IACP Law Library-Compounding for Office Use Available for Purchase

As part of our ongoing development of tools, programs and materials that help our members improve their professional and business practice, IACP is launching its IACP Law Library. As conceived, this law library will provide pharmacists with a comprehensive analysis of state pharmacy law and regulation that affect many day-to-day decisions.

Our first installment in the new IACP Law Library—Compounding for Office-Use is now available for purchase! Click here for purchase information.

Overview of Results
The majority of the states (42) allows pharmacies to sell any non-controlled prescription drug and compounded drugs to practitioners for office use. Six states specifically prohibit that activity, and two states appear to be silent. Silent means the statutes and regulations do not specifically say whether it’s allowed. As our phone calls to the states Boards revealed, silent does not necessarily mean it is not allowed. Many of the states Boards confirmed that although the statutes or regulations don't say office use is specifically permitted, the Boards allow by broad interpretation, board policy, or by common practice covered by a pharmacy’s license the provision of office-use prescriptions.
For the most part, those states that do specifically prohibit office-use prescriptions provide for a “sales” process instead and require that in lieu of a prescription, orders from practitioners must be placed via an invoice. Several of these states limit the amount of product that a pharmacy can sell to a practitioner for office use to either 5% of the total annual sales or 5% of the total dosages in a consecutive 12-month period. This five percent figure appears in many of the states controlled substances laws and is being applied by the Boards to sales for office use in general.
The percentage limitation is from the federal DEA Controlled Substances Act and rules. The five percent language was placed into some of the states PDMA laws – which deal with wholesaler licensure -- where the allowing of sales for office use also is found in an exemption provided in the definition of wholesale drug distribution. In these states, sales to practitioners are not wholesale drug distribution and do not require a wholesaler license. Many of the states providing the exemption limit the sales to 5%. If sales exceed 5%, then a pharmacy would be required to obtain a wholesale drug distributor license.
Unanswered Questions
Even the best research has limitations. Three states did not respond to our numerous phone calls and emails for clarifications and additional information. They are: Georgia, Illinois, and New Jersey.

• Based on our review of the statutes and regulations, Georgia allows the sale to practitioners for legend drugs but is not clear as to whether such is allowed for compounded products.
• Illinois and New Jersey allow the sale of compounded products for office use but appear to be silent as to whether legend drugs may be sold to a practitioner for office use.

IACP members doing business in those states should confer with the Board of Pharmacy if they have any questions.

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