States Adopt Variety of Oversight Strategies in Wake of NECC Disaster

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Martha Kessler and Adrianne Appel  

March 13 --In September 2012, a clinician in Tennessee reported to the Centers for Disease Control and Prevention (CDC) a case of fungal meningitis in a patient who had received an injection of a steroid produced by the New England Compounding Center (NECC) in Framingham, Mass. The CDC linked a growing number of such cases to three lots of the steroid shipped to 20 states. By the time the CDC declared the outbreak over in October 2013, 751 people in 20 states had become infected, and 64 people had died.

Federal lawmakers questioned how such a disaster could occur, and through multiple hearings and reports, concluded that NECC appeared to have exploited a gap in regulatory authority between the federal Food and Drug Administration (FDA) and state boards of pharmacy pertaining to compounding pharmacies. Federal lawmakers reacted by crafting and passing the Drug Quality and Security Act (DQSA), which gives clear oversight and enforcement authority to the FDA to regulate companies that manufacture compounded substances. President Barack Obama signed the DQSA into law Nov. 27, 2013 (Pub. L. No. 113-54).

The Federal Compounding Quality Act leaves regulation of traditional compounders--or those that prepare patient-specific products based on individualized prescriptions--to the states. Following the meningitis outbreak, many states began considering updating--or, in some cases, completely revamping--their regulations of compounding pharmacies, particularly sterile compounding, and stepping up inspections.

Those efforts range from adoption of a stringent new regime in California, which has put in place a requirement that compounding pharmacies obtain a special license beginning July 1, to a Texas requirement that out-of-state compounding pharmacies be inspected by the Texas pharmacy board.

At the other end of the spectrum are states that have reviewed their existing laws and regulations and decided there is no need for further action, as well as some jurisdictions that report they are waiting for further guidance from the FDA before deciding whether they must act.

The FDA will be hosting an intergovernmental working meeting March 20-21 at its headquarters near Washington, to discuss with state officials the oversight of compounding pharmacies and the relationship between FDA and the states under the DQSA.

The agency held a meeting with state officials in December 2012, in the wake of the meningitis outbreak. The FDA said this latest working group session is intended to “identify opportunities to better protect the public health by strengthening oversight of compounding pharmacies, including through improved federal-state collaboration.”

Among the topics identified for discussion are FDA's plans for implementing the new law, conducting inspections of sterile compounding facilities and improving communication between the FDA and the states with regard to compounding, including issues related to the sharing of confidential information.

The FDA also is seeking comments on what it should include in the standard Memorandum of Understanding (MOU) the agency is required to develop under the Federal Food, Drug and Cosmetic Act addressing the interstate shipment of compounded products.

Meningitis Outbreak Facts

Company involved: New England Compounding Center, Framingham, Mass.

License: Was licensed in Massachusetts as a pharmacy

Drug: Preservative-free methylprednisolone acetate, an injection steroid

Illness: Fungal meningitis

First case reported: Sept. 18, 2012, in Tennessee

Total infected: 751 people; total died: 64

Number of states with cases: 20

Most cases: Michigan, 259 cases; Tennessee, 152; Indiana, 85

Source: CDC

Also involved in the development of the FDA guidance is the National Association of Boards of Pharmacy (NABP). The NABP said in a posting on its website in January that it has received a variety of questions related to “outsourcing facilities,” as defined in the DQSA. Specifically, it said it has been asked whether, and how, the states should be licensing these types of entities, even if they are solely operating as an “outsourcing facility.”

The NABP told Bloomberg BNA March 11 that it is working with its member boards of pharmacy to ensure appropriate oversight of compounding pharmacies and with the FDA to ensure all resulting regulations from the DQSA are in the best interest of public health. In addition, the NABP said it is working with the FDA to develop an MOU for use between the FDA and the states to address interstate distribution of inordinate amounts of compounded products. It is expected to be released at the end of the first quarter of 2014.

Actions in Three Categories.

Also tracking efforts at the state and federal level to oversee compounding pharmacies is the International Academy of Compounding Pharmacists.

IACP Executive Vice President and Chief Executive Officer David Miller told Bloomberg BNA Feb. 27 that compounding pharmacists are seeing a wide range of activity in the states, which started in 2013 and has continued. These efforts, he said, tend to fall into three categories.

In the first category are the states that hadn't updated or even addressed the issue of compounding pharmacies and operations in their state. In these states, regulatory agencies are doing a complete review of what they require and what are considered best practices that should be adopted.

