Pharmacy compounding and the potential impact of cGMPs


Since the NECC-triggered outbreak of fungal meningitis in 2012, FDA has responded aggressively, inspected almost 70 pharmacies. Now it is supported by a new law, the DQSA, and many new questions arise.

It has been one year since products distributed by the New England Compounding Center (NECC) were linked to over 700 cases of fungal meningitis and the deaths of over 50 patients.  Since that outbreak, FDA has responded aggressively, conducting inspections of almost 70 pharmacies engaged in large-scale compounding and distribution of sterile products.

FDA held each of these pharmacies to standards established in FDA’s current good manufacturing practice (cGMP) regulations as set forth in 21 CFR Parts 210 and 211, and issued notices of inspectional observations (FDA Form 483)[1] citing specific cGMP requirements, some of which included:

·      Incomplete and/or inadequate drug product batch failure investigations

·      Inappropriate and/or inadequate clothing for sterile processing

·      Lack of appropriate air filtration systems

·      Insufficient microbiology testing

·      Other practices that create higher risk of contamination.

A number of these inspections prompted pharmacies to issue nationwide recalls of products.

More oversight needed

In spite of FDA’s aggressive response to widespread deficiencies associated with compounding, questions still lingered about how to best regulate “nontraditional” pharmacies that compound drugs on a large scale and distribute products across state lines.

For a number of years, FDA has exercised enforcement discretion with regard to pharmacy compounding, as long as the pharmacy compounded the product after receipt of a valid prescription for an individually identified patient.[2]  As FDA’s enforcement initiative revealed, however, pharmacies engaged in high-volume production require greater oversight and more stringent operating standards. 

Congress recently clarified FDA’s authority regarding “nontraditional” compounders that operate more like pharmaceutical manufacturers than the corner pharmacy, and on November 27, 2013, the President signed into law the “Drug Quality and Security Act.” 


The new law creates a structure for voluntary registration for sterile compounders as “outsourcing facilities.” An outsourcing facility is not required to be a licensed pharmacy under federal law, and it may or may not obtain prescriptions for identified individual patients.

The law exempts outsourcing facilities from certain requirements, specifically the provisions pertaining to new drug applications, track-and-trace, and labeling for adequate directions for use. However, there are no exemptions from cGMP requirements.

Outsourcing facilities will be subject to FDA inspections determined by a risk-based schedule, and risk factors FDA will consider include compliance history, history and nature of recalls, inherent risk of the drug products compounded, inspection frequency and history (including whether the facility has been inspected in the past four years), whether the facility will compound drugs in shortage, and other criteria established by FDA. 

cGMP compliance requires firms to maintain a robust quality system, establish and maintain standard operating procedures, properly train employees, maintain adequate documentation of these operations and more. It is likely that most compounding pharmacies opting to register as outsourcing facilities will need to make fundamental infrastructure changes and develop sophisticated quality systems in order to meet these higher standards.

Questions remain

An open question is whether outsourcers will be held to the same standards as pharmaceutical manufacturers or whether the agency will tailor cGMP requirements for outsourcing facilities. 

If the standards for outsourcing facilities are different, how will FDA ensure that standards for outsourced products are equivalent to those for other drug products?  How will compounders ensure that their products meet the same standards of quality, if the regulatory standards are different?  Would repeated failure to comply with cGMP requirements subject pharmacy compounders to civil or criminal enforcement by the FDA and the Department of Justice? 

Regardless of whether the cGMP standards for outsourcers are identical or equivalent to those for manufacturers, it is clear that outsourcing facilities are no longer in a state of legal ambiguity and will be required to comply with cGMPs. 


[1]. FDA has made the 2013 Pharmacy Inspections and Related Records available on its website.

2. See Compliance Policy Guides Manual, Sec. 460.200, Pharmacy Compounding (May 2002).

Cathy L. Burgessis a Washington, D.C. partner in the Alston & Bird Health Care Group. She specializes in regulatory compliance, product risk management, enforcement, and policy matters connected with FDA. Contact her at (Ted) Kangis a partner in the Alston & Bird Government & Internal Investigations Group. He specializes in white-collar criminal, regulatory, and compliance matters. Contact him at

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