	Background

Drug compounding is a process by which a pharmacist or physician combines, mixes, or alters various drug ingredients to create a drug to meet the unique needs of an individual patient. The Federal Food, Drug, and Cosmetic Act (FFDCA) authorizes FDA to regulate the manufacturing and sale of drugs in the United States, including compounded drugs. Generally, a new drug may not be sold unless the FDA, through its drug approval process, has determined that the drug is safe and effective for its intended use. Although compounded drugs are considered new drugs, it would not be practicable for pharmacies to obtain approval for each drug compounded for an individual patient. 105-115 ). Among other things, FDAMA added new FFDCA Section 503A, "Pharmacy Compounding," designed to clarify FDA's authority to regulate compounded drugs. Following the NECC event and numerous other reports of problems resulting from compounded drugs, Congress passed the Compounding Quality Act (CQA) as Title I of the Drug Quality and Security Act (DQSA; P.L. 113-54 ). The CQA also added a new FFDCA Section 503B and created a new category of drug compounders called outsourcing facilities , a term that describes entities that compound sterile drugs in circumstances that go beyond what 503A compounding pharmacies are allowed to do (e.g., compounding drugs in large volumes without obtaining patient-specific prescriptions). The agency has communicated with stakeholders and state regulators via annual listening sessions, notice-and-comment guidance development, intergovernmental meetings, and information posted to FDA's website, among other things. Some states have found FDA communication to be helpful, while others have reported several communication challenges. In addition, legislation has been introduced that would amend certain compounding provisions in the FFDCA. Outsourcing Facility Compounding

In response to the 2012 fungal meningitis outbreak and a series of adverse event reports and quality problems linked to compounding facilities, Congress held a series of hearings, which led to the enactment of the CQA in November 2013. A drug may be compounded by or under the direct supervision of a licensed pharmacist in a registered outsourcing facility if
it is not compounded using bulk drug substances unless they comply with specified limitations; it is compounded using ingredients (other than bulk drug substances) that comply with the applicable USP or NF monograph, or any other compendium or pharmacopeia recognized by the Secretary; it does not appear on the Secretary's list, established by regulation, of drugs that have been withdrawn or removed from the market because they have been found to be unsafe or not effective; it is not "essentially a copy of one or more approved drugs"; it does not appear on the Secretary's list, established by regulation, of "drugs or categories of drugs that present demonstrable difficulties for compounding that are reasonably likely to lead to an adverse effect on the safety or effectiveness of the drug or category of drugs, taking into account the risks and benefits to patients" unless compounding is done "in accordance with all applicable conditions identified on the list ... as conditions that are necessary to prevent" such difficulties; the drug is subject to a Risk Evaluation and Mitigation Strategy (REMS), the outsourcing facility must demonstrate a plan to use "controls comparable to the controls applicable" under the REMS; it will not be sold or transferred by any entity other than the outsourcing facility that compounded it; it is compounded in an outsourcing facility that had paid fees pursuant to FFDCA Section 744K; the drug label bears the statement "this is a compounded drug" or a comparable statement; the name, address, and phone number of the outsourcing facility; and the following specified information with respect to the drug: the lot or batch number; the established name of the drug; dosage form and strength; statement of quantity or volume; date that the drug was compounded; expiration date; storage and handling instructions; National Drug Code (NDC) number, if available; the statement "not for resale," and if the drug is dispensed or distributed other than pursuant to a prescription for an individual identified patient, the statement "Office-use Only," as well as a list of active and inactive ingredients by established name and quantity or proportion of each ingredient; and the container "from which individual units of the drug are removed for dispensing or administration" includes a list of active and inactive ingredients (if there is not space on the label), adverse event reporting information, and directions for use (e.g., dosage and administration). The agency also has issued a draft MOU addressing the interstate distribution of certain compounded drug products. Additionally, since enactment of the CQA, FDA has conducted over 400 inspections of drug compounders, issued more than 150 warning letters advising compounders of violations of federal law, and overseen more than 125 recall events. Policy Considerations