Second, Miller said, states are looking at what they require in terms of licensing and inspection of out-of-state pharmacies that provide compounded products for residents in their state. Traditionally, a pharmacy simply had to be licensed in its home state, and it could then apply for a license in a reciprocal state, pay a fee and the second state would automatically send out a permit for a nonresident pharmacy.

Regulators basically took the word of the pharmacy's home-state regulators and figured they would be notified if violations occurred, Miller explained, saying it was basically “a gentleman's agreement.” However, he said, what everyone discovered in the wake of the NECC situation is that it was fairly common knowledge in Massachusetts that the Massachusetts Board of Pharmacy didn't conduct regular, unannounced inspections of any pharmacy, not just compounding pharmacies.

This led regulators in other states to say that they may not be able to rely on their counterparts in other states to investigate their pharmacies, he explained. As a result, there has been an increase in the number of states adopting requirements for nonresident pharmacies seeking permits to provide compounded substances to in-state residents. In addition, there has been a corresponding increase in requests by state agencies for more inspectors and funding for those inspectors to travel to other states to perform their own investigations.

Miller said a third step many states have taken is to begin looking at who ultimately is responsible for compounding medications within a practice setting, and the quality standards that should be put into place.

More than half of the states don't formally require that pharmacists engaged in compounding of any type (sterile or nonsterile) comply with the national U.S. Pharmacopeial Convention (USP) standards, he said.

He said the good news is that a number of states are adopting rules requiring--and it's a policy endorsed by the IACP-- anyone engaged in compounding to follow the national quality standards established by the USP.

Massachusetts Under Scrutiny

The Massachusetts Board of Registration in Pharmacy (MBRP) was scrutinized by federal and state lawmakers and the administration of Gov. Deval Patrick (D) following the NECC meningitis outbreak. The NECC clearly was a bad actor, they said, but lax enforcement by the board allowed the NECC to continue operating, despite inspections showing serious breaches in sterile practices dating back to 2002, when two people were hospitalized, according to a Nov. 12, 2012, memo of the U.S. House Subcommittee on Oversight and Investigations of the Energy and Commerce Committee.

“It is difficult to understand why definitive action was never taken to either revoke its license or at a minimum, closely monitor the company's operations. Instead, the company was allowed to grow and expand operations, ultimately holding licenses to ship drugs to at least 45 states,” a Nov. 15, 2012, report of the U.S. Senate Health, Education, Labor and Pensions Committee said.

Immediately following the outbreak, a Patrick administration review of board e-mails and minutes led to the termination of one long-time member employed by Ameridose, a sister company to the NECC, for potential conflicts of interest and to fire the board director for failing to act in July 2012 on a warning letter about the NECC from the Colorado Board of Pharmacy, according to statements by Lauren Smith, interim director of the Department of Public Health, on Oct. 28 and Nov. 7, 2012.

Patrick released emergency regulations in October and November 2012 to increase the number of inspectors from five to 10 and to begin unannounced inspections of all 39 sterile compounders in the state by Jan. 1, 2013. He appointed three new members to the MBRP who were outside the pharmacy industry; required all sterile compounding pharmacies to report the volume and distribution of their products; and required all licensed pharmacists to alert the board if they were the subject of any disciplinary action by any state or federal agency.

The state's inspectors issued 11 cease-and-desist orders to sterile compounders in the state, according to a July 7, 2013, report on compounding by state Rep. Jeffrey Sanchez (D), co-chair of the Joint Committee on Public Health.

Led by Patrick, lawmakers agreed to appropriate $1.3 million to the board for fiscal year 2014. This compared with the $182,623 the board received in FY 2013. The board licenses and oversees approximately 26,000 pharmacists and technicians, according to the Sanchez report.

Massachusetts Legislation, in Conference

On Jan. 14, 2013, Patrick introduced legislation (H. 039) to further strengthen oversight, licensing and enforcement of compounding pharmacies in Massachusetts. The House Oct. 2, 2013, passed a version of the bill (H. 3672 ), 157-0, and the Senate Oct. 30, 2013, passed its own bill (S. 1899), 38-0.

The bills were sent to conference Nov. 17, 2013, and have seen little action since, three legislative aides told Bloomberg BNA March 3. A conference report isn't expected to be released before July, when formal sessions end. The Legislature has until January 2015 to vote on the report, the chief of staff to Sen. John Keenan (D), a conferee, said.

The House and Senate bills would require separate licensing for in-state and out-of state compounders, random checks of pharmacists' licenses and new labeling for compounded drugs. The board would be permitted to assess fines of up to $25,000 for violations, compared with the current $1,000. An online public database of adverse events related to compounded drugs and the records of pharmacies would be created, and DPH would be required to track in-state compounded drugs. The bills also would change the composition of the board to include more nonpharmacy members, and the board would be required to write a code of ethics.

