Pharmacy Law: Compounding Controlled Substance Medications for Equine Patients

Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.

Issue of the Case

A pharmacy specializing in veterinarypharmaceuticals had its registrationrevoked by the US Drug EnforcementAdministration (DEA), because, in theview of the agency, it was engaged in"manufacturing" and "distributing" controlledsubstances, rather than "compounding"and "dispensing" them. Thepharmacy challenged the interpretationat the level of an agency hearing as wellas a request for reconsideration and, afterthe subsequent revocation of its DEAregistration, sought judicial review of theaction of the administrative agency.

Facts of the Case

A pharmacy in an eastern state wasregistered with the DEA as a practitionerand had as the focus of itspractice supplying equine veterinarianswith specially formulated medications.After receiving reports that thepharmacy was ordering controlled substancesin unusually large quantities,the agency conducted an investigationat the pharmacy facility and concludedthat it was operating outside the scopeof its registration.

DEA officials took exception withthe pharmacy's practice of compoundingequine medications in large quantitiesand then delivering the pharmaceuticalsto veterinarians instead ofdirectly to their patients. Under theDEA's view of the Comprehensive DrugAbuse Prevention and Control Act of1970—the statute it was charged withenforcing, this constituted "manufacturing"and "distributing"—activities tobe performed by those registered withthe DEA as manufacturers or distributors,not by pharmacies that are registeredin a different category.

One recordkeeping aspect of thecase that attracted the attention ofthe DEA inspectors was that morethan 95% of the prescriptions on fileat the pharmacy listed the name of theprescriber as also being the name ofthe patient. In the context of prescriptionsfor human patients, this certainlywould be most unusual.

The agency issued a cease and desistorder to the pharmacy, but the pharmacycontinued to conduct its practiceas it had been while it challengedthe DEA interpretation of the statuteand regulations. Eventually the agencybegan proceedings to revoke the firm'sregistration as a pharmacy, emphasizingthat "all compounded drugs must bepatient-specific and dispensed only bythe compounder to that patient?."

In conformity with the AdministrativeProcedures Act (APA), the agencyinformed pharmacy officials that theregistration would be revoked if theydid not request a hearing within 30 days,which they did. The hearing was heldbefore an administrative law judge whoissued a decision 1 year later rulingthat the revocation was justified andshould proceed. It took another year forthe deputy administrator of the DEA toissue the final decision: revocation.At this point, the pharmacy exercisedits option to request a reconsiderationunder the APA, advancing new argumentstied to the nature of veterinarypractice and veterinarians' administrationof medications to their patients.The DEA denied this request, and thepharmacy appealed to a court for reviewof this administrative agency action.

The Court's Ruling

Following a thorough review of thelaw regarding the closed system fordistribution of controlled substances,as well as a discussion of the recentcourt cases addressing compoundingactivities by pharmacists, the courtvacated the agency's revocation of theDEA registration issued to the pharmacy.The court ruled that the mattershould go back to the agency to defineand clarify its interpretation of certainterms in their regulations, such as generaloffice use, order, prescription, andconstructive transfer.

The Court's Reasoning

The court first looked at the issue ofproviding the medication to the veterinarianrather than to the patient, as theagency would have the pharmacy do.It reviewed the wording of the statuteenacted by Congress that permittedconstructive delivery of a controlledsubstance to an ultimate user, concludingthat this allowed the pharmacy todispense the equine medications to theveterinarian for later administration tohis or her patients.

It emphasized that the DEA hadfailed to consider differences in thepractice of veterinary and human medicine—especially the need for equinepractitioners to travel to their patientsand administer or dispense prescriptionmedication once there. The courtnoted that the agency had before itinformation about the differing operationof the veterinary profession butfailed to consider the difference, bothin its original decision and when itdenied reconsideration of the matter.

The court ruled that the agency hadfailed to explain how a veterinariancould adequately treat animals on-siteby ordering controlled substances for"general office use," a term not definedin DEA regulations.