In working to address the issues raised by stakeholders and maintain public health protections, policymakers may consider issues such as patient access to compounded drugs, drug quality, and necessity of compounding. For these patients, preserving timely access to compounded medications is important, a concern raised by those who support compounding for office-use. Drug quality is also a consideration, particularly in the context of patient safety. For these reasons, among others, FDA maintains that compounded drugs pose a higher risk than FDA-approved drugs. A related policy consideration is necessity. However, FDA and outsourcing facility groups have generally disagreed that 503A pharmacies need to compound for office-use. If a hospital, clinic, or health care practitioner wants to keep compounded drugs in stock for office-use, they can generally obtain non-patient-specific compounded drugs from outsourcing facilities that are registered under Section 503B.
Drug compounding is a process by which a pharmacist or physician combines, mixes, or alters various drug ingredients to create a drug to meet the unique needs of an individual patient for whom an approved drug may not be appropriate (e.g., due to an allergy to a dye in the product).
The Federal Food, Drug, and Cosmetic Act (FFDCA) authorizes the Food and Drug Administration (FDA) to regulate the manufacturing and sale of drugs in the United States, including compounded drugs. Generally, a drug may not be sold unless the FDA, through its drug approval process, has determined that the drug is safe and effective for its intended use. Although compounded drugs are considered new drugs, it would not be practicable for pharmacies to obtain FDA approval for each drug compounded for an individual patient. Thus, compounded drugs are not evaluated by FDA prior to marketing for safety, effectiveness, or quality.
In 1997, Congress passed the Food and Drug Administration Modernization Act (FDAMA, P.L. 105-115), which attempted to clarify FDA's authority to regulate compounded drugs. The act set forth, in a new FFDCA Section 503A, the conditions that must be met for a compounded drug to be exempt from certain statutory requirements related to new drug approval. Following the 2012 fungal meningitis outbreak and a series of adverse event reports and quality problems linked to compounding facilities, Congress passed the Drug Quality and Security Act (DQSA, P.L. 113-54). Title I of the DQSA, the Compounding Quality Act (CQA), created a new category of drug compounders called outsourcing facilities, a term that describes entities that compound drugs in circumstances that go beyond what 503A compounding pharmacies are allowed to do (i.e., compounding drugs in bulk for use in hospitals and other facilities, referred to as "office-use").
Since the enactment of the CQA, FDA has issued various guidance documents to facilitate implementation of the law and a draft memorandum of understanding (MOU) addressing the interstate distribution of certain compounded drug products. FDA has also increased its enforcement efforts with respect to compounding, conducting over 400 inspections of drug compounders, issuing over 150 warning letters, and overseeing 120 recalls involving compounded drugs. Additionally, FDA has communicated with stakeholders and state regulators via listening sessions, meetings, and information posted on the FDA website. Some stakeholders have found FDA guidance and communication to be helpful; others have reported communication challenges and disagreement with the agency's interpretation of the statutory provisions. These reported challenges have resulted in certain actions by some in Congress, including letters to FDA, report directives, and the introduction of legislation that would amend certain compounding provisions in the FFDCA.
In working to address the issues raised by stakeholders and maintain public health protections, policymakers may consider issues such as patient access, drug quality, and the necessity of compounded drugs. For patients with a legitimate medical need, preserving timely access to compounded medications has been identified as a concern by supporters of office-use compounding. However, in the context of patient safety, drug quality is also a consideration. Compounded drugs are not evaluated by FDA prior to marketing, and pharmacies that compound pursuant to FFDCA Section 503A are not required to register with FDA or report adverse events to the agency. For these reasons, among others, FDA maintains that compounded drugs pose a higher risk than FDA-approved drugs. A third consideration is necessity, specifically whether pharmacies need to compound for office-use. If a hospital, clinic, or health care practitioner wants to keep compounded drugs in stock for office-use, these entities can generally obtain non-patient-specific compounded products from outsourcing facilities that are registered with FDA and subject to more stringent regulatory requirements.