The Senate bill differs from the House bill in that it exempts hospital compounders from some rules. Also, the Senate bill would require nonsterile compounders to register with the MBRP.

Michigan Hard Hit

Of all the states, Michigan was the hardest hit, with 259 reported cases of fungal meningitis, according to the CDC.

As a result, legislation (S.B. 704) that would put new requirements on compounding pharmacies is in the works, according to Michigan Attorney General Bill Schuette (R).

In April 2013, Schuette used a state law to convene a multicounty grand jury to determine whether any state laws were broken in the making of the NECC compounds. The jury's term expired in December, and its work was folded into the federal investigation.

Schuette joined Michigan Sen. Joe Hune (R) at a December press conference introducing the legislation, which was referred to the Senate Health Policy Committee. No hearings have been scheduled.

“It's been a slow process,” Hune told Bloomberg BNA March 5. He blamed the delay on “too many attorneys in the room” and said he expects hearings this spring or summer.

Lawmakers are working with state officials and others to put “some finishing touches” on the bill before seeking a hearing, he said. “I don't think there will be significant opposition” to the legislation, he said.

Hune said a Michigan-specific law is needed to prevent further problems from compounding pharmacies. “Our government depended upon the FDA” and Massachusetts to regulate the NECC, and “I don't know if that was a mistake, or just not the right avenue for our citizens,” he said.

Among other things, the legislation would place new record-keeping and policy and procedure requirements on compounding pharmacies; require a licensed pharmacist to be on staff at each facility; and require pharmacies to report adverse events to the state. It wouldn't affect nonsterile compounding, such as lotions or creams.

In the meantime, Michigan regulators aren't taking any steps to put new requirements on compounding pharmacies, according to Michael Wissel, pharmacy services manager at the Bureau of Health Care Services's health investigation section. “Enacting legislation is much faster than changing the Board of Pharmacy administrative rules, although the board could enact additional rules/change current rules in the future to clarify the statute,” he said in an e-mail sent to Bloomberg BNA Feb. 24.

Schuette's criminal investigation into the outbreak “remains ongoing,” said a spokeswoman for the attorney general. “We are collaborating and sharing resources with federal investigators,” the spokeswoman, Sydney Allen, said in a Feb. 26 e-mail to Bloomberg BNA.

Nevada Proactive

Some states, such as Nevada, had taken action before the NECC series of events.

S. Paul Edwards, general counsel for the Nevada State Board of Pharmacy, said his board has been “very proactive” in regulating compounding pharmacies. Board members saw the potential danger posed by improper compounding practices about 10 years ago, he said. The board began enacting strict compounding standards then and made major additional revisions to its regulations in 2006-2008. For its efforts, he said, the board is regarded nationally as a leader in its field.

What has changed in light of the NECC, according to Edwards, is that board members “seem to be more probing in their questions and more active in the approval process for compounding pharmacies than perhaps they used to be.’’

Compounding pharmacies that apply for licensure in Nevada (in-state or out-of-state) often are asked to send a representative to appear at a board meeting to answer questions regarding the pharmacy's operations and business model before a license is granted. The chance of receiving such an invitation increases substantially if a pharmacy, or one of its principals or managers, has prior disciplinary action, Edwards said.

An appearance also is required where it appears from the pharmacy's information (application, literature and/or website) that the pharmacy engages in sterile compounding. (In-state compounding pharmacies also are inspected by a board inspector before licensure.) Board staff researches the background of each pharmacy to determine if any of those issues are present and an appearance is merited.

Edwards said the board also recently started limiting the scope of practice approved for pharmacies and documenting those limitations by signed affidavit from the pharmacy. For example, if a pharmacy says that it won't engage in sterile compounding, the board will approve the pharmacy to sell nonsterile products and require a signed affidavit from the pharmacy attesting to that limitation. If the pharmacy later wants to engage in sterile compounding, it must come back before the board for additional approval before it can do so, thus avoiding sterile compounding occurring without the board's knowledge.

Other states, such as North Carolina and Arizona, started to act in the wake of the NECC situation, but they then put those plans on hold as other developments occurred, including passage of the DQSA and resulting efforts by the FDA and other organizations to develop state guidance.

In the case of Arizona, Hal Wand, executive director of the state Board of Pharmacy, said the agency immediately set up a task force in the wake of the NECC and started rewriting rules and statutes. Then it put everything on hold, deciding instead to work through the NABP, because the issue concerns changes to be made at the national level by the FDA.

