When Should a Drug Compounder Register as an Outsourcing Facility?

When is it appropriate for a compounding pharmacy to register as an outsourcing facility under 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act)?

The Drug Quality and Security Act (DQSA), signed into law on November 27, 2013, introduced Section 503B of the FD&C Act, which allows for compounding pharmacies to voluntarily register as an “outsourcing facility.” But registration is not appropriate in all situations. Pharmacies that intend for all of their products to be compounded in accordance with 503B requirements may choose to register. But pharmacies that do not intend to compound all products in accordance with 503B should not register as an outsourcing facility.

In February 2015, FDA released the following five guidance documents relating to human drug compounders:

The five documents indicate the agency’s current thinking on human drug compounding issues. The guidance also reviews additional regulatory requirements for compounders and addresses Good Manufacturing Practices (GMPs) as well as compliance with United States Pharmacopoeia 797 (which provides guidelines, procedures and compliance requirements for compounding sterile preparations).

Drugs compounded in outsourcing facilities are required to adhere to cGMPs. The new law does not provide any relief for compounding pharmacies from a FDA enforcement action concerning compliance for either traditional or outsourcing facilities from an FDA inspection. Traditional Compound Pharmacies are also subject to the FD&C Act, which can be built upon an FDA investigation where the inspection finds the possibility of contamination in which a drug may become adulterated.

An outsourcing facility is able to qualify for exemptions from the FDA approval requirements and the requirement to label products with adequate directions for use, as long as outsourcing facilities meet the following criteria:

  • Must comply with cGMP requirements,
  • Will be inspected by FDA according to a risk-based schedule, and
  • Must meet certain other conditions, such as reporting adverse events and providing FDA with certain information about the products, they compound.

Beyond the cGMP requirements, outsourcing pharmacies should be aware of FDA’s criteria for identifying a violation as an unapproved drug. The criteria include any change to an FDA approved finished drug product with a different intended use or a change in the indications, dosage, route of administration, dosage form, strength or container-closure system, or misbranding because of inadequate directions for use or extra-label use. For example, an unapproved drug could be a finished approved IV drug and prefilled into a syringe without dilution, with the intent to use the drug other than the approved use. These are violations of the FD&C Act. The FDA/CDER Office of Compliance is responsible for determining whether a violation exists as an unapproved drug.

Drugs allowed to be outsourced will be published and codified by FDA, in addition to the criteria in the above guidance documents FDA has formed advisory panels to nominate a list of bulk drugs that will be permitted to be compounded.

Although there are several thousand unapproved drugs in the U.S marketplace, these drugs are exempted by grandfather statutes, such as those on pre-1938 drugs, OTC drugs, drug shortages, where FDA and States have arranged oversight. If compounded drugs are found in violation as an unapproved drug, FDA may stay silent with regard to enforcing the FD&C Act, because the agency takes a risk-based approach as part its mission to promote health.

If a compounder chooses not to register as an outsourcing facility and qualify for the exemptions under section 503B, the compounder could qualify for the exemptions under section 503A of the FDCA. Otherwise, it would be subject to all of the requirements in the FD&C Act applicable to conventional manufacturers. FDA anticipates that State boards of pharmacy will continue their oversight and regulation of the practice of pharmacy, including traditional pharmacy compounding.

There is also a concern when repackaging a drug or biological product that a change in the product’s characteristics as part of the repackaging could affect the product’s safety and effectiveness, and cause serious adverse events (SAEs). A biological product that is mixed, diluted or repackaged outside the scope of an approved Biologics License Application (BLA) is considered an unlicensed biological product under Section 351 of the Public Health Service Act and may not be legally marketed. FDA addresses the mixing, diluting or repackaging of a licensed biological product, but it does not address a biological product licensed for further manufacturing use, or to be used in a bulk drug substance.

Serious adverse event reports (SAERs) for outsourcing facilities under 503B are required of outsourcing facilities because the term prescription drug products includes any compounded drug product subject to the prescription requirements in 51 section 503(b)(1) of the FD&C Act. The agency’s AER guidance includes details on when and how to submit SAERs. For example, a 15-Day Alert Report should be submitted no later than 15 days after receiving an initial report of an adverse event.

Under the draft Memorandum of Understanding for use in agreements between individual states and FDA on distribution of compounded human drug products interstate, it is the state’s responsibility to investigate claims and report their investigation results back to FDA.

