Now That We Have DQSA, What s Next For Pharmacy Compounding? AHLA Manuscript
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1 Now That We Have DQSA, What s Next For Pharmacy Compounding? AHLA Manuscript Lee H. Rosebush, PharmD, JD, MBA Partner Baker & Hostetler LLP Washington, DC lrosebush@bakerlaw.com Francis B. Palumbo, PhD, JD Professor and Executive Director University of Maryland School of Pharmacy Center on Drugs & Public Policy Baltimore, Maryland fpalumbo@rx.umaryland.edu C:\Users\pathomas\Desktop\Now That We Have DQSA What_s Next for Pharmacy Compounding--AHLA Manuscr...docx
2 I. History of Pharmacy Compounding a. What is Pharmacy Compounding? i. Generally, compounding is a practice in which a licensed pharmacist, a licensed physician, or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. 1 ii. This includes the combination of two or more drugs. It often happens that compounding is necessary because a drug currently on the market is not in the appropriate formulation to meet the patient s needs (e.g., the patient has an allergy to the FDA-approved drug on the market. Compounded drugs products are not FDA-approved. 2 b. How is Compounding Regulated (State Boards of Pharmacy v. FDA)? i. Historically, most prescriptions were compounded, even up to the time of the passage of the 1938 Food, Drug and Cosmetic Act. States and state boards of pharmacy were traditionally responsible for the regulation and oversight of compounded products. ii. FDA became interested in regulated drugs over time, and first issued compounding guidance in the 1990s. In 1992, FDA issued compliance policy guide ( CPG ) (later renumbered as ). 3 The CPG included specific requirements that pharmacists must meet when compounding, including addressing issues of licensure, the need for a valid prescription, use of bulk substances and advertising. 1 FDA, Compounding and the FDA: Questions and Answers, 2 Id. 3 Guidance for FDA Staff and Industry, Compliance Policy Guides Manual, Sec Pharmacy Compounding (May 2002), available at 1
3 This CGP was withdrawn and made obsolete on December 4, 2013 with passage of the Drug Quality and Security Act ( DQSA ). 4 iii. In 1997 Congress enacted the Food Drug Administration Modernization Act ( FDAMA ) which created section 503A of the Federal Food Drug and Cosmetic Act ( FFDCA ) and (1) acknowledged FDA's right to regulate pharmacy compounding, (2) created an exemption for compounding products that are compounded by pharmacies meeting specific standards, and (3) put in place marketing prohibitions for compounding pharmacies. 5 Marketing prohibitions included prohibitions on soliciting prescriptions and advertising. iv. FDAMA was challenged in court in Thompson v. Western States Medical Center. 6 Compounding pharmacies challenged FDAMA on the premise that is placed an undue burden on free speech in violation of the First Amendment. Specially, compounders argued that the marketing prohibitions went too far. Although the Ninth Circuit held the statute was invalid, the Supreme Court did not rule on the invalidity of the statute and only held that the marketing prohibitions were an undue burden. This decision led FDA to issue a new CPG in v. FDAMA was again challenged by Medical Center Pharmacy v. Mukasey which reached the 5 th Circuit in The 5 th Circuit held that certain compounded products are exempt from certain requirement under the FFDCA by acknowledging FDAMA, but that compounded products are new drugs under the 4 78 Fed. Reg (Dec. 4, 2013). 5 FFDCA Section 503A. 6 Thompson v. Western States Medical Center, 535 U.S. 357 (2002). 7 See CPG, supra note 3. 8 Medical Center Pharmacy v. Mukasey, 536 F.3d 383 (5 th Cir. 2008). 2
4 law. 9 The decision by the 5 th Circuit led to a circuit split with the 9 th Circuit. The 9 th Circuit held FDAMA invalid, while the 5 th Circuit held the statute valid, but invalidated the marketing provisions. Consequently, compounders in the 9 th Circuit (California) faced different federal standards than compounders in the 5 th Circuit (Louisiana). c. The events leading up to DQSA, the New England Compounding Center. i. In 2012, the New England Compounding Center ( NECC ) compounded and shipped approximately 17,000 vials of a sterile injectable steroid for injection into the spines of pain patients. 10 NECC held a pharmacy license in the state of Massachusetts. 