On February 13, 2015, FDA issued four draft guidance documents and a draft memorandum of understanding (MOU) regarding the compounding of drug and biological products and the regulation of outsourcing facilities under the Drug Quality and Security Act (DQSA), enacted in November 2013.

Three of the guidance documents clarify the circumstances under which an entity should register as an outsourcing facility and the circumstances under which FDA expects to exercise enforcement discretion as to entities that repackage human prescription drug products or mix, dilute, or repackage biological products. The last guidance addresses adverse event reporting requirements for outsourcing facilities. The agency also published a draft MOU that may be used between a state and FDA concerning responsibilities for oversight of compounding activities.

This guidance clarifies that a company may register as an outsourcing facility only if the facility is engaged in the compounding of sterile human drugs. FDA notes that the definition of compounding does not include repackaging of drugs or the mixing, diluting or repackaging of licensed biologic products. Therefore, a company that is exclusively engaged in any or all of these activities should not register as an outsourcing facility. FDA further states that by registering as an outsourcing facility, an entity is electing to have all of its compounded drugs comply with the requirements that apply to outsourcing facilities (e.g., adherence to current Good Manufacturing Practice (cGMP)). Therefore, even if an outsourcing facility engages in traditional pharmacy compounding (i.e., compounds for an individual patient pursuant to a valid prescription), that compounding must comply with cGMP and is subject to inspection by FDA. The guidance reiterates that a facility will only qualify for the exemptions that apply to registered outsourcing facilities, related to new drug approval, track & trace, and labeling with adequate directions for use, if all of the outsourcing facility’s compounding complies with cGMP.

As noted above, FDA states that it does not consider repackaging to fall within the definition of compounding. Accordingly, the agency considers facilities that engage in repackaging not to be subject to the statutory exemptions available to traditional compounders, relating to new drug approval, adequate directions for use, and cGMP, or the statutory exemptions available to outsourcing facilities. In this context, FDA considers repackaging “the 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” and “the act of placing contents in multiple containers, (e.g., vials) of the same finished drug product into one container as long as the container does not include other ingredients.” Under certain conditions, FDA will exercise enforcement discretion with regard to the new drug approval or adequate directions for use labeling requirements when an approved human prescription drug product is repackaged and distributed by a state-licensed pharmacy, Federal facility, or an outsourcing facility, or with regard to cGMP compliance when the activities take place in a state-licensed pharmacy or Federal facility. The agency also does not intend to take enforcement action, with regard to the new drug approval, adequate directions for use, or cGMP requirements when an unapproved prescription drug is compounded by any of these facilities, so long as the product is on FDA’s drug shortage list (or is distributed within thirty days after it is removed from that list) and meets the conditions of the guidance.

This guidance states that a biological product that is mixed, diluted, or repackaged outside the scope of an approved Biologics License Application (BLA) is an unlicensed biological product under section 351 of the Public Health Service (PHS) Act, and, therefore, requires an approved BLA, labeling with adequate directions for use, and manufacturing in accordance with biological product standards and cGMP. FDA does not intend to take enforcement action for the failure to have an approved BLA or to be labeled with adequate directions for use if a state-licensed pharmacy, Federal facility, or an outsourcing facility engages in these activities. Further, FDA will exercise enforcement discretion regarding cGMP compliance under certain conditions when a state-licensed pharmacy or Federal facility conducts these activities. This guidance also explains the conditions under which FDA will not take enforcement action regarding the BLA licensing, adequate directions for use, and cGMP requirements related to the preparation of prescription sets of allergenic extracts. FDA defines “prescription sets,” in this context, as “a vial or set of vials of premixed licensed standardized and non-standardized allergenic extracts for subcutaneous immunotherapy diluted with an appropriate diluent prepared according to instructions from a prescription or order by a licensed physician for an individual patient.”

In this guidance, FDA provides its current thinking regarding adverse event reporting requirements for outsourcing facilities. The guidance outlines what must be reported to FDA, how to report to FDA, the investigation process that outsourcing facilities must conduct regarding the adverse drug experience, as well as inspection and recordkeeping requirements. The guidance also makes clear that outsourcing facilities must report serious and expected adverse drug experiences as soon as possible, but in no case later than 15 calendar days (a 15-day “Alert report”), if the facility has information on at least the suspect drug and the adverse event.

FDA provides this draft agreement to be used by a state and the agency to clarify responsibilities regarding the interstate distribution of “inordinate amounts” (defined in the MOU) of compounded human drug products and the state’s investigation of complaints relating to compounded drugs distributed outside the state. The MOU is significant because under section 503A(b)(3)(B) of the Federal Food, Drug, and Cosmetic Act (FDCA), in order for a compounded human drug to be exempt from the requirements regarding FDA approval, adequate directions for use, and cGMP compliance, the compounding must have taken place in a state that enters into an MOU, unless a quantity restriction is met. Accordingly, a drug compounded in a state that has not entered into an MOU with FDA, may be distributed only in quantities of 5 percent or less of the total prescription orders dispensed or distributed by the pharmacy or physician. This quantity restriction does not apply if the state has entered into an appropriate MOU with FDA.

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The documents are the most recent of a series of policy documents that FDA has issued relating to compounded drugs under the DQSA, and take on some of the central controversies surrounding compounding. On a related note, on February 23 to 24, 2015, the Pharmacy Compounding Advisory Committee will convene to review bulk substances that may be compounded and products that should not be compounded. See FDA, Pharmacy Compounding Advisory Committee Meeting Announcement (Jan. 23, 2015).

Comments are due on the guidance by May 20, 2015, and the MOU by June 19, 2016.