FDA Issues Draft Guidance Concerning Hospital and Health System Compounding: FDA Will Permit Compounding in Advance of a Prescription for Hospital Pharmacies

By Karla L. Palmer –

In FDA’s third draft guidance document in the past week related to drug compounding , FDA addresses hospital and health system drug compounding and distribution. FDA “regards a health system as a collection of hospitals that are owned and operated by the same entity and that share access to databases with drug order information for their patients.” (FN 5). FDA notes that hospital compounding and distribution varies: Some compound only for use and administration within the hospital and others compound for distribution throughout a broader health system to hospitals, clinics, infusion pharmacies, long term care facilities. Sometimes, hospitals compound after receipt of a prescription, but they also compound before receipt of a prescription, and hold the medication until a patient presents with a need for it (i.e., emergency room or surgery). Some hospitals act as traditional pharmacies. Hospitals and health systems also purchase from outsourcing facilities and others register as outsourcing facilities so that they can centralize compounding operations and distribute on a broad scale within their system.

FDA recognizes that hospitals may need to maintain supply of certain compounded drugs within the hospital but outside the pharmacy “in anticipation of a patient prescription.”   FDA asserts (for better or worse) that because the hospital or healthcare facility are under common ownership or control and are responsible for both the compounding of the drug and treatment of the patient, the cause of any compounding adverse event may be more readily identified. FDA announces the following draft policies for compounding within a hospital or health system:

(1) Hospital and Health System Compounding Under Section 503A.

FDA recognizes that Section 503A does not distinguish between compounding at traditional pharmacies or within hospitals or health systems. However, FDA will exercise enforcement discretion for Section 503A hospital and health system pharmacies “without first receiving a patient-specific prescription order” provided that:

(1) The drug products are distributed only to healthcare facilities that are owned and controlled by the same entity that owns and controls the hospital pharmacy and that are located within a 1 mile radius of the compounding pharmacy;

(2) The drug products are only administered within the healthcare facilities to patients within the healthcare facilities, pursuant to a patient specific prescription or order; and

(3) The drug products are compounded in accordance with all other provisions of section 503A, and any other applicable requirements of the FD&C Act and FDA regulations (e.g., the drug products are not made under insanitary conditions (section 501(a)(2)(A)) or misbranded (e.g., section 502(g)). (Emphasis supplied).

Thus, with respect to Section 503A pharmacies within hospitals or health systems, a patient-specific prescription would only be required at the time of administration of the compounded product.

(2) Hospital and Health System Compounding under Section 503B.

FDA states that a “compounder” (we assume FDA means one located within a hospital or health system) can register as an outsourcing facility if it intends to provide compounded preparations outside the one-mile radius of the pharmacy in which the drug is compounded without first obtaining a patient-specific prescription. If the pharmacy elects to register as an outsourcing facility, then it must comply with all provisions of Section 503B, and 501(a)(2)(B) of the FDCA, which are FDA’s current good manufacturing practices (required of any outsourcing facility).

Comments on the draft guidance are due July 18, 2016.