Increased Oversight Of Compounding Pharmacies

Contributed by Natalie Blazer

You may have read our extensive coverage of the deadly meningitis outbreak that struck in the fall of 2012: with 64 deaths and over 700 cases reported, it has been called the worst public health crisis in decades.  (In case you missed it, you can catch up here).  The outbreak was ultimately traced to a tainted steroid made in a compounding pharmacy in Massachusetts, which immediately drew attention to the regulation–or lack thereof–of compounding pharmacies.  State regulators and the Food and Drug Administration were harshly criticized for not doing more to prevent the tainted compounded drugs from being shipped in mass quantities across state lines. At the time, the FDA maintained that it had limited resources to effectively oversee compounders and that Congressional authority was required.

Just over a year later, the FDA is getting what it asked for–sort of. Last week, President Obama signed into law a bill that clarifies the FDA’s authority over compounding pharmacies and creates a uniform national standard for drug supply chain security. Known as the Drug Quality and Security Act, the new law defines the FDA’s role in the oversight of large-scale compounding facilities. The law also contains “track-and-trace” provisions for the drug supply chain that would replace state laws with a uniform standard.

However, state-level regulation is not being replaced anytime soon, and in fact most pharmacies will be unaffected by the compounding bill. This is because the law distinguishes the compounders engaged in traditional pharmacy practice from those making large volumes of compounded drugs without individual prescriptions. Compounders who wish to practice outside the scope of traditional pharmacy practice can register voluntarily as outsourcing facilities, but those who choose to remain traditional pharmacies will continue to be primarily regulated by state boards of pharmacy, as they are now. Because of this distinction, some question whether the bill really will improve the safety of large-scale compounded drugs, since it only requires voluntary registration with the FDA. Of course, only those compounders who register with the FDA will be subject to the FDA’s enhanced oversight under the new law.

Perhaps in response to such concerns, the FDA announced this week that it is urging hospitals and doctors to work with FDA-registered compounding facilities. By encouraging compounders to voluntarily register, the FDA hopes to increase the number of facilities that will then be subject to the FDA’s enhanced oversight program. Given the criticism it received in the wake of the 2012 meningitis outbreak, the FDA likely wants to be seen as taking its oversight responsibilities very seriously.

In conjunction with these efforts, the FDA has released three draft guidances over the last few days clarifying implementation of the new law. The first stipulates that a compounded drug can be exempt from various provisions if certain conditions are met. These include compounding a drug for an individual based on a valid prescription from a healthcare provider. The drug must also be made by a licensed pharmacist in a licensed facility or by a licensed physician, among other conditions.

The second guidance addresses the requirements of registering a compounding facility with the FDA. Registered outsourcing facilities will be inspected by the FDA and must comply with other provisions of the Food, Drug and Cosmetic Act, such as current good manufacturing practice requirements. Compounders who do not register with the FDA as outsourcing facilities are subject to regulation as conventional drug manufacturers. Traditional compounders that operate within state lines, which includes compounding activity in hospitals, will still be regulated by state boards of pharmacy.

The third guidance requires compounders to submit a list of all drugs compounded during a six-month period and include such information as active ingredient, number of units produced, and dosage form, among other things.

To be sure, the new law and the FDA’s proactive efforts to step up its oversight are steps toward gaining stricter control over compounding pharmacies. While the bill is not as comprehensive as some in the industry may have hoped, the FDA supports the bill and says that it will help regulate compounders in the future. FDA Commissioner Margaret Hamburg clarified that the bill’s concern is with very large volume drug compounders shipping high-risk products, such as sterile injectables, across state lines–not with compounding in traditional “mom and pop” pharmacies. On the other hand, it is exactly these high-volume compounders that are supplying our nation’s hospitals and clinics with drugs–and the ones that are subject to only “voluntary” registration. So the question is, can the FDA close this regulatory gap by encouraging providers to work with registered facilities? If facilities do in fact register, will the FDA’s new oversight program be able to effectively prevent another public health crisis? We will continue to monitor implementation of the legislation and what impact it has on the industry.