[Updated 12/5]

The Drug Quality and Security Act, which aims to close holes in the regulation of compounding pharmacies, was recently voted into law. Both the House of Representatives and the Senate passed the bill by a voice vote. Speaking from the Senate floor on Nov. 12, Sen. Harry Reid (D-Nev.) called the bill “a matter of life and death,” referring to 2012’s deadly outbreak of fungal meningitis traced back to the New England Compounding Center.

But outside of Washington, support for the new law is mixed. In a statement on Sept. 28, David G. Miller, RPh, chief executive officer of the International Academy of Compounding Pharmacists (IACP), said the bill “does not contain any provisions that speak directly to standards aimed at raising the quality of compounded medications.” The legislation “will not protect the American public” and “contains significant gaps,” the trade group added.

One such safety gap, critics point out, is the voluntary nature of a central component of the new legislation—its creation of a separate outsourcing facility category. Under Title I of the bill, compounding pharmacies that choose to register as an outsourcing facility will be able to make large volumes of compounded drugs for anticipatory demand, unlike the pharmacies that compound drugs based on existing prescriptions. Beginning in 2015, those facilities will pay an annual fee, up to $15,000 if sales exceed more than $1 million per year. The fee will cover the cost of a yearly FDA inspection; if the outsourcing facilities must be inspected subsequently in the year, the company will pay an additional $15,000, adjusted for inflation, to cover the cost. (Less controversially, the Drug Quality and Security Act also establishes an electronic “track-and-trace” system, which aims to record the supply of pharmaceuticals from manufacturer to patient, in order to prevent the sale of counterfeit medication.)

“This bill is an important first step in assuring that compounded sterile products are prepared safely,” said Paul W. Abramowitz, PharmD, ScD (Hon.), chief executive of the American Society of Health-System Pharmacists. “While ASHP is somewhat disappointed that the final agreement makes [the outsourcing facility] category voluntary rather than mandatory, we believe the new category, along with ... enhanced communication between state boards and FDA, will help improve the safety of products that health care providers and the public receive from compounding outsourcers.”

Other stakeholders in pharmacy share ASHP’s disappointment in the voluntary nature of the new outsourcing category. “My preference would have been to have it be mandatory,” said Scott Knoer, PharmD, the chief pharmacy officer of the Cleveland Clinic in Ohio, “though it’s better than what we had before.”

“A voluntary category of outsourcing facilities is not the answer,” Mr. Miller of the IACP said. “Would NECC [the New England Compounding Center], with its alleged myriad violations of law and regulations, have voluntarily enrolled in this new category? We think the answer is clear.”

Even if compounders register with the FDA, the law does not hold outsourcing facilities to the same standards as other manufacturers, according to Michael Carome, MD, director of Public Citizen’s Health Research Group. “It creates a double standard and an uneven playing field,” he said. In the case of drug shortages, the federal compounding bill could allow outsourcing facilities to create select medications without premarket approval. This approval, he said, is an essential aspect of existing law, which “has helped to ensure the safety and quality of drugs for more than half a century.”

Instead of the intended effect, Dr. Carome said relying on outsourcing facilities could make the problem of drug shortages worse—if these facilities can produce drugs without approval, at lower cost, he argues they might be able to price other manufacturers out of the market.

The FDA currently has the authority to inspect compounding facilities, according to Dr. Carome. Had the FDA acted more aggressively, he believes last year’s tragedy could have been prevented.

Debate over Hospitals

Hospitals and health-system pharmacies are not mentioned in the new legislation. Thus, regulations of sterile compounding in hospitals is left up to state boards of pharmacy. As with the voluntary clause of the new bill, that omission has been a source of contention—especially at the time the bill was first proposed, when the legislation included a clause that specifically exempted hospital pharmacies from its stipulations. Eric Kastango, RPh, MBA, the president and chief executive of Clinical IQ, a firm that consults on sterile compounding systems, said that earlier exemption was “a terrifying part of the [proposed] legislation.” It is “only a matter of time,” he added, “before we have a catastrophic event in a hospital because of poor oversight.”

