Hub on Policy and Advocacy, December 2012

ACA implementation; Congress to tackle compounding

With Obama’s reelection, ACA implementation proceeds

After the November 6 elections, pharmacists now know that the Affordable Care Act (ACA) is here to stay. Implementation of the health care reform law on the federal regulatory side is expected to pick up. At the same time, opponents of the law, while unable to repeal it, may try to slow down or block funding for implementation—and states must make decisions on the expansion of coverage promised by the law.

President Barack Obama’s reelection followed the U.S. Supreme Court’s upholding of the landmark law in June, and was coupled with the status quo of Democratic control of the U.S. Senate and Republican control of the U.S. House of Representatives.

“While there will be some activity [on ACA in the Republican-controlled House], I don’t think you’re going to see quite as much action on it as we saw last year and the year before,” said Michael Spira, APhA Senior Lobbyist. “Because that was a run-up to the election. And it’s done. It’s the law.” There could be a battle between the House and Senate on how much is funded and how well parts of ACA are funded, he added.

Another funding issue is that ACA may be a target in this difficult budget environment, with attention in Washington, DC, turning now to deficit reduction with the so-called “fiscal cliff” combination of tax hikes and sequestration cuts.

“During this process [of ACA implementation], APhA is committed to pursuing greater engagement of pharmacists’ clinical services in federal programs, state Medicaid programs, and private plans,” APhA Executive Vice President and CEO Thomas E. Menighan, BSPharm, MBA, ScD (Hon), FAPhA, wrote on’s CEO Blog. He looked to colleague pharmacy groups for a similar focus and willingness to collaborate, and called for the “continued support of pharmacists in all practice settings.”

“States will need to carefully evaluate the opportunities and responsibilities under ACA and implement them in such a way to ensure the health and well-being of the citizens of their state,” said Rebecca P. Snead, BSPharm, Executive Vice President & CEO, National Alliance of State Pharmacy Associations. “I believe that it will be critical that state pharmacy associations receive the pharmacy profession’s support in working with state agencies to ensure access to pharmacist-provided patient care services.”

Watching the states

Many states took a wait-and-see approach to ACA. Now that the elections have made it clear that the law will survive, state governments have decisions to make regarding two key parts of ACA’s expansion of coverage. There’s the option to expand Medicaid in their state, following the Supreme Court’s complicated ruling. There’s also the decision on whether to build a state-based health insurance exchange, to partner with the federal government, or to let the federal government run it.

After the elections, more state governments continue to be controlled by Republicans than by Democrats. “It is anyone’s guess as to how many states will decide to run their own exchange, but some are predicting that fewer than half of the states will,” Snead told Pharmacy Today. “I think there will be a growing number of states that will officially announce that they will be opting out of the Medicaid expansion, as it is viewed by many states as an unfunded mandate.”

Snead added that the number of people enrolled in the Medicaid program is expected to increase regardless of the state’s decision not to expand coverage, because people will enroll through the exchanges and learn they qualify for benefits under the Medicaid program.

Key committees in Congress

Regarding pharmacy and specific election results for Congress, there are a lot of changes and a lot of different scenarios.

APhA works with four main committees: on the House side, the Energy & Commerce Committee and the Ways & Means Committee, including both full committees’ health subcommittees; and on the Senate side, the Finance Committee and the Health, Education, Labor, & Pensions Committee. These committees have jurisdiction over health issues important to pharmacy.

With key Members of Congress gone, including Rep. Pete Stark (D-CA), the top Democrat on the Ways & Means health subcommittee; pharmacy-friendly Members of Congress still on the Hill, such as Sen. Jon Tester (D-MT), who was reelected in a tight race; and new Members of Congress on the way, committee assignments for the 113th Congress have yet to be determined. The underground jockeying for who’s on what committee has likely already begun.

Congress takes on the meningitis outbreak

Reacting to the expanding fungal meningitis outbreak linked to the now-shuttered New England Compounding Center (NECC), Congress introduced a bill and held two hearings last month. During both the pointed House investigative hearing and the Senate hearing with testimony by pharmacy groups, Members of Congress appeared aware that NECC was not a traditional compounding pharmacy.