11 The vials shipped were contaminated with a fungus Exserhilum rostratum mostly found in soil and in plants. This fungus led to fungal meningitis in the patients that received the steroid injections. According to the CDC, the injections led to 64 deaths and infections in almost 700 people. As a result, in October 2012, NECC recalled all products compounded in and distributed from Framingham, Massachusetts and the Massachusetts Board of Pharmacy suspended NECC s pharmacy license, which was later revoked. 12 ii. The events involving NECC led to a significant amount of confusion over which regulatory body had responsibility over NECC, and whether FDA properly had jurisdiction. This was despite the fact that Wedgewood Village Pharmacy v. US 13 allowed FDA to inspect pharmacies for purposes of determining whether a 9 Id. 10 Centers for Disease Control and Protection, Multistate Outbreak of Fungal Meningitis and Other Infections, (last updated Oct. 23, 2013). 11 Massachusetts Health and Human Services, Board of Registration on Pharmacy Report (Oct. 23, 2012), available at 12 Id. 13 Wedgewood Village Pharmacy v. US, 421 F.3d 263 (3 rd Circ. 2005). 3
5 pharmacy was manufacturing, and that NECC had previously received a warning letter from FDA on another matter. 14 Warning letters are used by FDA as an enforcement mechanism. In addition, the Massachusetts State Board of Pharmacy did not inspect NECC. This led to national pressure from both the media and Congress for FDA to acknowledge authority over these entities while FDA waffled and argued that the split by the 5 th and 9 th Circuits clouded jurisdiction and caused ambiguity. As a result, DQSA was signed into law by President Obama on November 27, 2013 and consists of two Titles: Title I Compounding Quality Act and Title II Drug Supply Chain Security Act. 15 I. DQSA a. Title I Compounding Quality Act 16 i. Title I covers pharmacy compounding and provides for two regulatory schemes for compounders. One is applicable to Outsourcing Facilities, while the other is applicable to traditional state-licensed pharmacies. The difference between the two essentially boils down to the business model that the entity has. The law states that compounding includes the combining, admixing, mixing, diluting, pooling, reconstituting, or otherwise altering a drug or bulk drug substance to create a drug. 17 ii. Outsourcing Facilities 1. Title I states that certain provisions of the FFDCA will not apply to facilities who VOLUNTARILY register as Outsourcing Facilities with the FDA. 14 FDA Warning Letter to New England Compounding Center (Dec. 4, 2006), available at 15 Pub. L. No (Nov. 27, 2013). 16 Id. 17 FFDCA Section 503B(d). 4
6 Outsourcing Facilities are also often referred to as 503B facilities based on the section of the law under which they are regulated. Sections 502(f)(1), 505 and 582 shall not apply to a drug compounded by or under the direct supervision of a licensed pharmacist in a facility that elects to register as an outsourcing facility. Exemptions include the drug approval requirements, certain labeling requirements and what has commonly become known as the track and trace requirements. 18 a. Although exempt from a number of FDA requirements, Outsourcing Facilities must follow FDA s current good manufacturing practices ( cgmps ). In addition, a registered Outsourcing Facility need not be a pharmacy Registration 20 a. In order to qualify as an Outsourcing Facility, the facility must register with FDA and submit to certain reporting requirements. Registration is required between October 1 and December 31 annually. Currently registration is simply a notification to FDA, but FDA has the authority to change the registration to a more detailed process and likely will make modifications over time. Again, this registration is completely voluntary. If a facility does choose to register, the facility s information is made publically available on FDA s website, like most other registered facilities under FDA jurisdiction, e.g., manufacturers. The publically available information also includes the 18 FFDCA Section 503B(a). 19 FDA has issued an interim guidance addressing cgmps specific to Outsourcing Facilities, available at 20 FFDCA Section 503B(b). 5
7 date of the facility s last inspection and whether the facility has received a Warning Letter from FDA. b. Required Information i. Facility has two options for registration. It can use the FDA s electronic drug registration system or FDA s drug registration and listing staff. The following information is required for registration: 1. Company name; 2. Place of business; 3. Unique facility identifier; 4. Point of contact address; 5. Whether the facility intends to compound within the next year any drug on that appears on the FDA s drug shortage list; 6. Whether the facility intends to compound within the next year any drug from a bulk substance; and, 7. Whether the facility intends to compound within the next year any sterile drug Fees 22 a. Outsourcing Facilities are required to pay fees associated with registration and oversight, although for FY 2014 no fees were collected for registration as an Outsourcing Facility. For FY 2015, the statute requires a fee of $15,000 multiplied by the inflation adjustment factor. The inflation factor 21 FFDCA Section 503B(b). 22 FDA Guidance, Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act (Nov. 2014), available at 6
