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Concerns Still Percolate Around Compounding

New FDA and GAO Reports Highlight Continuing Issues
Stephen Barlas

The report issued on compounding in January1 by the Food and Drug Administration (FDA) raises questions about whether there has been a significant uptick in safety in that industry since Congress passed the Drug Quality and Security Act in 2013. That law created a new category of outsourcing facilities that are seen as the primary compounded product suppliers to hospitals. It also clarified, or at least it attempted to, when retail pharmacies could send more than one compounded drug across state lines, typically to a physician, without that retail pharmacy being presented with a prescription for the individual patient.

Under the new 503B outsourcing program, pharmacies that voluntarily register with the FDA, pay a fee, and agree to abide by current good manufacturing practices (cGMPs) can sell unlimited sterile and nonsterile products to hospitals without a prescription. The FDA inspects these facilities. Retail pharmacies in the longer-standing 503A program are inspected by the state and follow U.S. Pharmacopeial Convention (USP) <797> standards, not cGMPs. The FDA may inspect a 503A pharmacy if it does not qualify for exemptions from federal oversight.

But despite issuing warning letters and inspecting the new outsourcing facilities, the agency admits that it “continues to be concerned about the risk to patients from drugs compounded by facilities that do not comply with the conditions in sections 503A or 503B. … Of particular concern is that FDA continues to observe insanitary conditions during many of its inspections.” 1

John Voliva, RPh, Executive Vice President of the International Academy of Compounding Pharmacists (IACP), says there is no excuse for insanitary conditions at either 503A or 503B pharmacies. The FDA has published guidance on this issue, and the IACP was generally supportive of that guidance, although Voliva adds that, in places, the guidance goes above and beyond USP standards.

The “risk to patients” the FDA is worried about goes beyond insanitary conditions. The agency says that “many compounders” are engaged in large-scale compounding without registering as a 503B pharmacy. Those outsourcing facilities have received Form 483s from the agency.2 A Form 483 lists violations the FDA finds as the result of an inspection. “The findings on a 483 can range from very minor infractions to serious health concerns, so 483s do raise concerns for hospitals and health systems buying from 503Bs,” says Jillanne Schulte, Director of Federal Regulatory Affairs for the American Society of Health-System Pharmacists (ASHP).

Voliva says that, in some instances, the FDA has come into a 503A pharmacy, found that the pharmacy was sending bulk compounded drugs across state lines without first receiving a prescription, and commenced to inspect that small pharmacy as if it were a 503B facility, meaning inspecting it based on cGMPs. Voliva says the community pharmacies are unable to reach that high level of safety, after adhering only to USP <797>. So naturally, the FDA finds safety problems and issues a warning letter. Some of the problems highlighted in warning letters are significant, some are not. Moreover, the IACP has raised questions with the FDA about a memorandum of understanding it is supposed to develop that would give states more regulatory authority and allow 503A pharmacies to dispense nonspecific patient product across state lines, which the FDA has considered illegal distribution.

The FDA report, in which the agency applauded its accomplishments of bringing “needed clarity to certain regulatory requirements for compounders” and stated its concerns, followed a report from the Government Accountability Office (GAO) in November 2016.3 The GAO report—Drug Compounding: FDA Has Taken Steps to Implement Compounding Law, but Some States and Stakeholders Reported Challenges—looked mostly at how states were regulating 503A pharmacies and whether the FDA was providing effective communication to them, either individually or through published guidance documents and rulemakings.

The report is couched in the GAO’s always-diplomatic language. Reading between the lines, the GAO, which sent and received electronic surveys from 50 of 54 states and territories and did detailed interviews with officials in three states, says that the FDA has worked to complete its compounding regulatory tasks “but states and stakeholder organizations have cited challenges and concerns.” These challenges and concerns are not spelled out in the report because they are not “generalizable.”

The FDA has issued multiple guidances on multiple regulatory issues, including the latest published in January: Repackaging of Certain Human Drug Products by Pharmacies and Outsourcing Facilities.4 The American Hospital Association submitted detailed comments after the draft was published in 2015, expressing concern about a number of ways the draft would impact hospitals negatively. But a footnote in the final guidance says it applies to 503B facilities and 503A pharmacies but not to hospitals and health systems; the FDA intends to address those facilities in separate guidance. That would appear to leave hospital compounding in some sort of a regulatory netherworld with regard to repackaging, which, after all, is what compounding is all about.

“I don’t think we’re particularly concerned about them operating in a grey area at the moment,” explains ASHP’s Schulte, referring to hospitals. “That said, I think we’d hope to see specific guidance for hospitals and health systems in the near term.”

Author bio: 
Mr. Barlas is a freelance writer in Washington, D.C., who covers issues inside the Beltway. Send ideas for topics and your comments to


  1. Food and Drug Administration. FDA’s human drug compounding progress report: three years after enactment of the Drug Quality and Security Act January 2017; Available at: Accessed January 26, 2017
  2. Food and Drug Administration. FDA Form 483 frequently asked questions April 23, 2015; Available at: Accessed January 26, 2017
  3. Government Accountability Office. Drug compounding: FDA has taken steps to implement compounding law, but some states and stakeholders reported challenges November 17, 2016; Available at: Accessed January 26, 2017
  4. Food and Drug Administration. Repackaging of certain human drug products by pharmacies and outsourcing facilities: guidance for industry January 2017; Available at: Accessed January 26, 2017