Senate’s HELP Committee Releases Draft Compounding Legislation; Seeks Stakeholders’ Written Comments by May 3, 2013

By Karla L. Palmer –

The Senate’s Health, Education, Labor and Pensions (“HELP”) Committee released draft legislation on Friday, April 26, 2013, that would replace section 503A of the Federal Food, Drug & Cosmetic Act (“FDCA”), amend other sections, and clarify FDA’s authority to regulate pharmaceutical compounders and compounded pharmaceutical products.  Interested persons, industry and other stakeholders are asked to submit written comments concerning the draft legislation to compounding@help.senate.gov by 6:00 PM on May 3, 2013.  The draft legislation is available here, along with a summary, and an easily digestible section-by-section analysis of the draft bill.  

Set forth below is a summary of the draft legislation: 

Compounded Drugs Would Be Considered “New Drugs.”  In a section titled, “Clarification of New Drug Status” the proposed legislation explicitly clarifies that compounded drugs are “new drugs” subject to regulation under the FDCA. This clarification would put to rest decades of ambiguity concerning whether the FDCA’s provisions relating to new drug approval requirements apply to compounded drug products.

The Proposed Legislation Seeks to Establish Clear Regulatory Boundaries By Defining “Traditional Compounder” and “Compounding Manufacturer.”  The legislation would create two categories of compounding pharmacies: “traditional compounders” and “compounding manufacturers.”

Compounding Manufacturer.  The draft defines “compounding manufacturer” as an entity that: (1) makes sterile drug products without receiving or in advance of a prescription and introduces those drugs in interstate commerce; or (2) “repackage[s] a drug using sterile preservative-free single-dose vials or by pooling sterile drugs.”  Compounding manufacturers would be required to pay FDA annual registration fees, follow statutory restrictions on drugs they can compound (both for humans and animals), submit to FDA inspections similar to those conducted of drug manufacturers, and make regular reports to FDA pursuant to a national, uniform set of rules.  Drugs compounded by newly defined compounding manufacturers that meet the requirements set forth in the new section 503A would be exempt from the Act’s requirements regarding adequate directions for use (Sec. 502(f)(1)) and the new drug approval provisions (Sec. 505 for human drugs and Sec. 512 for animal drugs), but are subject to current Good Manufacturing Practices (“cGMP”) applicable to drug manufacturers.  In order for the exemptions to apply, the compounding manufacturer would have to comply with the other provisions of the legislation, and cannot be licensed as a pharmacy in any state.

More specifically, under the legislation, compounding manufacturers would have to:

• Ensure that a pharmacist, licensed in the state where the compounding manufacturer is located, exercises direct supervision over the operations of the compounding manufacturer.

• File with FDA every six months a list of drugs compounded during the previous six month period (including active ingredients, NDC numbers, the strength of active ingredients per unit, dosage form and route of administration, number of individual units produced, the NDC of the final product, and other requirements as established by FDA pursuant to regulation).

• Report to FDA any serious adverse drug experience not later than 15 days after receipt of information about the adverse event and maintain records of serious adverse drug experiences for 10 years.

• Label compounded drugs with the following statement: “This is a compounded drug,” or a reasonable comparable alternative statement (as specified by FDA).  The label also would include the name, address, and phone number of the compounding manufacturer; the lot or batch number; established name of the medication; strength; statement of quantity; directions for use; date the product was compounded; the “beyond use date;” storage instructions; and other information that the FDA determines is necessary.

• Pay registration fees.  For compounding manufacturer establishments with more than 25 employees, the annual fee would be $15,000 (subject to inflation); those with less than 25 employees would pay roughly one-third of that fee.  To the extent that FDA must reinspect a compounding manufacturer, that entity would be responsible for 100% of the reinspection-related costs.  All fees collected will be used by FDA solely to pay costs associated with inspections.

Traditional Compounders.  As defined by the legislation, a “traditional compounder” requires a licensed pharmacist in a state-licensed pharmacy, a licensed physician or licensed veterinarian, to the extent permitted under state law, to compound a drug, but only (1) upon receipt of a prescription for an individual patient; or (2) in limited quantities before receipt of a prescription for an individual patient if such compounding is based on an “established history” of such prescriptions.  Compounded drugs meeting the requirements set forth in the new 503A would be exempt from FDA’s cGMP (Sec. 501(a)(2)(B)), adequate directions for use requirements (Sec. 502(f) (1)), and the new drug provisions of the FDCA (Sec. 505 for human drugs and Sec. 512 for animal drugs).

The Proposed Legislation Contains An Exemption for Hospital Pharmacies.  A pharmacy located within a “health system” that compounds and ships drugs for dispensing within that health system (which may include interstate shipment) is considered a traditional compounder, subject to specified conditions, if it otherwise meets the definition of a traditional compounder.

Prohibitions on Compounding Certain Drugs.  The draft legislation states that certain drugs may not be compounded except under limited circumstances.  Those drugs include complex dosage forms and biologics as designated by FDA pursuant to regulation (this may include “extended release products, metered dose inhalers, transdermal patches, and liposomal products”). 

Copies of marketed animal or human drugs, including variations of such drugs compounded from bulk substances also could not be compounded, with a few exceptions.  These exemptions include: (1) if the compounder receives a prescription order for an identified individual patient indicating that the compounded variation produces for that patient a significant difference, as determined by the prescribing practitioner; (2) for copies of marketed FDA-approved drugs, if the drug at the time of compounding and its distribution is on FDA-maintained drug shortage lists, and the compounder notifies FDA prior to compounding.

Other Provisions.  The draft legislation also contains restrictions on the bulk chemicals that can be used in compounding, prohibits compounding manufacturers from selling to middlemen or wholesalers.  Lastly, references in the draft legislation to a prescription order for an “identified individual patient” would, in the case of animals, include a prescription order for a specific herd or flock of animals.