	Background

Under its traditional definition, drug compounding is a process in which a pharmacist combines, mixes, or alters various drug ingredients to create a medication for an individual patient in response to a practitioner's prescription. Compounding is considered a conventional component of the practice of pharmacy and has historically been regulated at the state level. In order to "clarify the status of pharmacy compounding under Federal law," Congress added Section 503A (21 U.S.C. §353a) to the FFDCA as part of the FDA Modernization Act of 1997 (FDAMA), which specifically addressed the FDA's role in the regulation of drug compounding. Section 503A of the FFDCA, as added by FDAMA, exempts compounded drugs from FFDCA requirements regarding drug adulteration, misbranding, and new drug approval, provided that certain conditions are satisfied. Section 503A of the FFDCA also provided that the exemptions from the FFDCA's new drug and other requirements only applied to drug products compounded based on a valid prescription that was not solicited. The court indicated that the FDA's 2002 Compliance Policy Guide, which exempts traditional compounding from the scope of the guidance, and instead focuses on the regulation of pharmacies that manufacture drugs "under the guise of compounding," provided additional support for the position that traditional compounding was not subject to the new-drug approval requirements. Issues with Current FDA Authority to Regulate Drug Compounding

As discussed above, the Western States and Medical Center Pharmacy cases directly conflict on the question of whether the non-speech provisions of Section 503A are severable and thus, whether the remaining sections of the statute are still in effect. Based on these two decisions, the FDA has determined that it will apply the non-advertising provisions of Section 503A of the FFDCA to entities that are located within the jurisdiction of the Fifth Circuit (Texas, Louisiana, and Mississippi) as well as to the plaintiffs that brought the Medical Center case. In other words, the current situation presents an interesting scenario of non-uniform enforcement throughout the United States. In the Fifth Circuit, compounded drugs are specifically exempted from adulteration, misbranding, and new drug provisions of the FFDCA, subject to meeting certain criteria; while in the Ninth Circuit (and, according to the FDA, the rest of the United States), compounded drugs are subject to these provisions, but the FDA may exercise discretion in taking action against a pharmacy that violates them. The parties in Medical Center Pharmacy did not petition the Supreme Court for review, and thus, uncertainty remains about the FDA's authority to regulate compounded drugs as new drugs.
In light of the recent meningitis outbreak, believed to have been caused by a contaminated compounded steroid injection, the regulation of drug compounding has received significant attention. Compounding is traditionally defined as a process of combining, mixing, or altering ingredients in order to create a medication for a particular patient. However, as in the case of the pharmacy that produced the steroid medication, concerns have been raised about compounding pharmacies producing drugs on a larger scale, something more akin to drug manufacturing. While drug compounding has historically been regulated primarily by states through their regulation of pharmacies, recent questions have been raised about the extent to which the Federal Food, Drug, and Cosmetic Act (FFDCA) governs this practice, and what authority the U.S. Food and Drug Administration (FDA) has to regulate a compounded drug as a "new drug," subject to approval by the FDA, as well as other requirements.
In 1997, Congress enacted the FDA Modernization Act of 1997 (FDAMA), which was a comprehensive revision of the FFDCA. Section 127 of FDAMA added Section 503A to the FFDCA, which excepted compounded drugs from various "new drug" requirements, conditioned upon the compounded drugs meeting a variety of restrictions. One of the restrictions in Section 503A of the FFDCA was that drug providers were prohibited from soliciting or advertising particular compounded drugs. These speech restrictions were challenged on First Amendment grounds and were struck down by the Supreme Court in Thompson v. Western States Medical Center. Following this decision, there was controversy over the current status of compounded drugs under the FFDCA and whether the remaining provisions of Section 503A remain good law, an issue that the Supreme Court did not address in Western States. The two circuits that addressed this issue took different positions. While the Ninth Circuit in Western States determined that Section 503A was struck down in its entirety, the Fifth Circuit in Medical Center Pharmacy v. Mukasey found that the lawful provisions of Section 503A are still in effect. Accordingly, these cases have created an interesting scenario of non-uniform enforcement throughout the U.S. In the Fifth Circuit, compounded drugs are specifically exempted from new-drug, adulteration, and misbranding requirements of the FFDCA if certain criteria are met; while in the Ninth Circuit (and, according to the FDA, the rest of the United States), compounded drugs are subject to these requirements, but the FDA may exercise discretion in taking action against an entity that violates these provisions. This report provides a brief historical overview of the FDA's regulation of drug compounding and addresses these conflicting decisions. The report will also address the FDA's current authority to regulate compounded drugs under the FFDCA in light of these decisions.