Pharma Beat

Compounding the Problem

By Ed Silverman, Contributing Editor | November 9, 2012

Could a meningitis outbreak have been prevented?

The scandal over the meningitis outbreak linked to a compounding pharmacy in New England was a fiasco waiting to happen. There really is no other way to view the tragedy. For years, the compounding industry — and it is an industry — included companies that were doing much more than using an old-fashioned mortar and pestle to quickly mix a needed medication for an individual patient. In this case, patients are dying from fungal infections after receiving contaminated steroid injections.

Now, of course, we know that the New England Compounding Center (NECC) had gradually transformed itself into a multi-state operator that was selling large quantities of compounded medicines around the country — and did this on a regular basis. Yet a lack of sufficient oversight, compounded (pun intended) by regulatory confusion, allowed the outbreak to occur.

How many deaths will be attributed to this episode remains to be seen. But the scandal has focused attention on compounding in a way that is long overdue. Granted, compounding serves an important purpose — compounding pharmacies provide medicines for individual patients with special needs and prepare drugs that are not available commercially. This is a legitimate service.

Unfortunately, there is sufficient blame to go around for what has happened. For starters, regulators say NECC failed to take sufficient precaution to prevent the contamination that has been linked to the outbreak. It’s not that other compounders have avoided mistakes or negligence over the years, but this sort of outcome does not occur every day.

While it can be difficult, at the very least, to prevent a single manufacturer from allowing its products to become contaminated — federal and state regulators do have limited resources — more could have been done to raise the odds against a tragedy from taking place. And the blame can also be shared by the FDA, Massachusetts health officials, Congressional lawmakers and compounders.

For instance, one of the 11 members of the Massachusetts Board of Registration in Pharmacy, who is a former president of the state agency, is also an executive at Ameridose, another pharmacy owned by the same folks who own NECC. The two companies insist that separate operations have always been maintained, but Ameridose is now closed.

Obviously concerned about the perception, the state’s Department of Public Health, which oversees the pharmacy board, insisted that board member Sophia Pasedis “recused herself from all matters” concerning the two pharmacies dating back to her appointment. She was first appointed in 2004 and was re-appointed in 2009, according to published reports.

The pharmacy board, by the way, ¬inspected NECC last year, but reportedly did not find any problems, although another complaint made in March about the potency of eye medications is under investigation. Her dual roles do not prove anything untoward occurred, but this is an embarrassment for state regulators, who should never have allowed Ms. Pasedis to occupy both positions simultaneously.

Three members of Congress, seeking a hearing by the House Energy and Commerce Committee, wrote, “What state laws governed NECCs activities? Did the Massachusetts Board of Registration of Pharmacy know NECC was manufacturing and shipping the steroid in such large quantities? If so, did the Board take any actions to prevent ECC from doing so? If not, why not? Are there state laws — in Massachusetts or in other states where NECC was licensed — that prohibit this practice?”

Then there is the FDA, which maintains it has been hamstrung by court rulings. For instance, in 2002, the U.S. Supreme Court struck down a portion of a law that prohibited compounders from advertising their products under free speech concerns. As a result, the FDA decided to defer to states to oversee compounding pharmacies in most cases. However, the FDA has often indicated it would pursue enforcement actions, such as safety concerns or when the equivalent of mass production takes place.

A 2008 court ruling confused the issue, saying the earlier ruling applied only to the advertising portion of the law. But Peter Bart Hutt, who was FDA chief counsel in the 1970s, called the conflicting decisions irrelevant and argued the federal government still has oversight under a 1938 law that would have allowed the FDA to shut down the NECC. “The FDA should have put them out of business, and the state should have put them out of business. Neither of them did their job,” he told one newspaper.

Yet other experts say the reading of the law and the court rulings has never really been clear. Kevin Outterson, an associate professor of law at Boston University, maintained that Congress should have stepped in to clarify the situation by passing legislation that would have stipulated FDA authority and responsibilities. Instead, a lack of Congressional action over the years has meant the “FDA hasn’t exactly been given clear regulatory authority in this area,” he said.

Perhaps this may have played out differently if an effort that began in 2007 to clarify FDA authority had come to fruition. A version of draft legislation circulated by two U.S. Senators suggested giving the FDA the power to inspect all retail pharmacies that make or dispense compounded drugs, and also would have required compounded medicines to get the same sort of pre-market approval as generic drugs, sometimes even requiring clinical trials, The Wall Street Journal reported.

The legislation, which would have also restricted distribution of compounded medications across state lines, drew a swift response from the compounding industry over fears that the bill went too far and could greatly choke off revenue. The International Academy of Compounding Pharmacists, which spent $260,000 in lobbying that year, also complained that state boards already possessed sufficient oversight authority.

Meanwhile, Public Citizen Health Research Group last month maintained that the FDA was aware as far back as 2006 that the NECC was engaged in large-scale manufacturing “that went well beyond the traditional narrow role of a compounding pharmacy, yet the agency failed to implement follow-up measures that could have prevented the current outbreak.” 

How so? That year, the agency sent a warning letter to NEEC that, among other things, cited concerns about marketing anesthetic creams and potential microbial contamination associated with splitting and repackaging the Avastin cancer medication, which some ophthalmologists use to treat wet age-related macular degeneration. In light of a six-year-old warning, the watchdog accused the agency of failing to exercise its responsibility.

In what can only be described as a bit of understatement, Rep. Rosa DeLauro (D-CT) summed up the situation in a statement issued the day after the FDA descended on NECC offices in mid-October by saying, “A regulatory morass has led to (24) deaths and hundreds more sickened. The federal government has the responsibility to ensure this failed patchwork of regulations is corrected. Congress must act to ensure this does not happen again.”

In an ironic footnote, KV Pharmaceutical is seizing on the controversy by reminding anyone who will listen that it was complaining for more than year about the quality of some compounded versions of its Makena treatment for premature births, as well as active pharmaceutical ingredients used to make them. Among the products recalled by NECC is hydroxyprogesterone caproate, or 17P, which is a compounded version of Makena.

KV Pharma, you may recall, last year threatened to sue any compounder that made Makena. The drug maker does not have a patent, but FDA approval under the Orphan Drug Act effectively eliminated competition, since seven years of market exclusivity was granted. KV Pharma caused a ruckus by initially charging $1,500 for a treatment that cost $10 to $20 when compounded, but the FDA decided not to take any enforcement action unless a safety issue arose.

The FDA then analyzed samples — some of which were provided by KV Pharma — and declared there were no safety problems. Just the same, the decision not to pursue any actions against compounders was politically motivated, because the White House was concerned that the Makena approval unwittingly caused a monopoly in the marketplace. Now, though, that move may look imprudent, given that everything produced by NECC is being so closely scrutinized.

A preliminary survey of active online consumers of health information found that, as of mid-October, most were worried about the safety of prescription drugs and injections, in general. That’s not surprising. Going forward, the situation can only be rectified by passing legislation that gives the FDA the authority — and the resources — to more closely track compounding pharmacies. Legitimate compounders that meet legitimate patient needs should not be made to suffer, but a sorry combination of greed, indifference and inertia caused this outbreak to occur. There are few clean hands in this mess.

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, for more than 12 years. Prior to joining The Star-Ledger, Ed spent six years at New York Newsday and previously worked at Investor’s Business Daily. Ed blogs about the drug industry at Pharmalot, at He can be reached at

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