The U.S. GAO Reports on FDA’s Oversight of Compounded Animal Drugs: FDA Could Improve Oversight with Better Information and Guidance

October 12, 2015

By Karla L. Palmer

The U.S. Government Accountability Office (GAO) recently published a Report concerning animal drug compounding, titled “FDA Could Improve Oversight with Better Information and Guidance.”  The Report is a result of a Congressional request for GAO to review issued related to animal drug compounding and FDA’s oversight thereof.  GAO conducted its audit from June 2014 to September 2015.  The Report examines: (1) the benefits and risks of animal drug compounding; (2) the extent animal drug compounding occurs; and (3) FDA’s approach to regulating compounded animal drugs.  The Report comes on the heels of Congress’  reenactment of FDCA Section 503A addressing compounding of human drug products for individually identified patients and the enactment of Section 503B (Title I of the Drug Quality and Security Act, blogged about extensively here, in November 2013).  

The GAO undertook, among other activities, an analysis of relevant federal law, regulations, and animal compounding guidance documents (withdrawn in May of 2015; FDA simultaneously issued draft guidance, with comments now due November 19, 2015; see our previous post here).  GAO also reviewed FDA’s Foods and Veterinary Medicine Program Strategic Plan (2012-16), FDA’s activities concerning animal drug compounding over the past decade, and the Office of Management and Budget’s instructions for drafting appropriate regulatory guidance.  In addition, GAO interviewed FDA officials and reviewed regulatory oversight in four states – Florida, California, Kentucky, and Texas.  GAO selected these states because they vary in their regulation of animal drug compounding, and two of the states (Florida and Kentucky) have been the site of adverse events related to compounded drugs over the past six years.  For the four states, GAO also reviewed relevant state statutes and regulations, because states traditionally have provided oversight of animal drug compounding. 

The Report provides a historical background into animal drug compounding from both approved animal drugs and bulk substances and describes the benefits and risks of the same. (Report at 6-11).  It cites the benefits of compounding to include, among other factors, the lower costs of compounded animal drugs (especially given the high cost of approved drugs and the lack of insurance coverage for most drugs for animals), and the life-saving benefits associated with compounding when no suitable FDA-approved drugs exist.  The Report does differentiate compounding drugs for food-producing versus non-food producing animals, however – the latter of which typically presents less risk to the public health. 

The GAO stated that there is incomplete information concerning the extent to which compounded drugs have caused or may be linked to adverse events given the voluntary nature of reporting from veterinarians, pet owners, and pharmacies, unlike reporting required by manufacturers of approved animal drugs.  (Report at 12-14). The lack of reporting makes it difficult for FDA to determine whether the drug involved in an adverse event was compounded, and the frequency of adverse events.

The GAO also found that FDA does not have guidance concerning compounded animal drugs, and it has not documented consistently the bases for its enforcement and other decisions.  However, FDA in fact did issue guidance animal drug compounding (CPG 608.400) back in 2003, which FDA withdrew in the wake of its publication of its new draft guidance in July 2015 (mentioned above).  GAO noted the prior guidance contained several “limitations” and vague definitions (Report at 14-16). 

FDA explained to GAO that it did not routinely inspect pharmacies that compounded animal drugs because: (1) FDA does not have a comprehensive list of pharmacies that compound animal drugs because they do not need to register with FDA; (2) FDA lacks resources to routinely inspect the thousands of animal drug compounding pharmacies; and, (3) states regulate pharmacy practice and drug compounding.  Notwithstanding these limitations, FDA noted it has sought enforcement action against pharmacies that compound animal drugs on several occasions (including warning letters and voluntary recalls). 

However, FDA has not pursued a legal action to stop a pharmacy from illegally compounding animal drugs since 2010 (referring generally to the Franck’s Lab Inc. matter in the United States District Court for the Middle District of Florida, which decision favorable to the compounder was vacated as moot by agreement when the compounder stopped compounding animal drugs from bulk substances.)  With respect to its enforcement actions generally and FDA’s inconsistent documentation, GAO noted the significant inconsistencies with FDA’s follow-up concerning allegedly violative activities  – ranging from no apparent follow-up to follow-up occurring from 9 months to 6 years after identifying potential violations.  (Report at 20-21).  GAO found FDA was also inconsistent with its handling of adverse event reporting. (Report at 21).  GAO was also unable to determine how FDA handles complaints about illegal compounding because FDA does not track or collect such information. 

GAO provided the following recommendations for FDA:

  • Modify the voluntary reporting form FDA uses to obtain information on adverse events to ask whether drugs involved in adverse events were compounded
  • Develop policy or guidance for agency staff that specifies circumstances under which FDA will or will not enforce compounding regulations for animals and clearly define key terms.
  • Consistently document the bases for FDA’s decisions about how or whether it followed up on warning letters, adverse event reports, and complaints about drug compounding for animals. 

FDA stated in response to GAO’s Report that it generally agreed with the Report’s recommendations, and that it has made substantial progress addressing animal drug compounding.  However, to date, the FDA’s draft guidance is still awaiting industry comments and must be finalized, and there is no effective federal regulatory structure – for better or worse – addressing compounded animal drugs.