FDA restrictions on advertising compounded drugs may not be justified given the additional safeguards provided under the FDA Modernization Act, U.S. Supreme Court justices suggested during oral arguments in Thompson v. Western States Medical Center Feb. 26.

Associate Justice Sandra Day O'Connor asked the government how the additional ban on truthful commercial speech would be justified, when Congress can limit the use of compounded drugs.

O'Connor said she was having "the same problem as the court below." The Ninth Circuit appeals court found that "without the advertising restrictions, other safeguards exist to protect the public."

Department of Justice Deputy Solicitor General Edwin Kneedler argued that the advertising restrictions serve FDA's interests in preserving the integrity of the drug approval process and protecting the public's health.

Associate Justice Antonin Scalia suggested that tighter volume restrictions or a "dollar limit" on compounded drugs could also achieve FDA's goal of protecting public safety, without restricting commercial speech.

Kneedler emphasized the difficulty in administering restrictions on the volume of specific drugs.

The pharmacy compounding section of FDAMA limits the total volume of compounded drug products that a pharmacy may distribute out of state to 5%, but allows compounding to account for 100% of intrastate business.

In Thompson v. Western States Medical Center, the Supreme Court is being asked to decide whether FDAMA restrictions on the advertising of compounded drugs - which are exempt from new drug approval requirements - are consistent with the First Amendment.

In February 2001, the Ninth Circuit appeals court in San Francisco agreed with the plaintiffs, a group of licensed pharmacies, that the compounding provisions' restrictions on commercial speech were unconstitutional (¹ Also see "Pharmacy Compounding Disclaimer May Be Alternative To FDAMA, Court Says" - Pink Sheet, 12 February, 2001., p. 29). The court ruled that FDAMA's pharmacy compounding section is "invalid in its entirety."

FDA has continued to enforce the pharmacy compounding provisions outside the Ninth Circuit, pending the Supreme Court's ruling (² Also see "FDA Enforcing Rx Compounding Regs Pending Supreme Court Ruling" - Pink Sheet, 5 November, 2001., p. 12).

Associate Justice Anthony Kennedy challenged the government's position that creating a market for specific compounded drugs through advertising is indicative that the drugs are being manufactured rather than compounded. "I don't think that is a proxy for being a manufacturer," Kennedy said.

Under FDAMA, a drug may be compounded only if the pharmacy "does not advertise or promote the compounding of any particular drug, class of drug or type of drug." Pharmacists may, under FDAMA, advertise that they offer general compounding services.

The government has suggested that soliciting business by "promoting, advertising or using sales persons" or distributing large amounts of product out of state are "among the factors" FDA considers relevant in discerning whether a pharmacy is manufacturing drugs rather than compounding.

Kennedy suggested advertising is an "imprecise proxy" since the size of a drug's market is not a clear indication that the product is being manufactured instead of compounded. He challenged the notion that a pharmacy could be labeled a manufacturer as a result of advertising compounded drugs to a senior citizen home, where there is a large market.

FDAMA prohibits pharmacists from developing a market for a compounded drug, which HHS views as behaving like a manufacturer, Kneedler said. Congress intended to carve out a narrow exception for "extemporaneous compounding" to meet the idiosyncratic needs of individual patients, he added.

The government argued that the advertising restrictions serve its interest in "balancing the need to preserve drug compounding for individual patients with particularized needs while preventing widespread distribution of compounded drugs." Several justices challenged this argument, which was rejected by the Ninth Circuit.

Congress is trying to "ride two horses at once," Scalia suggested. While Congress wants all drugs to be approved by FDA because it does not trust doctors' independent judgment about safety and efficacy, it also wants to allow physicians to prescribe certain compounded products that do not go through the drug approval process, Scalia said.

Congress' answer - to allow compounding but restrict advertising - ends up "restricting truthful free speech," Scalia concluded.

Associate Justice David Souter also noted that while Congress does not want the physician to make independent decisions about safety, it is willing to "tolerate it up to a point" by allowing the prescription of compounded drugs for special patients.

Souter questioned if both the advertising and volume restrictions of FDAMA were necessary to "draw the line" between the two goals. He said stricter volume limits could achieve a similar balance.

Associate Justice Stephen Breyer pointed out that the compounding regs were not only intended to limit the volume of compounded drugs dispensed, but also the source of the demand for those drugs.

Breyer said a "positive impact" of the law was that it ensured that scripts for compounded drugs initiate with a physician and not with a solicitation by the patient, which is the "demand we don't want." FDAMA's restrictions on marketing seek to avoid widespread demand by patients for compounded drugs where no double-blind studies have been conducted and "all we have is the word of the pharmacist," he noted.

However, Breyer appeared to agree with Kennedy and Scalia that FDAMA has the "negative impact" of preventing pharmacists from communicating to physicians that they can compound a certain drug.

Associate Justice John Paul Stevens told the government it would have a stronger case if the restriction was just on advertising to consumers and not to physicians.

Attorneys for both sides acknowledged that, should the Supreme Court affirm the lower court ruling, the regulation of pharmacy compounding would return to a pre-FDAMA state. The parties differed, however, on what the consequence of such a decision might be.

The entire compounding section was ruled invalid by the appeals court, which held that the unconstitutional provisions regarding advertising and promotion were not severable from the rest of the section. The government has not raised the issue of severability on appeal.

O'Connor noted that since the government did not raise the issue of severability in its writ of certiorari, the "old regime" where there is "no leeway for compounding" could be reinstated, should the Supreme Court affirm the Ninth Circuit ruling.

The government maintains that compounded drugs were "unlawful" prior to the enactment of FDAMA. Kneedler told the Supreme Court that compounding would be "absolutely prohibited" if the pharmacy compounding statute were found unconstitutional.

"When a pharmacy compounds a drug, the pharmacy creates a 'new drug' because the compounded product is not generally recognized as safe and effective," the government argued in its writ of certiorari.

Pharmacists' attorney Howard Hoffman (Duane Morris, Chicago) agreed that a pre-FDAMA situation would exist, but emphasized that compounded products are not new drugs. He argued that manufacturing regs would not apply because compounded drugs are sold directly to patients, not third parties. Pharmacies do not stockpile compounded products, thereby creating a market, he added.

Souter questioned the distinction that Hoffman had drawn, noting that pharmacies argue that compounding is not manufacturing because the services are patient-specific and yet, to have successful advertising, pharmacies necessarily highlight classes of patients or classes of drugs.

The National Community Pharmacists Association has pointed out that pharmacy compounding has historically been regulated by the states and not subject to FDA's approval process.

FDA acknowledged, that "as a matter of policy" it did not historically bring enforcement actions against pharmacies engaged in compounding.

FDA Rx Compounding Ad Restrictions May Be Unnecessary, Justices Say

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