Court: FDA can't touch compounding pharmacies

Friday, June 30, 2006

MIDLAND, Texas - A Federal judge ruled May 25 that compounded drugs are outside the Food and Drug Administration's reach.
According to the ruling, compounded preparations are not considered new, unapproved drugs, as the FDA has long contended.
In September 2004, a group of 10 compounding pharmacies known as the Midland Coalition filed suit against the FDA charging the agency had exceeded its jurisdiction.
As long as a pharmacy is compounding drugs in accordance with state pharmacy regulations and a valid prescription, the FDA has no say, says Lisa Smith, an attorney with Brown & Fortunato in Amarillo, Texas.
However, Smith said, it wasn't clear whether this would open the door for pharmacies to compound equivalents to commercially available drugs. Previously, the FDA has said that compounding the equivalent of an FDA-approved drug without some special clinical necessity for the compounding, crossed the line from pharmacy compounding into manufacturing, said Smith.
It is too soon to tell what effect, if any, the ruling will have on neb-med reimbursement. However, CMS will probably develop a separate HCPC for the compounding powder based on the ASP of the powder, instead of the commercially available equivalent, said Smith.
"You're not going to have the kind of profit margin there that has historically supported compounding," she said.