Pharmacy Issues: 2004

1. Pharmacy Issues: 2004 Elizabeth Curry-Galvin, DVM Assistant Director, Scientific Activities AVMA-Schaumburg Egalvin@avma.org

2. Topics Compounding Ethical Products Internet Pharmacies Context Business Legal Ethical Reminder Allegations, No Names Policy vs. Not State laws and rules vary-check Colorado Pharmacy Issues: 2004

3. What’s Compounding? • Definition • Simply, the preparation of custom medication for a particular patient (manipulation--> unapproved drug) • Pharmacists or Veterinarians • Fills a niche • No drug approved for condition • Approved drug needs modification • Examples • Mixing two pre-anesthetics • Tablets into suspension • Diluting • Flavoring

4. Be Precise • Avoid generalizing when discussing “compounding” • DRUG • Approved drug (AMDUCA) vs. bulk drug [raw drug ingredient or chemical] (not legal) • VCPR • Custom medication prescribed for one animal vs. purchases outside of a VCPR • SCALE • Individual animal (compounding) vs. manufacturing / wholesaling (piracy) • ANIMAL • Food vs. non-food animal (different risks, differences in regulatory discretion)

5. 2 Compounding Issues • Address Piracy • Compounding from bulk drugs is not legal • Need regulatorydiscretion from states and FDA when veterinarians compound medically necessary drugs from bulk ingredients for individual, non-food animals, within a VCPR because no drug is approved and available to adequately treat the patient.

6. “Piracy” (manufacturing unapproved drugs) • “Piracy” as distinct from traditional compounding • Essentially wholesaling unapproved drugs • Made from bulk ingredients • Circumvents FDA drug approval & monitoring process • Mass markets products with little quality control • Mimic approved drug (knock-off) • Omeprazole, enrofloxacin, praziquantal, ivermectin formulations • Beware these are not generics!

7. Why Piracy? • Financial Drivers $$$$$ • Pirating firms • Mass production with no FDA costs • Veterinarians • Purchase drug at lower price than approved product, pass along or keep savings • Unfamiliarity • Lack of appreciation of differences between FDA approved and compounded drug • Lack knowledge of laws and rules • Mistaking compounded drugs for generic drugs • Assuming provider is working in patient’s best interest • Little enforcement visible in recent history..changing

8. Approved Drug Assurances • Safe • Studied under label conditions of use in target species • No contaminants (chemical, biological, toxins) • Effective • Studied under label conditions of use • Not sub- or super-potent (active ingredient) • Formulation proven successful • Batch to batch consistency • No surprises • You get what you paid for

9. Approved Drug Assurances • Scientifically proven expiration dates • Scientifically proven withdrawal times • Proper packaging assures stability • Label information derived from studies • Dose, indications, precautions, contraindications • Post-marketing surveillance / Label updates • Adverse event tracking

10. Laws & Rules • Federal Oversight • Different “rules” for humans vs. animals! • FFDCA does not permit veterinarians to compound unapproved finished drug products from bulk drug substances (affirmed by two Federal Appeals Court decisions) • AMDUCA-permits compounding from approved drugs • FDA Compliance Policy Guide on Compounding • “when the scope and nature of compounding raise the kinds of concerns normally associated with a drug manufacturer” • State Oversight • Board of Pharmacy • Laws, regulations, policies, standards

11. Why is Piracy Bad? • Denies patient treatment with approved drug • Safe, effective, pure, potent, stable, GMPs • Exposes patient to unapproved drug • Contaminated, sub- or super-potent, unstable • Exposes parties to unnecessary liability • Undermines R&D by drug companies • Veterinarians will have fewer approved drugs • Bulk ingredients…quality? bio-terrorism? • Illegal

12. AVMA Position on Compounding • Decision to use compounded drug driven by veterinarian within VCPR • Comply with AMDUCA and FDA Compliance Policy Guide on Compounding for Animals • Food safety concerns preclude use unless information exists to assure avoidance of illegal tissue residues

13. AVMA Position on Compounding • Limited to: • Safety and efficacy of compounded drug demonstrated in target species, • Response to therapy or drug concentrations can be monitored, or • Individual patients where no other drug delivery is practical. • Precautions, counsel client, adverse reactions, unintended exposure

14. 2 Compounding Issues • Address Piracy • Compounding from bulk drugs is not legal • Need regulatorydiscretion from states and FDA when veterinarians compound medically necessary drugs from bulk ingredients for individual, non-food animals, within a VCPR because no drug is approved and available to adequately treat the patient.

