Drug Quality And Security Act

On Wednesday, Nov. 27, 2013, President Obama signed the Drug Quality and Security Act (the "Act"). The Act is an attempt by Congress to bring some compounding pharmacies that use certain bulk products under more federal oversight. Prior to the passage of the Act, jurisdiction over compounding pharmacies, particularly large scale compounders, has long been the subject of the "I got it, you take it" attitude between the federal Food and Drug Administration ("FDA") and the state boards of pharmacy. Generally, the FDA regulates drug manufacturers while the state boards of pharmacy regulate and license compounding pharmacies. The "gray area" typically occurs when a compounding pharmacy compounds medications in such large quantities the FDA has a colorable argument that the compounding pharmacy is acting more like a drug manufacturer than a compounding pharmacy. When this occurs, many times both the board of pharmacy and the FDA will exert oversight of the compounding pharmacy. Unfortunately, there are no bright line tests to determine when a compounding pharmacy is simply compounding or has crossed the threshold and become a drug manufacturer.

The Act attempts to clarify some of the legal gray between drug manufacturers and compounding pharmacies. The Act essentially creates a new class of compounding pharmacies called “outsourcing facilities.” Sterile compounding pharmacies can register with the FDA as an outsourcing facility but will have to submit to federal inspections and quality standards much like a drug manufacturer. Generally, the Act amends the Federal Food, Drug, and Cosmetic Act ("FFDCA") regarding the regulation of compounding drugs by exempting certain compounded drugs from the FDA's (i) new drug requirements, (ii) labeling requirements, (iii) track and trace requirements, and (iv) not requiring prescriptions for individually identifiable patients.