8 calculation is established by the statute. There is also an adjustment for small businesses which is defined as sales of one million dollars or less in a 12 month period. If the applicable fees are not paid in full, all drugs manufactured, prepared, compounded, processed, or propagated are misbranded until the fees are paid. 23 In March 2014, FDA released a guidance document titled Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act which discussed to establishment fee and registration fee, as well as the payment process Labeling 25 a. Outsourcing Facilities must include the following on product labels: i. The statement This is a compounded drug or similar statement that promptly identifies the drug as a compounded drug ii. The name, address, and phone number of the Outsourcing Facility iii. Drug information, including: 1. Lot or batch number 2. Established name, dosage form and strength 3. Quantity or volume 4. Date of compounding 5. Expiration date along with storage and handling instructions 6. National Drug Code (NDC) Identifier (if applicable) 7. The statement Not for resale and, if the drug is compounded other than pursuant to a prescription, the statement Office Use Only 23 Id. 24 Id. 25 FFDCA Section 503B(a)(10)(A)-(B). 7
9 8. Active and inactive ingredient information (if adequate space) iv. Container requirements include: 1. Directions for use, including dosage and administration 2. FDA adverse event reporting contact information s 3. Active/inactive ingredient information s (that cannot fit on the label) 5. Inspections 26 a. Title I gives FDA the authority to inspect Outsourcing Facilities. FDA inspections of Outsourcing Facilities are conducted on a risk-based schedule based on known safety risks of such outsourcing facilities using the following factors: i. Compliance history of the Outsourcing Facility ii. Recall history and nature of the Outsourcing Facility iii. Inherent risk of drugs compounded at the Outsourcing Facility iv. Inspection history and frequency v. Intent to compound drugs on the drug shortage list b. FDA has indicated that its plans to continue proactive and for cause inspections of compounding pharmacies. FDA has conducted 42 for-cause and 31 proactive inspections conducted between October 1, 2012 and October 31, FDA lists the results of a Form FDA-483 listing inspection on FDA s website. FDA has already begun conducting inspections pursuant to DQSA. c. FDA has stated that it expects to inspect newly registered outsourcing facilities within two months of initial registration, if the facility has not been 26 FFDCA Section 503B(4). 8
10 previously inspected, and subsequent inspections will depend on the finding from the first inspection. 27 d. Beginning in FY 2015, Title I requires the Outsourcing Facility pay a reinspection fee in the event that FDA finds that a facility must be reinspected based on FDA s prior inspection findings of non-compliance. The reinspection fee is $15,000 multiplied by the inflation adjustment factor. There is no re-inspection fee discount for small businesses. 6. Reporting 28 a. Upon initial registration, as well as in both June and December of each year, each Outsourcing Facility must submit a report. These reports are confidential, exempt from inspection, and submitted electronically to FDA. The reports must include: i. Identification of the drugs compounded during the prior 6-month period ii. For each compounded drug, the report must state the: 1. Active ingredient strength and source 2. Dosage form and route of administration 3. Package description 4. Number of individual units produced 5. NDC of active ingredient source and the final product (if applicable) 7. Other Requirements a. Outsourcing Facilities are: 27 FDA, Information Concerning Outsourcing Facility Registration, (last updated Mar. 14, 2014). 28 FFDCA Section 503B(b)(2). 9
