Last month, the Senate Health, Education, Labor, and Pensions (HELP) Committee approved the "Pharmaceutical Compounding Quality and Accountability Act," a bipartisan bill introduced by Senator Tom Harkin (D-Iowa) and other members of the HELP Committee.1 The bill will likely serve as the primary Senate vehicle to address pharmaceutical compounding and delineate compounding oversight responsibility between states and the U.S. Food and Drug Administration (FDA). The bill represents one of Congress’s latest responses to last year’s tragic New England Compounding Company (NECC) meningitis outbreak, but it has not been its only attempt.2 This article compares past and current legislation in the House and Senate related to pharmacy compounding.

2012 House Actions

After the meningitis outbreak came to light, the House introduced two bills in 2012 that died last year in Congress: "The Verifying Authority and Legality in Drug (VALID) Compounding Act of 2012,"3 and "The Supporting Access to Formulated and Effective (SAFE) Compounded Drugs Act of 2012."4 While both bills would have strengthened federal oversight of compounding pharmacies, the VALID Compounding Act of 2012 had several key elements:

  1. Provided that new drug approval requirements of the Federal Food, Drug, and Cosmetic Act (FDCA) did not apply to a compounded product under certain circumstances, such as when drugs are made for an identified individual patient based on a prescription.
  2. Specified drugs that should not be compounded.
  3. Preserved state authority regulating traditional small compounding pharmacy activities.
  4. Ensured that compounding pharmacies operating as drug manufacturers were regulated by FDA as drug manufacturers.
  5. Permitted some compounding pharmacies to request waivers to enable them to compound drugs before the receipt of a valid prescription.
  6. Allowed FDA to waive the requirement to compound drugs only if the compounded drugs are not copies of commercially-available drugs if doing so is necessary to protect public health or well-being.
  7. Increased transparency regarding compounded drugs.

While both House bills required compounding pharmacies to register their facilities with the FDA and comply with certain labeling requirements, the SAFE Compounded Drugs Act of 2012 also would have:

  1. Required the practitioner writing the prescription, pharmacist dispensing the product, and health care provider providing services to follow certain procedures related to informing the patient for whom the prescription is being written that a compounded drug is being prescribed and provide the patient with a document containing safety, availability, and production information.
  2. Established an FDA database of compounding pharmacies and an advisory committee on the database to ensure states and FDA shared information.
  3. Established another FDA advisory committee to advise on the appropriate label content and format for compounded drugs.
  4. Required the FDA to set minimum production standards for compounded drugs.
  5. Established a registration process for compounding pharmacies.
  6. Directed the FDA to offer training opportunities for state regulators.

2013 House Actions

House Republicans still appear unconvinced that FDA needs more control over drug compounding. At a recent House Energy and Commerce Committee hearing on the topic, many Republicans, such as Congressman Joe Pitts (R-Pennsylvania), voiced concern against granting FDA more authority.5 Nonetheless, in late May, Congressman Ed Markey (D-Massachusetts) introduced the "Verifying Authority and Legality In Drug Compounding Act of 2013" or the "VALID Compounding Act of 2013," which will expand FDA’s ability to regulate drug compounding.6

Current House Bill: VALID Compounding Act of 2013

Unlike the current Senate bill, the current House bill, the VALID Compounding Act of 2013, provides that:

  1. FDA has sole regulatory authority over compounding pharmacies that engage in interstate commerce and high-risk sterile compounding (i.e., compounding sterile drug products using non-sterile ingredients, nonsterile devices, or nonsterile components). States retain authority over traditional small compounding pharmacies, as they are exempt from certain FDCA requirements if they meet certain conditions:
    • The drug must be compounded by a licensed pharmacist or physician for an identified patient with a prescription for the drug.
    • The drug must be compounded using safe and approved ingredients and practices.
    • The drug cannot be a copy of a commercially-available drug, except in cases of a drug shortage.
  2. If FDA determines that a state can oversee requirements set forth for pharmacies that compound drugs before or without receiving a prescription for an individual patient, FDA may enter into a Memorandum of Understanding with that state.
  3. Certain compounding pharmacies may compound drugs before or without receiving prescriptions for the drug provided that they register with FDA and meet standards FDA establishes, similar to provisions in the VALID Compounding Act of 2012. These compounding pharmacies include pharmacies within a hospital system and pharmacies compounding sterile drug products.
  4. FDA will develop a list of bulk substances from which drug products can be compounded.
  5. Copies of commercially available drugs may be compounded if there is a shortage of the drug and the pharmacy has notified FDA, or if there is a significant difference between the compounded drug and comparable commercially available drug product, as determined by the prescribing practitioner. Additionally, FDA may allow compounding of a commercially available drug if it determines that doing so is necessary to protect public health or well-being.

