GAO Recommends Congress Clarify FDA’s Authority to Oversee Drug Compounding

August 8, 2013

On July 31, the Government Accountability Office (GAO) released a report updating its 2003 testimony regarding drug compounding. The report was commissioned by the House Committee on Oversight and Government Reform last October and addressed: (i) the status of FDA’s authority to oversee drug compounding and the gaps between federal and state authority; (ii) how FDA has used its data and authority to oversee drug compounding; and (iii) the actions taken or planned by states or national pharmacy organizations to improve oversight of drug compounding.

The following are the key findings from the GAO report:

  1. The authority of the FDA to oversee drug compounding is unclear. The GAO report discussed the circuit split regarding whether only part or the entirety of Section 503A of the Food and Drug Administration Modernization Act (FDAMA) is invalid. In Thompson v. Western States Medical Center, the U.S. Supreme Court determined that the advertising provisions of Section 503A were a violation of compounding pharmacies’ First Amendment rights and were therefore unconstitutional. The Supreme Court did not decide on whether the remaining parts of Section 503A, which discussed FDA’s authority over compounding pharmacies, were still valid. The Ninth Circuit has ruled that the entirety of Section 503A is invalid, while the Fifth Circuit ruled that only the advertising provisions are invalid.
  2. There is no consensus on whether compounding drugs in large quantities and selling across state lines falls within the practice of pharmacy or is manufacturing. The GAO interviewed officials from FDA and national pharmacy organizations and found no agreement on whether pharmacies that engage in large-scale drug compounding, produce drugs in anticipation of individual prescriptions or without prescriptions, and sell them across state lines, are engaged in the practice of pharmacy or are engaged in drug manufacturing. The FDA proposed to create a category of “nontraditional drug compounders” however, officials from national pharmacy organizations said the establishment of a new category of nontraditional drug compounder may create more confusion between drug compounding and manufacturing, unless the new category is carefully crafted.
  3. FDA lacks the information needed to oversee compounding pharmacies. The FDA acknowledges that compounding pharmacies are generally not required to register with FDA, and therefore FDA does not know who they are or what they are compounding. In fact, during the interviews for the GAO report, FDA stated that one of the reasons it has not routinely inspected compounding pharmacies is because FDA does not know who they are. This lack of knowledge creates a deficiency of reliable data to make decisions to prioritize FDA’s inspection workload and other follow-up and enforcement actions.
  4. Several states have taken action to enhance their oversight of drug compounding. The GAO report reviewed four states – California, Connecticut, Florida and Iowa – each of which had recently taken actions to improve oversight of drug compounding. Also, national pharmacy organizations have undertaken efforts to help states oversee drug compounding. However, the GAO found that some states lack the resources to provide the necessary oversight of drug compounding.

Overall, the GAO recommends that Congress consider clarifying FDA’s authority oversee drug compounding. Additionally, FDA should ensure its databases collect reliable and timely data on inspections associated with compounded drugs and differentiate drug compounders from manufacturers.

If you have questions regarding the GAO report, the proposed legislation or regulations regarding compounding pharmacies, please contact one of the authors.