Home > Property & Casualty > Death toll prompts push for tighter federal regulations for compounding pharmacies

Death toll prompts push for tighter federal regulations for compounding pharmacies

The recent meningitis outbreak linked to contaminated injections has led to many complaints about Food and Drug Administration (FDA) regulation and oversight of the compound pharmaceutical industry. Congress has pushed for more authority over this industry since the 1990s, but despite attempts to strengthen regulations, the industry has been successful in getting most of those efforts thrown out by the U.S. Supreme Court. It has left contradictory court rulings and uncertainty about how much power the FDA has to regulate compound pharmacists. Reports say that the compounding industry in is a $3 billion business with 7,500 pharmacies.

Sales representatives from the New England Compounding Center in Framingham MA, the pharmacy responsible for distributing the steroid shots that lead to the outbreak, reportedly undercut major manufacturers by selling the drugs directly to hospitals and other healthcare venues at lower prices. Normally, drug manufacturers have to cover costs for regulations, FDA approvals and applications. Despite prior attempts to strengthen regulations, the industry has been successful in getting most of those efforts thrown out by the U.S. Supreme Court. Without having to account for any federal oversight to ensure the products were safe, however, the NECC sales reps were able to lower their prices.

Although the NECC has reportedly halted all production and recalled all of its injectable products, only several hundred vials have been returned unused. The prominent consumer watchdog Public Citizen, called for a congressional investigation into the meningitis outbreak and stricter regulations for compounding pharmacies, and claims the FDA failed to take action to ensure that the drug makers were adhering to the rigorous safety standards required for the approval of all new drugs. Stronger regulation, says the group, could have prevented the outbreak from occurring in the first place. The investigation will examine whether or not FDA officials are responsible for not stepping in sooner, and will determine if new legislation and regulatory statutes should be passed to govern compounding pharmacies.

The FDA, which claims it has no authority to regulate compounding pharmacies, says it recognizes the need for additional regulations that will grant it oversight authority for compounding pharmacies, and will work with Congress to create new guidelines to prevent future drug mishaps and minimize risks. Members of Congress have promised to introduce legislation that would give the FDA greater authority to oversee the specialty pharmacies.

About the Author

Jamie Balboni is the Property & Casualty Practice Leader at William Gallagher Associates (WGA). She is a Principal at the firm with over 25 years of experience in the insurance brokerage industry.

617.646.0247 | JBalboni@wgains.com | Connect with Jamie on LinkedIn

  1. Jamie T. Balboni
    October 18, 2012 at 11:15 am

    The latest news about quality issues affecting drug production:

    Report: Quality issues at pharma factories contribute to drug shortages
    A congressional report found that almost a third of the drug industry’s manufacturing capacity is down due to quality issues, contributing to shortages of critical treatments. Compounding pharmacies took on a greater role as health professionals looked for alternative sources. Drugmakers may hesitate to address problems because stopping production can be very costly, according to former plant employees and several industry observers. Drugmakers and regulators say quality remains high, and large investments are made to maintain and improve manufacturing.
    The New York Times (tiered subscription model)(10/17)

  2. Ann Mizner McKay
    November 30, 2012 at 4:30 pm
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