Another Holiday Surprise: FDA Releases Four Draft Guidances and a Draft Memorandum of Understanding Related to Drug Compounding

By Karla L. Palmer –  

As it did on the eve of another holiday weekend last July (see our previous posts here and here), on this past Friday (the 13^th), FDA released the long-awaited draft Memorandum of Understanding (MOU) addressing interstate shipment of compounded preparations under FDCA Section 503A and four other compounding draft guidance documents.  See FDA’s Press Release here, which also includes a handy link to all five drafts.

The four draft guidances address: (1) considerations for entities who wish to register under Section 503B; (2) drug repackaging by pharmacies, outsourcing facilities, federal facilities and hospital systems; (3) mixing, diluting, or repackaging biological products; and, (4) Section 503B adverse event reporting.  Neither the guidances nor the draft MOU have been published in the Federal Register (but publication is likely imminent).  Once published, interested parties have 90 days to comment on the draft guidance documents and, according to the FDA press release, 120 days to comment on the draft MOU.  Recall, however, that FDA’s Section 503A final guidance dated July 2, 2014 stated: “FDA does not intend to enforce the 5% limit on interstate distribution until after FDA has finalized an MOU and made it available to the states for their consideration and signature.  The Federal Register notice that will announce the availability of the draft MOU will specify the time period during which the MOU will be made available to the states to sign.  After this time period expires, FDA intends to begin enforcing the 5% limit in states that have not signed the MOU.”  July 2, 2014 Section 503A Guidance at 6 (emphasis added).  Thus, it is still unclear when FDA will begin Section 503A’s 5% limit on interstate shipments of compounded preparations in those states that do not sign an MOU.

A brief summary of each draft guidance document and MOU is below:

(1)        “For Entities Considering Whether to Register As Outsourcing Facilities under Section 503B of the Federal Food, Drug, and Cosmetic Act”  

This guidance lists eleven “conditions” for qualifying for the exemptions under Section 503B (i.e., FDCA’s new drug, adequate directions for use, and track and trace requirements).  It also clarifies that a facility can only qualify for the exemptions if all of the facility’s compounded drugs are compounded in accordance with Section 503B.  If a compounder does not intend to compound all drugs at the facility in accordance with Section 503B – including cGMP – then it should not register as an outsourcing facility.  The guidance similarly clarifies the law for those facilities that compound both office use and patient-specific preparations:  Even patient-specific preparations must meet cGMP requirements (no exceptions).

An outsourcing facility should also consider the following:

• To meet the “outsourcing facility” definition, it must be engaged in sterile drug compounding.  
• The definition of compounding under Section 503B(d)(1) does not include repackaging (but repackaging is addressed in another draft guidance, below).
• For purposes of 503B, a drug including a sterile drug does not include a biological product under Public Health Service Act (PHS) Section 351 or an animal drug under FDCA Section 512 (but biological products are also addressed in another draft guidance).
• A facility should not register as an outsourcing facility if the only activities conducted at the facility are repackaging, compounding non-sterile or animal drugs, or mixing, diluting, or repackaging biological products subject to licensure under Section 351 of the PHS Act, because none of the products would qualify for the exemptions under Section 503B.  It seems such activities could only be conducted by pharmacies pursuant to patient specific prescriptions.  .  
• Facilities that only compound non-sterile drugs are not eligible for the exemptions from the federal laws’ requirements that any new drug be distributed only after FDA approval, adequate directions for use, and track and track requirements; nevertheless, if the facility compounds sterile and non-sterile drugs, then those non-sterile products are eligible for exemptions in Sections 505, 502(f)(1), and 582 if the drugs are otherwise compounded in accordance with Section 503B.  

(2)        “Repackaging of Certain Human Drug Products by Pharmacies and Outsourcing Facilities”

This guidance defines “repackaging” compounders: The act of “taking a finished drug product from the container in which it was distributed by the original manufacturer and placing it into a different container without further manipulation of the drug.”  Repackaging also includes placing contents of multiple finished drug containers (e.g., vials) into one container, “as long as the container does not include other ingredients.”  FDA notes that, “if the drug is manipulated in any other way, including if the drug is reconstituted, diluted, mixed, or combined with another ingredient,” then it is not considered repackaging.  FDA’s draft guidance describes the conditions under which FDA does not intend to take action for violations of the law when pharmacies, federal facilities or outsourcing facilities repackage certain drug products.  In other words, in these situations, FDA will exercise what it has traditionally called its “enforcement discretion” not to sanction or punish these facilities for engaging in what FDA describes as illegal acts.

