FDA Addresses “Facility Definition” For Outsourcing Facilities: Manufacturers Can Live With Outsourcing Facilities But Section 503A Compounders Cannot

By Karla L. Palmer –

On April 18, 2016, FDA released draft guidance addressing what it considers a “facility” under FDCA Section 503B (the section of the Drug Quality and Security Act that created outsourcing facilities back in 2013). The draft guidance was prompted FDA was asked whether an outsourcing facility may create a separate area within its facility for compounding according to patient specific prescriptions under Section 530A, and not follow cGMP requirements in that area, yet use the same components and staff that compound in the Section 503B area. FDA believes that the application of different cGMP requirements or different conditions in Sections 503A and 503B to "comingle compounding activities” would cause confusion about what requirements apply, and may ultimately lead to production of substandard drugs.

Compounding Drug Products under Sections 503A and 503B at One Facility

FDA defines, in part, Section 503B as a “facility in one geographic location or address” to mean a “business or other entity under one management, direct or indirect, engaged in human drug compounding at a geographic location or street address.” Interestingly (and expansively), the Agency considers all activities, equipment, appurtenances, and materials part of such a facility if related to human drug compounding under the supervision of the facility’s management at the same address, or same building, or “buildings located in close proximity to one another.” A compounder cannot avoid conditions of Section 503B by “segregating or subdividing” compounding within an outsourcing facility. As an example, FDA states that an outsourcing facility may not divide its space with either permanent or temporary barriers, (i.e., different hoods or different rooms), or conduct different types of compounding activities (i.e., switching between 503B and 503A compounding) at different times of the day. FDA states that Section 503B’s intent is that all drugs compounded without the restrictions in 503A must be compounded in accordance with cGMP, appropriately labeled, and subject to adverse event reporting. FDA further states this will prevent co-mingling of 503A and 503B compounding activities to “evade the conditions” of Section 503B and cGMP requirements. FDA also believes its position provides clarity during inspections so that inspectors know what standard to apply (which statement is somewhat surprising since review of 483s of Section 503A compounding pharmacies since 2013 shows that FDA is holding most pharmacies to a quality standard that is close to if not overlapping with cGMP in many important respects).

Compounding Drug Products under Section 503B and Drug Manufacturing at the Same Facility

A conventional drug manufacturer may register as a Section 503B outsourcing facility, and thus make both approved drug products and compounded drug products – so long as all of the drug products at the facility are subject to the cGMP requirements set forth in 21 C.F.R. parts 210 and 211. When FDA finalizes its cGMP guidance for outsourcing facilities (released in draft form in 2014 (see our previous post here), that guidance would apply to drugs compounded at the facility pursuant to 503B. However, certain cGMP requirements (such as environmental monitoring and pressure differential monitoring rudiments) apply facility wide, and must be implemented throughout.   FDA is permitting manufacturers and outsourcing facilities to share space because compounded products are “easily differentiated” from approved drug products, and there is little chance of comingling of products to avoid regulatory requirements.

And a Note about Animal Drug Compounding…

In the draft guidance’s first footnote, FDA claims that the draft guidance does not apply to compounding of animal drugs, which seems inconsistent with FDA’s earlier May 2015 Draft Guidance concerning animal drug compounding, in which FDA is attempting to impose the outsourcing facility paradigm (and compliance with its statutory provisions) on veterinary drug compounders. See our prior post and FDA’s Draft Guidance here.   

Comments on the Draft Guidance are due July 18, 2016.