March-April 2013 HASTINGS CENTER REPORT 9

In September 2012, news broke of a developing drug disaster in the United States. Health authorities

had linked a fungal meningitis out-break to a contaminated steroid made by a company called the New England Compounding Center. The contami-nated steroid was a compounded drug that had not been approved by the Food and Drug Administration, dif-fering from three others that had been approved in that it lacked preservatives present in those agents. Factory inspec-tions revealed unsanitary conditions at NECC’s drug production facility. By the time the source of the outbreak was identified, an estimated fourteen thou-sand people had been injected with the drug. As of December 2012, thirty-nine had died of meningitis, and hundreds more had been diagnosed with menin-gitis and other drug-related conditions.1

Many factors contributed to this di-saster. One was a 2002 Supreme Court decision holding that a law prohibiting providers of compounded drugs from promoting their products through ad-vertising and other means impermissi-bly restricted commercial speech.

Compounding, Past and Present

Drug compounding was quite com-mon in this country until the

1950s, when large companies began producing standardized drugs in mass quantities. With the development of the

pharmaceutical industry, compound-ing became a relatively rare form of drug production used to meet specific medical needs. In the typical situation, doctors prescribed compounded medi-cines for individual patients, and spe-cialty pharmacies filled prescriptions on a case-by-case basis. Compounding pharmacists put pills into liquid form for patients with swallowing difficulties, added flavoring to medicines to make them more appealing to children or pets, and removed commonly used inac-tive drug ingredients to protect patients allergic to those ingredients. Hospital pharmacies often prepared intravenous chemotherapy and other drugs to fit specific patient needs.2

Drug compounding is not an en-tirely benign activity, however. It ex-poses patients to risks because the usual quality-control measures governing drug preparation are relaxed. States tra-ditionally regulate the practice of phar-macy, but few have imposed strict rules to ensure that compounded drugs are safe and effective. Nevertheless, the gen-eral view is that the benefits small-scale compounding provides to individual patients outweigh its risks.

During the 1990s, a new kind of compounding business emerged. Some pharmacies began promoting and sell-ing compounded agents they claimed were superior to standard FDA-ap-proved drugs. In turn, more people were exposed to compounded drugs

that had not been evaluated for safety and effectiveness. Worried that com-pounding had become a way for phar-macies to produce mass quantities of new drugs without complying with the usual testing, labeling, and other regu-latory requirements, FDA officials de-veloped a compliance policy guide that explained how new drug manufactur-ing was distinguished from traditional compounding. For example, the guide said that pharmacies using commercial-scale equipment and preparing large quantities of compounded drugs in the absence of specific patient prescrip-tions were engaged in manufacturer-like activities. According to the guide, the FDA had the power to investigate and penalize such pharmacies for violating the general drug manufacturing rules.3

Compounding pharmacists opposed this move, but Congress sided with the FDA. Much of the agency’s position was incorporated into the 1997 FDA Modernization Act (FDAMA), which established seven conditions for ex-empting compounded drugs from the usual regulatory requirements. One of these provisions prohibited pharmacies from advertising or otherwise promot-ing compounded drugs (on the theory that promotion was inconsistent with the individual patient focus that is the hallmark of traditional compounding). A group of compounding pharmacies challenged this ban in court, claiming that it violated their constitutionally protected right to freedom of speech.

The Supreme Court’s Decision and Its Aftermath

In Thompson v. Western States Medi-cal Center, a majority of the Supreme

Court sided with the pharmacies.4 To reach its decision, the Court applied a previously adopted test that allows re-strictions on commercial speech if they advance a substantial government in-terest and are “not more extensive than necessary.”

In the compounding case, the Court agreed that the advertising ban advanced the government’s substantial interest in preserving the integrity of the new drug approval process. But a majority

at law

Drug Compounding, Drug Safety, and the First

Amendment

by Rebecca Dresser

10 HASTINGS CENTER REPORT March-April 2013

of the justices were unconvinced that the ban was essential to advancing that interest. Instead, they thought there were other ways to prevent drug com-pounding from becoming a means for manufacturers to evade the usual reg-ulatory requirements. Indeed, wrote Justice O’Connor, FDAMA’s other six exemption conditions, as well as re-quirements in the FDA compliance guide, could be adequate to address the problem. For the advertising ban to survive constitutional scrutiny, the gov-ernment would have to supply strong evidence that the commercial speech restriction was necessary to protect the public from unsafe compounded drugs.

