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Compounded drugs made using poor quality practices may be sub- or super‑potent, contaminated, or otherwise adulterated. While compounding under poor quality practices has been previously associated with adverse events, the compounding industry remained opposed to Food & Drug Association (FDA) regulatory oversight on compounding drug practices (1). It was the 2012 fungal meningitis outbreak (750 infected, 64 deaths across 20 states) caused by contaminated compounded steroid injections made by a Massachusetts firm (2) that brought state pharmacy boards and FDA closer together on the need for greater regulatory oversight (1, 2).

State pharmacy boards became concerned with pharmacies located outside their jurisdiction of oversight that shipped sterile drugs into their state (2). Numerous FDA inspections and recalls of sterile drug products resulted; and several pharmacies stopped compounding sterile drug products (2). The Drug Quality and Security Act (DQSA) which addresses compounding quality had been enacted at the time. However, the outbreak brought forth new legislation, section 503B of the Federal Food, Drug and Cosmetic Act (FDCA) which enables facilities that compound sterile drug products to voluntarily register with FDA as an ‘outsourcing facility.’ This article explores this legislation amongst others, to give a comprehensive coverage of the current US legislative framework for human drug product compounding.

Drug Product Compounding

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. Compounding includes the combining of two or more drugs. It is usually needed when a patient’s health needs cannot be met by a FDA approved drug, for example, if a patient has an allergy and needs a medication to be made without a certain dye; or if an elderly patient or a child can’t swallow a pill and needs a medicine in a liquid form that is not otherwise available. Compounded drugs do not proceed through via FDA registration process meaning their safety, efficacy and quality have not been evaluated prior to use.

Drug Product Legislation

Typically, drugs in USA need FDA approval via submission of a new drug application (NDA) or a generic abbreviated new drug application (ANDA). Drugs need to be manufactured according to current good manufacturing practices (CGMP) and bear adequate labeling including appropriate directions for use according to US regulations.

However, compounded drugs do not need to meet the above requirements if they qualify under the exemptions in Section 503A (FDCA). These exemption conditions include the following.

  1. There is a valid prescription order / notation by a prescribing practitioner for a compounded drug product for an identified patient.
  2. Drug product compounding is conducted by state licensed pharmacies, pharmacists or physicians. If no valid prescription order is yet available, limited quantities of a drug product may be compounded if
    1. there is a history of the licensed pharmacist / physician receiving such orders and
    2. there is an established relationship between the licensed pharmacist / physician conducting the compounding and either the patient or prescribing, licensed physician / practitioner.
  3. The drug product is compounded in compliance with USP Chapters on pharmacy compounding (USP<795><797>) and uses bulk drug substances that become the active ingredient or finished dosage form of the drug. The bulk drug substances used must
    1. comply with standards of an applicable United States Pharmacopeia (USP), National Formulary (NF) monograph or
    2. be a component of an FDA approved human drug product or
    3. appear on a list of bulk drug substances for use in compounding developed by FDA through regulation (section 503A(b)(1)(A)(i), FDCA).
  4. The bulk drug substances used for compounding are manufactured by a registered US or foreign establishment under section 510 or 510(1) of the FDCA.
  5. Each bulk drug substance used for compounding has a valid Certificate of Analysis (CoA)
  6. Ingredients other than bulk drug substances used in compounding comply with standards of an applicable USP / NF monograph and USP Chapters on pharmacy compounding.
  7. The drug product for compounding does not appear on the list of drug products withdrawn or removed from the market for reasons of safety or effectiveness.
  8. The licensed pharmacist or licensed physician does not compound regularly or in inordinate amounts any drug products that are essentially copies of commercially available drug products.
  9. The drug product is not a drug product identified by FDA by regulation as a drug product that presents demonstrable difficulties for compounding that reasonably demonstrate an adverse effect on the safety or effectiveness of that drug product. This list is still an FDA development and not as yet in enforcement.
  10. The drug product is compounded
    1. in a state that has entered into a memorandum of understanding (MOU) with FDA that addresses the distribution of inordinate amounts of compounded drug products interstate and provides for appropriate investigation by a state agency of complaints relating to compounded drug products distributed outside such state; or,
    2. in states that have not entered into such an MOU with FDA, the licensed pharmacist, licensed pharmacy, or licensed physician does not distribute, or cause to be distributed, compounded drug products out of the state in which they are compounded, more than 5% of the total prescription orders dispensed or distributed by such pharmacy or physician.

As of the publication of this article, this is still an FDA development and has not come into force.

Common Legislation Applicable To All Compounded Drug Products

Even if an individual or firm meets the criteria for exemption under section 503A (FDCA), the FDCA has the additional following requirements to ensure the quality of compounded drug products and prevent their mis-representation.

