    [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

    90-129              U.S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON : 2003
    ____________________________________________________________________________
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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.
    ---------------------------------------------------------------------------

    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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    topics/enforce/2002/ENF00736.html.
        25. Missouri Department of Economic Development News Release
    Missouri Board of Pharmacy takes action against Kansas City Company.
    March 10, 2003. Accessed 10/19/03 from http://www.ded.state.mo.us/
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    Henney, M.d. May 8, 2000.
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    15, 2000 http://www.fda.gov/bbs/topics/ENFORCE/ENF00633.html;
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    www.fda.gov/bbs/topics/ENFORCE/ENF00166.html.
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    from http://www.obrienrx.com/o_brien_pharm/sterile/quality/qual_chem/.
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    disaster: Some pharmacists who mix medicines dispense unsafe drugs. The
    Kansas City Star October 6-8, 2002.
        32. South River Compounding Pharmacy. Accessed 12/27/02 from http:/
    /www.customdrugs.com/hrt.htm.
        33. Russell S and Hallissy E. Chronicle Investigation: Who's mixing
    your drugs? Bad medicine: Pharmacy mix-ups a recipe for disaster. San
    Francisco Chronicle June 23, 2002. Available at: http://www.sfgate.com/
    cgi-bin/article.cgi?file=/chronicle/archive/2002/06/23/MN12273.DTL.
        34. Centers for Disease Control Exophiala Infection from
    contaminated injectable steroids prepared by a compounding pharmacy--
    United States, July-November 2002. MMWR December 13, 2002/51(49);1109-
    1112. Available at www.cdc.gov/mmwr/preview/mmwrhtml/mm5l49al.htm.
        35. Suchard JR and Graeme KA. Pediatric clonidine poisoning as a
    result of pharmacy compounding error. Pediatric Emergency Care 2002
    18(4):295-96.
        36. Ramano MJ and Dinh A. (2001) A 1000-fold overdose of clonidine
    caused by a compounding error in a 5-year-old child with ADHD.
    Pediatrics 108(2):471-72.
        37, Glod M. Pharmacist penalized in death of boy, 5; Va. Board
    rules in medication error. The Washington Post. August 17, 2000.
        38. Department of Health and Human Services Food and Drug
    Administration WARNING LETTER to College Pharmacy, April 7, 1999.
        39. Teegardin C, Probe questions safety of pharmacy-made drugs. The
    Atlanta Journal--Constitution Friday March 30, 2001.
        40. Hartman T. Springs pharmacy sued in injected tea death. The
    Gazette April 11, 1999.
        41. Sanchez-Ramos L, Farah LA, and Kaunitz AM et al. Preinduction
    cervical ripening with commercially available prostaglandin E2 gel: a
    randomized, double-blind comparison with a hospital compounded
    preparation. Am J Obstet Gynecol 1995; 173(4):1079-84.
        42. Gebhart, Fred (1998) Clonidine implicated in household
    poisonings. Drug Topics, Nov 2:27.
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    usage in children. South Dakota Journal of Medicine: 234. Retrieved 8/
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        44. Coyne PJ, Hansen LA, Watson AC. Compounded Drugs: Are
    customized prescription drugs a salvation, snake oil or both? American
    Journal of Nursing 2003; 103(5) 78-85.
        45. Kaye T. The quandary of compounding for MCOS: Administrative
    costs, risks, and waste. MANAGED CARE 2003: 42-8.
        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.
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    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.
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    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 klunner@APhAnet.org 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 sbishop@aphanet.org.
                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.]