The pharmacy compounding industry was changed forever after the 2012 fungal meningitis outbreak attributed to the New England Compounding Center. In an attempt to prevent such a catastrophe from happening again, the Drug Quality and Security Act (DQSA), which increases FDA oversight of some types of compounding, was signed into law on November 27, 2013. The law created the outsourcing facility category under a new section 503B of the Food, Drug & Cosmetic (FD&C) Act.
The law defines an outsourcing facility as a facility that is “engaged in the compounding of sterile drugs; has elected to register as an outsourcing facility; and complies with all of the requirements of section 503B.” Registration as an outsourcing facility is voluntary, but it carries an annual fee north of $15,000 for each facility registered and regulatory consequences.
According to James Ruble, PharmD, JD, Associate Professor of Pharmacotherapy at the University of Utah College of Pharmacy, nearly 2 years after the law was enacted, determining the benefits of registering as an outsourcing facility is still a “work in progress.” He explained to Pharmacy Today that, given the complexity of the legislation, “it’s taking a long time for pharmacy companies to grasp what it is they need to do to comply, and what benefit it is to them and their business.”
Before choosing to register as an outsourcing facility, each company must look at its business structure and evaluate the positives and negatives of registration, noted Ruble. “Much like medications are customized for patients, the decision whether or not to go this route is very much an individual decision based on the [company’s] model and business plan,” he said.
Compounders who register as outsourcing facilities agree that they will be overseen primarily by FDA, rather than by state boards of pharmacy. After registration, an outsourcing facility’s compounded products may be entitled to exemptions from certain provisions of the FD&C Act that apply to commercial drug manufacturers, including the new drug approval requirements and the requirement to label drug products with adequate directions for use, according to a February FDA news release.
As of July 24, FDA’s website showed that a total of 55 companies have registered as outsourcing facilities: 54 domestic and 1 outside of the United States. “The list seems to be growing more quickly,” said Ruble. “But I wouldn’t say it’s exploding by any means.”
Although 54 companies may sound like a lot, many more may be eligible to register. “We don’t know how many there are and there is no way to track it because there is no federal pharmacy licensing requirement,” said Ruble. He added that pharmacy licensing is handled at the state level.
Only time will tell if more companies will register with FDA as outsourcing facilities. “It’s a balancing act, where decisions are a balance between the cost associated with delivering the care, the access patients have to care, and the quality of care that is provided,” said Ruble. “Compounding sits in the intersection of those three circles.”
FDA is still finalizing the compounding framework—so time, along with regulatory changes, may result in shifts in the number of companies that register as outsourcing facilities.
In July, APhA submitted comments to FDA regarding the draft Memorandum of Understanding (MOU) governing interstate distribution of compounded medications.
“The draft MOU raises serious concerns about patient and provider access to vital medications, which could result in real health consequences for many patients,” said Jillanne Schulte, JD, Director of Regulatory Affairs at APhA. “We’re hopeful that FDA will continue to work closely with stakeholders to revise the MOU in a way that will not only safeguard patient access to these necessary medications, but also focus oversight efforts on activities that present greater risk to patient health and safety.”
In its comments, APhA reiterated ongoing concerns related to Drug Quality and Security Act implementation, including what appears to be a shift to prohibiting compounding products for office use. APhA also noted that the MOU’s arbitrary percentage limitations on interstate distribution (5% for a non-MOU state and 30% for an MOU state) will seriously disrupt patient and provider access to medications—an outcome that will be further exacerbated if compounding for office use is prohibited.
To create a safe compounding framework that doesn’t compromise patient care, APhA suggested that FDA define interstate “distribution” to completely exclude dispensing of compounded products pursuant to a patient-specific prescription.
Given that FDA received more 3,000 comments on the MOU, it may be a while before the FDA takes final action on the document.