On April 15, 2016, the U.S. Food and Drug Administration (“FDA”) issued three new draft guidance documents related to human drug compounding under the Food, Drug, and Cosmetic Act (“FD&C Act”), as amended by Title I of the Drug Quality and Security Act, that apply to both outsourcing facilities and compounders seeking to operate under section 503A.

According to the FDA’s release, the draft guidance documents outline the FDA’s proposed policies concerning: (1) the prescription requirement in section 503A of the FD&C Act; (2) how the FDA intends to apply the prescription requirement in section 503A to compounding in a hospital or health system pharmacy; and (3) the definition of “facility” in section 503B of the FD&C Act. 

The FDA’s new three draft guidance documents are included below, along with a summary of what each guidance document addresses:

1. Draft Guidance: Prescription Requirement Under Section 503A of the Federal Food, Drug, and Cosmetic Act.  The FDA’s draft guidance describes its proposed policies concerning certain prescription requirements for compounding drug products for identified individual patients under section 503A of the FD&C Act.  The guidance document addresses compounding after the receipt of a prescription for an identified patient, compounding before receipt of a prescription for an identified patient, and compounding for office use.
2. Draft Guidance: Hospital and Health System Compounding Under the Federal Food, Drug, and Cosmetic Act.  Pharmacies located within a hospital or standalone pharmacies that are part of a health system frequently provide compounded drug products for administration within the hospital or health system.  The FDA’s draft guidance notes that some of these compounders have registered with the FDA as outsourcing facilities under section 503B of the FD&C Act and others are state-licensed pharmacies subject to section 503A.  The guidance document describes how the FDA intends to apply section 503A of the FD&C Act to drugs compounded in state-licensed hospital or health system pharmacies for use within the hospital or health system.

The FDA’s draft guidance on this issue may have important implications for hospital-based pharmacies.  The FDA’s guidance document explains that some hospital pharmacies compound drugs only for use in the hospital, while other hospital and health system pharmacies compound and distribute their compounded drugs to other facilities within their health system.  See FDA’s release. 

Section 503A of the FD&C Act describes the conditions under which compounded drug products by pharmacies are entitled to exemptions from certain provisions of the FD&C Act regarding (1) new drug approval, (2) labeling with adequate directions for use, and (3) current good manufacturing practice (“CGMP”) requirements.  One of the conditions that must be met to qualify for the 503A exemptions is that the drug must be compounded for an identified individual patient, either after receipt of a valid prescription, or in limited quantities in advance of receipt of a prescription for an identified individual patient (and the drug must be distributed after receipt of the prescription). 

Under section 503B, a compounder may elect to register with the FDA as an outsourcing facility.  Drugs compounded by an outsourcing facility under section 503B are entitled to exemptions from provisions of the FD&C Act regarding new drug approval, labeling, and drug supply chain security.  These outsourcing facilities may or may not receive prescriptions for identified individual patients, but they are subject to CGMP requirements.  See FDA’s release.

The FDA’s new draft guidance provides that the FDA does not intend to take action if a hospital pharmacy distributes compounded drug products without first receiving a patient-specific prescription or order provided that:

1. The drugs are distributed only to facilities owned and controlled by the same entity that owns and controls the hospital pharmacy and that are located within a one-mile radius of the compounding pharmacy;
2. The drugs are only administered within the healthcare facilities to patients within the healthcare facilities, pursuant to a patient-specific prescription; and
3. The drugs are compounded in accordance with all other provisions of section 503A, and any applicable requirements of the FD&C Act and FDA regulations.

The FDA’s draft guidance explains that the one-mile radius is intended to distinguish a hospital campus from a larger health system, noting that certain characteristics of hospital pharmacies distinguish them from conventional manufacturers.  The FDA’s guidance also states, however, that a health system pharmacy that compounds drugs without patient-specific prescriptions for facilities within its health system across a broader geographic area could function as a large manufacturing operation, but without the necessary standards to assure drug quality.

3. Draft Guidance: Facility Definition Under Section 503B of the Federal Food, Drug, and Cosmetic Act.  Section 503B of the FD&C Act defines outsourcing facility, in part, as “a facility at one geographic location or address.”  The FDA’s draft guidance seeks to answer questions received from outsourcing facilities and other stakeholders about the meaning of the term “facility,” such as whether multiple suites used for compounding drugs at a single street address constitute one or multiple facilities, or whether a single location where human drugs are compounded can be subdivided into separate operations compounding under different standards.

Reporter, John Whittaker, Sacramento, +1 916 321 4808, jwhittaker@kslaw.com