North Carolina had been inspecting compounding pharmacies prior to October 2012, but following the NECC outbreak, the state pharmacy board retained an expert consultant, made certain improvements to its inspection forms, added additional field staff and provided them with enhanced training, Jay Campbell, the executive director of the state pharmacy board, told Bloomberg BNA Feb. 28.

A working group also was formed in February 2013 to review North Carolina's regulations and procedures covering drug compounding, according to Campbell. As federal legislation was under consideration and eventually enacted, that group is continuing its review based on the new law to avoid conflicting requirements, he said.

Any potential changes to North Carolina's oversight of drug compounding may be informed by guidance provided by the FDA at the March 2014 intergovernmental meeting, Campbell said.

No Action in Some States

Although several states adopted new legislative or regulatory requirements, other states haven't taken any action in the wake of the NECC situation.

For example, a representative of the Ohio State Board of Pharmacy told Bloomberg BNA, “We recognize and enforce federal law that compounding is performed by a pharmacist in a pharmacy and is pursuant to a patient-specific prescription.”

Larry Loring, executive director of the New Mexico Board of Pharmacy, said no new regulation or legislation is proposed in that state in the wake of the NECC case.

'We did a thorough review of our pharmacies after NECC,” Loring said. “We don't have any big compounding pharmacies in New Mexico that are compounding on a large scale, and we do not allow our pharmacies to do sterile compounding except pursuant to patient prescription.”

“We just felt we didn't need to do anything right now as far as rules go,’’ Loring said.

Illinois Says It Has Adequate Authority

The Illinois Department of Financial and Professional Regulation (IDFPR) has adequate authority to regulate compounding pharmacies in the state, a spokeswoman for the agency told Bloomberg BNA Feb. 28.

Department spokeswoman Susan Hofer said approximately 40 of Illinois's 3,500 licensed pharmacies are engaged in compounding on a large scale. She said the operations are inspected by the IDFPR on a regular basis and appear to be in compliance with current state standards. The IDFPR has primary regulatory authority over pharmacies in Illinois. The IDFPR is supported by the Illinois State Board of Pharmacy, which acts in an advisory capacity.

“We currently have the authority that we need to check records, inspect facilities and discipline the pharmacists,” Hofer said.

Hofer said the IDFPR inspected all of the large-scale pharmacies in the state following the 2012 meningitis outbreak, and Illinois's chief of pharmacy found the facilities to be in full compliance with state standards.

“We have a few pharmacies in Illinois that do a lot of compounding, and we inspect them very frequently,’’ she said. “In fact, we went to each and every one of them with the chief of pharmacy to look at their operations last year. We didn't find any problems. But we know which ones they are, and we keep pretty close tabs on them.’’

USP Compliance

Other states, such as New Jersey, have measures in place requiring compliance with the USP, particularly Chapter 795, nonsterile compounding and Chapter 797, sterile compounding.

The USP standards for Chapter 797 in use currently were last revised in 2008. Since 2010, the USP has been in the process of revising Chapter 797 to reflect the latest science, Rick Schnatz, manager of compounding and health-care standards at USP, told Bloomberg BNA March 10. “We want to take anything that's occurred scientifically since May 1 of 2008 and bring that science to the table,’’ Schnatz said.

There is no timeline for the revision to be complete, he said. “We certainly want to get it right. On purpose we don't put a date on the table, even internally. We don't want to rush and miss something,’’ Schnatz said.

“Our decision to revise the chapter had nothing to do with the NECC tragedy,” Schnatz said. The USP updates its chapters every five years, and Chapter 797 was due, he said.

“The states are not waiting for the revisions. They make their own decisions about what to incorporate in their regulations,’’ Schnatz said. The revisions are moving ahead, he said.

In 2010, the USP created an internal group, the Chapter 797 subcommittee, to revise Chapter 797. In April 2013, the USP formed a panel of 16 outside experts to take a fresh look at the proposed standards created by the Chapter 797 subcommittee. “We do this when we feel we need core knowledge,’’ Schnatz said. The panel is wrapping up its work and writing a summary that will then head back to the Chapter 797 subcommittee for review. An expert panel of microbiologists also had input into the proposed revisions, Schnatz said. The USP also is working closely with representatives from the FDA and the CDC on the Chapter 797 revisions, Schnatz said.

Once approved by the subcommittee, the draft revisions will be posted to the Pharmacopeial Forum part of the USP's website and comments accepted from stakeholders and the public for 90 days. Similar to a regulatory process, the subcommittee will consider all the comments before finalizing the revisions.

