01-344 Thompson v. Western States Medical Center

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The Government asserts that three substantial interests underlie the FDAMA: (1) preserving the effectiveness and integrity of the FDCA’s new drug approval process and the protection of the public health it provides; (2) preserving the availability of compounded drugs for patients who, for particularized medical reasons, cannot use commercially available products approved by the FDA; and (3) achieving the proper balance between those two competing interests. Preserving the new drug approval process is clearly an important governmental interest, as is permitting the continuation of the practice of compounding so that patients with particular needs may obtain medications suited to those needs. Because pharmacists do not make enough money from small-scale compounding to make safety and efficacy testing of their compounded drugs economically feasible, however, it would not make sense to require compounded drugs created to meet the unique needs of individual patients to undergo the entire new drug approval process. The Government therefore needs to be able to draw a line between small-scale compounding and large-scale drug manufacturing. The Government argues that the FDAMA’s speech-related provisions provide just such a line: As long as pharmacists do not advertise particular compounded drugs, they may sell compounded drugs without first undergoing safety and efficacy testing and obtaining FDA approval. However, even assuming that the FDAMA’s prohibition on advertising compounded drugs “directly advance[s]” the Government’s asserted interests, the Government has failed to demonstrate that the speech restrictions are “not more extensive than is necessary to serve [those] interest[s].” Central Hudson, supra, at 566. If the Government can achieve its interests in a manner that does not restrict commercial speech, or that restricts less speech, the Government must do so. E.g., Rubin v. Coors Brewing Co., 514 U.S. 476, 490-491. Several non-speech-related means of drawing a line between compounding and large-scale manufacturing might be possible here. For example, the Government could ban the use of commercial scale manufacturing or testing equipment in compounding drug products, prohibit pharmacists from compounding more drugs in anticipation of receiving prescriptions than in response to prescriptions already received, or prohibit them from offering compounded drugs at wholesale to other state licensed persons or commercial entities for resale. The Government has not offered any reason why such possibilities, alone or in combination, would be insufficient to prevent compounding from occurring on such a scale as to undermine the new drug approval process.”

238 F.3d 1090, affirmed.

Local effect:

The Seventh Circuit has not considered the issue.

O’Connor, J.; Thomas, J., concurring; Breyer, J., dissenting.