of PCAB, Wedgewood won't participate."

Shafer, executive director of the IACP, shares the view that accreditation standards should steer clear of regulatory policy. "PCAB, their major concern should be quality," he said. "State boards of pharmacy and other agencies that have responsibility for licensure and meeting (government) rules and regulations should be concerned about whether you're following the law."

Veterinarians have stake, responsibility, power

Ongoing uproar in the industry could spell its demise, some fear. "I would really hate to see us to the point where the FDA says, ‘We can't control all these loose cannons, so we just need to shut down the whole show,' " said Reitzenstein, whose pharmacy will seek accreditation once it completes a transition to computerized recordkeeping, an essential step toward meeting the standards.

Cordes said veterinarians stand to lose as well — losing customer respect if not compounding services.

"Veterinarians are going to start looking bad ... once consumers become more aware," Cordes said. "And consumers are becoming more and more aware."

Although much of the ruckus over compounding takes place out of the public eye, incidents occasionally push the subject into the spotlight. That happened this spring when 21 prized polo ponies died abruptly before a match in Florida, killed by a vitamin and mineral supplement that was compounded incorrectly. The case is under investigation.

Dr. Katrina Mealey, who teaches small-animal medicine and pharmacology at Washington State University, said clinicians must be mindful that their liability is much greater when prescribing compounded medications than with FDA-approved drugs.

To make her point, she tells practitioners that they should be willing to label all compounded medications with a notice reading: "This drug is not FDA-approved. Your veterinarian verifies its safety and efficacy for treating your pet's condition."

Davidson said veterinarians have the power to drive business — and therefore the industry as a whole — toward ethical, appropriate uses of compounding and away from improper and potentially illegal and unsafe uses.

She argues that "mega compounders," in trying to undercut their competitors and monopolize entire markets, are "driving the quality of compounding down. It's putting the mom-and-pops out of business because they can't compete with the volume that the mega-compounders are able to provide. Veterinarians are the only ones who will be able to stop that."

A compounding question raised more than once on Veterinary Information Network (VIN) discussion boards is whether practitioners are likely to be prosecuted or penalized for too-liberal use of compounded drugs.

Douglas Kemp, Pharm.D, a retired director of pharmacy at the University of Georgia College of Veterinary Medicine, and one of VIN's resident experts on the subject, says that whether anyone has been cited is not the point.

"FDA is concerned with the degradation of the drug-approval process and the creation of manufacturing under the guise of compounding," he wrote in an online discussion in 2007. "I share in that concern and all of us should accept the responsibility of trying to protect the laws and regulations that were developed in response to real problems and designed to protect us from the unscrupulous.

"From an FDA viewpoint — how do they separate the ‘manufacturing as compounding' businesses from the local compounder trying to meet the needs of a practitioner? What is the delineating factor? What is OK? One violation? 25? 100? How do you maintain the safeguards offered through the approval process if anyone who wants to can simply declare the act to be compounding and state that (the) FDA cannot touch them?

"I fear that FDA will accumulate enough reports of violations and find a way to document a detrimental impact on the approval process — at which time we might see compounding severely curtailed or prohibited."

Dr. Laura Wade, an avian and exotics practitioner in western New York state who relies heavily on compounded medications for her usually small and often fragile patients, knew very little about the complicated regulatory background of compounding a few years ago. She has since boned up. She takes seriously the threat of losing the compounding option.

"If they took it away, it would be very difficult for me to treat my patients well," Wade said. "I would be up against a wall. I don't know what I'd do. ... It would be really hard for me not to have access ... which is why I want to be very careful how I do my work."

Part 1: Legal fog surrounds growing source of veterinary drugs