Future of veterinary compounding hangs in balance

Judge hits federal government with tough questions

Published: February 25, 2011
By Jennifer Fiala

Attorneys for the U.S. Food and Drug Administration (FDA) faced off with Franck’s Pharmacy yesterday in what promises to be a pivotal case on the laws governing compounding in veterinary medicine.

The decision is in the hands of Judge Timothy J. Corrigan of the U.S. District Court for the Middle District of Florida. While lawyers for the FDA could not be reached, Mark Brown, an attorney representing Franck’s, suggests that the outcome carries “national implications” despite the court’s limited jurisdiction, which extends from Georgia's border to southwest coastal Florida.

Asked to predict how and when the case will resolve, Brown responded: “Judge Corrigan is carefully and thoughtfully considering the novel legal issues in this case and the important ramifications not just to Franck's Lab, but to compounders across the country. Until he issues a decision, it is pure speculation to predict the outcome or when he will issue his opinion. It is clear that FDA is going after compounding generally, and the judge is going to take his time with this.”

Settling the case could culminate more than a year of battling between the FDA and Franck’s. At the lawsuit’s core, the FDA wants to cement its jurisdictional authority over compounded medications, requiring that they meet the agency’s safety and efficacy protocols. That stance is counter to the position by some proponents of compounding that Congress never intended to provide the FDA with oversight authority, and that the centuries-old practice of mixing bulk chemicals to create tailored medications should be left to the purview of state pharmacy board regulators.

In oral arguments on cross motions for summary judgment heard yesterday at Florida Coastal School of Law in Jacksonville, the FDA made two clear 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 difference 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 FDCA is what’s known as a strict-liability statute, which means violators may be held responsible even if they did not intend to break the law. The statute carries civil and criminal penalties for offenses.)

Challenging the FDA’s line of thinking, Franck’s attorney Brown asks, in an interview with the VIN News Service: “How can traditional pharmacy compounding permitted under state law that’s a direct result from an assessment of a veterinarian of an animal be a crime?”

Compounding operations are governed by state pharmacy laws and regulations, but the FDA argues that compounding pharmacies are “manufacturing” drugs and therefore should be subject to regulatory oversight by the agency. Large pharmaceutical companies side with the FDA because their drugs are subject to the agency's regulatory approval process, an expensive and lengthy undertaking. It's illegal for compounding pharmacies to create and sell mimics of commercially available, FDA-approved drugs, although many observers say the practice is rampant.

Ron Phillips, spokesman for the Animal Health Institute, a membership group for some of the world’s largest pharmaceutical companies, says that too often, compounding companies undermine the drug-approval system.

“We continue to have concerns about illegal manufacturing and the FDA's ability to regulate in that arena,” he says.

Proponents of compounding argue that there’s not a big enough market for most veterinary drugs, making it nearly impossible for companies to develop data to support an application for the FDA's approval. The compounding arena is further limited because it is intended to serve the needs of small patient groups where no commercially available product or particular formulation exists.

The dispute came to a head last spring, when the FDA attempted to shut down Franck’s while accusing the pharmacy of selling adulterated and misbranded drugs. On Aug. 18, Judge Corrigan denied the FDA’s request for a permanent injunction against the compounding pharmacy, contending that significant legal questions were at play, and ordered the hearing that took place yesterday.

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

Regulators now say that the high-profile incident has little to do with the FDA's case against Franck's. Rather, the FDA’s court challenge of Franck’s deals with the general practice of compounding animal drugs from bulk API, an agency spokeswoman told the VIN News Service. 

During yesterday's hearing on U.S. v. Franck’s Labs, Inc., the following courtroom exchange played out when the pharmacy’s legal team balked at classifying the compounding pharmacy as a "manufacturer."

Trial lawyer John Claud with the U.S. Department of Justice, representing the FDA, countered: “If (a compounded drug) is not known as safe and effective, it is a new animal drug. And new animal drugs are unsafe and cannot be legally distributed.”

Judge: “When you say unsafe, you mean that in a statutory way, not a literal way, right?”

Claud: “Yes and no…”

Judge: “Wouldn’t it be impossible to approve all new animal drugs?”

Claud: “The size of Franck’s is a problem for approval of all the thousands of drugs they compound.”

Judge: “This principle would be applied to all compounding pharmacies. … So you want me to say compounding is illegal?”

Claud: “The statute is already stated that compounded drugs are new animal drugs. You do not have the burden of making that decision.”

Judge: “The FDA can do whatever it wants?”

Claud: “No …”

Judge: “Have any other pharmacies stopped compounding because of an FDA warning letter? … The FDA says the defense are ‘bad actors’ and doing bad things.”

Claud: “We have no evidence that the bulk drugs used in the case involving the 21 polo ponies were the problem. The problem was incorrect calculation. There is no regulation for protection. There is a lack of control and they are assembling drugs that are not approved by the FDA. … The big picture is that Franck’s undercuts the approval of new animal drugs.”

Judge: “I understand the, ‘We’re from the government, we’re here to help.’”

Claud: “What the defendants are producing are new animal drugs. That’s what the FDA wants the court to decide because they are violating the law.”

Judge, speaking hypothetically: “FEVA (a fictitious agency) made it well known that even though they technically regulate all four-wheeled vehicles, the regulations are only for cars. Now 50 to 60 years later they decided that they want to regulate golf carts, too. Ultimately it will become too expensive to manufacture golf carts to these new regulation standards. How is this different?”

Claud: “The FDA can regulate and enforce as it wants. This is supposed to be regulated state to state but Franck’s is shipping out of state, which makes this a federal matter.”

If either side appeals Judge Corrigan’s ruling, the case will go to the 11th Circuit Court of Appeals, which has jurisdiction over federal cases originating in Alabama, Florida and Georgia. It is the busiest federal appellate court in the United States. The vast majority of decisions on cases coming out of the 11th Circuit are decided on briefs submitted by the parties.

Freelance writer Lara Shepard contributed to this report.

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