11 i. Prohibited form compounding drugs using bulk drug substances unless it appears on a list of bulk drug substances specifically identified by FDA. 29 Note: this list has yet to be published, but FDA has issued a notice and comment period for interested parties to submit bulk drug substances for consideration to be added to the list. ii. Prohibited from wholesale meaning that drugs cannot be sold or transferred by an entity other than the Outsourcing Facility. 30 iii. Required to comply with cgmps. 8. Traditional state-licensed pharmacies ( 503A Entities ) a. Section 503A states that certain aspects of FFDCA shall not apply to a drug product if the drug product is compounded for an identified individual patient based on the unsolicited receipt of a valid prescription order or a notation, approved by the prescribing practitioner, on the prescription order that a compounded product is necessary for the identified patient, (Section 503A) if the drug meets certain requirements and is compounded by: i. (A) a licensed pharmacist in a State licensed pharmacy or a Federal facility, or ii. (B) a licensed physician, on the prescription order for such individual patient made by a licensed physician or other licensed practitioner authorized by State law to prescribe drugs; or 29 FFDCA Section 503B(a)(2). 30 FFDCA Section 503B(a)(8). 10
12 iii. (2)(A) is by a licensed pharmacist or licensed physician in limited quantities before the receipt of a valid prescription order for such individual patient; and iv. (B) is based on a history of the licensed pharmacist or licensed physician receiving valid prescription orders for the compounding of the drug product, which orders have been generated solely within an established relationship between 1. (i) the licensed pharmacist or licensed physician; and 2. (ii)(i) such individual patient for whom the prescription order will be provided; or (II) the physician or other licensed practitioner who will write such prescription order. 31 b. Section 503A describes conditions under which human drug products are exempt from the following FFDCA requirements: i. Compliance with cgmps ii. Labeling with adequate directions for use; and iii. FDA approval prior to marketing Other Provisions of DQSA a. DQSA places additional responsibility on FDA. i. Enhanced communication with states including: 1. Establish a mechanism to receive submissions from state boards of pharmacy that described actions taken against compounding 31 FFDCA Section 503(A). 32 FDA, Compounding, (last updated May 26, 2015). 11
13 pharmacies by the board, e.g., warning letters, sanctions, penalties pursuant to state compounding pharmacy regulation, suspension or revocation of pharmacy licensure, and drug recalls under state law. 2. Express concerns or report potential violations. a. FDA must notify state boards of pharmacy when submissions are received or specific actions are taken. b. FDA is currently consulting with the National Association of Boards of Pharmacy to create this system. Until then, states can FDA. c. FDA must promulgate regulations in consultation with an advisory committee composed of representatives of the National Association of Boards of Pharmacy, United States Pharmacopeia, compounding pharmacists, and physicians with knowledge of compounding, and patient and public health advocacy organizations. d. FDA must produce a Demonstrable Difficulties List FDA must publish a list of drugs or categories of drugs that present demonstrable difficulties for compounding that are reasonably likely to lead to an adverse effect involving the safety or effectiveness of the drug or category of drugs, taking into account the risks and benefit to patients. Outsourcing facilities are prohibited from compounding drugs or categories of drugs on this list. FDA has solicited nominations for the list. 12
14 e. FDA must produce a Listing of Drug Products Withdrawn or Removed from the Market 21 C.F.R lists drug products that the FDA has withdrawn or removed from the market because they were found to be unsafe or not effective; no drug product on this list can be compounded. In July 2014, FDA issued a proposed rule to add 25 more drug products. 73 Fed. Reg (July 2, 2014). f. FDA must produce a Bulk Drug Substance List based on clinical need FDA has issued several proposed rules regarding drugs to be included on the list. In December 2013, FDA withdrew the 1999 list (that was never finalized), and asked for nominations for the bulk drug substances list. 33 FDA issued a notice and revised request for nomination in July 2014 because many of the nominations received in response to the December 2013 notice either were for a substance that is already the subject of a USP monograph or a component of an-fda approved drug, were not for bulk drug substances used in compounding as active ingredients, or did not include sufficient information to justify inclusion of the nominated substance on the list. 34 b. Benefits of Registering as an Outsourcing Facility Office Use and Business Opportunities Fed. Reg (Dec. 4, 2013) Fed. Reg (July 2, 2014). 13
