§201.120. Prescription chemicals and other prescription components. — Inbound Citations

A drug in a bulk package, except tablets, capsules, or other dosage unit forms, intended for processing, repacking, or use in the manufacture of another drug shall be exempt from section 502(f)(1) of the act if its label bears the statement “Caution: For manufacturing, processing, or repacking”; and if in substantially all dosage forms in which it may be dispensed it is subject to section 503(b)(1) of the act, the statement “Rx only”, or if in substantially all dosage forms in which it may be dispensed it is subject to section 503(f)(1) of the act, the statement “Caution: Federal law restricts this drug to use by or on the order of a licensed veterinarian”. This exemption and the exemption under § 201.120 may be claimed for the same article. However, the exemption shall not apply to a substance intended for a use in manufacture, processing, or repacking which causes the finished article to be a new drug or new animal drug, unless:

(b) The exemptions conferred by §§ 201.117, 201.119, 201.120, 201.122, and 201.125 shall continue until the drugs are used for the purposes for which they are exempted, or until they are relabeled to comply with section 502(f)(1) of the act. If, however, the drug is converted, compounded, or manufactured into a dosage form limited to prescription dispensing, no exemption shall thereafter apply to the article unless the dosage form is labeled as required by section 503(b) and §§ 201.100 or 201.105.

The words intended uses or words of similar import in §§ 201.5, 201.115, 201.117, 201.119, 201.120, 201.122, and 1100.5 of this chapter refer to the objective intent of the persons legally responsible for the labeling of an article (or their representatives). The intent may be shown by such persons' expressions, the design or composition of the article, or by the circumstances surrounding the distribution of the article. This objective intent may, for example, be shown by labeling claims, advertising matter, or oral or written statements by such persons or their representatives. Objective intent may be shown, for example, by circumstances in which the article is, with the knowledge of such persons or their representatives, offered or used for a purpose for which it is neither labeled nor advertised; provided, however, that a firm would not be regarded as intending an unapproved new use for an approved drug based solely on that firm's knowledge that such drug was being prescribed or used by health care providers for such use. The intended uses of an article may change after it has been introduced into interstate commerce by its manufacturer. If, for example, a packer, distributor, or seller intends an article for different uses than those intended by the person from whom he or she received the article, such packer, distributor, or seller is required to supply adequate labeling in accordance with the new intended uses.

(iii) Advertisements of prescription-compounding drugs that promote sale of a drug for use as a prescription chemical or other compound for use by registered pharmacists in compounding prescriptions if the drug otherwise complies with the conditions for the labeling exemption contained in § 201.120 and the advertisement contains no claims for the therapeutic safety or effectiveness of the drug.

(2) Potassium permanganate labeled for use as a prescription component in human drugs under the exemption provided in § 201.120 of this chapter or labeled for manufacturing use under the exemption provided in § 201.122 of this chapter will be regarded as misbranded unless the label bears the statement, “Rx only.”