Although legislation requiring compounding pharmacies in New Jersey to be accredited by the Pharmacy Compounding Accreditation Board is still pending before legislative panels, the New Jersey State Board of Pharmacy adopted new and amended regulations governing the compounding of sterile and nonsterile preparations in both retail and institutional pharmacies that took effect June 3, 2013. The board said the extensive changes it adopted were necessary to ensure the regulations are consistent with the USP best practice standards.

Iowa's Legislation

In some states, the NECC situation had a different impact.

For example, Iowa Board of Pharmacy Executive Officer Terry Witkowski said, the board already was looking at changing the way it regulated out-of-state pharmacies, including compounding pharmacies, even before the NECC situation occurred. The meningitis outbreak , however, has made it easier to educate state legislators on the issues surrounding those pharmacies, she said.

Currently, legislation (S.F. 2156), passed by the Senate and pending before the House, would give the state pharmacy board greater authority over out-of-state pharmacies, including those that prepare compounded prescriptions, among other requirements, she said.

Under the bill, which has been forwarded to the Iowa House, nonresident pharmacies that prepare sterile compounded products for Iowans would be required to comply with rules relating to sterile compounded products that have been adopted by the state pharmacy board, and pay a fee to cover the costs of periodic inspections. It also contains provisions relating to inspections, licenses renewals and a prohibition on out-of-state pharmacies offering their services in the state until they had a license or renewal certificate from the pharmacy board.

Witkowski said whether the legislation passes or not the pharmacy board likely will work to pass rules addressing sterile and nonsterile compounding in the near future. She said the board has appointed a task force to study the issue of compounding. The task force will be examining Iowa's current rules, she said, as well as the rules and laws of other states. She said the board also expects the task force to use information it has gleaned from inspections of compounding pharmacies.

The task force is expected to make its recommendations to the board soon, she said. A rulemaking process that might take between one and two years will follow, she said. She noted, however, that a rule could be implemented more quickly if the board determines it is necessary.

Agency Inspections

Other issues with which states are grappling are which body would perform mandated inspections, whether to place limits on the amount of medication that may be compounded without a prescription and restrictions on where compounding may be done.

Mark J. Hardy, assistant executive director of the North Dakota Board of Pharmacy, told Bloomberg BNA Feb. 25 that the board soon will consider whether to require out-of-state compounding pharmacies to be inspected once a year. The proposed rule, which might be acted upon by the board at its April meeting, would require such pharmacies to be inspected by the board, an agent representing the board or the authorized agent of the National Association of Boards of Pharmacy Verified Pharmacy Program.

The inspection requirement would apply to out-of-state compounding pharmacies preparing and shipping both sterile and nonsterile products, he said. If the board approves the proposed rule in April, it would take effect in July, Hardy said.

Limits on Amounts

The Louisiana Board of Pharmacy is promulgating a new rule that places limits on the amount of compound medications that a pharmacy may prepare without a patient-specific prescription. The board issued an emergency rule, Compounding for Prescriber Use, in January 2013, noting “the tragedies associated with fungal meningitis traced to a compounding pharmacy in Massachusetts” and learning there are other similar types of pharmacies that specialize in large-scale preparation of drug products operating in the U.S. that are licensed to do business in Louisiana.

In an effort to mitigate the risk for Louisiana residents, the emergency rule limits a compounding pharmacy's product preparation intended for general use to 10 percent of its total drug units dispensed and distributed by the pharmacy on an annual basis.

The emergency rule remains in effect until adoption of a permanent rule.

Mississippi, Oregon.

In January 2013, the Mississippi Board of Pharmacy updated regulations for pharmacists and pharmacies licensed in the state. Changes included a requirement that no compounding and manufacturing can take place at the same locations. The regulations include language stipulating that permits issued to any wholesaler/manufacturer facility become null and void 60 days from the date of issuance if inspection reveals a lack of legitimate business activity.

Another state that noted that it had moved proactively to prevent an NECC-type of catastrophe is Oregon, where the Board of Pharmacy adopted regulations in 2008 that lean heavily on USP Chapters 795 and 797 and address a broad range of issues such as “clean air rooms, risk levels, and testing,” Compliance Director Gary Miner told Bloomberg BNA March 4. “And there's a lot of emphasis on training.”

“We were ahead of the curve,” Executive Director Marcus Watt added.

In addition to applying to Oregon compounders, the regulations also apply to “any business entity, located in any other state that compounds drugs for the use of patients located in Oregon.”

Although Miner said he believes “the state should be able to regulate its own compounders within the state, the concern is that we don't have any control over regulating out-of-state compounders unless they register with us as a manufacturer,” a concern mentioned by other states as well in interviews with Bloomberg BNA.

