Bi-Partisan Senators Introduce New Bill to Regulate Compounding: The Pharmaceutical Compounding Quality and Accountability Act

On May 15, 2013, bi-partisan legislation was introduced to establish a new framework for compounding regulation. The Pharmaceutical Compounding Quality and Accountability Act (“PCQAA”) was introduced by Senators Tom Harkin (D-Iowa), Lamar Alexander (R-Tenn.), Pat Roberts (R-Kan.), and Al Franken (D-Minn.), which largely followed the recommendations of FDA Commissioner, Dr. Margaret Hamburg, and seek to clarify oversight of compounding and the FDA’s role. The draft legislation encompasses six major areas of focus and new changes.

1. Boundary between Traditional Compounders v. Compounding Manufacturers

The PCQAA seeks to establish a clear boundary between traditional compounders and what the FDA refers to as “compounding manufacturers.” Under the Act, a compounding manufacturer is an entity that compounds a sterile drug prior to or without receiving a prescription and introduces such drug into interstate commerce, with the exception that interstate shipment within a hospital system will not cause a hospital pharmacy to be considered a compounding manufacturer. In addition, any entity that pools sterile products, or that repackages sterile, single-use, preservative-free vials is also a compounding manufacturer. In order to maintain clear accountability, “compounding manufacturers” cannot be licensed as pharmacies. Instead, compounding manufacturers are to be regulated directly by the FDA and must adhere to numerous additional standards and requirements, not otherwise applicable to traditional compounding pharmacies (which are subject to the oversight and regulation of the various state boards of pharmacy).

2. Compounded Drugs are New Drugs Subject to the Food, Drug and Cosmetic Act

To correct a prior perceived ambiguity, the PCQAA explicitly provides that compounded drugs are “new drugs” within the meaning of the Federal Food, Drug, and Cosmetic Act (FDCA). The new legislation delineates certain provisions of the FDCA that will apply to “traditional compounders,” and others which will apply to “compounding manufacturers.” Under the proposed legislation, traditional compounding pharmacies will not be required to follow all of the new drug approval procedures otherwise applicable to manufactured drugs, so long as certain requirements are met.

3. FDA Oversight of Compounding Manufacturers

The draft legislation specifically defines the Food and Drug Administration’s (FDA’s) role in oversight of “compounding manufacturers.” With respect to “compounding manufacturers,” the PCQAA gives the FDA specific authority to:

  1. Require compounding manufacturers to register with the FDA
  2. Require compounding manufacturers to tell the FDA specifically what products they have made
  3. Require compounding manufacturers to make products under a pharmacist’s oversight and in compliance with Good Manufacturing Practices
  4. Require compounding manufacturers to investigate and report adverse events
  5. Require compounding manufacturers to label products to indicate that they are compounded and to specify other identifying information
  6. Require compounding manufacturers to pay an annual establishment fee to defray the cost of compounding oversight (e.g. inspections), and cover the FDA’s costs for any needed re-inspections

4. State Maintains Primary Role in Oversight of Traditional Compounders

The new legislation specifically preserves the States’ primary role in oversight of traditional pharmacy practice, so long as compounded products meet certain minimum standards. When a pharmacy shifts from the traditional pharmacy practice into compound manufacturing, the FDA is given authority to directly regulate the pharmacy.

5. Prohibition on Compounding Certain Drug Products

The bill specifically prohibits compounding of certain drug products, including those:

  1. identified by regulation as being demonstrably difficult to compound (such as complex dosage forms and biologics)
  2. marketed FDA-approved drugs that are not in shortage
  3. variations of marketed FDA-approved drugs unless they fulfill a specific patient need
  4. products subject to certain risk evaluation and management strategies unless the compounder utilizes comparable safety controls

Importantly, this new proposed law marks a shift in the ability of pharmacy to compound variations of commercially available products. Previously, pharmacies were prohibited from compounding drugs that were essentially copies of commercially available drugs. Now, a pharmacy must obtain a certification from a prescriber that a “variation” of a commercially available drug meets a specific client need.

6. Increased Communication Between the States and FDA

Finally, the bill encourages communication among states and increases communication between States and the FDA. If the FDA receives a complaint from a State regulatory agency about a traditional pharmacy in another state, the FDA must promptly relay that information to the relevant State pharmacy board.

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Pharmacies need to stay ahead of the curve and stay abreast of the developments of this bill. Pharmacies should be prepared to comply with the new potential law, as well as be prepared for potential FDA inspections. Compounders need to be prepared for what lies ahead. These new developments signal a more aggressive approach by the FDA and all firms need to be prepared. Your compounding pharmacy can become prepared for FDA inspections through effective and in-depth Standard Operating Procedures and advance counsel by experienced attorneys. Frier Levitt can provide SOPs to pharmacies and can assist them in staying ahead of the curve. Contact us today to speak to an attorney.

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