15 i. There are a number of benefits of registering as an Outsourcing Facility. Portions of Section 502, misbranding, and 505, new drug, of the FFDCA do not apply to a drug properly compounded at an Outsourcing Facility. In addition, registered Outsourcing Facilities can compound drugs without a prescription. This allows for Office Use compounding and potentially lucrative business opportunities for compounding pharmacists. 1. Office Use Drugs compounded for office use are compounded in bulk without a prescription for future administration or dispensing to unidentified patients on an as-needed basis, often in a physician s office. This gives physicians quick access to commonly used compounded drugs instead of waiting for a prescription to be filled. c. Enforcement i. As of May 8, 2015, there are 52 registered Outsourcing Facilities. FDA continues to encourage registration, e.g., letters to hospitals, public statements about increased inspections, and enforcement actions. Although implementation of DQSA is ongoing, FDA has already issued a number of Warning Letters citing DQSA. This has also encouraged registration. 1. Warning Letters a. A number of FDA warning letters found that pharmacies were compounding without prescriptions and violating a number of cgmps. FDA has stated that compounder were compounding unapproved new drugs. Drugs compounded by a non-outsourcing facility without a valid prescription are considered new drug products that cannot be marketed without an approved application. 14
16 The drug products were thus misbranded drug products, as they failed to include adequate directions for use. In addition the drug products were considered adultered because of the failure to follow certain cgmps. b. Generally, FDA Warning Letters have indicated that if a pharmacy is acting like an outsourcing facility, it will be regulated like one. That is, if drugs are being compounded without a prescription, then the compounded must register or face enforcement action based on misbranded, adultered, and unapproved new drugs. d. Potential Issues Under DQSA i. Moving Forward 1. DQSA Draft Guidance Documents FDA has issued a number of draft guidance documents addressing the implementation of DQSA. The comment periods for most guidance documents ended in May and June of a. Registration This guidance details under which circumstances an entity should register as an Outsourcing Facility under Section 503B of the FFDCA. b. Repackaging These guidance documents detail under what circumstances and pursuant to which standards Outsourcing Facilities, state-licensed pharmacies and Federal facilities may repackage drugs and biologics. 35 Generally, the biggest concern for repackagers resulting from the issuance of these draft guidance documents is the limitation FDA has proposed to 35 FDA Guidance, Repackaging of Certain Human Drug Products by Pharmacies and Outsourcing Facilities (Feb. 2015), available at FDA Guidance, Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application (Fed. 2015), available at 15
17 place on the beyond-use-dates ( BUD ) of repackaged drug and biologic products. i. FDA defines repackaging as: 1. [T]he act of taking a finished drug product from the container in which it was distributed by the original manufacturer and placing it into a different container without further manipulation of the drug. Repackaging also includes the act of placing the contents of multiple containers (e.g., vials) of the same finished drug product into one container, as long as the container does not include other ingredients. 36 c. cgmps FDA has issued a draft guidance specific to Outsourcing Facilities. 37 d. Adverse Event Reporting This guidance details the adverse event requirements for Outsourcing Facilities. Generally, the biggest issue for registered Outsourcing Facilities is that these standards do not apply to 503A entities and that these standards should be imposed consistently across the board for all entities. 38 e. Memorandum of Understanding ( MOU ) This guidance addresses how states and FDA will interact with respect to 503A entities Id., at lines See cgmp Interim Guidance, supra note FDA Guidance, Adverse Event Reporting for Outsourcing Facilities Under Section 503B of the Federal Food, Drug and Cosmetic Act (Feb. 2015), available at 39 Draft Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products Between the State and the U.S. Food and Drug Administration (2015), available at pdf. 16
