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Regulatory: Latest proposed federal legislation of compounding pharmacies

No new legislation has been passed surrounding compounding pharmacies, but plenty of potential options have been placed on the table

Historically, compounding pharmacies have been regulated and licensed by state boards of pharmacy. However, due to the attention created by the New England Compounding Center case and the resulting meningitis outbreak, the federal government is once again proposing ways to regulate the industry.

On April 26, 2013, the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP) released proposed legislation (Senate Proposal) aimed at regulating compounding pharmacies. The Senate Proposal contains fundamental legislative changes to compounding pharmacies.

For example, the proposed legislation includes “compounded drugs” within the definition of a “new drug” under the Federal Food, Drug and Cosmetic Act (FDCA). This inclusion would create a presumption that all compounded drugs have to comply with the requirements of the FDCA such as the registration, new drug and manufacturing process.

The Senate Proposal’s use and inclusion of the term “compounded drug” in the definition of “new drug” is interesting considering the proposed legislation creates two classes of compounding pharmacies as discussed below. Including all “compounded drugs” as a “new drug” is extremely broad and would include any compounded drug, even those compounded by a “traditional compounder.”

Another interesting proposal is the creation of two categories of compound pharmacies: “traditional compounders” and “compounding manufacturers.” While the definition of “traditional compounder” is very similar to the historical use of the term compounder and would continue to be licensed by state boards of pharmacy, “traditional compounders” would be subject to additional federal requirements.

“Compounding manufacturer” is a new category, which refers to an entity that compounds any sterile drug without receiving a prescription order prior to beginning compounding and introduces the compounded drug into interstate commerce or that repackages a drug using sterile preservative-free single-dose vials or by pooling sterile drugs. It is interesting that the definition of “compounding manufacturer” is specifically limited to the compounding of sterile drugs. Under the Senate Proposal, compounding manufacturers cannot be licensed as pharmacies under state laws.

On June 14, 2013, U.S. Rep. Morgan Griffith (R-Va.) released a draft House Bill of a regulation concerning compound pharmacies. On July 11, 2013, Rep. Griffith released a revised draft. The July House Bill allows the regulation of compounding pharmacies to stay with the states, exempts compounded drugs from the FDCA, and does not create a new “compounding manufacturer” regulated category. In particular, the July draft proposes that compounded drug products for human use should be exempted from Sections 501(a)(2)(B) (Current Good Manufacturing Practices), 502(f)(1) (adequate directions for use) and 505 (new drug application process) of the FDCA laws, as long as certain conditions are met, including:

  • A drug product that is compounded pursuant to a patient-specific prescription order stating that a compounded product is necessary for the patient
  • As long as permitted by state law, a compounded drug is made before receipt of a patient-specific prescription order when the pharmacist has historically received valid prescription orders for compounded drug products and there is an established relationship between the licensed pharmacists or physician and the patient or prescriber
  • As long as permitted by state law, pursuant to a non-patient-specific purchase order submitted by a healthcare provider, which assures that the drug will be administered by the healthcare practitioner within a healthcare setting and a patient-specific prescription order will be submitted within seven days

Compounded drugs must not be “essentially copies” of commercially available products, drug products that have been withdrawn or removed from the market for lack of safety or effectiveness or drug products for which compounding presents adverse effects on safety or effectiveness.

The Senate Bill is broader in scope than the House Bill, especially the provision that treats all “compounded drugs” as “new drugs” under the FDCA. The Senate Bill also attempts to draw a bright line between “traditional compounders” and “compounding manufacturers.”

As of the writing of this article, no new legislation has been passed. However, with the increased legislative activity, it is only a matter of time before the federal government issues new legislation applicable to compounding pharmacies.

Contributing Author

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Jim Hoover

Jim Hoover is a partner and health care attorney with Burr & Forman LLP (Birmingham, Ala.). He represents hospitals, physician practices, pharmacies, medical device manufacturers,...

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