Experts in the False Claims Act and whistleblower laws have been following closely the evolving scandal arising out of the New England Compounding Center tragedy. The death toll from the meningitis contaminated steroid injections from the center reached 29 this week, as accusations fly about how lethally contaminated drug products could have so easily entered the market and been administered to unsuspecting patients.
How, people are asking, could this happen in such a heavily regulated industry?
The media’s superficial answer is that the New England Compounding Center (“NECC”), and many facilities like it across the country, falls between the cracks of pharmacy practice, which is regulated under state law, and drug manufacturing and repackaging, which is regulated under federal law, under the Food Drug and Cosmetic Act. By calling itself a pharmacy, and obtaining a state pharmacy license, NECC managed to avoid, the argument goes, the kind of strict oversight that the Food and Drug Administration would apply to a drug manufacturer or repackager.
Not so fast.
NECC, and entities like it all across the country, can’t get very far arguing that they really thought of themselves as mere pharmacies beyond the reach of federal law. It turns out that there has been for some time now substantial and clear guidance on these issues not only from the FDA, but also from state pharmacy licensing officials. The guidance says that if you don’t have individualized patient prescriptions from doctors, and if you’re compounding activities are not in response to specific patient prescriptions, but instead you are involved in industrial scale compounding or repackaging, you are not a pharmacy at all but rather a drug manufacturer and subject to all the current good manufacturing practice standards (“cGMP”) that federal law imposes. Appropriately enough, merely calling yourself a pharmacy is not enough to make you one.
If you’re really a drug manufacturer, you have to comply with all the critical legal requirements that apply to these facilities, such as ensuring sterility, appropriate manufacturing protocols, and lot tracking and numbering, sampling and testing for contamination.
It turns out that NECC was well aware of these rules, having received an FDA warning at least once in the past. And it seems that neither the Commonwealth of Massachusetts nor the feds will be fooled by this “I thought I was just a pharmacy” argument. The Commonwealth’s Board of Registration in Pharmacy has already stated publicly that NECC violated the terms of its pharmacy license by failing to have individualized prescriptions on the premises. The federal government is all over this, too, with the U.S. Attorney’s Office in Massachusetts coordinating with the FDA’s criminal investigators in conducting a search warrant of the NECC premises, indicating that they believe there is probable cause to believe that federal law has been violated.
The takeaway: The FDA and federal law enforcement were already in this field to begin with, and there’s no question that they will continue to make their presence felt, as the problems of patchy state oversight of compounders becomes more widely publicized. (See Markey letter.) Drug manufacturers and repackagers seeking to avoid federal oversight merely by calling themselves “pharmacies” may have a little trouble sleeping in the weeks ahead. The gig is up. As the death toll mounts from the NECC scandal, the feds will surely put the spotlight on similar facilities across the country.
In future blogs, I’ll make some predictions of what sorts of indictments and False Claims Act actions we might be seeing in this arena. But for the moment, just watch to see how many companies start pulling down those “Pharmacy” signs.