FDA identified five key areas the agency intends to address before the end of 2018 to continue implementation of regulations and policy governing oversight of compounding pharmacies and outsourcing facilities.

Achieving balance between promoting patient access to medications and implementing measures designed to ensure medications are safe has been a recurrent theme from the U.S. Food and Drug Administration. FDA reprised the theme of “an appropriately balanced approach to regulation” again in its 2018 Compounding Policy Priorities Plan, released on Thursday, January 18, 2018.

FDA identified five key areas the agency intends to address before the end of 2018 to continue implementation of regulations and policy governing oversight of compounding pharmacies and outsourcing facilities:

  1. Quality standards for outsourcing facilities registered under Section 503B;
  2. Restrictions on compounding drugs that are essentially copies of FDA-approved drug products;
  3. Regulations for pharmacies and outsourcing facilities to compound from bulk drug substances;
  4. FDA’s partnership with state regulatory authorities with oversight of compounding pharmacies; and
  5. Additional guidance documents addressing specific areas of concern for compounding activities.

FDA has set forth an ambitious agenda for the coming year.

FDA’s flexible, risk-based approach to current good manufacturing practices (cGMP) requirements for outsourcing facilities.

FDA wants more compounders to register as outsourcing facilities under Section 503B of the Food Drug and Cosmetic Act (FDCA). To achieve this, FDA has announced it plans to implement a more flexible, risk-based approach to manufacturing requirements for outsourcing facilities.

Among the statutory requirements for outsourcing facilities is compliance with cGMP. Many of these cGMP standards were developed, however, primarily in the context of requirements for drug manufacturers. For a variety of reasons, compliance with these cGMP requirements has proven impractical or even impossible for compounding facilities.

Recognizing that cGMP requirements have prevented some compounders from registering as outsourcing facilities, FDA plans to issue proposed regulations specific to cGMP requirements that will apply to outsourcing facilities. Before issuing those proposed regulations, FDA will issue a revised draft guidance outlining its new flexible, risk-based approach to cGMP requirements for outsourcing facilities. FDA’s new flexible approach will take into account the size and scope of an outsourcing facility’s operations in hopes that smaller facilities (which FDA presumes present lower risks) will register as outsourcing facilities.

FDA issued final guidances addressing the prohibition against compounded drug products that are essentially copies of a commercially available drug.

The same day FDA announced its 2018 Compounding Policy Priorities Plan, the agency also issued two guidances addressing compounded medications that are essentially copies of a commercially available drug product—one guidance for compounding under Section 503A and one guidance for compounding under Section 503B. These guidances are intended to implement FDA’s position that prescribers and patients should turn to compounded medications only when there is no commercially available, FDA-approved drug product that could meet the patient’s medical needs. FDA has expressed more confidence in the safety and effectiveness of manufactured drug products that have undergone premarket review for approval. Additionally, FDA shares a concern of many drug manufacturers that compounders undermine the drug approval process if they are allowed to sell copies of a commercially available drug product without investing in the development and regulatory costs that accompany taking a New Drug Application or Abbreviated New Drug Application through the FDA approval process.

FDA recognizes these same general policy concerns for copies of FDA-approved drug products regardless whether they are compounded under Section 503A or by an outsourcing facility under Section 503B. But, because Congress adopted a different statutory prohibition under Section 503A as compared to Section 503B, FDA has issued separate guidances implementing each of those statutes prohibiting compounded medications that are essentially a copy of a commercially available FDA-approved drug product.

FDA continues with development of regulations that will limit the drugs that can be compounded from bulk drug substances under Section 503A and under Section 503B.

Both Section 503A and Section 503B limited the drugs that could be compounded from bulk substances. Under Section 503A, compounders can use bulk drug substances if the bulk drug complies with a United States Pharmacopeia (USP) or National Formulary monograph, is a component of an FDA-approved drug product, or appears on a list developed by FDA through regulation (503A bulks list). FDA intends to issue a final regulation developing the list of additional drug substances that can be compounded from bulk ingredients under Section 503A, and FDA will continue evaluating additional bulk drug substances that have been nominated for inclusion on this list.

Under Section 503B, outsourcing facilities can use bulk drug substances if the drug appears on FDA’s drug shortage list or on a list to be developed by FDA of bulk drug substances for which there is a clinical need as determined by FDA (503B bulks list). FDA plans to issue a draft guidance in March 2018 proposing criteria for making clinical need determinations for purposes of the 503B bulks list. FDA intends to address in this draft guidance document concerns the agency “has heard” about compounding from bulk drug substances when the drug can be compounded from FDA-approved drugs. In October 2017, Endo Pharmaceuticals sued FDA alleging that FDA’s interim policies allowing compounding from bulk drug substances (Case No. 17-cv-2221, D.D.C.) violated the Drug Quality and Security Act of 2013 (DQSA).

As a practical matter, once FDA formally limits outsourcing facilities to compounding from bulk drug substances only where the drug appears on FDA’s drug shortage list or the 503B bulks list, that may be sufficiently restrictive to discourage some compounders from choosing to register as an outsourcing facility.

FDA is planning to issue a revised draft Memorandum of Understanding (MOU) to foster FDA’s partnership with state regulators.

Section 503A recognized a need for coordination between state and federal regulatory authorities. Traditionally, state boards of pharmacy have overseen the practice of pharmacy, including compounding, while FDA has had authority over drug manufacturing. The DQSA, adopting Sections 503A and 503B of the FDCA altered that dynamic by creating a framework for federal oversight and limits on compounding activities. Nevertheless, FDA has reiterated that it intends “to leave the oversight of traditional pharmacy to states.” Where the line is drawn between compounding and manufacturing activities or between state and federal regulation has been unclear since long before DQSA.

FDA hopes to help clarify the roles of state and federal regulators through a revised draft Memorandum of Understanding (MOU) that can be adopted by states. Section 503A explicitly envisions development of an MOU by FDA that is intended to facilitate cooperation with states for regulation of compounding activities that involve “distribution of inordinate amounts of compounded drug products interstate.”

FDA identified several additional guidance documents it intends to issue during the coming year.

The same day as the 2018 Compounding Policy Priorities Plan, FDA issued a final guidance addressing Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application. FDA also announced plans to develop guidance documents addressing the definition of a facility in Section 503B, compounding and repackaging of radiopharmaceuticals, examples of conditions FDA considers to be insanitary and in violation of FDCA, and a final rule regarding additions and modifications to the list of drug products that cannot be compounded because they have been withdrawn from the market for reasons related to safety or effectiveness.

With respect to the definition of a facility in section 503B, FDA has promised to address whether an outsourcing facility can be co-located with a Section 503A pharmacy, and whether an outsourcing facility can also manufacture FDA-approved drug products within the same facility. FDA had previously issued a draft guidance in April 2016 that addressed the definition of “facility” under Section 503B. At that time, FDA indicated that medications could not be compounded under the provisions of Section 503A at the same geographic location or address as an outsourcing facility registered under Section 503B. FDA has now indicated that it will define more clearly when products intended to be compounded under Section 503A will not be held to the more stringent requirements of Section 503B just because they were prepared near an outsourcing facility. Furthermore, FDA has stated that it wants more compounders, especially smaller operations, to register as outsourcing facilities. Clarification of how an organization could compound medications under both Section 503A and Section 503B could be helpful to FDA in achieving that goal.

FDA’s 2018 Compounding Policy Priorities Plan promises a busy year ahead for implementation of DQSA and clarification of the regulatory framework for compounding services provided under Section 503A and 503B.