Compounding Industry on the Newest MOU Draft

July 22, 2019
Mari Edlin
Mari Edlin

Volume 163, Issue 7

FDA plans to finalize the draft in 2019. 

The 2012 nationwide fungal meningitis outbreak resulting from contaminated steroid injections from the New England Compounding Center in Framingham, MA, is still reverberating throughout the industry. The FDA and compounding pharmacy stakeholders are still wrestling with many unresolved issues from the tragedy, but there are ongoing discussions and a proposed piece of legislation to reach a resolution.

After the tragedy, Congress passed the Drug Quality and Security Act (DQSA) in 2013, which authorized FDA to create a memorandum of understanding (MOU) with states to address some interstate distribution of compounded drugs by traditional compounders-called 503A facilities in the law, after the section of the Federal Food, Drug, and Cosmetic Act (FD&C). 

The agency plans to finalize the MOU in 2019. 

Distribution Levels of Drugs Sold Interstate

FDA issued a draft MOU in 2015, but withdrew it after strong pushback from pharmacist, physician, and patient groups. The agency released a revised draft in September 2018 that outlines the allowable level of out-of-state distribution of compounded drugs in states that enter into the MOU. The revised version also allows for a greater percentage of total prescriptions for compounded drugs-50%-before becoming what the FDA considers an “inordinate amount,” which would require additional reporting by and inspection of compounding pharmacies. 

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If state pharmacy boards choose not to sign the MOU, only 5% of total prescription orders dispensed or distributed by a 503A compounder in that state can be shipped out of state. 

Reed Smith LLP, a law firm based in Pittsburgh, directed a letter to the FDA last December, targeting the threshold change and other issues. Although the threshold has increased, Rachael Pontikes, a partner with Reed Smith, says the firm believes the boost does not solve the concerns raised by the 2015 draft. The new threshold “has also narrowed what is included in that threshold to compounded products,” she says.

Shawn Hodges, PharmD, president and CEO of Innovation Compounding, a 503A pharmacy in Kennesaw, GA, is concerned about the potential 5% cap if Georgia’s pharmacy board decides not to sign the MOU. His pharmacy, like others, compounds products in a specific therapeutic area-in his case, compounded products for allergy immunotherapy-which might not be available from pharmacies in other states.

“We are concerned about patient access. It’s difficult to tell a doctor ‘no’ when a drug is allowed clinically, but not by federal law,” Hodges says. 

“The proposed 5% cap creates the potential that patients won’t be able to access compounded medications,” says Scott Brunner, executive vice president, International Academy of Compounding Pharmacists (IACP).

Hodges says the MOU puts pressure on state boards, which may be hesitant to sign the MOU in its present form.

“It’s an unfunded mandate for states,” Brunner adds. “The FDA is, in effect, commandeering a state agency to take enforcement actions that the state legislature hasn’t necessarily funded. That creates ambiguity over whether state boards even have the legal authority to sign the MOU.”

“There is no incentive to sign,” says Peter Koshland, PharmD, of Koshland Pharm: Custom Compounding Pharmacy, a 503A pharmacy in San Francisco. “Signing the MOU will present even more work even if it increases the percentage of products sold across state lines.”

Brunner adds another caveat to the MOU-stakeholders do not have enough time to respond to the terms.

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‘Dispense’ and ‘Distribute’

The 2018 draft MOU also revisits the definitions of “dispense” and “distribute” that had traditionally been distinct. Currently, they are the same in the MOU draft. Public comment swayed the agency to make more of a distinction, says Ilisa Bernstein, PharmD, JD, deputy director of the Office of Compliance, Center for Drug Evaluation and Research at FDA.

The definitions are consistent with previous law she says. “We are getting closer, but because the MOU is not yet operational, no one has signed it yet. We have spent many years trying to make the MOU acceptable.”

No other organizations consider “dispense” and “distribute” to be the same thing. “The difference is not clear,” says Erik Tosh, RPh, chairman of the IACP Board.

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Brunner says the FDA conflates the definitions in a way that runs contrary to how they are defined in state and national laws, and even in the National Association of Boards of Pharmacy (NABP) Model State Pharmacy Act.

“The FDA’s proposed MOU redefines the two terms in a way that Congress did not intend and which stands to limit patient access to compounded medications,” Brunner says.

Office Use Compounding 

Another disputed issue is the FDA’s refusal to allow 503A pharmacies to compound for office use, that is, supplying a small quantity for physicians to keep on hand in their offices to use when needed by their patients. 

 “Compounders provide access to medications that are not commercially available, but that prescribers believe are necessary for adequate treatment. Doctors should be able to order them. We want to do the right thing but need guidance on what is expected,” Koshland says.

