## Facts

- Ten licensed pharmacies specialized in compounding prescription drugs for human and animal patients.
- The pharmacies compounded medications by combining or altering ingredients pursuant to prescriber orders to meet individual patient needs, including when commercially available drugs were unsuitable.
- The pharmacies sued federal officials responsible for enforcing the Federal Food, Drug, and Cosmetic Act (FDCA), seeking declaratory and injunctive relief allowing compounding without obtaining premarket approval required for “new drugs.”
- The dispute centered on whether compounded preparations fall within the FDCA’s “new drug” definition and, if so, whether pharmacies are exempt from premarket approval requirements.
- The district court granted relief that substantially limited the FDA’s authority over compounded drugs and adopted a broad view of a pharmacy-based exemption.
- The federal government appealed, challenging the scope of the district court’s constraints on FDA regulation and enforcement concerning compounding.

## Issues

1. Whether compounded drugs may qualify as “new drugs” under the FDCA and therefore be subject to premarket approval requirements.
2. Whether the FDCA contains a broad, implied “pharmacy exemption” for compounded prescriptions dispensed by licensed pharmacies.
3. Whether FDCA § 503A creates a limited statutory safe harbor for certain compounded drugs, and how that safe harbor operates after partial invalidation of § 503A’s advertising provisions in prior Supreme Court litigation.
4. Whether the district court improperly restricted FDA authority and enforcement discretion by judicially distinguishing “traditional” compounding from manufacturing beyond the statute’s text.

## Decision

- The Fifth Circuit vacated the district court’s judgment in substantial part and remanded.
- The court held that compounded drugs can fall within the FDCA’s definition of “new drug,” and the FDCA contains no explicit categorical exception for compounded drugs prepared by pharmacies.
- The court rejected a broad, implied “pharmacy exemption” that would remove compounded prescriptions from the FDCA’s new drug framework.
- The court recognized that the FDCA, as amended, allows certain compounded drugs to avoid the new drug approval process only in statutorily specified circumstances, principally under § 503A.
- The court concluded that the district court’s broader limits on FDA authority were inconsistent with the statute and required reconsideration on remand under the correct statutory framework.

## Legal Principles

- A compounded drug that meets the FDCA’s “new drug” definition is subject to premarket approval unless an explicit statutory exception applies.
- Historical FDA enforcement discretion and state regulation of pharmacy practice do not create a statutory exemption from federal new drug requirements.
- Any exemption for compounded drugs from premarket approval arises from the FDCA’s text (including § 503A) and applies only when the statute’s detailed conditions are satisfied.
- Courts may not create nonstatutory safe harbors that limit FDA enforcement authority by imposing extra-textual distinctions between compounding and manufacturing.

## Conclusion

The Fifth Circuit held that compounded preparations are not categorically exempt from the FDCA’s new drug approval regime; only narrowly defined statutory exceptions, chiefly § 503A, can permit compounding without premarket approval, and the district court’s broader restrictions on FDA authority were largely vacated and remanded for reconsideration under those limits.


Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383 (5th Cir. 2008)