After Western States, it was unclear whether the remaining FDAMA com-pounding provisions had survived the ruling. The Supreme Court failed to consider this question, and on remand, the Ninth Circuit Court of Appeals ruled that all the compounding pro-visions were invalid. Officials at the FDA issued a revised compliance pol-icy guide that described compounding activities linked to illegal drug manu-facturing but omitted the advertising prohibition. After that, they took a less assertive role, citing their lack of explic-it authority to regulate compounding.5 When FDA staff did seek to inspect compounding facilities and enforce the general drug manufacturing rules, com-pounding companies like NECC often challenged the agency’s jurisdiction.6

Some observers believe the 2012 health tragedy might have been averted if the Supreme Court had upheld the FDAMA advertising prohibition.7 At a congressional hearing convened on the meningitis outbreak, several members criticized the FDA’s failure to move more aggressively against NECC, a company that was so obviously engaged in manufacturing and promoting unap-proved drugs for national use.8 Other members accepted the need to strength-en the FDA’s authority over compound-ing pharmacies. Edward Markey, who represents the Massachusetts district in which NECC is located, introduced the Verifying Authority and Legality in Drug Compounding Act, which would give the FDA express authority over

compounding pharmacies and establish labeling and adverse event reporting re-quirements for pharmacists engaged in drug compounding.9

Ongoing Issues

Although the meningitis outbreak may lead to improved oversight of

drug compounding, conflicts between public health regulation and the First Amendment are likely to persist. In his Western States dissent, Justice Breyer an-ticipated such conflicts. He contended that the majority had given inadequate weight to the government’s claim that advertising restrictions were needed to protect the drug approval process. He also thought his colleagues were wrong to believe that the remaining FDAMA and compliance guide provisions could effectively prevent compounders from evading drug manufacturing rules. Breyer warned that “an overly rigid ‘commercial speech’ doctrine will trans-form what ought to be a legislative or regulatory decision about the best way to protect the health and safety of the American public into a constitutional decision prohibiting the legislature from enacting necessary protections.”10

Public health scholars and advocates fear that this transformation is well un-der way. In several cases since Western States, courts considering First Amend-ment challenges to public health regu-lation have favored commercial speech rights. For example, the Supreme Court invoked commercial speech rights in striking down a Vermont law that sought to reduce pharmaceutical com-panies’ ability to promote their costly brand-name drugs. The invalidated law prohibited pharmacies from selling data about individual physician prescribing practices to companies that help drug sales representatives target their market-ing messages to those physicians.11

The FDA’s requirement for graphic warnings on cigarette packages is also in jeopardy, for one federal appellate court has declared the requirement a vi-olation of cigarette manufacturers’ free speech rights. The issue is headed to the Supreme Court, where a majority of the justices might well take a similar

position.12 The FDA ban on advertis-ing and promoting approved drugs for unapproved uses (off-label use) is under First Amendment attack as well.13

The FDA faces many demands. Despite its relatively small budget and staff, the public and its elected rep-resentatives expect the agency to do a near-perfect job regulating products that make up a large share of the U.S. economy. Now agency officials must also cope with heightened commercial speech demands as they search for effec-tive ways to protect the public’s health.

DOI: 10.1002/hast.151

Acknowledgments

Thanks to Kevin Outterson for com-ments on an earlier draft of this article.

1. M.A. Hamburg, “Pharmacy Compound-ing: Implications of the 2012 Meningitis Outbreak,” statement before the U.S. Senate Committee on Health, Education, Labor and Pensions, November 15, 2012, http://www.fda.gov/NewsEvents/Testimony/ucm327667.htm.

2. R.C. Rabin, “A Spotlight on Com-pounded Medicines,” New York Times, Octo-ber 15, 2012.

3. J.M. Boodoo, “Compounding Problems and Compounding Confusion: Federal Regu-lation of Compounded Drug Products and the FDAMA Circuit Split,” American Journal of Law and Medicine 36 (2010): 220-47.

4. 535 U.S. 357 (2002).5. D. Grady and S. Tavernise, “FDA Warns

of Further Risk from Tainted Drugs,” New York Times, October 15, 2012.

6. Hamberg, “Pharmacy Compounding,” 3-4.

7. K. Outterson, “Regulating Compound-ing Pharmacies after NECC,” New England Journal of Medicine 367 (2012): 1969-72.

8. D. Grady, “Deaths Stir a Dispute on Powers of F.D.A.,” New York Times, Novem-ber 19, 2012.

9. H.R. 6584, 112th Cong., 2d Sess. (No-vember 2, 2012).

10. 535 U.S. at 389.11. K. Outterson, “Higher First Amend-

ment Hurdles for Public Health Regulation,” New England Journal of Medicine 365 (2011): e13.

12. R. Bayer, L. Gostin, and D. Marcus-Toll, “Repackaging Cigarettes—Will the Courts Thwart the FDA?” New England Jour-nal of Medicine 367 (2012): 2065-67.

13. M. Boumil, “Off-Label Marketing and the First Amendment,” New England Journal of Medicine 368 (2013): 103-5.