What Are The Laws Regarding Outsourcing Facilities?

Friday, March 6th, 2015

The Compounding Quality Act (CQA) brought significant changes to compounding pharmacies in the United States. The changes made by the CQA include the introduction of a new category of compounders, outsourcing facilities, that compound sterile medications. An outsourcing facility compounds sterile drugs for use by healthcare providers or for use by individual patients. Below are some common questions that discuss the laws regarding outsourcing facilities.

When Did The CQA Go Into Effect?

The CQA, which was part of the larger Drug Quality and Security Act, went into effect in November 2013. The CQA created a new section (503B) within the federal Food, Drug, and Cosmetic Act that provided legal authority and certain guidelines for outsourcing facilities.

What Does The Creation Of Outsourcing Facilities Mean For Patients And healthcare Providers?

This new healthcare entity helps to fill a gap between manufacturers of traditional commercially available drugs and pharmacies.

In the past, if a patient required a compounded medication created to meet that patient’s individual needs, he or she would have to go to a compounding pharmacy with a prescription. Some patients did not have access to such a pharmacy.

Additionally, some compounding pharmacies used to provide compounded medications to other pharmacies or healthcare providers without patient-specific prescriptions. This distribution caused the federal Food and Drug Administration (FDA) to categorize some of these pharmacies as pharmaceutical manufacturers, not pharmacies. Drug manufacturers have to meet strict healthcare requirements for drug approval, labeling and manufacturing practices. However, these healthcare requirements were too much of a burden for many pharmacies. This burden created the gap that existed before the recent changes and creation of outsourcing facilities.

An outsourcing facility can fulfill compounded medication orders with or without a prescription. This makes it easier for doctors’ offices and hospitals to get these drugs to use for patients in the healthcare facilities.

How Does A Facility Qualify As An Outsourcing Facility?

The healthcare facility must be in the business of compounding sterile drugs, register with the FDA and meet all provisions within Section 503B of the FDCA. The facility does not have to be a pharmacy, but must comply with FDA requirements, and all compounding performed at the facility must be supervised by a licensed pharmacist.

The facility must comply with Current Good Manufacturing Practices (CGMPs), as established by the FDA. The CGMPs provide guidelines for designing, monitoring and controlling manufacturing processes and facilities. These healthcare practices help prevent mix-ups, contamination and product deviations.

An outsourcing facility must agree to FDA inspections and must also pay an annual registration fee and for any inspection costs. The outsourcing facility must also report any adverse events to the FDA and provide semiannual reports on the drugs compounded.

Among other things, an outsourcing facility must agree not to make copies of existing commercial drugs. Also, an outsourcing facility cannot make any drug product the FDA has removed from the market for efficacy or safety reasons.

What Happens If A Compounding Pharmacy Does Not Register As An Outsourcing Facility? 

A traditional compounding pharmacy does not need to register as an outsourcing facility. Currently, that pharmacy can provide compounded medications to patients, but only upon receipt of a patient-specific prescription.

If a compounding pharmacy starts acting as an outsourcing facility without registering as such, the FDA can categorize it as a pharmaceutical manufacturer. This healthcare categorization means the pharmacy must meet all FDA requirements for a pharmaceutical company. These requirements include getting new drug approvals for medications.

If you are a compounding pharmacy, you may have questions about the outsourcing facility requirements. You should talk with one of our attorneys in the Healthcare Group at Brown & Fortunato We combine knowledge about healthcare law and the real world of medicine to provide our clients with the best representation and advice possible. Call us at (806) 345-6320 or stop by our office at 905 S. Fillmore, Suite 400 in Amarillo, Texas. You can also contact us via email and check out our website to read about our other practice areas.

This information is subject to change. Please check for updates that are more recent than the published date of this article.