Document Type

Article

Publication Date

5-4-2024

Abstract

The United States is currently experiencing its worst drug shortage in over a decade—more than 300 drugs are in shortage, leaving patients without access to lifesaving medicines. Luckily, drug manufacturers are not the only source of drugs. Through drug compounding, licensed pharmacists can create medications that are not commercially available due to discontinuations, shortages, or other supply chain issues. The recent slew of severe drug shortages has forced patients and physicians to rely on compounding pharmacies to make critical drugs for patients—particularly vulnerable patient populations, including pediatric, disabled, and transgender patients—such as mixed amphetamine salts (sold as Adderall), semaglutide (sold as Ozempic and Wegovy) and tirzepatide (sold as Mounjaro and Zepbound), and injectable estrogen (sold as Depo-Estradiol). However, a corresponding uptick in litigation brought by innovator drug companies against compounding pharmacies alleging intellectual property (IP) infringement and unfair competition threatens the ability of compounding pharmacies to meet critical patient needs during such shortages. Compounding pharmacies serve smaller, local groups of patients and physicians and are less capable of withstanding the threats and costs of litigation. Without legal clarity about these risks, patients face real harms.

Drugs that are in shortage must be compounded, or else patients risk forgoing essential healthcare. While the U.S. Food and Drug Administration (FDA) permits such compounding during shortages, the Patent Act and Lanham Act do not exempt patent and trademark infringement by compounders. This conflict between FDA and IP law creates an incentive for drug manufacturers to deter compounding through the threat of IP litigation. This Article deconstructs the undertheorized IP and unfair competition risks of drug compounding in three ways. It documents the FDA’s authority to regulate compounding and highlights vulnerabilities created by recent and proposed regulations. It also analyzes ongoing litigation against compounding pharmacies for patent and trademark infringement, as well as allegations of unfair competition. Finally, it proposes two practical mechanisms to curtail these liabilities: a patent use exception that creates statutory immunity for pharmacies compounding patented drugs during active shortages, and widespread adoption of name suffixes that indicate the origin of compounded drugs—similar to nonproprietary name suffixes that are used to distinguish biosimilar products from a reference biologic. Both mechanisms would address the conflict between the FDA and IP regimes that affect compounding while protecting patients’ access to life-saving healthcare by promoting the availability of safe, effective, and high-quality drugs during shortages.

Publication Citation

Forthcoming in the Washington University Law Review, Vol. 102.

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