US Pharm.
2008;33(1):55-59.
This month's case is not about
prescriptions for humans, at least not primarily. Instead, it is about a
pharmacy that dispenses 95% of its annual prescription volume to veterinarians
for subsequent administration to horses. Much of this pharmacy's practice
involves compounding controlled substances and delivering them to equine
veterinarians. This process involves a vet transmitting a prescription to the
pharmacy with the desired drug "recipe," which shows the vet's name on the
line where the patient's would normally appear. The definitions of
"prescription" and a few other terms, like "compounding," "dispensing," and
"manufacturing," will become critical to the outcome of the case.
Investigation
The Drug
Enforcement Administration (DEA) decided to look into this practice after it
received reports that the pharmacy was ordering very large amounts of
controlled substances. The DEA obtained an administrative inspection warrant
and searched the pharmacy between March 12 and 14, 2003. What the DEA found
was "large quantities of bulk drug substances to manufacture large quantities
of unapproved drug products" as well as large-scale equipment used in the
manufacturing process. The investigation revealed that the pharmacy received
131 kg of phenylpropanolamine (PPA) between November 27, 2000 and October 29,
2002. During this time the pharmacy "manufactured" at least 750,000 PPA
tablets. (In contrast, the typical retail pharmacy is expected to handle
between 25 and 1,000 g.) The DEA also looked at the pharmacy's prescription
logs, which contained a record of all controlled substances it sold between
January 1, 2002 and December 31, 2002. The DEA noted that the pharmacy
"routinely delivered controlled substances to another practitioner rather than
directly to the ultimate user, using prescriptions that listed the same person
as both prescribing doctor and patient."1
Initial Order
The DEA concluded
from this evidence that the pharmacy's activities are not consistent with
"traditional retail pharmacy practices" and that the pharmacy was operating in
violation of the Controlled Substances Act of 1970 (CSA) and the DEA's
regulations implementing the CSA. On August 21, 2003, the DEA issued an order
to the pharmacy to "immediately cease and desist manufacturing and
distributing activities outside the scope of its registration" or risk
revocation of its registration.2 According to the DEA, the pharmacy
ignored this order and continued to compound and dispense controlled
substances for at least two months after the letter was sent. It stopped this
practice only when it moved its operations to another location and the DEA
refused to modify the pharmacy's registration.3
DEA Decision
On September 8, 2003, the DEA began
formal proceedings to revoke the pharmacy's controlled substances
registration. A hearing was held before an Administrative Law Judge (ALJ) on
January 26 to 28, 2004. Approximately one year later, the ALJ issued a
decision, concluding that the pharmacy had "manufactured and distributed
controlled substances...without a valid DEA registration authorizing such
activities." On April 3, 2006, the deputy administrator of the DEA issued the
agency's final decision, adopting every finding and recommendation of the ALJ,
and revoked the pharmacy's DEA registration.4
Appeal
The pharmacy
appealed this decision to the U.S. Court of Appeals for the District of
Columbia. The panel hearing the appeal voted unanimously to "vacate" the DEA's
revocation of the pharmacy's registration and remanded the case back to the
DEA for further deliberations.5 How and why the Court of Appeals
came to its conclusion is an interesting course of action.
CSA Background
In 1970, the CSA
was enacted to reduce drug abuse by preventing the diversion of controlled
substances.6 It established a "closed system" of distribution in
which all persons in the "legitimate distribution chain" must register with
the DEA.7 Within this system, there are three categories:
manufacturer, distributor, and practitioner, each with distinct requirements
for registration.8 A "practitioner" is a "physician, dentist,
veterinarian, or pharmacy registered to distribute, dispense...or
administer...a controlled substance in the course of professional practice."
9 Dispensing involves the delivery of a controlled substance to an
ultimate user, including compounding necessary to prepare the substance for
delivery.10 Delivery includes the actual, constructive, or
attempted transfer of a controlled substance.11 The preparation or
compounding of a drug by a practitioner as an incident to administration or
dispensing of the drug does not constitute manufacturing.12 The CSA
does not define "compounding." Normally, a court could look to the Food, Drug,
and Cosmetic Act,13 but this did not apply because the U.S. Supreme
Court held that amendments attempting to regulate pharmacy compounding by
limiting compounding pharmacies' ability to advertise or solicit prescriptions
are unconstitutional. That decision left "compounding" without a statutory
definition.14
Arguments
According to the
DEA's interpretation of the CSA, a retail pharmacy may dispense controlled
substances only to the ultimate user and not to another practitioner.15
It reached this conclusion because "dispense" is defined, in part, to mean
"to deliver a controlled substance to an ultimate user."16
"Ultimate user" is defined as "a person who has lawfully obtainedÖa
controlled substance for his own useÖor for an animal owned by him."