There is no consensus on whether existing law could have been enforced to prevent the tragedy from happening. But the idea of a fix to what many consider a regulatory gray area—in which NECC was a bad actor and federal and state regulatory agencies may have dropped the ball—appeared to gather steam during the hearings.

The outbreak has resulted in 34 deaths and 490 illnesses in 19 states, CDC reported on November 19 (see page 49). The first identified case of fungal meningitis, due to an epidural injection from contaminated lots of methylprednisolone acetate compounded by NECC, came to CDC’s attention on September 21.

Markey introduces bill

On November 2, Rep. Ed Markey (D-MA) introduced a bill, the Verifying Authority and Legality in Drug (VALID) Compounding Act (H.R. 6584), that aims to strengthen regulatory oversight of compounding pharmacies. His congressional district was home to NECC.

“Compounding pharmacies have been governed by fragmented regulations for too long, leading to the worst public health disaster in recent memory,” Markey said in a November 1 news release announcing the bill.

A letter of endorsement from Gov. Deval Patrick of Massachusetts accompanied the announcement, citing a “regulatory gap” and the need to “strengthen FDA’s oversight.” There was also a letter of endorsement signed by several groups. Pharmacy did not appear on the list of signatures.

Part of the regulatory gap referred to by Deval is that state boards of pharmacy oversee the practice of compounding while FDA has oversight for the medication ingredients used in compounding. Another part is that state boards of pharmacy regulate pharmacies but FDA regulates manufacturers. NECC crossed the line from pharmacy to manufacturing.

As proposed, Markey’s VALID Compounding Act includes provisions to preserve state regulatory authority for traditional small compounding pharmacy activities, ensure that compounding pharmacies operating as drug manufacturers are regulated by FDA as drug manufacturers, require waivers for exceptions, and increase public transparency.

Emotional House hearing

On November 14, the House Energy & Commerce Subcommittee on Oversight and Investigations conducted an investigative hearing, The Fungal Meningitis Outbreak: Could It Have Been Prevented? FDA Commissioner Margaret A. Hamburg, MD, and Massachusetts Department of Public Health Interim Commissioner Lauren Smith, MD, MPH, indicated that they supported the Markey legislation during the 4-hour hearing. Markey serves on the subcommittee.

In her written testimony, Hamburg proposed a risk-based framework in statute that would differentiate between traditional and nontraditional drug compounding, with the latter subject to tougher federal standards.

The emotional hearing took place on Congress’s first day back in session after the elections. While there was consensus in the room on the magnitude of the tragedy, opinion on what went wrong from a regulatory standpoint and what to do moving forward appeared to be somewhat split along party lines. And while both sides of the dais pointed fingers at FDA, the intensity of the grilling of Hamburg also appeared to vary along party lines.

Yet all the emotion was not just for show. Joyce Lovelace, whose husband died as a result of the outbreak, spoke about the “nightmare” being lived by her family and begged the Members of Congress before her to “do something.” Barry Cadden, the President, Co-Owner, and Director of Pharmacy of NECC, who was subpoenaed to appear, repeatedly invoked the Fifth Amendment when it was his turn to speak.

And so attention turned to the regulating agencies, represented by Hamburg and Smith, and to the question of whether a fix to federal law—namely the Food, Drug, and Cosmetic Act, and in particular section 503A—was necessary. Hamburg noted that section 503A of the law exempted pharmacies from FDA jurisdiction, and described a “changing, evolving industry overlaid on top of a fragmented and ambiguous legal framework” caused by a patchwork of regulatory authority and two court cases limiting that authority in different parts of the country. She called for a “seamless system” that clarified state and federal regulatory authority.

Democrats such as Henry Waxman (D-CA) wanted to push “to correct the law … before we leave at the end of this year” for fear that “interest groups are going to gear up to stop this.” But Republicans such as Phil Gingrey (R-GA) appeared reluctant to change existing law, expressing concern about “overreacting and over-regulating compounding pharmacies.” Gingrey noted that he would be very surprised if there weren’t “multiple lawsuits” and “folks serving jail time,” but that NECC was “an absolute crooked operation” and should not be confused with traditional compounding pharmacists.