  1. The drug product must not consist in whole or in part of any filthy, putrid, or decomposed substance, or be prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health. (Sections 501(a)(1) and (a)(2)(A), FDCA)
  2. If the drug product purports to be a drug that is recognized in an official compendium, its strength must not differ from, and its quality or purity must not fall below, the standards set forth in the compendium, unless the difference is plainly stated on its label. (Section 501(b), FDCA)
  3. For a drug product not subject to section 501(b) (FDCA), the drug’s strength must not differ from, and its quality or purity must not fall below, that which it purports to have. (Section 501(c), FDCA)
  4. If the drug product purports to be a drug that is recognized in an official compendium, it must be packaged and labeled as prescribed in the compendium. (Section 502(g), FDCA)
  5. The drug product’s labeling, advertising, and promotion must not be false or misleading. (Sections 502(a), 502(bb), 201(n), FDCA)


Sterile Drug Compounding Legislation (503B exemptions, FDCA)

As mentioned above, sterile drug compounding facilities, including licensed pharmacies, that qualify as outsourcing facilities under section 503B (FDCA) are exempt from the FDA market approval (NDA / ANDA) applications and from the requirement to label products with adequate directions for use. Qualification as an ‘outsourcing facility’ involves voluntary facility registration with the FDA.

Of note is that under the DQSA, an outsourcing facility is not considered registered until all registration fees owed by the facility have been paid (section 503B(g)(3)(A), FDCA). However, an outsourcing facility can register without paying a fee until October 1, 2014, because under the DQSA, fees will not be assessed or owed until after that date.

In addition to initial and subsequent annual registration, outsourcing facilities

  1. Must provide FDA with certain information about the products they compound;
  2. Must comply with CGMP requirements for Drugs;
  3. Will be inspected by FDA on a risk-based schedule; and
  4. Must meet certain other conditions, such as reporting adverse events and labeling their products with certain information.

Compounders who conduct outsourcing operations but do not register with FDA will not qualify for the section 503B exemption from the FDA approval requirements and the requirement to label products with adequate directions for use. If these compounders additionally fail to satisfy the conditions for the section 503A exemption, they will be subject to all of the requirements of the FDCA that are applicable to drugs made by conventional manufacturers, including the new drug approval, adequate directions for use, and CGMP requirements (Figure 1).

FDA is currently working on a mechanism for an enhanced regulatory oversight by and communication with state boards of pharmacies. The consequences of legislation violation for individuals and firms include FDA warning letters, seizure of product, injunction, and/or criminal prosecution.

AXSource Consulting For Regulatory Compliance

AXSource Consulting can support licensed pharmacies, pharmacists and physicians in

  • Determining if their drug product compounding qualifies for exemption from FDA market approval, CGMP and labeling compliance under section 503A (FDCA) by answering any number of questions, such as,
    1. Is a bulk drug substance used for compounding
      1. On FDA’s acceptable list?
      2. Manufactured by a registered establishment?
  • A component of an FDA approved human drug product?
  1. What constitutes a regular or inordinate amount of commercially available drug product?
  2. Is the drug product for compounding about to be added to FDA’s list of drug products withdrawn / removed from market for safety / efficacy reasons?
  • Filing a NDA / ANDA with FDA for market approval, designing and maintaining a CGMP compliant quality system, adjusting labeling for compliance in cases where the exemption of these requirements under section 503A (FDCA) are not met.
  • Designing a minimal quality system for regulatory compliance. This may include documenting processes to ensure compounding under sanitary conditions, processes for compendial compliance or labeling compliance for prevention of mis-representation.
  • Complaint handling and Recall Management
  • Maintaining compliance by conducting periodic self-inspections.

AXSource Consulting supports sterile drug compounding facilities with the transition process to qualify as an ‘outsourcing facility’ and then aids in maintaining compliance. Our key service areas for outsourcing facilities include the following.

  1. Initial facility registration and listing
  2. Annual facility registration
  3. Fee payment for registration
  4. CGMP quality system design, gap analysis and maintenance
  5. Computer System Validation
  6. Complaint handling and Recall Management
  7. Self-Inspections for quality compliance
  8. FDA inspection hosting

AXSource Consulting can also support US state pharmacy boards and hospitals in the development of an over-arching quality management system for greater regulatory oversight and co-ordination with FDA, pharmacies, importers and distributors in the drug product supply chain, which will be particularly useful when dealing with complaints and recalls.

In conclusion, safety issues with drug compounding have resulted in legislation that has led to the need for an increased regulatory oversight of drug compounding by industry. AxSource Consulting Inc. helps state pharmacy boards, pharmacies, hospitals, pharmacists, physicians and sterile drug compounding facilities achieve and maintain regulatory compliance.