A recent decision from the U.S. District Court for the Middle District of Florida, Ocala Division, has held that the FDA lacks jurisdiction to assert authority over traditional pharmacy compounding for animal drugs, a practice that has historically been relegated to the regulatory authority of the states. In United States v. Franck’s Lab, Inc. , Judge Timothy J. Corrigan noted that “in enacting the [Food, Drug and Cosmetic Act] in 1938, Congress did not intend to give the FDA per se authority to enjoin the long-standing, widespread, state-regulated practice of pharmacists filling a veterinarian’s prescription for a non food-producing animal by compounding from bulk substances.”
The defendant, Franck’s Lab, Inc., was a compounding pharmacy that dispensed compound prescriptions for both humans and animals. Like many compounding pharmacies, Franck’s used bulk ingredients to mix the compound medications. The term “bulk,” as it was used by the court, referred to the raw chemical materials used in the compounding process as defined under 21 C.F.R. § 207.3(a)(4). After twenty-one polo ponies had died as a result of mathematical mixing error, the FDA sought an injunction to prevent Franck’s from compounding animal medications using bulk ingredients. Essentially, the FDA took the bright-line position that any compounding of animal medications from bulk substances violates the FDCA, even when conducted by a state-licensed pharmacist for an individual animal patient pursuant to a valid veterinary prescription. Franck’s countered with evidence of the FDA’s historical acceptance of and shifting approach towards “traditional pharmacy compounding”, their understanding of the FDA’s role in regulating the practice, the necessity of bulk compounding to provide life-saving treatment for non food-producing animal patients, the ubiquity of the practice of compounding animal drugs from bulk, and industry standards for quality control in the preparation of such compounded medications.
The court began by noting that the practice of pharmacy is state-governed, and that the States, including Florida, regulate compounding as part of their regulation of pharmacists. The court then provided an overview of the FDA’s history of regulating traditional pharmacy compounding, noting that for over a half-century after enactment of the FDCA, the FDA did not assert authority to regulate such practices. Among many factors and issues, Judge Corrigan took particular note of the FDA’s regulatory inconsistencies, pointing out that according to the FDA’s desired logic, “A pharmacist who compounds medication from bulk for ingestion by a horse is akin to a manufacturer and subject to an FDA enforcement action, while the same pharmacist compounding medication from bulk for ingestion by the human rider of that horse is not.”
In the end, the court held that the FDA lacked jurisdiction to regulate the compounding of animal prescriptions by a licensed veterinarian in the context of a valid pharmacist-prescriber-patient relationship. Clearly, this decision has implications for both animal and human compounders as it narrows the scope of what the FDA can regulate as the manufacturer of drugs. With this ruling compounding pharmacies in Florida preparing animal drugs pursuant to valid prescriptions will no longer have to worry about scrutiny from the FDA for engaging in this practice.
UPDATE:
On October 18, 2012, the U.S. government and Franck’s Lab, Inc. filed a Joint Motion to Vacate and Dismiss as Moot in the appeal in U.S. v. Franck’s Lab, Inc., et al. As noted above, U.S. v. Franck’s Lab, Inc. was a seminal decision in the pharmacy world because it severely limited the FDA’s authority to regulate compounding pharmacies when they engaged in traditional compounding practices, and supported the conclusion that a pharmacist could compound from bulk ingredients. In July 2012 during the pendency of the appeal brought by the U.S. government, however, Wells Pharmacy Network, LLC acquired Franck’s compounding business through an asset sale, and Paul Franck executed a seven-year non-competition agreement with Wells that prohibits him from engaging in any compounding that would compete directly or indirectly with Wells. As a result, Franck’s Lab and Mr. Franck were no longer engaging in compounding practices, nor would they be returning to any of the compounding practices which the government contended were improper, and hence, the parties viewed the case as moot. Notably, in the joint submission from the parties, in addition to dismissing the appeal and the complaint, the parties also agreed to vacate the underlying order (i.e., the September 19, 2011 decision and opinion from the U.S. District Court for the Middle District of Florida, Ocala Division). As a result of this joint dismissal, the continued validity of that decision is severely discounted since it was dismissed altogether before the completion of the appeals process. This calls into question whether the favorable decision in U.S. v. Franck’s Lab, Inc. is still “good law.” Based on the logical reasoning employed by Judge Corrigan and the law relied upon in writing the opinion, we believe that another court interpreting the same issue could likely come out the same way, irrespective of the fact that the opinion was vacated. Nevertheless, the future of the law in this area, particularly in light of the recent meningitis outbreak tied NECC, will surely be called into question with this order having been vacated.
Frier Levitt regularly represents compounding pharmacies on a variety of issues, from PBM audit abuse to regulatory compliance. Contact us today.
