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Legislation, Regulation and Advocacy

Compounding Legislation Action Center


In the wake meningitis outbreak caused by drugs manufactured by the New England Compounding Center (NECC) in Framingham, Massachusetts there has been a call for greater oversight of compounding pharmacies in the U.S.  The National Home Infusion Association (NHIA) believes we should do everything possible to prevent a repeat of the failures of NECC.  We know that the substances produced at NECC have claimed 53 lives and sickened more than 700 people in 20 states.  The NHIA believes that the safety of patients is the first priority for all home infusion providers and as new regulatory structures are considered this should be the first test.  We must also work toward a balanced approach that does not put the availability of services and medications in jeopardy.

The NHIA legislative action center for compounding pharmacy legislation is a clearinghouse of information on legislation and regulation for home infusion providers.  Should issues arise where your grassroots action is needed we will update this page.  We also urge you to sign up for the NHIA ListServ to get regular updates from us on the issue.

Federal Action

The Drug Quality and Security Act

The Drug Quality and Security Act, H.R. 3204 was signed into law by President Obama on November 27, 2013.  This bill contains two titles. Title I, “The Compounding Quality Act,” distinguishes between traditional compounders and outsourcing facilities. It establishes a uniform set of rules for outsourcing facilities while preserving the states’ primary role in traditional pharmacy regulation. Title II, “The Drug Supply Chain Security Act,” provides a uniform, national drug tracing framework to track prescription drugs from the manufacturer to the pharmacy and raises the standards for prescription drug wholesalers across the U.S.

It is important to review the text of Title I with section 503A of the Federal Food, Drug and Cosmetic Act (FFDCA) in mind. 

We have provided the text of section 503A on NHIA’s website and it can be accessed here.

The legislation does not reference section 503A except in the severability clause under section 106 of the legislation.  This section would amend section 503A of the FFDCA by removing the advertising and promotion provisions that the Supreme Court had found unconstitutional years ago and which resulted in a Circuit Court split as to the validity of section 503A—which led to legal uncertainty for the industry and for FDA. By striking the unconstitutional portions of 503A, Congress re-establishes this section as the principal federal recognition that traditional compounding pharmacies will continue to be regulated by the states.  In particular, traditional compounding will remain exempt from certain provisions of the FFDCA relating to drug manufacturing (chiefly cGMP) if performed in compliance with section 503A. 

With 503A becoming the national law regarding traditional compounding pharmacies, the bill also creates a new type of compounding entity called an “outsourcing facility.  This option for a facility engaged in compounding of sterile drugs allows the facility to choose to register with the FDA as an outsourcing facility. A facility qualifying as an outsourcing facility, and which chooses to register with FDA, will be exempt from several (but not all) burdensome provisions of the FFDCA.

Under the provision the FDA will make available on their website a list of the name of each outsourcing facility along with the state where the facility is located, whether the facility compounds from bulk drug substances, and whether drugs compounded from bulk are sterile or non-sterile. An outsourcing facility that chooses to register with the FDA must:

  • Give a licensed pharmacist direct oversight over the drugs compounded;
  • Compound only drugs from bulk ingredients that appear on a list developed by the Secretary. This list will be developed through a notice published in the Federal Register following a 60 day comment period, and must take into consideration clinical need;
  • Report to the Secretary upon registering, and every 6 months thereafter, the drugs sold in the previous 6 months;
  • Be inspected by FDA according to a risk-based inspection schedule, and pay annual fees to support such inspections;
  • Report serious adverse event experiences, and conduct follow up investigation and reporting similar to drug manufacturers;
  • Label products with a statement identifying them as a compounded drug and other specified information about the drug.

Drugs removed from the market for safety and effectiveness reasons may not be compounded.

Copies of marketed FDA-approved drugs may not be compounded by an outsourcing facility except in the case of a drug shortage. Products subject to Risk Evaluation and Mitigation Strategies (REMS) with elements to assure safe use can only be compounded if they otherwise comply with the criteria to qualify for the exceptions and if the compounder shows the Secretary it utilizes controls that are comparable to those in the REMS.

Compounded drugs may only be sold by the outsourcing facility that compounded the drug, and all must be labeled “not for resale”.  An outsourcing facility may or may not be a licensed pharmacy. FDA is responsible for overseeing all drugs compounded in an outsourcing facility.

The annual fee for outsourcing facilities is $15,000 per year with an inflation adjustment. Small businesses, defined as compounding manufacturers with under $1,000,000 in annual gross revenue, pay one-third of that fee. FDA would then adjust the fee for the larger facilities based on the number of small businesses. Fees can only be used for the inspection and regulation of compounding manufacturers.

Aside from the new voluntary outsourcing facility designation, the bill also requires enhanced communication between states and the FDA.  This section would require the Secretary to facilitate meaningful communication between the FDA and the State Boards of Pharmacy about concerns raised, or actions taken, against compounding pharmacies.

NHIA Thoughts and Analysis

In the final hours before the House vote the House and Senate worked out a provision that was requested by NHIA to further clarify the voluntary nature of being an outsourcing facility.  NHIA pushed for this clarification to ensure that the election to be an outsourcing facility would be a voluntary decision by the pharmacy would not be a coerced election by the FDA.

The goal of Congress in creating the new outsourcing facility designation is to create an FDA “good housekeeping seal of approval” scenario.  Congress believes that once this designation is in place the market will demand that facilities seek to be designated as outsourcing facilities to ensure safety.  By “market,” we are referring to payers, accreditation organizations, liability insurers and patient demand.  This may well be an accurate scenario for office use compounders and pharmacies that compound non-patient-specific medications.  However, due to the patient-specific nature of home infusion, the market forces driving the election to become an outsourcing facility may be mis-directed.  Outsourcing facilities would still be subject to the cGMP sterility testing requirements, and the typical sterility testing under cGMP is a minimum 14 day test that is based on a lot testing system.  This is an impossible standard for compounders of patient-specific medication who are trying to address patients’ immediate needs.   Thus, this designation simply will not work for infusion pharmacies.  Throughout this legislative process, Congress clearly did not want to create situations that would disrupt the normal practices of infusion pharmacies.  We will need to continue our dialogue with Congress as the outsourcing designation rolls out in the future to ensure that infusion pharmacies are not pressured to become entities that cannot respond to their patients’ needs.

We would like to also to note there are provisions included in the bill that require the FDA to go through a full rule-making process with comment periods.  This will give NHIA and other stakeholders an opportunity to influence the rule making process. 

Regulatory Action

Shortly after the signing of the Drug Security and Quality Act the FDA released three draft guidances and three rules were published in the Federal Register.  The rules and guidances can be reviewed through the links below. NHIA has reviewed these documents and commented on the rules and guidances that affect home infusion.  NHIA welcomes your thoughts on these guidances and rules.  Please contact Kendall Van Pool at kendall.vanpool@nhia.org with your comments.

NHIA has also contacted the FDA urging the FDA consider the need for 503A facilities when promoting outsourcing facilities:

NHIA Expresses the Need for Traditional Compounding Pharmacies to FDA
Click Here to Read the Letter
February 19, 2014

FDA Responds to NHIA Need for Traditional Compounding Pharmacies Letter
Click Here to Read the Letter
March 27, 2014

State Action