In comments to the FDA, the Oregon board also expressed concern with “spot drug shortages where compounders would be able to help out. They are helping right now. Some hospitals are having a lot of problems with shortages,” Miner said.

With what Watt and Miner consider to be already robust regulations in place in Oregon, “we are waiting to see what the FDA does,” Miner said. “We're in good shape to make a quick move if we need to.’’

Colorado Bill, Availability for Hospitals

Another state that has taken action with regard to availability and hospitals is Colorado.

In that state, lawmakers are considering a bill (S.B. 95) that would allow prescription drug outlets to compound drugs for hospitals in the state. If given final approval by the state General Assembly, it would take effect upon the signature of Gov. John W. Hickenlooper (D).

Under current law, in-state prescription drug outlets may distribute compound drugs only to individual practitioners, not hospitals, Rep. Beth McCann (D), House sponsor of the measure, said during testimony before the House Committee on Health, Insurance & Environment.

“Hospitals may not store [compound] drugs,” she said. The bill would “help hospitals with potential drug shortages.”

Under the measure, the state Department of Regulatory Agencies would be responsible for promulgating rules that limit the amount of drugs a prescription drug outlet can compound to a hospital. The limit would be no more than 10 percent of the total number of dosage units the outlet disperses on an annual basis.

California to Require Special License

California adopted a law in fall 2013 that will take effect July 1, mandating that compounding pharmacies obtain a special license from the California Board of Pharmacy.

Gov. Jerry Brown (D) signed the legislation, S.B. 294, on Oct. 4.

The law spells out requirements for the CBP to issue or renew licenses and sets requirements for the licensed compounding dispensary. It expands the CBP's scope, requiring direct inspection of all compounding pharmacies, even those out-of-state operations that sell products in California. It targets sterile drug products for injection, administration into the eye, or inhalation.

“The world of sterile compounding changed with what happened in Massachusetts two years ago,” Virginia Herold, executive director of the California Board of Pharmacy, said.

In drawing up the regulations, the state's pharmacy board cited problems found at the NECC before the outbreak, complaining that it “remained accredited and was licensed to ship sterile compounded injectable products into California.”

“Because the board had to rely on third-party accreditation, the board did not have the opportunity or authority to inspect NECC or prevent NECC from shipping products into California until patients in other states had already been harmed,” it said in a statement.

Under California's new law, compounding dispensaries outside the state will have to undergo mandatory inspections by the California Board of Pharmacy and reimburse it for expenses. They also must notify the California board of any recalls of sterile drugs, provide a list of all compounded drugs they produce and notify the board of any discipline or suspension of accreditation. Failure to comply will result in no license, which will preclude them from selling compounded drugs in California.

Washington Bill Expanded

When the meningitis outbreak occurred , Washington state legislators already were in the process of crafting a bill that would allow compounding pharmacies in the state to repackage the costly cancer drug Avastin into smaller doses that could be administered for use in patients with wet macular degeneration without being classified as a manufacturer, Chris Humberson, executive director of the state Pharmacy Quality Assurance Commission, told Bloomberg BNA March 7.

Humberson said he suggested to lawmakers that they broaden the language of H.B. 1800 to allow the commission a regulatory mechanism to deal with broader compounding pharmacy issues. The bill was reworked before passage to include language saying that compounded medicinal products must meet the USP standards, and it went into effect May 7, 2013.

“It allows us a formal process to put in specific regulations regarding compounding standards that didn't exist in statute or regulation before,” Humberson said. The commission is in the process of writing very specific rules governing compounding pharmacies, he said.

The draft rules are expected to be released for review in May. Humberson said the commission is considering whether to begin requiring separate license types for specialty pharmacies.

Utah, Texas.

In Utah, state regulators and pharmacy professionals formed a task force in July 2013 to share information about public policy and new compounding regulations in the aftermath of the sterile compounding contaminations that occurred in Massachusetts. State regulators said they hope the effort will help compounding pharmacists maintain compliance with laws and regulations at the state and federal levels, Trip Hoffman, a member of the Utah Pharmacy Board, told Bloomberg BNA March 7.

Texas also adopted effective Sept. 1, 2013, several measures amending the Texas Pharmacy Act, including provisions relating to the licensing and inspection of out-of-state pharmacies by the Texas State Board of Pharmacy.

“In order to prevent a potentially deadly outbreak in Texas, this bill requires that any out-of-state compounding pharmacies wishing to ship their products into Texas must be inspected by the Texas State Board of Pharmacy (TSBP), and additionally must reimburse TSBP for the costs associated with this inspection,” according to an analysis by the measure's author, state Sen. Leticia Van de Putte (D).

