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PhRMA: Compounders Just Drugmakers by Another Name

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By Mari Serebrov
Washington Editor

If a compounding pharmacy looks like a drug manufacturer, walks like a drug manufacturer and quacks like a drug manufacturer, it should be regulated like a drug manufacturer.

That's the message the Pharmaceutical Research and Manufacturers of America (PhRMA) conveyed to a House subcommittee Tuesday as it argued against creating a new regulatory class for "compounding manufacturers."

PhRMA recognized the need for pharmacies that compound individual drugs for specific patients with prescriptions or in limited quantities based on a history of prescription orders. But compounders that mass produce large quantities of drugs not based on prescriptions are manufacturing and distributing unapproved new drugs and biologics, PhRMA Assistant General Counsel Jeffrey Francer told the House Energy and Commerce Subcommittee on Health.

In the wake of a deadly meningitis outbreak linked to contaminated "sterile" drugs produced by the New England Compounding Center, the FDA has been pushing for new authority over large-scale compounders. Although the agency continues to inspect compounding facilities and issue warning letters, it claimed it doesn't have the clear oversight it needs to regulate a new industry that has evolved by blurring the lines between pharmacy and manufacturer. Its solution is a new regulatory class. (See BioWorld Today, Nov. 15, 2012.)

To deal with the issue, lawmakers have proposed three bills – the Pharmaceutical Compounding Quality and Accountability Act (S. 959), Verifying Authority and Legality in Drug Compounding Act (H.R. 2186) and a draft bill recently proposed by Rep. Morgan Griffith (R-Va.).

S. 959 would create a new class of "compounding manufacturers" that would be subject to FDA oversight without having to go through the drug approval process. The class would cover large-scale compounders that make sterile compounded drugs in advance of a prescription and sell them across state lines. The Senate Health, Education, Labor and Pensions Committee sent the bill to the Senate floor a month ago; it has yet to come up for a vote. (See BioWorld Today, May 10, 2013, and May 23, 2013.)

The other two bills subject large-scale compounders to some FDA regulation, but they also would allow them to circumvent the drug approval process.

"Rather than strengthening the oversight of traditional pharmacy compounding, any of these bills, if enacted, would undermine the strict legal standards for ensuring the safety and effectiveness of manufactured drugs that have been in place in the U.S. for more than half a century," Michael Carome, director of Public Citizen's Health Research Group, said in comments submitted to the subcommittee.

"To varying degrees, the proposed bills would result in the further growth of substandard – and what is currently illegal – drug manufacturing that has been allowed to thrive under the guise of pharmacy compounding," he continued.

Growth of the Industry

Under the 1997 FDA Modernization Act, compounders were exempted from the premarket approval requirement for new drugs, mandatory good manufacturing compliance and certain directions for use requirements. Taking advantage of those exemptions and lack of oversight, a new compounding industry has evolved, with some compounders producing large volumes of drugs for distribution nationwide.

Contributing to the growth of large compounders is the trend for hospitals and health care systems to outsource their pharmaceutical tasks.

Economics have also come into play. Even though current law prohibits compounding to produce copies of approved drugs, the FDA has looked the other way in instances of drug shortages or public protest over the brand price. (See BioWorld Today, May 24, 2013.)

Despite the volume and complexity of drugs involved, compounders today are not required to register with the FDA, pay user fees, use approved bulk substances or submit adverse event reports. They also are not required to validate the expiration dates of their compounded or repackaged products, relying instead on the dates used by the reference drug, Janet Woodcock, director of the agency's drug center, testified.

Because they typically register with their state as a pharmacy, the FDA doesn't know who they are or where they are. Without that knowledge, the FDA can't inspect them to ensure they comply with good manufacturing practices, Woodcock said.

Rather than seeking oversight of all compounders, the FDA proposed it be given regulatory authority over "nontraditional compounders" – a term yet to be defined. The agency suggested the definition be based on factors that make the products higher risk, such as interstate distribution and the need for sterility.

The discussion that followed Woodcock's testimony showed how difficult it will be to define a "nontraditional compounder." Some lawmakers objected to using interstate commerce as that could add burdens to small compounders located close to state lines. Others suggested arbitrary volume numbers but wanted to protect the ability of a doctor's office to maintain a one-week supply of a compounded drug.

While one doctor may only need 25 vials a week, a compounder could have 1,000 clients with that need, Woodcock pointed out. A weekly volume of 25,000 vials increases the risk.

Rather than focusing on the line separating traditional compounders from nontraditional, Public Citizen urged Congress to draw a clear line between drug manufacturing and compounding, "with no loopholes for large-scale production of unapproved drugs."

PhRMA agreed. "The public health is best served when FDA regulates medical treatments consistent with the risks they present," Francer said. "Medicines that present similar risks should be regulated similarly."