Note of Caution to Compounding Pharmacies

Alerts / December 6, 2022
Key Takeaways:
  • FDA created a new category for voluntary firm registration after NECC compounding fungal meningitis outbreak in 2012.
  • Individuals face criminal liability for misrepresentations made to FDA.
  • Compounding pharmacies should review business practices and consider registering with the FDA as an outsourcing facility if producing high volumes of compounded sterile products.

Former co-owner of the now defunct New England Compounding Center (NECC) Gregory Conigliaro may face prison time for conspiring to defraud the U.S. Food and Drug Administration (FDA). Prosecutors argued Conigliaro conspired with more than a dozen others at NECC to deceive and defraud the FDA by misrepresenting the facility as solely a compounding pharmacy dispensing only patient-specific prescriptions while in fact it was also operating as a generic drug manufacturer. NECC was not registered with the FDA as a drug manufacturer although it was supplying large quantities of generic drugs throughout the country. Prosecutors allege that through this deceit, NECC, Conigliaro and his co-conspirators were able to avoid the high cost of compliance with federal regulation and oversight, which allowed them to profit unjustly as well as operate in an unsafe and illegal manner. By not registering as a manufacturer, NECC avoided compliance with FDA’s current Good Manufacturing Practices requirements, which are designed to ensure facilities implement the highest safety and cleanliness standards. NECC is tied to the 2012 fungal meningitis outbreak that led to the deaths of more than 100 people and the sickening of hundreds more. Although Conigliaro was not involved in the compounding that led to the outbreak, prosecutors argued his deception allowed the facility to operate without the federal regulation that is precisely intended to prevent these events.

The First Circuit Court of Appeals recently reversed Conigliaro’s acquittal by the District Court in 2021 and reinstated his fraud conviction, finding that while the FDA does not have authority to regulate compounding pharmacies, it does have authority to regulate drug manufacturers. Federal prosecutors asked the court for a sentence of 18 months in prison, while Conigliaro requested probation. Conigliaro was sentenced to one year of prison and one year of probation on Friday, Dec. 2.

Firms manufacturing drug products or compounding in large quantities should register with the FDA. The actions of NECC led to passage of the 2013 Drug Quality and Security Act and the Compounding Quality Act, which established outsourcing facilities. Outsourcing facilities voluntarily register with the FDA and adhere to current Good Manufacturing Practices. Consequently, they may produce high volumes of compounded sterile products that do not need to have a patient’s prescription but can be shipped to hospitals, clinics and other facilities in large quantities across state lines. While state law may permit a state-licensed pharmacy to compound without a patient-specific prescription, a pharmacy should register with the FDA if it supplies large quantities of non-patient-specific drugs. Operating like an outsourcing facility or drug manufacturer without registering with the FDA and complying with Good Manufacturing Practices not only puts patient safety at risk but also risks criminal liability.

Authored by Winston Kirton, Lee H. Rosebush, Francis Palumbo, Laura Macherelli, Marc Wagner

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