July 15, 2010


 DEA, pharmacy come to terms on compounding

Agreement gives clarity for similar operations

By Malinda Larkin

Posted July 1, 2010 

A recent agreement between a compounding pharmacy and the federal agency responsible for drug enforcement activities provides greater clarity for how such pharmacies should do business.

Wedgewood Pharmacy of Swedesboro, N.J., announced in a May 25 press release that its registration to dispense controlled substances had been restored after an eight-year dispute with the Drug Enforcement Administration.

The DEA and the pharmacy, which specializes in drug compounding from bulk substances for human and animal patients, agreed to settle a protracted battle over the interpretation of certain regulations, according to the release.

The dispute centered on the DEA's and pharmacy's different interpretations of whether the Controlled Substances Act allows compounding pharmacies to dispense controlled substances directly to veterinarians for administration to their patients.

DEA regulations maintain that a "prescription may not be issued in order for an individual practitioner to obtain controlled substances for supplying the individual practitioner for the purpose of general dispensing to patients. Unless the physicians are the patients, these documents are not prescriptions for purposes of the Controlled Substances Act."

The DEA argued that, by dispensing a controlled substance to a veterinarian rather than to the patient's owner, a pharmacy is "distributing," rather than "dispensing." According to the government, the pharmacy was operating beyond the scope of its registration as a retail pharmacy and was acting as a manufacturer and distributor of controlled substances and listed chemicals without the appropriate DEA registration. Specifically, the DEA believed that because the pharmacy was not preparing or compounding medications on an individualized patient basis, the pharmacy's activities constituted manufacturing under the Controlled Substances Act, and the pharmacy ought to have been registered as a manufacturer prior to conducting such activities.

Wedgewood's position—supported by a Federal Appeals court in 2007—maintained that the DEA's definition failed to recognize the difference between the practices of animal medicine and human medicine, and that delivering controlled substances to the animal owner may make it more likely those controlled substances will fall into the wrong hands.

The agreement acknowledges that the parties' "competing positions … have been held respectfully and in good faith," according to the release.

Under the terms of the agreement, Wedgewood has agreed to dispense controlled substances under the DEA's interpretation of the law, that is, directly to a human patient or to an animal's owner. That hasn't always been the case with the pharmacy.

Owner George Malmberg admitted during an inquiry before the New Jersey State Board of Pharmacy in October 2002 that over 80 percent of the pharmacy's sales were made directly to a physician or veterinarian and not to an individual patient.

For example, records indicated the pharmacy made several lots of stanozolol 50 mg/mL injectable solution, a schedule III anabolic steroid. Many times, the yield of each lot, comprising 300 30-mL vials, would be divided and shipped to several physicians or veterinarians, according to a DEA investigation.

At the time, more than 95 percent of these sales were to physicians or veterinarians. They were documented by what the pharmacy called prescriptions but which contained the name of the physician or veterinarian as the patient, which is a registrant-to-registrant "transfer" and is not considered by the DEA to be drug "dispensing."

DEA regulations permit a retail pharmacy to transfer up to 5 percent of the "total number of dosage units of all controlled substances distributed and dispensed by the practitioner during the same calendar year."

The DEA conducted an investigation in March 2003, and in September that same year, issued an order to show cause that Wedgewood was registered by the DEA as a retail pharmacy (see JAVMA, June 1, 2006).

The order proposed to revoke the DEA certificate of registration issued to Wedgewood and to deny any pending applications for renewal of registration.

In April 2006, the DEA revoked Wedgewood Pharmacy's certificate of registration, which Wedgewood challenged successfully.

The U.S. Court of Appeals for the District of Columbia Circuit vacated the DEA's revocation of the pharmacy's certificate of registration to dispense or compound controlled substances in December 2007 (see JAVMA, Feb. 1, 2008).

In vacating the revocation of Wedgewood's registration, the court remanded the case to the DEA "for further proceedings consistent with this opinion," and eventually the pharmacy agreed to abide by the DEA's interpretation.

For its part, the DEA said the recent agreement "signal(s) its intention to enforce" its interpretation no differently with "any similarly situated compounding pharmacy," and that "Wedgewood shall not be restricted from transferring controlled substances in any greater or different degree than are comparably situated registrants … ."

For more information on the history behind the agreement between Wedgewood Pharmacy and the DEA, click here.