18 i. The guidance essentially defers to state oversight of such entities. 1. In the event that a state does not agree to sign the MOU with FDA, entities that compound within the state are limited to distributing out of state only 5% of their total units. 2. If the state signs the MOU, the limit is increased to 30%. ii. The guidance does not explain what should occur if a state does not have adequate resources to oversee compounding pharmacies within its borders, aside from refusing to sign the MOU. 40 ii. There are a number of potential issues under DQSA, including: 1. Sterile v. non-sterile compounding DQSA s definition of outsourcing facility includes only facilities engaged in compounding of sterile drug products, although the law s definition of compounding applies to drugs. In addition, recent guidance document have addressed both sterile and non-sterile products. 2. Outsourcing pharmacies v. state-licensed and Federal facilities a. All of these entities engage in a number of the same activities, such as repackaging of drugs/biologics and compounding based on an individualized prescription (Outsourcing Facilities are permitted to do this), but FDA draft guidance documents have made clear that Outsourcing Facilities will be held to different standards than state-licensed and Federal facilities, including adverse event reporting, labeling, and quality standards (cgmps v. USP). i. FDA will likely face challenges based on arbitrary and capricious nature of the differing standards. 40 See Draft MOU, supra note
19 b. A number of states do not recognize Outsourcing Facilities under state law and still require that these entities be licensed by the state board of pharmacy, and may include registering as a distributor or a pharmacy. i. This will lead to conflicts in standards and conflicts of law. FDA has yet to clarify how such issues will be dealt with. 3. Animal/veterinary use DQSA applies only with respect to human drugs. 4. Standards for Outsourcing Facilities a. Although recent draft guidance documents have added some clarifications, it s not fully apparent yet if aspects of USP standards will be applicable to Outsourcing Facilities. 5. USP 797 vs. cgmp Will FDA establish national compounding standards? 6. Where Do 503A Entities Stand? a. Prescriptions i. FFDCA Section 503A(a) PRIOR to the DQSA 1. A compounded drug is exempt from FFDCA Section 501 (cgmp), 502 (directions for use), and 505 (new drug application) if the drug is compounded based on unsolicited receipt of a valid prescription for an identified individual patient if: a. The drug is compounded by a licensed pharmacist in a statelicensed pharmacy or a Federal facility, OR b. The drug is compounded: 18
20 i. By a licensed pharmacist in limited quantities before the receipt of a valid prescription for such individual patient, AND ii. Based on a history of the licensed pharmacist receiving valid prescriptions for the compounded drug sole within the relationship between the pharmacist and either the ordering physician or the affected patient. 41 ii. FFDCA Section 503A(a) AFTER DQSA 1. Compounded drug exempt from FFDCA Sections 501 (cgmp), 502 (directions for use), and 505 (new drug application) if the drug is compounded based on unsolicited receipt of a valid prescription for an identified individual patient if: a. The drug is compounded by a licensed pharmacist in a statelicensed pharmacy or Federal facility, OR b. The drug is compounded: i. By a licensed pharmacist in limited quantities before the receipt of a valid prescription for such individual patient, AND ii. Based on a history of the licensed pharmacist receiving valid prescriptions for the compounded drug solely within the relationship between the pharmacists and either the ordering physician or the affected patient. iii. Advertising A pharmacies may compound products in advance. 19