15. New CPG on Compounding • Replaced 1996 CPG (federal) • Emphasizes FDA’s concern with compounding that approximates manufacturing • Written to facilitate enforcement • Did it make use of bulk drugs in compounding illegal? • No, compounding from bulk drugs has been not legal for years • However, less text on regulatory discretion..bulk

16. New CPG on Compounding • Less text on regulatory discretion for medically necessary bulk drugs • Includes an Appendix • Bulk drugs for which the FDA would not ordinarily object if compounded • Certain large animal antidotes • No listing of bulk drugs that are important companion animal therapeutics, e.g. potassium bromide • Makes one worried if needed drug is “not on the list” • Renewed visibility of thorny issue • Business as usual?

17. Should CPG be withdrawn? • IACP (pharmacists) lobbying veterinarians • COBTA says “no” • Pro-enforcement against mfg. of unapproved drugs • Seeking ways to specify regulatory discretion • Medically necessary drugs compounded from bulk ingredients for individual non-food animals when no such approved drug exists • COBTA meets March 26-27

18. In-Office Use • “In-Office Use” generally recognized by state Pharmacy Boards • Upon prescription, pharmacist prepares small quantity for veterinarian’s “in-office” use (administration) • Facilitates timely administration of medication since compounded drug often mailed • Product labeled “In-Office Use” in place of patient name • Stability not definitively known…watch shelf life • Not to be used as stock from which to dispense • Makes pharmacist a “wholesaler”

19. “Resale” of Compounded Products • FDA Compliance Policy Guide • Concern with “compounding drugs for third parties who resell to individual patients, or offering compounded drugs at wholesale to other state licensed persons or commercial entities for resale.” • Possible state Board of Pharmacy rules • Makes pharmacist a wholesaler • Don’t buy pirated drugs wholesale for resale • Don’t receive a drug compounded by a pharmacist for a particular patient, change the label & dispense

20. “Resale” of Compounded Products • Question whether you can dispense “In-Office Use” compounded drug to provide timely treatment and bridge the time needed for the mail order drug to arrive (needed regulatory discretion) • Question whether you can prescribe, pay for, and receive a drug compounded by a pharmacist for a particular patient, then sell it (unaltered) to the client with a mark-up (?)

21. Reminders • A drug is a formulation, not just an active ingredient • Changes in formulation affect bioavailability • Adsorption, Distribution, Metabolism, Excretion • transdermals • Alterations in bioavailability affect treatment outcome

22. Reminders • Compounded drugs are NOT generics • Generics have been approved by FDA to ensure safety, efficacy, quality, stability, package, label • Flavored preparations can be legally compounded when APPROVED drugs are flavored • Flavoring can be an non-legal profit center for those who flavor bulk drugs without purchaser’s knowledge

23. State Compounding Issues • Arkansas Board of Pharmacy Regulation 07-02-0002 Section (m)(5) • “Compounding for office stock for veterinarians is prohibited, except for compounds to be used in life-threatening situations where lack of immediate availability of the product could result in patient harm and no FDA-approved product is commercially available.” • ArVMA opposes, under discussion

24. State Compounding Issues • Texas Board of Pharmacy Proposal • “The quantity of all compounded pharmaceuticals distributed to all practitioners during the previous 12 months pursuant to this exception does not exceed 5% of all prescriptions compounded and dispensed during the previous 12 months. For the purposes of the exception, distributions to practitioners shall not be included in the 5% if the pharmacy receives and documents within 30 days of distribution, the name of the patient to whom the compounded pharmaceutical was administered.”

25. “Ethical” Products • AVMA defines ethical product: • Mfg. voluntarily limits sale to veterinarians • Often different name/packaging than direct to consumer products • Sold only to veterinarians as a condition of sale that is specified in a sales agreement or on the product label.

26. “Ethical” Products • AVMA Principles of Vet. Med. Ethics state • “it is unethical for veterinarians to use or permit the use of their names, signatures, or professional status in connection with the resale of ethical products in a manner which violates those directions or conditions specified by the manufacturer to ensure the safe and efficacious use of the product.”

27. “Ethical” Product Diversion • Distribution channel is manufacturer’s policy • Not government restricted distribution, e.g. Rx • Manufacturer’s responsibility to enforce its policy—contact manufacturer with concerns • Legally not appropriate for associations to seek to influence those policies • Manufacturer may deny future purchases? • Registered as distributor? • Tax laws?

