Dodgy compounded-drug makers must be monitored better

Going to a cancer-treatment facility is not supposed to produce fungal infections in patients. Nor is routine cataract surgery expected to result in blindness. Unfortunately, that’s exactly what happened to dozens of oncology patients in New York last year and dozens more ophthalmic patients in Texas earlier this year. In each case, and in all too many cases across the country, Americans are being treated with poorly regulated “compounded drugs,” which are made from combining two or more medications to address a particular patient’s condition.

The worst incident to date occurred in 2012, when 64 people died from meningitis and about 700 others were sickened after receiving tainted steroid injections made by the New England Compounding Center, a now-defunct Massachusetts compounder. Unscrupulous compounders, like one in Broward County, have also been charged with defrauding the government and insurance companies.

Compounded drugs are legal and beneficial for many patients. Except when they aren’t.

Current law allows state-licensed “compounding pharmacies” to make such drugs expressly with a doctor’s prescription. In theory, a doctor is making an informed decision that an individual needs a mixture of drugs that aren’t stocked by the corner CVS or Walgreen’s. On the other hand, compounded drugs are legally manufactured in bulk for hospitals, clinics, and other providers by 74 firms called “outsourcing facilities.”

The problem is twofold, and, in broad brush, is like many problems. There are a growing number of bad guys and not enough cops.

Some compounders licensed only to make individually prescribed drugs see big dollar signs and secretly make compounded drugs in large quantities to sell wholesale. These are sterile compounds either injected into one’s skin or infused into one’s eyes. While the Food and Drug Administration (FDA) regulates drug manufacturers and outsourcing facilities, only states have jurisdiction over compounding pharmacies, and they have a patchwork of laws and enforcement capabilities to monitor them.

Yet, a recent report by the Pew Charitable Trusts found that barely half of the states monitor the number of compounders in their state, and only a few keep track of violations. The study found revealed that many states have too few inspectors and that their inspections are irregular and brief. Only Minnesota, Washington state, and Washington, D.C. reported that their inspections lasted between one and three days.

Some bad actors, seeing that the odds of being inspected and cited for violations are low, produce contaminated compounded drugs that they illegally sell to online pharmacies, clinics and doctors. As this graymarket manufacturing expands, so do the risks to patients. Although the FDA lacks regulatory powers over these pharmacies, a study by the agency found that one-third of samples failed quality and safety tests.

“Dodgy companies peddling pricey compound pharmaceuticals have fleeced the Tricare program,” the federal military health-insurance program, by $1.7 billion in the first nine months of 2015, Stars & Stripes reported. Meanwhile, an Inspector General’s report revealed that Medicare Part D spending on drugs sold by compounding pharmacies rose from $70 million in 2006 to more than half a billion dollars in 2015. In the particularly egregious Broward County case, compounders were charged with defrauding insurers and Tricare to the tune of $175 million.

How do we rein in this “dodgy” new type of essentially unregulated drug manufacturer? Lawsuits have been filed, prosecutors have gone after some compounding pharmacies, and compounders have pled guilty to fraud in New Jersey, Colorado, Mississippi, and other states in recent months. The FDA “issued guidance” on inspection procedures and sanitary standards for compounders.

Ultimately, Congress should give the agency greater authority over entities that blur the lines between pharmacies and pharmaceutical companies. Federal enforcement also could help reduce Medicare and Tricare fraud.

For now, state health agencies need to step up to protect patients, prevent fraud, and save taxpayer dollars. Just this summer, the Michigan Board of Pharmacy began implementing strict regulations and licensing requirements for the state’s compounding pharmacies.

In addition to licensure, the Pew report recommended frequent inspections, better pharmacist training on sterile compounding, adherence to quality preparation, facility, and equipment standards, and enforcement. Perhaps we need a true-crime TV series in which there are innocent victims and agents bust down the doors of unscrupulous compounders.