And while Cliff Stearns (R-FL), Chairman of the subcommittee, said that legislation may not happen during the lame-duck session, Diana DeGette (D-CO), ranking Democrat on the subcommittee, said that “we have a job to clarify the law if there’s not clarity in the law, and we can easily do it.”

Senate’s turn: Pharmacy groups testify

On November 15, the Senate Health, Education, Labor, & Pensions (HELP) Committee held a hearing, Pharmacy Compounding: Implications of the 2012 Meningitis Outbreak.

In testimony, the International Academy of Compounding Pharmacists (IACP) and American Society of Health-System Pharmacists (ASHP) indicated to the HELP Committee that new legislation is needed in the wake of the outbreak. Sen. Tom Harkin (D-IA), HELP Committee Chairman, pledged before adjourning the hearing that the committee “will forge ahead in developing legislation” and expected that “we’ll have something soon next year that we’ll be able to move ahead on and put this sad chapter behind us.”

The 3-hour full committee hearing was a less ferocious affair than its House counterpart the day before. The lists of witnesses at the two hearings were somewhat different. Hamburg and Smith testified at both hearings. But unlike the House, the Senate didn’t bother to subpoena Cadden.

And while the House heard from the family member of a victim, the Senate instead picked additional witnesses from public health organizations including CDC and the Tennessee Department of Health, and pharmacy groups including IACP and ASHP.

“The tragedy of the New England Compounding Center is quite simple to us as an organization,” IACP Executive Vice President and CEO David G. Miller, BSPharm, said in his opening statement. “They were a pharmacy that [was] essentially hiding behind that license, and in reality acting as an illegal drug manufacturer. Plain and simple, what NECC did was violate the trust that every member of the public has specifically in their local pharmacy [and] tainted the reputation of pharmacists throughout the country.”

Miller blamed the Massachusetts state board of pharmacy and FDA, and questioned why physicians and hospitals had purchased medications from NECC instead of from a local, accredited, compounding pharmacy.

Harkin asked Miller for the features that distinguished NECC from a legitimate large-scale compounding pharmacy, in addition to volume, interstate shipment, and prescription records.

“I am a pharmacist,” Miller answered. “I tend to think black and white. … The difference between NECC and a compounding pharmacy was that they weren’t filling prescriptions; they were bulk manufacturing and selling.” Miller said that any inspector of pharmacies could determine the difference based on the pharmacy’s paperwork.

Sen. Pat Roberts (R-KS) referred to the question of industry pushback, and asked Miller to speak to whether organized pharmacy would work with Congress.

“As a pharmacist and as an organization representing pharmacists, the worst possible thing has happened,” Miller said, citing deaths and illnesses. “Right now, the focus must be on working collaboratively. … You have my commitment on that.”

Kasey K. Thompson, PharmD, Vice President, Office of Policy, Planning, and Communications, ASHP, noted that the distinction between compounding and manufacturing “appears to be a regulatory gray area” with obvious implications. Thompson said ASHP had developed policy recommendations, that there may be a need for a special category regulated by FDA, and that FDA must be provided with the resources it needs.

The question of sufficient resources was one thread of many in the Senate hearing.

APhA activity

APhA sent a letter dated November 1 to the Senate HELP Committee regarding appropriate regulation of pharmacy compounding. The 14-page letter supported increased resources for state boards of pharmacy and FDA to enforce existing laws.

While the letter described 2008 Association policies that address the differences between compounding and manufacturing, the majority of the letter consisted of responses to questions posed by the HELP Committee. In response to a question, APhA wrote, “Clear and existing regulations were not invoked and enforcement options may not have been pursued.”

Eleven pharmacy groups, including APhA, released a November 12 statement, Pharmacists’ Commitment to Patient Safety and Compounding Quality.

APhA has met with Members of Congress, their staff, and the relevant committees to discuss what happened, what compounding is, why it is important, and potential solutions. now has a new section called Just the Facts on Compounding that provides FAQs (see page 50), APhA news coverage, and other resources on compounding.