Endo, Par Take Aim at Bulk Drug Compounding

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By Dana A. Elfin

Bulk drug compounding could be facing a huge regulatory upheaval—one that could essentially shut down the industry.

Recently, drugmakers have raised concerns about whether compounders are complying with applicable Food and Drug Administration regulations and whether compounded drugs are safe and effective. Endo International Plc’s subsidiaries Endo Par Innovation Co. and Par Sterile Products LLC are suing the Food and Drug Administration, alleging the agency’s failure to strictly oversee compounding facilities is allowing unlawful and unsafe bulk compounding ( Par Sterile Products LLC v. Hargan , D.D.C., No. 1:17-cv-02221, complaint filed 10/26/17 ).

The suit, which is the first one of its kind, has the potential to upend how the agency regulates compounders and force some bulk compounders out of business, eliminating lower-cost alternatives to mass-produced drugs.

Compounding is the practice of combining, mixing, or altering an existing drug’s ingredients to create medication specifically tailored to an individual patient’s needs.

Drastic Impact

If the Endo case results in changes to the FDA’s bulk compounding policy, it could drastically alter the bulk compounding industry, according to attorney Lee Rosebush of Baker Hostetler LLP in Washington. According to conservative FDA estimates, the bulk compounding industry produced about $780 million worth of drugs in 2016.

If Endo succeeds in throwing out the FDA’s bulk substance policy, “there is a strong argument that compounding from bulk would be prohibited until FDA publishes a new bulk list,” Rosebush said. “Without the ability to bulk, compounders would only be able to make combinations of finished product or products that are less concentrated than finished product. This would drastically affect patient access and drug availability.”

Compounders wanting to make larger amounts of drugs without individual prescriptions can voluntarily register with the FDA as 503B outsourcing facilities and become subject to federal manufacturing oversight. Rosebush represents a coalition of 503B registered outsourcing facilities.

Currently, combination compounded products represent about half of all bulk compounded products, Rosebush said, with the other half being more concentrated versions of commercially available drugs.

“For example, if a hospital or physician requests a medication or compound that is more concentrated than the FDA approved product, the 503B facility has no way to compound or make that product besides by adding bulk substance,” he told Bloomberg Law.

An Endo victory “could more than likely force several 503Bs out of business,” he said.

Drug Quality and Security Act

Compounded drugs are often less expensive than mass-produced branded drugs, but there are concerns compounded drugs could put patients at risk. Compounding received national attention in 2013 after contaminated compounded drugs sold by the now-shuttered New England Compounding Center (NECC) caused a deadly fungal-meningitis outbreak.

After that outbreak, new regulatory controls were imposed on compounders under the Drug Quality and Security Act of 2013 (DQSA).

The DQSA distinguishes between compounders engaged in traditional compounding and compounders making large volumes of compounded drugs without individual prescriptions. Currently, outsourcing facilities are permitted to provide compounded drugs without requiring individual prescriptions because they are subject to current good manufacturing standards.

Challenging FDA Enforcement

Endo, along with co-plaintiff Par Sterile Products, are challenging how the FDA is regulating compounding. They claim the FDA isn’t enforcing the DQSA’s statutory provisions governing bulk compounding, and that its policies could lead to another NECC-type tragedy.

According to the lawsuit, filed Oct. 26 in the U.S. District Court for the District of Columbia, the FDA has chosen to implement its own ”interim” policy on bulk compounding in contravention of the statute, essentially allowing compounders to engage in mass production of drugs while sidestepping the FDA’s drug approval process.

“Unapproved, bulk compounding represents a threat to the public health,” Stephen Mock, senior vice president of investor relations and corporate affairs for Endo in Malvern, Pa., told Bloomberg Law. “FDA’s interim policy regarding this topic is contrary to the directives of the Drug Quality and Security Act of 2013 (DQSA), and otherwise undermines the framework of the Federal Food, Drug and Cosmetic Act (FDCA), including Hatch-Waxman,” Mock said.

Endo and Par want the court to enjoin the FDA from authorizing bulk compounding of Par’s septic shock treatment drug Vasostrict (vasopressin). Endo owns intellectual property in Vasostrict.

“Endo opposes the unapproved, bulk compounding of vasopressin, and will vigorously defend and protect its substantial investment in its proprietary products,” the company said. “Vasostrict has been approved by FDA and is demonstrated to be safe and effective,” Endo added.

In September, FDA Commissioner Scott Gottlieb said the agency was working on a new compounding policy. Endo said in a statement at the time it filed the suit it hoped the new policy would include “the legally required changes to FDA’s regulatory framework.”

FDA Inaction

But Endo said the FDA’s inaction to date forced the company to sue the agency.

"[B]ecause we believe the status quo is unlawful and because we have no certainty about FDA’s plans, we feel compelled to bring this action in an effort to protect the public health and safety, together with our own investments in product development and the integrity of the new drug approval process,” Endo Executive Vice President and Chief Legal Officer Matthew J. Maletta said.

Vasostrict is protected by five patents listed in the FDA’s Orange Book (formally titled “Approved Drug Products with Therapeutic Equivalence Evaluations"). The Orange Book is a listing of patents brand-name manufacturers claim cover their drug products. The five patents are: U.S. Patent Nos. 9,375,478; 9,687,526; 9,744,209; 9,744,239 and 9,750,785; none of which expires until Jan. 30, 2035.

Fight Over Money

The concern over compounding policies likely goes beyond safety issues or the agency’s failure to follow administrative law procedures or finalize guidances and regulations.

It’s also about money. Vasopressin used to be compounded on a regular basis, Rosebush said.

“Based on historical compounded prices and the current price of Vasopressin, we have seen up to a thirty-fold increase in pricing for the drug,” Rosebush told Bloomberg Law.

Compounders Want FDA Action

Meanwhile, 503B facilities have their own concerns about the FDA’s policies, Rosebush said.

The standards are “squishy” and “could change tomorrow,” he said.

They would like the agency to better define current good manufacturing practices (cGMP) for bulk compounders and also want the agency to develop final guidance and additional regulations, he said.

“Our members are are also looking to the agency for more guidance,” Rosebush said.

Par Sterile Products LLC and Endo Par Innovation Co. are based in Chestnut Ridge, N.Y. Endo International’s global headquarters are in Ireland, with U.S. headquarters in Malvern, Pa.

To contact the reporter on this story: Dana A. Elfin in Washington at delfin@bloomberglaw.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com

For More Information

Endo's suit against the FDA is available at http://src.bna.com/ukN. The FDA's Interim policy on bulk compounding is at http://src.bna.com/ups.

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