Empower Pharm. v. Iowa Bd. of Pharm.

• Decision Date: 08 February 2023
• Docket Number: 22-0052
• Parties: EMPOWER PHARMACY, Petitioner-Appellant, v. IOWA BOARD OF PHARMACY, Respondent-Appellee.
• Court: Iowa Court of Appeals

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EMPOWER PHARMACY, Petitioner-Appellant, v. IOWA BOARD OF PHARMACY, Respondent-Appellee.

No. 22-0052

Court of Appeals of Iowa

February 8, 2023

Appeal from the Iowa District Court for Polk County, Celene Gogerty Judge.

A pharmacy appeals the denial of its petition for judicial review challenging administrative action of the Iowa Board of Pharmacy.AFFIRMED.

David L. Brown and Alexander E. Wonio of Hansen, McClintock &amp Riley, Des Moines, for appellant.

Brenna Bird, Attorney General, and Laura Steffensmeier, Assistant Attorney General, for appellee.

Heard by Bower, C.J., and Badding and Buller, JJ.

BADDING, JUDGE

Empower Pharmacy appeals the denial of its petition for judicial review that challenged adverse administrative action by the Iowa Board of Pharmacy for a violation of Iowa Administrative Code rule 657-20.12, governing compound preparations that are essentially copies of approved drugs.Empower argues the district court erred in determining: (1) the rule is not unconstitutionally vague, (2) it was afforded due process in the administrative proceeding, (3) the Board's decision was supported by substantial evidence, and (4) the sanction levied was appropriate.We affirm.

I.Background Facts and Proceedings

To understand the relatively uncomplicated issues in this disciplinary licensing proceeding, we must first wade into the more complicated world of drug compounding.In pharmacist-speak, "[d]rug compounding is a process by which a pharmacist or doctor combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient."Thompson v. W. States Med Ctr., 535 U.S. 357, 360-61(2002);accordIowa Admin. Code r. 657-20.2("'Compounding' means the combining, mixing, diluting, pooling, flavoring, or otherwise altering of a drug or bulk drug substance to create a drug.").According to guidance from the Food and Drug Administration (FDA) contained in this agency record,

Compounded drug products serve an important role for patients whose clinical needs cannot be met by an FDA-approved drug product, such as a patient who has an allergy and needs a medication to be made without a certain dye, an elderly patient who cannot swallow a pill and needs a medicine in a liquid form that is not otherwise available, or a child who needs a drug in a strength that is lower than that of the commercially available product.

That said, the same guidance recognizes compounded drugs "can also pose a higher risk to patients" because those drugs "have not undergone FDA premarket review for safety, effectiveness, and quality."

State and federal regulation of drug compounding has waxed and waned over the years until an incident in 2012, "in which a drug compounding center 'produced contaminated injections that caused a meningitis outbreak, killing more than 60 people and infecting hundreds more.'"Hope Med. Enters. Inc. v. Fagron Compounding Servs., LLC, No. 2:19-cv-07748-CAS(PLAx), 2021 WL 4963516, at *4(C.D. Cal.Oct. 26, 2021)(citation omitted).To improve the "overall quality and safety of compounded drugs following" that incident, Congress passed new legislation in 2013 creating federal regulatory power over compounding firms, consisting of amendments to section 503A(applying to pharmacies) and creating section 503B(applying to a new category of drug makers called outsourcing facilities) of the Food, Drug, and Cosmetic Act.Id. at *4-6.Iowa has since enacted its own regulations on compounding, modeled after federal regulations and guidance, which Empower Pharmacy (Empower) is alleged to have violated.

The regulation at issue-Iowa Administrative Code rule 657-20.12- became effective on September 6, 2017.^[1] It limits "compound preparations that are essentially copies of approved drugs" unless "the compounded preparation is changed to produce for an individual patient a clinically significant difference to meet a medical need as determined and authorized by the prescriber."^[2]Iowa Admin. Code r. 657-20.12.Rule 657-20.12(1) sets forth factors the Iowa Board of Pharmacy(Board) may consider "as an indication that a compounded preparation is essentially a copy of an approved drug."If the Board determines the compounded preparation is essentially a copy, the prescription for the preparation "shall clearly indicate the relevant change and the significant clinical difference produced for the patient."Id.r. 657-20.12(2).