Allen J. Vaida, PharmD, executive vice president of the Institute for Safe Medication Practices, said he was not troubled by the fact that the passed bill does not specifically mention hospital pharmacies. “I don’t think the legislation necessarily needed to address hospitals [or] retail pharmacies,” Dr. Vaida said. That task, he noted, could be handled by the state boards of pharmacy, which “should regulate that any licensed pharmacy adheres to U.S. Pharmacopeial Convention [USP] standards for sterile compounding.”

Dr. Vaida acknowledged, however, that not every state inspects hospital pharmacies, and “less than half of the states mandate that licensed pharmacies follow USP standards.” But the risk posed by such uneven oversight, he noted, is tempered by the fact that “the majority of hospital pharmacies have been adhering to the [USP Chapter <797>] standards for sterile compounding.”

“Frankly, the bill is a little watered-down from my point of view,” said William L. Greene, PharmD, chief pharmaceutical officer at St. Jude Children’s Research Hospital, in Memphis, Tenn. “But, pragmatically, it may be the best thing we can get out of Congress.”

Dr. Greene said he was encouraged that the new legislation requires pharmacies that register as outsourcing facilities to submit annual reports to the Secretary of Health and Human Services, including all accounts of adverse events. Because such pharmacies also submit themselves to FDA inspection, he noted, the implication is that these facilities will adopt the FDA’s better manufacturing standards. “And that’s a good thing,” he stressed.

In some quarters, support for the compounding bill is quite strong. B. Douglas Hoey, RPh, MBA, CEO of the National Community Pharmacists Association, said “this important legislation strikes the right balance” between strengthening oversight of compounding while preserving patient access to medications.
“When manufactured drugs are not an option, community pharmacists prepare, or compound, customized medications to meet a variety of individual health needs. H.R. 3204 leaves regulation of this vital and long-accepted practice by independent community pharmacies to state boards of pharmacy, where it should be,” Mr. Hoey said. “It also establishes a voluntary, regulatory pathway for companies to register as outsourcing facilities subject to standards and inspection by the [FDA]. Thus, the legislation should help prevent a recurrence of the tragic meningitis outbreak linked to The New England Compounding Center (NECC), while preserving patient access to individual medications compounded by local pharmacies in response to a doctor's request.
 
Mr. Hoey added that H.R. 3204 "was carefully crafted to avoid burdening pharmacy small businesses with cumbersome requirements or new unfunded mandates.”
 
A Manufacturer’s Reaction

At least one company that manufactures compounded drugs also expressed support for the new legislation. PharMEDium, one of the nation’s top outsourcing compounders, sent a letter to its customers saying that the bill “will finally instill clarity and certainty into the oversight of compounding facilities—ensuring that large-scale sterile compounding operations that conduct interstate commerce are subject to appropriate federal oversight.”

Rich Kruzynski, RPh, the president of PharMEDium, said the firm intends to take an active part in the legislation’s new outsourcing category. “Recognizing how the law enhances protections for patients and hospitals, we want to be one of the first outsourcing facilities [to register for it],” Mr. Kruzynski told Pharmacy Practice News. Because it adds a layer of transparency to the process of validating a compounder, he added, “this outsourcing category should be a very welcome thing.”

Easier Vetting of Vendors

Under section 503B of the bill, the FDA will create a website with a list of registered compounders. This new registry should make it easier for hospital pharmacies to vet outsourcing compounders, experts note, and is in stark contrast to the process that was required prior to the new law being passed, when choosing among several outsourcers often required a lengthy due diligence process, including background checks and site visits.

“Hospitals should note that entities [that] don’t become 503B registrants [and] are engaged in large-scale compounding without a prescription, specifically anticipatory, are likely in violation of one or more provisions of the FD&C Act,” Mr. Kruzynski said, adding that such companies “are not inspected to the higher level of the FDA.”

Many pharmacists asked to comment on the new compounding bill stressed that no piece of legislation is perfect, and that the new compounding bill has much to offer. As the Cleveland Clinic’s Dr. Knoer noted, the profession should be pleased that the FDA will now have a more active role in the safety of compounding drugs. “Overall,” he said, “we’re very happy that we got a bill passed in a difficult legislative environment.”



None of the sources had any relevant conflicts of interest to disclose.