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A New Era for Compounding Pharmacies

FDA Registration, New Regulations, and GMP Standards

Historically, pharmacies have been able to compound drugs for individual patients or in small batches. These compound pharmacies create and mix drugs customized to specific patient needs,  based on a prescription written by a physician. They abide by state regulations, as well as section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act), and are overseen by the state boards of pharmacy.

In the last decade these pharmacies have outgrown their guidelines, simply because of the demand for compound drugs. What once was done on a per-patient basis grew into bulk production of compounded drugs, and this has serious consequences.

Adverse Events Linked to Contaminated Compounded Drugs

When Los Angeles experienced a meningitis outbreak in 2001 due to a compounded drug, the rules and regulations that govern compounding pharmacies became a topic of debate. This incident provoked health officials to request implementation of stricter laws for compounding pharmacies. There were several prominent concerns, including: the production and distribution of compounded drugs — in a high volume — without a prescription, maintaining sanitary environments during the manufacturing process, and lack of reporting adverse affects.

These issues again became a focal point in October 2012, when the New England Compounding Center (NECC) in Massachusetts manufactured and released a contaminated compound drug. This drug was responsible for a fungal meningitis outbreak, accounting for “infections in 750 individuals and the deaths of over 60 people,” according to the National Conference of State Legislatures. This incident prompted enactment of the Drug Quality and Security Act (DQSA) in November 2013, amending the FD&C Act, and including the significant addition of Section 503B, covering rules for bulk outsourcing facilities.

New regulations specified in the DQSA

1)    Compounding Pharmacies that distribute a high volume of compounded drugs, without prescription, have the option to register as an “outsourcing facility” (section 503B). This makes a clear distinction between traditional pharmacies compounding on a per patient basis, and the bulk production outsourcing pharmacies. The primary distinctions are that outsourcing facilities are now regulated by the FDA, and these facilities can now manufacture bulk compounded drugs without the need to be patient specific.

The FDA states that these facilities:

  • Must comply with Current Good Manufacturing Practice (CGMP) requirements
  • Be inspected by the FDA according to a risk-based schedule
  • Must meet certain other conditions, such as reporting adverse events and providing FDA with certain information about the products they compound

Compounding pharmacies that do not register as an outsourcing facility will still be required to comply with section 503A.  Each state is required to put a system in place to improve communication between the state boards of pharmacy and the National Association of Boards of Pharmacy (NABP). This system aims to promote a better regulation of these pharmacies. If a compound facility doesn’t comply with section 503A, the offense must be reported to the state boards of pharmacy.

2)    There will be new labeling requirements for compounded drugs. According to section 503B, labels should include:

  • A statement saying, “This is a compounded drug” and “Not for resale”
  • Information about the outsourcing facility
  • All pertinent details regarding the compounded drug (i.e. expiration date, active and inactive ingredients, manufacture date, storage and handling instructions, quantity, etc.)

3)    Per Title II: the drug supply chain will be strengthened by a “track and trace” system for prescription drugs. The goal is to have nationwide drug serial numbers that provide federal officials, manufacturers, repackagers, wholesale distributors, and dispensers with transaction information that will make it easier to investigate suspicious products.
How does the FDA plan to implement these new laws?
Besides becoming actively involved in inspecting high-risk compound pharmacies, the FDA has released documents to help implement the new rules mentioned above. According to the FDA, these documents consist of a draft interim guidance, a proposed rule, a and final guidance.

Draft Interim Guidance

When new rules are put into place, there can be an overwhelming amount of questions about compliance. The draft interim guidance helps pharmacies that register as outsourcing facilities comply with CGMP requirements, specifically focusing on sterility assurance of sterile drug products and the general safety of compound drug products.

Proposed Rule

A “proposed rule” would update the list of drug products considered unsafe or ineffective and therefore prohibited for use by outsourcing facilities and traditional compound pharmacies.

Final Guidance

This document reiterates section 503A for the pharmacies that do not register as outsourcing facilities. It also outlines what punitive actions that will be taken if compliance with section 503A is not met.

Expected Testing for Outsourcing Facilities

Outsourcing facilities are expected to adhere to the cGMP requirements in Title 21 of the Code of Federal Regulations Part 210 and 211 (21 CFR 210 and 211) until the FDA creates guidelines specifically designed for outsourcing facilities. According to 21 CFR 211.160(b), components of the compounded drug and the final drug product must “conform to appropriate standards of identity, strength, quality, and purity”. The facilities must also have “a system for monitoring environmental conditions” per section 211.42(c)(10)(iv).

If the facility does not have its own testing laboratories they will rely on 3rd party testing from laboratories that are approved by the FDA. These laboratories will conduct the necessary testing required, such as, but not limited to, Stability Testing (per section 211.166), Pyrogen and/or Sterility Testing (per section 211.165) and Environmental Monitoring. Other testing for potency, identity and concentration may also be required to ensure the safety of the drug product before released to the public.

Overall, the heightened regulations on compound pharmacies and the new addition of outsourcing facilities that the DQSA provides will safeguard the manufacturing of compound drugs.

Pacific BioLabs supports testing on compounded drugs that is required by 21 CFR 210 and 211, including characterization, and analytical method development and validation.


1.    “Compounding and the FDA: Questions and Answers.” 2 Dec. 2013. Web. 6 Aug. 2014.
2.    “FDA Implementation of the Compounding Quality Act.” 25 April 2014. Web. 6 Aug. 2014.
3.    “FDA outlines expectations for human drug compounders, including registered outsourcing facilities.” 10 July 2014. Web. 6 Aug. 2014.
4.    “CFR – Code of Federal Regulations Title 21.” 1 April 2013. Web. 18 Aug. 2014.
5.    Morgan, Rachel B. “Oversight of the U.S. Drug Supply.” 2 Dec. 2013. Web. 6 Aug. 2014.
6.    Drug Quality and Security Act. 27 Nov. 2013.
7.    Vivian, Jesse C. “New Rules for Compounding Drug Products.” 19 Feb. 2014. Web. 6 Aug. 2014.

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