28. Flea and Tick • 40% of practices only sell flea and tick products to clients who have visited with the pet in the last year. • 43% practices sell to anyone • Source: VetMedTeam.com in Veterinary Economics, October 2003

29. Internet Pharmacies • Internet pharmacies are here to stay! • Honor client requests for prescriptions • Know your rights • Know your responsibilities • Answers & enforcement frequently found at state level • Do your part right; Can’t police everything • Offer clients value and convenience • Speak factually • Report complaints; Complete documentation

30. AVMA Position on Internet Pharmacies • Drug therapy initiated by DVM within VCPR • Veterinarians should honor client requests to prescribe rather than dispense a drug • Client has option of filling at any pharmacy • Might advise clients of VIPPS pharmacies • Veterinarians asked by pharmacies to approve prescriptions they have not initiated should do so only if the prescription is appropriate and VCPR exists

31. AVMA Position on Internet Pharmacies • Veterinarian’s purview to determine medical criteria whereby drug is indicated, not pharmacist • Maintain written record of prescription • Communicate proper use, risks regardless of drug source • Use of drugs of foreign origin that lack FDA approval generally is not permitted

32. Current Commonly Asked DVM Questions • Can I charge for a prescription? • Do I have to provide a prescription? • Can I write a prescription to be used at a Canadian pharmacy? • Generic substitution? • Can I ignore the fax, but work with client, and offer a written Rx? Hospital policy? • What can I say about the pharmacy? • Can I insist the client come in for a written Rx? • Where do I report….?

33. Other Contacts • Consumer calls • Is it legal for my vet to… • Agency Calls: MO, MI, TN, DE responding to consumers allegations • (Per FTC: It would be within its jurisdiction to create a regulation if consumer complaints indicate consumers need greater protection) • Jurisdictional Challenges: agencies may not see total picture • Internet (human) pharmacy is exploring animal drugs

34. Environmental Scanning-FTC • 1978 FTC regulations require prescribers to provide eyeglass prescriptions; upheld by courts • Dec. 6, 2003 President Bush signed Fairness to Contact Lens Consumers Act; FTC jurisdiction • Congressman’s wife’s experience (10 years), “long overdue, important consumer’s rights issue” • Requires prescriber to provide copy of prescription • Prescriber may not charge for prescription • Requires prescriber to verify electronic prescription requests w/in 8 business hours or request is considered authorized • Consumers Union an early supporter

35. Environmental Scanning • Reader’s Digest from Consumer Reports (a publication of Consumer’s Union) • “…the veterinary care industry languishes in the Stone Age of consumer-protection law…” • “…dispute a bill…Fluffy may be held hostage under state lien laws…” • “…vets dispense medicine, but few states require basic price disclosure and some don’t even mandate written prescriptions for those keen on bargain hunting…”

36. Environmental Scanning • VIPPS program for “veterinary pharmacies” • To my knowledge, there are no animal-related: • Pharmacy school classes required for graduation • Licensure requirements • CE requirements • American College of Veterinary Pharmacists • Offering certification to pharmacists who complete educational program on animal drugs and their regulation • Society of Veterinary Hospital Pharmacists

37. Revenue Impact of I.P. in Well-Managed Practices • Medicine dispensed: 15% total revenue • 50% say volume of meds dispensed declining • Drop in pharmacy revenue? • 11% drop say 1 percent of respondents • 6-10% drop say 6 percent • <5% drop say 38 percent • No change in revenue say 55% • Source: The 2003 Well-Managed Practice Study according to Veterinary Economics, October 2003

38. Environmental Scanning • Prepare for change-United Kingdom • Address current medicine margins • Identify contribution to practice income & profits • Assess true costs of supplying medicines • Premises, heating, lighting • Staff time for ordering, unpacking orders, stock control, auditing stock and labeling, dispensing. • Consider difference between all medicine sales being lost vs.losing half…retain most of cost base Source: Peter Gripper, Anval, “In Practice” publication of British Veterinary Assoc.

39. Environmental Scanning • Pharmacy and flea and tick products provide an average of just 3-4% of gross profit and • Pharmaceuticals have even less of an impact on the bottom line after accounting for operating expenses • Source: Cynthia Wutchiett, Wutchiett, Tumblin and Assoc. in Veterinary Economics, September 2003 • “By overcharging for medications or refusing to volunteer written prescriptions, the profession invites both regulation and loss of respect.” • Source: Linda Walker, Amboy Assoc., Veterinary Economics, Sept 2003

40. Enviromental Scanning • “Charge for your time both on the farm and in the exam room” and • “Those fighting the Internet are modern day Don Quixotes.” Source: David M. Lane, DVM Newsmagazine, Jan 2004 • Wake up call: “Change emphasis from selling products to providing services-and charging appropriately for services” and • Sell at competitive prices to avoid client perception that everything else is overpriced Source: Ronald Whitford, Veterinary Forum, Sept 2003 • Impact of pet insurance?Taxation of Internet?

41. Need for Information Exchange • Know your state rules and tell others! • Understand application of jurisdiction • Recycling • Label of dispensed products • Groom relationships between Bd. Of Vet Med and Bd of Pharm • Groom relationships between state VMA and state Boards • Boards know the rules • VMAs have constant interaction with profession • Report trouble! And document! Are laws/rules adequate? • Envision a preferred future