A dangerous court decision

A major decision by a Fifth Circuit Appeals Court judge could have huge implications for pharmacy compounding. It’s not hyperbole to say that the ruling in Zyla Life Sciences v. Wells Pharma is profoundly troubling and — if enforced to the extreme — could eliminate compounding in some states. 

The background: Zyla Life Sciences sells FDA-approved indomethacin suppositories; Wells Pharma of Houston sells compounded indomethacin suppositories. Zyla sued Wells, claiming that Texas consumer-protection law (like that in five other states) prohibited Wells from dispensing drugs that are not FDA-approved because it’s considered unfair competition. (That’s right: Six states have laws on their books that could be read as prohibiting pharmacy compounding.)

Normally the suit would be dismissed — the courts have already ruled that those particular state laws are pre-empted by the FD&C Act, which does allow the dispensing of compounded drugs; only the federal government (in this case the FDA) can enforce FD&C.

But last week a Fifth Circuit Federal Appeals Court judge ruled that, despite that existing case law, Zyla could sue under the state law, effectively allowing states in the Fifth Circuit to enforce FD&C. Thus, Wells Pharma would have to prove at the state level (in trial court) that it was in compliance with Section 503B of the FD&C Act. 

If that’s as clear as mud, give our summary of the case a read.

As our attorneys at Boesen & Snow implied in this 3-page analysis APC requested, there are some leaps of logic in the ruling, not to mention how much it deviates from established case law. But the decision is in … unless the Supreme Court ends up overturning it. So what does that mean for now? The attorneys summed it up thusly:

Compounding pharmacies and outsourcing facilities are still protected by Sections 503a and 503b of the FDCA. However, the Zyla decision means compounders may face a heightened risk of a civil lawsuit by a pharmaceutical manufacturer, especially if the lawsuit can be brought in Texas, Louisiana, or Mississippi — the jurisdiction of the 5th Circuit. In such a lawsuit, the compounder will have to prove that it is compliant with the exceptions provided by Sections 503a and 503b.

This is the kind of case we’ll be following closely as its implication spreads.