Tough new regulations for compounding pharmacies could be on the way, attorney says

LeClairRyan attorney Michael Ruggio foresees nationwide regulatory crackdown

WASHINGTON — Massachusetts and New Jersey lately have been cracking down on sterile compounding pharmacies alleged to violate safety regulations, but the crackdown may soon go nationwide, predicted a legal firm focused on the matter.

LeClairRyan attorney Michael Ruggio said officials in several states were increasing scrutiny of compounding pharmacies in the wake of an outbreak of fungal meningitis linked to the New England Compounding Center, which so far sickened 696 people and killed 45, according to the Centers for Disease Control and Prevention.

"Our team has already received calls from compounding pharmacies in states such as Colorado, Minnesota and Pennsylvania," Ruggio, leader of LeClairRyan's compounding pharmacy investigation and litigation team, said. "They are receiving warning letters from their state boards of pharmacy, and in one state, a prosecutor is exploring whether to file criminal charges for alleged safety violations. The takeaway here is clear: The meningitis outbreak amounts to a game-changer for compounding pharmacies everywhere; this sector will never be the same."

Meanwhile, Food and Drug Administration commissioner Margaret Hamburg in November 2012 called for FDA oversight of compounding pharmacies, while earlier that month, Rep. Edward Markey, D-Mass., proposed legislation to strengthen the federal government's ability to regulate compounding and end the "regulatory black hole."

"Because compounding pharmacies can be lucrative, it is not unusual for conventional pharmacies to attempt to pursue this line of business," Ruggio said. "As a result of the outbreak, however, this is going to become far more difficult to accomplish. States are going to be rolling out new hoops and hurdles related to licensure, and the federal government might well end up subjecting compounding pharmacies to the stringent regulations that now apply to mainstream pharmaceutical companies, radically altering the cost-benefit analysis."

Possible regulations, Ruggio said, include unprecedented whistleblower protections and new fines and penalties for specific violations. All of these could have huge implications, he said.

"Remember, compounding pharmacies serve a big purpose," Ruggio said. "For those people who have allergies and sensitivities with regard to some mainline drugs, these companies can literally be a lifeline. Typically, these are not massive pharmaceutical companies. Excessive regulation could drive a lot of them out of business. Alternatively, it could drive the costs of their products too high, adding yet another burden to our already overburdened healthcare system."

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