“Some state laws allow 503A pharmacies to compound for office use, but FDA’s interpretation is that office use is not allowed due to the requirement that there be a prescription,” Brunner says. “Pharmacists can compound a 30-day supply prior to receipt of prescription, but the FDA says it can’t leave the pharmacy until the prescription is received. It can’t be stored by the physician without a patient-specific prescription, so it’s largely a dispute about which highly trained, highly regulated healthcare professional’s shelf it sits on.”

Outsourcing facilities, or 503B compounding pharmacies, created under DQSA that do not require a patient-specific prescription under Section 503B of FD&C. These facilities are subject to increased quality standards, such as compliance with Current Good Manufacturing Practice (cGMP), and enhanced reporting. 

The FDA says its new draft is based on feedback from stakeholders and comments received on the initial draft guidance and is being revised, in part, to reflect further consideration of how cGMP requirements should be applied.

Bernstein says that due to the stricter requirements for these pharmacies, they “provide a higher level of patient protection.” 

Tosh is concerned, however, that the cGMP standards often require testing and are not always cost efficient.

For many 503A pharmacies, the requirement that only 503B pharmacies can compound without a patient-specific prescription stands in the way of patient access. The physician’s only option is to write a prescription for the compounded substance, send a patient to the pharmacy to pick it up, and then return to the physician’s office for a subsequent visit-for which the patient will be charged-to have the medication applied, Tosh says. 

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Jennifer Burch, PharmD, president of IACP and owner of Central Compounding Center South, a 503A pharmacy in Durham, NC, knows the burden this places on a patient who might not have immediate access to a medication. 

Although only 503B pharmacies may compound for office use, Burch says it is usually too small a quantity to make it economically viable for them. 

During a public hearing on drugs compounded for office use, cGMP, and an overview of the revised draft guidance, David Glasser, MD, secretary for federal affairs, American Academy of Ophthalmology, questioned the ability of 503B pharmacies to meet patient needs when medications, such as antibiotics, are required immediately and sometimes unexpectedly. 

“It becomes a financial situation for 503B pharmacies because there isn’t enough demand,” he says. He would like the FDA to approve low-volume orders for office use-quantity limits for emergencies. “The risk of not having a drug outweighs the harm,” he says.

Continue reading on page 3...Rulemaking versus Guidance Documents

Another concern is FDA’s reliance on guidance documents to regulate compounding, says Tosh. “There is a statutory process by which agencies must issue regulations, he notes. “When it is announced-having followed that proper statutory process-stakeholders must then abide by it in their operations. 

“Unfortunately, FDA has been skirting the proper rule-making process, issuing Guidance for Industry (GFI) documents. Those GFI’s do not have the force of formal regulation, but the FDA is holding compounding pharmacies accountable to GFI as if they were proper rules,” he says. “They do not create or confer any rights for or on any person and do not operate to bind FDA or the public for enforcement purposes.”

But CDER’s Bernstein says the FDA uses guidance to interpret the law and that it enables stakeholders-not just compounders-to provide input that is reflected in guidance documents. 

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“We need to exercise oversight to prevent another 2012 outbreak that wasn’t an isolated incident and ensure regulatory oversight as Congress had intended,” Bernstein says. “Compounding can be an important component of care, but products aren’t reviewed for quality and safety which can cause health risks. Promoting access to quality compounded drugs requires that compounders follow the law.”

Bipartisan Legislative Action on Compounding in Congress

The good news for the industry is a new bill-HR 1959, Preserving Access to Compounded Medications Act of 2019 by Congressmen H. Morgan Griffith (R-VA) and Henry Cueller (D-TX).

An IACP statement emphasizes the need for clarification of the MOU and for new legislation: “The FDA has misinterpreted congressional intent, overstepped its regulatory authority, and is jeopardizing patient access to compounded medications as a result,” IACP’s Scott Brunner says. “This legislation, which has broad support both in Congress and from an impressive coalition of groups representing pharmacists, physicians, and patients, seeks to assure that FDA’s role and actions in regulating compounding pharmacies are in line with Congress’ stated aims when it passed DQSA in 2013.”

Specifically, the HR 1959 would:

  • Authorize “office-use” compounding by 503A pharmacies where permitted by state law.

  • Define the terms “distribute” and “dispense” consistent with the NABP model pharmacy act and other state and federal law definitions.

  • Clarify that compounding pharmacies are retail pharmacies for purposes of FDA inspection authority.

  • Require FDA to go through the formal rulemaking process for establishing DQSA policies rather than issuing “guidance documents” that circumvent requirements for public notice and input.

  • Formally recognize state boards of pharmacy as the primary regulators of pharmacy compounding.
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