Drug compounding as a practice has, until recently, been met with far looser regulation than the manufacture of drugs. This practice serves to meet the needs of individuals who require certain formulations not available in manufactured form, such as discontinued medications or forms of manufactured drugs that do not contain ingredients to which a patient might be sensitive. Compounding may also change the form of the drug for patients who cannot take manufactured drugs in the manner in which they exist commercially. As industrial-level compounding grows to provide larger amounts of compounded drugs, regulators are scrambling to ensure the quality and safety of these drugs.

The biggest difference between a manufacturer of drugs and a drug compounding facility is that drug manufacturers must receive FDA approval before selling drugs to the public. Drugs from compounding facilities are not tested in the same manner for safety, efficacy or quality. After an outbreak of Aspergillus Meningitis between 2012 and 2013 due to tainted steroid injections from a compounding facility, Congress passed the Drug Quality and Security Act of 2013 (“DQSA”) in 2013, and a particular title called The Compounding Quality Act (“CQA”) to regulate the compounding industry. The DQSA/CQA set up a new regulatory regime that applies to all compounding pharmacies, and those pharmacies, large or small, should take notice as the FDA will soon release final rules implementing the provisions of the acts.

The CQA creates two different classes of compounders – traditional compounders and outsourcing facilities. Traditional compounders, such as small pharmacies that compound drugs based on prescriptions or in limited quantities, meet certain requirements that make them exempt from many of the strictures of the CQA, leaving them regulated largely by the states. Deviations from these exemptions will open these pharmacies up to federal inspection and potential enforcement actions.

The second class created by the CQA is for a new kinds of pharmacies known as outsourcing facilities. These facilities must adhere to a set of stringent standards created in the CQA: the compounding must be done at a state or federally licensed pharmacy and by a licensed pharmacist; the compounding must be done pursuant to a prescription order; each facility must be registered with the FDA and create a procedure for reporting “adverse events”; bulk drug ingredients must be approved by the FDA, appear in the U.S. Pharmacopeia or have a monograph in the National Formulary, and other ingredients must also appear in the U.S. Pharmacopeia or National Formulary; a compounded drug cannot contain a drug found to be ineffective or unsafe or essentially be a copy of another drug; the compounded drugs must not be considered by the FDA to be difficult to compound (and therefore result in safety or efficacy problems); the drugs cannot be wholesaled by the compounder; the facility must be up-to-date with all fees; the compounding must occur in a state that has a memorandum of understanding on file with the FDA regarding the compounding program and limitations on outsourcing facilities; and all drugs must be labeled with specific information to identify the facility so that the FDA, a patient or health care provider can contact the facility if some adverse event takes place.

Outsourcing facilities will now also be subject to Current Good Manufacturing Practices requirements, standards that have applied in the past to drug manufacturers. The FDA released several sets of guidance documents in July of 2014 that explain how the agency will view implementation of these standards.

Final rules implementing the DQSA/CQA have yet to be adopted and enforced, but traditional compounders and potential outsourcing facilities alike should begin to take steps toward compliance in anticipation of the new regulatory regime. The attorneys of McBrayer can help bring you into compliance ahead of time.