As in legislation adopted in other states, the Texas measure gives the board the authority to inspect an out-of-state pharmacy licensed by the board that compounds sterile preparations as necessary, to ensure compliance with the safety standards and other requirements, among other provisions.

New York Board Considering New Rules

The New York State Board of Pharmacy is drafting regulations on sterile compounding that generally are modeled after USP Chapter 797, according to Alfonse J. Muto Jr., chairman of the Compounders Academy at the Pharmacists Society of the State of New York. Muto told Bloomberg BNA the regulations, which haven't been formally drafted and released to the public, have been under consideration since before the NECC case.

Although other states permit office use compounding, New York requires that every prescription be specific to a patient. “New York state's always been very strict,’’ he said.

Doug Lentivech, deputy state education commissioner for the professions, told Bloomberg BNA that “pharmacists may compound medications based only upon patient-specific prescriptions written by authorized prescribers.’’

“Pharmacies registered in New York state, whether physically located within the state or shipping from other states, may not compound medications in bulk for general, non-patient-specific use or sent to a practitioner's office for use by the practitioner without a patient-specific prescription,’’ he said.

“We consider compounding in bulk to be manufacturing, which may only be performed by firms expressly approved by the federal Food and Drug Administration.”


In April 2013, Tennessee Gov. Bill Haslam (R) signed into law a bill that expanded the ability of pharmacies in Tennessee to compound drugs, aimed at addressing a shortage of certain drugs not commercially available, while increasing certain oversight of such activities, among other provisions (Public Act No. 13-266).

In June 2013, the Tennessee Board of Pharmacy adopted rules to implement the new state law, Reginald Dilliard, the board's executive director, told Bloomberg BNA. According to Dilliard, more extensive and updated emergency rules then were issued by the board in January 2014 which updated compliance with federal guidelines (USP 797) and aim to achieve conformity with provisions in the new federal law, he said.

Dilliard told Bloomberg BNA March 4 that the board plans to adopt a permanent version of those rules in the upcoming months, with some additional revisions.


Although the Minnesota Legislature tried to address issues related to compounding pharmacies last year by modifying licensing requirements, it might very well delve into the subject again this year, according to Cody Wiberg, executive director of the Minnesota Board of Pharmacy.

Wiberg told Bloomberg BNA March 3 that the state was affected by the NECC situation as some contaminated pharmaceutical products were shipped into Minnesota. He said the shipments occurred despite the fact that the manufacturers had been warned they couldn't ship into Minnesota without being licensed as both a manufacturer and a wholesaler, unless they were getting prescriptions for individual patients for every product they shipped into the state.

Last year's legislation required compounding pharmacies to be licensed in the states in which they were physically located and to be registered with the FDA, if it so required. H.F. 1233 also required the pharmacies to submit an inspection report to the state that was no more than 2 years old. Further, if the inspection report detailed any deficiencies, the pharmacy was required to provide evidence that they had been addressed.

The legislation also granted the pharmacy board the authority to promulgate rules to set licensing requirements for facilities that weren't required to be licensed or registered with the state in which they were located, or registered with the FDA.

Wiberg said the legislation was drawn up by the Minnesota pharmacy board. It originally called for revised definitions of “compounding,’’ he said, but the language was dropped because of prescribers' concerns. Language that would have created the state equivalent of section 503A of the Food, Drug and Cosmetic Act was also dropped, he said.

He said the board has proposed legislation (H.F. 2545) with the same language this year. Thus far, he said, it isn't generating opposition, probably because of the passage of the federal Drug Quality and Security Act.


Georgia's Department of Community Health adopted new compounding rules in 2013 to comply with a law passed by the state Legislature earlier in the year.

Highlights of the rule (Rule 480-11-.02) include factors to differentiate between pharmacy compounding and manufacturing, as well as the proper procedure for distribution of compounded products for office use by a practitioner, Pamela Keene, a spokeswoman for the DCH, told Bloomberg BNA on March 4.

Georgia's rule most recently was amended by the state Board of Pharmacy on Dec. 19, 2013, and the amendments took effect on Jan. 8.

“Fortunately, nothing resembling the New England Compounding Center incident has occurred within the borders of Georgia,” Keene said. “The board's efforts have been focused on preventing such an occurrence.”