Although as of this article’s publication the bill has only three Democratic co-sponsors in a Republican controlled house, the bill will likely be the primary House vehicle to address the pharmacy compounding issues because of Congressman Markey’s powerful role on the House Committee on Energy and Commerce and his high profile due to his current candidacy for a Senate seat in Massachusetts. The bill has been referred to the House Committee on Energy and Commerce.

Comparison of the Current Senate and House Legislation

The Senate and House bills have a few distinct differences:

  1. The Senate bill allocates authority to states and FDA differently than the House bill.
    The Senate bill grants states the authority to regulate traditional compounders, i.e., entities that compound a drug by a licensed pharmacist or physician for individual patients with a prescription or in limited quantities before receipt of a prescription if compounding is based on a history of receiving prescriptions for the compounding of the drug.7 Although the House bill does not define "traditional compounding," it permits these types of entities to be regulated by states, though it does not allow for states to regulate entities compounding drugs in "limited quantities before receipt of a prescription" or "high-risk sterile compounding." The Senate bill authorizes FDA to regulate compounding manufacturers, i.e., entities that compound a sterile drug without a prescription and sell them across state lines, except for hospital pharmacies that ship within a hospital system.
  2. Wholesale distribution of compounded drugs is prohibited. Under the Senate bill, compounded drugs may only be sold by the entity that compounded that product, and all compounded drugs must be labeled "not for resale." These requirements are not explicitly addressed in the House bill.

Despite these differences, the Senate and House bills share six main features:

