Medical Center Pharmacy v. Mukasey
On July 18, 2008, the United States Court of Appeals for the Fifth Circuit issued a ruling in Medical Center Pharmacy v. Mukasey, No. 06-51583. The court rejected the finding by the United States District Court for the Western District of Texas that compounded drugs are exempt from the definitions of "new drugs" and "new animal drugs" in the Federal Food, Drug, and Cosmetic Act (FDCA). The Fifth Circuit concluded instead that compounded drugs are "new drugs" and "new animal drugs" within the meaning of the FDCA and therefore are subject to regulation by the FDA. The court also ruled on the severability of advertising prohibitions in section 503A of the FDCA, which were found unconstitutional in a prior Supreme Court decision. The Fifth Circuit found that these prohibitions can be severed from section 503A, leaving the remaining parts of that section valid and effective.
The Fifth Circuit's severability ruling conflicts with an earlier decision by the United States Court of Appeals for the Ninth Circuit, which held that the unconstitutional parts of section 503A are not severable and that all of section 503A is therefore void. FDA and the Department of Justice are currently evaluating the Fifth Circuit's opinion. In the meantime, FDA will follow the court's decision in the Fifth Circuit and with respect to the plaintiffs covered by the decision. Elsewhere, the agency will continue to follow the enforcement approach reflected in the Compliance Policy Guide (CPG) section 460.200 [Pharmacy Compounding] issued by FDA on May 29, 2002.
In 1997, Congress added section 503A to the FDCA. Under section 503A, certain human drug products that were compounded by a pharmacist or physician were entitled to limited exemptions from FDCA provisions governing drug adulteration, misbranding, and approval. To qualify for these exemptions, a compounding pharmacy had to satisfy several requirements, including prohibitions against advertising and soliciting orders for compounded drugs.
A similar exemption from the new animal drug adulteration provisions exists for compounded animal drugs when they are compounded from approved new animal or human drugs in conformance with the Animal Medicinal Drug Use Clarification Act ("AMDUCA").
In 1998, seven pharmacies challenged the solicitation and advertising prohibitions in section 503A as an impermissible regulation of commercial speech. The Ninth Circuit held that these provisions were unconstitutional and could not be severed from the rest of section 503A, causing all of section 503A to be invalid. Western States Med. ctr. v. Shalala, 238 F.3d 1090 (9th Cir. 2001). In April 2002, the Supreme Court affirmed the Ninth Circuit's ruling that section 503A's advertising and soliciting restrictions were unconstitutional, but the Court did not rule on the severability of those restrictions. Thompson v. Western States Med. Ctr., 535 U.S. 357 (2002).
In May of 2002, FDA issued a revised compliance policy guide (CPG) on pharmacy compounding, CPG Sec. 460.200 ["Pharmacy Compounding"], which explained how the Agency would address pharmacy compounding following the Supreme Court's decision. The CPG sets forth a non-exhaustive list of factors that FDA considers in determining whether to take enforcement action when the scope and nature of a pharmacy's activities raise the kind of concerns ordinarily associated with drug manufacturing. The Agency issued a similar CPG with respect to new animal drugs.
In September 2004, ten pharmacies brought suit in the U.S. District Court for the Western District of Texas challenging FDA's authority to regulate compounded drugs and inspect state-licensed pharmacies. Medical Center Pharmacy v. Ashcroft (later changed to Medical Center v. Gonzalez and then Medical Center v. Mukasey). In August 2006, the district court issued a ruling interpreting, among other things, the application of the new drug provisions of the FDCA to compounded drugs. The court held that compounded drugs were implicitly exempt from the new drug definitions in the FDCA and that the advertising restrictions in section 503A were severable from the rest of that section. The court therefore found that compounded drugs are exempt from the new drug and new animal drug approval process and that drug compounding is an approved and legal practice. The government appealed this decision, leading to the Fifth Circuit's July 18 ruling.