The HHS Office of Inspector General Reports on Acute-Care Hospitals’ Ubiquitous Practice of Outsourcing High-Risk Compounded Sterile Products

By Karla L. Palmer & Jeffrey N. Gibbs –  

On April 10, 2013, the Department of Health and Human Services’ Office of Inspector General (“OIG”) released a Memorandum Report titled, “High-Risk Compounded Sterile Preparations and Outsourcing by Hospitals That Use Them.”  The OIG Report provides information about the extent to which acute care hospitals that participate in the Medicare program used sterile compounded preparations (“CSPs”) and purchased them from outside sources such as compounding pharmacies in 2012.  The Report also describes steps that surveyed hospitals took to ensure quality of CSPs.  The timing of the Report’s release squares with FDA’s brief summary of its investigation of sterile compounding pharmacies (see our previous post here) and Congress’ announcement of a second hearing by the House Energy and Commerce Committee addressing the meningitis outbreak that killed more than fifty people and sickened hundreds of others.  That Congressional Hearing occurs today, April 16, 2013 (see here).

298 small to large acute care hospitals responded to the OIG survey.  OIG also interviewed stakeholders including four practicing hospital pharmacies and officials of the trade association that represents hospital pharmacists.  The OIG Report focused on two types of CSPs that hospitals use (based on method of preparation and components): “sterile-to-sterile” and “nonsterile-to-sterile” products.  Sterile-to-sterile products are prepared solely from sterile ingredients, which a pharmacist constitutes, and are considered by the OIG Report to carry a “high risk” of contamination (to confuse matters, Chapter 797 of the U.S. Pharmacopeia, the authoritative national guidance on sterile compounding, refers to drug products prepared with sterile ingredients, under highly antiseptic conditions and in small quantities, as either “medium-risk level” or “low-risk level”).  Nonsterile-to-sterile products are prepared from one or more nonsterile ingredients that must be mixed together and sterilized, are considered to be “highest risk” by the OIG report, and are considered to be “high-risk level” by USP Chapter 797.  The Report notes that contaminated nonsterile-to-sterile products led to the New England Compounding Center (“NECC”) meningitis outbreak.  These products require “extensive safety precautions, including specialized staff training, positive and negative flow sterile rooms, sterile laminar hoods, and daily cleaning and disinfection.”  Report at 2. 

The Report states generally that 92% of surveyed hospitals used sterile-to-sterile CSPs and only 25% used the more risky nonsterile-to-sterile compounded products, but the nonsterile-to-sterile products comprised less than1% of all CSPs used those hospitals.  Hospitals also stated that opioids, steroids, electrolytes, and diuretics were among the most commonly used nonsterile-to-sterile CSPs. They also reported using nonsterile-to-sterile CSPs for intrathecal pain pumps and epidurals.  Commonly used sterile-to-sterile CSPs included antibiotics, opioids, epidurals, oxytocics, a total parenteral nutrition, and cardioplegic solutions.

The Report noted the following:

• Of the hospitals that used higher risk CSPs in 2012, 85% purchased “at least some” of these products from outside sources.

Of the hospitals that used the more risky nonsterile-to-sterile CSPs, 36% of the hospitals prepared these products at an on-site pharmacy; however, the majority of the hospitals used a combination of outsourcing and in-house preparation.  One reason cited for some of the hospitals’ outsourcing these products was because their facility could not meet the more stringent sterile compounding requirements in USP <797>.  Of those hospitals that outsourced nonsterile-to-sterile preparations, 67% purchased CSPs from pharmacies located in another state.  Of those hospitals that purchased sterile-to-sterile CSPs, 77% purchased them from at least one outside pharmacy, and most purchased from pharmacies located out of state.

• Hospitals consider ensuring an adequate supply of CSPs as “very important” when determine whether to outsource CSPs. 

When asked why hospitals obtained  supplies of high risk CSPs from third party pharmacies, several hospitals cited shortages in commercial products “as a very important factor when deciding whether to outsource CSPs,” and that “[o]utsourcing CSPs may be necessary to ensure the availability of products during such shortages.”  One hospital pharmacy director responded that the hospital had outsourced more products in 2012 than in prior years due to increased shortages in commercially available products. 

Almost half (48%) of the hospitals stated that an abrupt shortage of outsourced CSPs would have a “non-life threatening but great impact” on delivery of care in their hospitals.  An additional 11% stated that an abrupt shortage would cause a “life-threatening, major disruption at the hospital.”

Related to the issue of anticipation of product demand and shortages, hospitals also considered CSP stability and the need for CSPs with an extended shelf life (again, protecting against supply disruption from commercial unavailability) as “very important” factors in deciding whether to outsource.  However, many hospitals are constrained by their inability to produce CSP’s in-house; only 56% of those surveyed housed a USP <797> compliant clean room in which such products could be prepared.

• Hospitals took limited steps to ensure the quality of outsourced CSPs, but they also rarely had problems with CSP quality. 

The Report stated that most (83%) of the hospitals that outsourced CSPs required that the pharmacies compound products pursuant to USP <797>, or reviewed quality reports provided by the pharmacies (71%).  Only 22% of the hospitals conducted site visits to pharmacies or reviewed independent quality reports. 

Nevertheless, 42% were “very confident: that the steps taken to ensure quality were adequate; 47% were “somewhat confident” that pharmacies’ quality steps were adequate.  Most hospitals that outsourced CSPs had “no problems” with outside pharmacies, and of those that did have problems, most were related to product availability.  With respect to product contamination, few hospitals reported a problem (11 out of 236); however, the Report noted that any problem with contamination is potentially serious as evidenced by the 2012 meningitis outbreak.  

• Half of all hospitals made changes or planned to make changes to CSP outsourcing practices in response to the meningitis outbreak of 2012.

Over one-half of the surveyed hospitals made changes to CSP outsourcing practices due to the NECC meningitis outbreak.  These changes include decreasing outsourcing, requesting more information from pharmacies, or contracting with different outside pharmacies.  Some hospitals are planning to make changes in their methods for preparing CSPs in house including complying with USP <797>.  The Report notes that USP <797> compliance is difficult and resource intensive; cost and space limitations are “major challenges” for half of surveyed hospitals.  A few of the hospitals stated that USP <797> compliance would require building redesign or additional construction.

The OIG Report shows that hospitals routinely outsource CSPs.  Less than one fourth of the hospitals surveyed outsource the highest risk nonsterile-to-sterile products (these include typically the largest facilities).  Hospitals cite many factors in their decision to outsource CSPs including ensuring adequate supply during shortages and inadequate in-house pharmacy compounding expertise or facilities.  Hospitals are making changes in their procurement and evaluation of CSPs, hospitals “remain confident about the quality of outsourced CSPs.”  Notwithstanding the hospitals’ confidence in the safety of the products they receive from outsourced pharmacies and without offering any solutions, the Report concludes that the fungal meningitis outbreak “raises questions about whether this confidence is well placed and emphasizes the need to stay vigilant about procedures for compounding and outsourcing CSPs.”  At the same time, the Report shows that outsourcing CSPs is currently necessary in light of recurring drug shortages and the constraints hospitals would face if they had to compound themselves to fill the void left by drug shortages.  Thus, as Congress, FDA, state boards of pharmacy, and other stakeholders consider legislative and administrative changes, they need to keep in mind the important role that outsourcing CSPs currently plays in the health care system.