We’ve all seen the news stories about drug compounders filling the gap caused by a shortage of the GLP-1 drugs tirzepatide, Lilly’s Zepbound, and semaglutide, Novo Nordisk’s Wegovy, approved for the treatment of obesity. So, what rules govern how a compounding pharmacy is authorized to legally create a version of a patented drug when the drug is declared to be in short supply?
The authority under which FDA regulates drug compounding is the Food, Drug, and Cosmetic Act Section 503. The law differentiates drug compounders as those who prepare drugs in response to a prescriber’s order for a specific patient (Section 503(A)), and those that compound drugs in large quantities for sale to healthcare organizations, and not for individual patients (Section 503(B)). We will spend most of our space looking at 503(A) compounding, because that’s where most of you will compound.
The FDA is careful to note that manufacturers that approved version with demonstrated safety and efficacy, as well as good manufacturing practices (GMP), should have their products serve as the default choice when the drug is prescribed.
Compounding is allowed under circumstances where the approved product is not available in a dosage form required by the patient (e.g., liquid form rather than solid oral form), when the patient requires a dose not made available by the manufacturer (e.g., a prescriber has determined the patient should have a dosage of 8 mg, and the manufacturer only supplies a 10 mg dose), or when the drug in question contains a substance to which the patient would have an adverse reaction. Finally, drugs may be compounded if they are included in the FDA’s list of drugs in shortage.
For more on the regulation side of drug compounding, read our blog, “Drug Compounding: A Brief Regulatory History.”
There appears to be a booming demand for compounded GLP-1 drugs that are on the FDA drug shortage list. Internet pharmacies have been active in meeting demand through compounded versions, and Lilly recently announced that it would be making single-dose vials available to help alleviate shortages and lower the cost.
While compounding GLP-1 drugs in shortage would generally favor 503(B) compounders, many observers believe that a significant volume of these drugs are being compounded by 503(A) pharmacies. Since FDA does not require the 503(A) compounders to report the volume of drugs compounded, there are no definitive data on this at the time of writing.
Eventually, the supply of commercially available drugs will catch up with demand and the exception for compounders will disappear. While some drugs remain on the FDA drug shortage list for long periods (e.g., normal saline), manufacturers of GLP-1 drugs have an incentive to resolve the supply problem simply because of the economics of gaining market share during a period of intense demand.
The average cost of a liability claim against compounding pharmacies is more than $438,000, according to Healthcare Providers Service Organization (HPSO).
Since compounded drugs supplied by 503(A) pharmacies are not subject to FDA oversight and approval of safety and efficacy, and GMP, the pharmacy is vulnerable against arguments that they have improperly prepared a medication that caused an adverse reaction.
The 503(B) pharmacies do have a GMP obligation and have a better defense on this point but are still exposed on the issue of novel dosing regimens.
Not surprisingly, the GLP-1 manufacturers have taken aim against 503(A) compounding pharmacies, claiming patent infringement, deceptive trade practices, and trademark violations. The expense of defending against these actions can be cost-prohibitive for most small pharmacies.
Compounding is an essential response to the problem of drug shortages, dosage restrictions, and formulations that overcome barriers to use because of the presence of ingredients that cause adverse reactions in vulnerable populations.
There are also significant risks associated with compounding patented drugs. The risks are not limited to improper preparation but extend to attacks from major manufacturers determined to protect their market.
Prudence requires a pharmacy to carefully assess the risks, which includes a conversation with your liability insurer to determine how you can mitigate these risks. Responding to legitimate patient need is a high calling for pharmacists. Doing so with your eyes wide open, fully aware of what can go wrong, strikes a balance between meeting the need and limiting the risk.
