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Rich Kruzynski, RPh, MBA
President
PharMEDium Services, LLC.
Lake Forest, Ill.

The Drug Quality and Security Act (DQSA), signed into law on Nov. 27, 2013, has been a game-changer for the pharmacy compounding industry.

My company, PharMEDium, had been an advocate for the new law and was the first entity to voluntarily register with the FDA in the newly created “outsourcing facility” category. As of Feb. 28, however, of the estimated 3,000 compounding pharmacies that make sterile injectable drugs, only 28, including all four of our locations, have registered, which raises a question about how many outsourcing facilities will ultimately register.

The DQSA requirements for outsourcing facilities are challenging, but feasible, and we are pleased the law helps establish and strengthen FDA oversight by eliminating a patchwork of ambiguous federal jurisdiction and inconsistent state regulatory approaches, especially those related to licensing.

The law itself and the subsequent FDA draft guidance for outsourcing facilities cover several aspects of the new category: registration, interim product reporting and labeling additions, all of which we are following. We also submitted letters to the agency during the draft guidance’s public comment period requesting several clarifications to help us better understand and follow the law’s requirements.

As the FDA deliberates on the public comments from our company and other stakeholders, we firmly believe that in the long run the law will create greater clarity and certainty into the oversight of compounding facilities. This will result in a significant advance in the integrity of customized, compounded sterile preparations administered to millions of patients and will align all large-scale anticipatory compounding outsourcing facilities with the proper standards and requirements.

NECC Tragedy Spurs Action

The impetus for the DQSA was the 2012 fungal meningitis outbreak attributed to the New England Compounding Center (NECC) that resulted in more than 750 cases of confirmed or probable fungal meningitis. A federal investigation of outsourcing facilities followed, with the FDA and Congress determining that, in part, poor regulatory coordination and gaps in oversight may have contributed to the outbreak.

The DQSA attempts to correct this situation by establishing a stronger federal oversight and enforcement role under the FDA. Most significantly for our company, the law created the outsourcing facility category under a new section 503B of the Food, Drug & Cosmetic (FD&C) Act to regulate our category. To be designated as an outsourcing facility, the entity, among other requirements, must register with the FDA. If an entity chooses not to register with the FDA, then it is technically not an outsourcing facility, and its operation will be regulated under a different section of the FD&C Act, 503A, which requires that it adhere to the requirements of a traditional state-regulated pharmacy.

During a media briefing shortly after the DQSA’s passage, FDA Commissioner Margaret Hamburg, MD, urged hospitals to purchase from only FDA-registered outsourcing facilities, calling it “a critical step they can take to better ensure the health and safety of their patients.”

Numerous questions remain, however, even after the law was passed, about how facilities that do not register, yet currently perform outsourcing, will be regulated. Hospitals that have partnered in the past for certain types of compounding (e.g., anticipatory non–patient-specific), may become increasingly concerned that their compounder has not chosen the 503B pathway.

Following cGMPs Is Important Piece of the Puzzle

Although DQSA has certainly affected PharMEDium, many 503B outsourcing facility requirements are not new to our company. For example, PharMEDium has been registered and inspected by the FDA since its inception more than a decade ago. Moreover, as the law requires, we always have followed current Good Manufacturing Practices for pharmacy compounding.

Other than registration, the FDA’s draft guidance includes several changes, including submitting a report to the agency identifying all drugs compounded by the facility during the previous six-month period. The legislation also requires additions to product labels, which we are in the process of completing. We did not have to start from scratch with the labeling because we already had incorporated the majority of the requirements into our internal labeling policies years ago.

One significant labeling change is the addition of text reading “This Is a Compounded Drug” to be added to all products, including IV containers or their packaging. We are exploring ways to give products a uniform visible representation to this requirement, which we believe will help ensure safety and transparency in the medication administration process.

We also added the DQSA-required phrases in labeling of “Not for Resale” and “Hospital/Office Use Only” and incorporated the FDA’s Adverse Event Reporting website and phone number.

Encouraging Early Industry Response

The health care industry’s reaction to the DQSA has been cautiously optimistic, with many experts observing that the law should have granted the FDA more oversight over outsourcing facilities: As it stands, registration as an outsourcing facility is voluntary. A “Perspective” article by Boston University School of Law Professor Kevin Outterson, JD, LLM, in the Jan. 9, 2014 edition of The New England Journal of Medicine (370:97-99) noted that the DQSA will be most effective at protecting patients’ safety if purchasers “demand that their sterile compounded drugs be sourced exclusively from outsourcing facilities regulated by the FDA.”

Mr. Outterson, who was a member of the Massachusetts Special Commission on the Oversight of Compounding Pharmacies that convened after the NECC tragedy, also wrote that the decision to purchase from registered outsourcing facilities could be “included in accreditation standards and reimbursement contracts. Such a market-based response would force compounders to accede to their major customers’ demands and register with the FDA.”

Hospital pharmacists, including one of our customers, Andrew J. Donnelly, PharmD, MBA, FASHP, the director of pharmacy services at the University of Illinois Hospital & Health Sciences System, in Chicago, have indicated their support for the increased federal oversight. Dr. Donnelly told us that he believes “it’s extremely important for hospitals and other health care providers to work with FDA-registered compounders as FDA has advised.” Not doing so, he said, could ultimately have patient safety, drug supply and compliance implications, which could affect accreditation or reimbursement from payors.

Likewise, in a letter to hospitals and other purchasers issued shortly after the bill’s passage, the FDA’s Dr. Hamburg echoed Dr. Donnelly’s comments by urging organizations to carefully consider the entity they select as their pharmacy outsourcing facility.

“As a purchaser of compounded drugs, you can play an important role in improving the quality of compounded drugs by requiring compounding pharmacies that supply drugs to your facility to register as outsourcing facilities,” Dr. Hamburg wrote. “Once they register, you and the patients you serve can be assured that FDA will inspect these facilities on a risk-based schedule, hold them to cGMP [Current Good Manufacturing Practices] requirements, monitor the adverse-event reports they are required to submit to the agency and require appropriate labeling.”

Nonetheless, many industry stakeholders still have several questions and concerns about enforcement and requirements under the law. “The addition of the outsourcing facility category will help promote the safety of products that health care providers and the public receive from compounding outsourcers,” said American Society of Health-System Pharmacists CEO Paul W. Abramowitz, PharmD, ScD (Hon.), FASHP, in a prepared press statement. “However, we were disappointed that the bill did not go further to require compounding outsourcing facilities to register with the FDA, and create clearer risk-based criteria to help the FDA identify outsourcers that are operating outside the scope of traditional pharmacy compounding.”

Building Confidence In the Category

The DQSA will continue to pose challenges for outsourcing facilities as they try to interpret and meet all the requirements of the new law and forthcoming FDA final guidance. However, entities with a history of regulatory compliance that staff qualified personnel and that invest in state-of-the-art centers should be capable of adjusting to these changes. Not only will it instill confidence in the new outsourcing facility category, but it also might help prevent another national disaster like the devastating fungal meningitis outbreak.

In the coming months, we look forward to contributing input to the FDA as it finalizes the DQSA guidelines. We also look forward to educating our hospital customers about this landmark legislation and how their choice of a registered outsourcing facility protects and enhances their continued commitment to superior patient safety and care.