Millions of Americans use compounded drugs created by a pharmacist or physician who combines, mixes, or changes a drug’s ingredients to meet individuals’ needs. They trust the 7,500 or so compounding pharmacies that do this work.
That trust is sometimes misplaced. In 2012, for example, contaminated steroid painkillers mass-produced by the now-defunct New England Compounding Center in Framingham, Mass., killed more than 100 people and sickened more than 750 others in 20 states. Barry Cadden, the center’s president, and Glenn Chin, a pharmacist, were sentenced to prison for their roles in the tainted-drug scandal.
As a result of the 2012 outbreak, the Drug Quality and Security Act of 2013 was enacted, creating 77 “outsourcing facilities” that are permitted produce compounded drugs in bulk.
Because the 2013 law still does not sufficiently protect patient safety, former Food and Drug Administration Commissioner Scott Gottlieb issued interim guidelines in 2018 to increase oversight. The International Academy of Compounding Pharmacists, a trade association, recently alleged that the FDA had “overreached,” and was “circumventing” the federal rule-making process requiring stakeholder input. In fact, the agency established a public comment docket on its proposed guidelines and held a public meeting in May.
As Gottlieb said last year when announcing the 2018 Compounding Policy Priorities Plan, “a growing number of enterprises [have been] acting as large-scale drug manufacturers seeking to operate outside of the purview of FDA oversight by operating under the guise of a pharmacy license. These outfits often created substantial risk … by manufacturing and shipping large quantities of purportedly sterile drugs and not adhering to good manufacturing practices.”
State pharmacy boards currently have primary oversight of pharmacies that are not registered with the FDA as outsourcing facilities, but only 22 states and the District of Columbia do routine inspections of compounding pharmacies. The FDA, which regulates prescription and over-the-counter drugs, oversees outsourcing facilities but does not test or approve drugs created in compounding pharmacies for safety or effectiveness. As a result, there is a greater risk that unsafe compounds will be produced in unsanitary conditions — as happened at the New England Compounding Center — and by pharmacies seeking to profit from illegal bulk sales.
The list of unnecessary tragedies is long. In 2017, more than 60 people in Texas lost all or some of their eyesight due to a contaminated compounded steroid injected into the eye. The year before, 17 New York cancer patients developed fungal infections due to a contaminated compounded intravenous medication. A report by the Pew Charitable Trusts identified more than 50 instances of compounding problems between 2001 and 2017.
In addition to creating public health problems, some compounders are defrauding and over-billing government programs like Medicare, the Office of Workers’ Compensation, and Tricare, as well as insurers.
Earlier this year, a Mississippi compounder and a marketer for the company pled guilty to defrauding Tricare, the armed services’ health-insurance program, of as much as $192 million. Last year, a South Florida compounding pharmacist and his assistant were found guilty of a scheme involving pharmacies, physicians, and marketers who defrauded Tricare of tens of millions of dollars. In a 2017 case awaiting trial, eight people associated with three pharmacies were charged with a scheme to cheat the Office of Workers’ Compensation to the tune of $158 million by obtaining reimbursements for up to $28,000 per container of compounded pain-relief creams.
Taxpayers appear to be getting cheated in other ways, as compounders’ reimbursement claims to federal programs have skyrocketed. Medicare Part D spending on compounded topical creams rose by more than 3,400% between 2006 and 2015.
The compounding pharmacists’ trade association has lobbied to leave most oversight to states and to those who prescribe and produce compounded drugs. Although there are good arguments for local control of many government functions, health care and medications know no state boundaries. And industry self-regulation smacks of the proverbial fox guarding the henhouse.
Compounding pharmacies are not bartenders mixing a gin and tonic. They produce essentially new drugs, and ensuring drug safety and effectiveness is the FDA’s mission. States must do a better job, but the regulatory loophole that allows compounders to avoid necessary federal scrutiny must be closed.
Andrew L. Yarrow is a former New York Times reporter and affiliate faculty member at George Mason University who frequently writes about health policy.