The draft guidance explicitly does not address repackaging of animal drugs, repackaging by entities that are not state-licensed pharmacies, drugs administered at the point of care, and dispensing solid dosage forms directly to individual patients in amounts less than in the original container.   FDA notes that drug packaging is a part of the drug review and approval process; repackaging may affect the sterility of the product and other characteristics that could adversely affect the safety and efficacy of the drug.

The guidance addresses FDCA Section 506F, dealing with hospitals within health systems repackaging drugs in the event of drug shortages to extend supply when certain statutory conditions are met (page 4).  Section 506F will terminate when the guidance becomes final.   

FDA describes conditions under which it will exercise enforcement discretion in the context of drug repackaging.  Some of the highlights:

• The repackaged drug must be an approved drug unless that drug is on FDA’s shortage list.
• The drug must be repackaged by a pharmacy, federal facility or outsourcing facility, and under the direct supervision of a pharmacist.
• If repackaged by a pharmacy or federal facility (but not an outsourcing facility), the drug must be pursuant to a prescription or order for an individually identified patient.  It may be repackaged in advance of a prescription or order (but not dispensed) if that amount does not exceed the amount repackaged in the previous, consecutive  14-day period, and based on a history of receipt of prescriptions or orders over a consecutive 14-day period for such repackaged drug products.
• Except for single-dose vials, the drug must be repackaged in a way that does not conflict with approved labeling.
• The repackaged product must be assigned a beyond use date (BUD) (which is the date included on the label within which the repackaged drug must be used)  as detailed in the draft guidance, considering the drug’s stated in-use time, USP guidelines, or cGMP depending on whether the drug product is an approved drug product, the type of facility and drug product (pages 6-8).  
• The drug may not be sold or transferred by an entity other than the entity that repackaged the drug.  In other words, repackaged drugs may not be distributed by wholesalers or middlemen.
• Repackaged drugs may only be distributed in states in which the facility meets all applicable state requirements.
• Drugs repackaged by outsourcing facilities must include required information on their labels and meet other requirements of 503B (pages 8-9).
• FDA will not take action against repackagers of approved or unapproved drug products on FDA’s shortage list, provided the facility meets all conditions of the draft guidance, during the period of shortage and for 30 days after the period ends.  When this draft guidance and guidance concerning repackaging biological products becomes final, Section 506F (hospital repackaging in times of shortages) will no longer apply. 

(3)        “Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application”

This draft guidance describes the conditions under which FDA intends to exercise enforcement discretion when pharmacies, federal facilities or outsourcing facilities mix, dilute or repackage specific biological products without an approved BLA, or when such facilities or physicians prepare prescription sets or allergenic extracts (used to treat allergies) without an approved BLA.

FDA notes that under the FDCA, such products otherwise may not legally be marketed, and the Act’s compounding provisions do not address biological products subject to licensure under Section 351 of the PHS Act.

The guidance addresses the following:  