Animal Drug Compounding Guidance

In May 2015, FDA published draft Guidance for Industry #230 – Compounding Animal Drugs from Bulk Drug Substances. Dr. Douglass Oeller, EAS collaborating veterinary drug consultant, explains that the agency’s latest animal drug compounding guidance reiterates FDA’s long-standing position that sections 503A and 503B of the FD&C Act do not provide exemptions for drugs compounded for animal use.

The guidance seeks to rein in illegal compounding that competes with FDA-approved products while still allowing enforcement discretion when veterinarians must use products compounded from bulk drug substance to treat individual patients.

Legal compounding of animal drugs is restricted to re-formulation of FDA-approved human or animal drug products. This type of compounding is allowed in accordance with the regulations set forth in 21 CFR Part 530 for extra label drug use in animals.

However, FDA has always recognized that, if no drug is approved for a specific animal species or no drug is available under the extra label drug use provisions, an animal drug compounded from bulk drug substances may be appropriate. The draft guidance document provides a set of criteria for those situations. It addresses the source of bulk active pharmaceutical ingredients (APIs) and the need for an additional affirmation from the prescribing veterinarian when compounding from a bulk drug substance.

A FSMA Milestone 

Stephen Sundlof - D.V.M., Ph.D., Senior Advisor for Animal and Human Food SafetyAs I prepare this FSMA Perspective article, we are anticipating a significant milestone in the implementation of FSMA’s preventive control philosophy – release of a final rule on current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food and a separate final rule on cGMPs and preventive controls for animal foods.

Because they were developed with a high degree of transparency and collaboration between the Food and Drug Administration and stakeholders, hopefully neither final rule will contain big surprises.

But there is still a lot more FSMA work to be done. A quick review of FDA’s open dockets relating FSMA provisions indicates the size and scope of this ongoing regulatory undertaking. The open dockets include 12 guidance documents, three draft guidances and one significant proposed rule – on user fees for accreditation of third-party auditors and certification bodies to conduct food safety audits and issue certifications. Comments on that proposal are due by October 7, 2015.

The guidance includes:

  • Draft guidance for industry and FDA staff on Third-Party Auditor/Certification Body Accreditation for Food Safety Audits: Model Accreditation Standards (FDA-2011-N-0146 Comments due October 7, 2015)
  • Draft guidance for industry on FDA’s Voluntary Qualified Importer Program (FDA-2011-N-0144)
  • Prior Notice of Imported Food Questions and Answers – Edition 3 (FDA-2011-N-0179)
  • Questions and Answers Regarding Food Facility Registration (Sixth Edition) (FDA-2012-D-1002)
  • What You Need to Know About Establishment and Maintenance of Records; Small Entity Compliance Guide (FDA-2013-N-1421)
  • FDA Records Access Authority Under Sections 414 and 704 of the Federal Food, Drug, & Cosmetic Act (FDA-2011-D-0674)
  • What You Need to Know About Administrative Detention of Foods; Small Entity Compliance Guide (FDA-2011-D-0643)
  • What You Need To Know About Registration of Food Facilities; Small Entity Compliance Guide (FDA-2012-D-1003)
  • Questions and Answers Regarding Food Facility Registration (Fifth Edition) (FDA-2012-D-1002)
  • Necessity of the Use of Food Product Categories in Food Facility Registrations and Updates to Food Product Categories (FDA-2012-D-0585)
  • Questions and Answers Regarding Establishment and Maintenance of Records By Persons Who Manufacture, Process, Pack, Transport, Distribute, Receive, Hold, or Import Food – Edition 5 (FDA-2011-D-0598)
  • What You Need to Know About Administrative Detention of Foods (FDA-2011-D-0643)
  • Implementation of the Fee Provisions of Section 107 of the FDA Food Safety Modernization Act (FDA-2011-D-0721)
  • Fish and Fishery Products Hazards and Controls Guidance (FDA- 2011-D-0287)

In the next FSMA Perspective, I hope to be able to review the new preventive controls rules for human and animal food. In the meantime, I would like to draw your attention to a series of FDA instructional webinars that deal with implementing the preventive controls rules. The agency presented an August 27 session on industry best practices for supplier management. The next webinar in the series, on October 22, 2015, will deal with minimizing allergens.