Compound Pharmacy Regulatory Update: Senate to Vote on Proposed Legislation Granting FDA Broad Authority to Regulate Compounding Pharmacies

Jun 19, 2013   

On May 22, 2013, the United States Senate Health, Energy, Labor and Pensions (HELP) Committee approved the Pharmaceutical Compounding Quality and Accountability Act (“Senate Bill 959”), which, if passed, would significantly change the regulatory framework for compounding pharmacies. (To read the HELP Committee’s summary of Senate Bill 959, please click here.) Senate Bill 959 was drafted in response to the recent illnesses and deaths linked to contaminated drugs produced by a compounding pharmacy in New England, which we previously reported on here and here. The Senate is expected to vote on Senate Bill 959 within the next two weeks. (For information related to Senate Bill 959, please read news coverage by Reuters here and The Washington Post here.)

Changes to the Regulation of Traditional Compounders and Compounding Manufacturers

Under the current regulatory framework, all pharmacies, including compounding pharmacies, are regulated by state boards of pharmacies. Consequently, drugs produced by compounding pharmacies are not subject to premarket review by the FDA or any other regulatory body, unless state laws so require. Therefore, although the FDA has explicit jurisdiction to regulate the manufacture of drugs under the FDCA, the agency’s current jurisdiction over compounding drugs and compounding pharmacies is much less clear. (We previously reported on issues related to FDA’s jurisdiction over compounding pharmacies here and here.) Senate Bill 959 aims to clarify the oversight responsibilities of state and federal authorities.

If passed, Senate Bill 959 would establish a clear boundary between “traditional compounders” and “compounding manufacturers”. “Traditional compounders” are defined as any entity wherein a drug is compounded by a pharmacist or physician licensed under state law upon receipt of a prescription. The draft legislation creates a new category for “compounding manufacturers,” which are defined as any “entity that compounds a sterile drug prior to or without receiving a prescription and introduces such drug into interstate commerce.” Under Senate Bill 959, intrastate distribution of compound drugs and interstate shipment of drugs within a hospital system would not fall within the definition of compound manufacturing.

Furthermore, Senate Bill 959 defines the FDA’s role in overseeing the compounding industry. The bill authorizes the FDA to create and enforce a national, uniform set of rules for compounding manufacturers, but reserves primary regulatory authority over traditional compounders to state boards of pharmacy. The proposed provisions require every compounding manufacturer to register with the FDA, list any products it makes, and pay a registration fee. Moreover, compounding manufacturers will be required to make products under a pharmacist’s supervision and in compliance with good manufacturing practices. Compounding manufacturers would also be subject to labeling regulations and adverse event reporting requirements. Furthermore, section two of Senate Bill 959 grants the FDA clear authority to regulate compounded drugs as new drugs under the FDCA:

(a) Clarification of new drug status – For purposes of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), the term “new drug” (as defined in section 201(p) of such Act) shall include a compounded human drug.

Although Senate Bill 959 reserves jurisdiction over traditional compounders to state boards of pharmacy, the draft legislation significantly diminishes their regulatory authority. The draft legislation prohibits traditional compounders from compounding certain drug products, including any drugs that the FDA deems “demonstrably difficult to compound” (e.g., complex dosage forms and biologics), any FDA-approved drugs on the market that are not in shortage, variations of marketed FDA-approved drugs unless they fulfill a specific patient need, and products subject to certain risk evaluation and management strategies. Additionally, traditional compounders would be prohibited from engaging in wholesale distribution of compounded products. Thus, even though Senate Bill 959 purports to reserve jurisdiction over traditional compounders to state boards of pharmacy, the proposed legislation would actually give the FDA expanded jurisdiction to regulate and restrict the range of drugs that compounding pharmacies can and cannot produce.

Senate Bill 959’s Impact on the Production and Regulation of Biologics

Members of industry are particularly alarmed by the provision of Senate Bill 959 that prohibits traditional compounders from compounding “a drug or category of drugs that presents demonstrable difficulties for compounding, which may include a complex dosage form or a biological product, as designated by the Secretary.” As it is written, the proposed bill gives the FDA wide discretion to define the meaning of “difficult for compounding” and determine which drugs or category of drugs fall within that definition. In the absence of precise guidance outlining how the FDA must show that a drug is difficult to compound, this provision has the potential to substantially affect the biologics industry. Under this regulatory framework, if the FDA determines that all biologic products are too complex or difficult to compound, producers of biologics could be required to submit their products to the FDA for formal approval. Senate Bill 959 thus gives the FDA explicit authority to restrict the compounding of biologics products and also has the potential to completely transform the future of biologics regulation.

It should be noted, however, that Senate Bill 959 provides exceptions for the compounding of biologics. Under the bill, a drug that is a biological product may be compounded if it is compounded from a licensed biological product and the compounding does not involve combining or mixing the biological product with a bulk drug substance. Similarly, a biological drug may not be combined or mixed with certain approved or conditionally approved drugs, unless the compounding is limited to combining, mixing, or diluting licensed allergenic products. Additionally, traditional compounders and compounding manufacturers may, upon the receipt of an authorized prescription from a physician or medical order from a hospital, compound a biological product if the compounded biological product is an allergenic product or produces a clinical difference between the compounded drug and the licensed biological product, as determined by a prescribing practitioner or licensed practitioner of a hospital.

Opposition by Industry

Although members of the compounding industry support certain changes to the current regulatory framework, many members strongly oppose Senate Bill 959 because it gives too much power to the federal government to regulate drug compounding. The International Academy of Compounding Pharmacists (“IACP”) stated that the proposed legislation is “too far-reaching in its scope” and constitutes “micromanagement of practitioner decisions.” (For more information, please read the IACP’s press release here.)

Industry members are particularly concerned with Senate Bill 959’s explicit grant of authority to the FDA to disallow entire categories of compounding drugs. (For more information from industry groups, please read statements from MyMedsMatter here and the Alliance for National Health USA here.) Even though these provisions would give the FDA broad power to ban the production of drugs that it believes can harm consumers, it also gives the FDA authority to ban the compounding of drugs that have been effective in patient treatments but are not otherwise available in a standard drug form. For this reason, the IACP argues that the draft legislation fails to “contain any provisions that speak directly to standards aimed at raising the quality of compounded medications,” despite lawmakers’ insistence that Senate Bill 959 will protect the public from unsafe compounded products. (For more information regarding IACP’s position on this issue, please read the IACP’s summary here.) Members of industry do not seem to outright oppose federal oversight of the compounding industry; however, they generally agree that Senate Bill 959 goes too far in stripping state boards of pharmacy of control.

What This Means

The enactment of Senate Bill 959 could have significant, widespread impacts on the compounding industry and the public’s access to compounded drugs. In granting the FDA broad authority to regulate compounding manufacturers and, indirectly, traditional compounders, this legislation could unnecessarily hamper the compounding industry’s ability to provide customizable medications for patients’ medical care. At present, it remains unclear whether increasing the scope of the FDA’s regulatory authority will actually help to achieve the goal of improving the safety of compounded drugs.

It is worth noting that Senate Bill 959 is not the first attempt by lawmakers to increase the federal government’s oversight of the compounding industry. As we previously reported here, lawmakers have been open to legislation that tightens regulations governing the compounding industry but have, up to this point, been unable to agree on how to address the gaps in the present regulatory scheme. Fuerst Ittleman David & Joseph, PL will continue to monitor any developments in the regulation of compounding pharmacies. For more information, please feel free to contact our offices by email at or by phone at (305) 350-5690.