Empower, whose headquarters are in Texas, is licensed as a non-resident pharmacy in Iowa and several other states, including Oklahoma.^[3] In June 2018, Empower consented to the imposition of a $37,200 civil penalty, plus two years of probation, by the Oklahoma Board of Pharmacy for its compounding of human chorionic gonadotropin (HCG).^[4] The agreed findings of fact in the order imposing that penalty stated Empower "compounded . . . products that the [Oklahoma] Board alleges are commercially available or essentially copies of commercially available FDA approved drug products under Oklahoma law," namely prescriptions of HCG in 11,000 units per vial and 5,000 units per vial.According to the order, "HCG injection in 5,000 units per vial is commercially available" and "HCG injection in 11,000 units per vial is essentially a copy of the HCG 10,000 units/vial."The order, which deferred disciplinary action against Empower pending completion of probation, noted Empower "neither admitted nor denied violating" applicable Oklahoma law.

Empower immediately notified the Board of the agreed order in Oklahoma although, in doing so, it asserted that its conduct complied with FDA guidance and inspections.Even so, Empower told the Board that once it was "made aware that Oklahoma considered the products essential copies, Empower immediately ceased compounding them."Upon receiving this notification from Empower, an investigation was opened by Board compliance officer and licensed pharmacist, Sue Mears.

During her investigation, Mears reviewed dispensing records from September 6, 2017, the date rule 657-20.12 became effective, through the end of calendar year 2017.She learned that during that timeframe, Empower dispensed the same formulations of HCG that were the subject of the Oklahoma order-5000 and 11,000 units per vial-to twenty-two Iowa patients.While Empower supposedly ceased compounding these formulations after the Oklahoma non-disciplinary action, it continued to dispense "slightly modified" formulations of HCG to sixteen of those twenty-two patients in Iowa throughout 2018.Specifically, "[p]atients previously receiving an HCG 5,000 IU formulation instead received an HCG 6,000 IU formulation in 2018.Likewise, patients previously receiving an HCG 11,000 IU formulation instead began receiving an HCG 12,000 IU formulation in 2018."

In late 2018 and early 2019, the Board requested prescription records from Empower.In reviewing the first batch of information, Mears concluded there were "nine prescriptions which could potentially be considered essentially copies of approved products."Not one of those prescriptions, according to Mears, "contained patient-specific documentation for why the compounded medication was being prescribed when an FDA-approved product would have been available," which "indicate[s] the pharmacy does not routinely ensure such patient-specific documentation is provided on such prescriptions as required by board rules."Exhibit E of the investigative report shows that four of these prescriptions were for HCG.The bottom of the first prescription provides the following language:

The compounded medications listed are made at the request of the prescribing practitioner whose signature appears above due to the medical need of a specific patient and the preparation is prescribed because the practitioner has determined that the preparation will produce a clinically significant therapeutic response compared to a commercially^[5]

The third prescription provides a similar notice; the second and fourth do not.

The Board requested a second batch of prescription records to assess Empower's "dispensing of HCG formulation following the Oklahoma order."This included records for eight of the sixteen patients who continued to receive HCG from Empower in 2018 in slightly different formulations.A review of the records disclosed that "none of the prescriptions provided patient-specific documentation for the need for the compounded formulation instead of an FDA-approved formulation."Exhibits F and G of the investigative report show this batch of records included sixteen prescriptions for HCG, eight of which included a boilerplate notification on a clinically significant difference, and eight of which included no such notification.

In February 2019, Mears advised Empower of what her investigation had disclosed and requested the pharmacy

to provide a response to [its] lack of patient-specific documentation on each prescription for a compounded preparation which is essentially a copy of an approved drug as well as the pharmacy's reason or justification in asserting that it has discontinued production of a formulation when, in reality, it has continued production of essentially the same formulation . . . just in a different volume.

In its response, Empower stated it had not been disciplined for its compounding by any other states and the compounds complied with FDA guidance and inspections.It then asserted that it

does not believe that its compounded formulations are in fact "essentially copies" or "copies" of approved or otherwise commercially available drugs.Specifically, the active pharmaceutical ingredients in the products that Empower compounds do not have the same, similar or easily substitutable dosage strength as the approved drug product that is

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