17 The DEA also concluded that all compounding must be patient specific
and dispensed only to the patient identified in the prescription. It found
that by compounding multidosage batches of controlled substances pursuant to
orders that did not identify a specific patient, the pharmacy exceeded its
registration. Noting that most of the pharmacy's sales were made with orders
listing prescribing veterinarians or physicians as patients, the DEA took the
position that a drug compound prepared for distribution to practitioners is
considered a manufacturing activity. Because the pharmacy delivered controlled
substances to other practitioners (i.e., veterinarians and physicians), the
controlled substances were "manufactured" and not "compounded."
The pharmacy argued that
"unlike human health care physicians, equine veterinarians usually do not
treat animals on an individual basis; instead, veterinarians, particularly
those with an equine practice, travel to their patients, examine and diagnose
them, and administer the appropriate medicines on site, a procedure that
requires them to have a variety of medicines at their immediate disposal." The
DEA's interpretation of dispensing threatens to "severely handicap" the
practice of equine veterinary medicine by making it difficult for a vet to
administer controlled substances to horses at the stables. The pharmacy
explained that requiring a practitioner to only dispense controlled substances
directly to the "ultimate user" (i.e., the animal's owner) runs counter to the
goal of the CSA. It is a considerably more secure procedure for a licensed
veterinarian to be responsible for the controlled substances rather than
sending medications for each animal to the farm or stable where any worker has
access.
The DEA countered that the CSA
makes no distinction among physicians, veterinarians, dentists, and
researchers as practitioners and that a veterinary exception was unnecessary
because the law provides an adequate mechanism for any practitioner to obtain
controlled substances for general office use or dispensing to a herd or large
group as opposed to a specific animal. A veterinarian, just like any other
practitioner, can obtain controlled substances for general dispensing from any
properly registered manufacturer, distributor, or pharmacy.
The pharmacy answered these
claims by arguing that the CSA does not limit dispensing to a direct transfer
of controlled substances to a patient. Rather, the CSA permits a pharmacy to
"constructively" dispense controlled substances to a patient by delivering
them to an intermediary such as a veterinarian. The CSA authorizes a
practitioner, including a pharmacy, to "distribute, dispense [or]
administer...a controlled substance in the course of professional practice."
18 Further, it defines "dispensing" as the "delivery of a controlled
substance to an ultimate user...including...[any] compounding necessary to
prepare the substance for such delivery." "Delivery" expressly includes "the
actual, constructive, or attempted transfer of a controlled substance."
19 By allowing a "constructive" transfer, the CSA recognizes that a
pharmacy is not limited to dispensing controlled substances directly to the
ultimate user. Instead, dispensing controlled substances to a vet for later
administration to his animal patients is a "paradigmatic" example of a
constructive transfer. Therefore, the pharmacy asserted, the DEA's conclusion
that it distributed controlled substances because it did not deliver them
directly to specific patients is incorrect.
The DEA countered that this
would "eviscerate" the distinction between a distributor and a dispenser by
allowing any practitioner to become a distributor of controlled substances,
under the guise that the drugs were delivered "constructively" to the ultimate
user. A "constructive transfer" is limited to circumstances in which no
"actual transfer" of controlled substances takes place. Other courts have
limited constructive transfers to situations in which controlled substances
were not actually delivered, but rather were constructively delivered by
virtue of a person illegally distributing prescriptions, which in turn could
be used by the recipient to obtain the controlled drugs from a pharmacy.
Decision
After considering
both positions, the court determined that the DEA's arguments fell short for
three reasons. First, Black's Law Dictionary defines "constructive
transfer" as "delivery of an item--especially a controlled substance--by
someone other than the owner but at the owner's direction."20
Nothing in the definition precludes a "constructive" transfer simply because
an "actual" transfer has taken place.
Second, the definition of
delivery includes an "attempted" transfer as a distinct term to cover
circumstances in which there is no "actual" transfer.21
Delivery may, in some circumstances, occur constructively through an agent.
Thus, the CSA definition conflicts with the DEA's assertion that dispensing
only includes the direct transfer of a controlled substance to the ultimate
user.
Finally, the DEA's narrow
interpretation of "constructive transfer" conflicts with the DEA's own
regulation defining "prescription" as "an order for medication which is
dispensed to or for an ultimate user."22 Nothing prohibits
practitioners from acting as intermediaries on behalf of ultimate users. The
DEA could not explain why it would not allow registrant-to-registrant transfer
of a controlled substance with or without a prescription.
The court then lambasted the
DEA saying it knew from the beginning of its investigation that the bulk of
the pharmacy's business was with veterinarians and that it had information
indicating that animal medicine operates differently from human medicine. In
essence, the court concluded that the DEA's claim that there is no difference
between veterinarian and human medical practices is absurd.
