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Pharmacy Law: Compounding Controlled Substance Medications for Equine Patients

Joseph L. Fink III, BSPharm, JD
Published Online: Thursday, January 1, 2009   [ Request Print ]


Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.


Issue of the Case

A pharmacy specializing in veterinary pharmaceuticals had its registration revoked by the US Drug Enforcement Administration (DEA), because, in the view of the agency, it was engaged in "manufacturing" and "distributing" controlled substances, rather than "compounding" and "dispensing" them. The pharmacy challenged the interpretation at the level of an agency hearing as well as a request for reconsideration and, after the subsequent revocation of its DEA registration, sought judicial review of the action of the administrative agency.

Facts of the Case

A pharmacy in an eastern state was registered with the DEA as a practitioner and had as the focus of its practice supplying equine veterinarians with specially formulated medications. After receiving reports that the pharmacy was ordering controlled substances in unusually large quantities, the agency conducted an investigation at the pharmacy facility and concluded that it was operating outside the scope of its registration.

DEA officials took exception with the pharmacy's practice of compounding equine medications in large quantities and then delivering the pharmaceuticals to veterinarians instead of directly to their patients. Under the DEA's view of the Comprehensive Drug Abuse Prevention and Control Act of 1970—the statute it was charged with enforcing, this constituted "manufacturing" and "distributing"—activities to be performed by those registered with the DEA as manufacturers or distributors, not by pharmacies that are registered in a different category.

One recordkeeping aspect of the case that attracted the attention of the DEA inspectors was that more than 95% of the prescriptions on file at the pharmacy listed the name of the prescriber as also being the name of the patient. In the context of prescriptions for human patients, this certainly would be most unusual.

The agency issued a cease and desist order to the pharmacy, but the pharmacy continued to conduct its practice as it had been while it challenged the DEA interpretation of the statute and regulations. Eventually the agency began proceedings to revoke the firm's registration as a pharmacy, emphasizing that "all compounded drugs must be patient-specific and dispensed only by the compounder to that patient?."

In conformity with the Administrative Procedures Act (APA), the agency informed pharmacy officials that the registration would be revoked if they did not request a hearing within 30 days, which they did. The hearing was held before an administrative law judge who issued a decision 1 year later ruling that the revocation was justified and should proceed. It took another year for the deputy administrator of the DEA to issue the final decision: revocation. At this point, the pharmacy exercised its option to request a reconsideration under the APA, advancing new arguments tied to the nature of veterinary practice and veterinarians' administration of medications to their patients. The DEA denied this request, and the pharmacy appealed to a court for review of this administrative agency action.

The Court's Ruling

Following a thorough review of the law regarding the closed system for distribution of controlled substances, as well as a discussion of the recent court cases addressing compounding activities by pharmacists, the court vacated the agency's revocation of the DEA registration issued to the pharmacy. The court ruled that the matter should go back to the agency to define and clarify its interpretation of certain terms in their regulations, such as general office use, order, prescription, and constructive transfer.

The Court's Reasoning

The court first looked at the issue of providing the medication to the veterinarian rather than to the patient, as the agency would have the pharmacy do. It reviewed the wording of the statute enacted by Congress that permitted constructive delivery of a controlled substance to an ultimate user, concluding that this allowed the pharmacy to dispense the equine medications to the veterinarian for later administration to his or her patients.

It emphasized that the DEA had failed to consider differences in the practice of veterinary and human medicine—especially the need for equine practitioners to travel to their patients and administer or dispense prescription medication once there. The court noted that the agency had before it information about the differing operation of the veterinary profession but failed to consider the difference, both in its original decision and when it denied reconsideration of the matter.

The court ruled that the agency had failed to explain how a veterinarian could adequately treat animals on-site by ordering controlled substances for "general office use," a term not defined in DEA regulations.


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