21 1. FFDCA Section 503A(c) PRIOR to DQSA a. (c) Advertising and Promotion A drug may be compounded under subsection (a) only if the pharmacy, licensed pharmacist, or licensed physician does not advertise or promote the compounding of any particular drug, class of drug, or type of drug, The pharmacy, licensed pharmacist, or licensed physician may advertise and promote the compounding services provided by the licensed pharmacist or licensed physician. 2. FFDCA Section 503A(c) AFTER the DQSA This provision was removed due to the Supreme Court case holding that prohibitions on advertising were a. (c) Advertising and Promotion A drug may be compounded under subsection (a) only if the pharmacy, licensed pharmacist, or licensed physician does not advertise or promote the compounding of any particular drug, class of drug, or type of drug, The pharmacy, licensed pharmacist, or licensed physician may advertise and promote the compounding services provided by the licensed pharmacist or licensed physician. iv. Exemptions 1. Section 503A exempts a compounder from the requirements regarding compliance with cgmps, certain labeling provisions, and 20
22 new drug applications/abbreviated new drug applications if the compounder complies with ten specific conditions. 42 These include: a. The drug must be compounded for an identified, individual patient pursuant to a prescription or a notation that says a compounded product is required no changes in the guidance. b. The drug must be (1) compounded pursuant to a prescription or (2) before receiving a prescription if there is a history of the compounder receiving past orders no changes in guidance. c. The drug must be compounded in compliance with USP chapters on compounding, using only bulk drug substances that comply with an applicable USP or NF monograph. i. The guidance provides that compounded drugs should only contain bulk drug substances that are components of FDAapproved drugs, OR are the subject of a USP or NF monograph. d. The drug must be compounded using bulk drug substances manufactured by the registered entity no change in guidance. e. The drug must be compounded using bulk drug substances accompanied by a valid certificate of analysis for each substance not change in guidance. 42 FDA Guidance, Pharmacy Compounding of Human Drug Products Under Section 503A of the Federal Food, Drug, and Cosmetic Act (July 2014), available at 21
23 f. If the drug compounder is using ingredients other than bulk drug substances, they must comply with applicable USP or NF monographs no change in guidance. g. The drug compounded cannot have been withdrawn or removed from the market by FDA because the drug or its components are unsafe or ineffective. i. The guidance notes that FDA has promulgated a list of prohibited drugs, and the list will be updated periodically. Compounders should regularly check the list, which is located at 21 C.F.R h. The compounder may not regularly compound inordinate amounts of drugs that are commercially available no change in guidance. i. The compounder cannot compound drugs that FDA has identified as presenting difficulties for compounding that reasonably demonstrate a negative effect on a drug s safety or efficacy. i. The guidance provides FDA has not yet promulgated such a list, and this provision will not be enforced until the final list in in place. j. The compounder is generally prohibited from distributing more than 5% of its prescriptions out of state 5 percent rule. 22
24 i. Exception if the state in which the compounder is located signs the MOU with FDA. 43 ii. FDA will not enforce the 5% rule until after the MOU is finalized and made available for states to sign. e. Traditional Pharmacies i. Traditional compounding is permitted without FDA registration as long as it falls within the exemption. 1. Receipt of valid prescription. 2. Identified patient. 3. Compounded by licensed pharmacist, Federal facility, or a licensed physician. 4. Compounding of limited quantities before receiving a prescription is okay, if based on historical need. 5. No office use prescriptions allowed. 6. No FDA registration required. f. Practical Checklist for Advising Compounding Pharmacies 1. Understand the entity s business and where they plan to move in the future. a. What types of products do they compound? i. Drugs? Biologics? ii. Sterile? Non-Sterile? iii. Repackaging? b. Does the entity plan to expand its product line in the future? 2. How should entity be licensed/registered? a. With the state? 43 The draft guidance uses a 30% threshold. See Draft MOU, supra note
25 i. Consideration of all applicable state law. ii. Registration not only in home state, but in states pharmacy plans to distribute. iii. DEA registration (federal and state, if applicable) b. With FDA? c. With both? 3. Preparation for state or FDA inspection. a. SOPs. i. Training. ii. Risk assessments. iii. Adverse event detection and reporting. iv. Quality standards. b. Necessary equipment. c. Necessary rooms. d. Adequate training of staff. e. Conduct a mock inspection. 4. Address any post-state or FDA inspection compliance issues. 24
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