• Except as provided for single-dose vials (as described in the guidance), repackaging must not conflict with approved labeling.
• For a single dose vial that is mixed/diluted/repackaged into multiple units, it must be done in a way that does not conflict with labeling other than statements designating product as a single-use vial/dose (page 9; 9 n.15). 
• Specifically concerning Avastin, which is packaged in a single-dose vials: “This condition could be satisfied even if Avastin is repackaged into multiple single dose syringes,” despite the fact that label of the approved product states, “single-use vial…discard unused portion.”  The repackager must adhere to other approved labeling (e.g., regarding the appropriate diluent and storage conditions) (page 9).
• Products must adhere to very stringent BUDs specified in the draft guidance due to susceptibility of biological products to contaminants (page 9). 
• If mixed, diluted or repackaged by a pharmacy or federal facility, the BUD cannot be longer than the in-use time indicated on the package or four hours (whichever is shorter); or up to 24 hours if microbial challenge studies are performed (as described in the guidance appendix);
• If mixed or diluted by an outsourcing facility, then the BUD cannot be longer than the in-use time or four hours (whichever is shorter); or up to 24 hours if microbial challenge studies are performed, as described in the guidance appendix.
• If repackaged by an outsourcing facility, then, as an alternative to the above, the BUD may not exceed the shorter of five days or the expiration of the biological product being repackaged, if the outsourcing facility performs container-closure compatibility studies consistent with 21 C.F.R. § 211.94.   
• Products may not be sold or transferred by an entity other than the facility that mixes the product, and must meet state requirements.  Sale or transfer does not include administration in a health care setting.
• Outsourcing facilities must comply with FDA reporting and labeling provisions, but the NDC number for the original licensed biologic product should not be placed on the repackaged  product (page 11, 12).
• Secondary packaging (i.e., the bag, box, or other package in which the products are distributed) must include active and inactive ingredients; directions for use, including dosage and administration and information to facilitate adverse event reporting.
• Must be accompanied by a copy of the prescribing information that accompanied the original FDA-licensed biological product (page 12).
• The outsourcing facility must reports serious adverse events to FDA.
• Concerning prescription sets and allergenic extracts, FDA does not intend to take action for violations of section 351 of the PHS Act or FDCA section 502(f)(1), if the pharmacist, federal facility or outsourcing facility meets conditions for extracts/BLAs in the guidance.  Conditions are set forth at pages 13-15. 

(4)         “Adverse Event Reporting For Outsourcing Facilities under Section 503B of the Federal Food, Drug, and Cosmetic Act” 

Under Section 503B, outsourcing facilities are required to submit adverse event reports to FDA. Failure to report is a prohibited act.  The draft guidance describes a “serious adverse drug experience” and “unexpected adverse drug experience” under 21 C.F.R. § 310.305.  It reminds registrants they must report all serious, unexpected adverse events “associated with” their compounded drugs.  It also “strongly recommends” reporting of all “serious adverse drug experiences” (assuming this means reporting whether or not such event is “unexpected”  (page 4). 

The guidance sets forth considerations for event reporting, which should include an investigation of the following four data elements and submission of an “Alert Report’ as soon as possible but not later than 15 calendar days after receiving information about the event:

1. An identifiable patient
2. An identifiable reporter
3. A suspected drug product
4. A serious adverse event

The guidance describes the four data elements in detail (pages 5-7) and tells how to report the events to FDA (pages 7-8).  FDA is currently modifying its processes to specifically identify and accept electronic reports from outsourcing facilities.  Until the electronic system is available, outsourcing facilities should provide reports of adverse events to FDA in hard copy (page 8).  Reports should be maintained by the facility for ten years. 

(5)         Draft Memorandum of Understanding Between a State and FDA Addressing Interstate Distribution of Compounded Human Drug Products under Section 503A 

Released with no accompanying guidance or explanation (which we hope is forthcoming), the draft MOU describes a state’s responsibilities for investigating and responding to complaints related to compounded human drug products distributed outside the state.  The MOU sets forth clear notification requirements for complaints. 

The draft also defines interstate distribution of “inordinate amounts” of compounded human drug products:  “The number of units of compounded human drug products distributed interstate during any calendar month is equal to or greater than 30% of the number of units of compounded and non-compounded drug products distributed or dispensed both intrastate or interstate during that month.”  FDA does not intend to include prescriptions dispensed to a patient/patient’s agent; if the patient/patient’s agent carries the drug across state lines after dispensing. (MOU  III(b)(4)).  Recall that the 1998 version of the draft MOU, which states never signed, used a 20% ratio.  The MOUN provides that states will review compounding records during inspections to determine compliance with the 30% ratio.  The MOU explicitly does not prohibit FDA from taking action against a non-compliant pharmacy, although the primary responsibility for investigations will lie with the state.    

Notwithstanding the interminable length of this blogpost, it is not a complete analysis of the draft guidance documents.  We will continue to update as more information becomes available.