FDA’s Authority to Regulate Drug Compounding: A Legal Analysis

Jennifer Staman
Legislative Attorney

Compounding is a process of combining, mixing, or altering ingredients in order to create a medication for a particular patient. While drug compounding has historically been regulated primarily by states, recent questions have been raised about the extent to which the Federal Food Drug and Cosmetic Act (FFDCA) governs this practice, and what authority the U.S. Food and Drug Administration (FDA) has to regulate a compounded drug as a "new drug," subject to approval by the FDA, as well as other requirements. In general, the FDA maintains that drug compounding activities are subject to FDA oversight, but will exercise discretion in enforcing various provisions of the FFDCA. 

In 1997, Congress enacted the FDA Modernization Act of 1997 (FDAMA), which was a comprehensive revision of the FFDCA. Section 127 of FDAMA added Section 503A to the FFDCA, which excepted compounded drugs from various "new drug" requirements, conditioned upon the compounded drugs meeting a variety of restrictions. One of the restrictions in Section 503A of the FFDCA was that drug providers were prohibited from soliciting or advertising particular compounded drugs. These speech restrictions were challenged on First Amendment grounds and were struck down by the Supreme Court in Thompson v. Western States Medical Center. Following this decision, there has been controversy over the current status of compounded drugs under the FFDCA and whether the remaining provisions of Section 503A remain good law, an issue that the Supreme Court did not address in Western States. The two circuits that addressed this issue took different positions. While the Ninth Circuit in Western States determined that Section 503A was struck down in its entirety, the Fifth Circuit in Medical Center Pharmacy v. Mukasey found that the lawful provisions of Section 503A are still in effect. Accordingly, these cases have created an interesting scenario of non-uniform enforcement throughout the U.S. In the Fifth Circuit, compounded drugs are specifically exempted from newdrug, adulteration, and misbranding requirements of the FFDCA if certain criteria are met; while in the Ninth Circuit (and, according to the FDA, the rest of the United States), compounded drugs are subject to these requirements, but the FDA may exercise discretion in taking action against an entity that violates these provisions. This report provides a brief historical overview of the FDA's regulation of drug compounding and addresses these conflicting decisions. The report will also address the FDA's current authority to regulate compounded drugs under the FFDCA in light of these decisions, and discuss possible future developments, including the recent controversy over compounding bioidentical hormone replacement therapy (BHRT) drugs.


Date of Report: January 29, 2010
Number of Pages: 14
Order Number: R40503
Price: $29.95

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