  1. Exempt certain FDCA requirements to a drug product in certain circumstances and permit state regulation. 
    • Under both of the proposed bills, the requirements regarding Good Manufacturing Practices (Sec. 501(a)(2)(B)), adequate directions for use (Sec. 502(f)(1)), and new drug approval (Sec. 505 for human drugs) do not apply to drugs compounded by licensed pharmacists or physicians for identified individual patients based on prescriptions ("traditional compounding" in the Senate bill). The current House bill provides more specific requirements than the Senate bill to qualify for the exemption.
    • Under the Senate bill, compounding manufacturers are exempt only from the FDCA requirements regarding adequate directions for use (Sec. 502(f)(1)) and the new drug approval provisions (Sec. 505 for human drugs), but are subject to applicable Good Manufacturing Practices (Sec. 501(a)(2)(B)). The House bill does not specify this exemption.
  2. Specify that only bulk drug substances may be used to compound a drug.
    • Only bulk drug substances8 may be used to compound a drug. Under the Senate bill, the bulk requirements in current section 503A of the FDCA are preserved, with one modification. The revised section 503A would permit FDA to identify a drug as not suitable for compounding due to public health concerns following the publication of the reasoning and consideration of comments submitted to a docket open for at least 60 days.
    • Under the House bill, if the drug product is produced using high-risk sterile compounding, the drug product must be compounded according to procedures FDA establishes. FDA will also develop a list of bulk substances that may be compounded.9
  3. Increase reporting and investigations.
    • Compounding manufacturers are required to report adverse health-related events to FDA (within 15 calendar days after initial receipt of the applicable information for serious adverse  events under the Senate bill, and 10 calendar days after becoming aware of any adverse event under the House bill) and fulfill other investigation and reporting obligations, including reporting a history of actions taken during the year and product quality reporting. The House bill requires manufacturers to notify FDA within two calendar days of becoming aware of information concerning bacteriological, fungal, or other contamination, significant chemical, or physical changes, or deterioration of a compounded drug product that has already been distributed that could cause serious injury or death.
  4. Compounded product labels must indicate that they are compounded.
    • Under the proposed Senate bill, the label must state: "This is a compounded drug" or a reasonable alternative.
    • Under the House bill, the following statement must be included: "This drug has not been tested for safety and effectiveness and is not approved by the FDA. This drug was made specifically for you because your health care provider determined that no FDA-approved product would suit your needs. Serious adverse reactions to this drug should be reported to the FDA at _____, to the pharmacy where the drug was received, and to your health care provider."
  5. FDA is given authority to inspect compounding manufacturers.
    • The Senate bill provides for a risk-based schedule of inspections that FDA will establish, depending on safety risk factors such as the compounding manufacturer’s compliance history, recalls linked to the compounding manufacturer, inherent risk of the drug compounded, and the inspection frequency of the compounding manufacturer.
    • The House bill allocates to FDA the authority to inspect compounding pharmacies that compound without prescriptions.
  6. Registration of certain compounders is required. 
    • Under the Senate bill, compound manufacturers must annually register with FDA, report to FDA every June and December the drugs sold in the previous six months, and provide other information related to each drug. Traditional compounders are not required to do so.
    • Under the House bill, FDA "shall specify by regulation for each type of pharmacy or pharmacist compounding drug products . . . [without prescriptions] . . . the registration requirements." However, pharmacies within a hospital system and pharmacies compounding sterile drug products are included.
  7. Compounding manufacturers must pay establishment and reinspection fees.
    • Under both bills, beginning in fiscal year 2015, compounding manufacturers must pay an annual establishment fee of $15,000 per year with an inflation adjustment to defray the cost of compounding oversight, and a reinspection fee of $15,000 if a reinspection is required. Small businesses, defined as compounding manufacturers with no more than $1 million in gross annual sales, would pay one-third of those fees.
  8. Specify drugs that should not be compounded. 
    • The Senate bill prohibits compounding of:
      • "[a] drug or category of drugs that presents demonstrable difficulties for compounding, which may include a complex dosage form or biological product, as designated by" FDA in regulations. The FDA’s list may include extended release products, metered dose inhalers, transdermal patches and sterile liposomal products;
      • copies of marketed FDA-approved drugs that are not in shortage if the compounder notifies the FDA within three calendar days after beginning compounding;
      • copies of marketed FDA-approved drugs that do not produce a clinical difference between the compounded drug and such marketed drug, as determined by the prescribing practitioner, or if the facility has not received a prescription specifying the variation; and
      • drugs subject to certain Risk Evaluation and Mitigation Strategies (REMS) unless the compounder uses comparable safety controls.
    • The House bill explicitly prohibits compounding of extended release products, metered dose inhalers, transdermal patches, liposomal products, and any other products FDA sets forth in a list, including products whose compounding is "reasonably likely to cause an adverse effect on safety or effectiveness of such drug product," similar to the VALID Compounding Act of 2012.
    • Both bills prohibit compounding products that have been removed from the market because they have been found to be unsafe or not effective, similar to the VALID Compounding Act of 2012.
  9. Add new grounds for misbranding. 
    • Drugs compounded by a compounding manufacturer would be considered misbranded if compounding manufacturers do not comply with the establishment or reinspection fee requirements, or if the labeling does not contain the information as required above.

The Senate bill was introduced with strong bipartisan support from within the HELP Committee, including Ranking Member Lamar Alexander (R-Tennessee). The bill has been reported out of the HELP Committee. The bill also incorporates the text of another measure to implement an electronic prescription drug tracking system. Along with the bill, the HELP Committee also released a staff report outlining the need for the framework that the bill establishes.10

Most of the provisions in the House and Senate bills would become effective one year after the bill is enacted, except for the fees. A copy of the proposed Senate legislation can be found by clicking here.11 The bill is awaiting a full Senate vote.