Agents from the Georgia Drugs and Narcotics Agency have inspected in-state compounding pharmacies and have ceased the sterile compounding operations at pharmacies that didn't comply with the relevant guidelines, she added. The legislation passed in 2013 (H.B. 209) also sets guidelines for permitting out-of-state pharmacies to ship prescription drugs into Georgia. These guidelines include a background investigation of the pharmacy's executives or managers by the Georgia Board of Pharmacy, and the out-of-state pharmacy must submit a current inspection report from the appropriate regulatory agency within its home state or locality.

Virginia Toughens Controls

Some states such as Virginia simply tightened existing controls.

Virginia's General Assembly approved legislation in 2013 that tightened the state's regulation of compounded drugs supplied by out-of-state pharmacies by among other things requiring compounders to file facility hygiene and safety inspection reports every two years instead of four, effective July 1, 2013.

New Hampshire

In New Hampshire, under legislation (Chapter 0121) that took effect Jan. 1, 2014, pharmacists may compound drugs on a per-prescription basis for a range of practitioners, including registered nurses and naturopathic physicians. During drug shortages, pharmacists may compound small quantities of drugs otherwise commercially available.

As directed by the new law, the New Hampshire Board of Pharmacy is in the process of creating rules governing compounding pharmacies, Bob Stout, vice president of the state Board of Pharmacy, told Bloomberg BNA March 5. “Our rules are 15 to 20 years old,’’ he said. Stout said he expects the board to vote on final language of the new rules in April and for the rules to head to the Legislature for a vote in June or July.

In the meantime, the board has stepped up its licensing and inspections, he said. Most compounded drugs used in New Hampshire are imported from other states, as only seven pharmacies in New Hampshire, including hospitals, compound, and none compounds sterile drugs, Stout said. The state relies heavily on out-of-state compounders. The board started new licensing requirements for the approximately 193 out-of-state compounders whose drugs are used in New Hampshire.

The previous licensing application was two pages long. Now, the board asks for extensive information about the compounding process, and the applications may be 50 to 60 pages, Stout said. “We didn't just renew their license. We asked them to send in all the information we requested. It took hundreds of hours to go through,’’ he said.

“There is no question that time and resources are an issue,’’ Stout said. “We've established a licensing committee and once a month we pre-screen applications, so that the board doesn't have to read through the 160-page applications.’’

In its most recent batch of license applications, 50 had serious issues and about 36 applications hadn't been resolved by the end of 2013, Stout said. “It's a long and arduous process. But at the end of the day if you can't produce the information we need we won't give you a license.’’

The board isn't reviewing its conflict of interest rules or considering changing the composition of the board, as Massachusetts has done. “In Massachusetts there were people with a connection to compounding on the board,” Stout said. “New Hampshire is a very conservative state. If there is any smell of a connection it's best to recuse yourself.’’

Stout said he isn't more wary of Massachusetts pharmacies since the outbreak. He attended a presentation by the Massachusetts Board of Registration in Pharmacy in November 2013 about the state's regulation of pharmacies. “We're confident that the Massachusetts board is doing a very good job right now of inspecting pharmacies,’’ Stout said.

Five hospitals in New Hampshire are preparing to pool their resources and open their own compounding pharmacy, Stout said. Hospitals and clinics are more careful about where they purchase compounded drugs, he said. “Everyone is scrambling to try and find good sources.”


In June 2013, the Maine Legislature passed a measure that would have put in place new rules for in-state and out-of-state compounding pharmacies. Gov. Paul R. LePage (R) vetoed the bill, however, saying the executive branch already was in the process of updating its compounding pharmacy rules, and the House voted to sustain the veto.

“We all agree that the problems brought to light with a certain compounding pharmacy in Massachusetts should cause each state to review their oversight of these institutions,” LePage said in his June 21, 2013, veto message. “The Maine Board of Pharmacy has already done that and is proceeding through the rulemaking process. If interested groups would like to comment or change those rules, the Administrative Procedures Act already gives them the opportunity to do so,’’ LePage said.


With contributions from: William H. Carlile in Phoenix, Mark Melnicoe in Sacramento, Calif., Tripp Baltz in Denver, Chris Marr in Atlanta, Michael Bologna in Chicago, Nora Macaluso in Lansing, Mich., Lorraine McCarthy in Philadelphia, Mark Wolski in St. Paul, Minn., Susanne Pagano in Houston, Gerald B. Silverman in Albany, N.Y., Andrew M. Ballard in Raleigh, N.C., Bebe Raupe in Cincinnati, Paul Shukovsky in Seattle, Paul Stinson in Austin and Jeff Day in Washington.

To contact the reporters on this story: Martha Kessler in Boston at and Adrianne Appel in Boston at

To contact the editor responsible for this story: Brian Broderick at

A state-by-state list of pending legislative proposals may be found on the IACP website at

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