Analysis
This is not the end
of the story, as the court reversed the order revoking the pharmacy's DEA
registration and ordered the DEA to make findings consistent with the court's
decision. Specifically, the DEA was ordered to explain how the difference, if
any, between the practices of human and veterinary medicine might affect its
analysis. Given that the federal government has been going after this pharmacy
with both barrels loaded, it would not be surprising if the DEA came back with
another adverse decision.23
It should be clear that the
method of distributing controlled substances at issue here is not the main
complaint. Rather, it's the fact that this pharmacy is compounding drugs and
the FDA does not agree with this practice. When the FDA could not get its way,
it appears they went to the DEA to get the pharmacy on another matter.24
Now that the Court of Appeals has blocked this strategy, the feds will have
to try another route of attack.
The more serious implication
of this decision is that it could alter the process by which controlled
substances are transferred between practitioners for human use. For all of the
reasons applied in this case, a physician could order controlled substances
that need to be compounded by the pharmacy for use in the physician's office,
using a prescription with the name of the prescriber where the name of the
patient usually appears. Of course, this flies in the face of the way pharmacy
is practiced in the human world. But then again, horses are not humans, so
maybe different considerations should apply.
References
1. Wedgewood Village Pharmacy v. DEA, slip op No. 06-1156 consolidated with 06-1196 (December 11, 2007), U.S.D.C. DC, 2007 U.S. App. Lexis 28544.
2. 21 U.S.C. ß 824.
3. This action was addressed in a prior column. Vivian JC. DEA: you can't move. US Pharm. 2004;29(3):100-104.
4. In footnote 11 of the decision, the opinion states, in part, "The DA's annoyance with Wedgewood's decision to challenge DEA's interpretation of the CSA rings throughout the decision. [The pharmacy] appears to dispute [DEA's] reading of the CSA and has refused to comply with the August 21, 2003, letter from DEA advising that it is in violation of the statute. [The pharmacy] has been on notice by both the FDA and DEA that their [sic] activities were manufacturing and distribution, but has chosen to contest the position of the agencies."
5. As used in the law, the term
"vacate" means that a judge sets aside or annuls an order or judgment from a
different, prior proceeding that the judge finds was improper. Available at:
dictionary.law.com/default2.asp?selected=2208&bold=. Accessed December 22,
2007.
6. See Gonzales v. Oregon, 546 U.S. 243, 250, 126 S. Ct. 904, 163 L. Ed. 2d 748 (2006) for a discussion of the legislative history of CSA.
7. H.R. Rep. No. 91-1444 (1970), as reprinted in 1970 U.S.C.C.A.N. 4566, 4572. The CSA requires manufacturers, distributors, and dispensers to register with the Attorney General, 21 U.S.C. ß 822(b); the Attorney General, in turn, has delegated the registration authority to DEA. See 28 C.F.R. ß 0.100(b).
8. See 21 U.S.C. ß 823(a) (criteria for "manufacturer" registration), 823(b) ("distributor" registration), 823(f) ("practitioner" registration).
9. ß 802(21).
10. ß 802(10).
11. ß 802(8).
12. ß 802(15).
13. 21 USC ß 353a(a) and (c).
14. Congress enacted the Food and Drug Administration Modernization Act of 1997 (FDAMA), Pub. L. No. 105-115, 111 Stat. 2296 to address concerns of the FDA that some pharmacies were manufacturing unapproved drugs under the guise of compounding. The legislative history of the FDAMA indicates that its "intent was to ensure continued availability of compounded drug products as a component of individualized therapy, while limiting the scope of compounding so as to prevent manufacturing under the guise of compounding." H.R. Conf. Rep. No. 105-399, at 94, as reprinted in 1997 U.S.C.C.A.N. 2880, 2884. The FDAMA contained a definition of "compounding" that required a prescription to be unsolicited by a retail pharmacy and prohibited the pharmacy from advertising the compounding of a particular drug. Pub. L. No. 105-115 ß 127 [codified at 21 U.S.C. ß 353a(a), (c)]. Several pharmacies with large compounding practices challenged these provisions as violative of the First Amendment. In Thompson v. W. States Med. Ctr., 535 U.S. 357, 360, 122 S. Ct. 1497, 152 L. Ed. 2d 563 (2002), the Supreme Court agreed with the pharmacies, holding that the FDAMA improperly restricted solicitation and advertising, both legitimate forms of commercial speech.
15. ß 802(10).
16. ß 802(27).
17. ß 802(27).
18. ß 802(21).
19. ß 802(10) and (21).
20. Black's Law Dictionary. 17th ed. St. Paul, MN: West Publishing Company; 1999:1503.
21. See note 13, supra.
22. 21 C.F.R. ß 1300.01(b)(35).
23. See notes 3, 4, and 16, supra.
24. See note 16, supra.
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