When Does Compounding Become Manufacturing?

APRIL 01, 2005
Larry M. Simonsmeier, JD, RPh

Issue of the Case:

Some issues just do not go away. While the US Supreme Court and the FDA have both provided general guidelines and principles regarding pharmacists' compounding, it may take some time for state jurisdictions to interpret and apply the federal decisions. This month's case is a malpractice action that asks whether a pharmacist was manufacturing or compounding when making customized "fen-phen"capsules for a patient.

Facts of the Case:

The plaintiff was prescribed fenfluramine 3 times a day and phentermine once a day (a combination often referred to as fen-phen) as a weightloss measure. The owner of the defendant pharmacy noticed that a number of patients who took this combination were not complying with their prescriptions. In particular, the patients often failed to take all the fenfluramine.

Based on his experience in compounding other time-release products, the pharmacist determined that a once-a-day dosage form might improve patient compliance. He contacted a number of physicians who indicated they were interested and would prescribe the dosage form. The pharmacist made the time-release capsules with raw materials provided by manufacturers and a national compounding organization.

When a friend who worked for one of the physicians informed the plaintiff about a "one-a-day fen-phen" available at the defendant pharmacy, she began to have her medications compounded there. After about 5 refills of the prescription, she began to experience nausea, chest pain, and dizziness and required open-heart surgery to repair 2 damaged heart valves. The plaintiff sued the prescribing physician, the dispensing pharmacy, and the providers of the raw materials.

The Court's Ruling:

The physician was dismissed from the lawsuit and the plaintiff settled with the national compounding organization and the manufacturers. The trial court found that the plaintiff had not provided any evidence to support a negligence claim against the pharmacy. In fact, the plaintiff admitted that dispensing the compounded product did not increase the risk of harm over taking the individual drugs.

The pharmacy could only be held liable if it was considered the manufacturer. Claims against manufacturers are often based on strict liability, sometimes termed liability without fault. Neither the trial court nor the Utah Supreme Court could support such a claim, and the case was dismissed.

The Court's Reasoning:

Based on a US Supreme Court case, the Utah court concluded that "drug compounding is recognized as a traditional function of pharmaceutical practice."The court was not convinced that the actions of the pharmacist in this case constituted manufacturing. Instead, it noted, "Consulting with physicians regarding the compliance problems of their patients, designing a new drug product that is not otherwise available...and dispensing the new drug product directly to patients, only after receipt of a valid prescription, appear to be legitimate activities for a licensed pharmacist.

"For a pharmacy to cross the line and become a manufacturer, there must be evidence of a large-scale compounding activity, third party resale or wholesale distribution efforts, or other significant indicators of questionable and nontraditional pharmaceutical behavior.

"A pharmacy taking steps to improve compliance within a small group of patients in the local community it serves, through legitimate marketing efforts and without violating state or federal regulations, is not strictly liable as a manufacturer for the compounded drug it provides."

These comments by the Utah Supreme Court are most enlightening. It confirms the right of pharmacists to meet the needs of their patients through specialty compounding if done in a limited scope. The court also took time to consider the marketing strategies used by the pharmacy. Again, based on the US Supreme Court, it concluded that pharmacists may not be prohibited from exercising their free speech rights and may advertise or promote the compounding of drugs. The dismissal of the case against the pharmacy was affirmed.

Larry M. Simonsmeier is Emeritus Professor of Pharmacy Law at Washington State University College of Pharmacy.