On September 25, 2013, the leadership of the Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Energy and Commerce announced an agreement on a bill to cover both topics. The House passed H.R. 3204 , the Drug Quality and Security Act, which now awaits Senate action. Title II is the proposed Drug Supply Chain Security Act. Compounding Quality Act

Under current law, the Federal Food, Drug, and Cosmetic Act (FFDCA, 21 USC 301 et seq. ), the federal government regulates drug manufacturing and sales within the United States. Title I of H.R. The act would, among other things:
maintain FDA authority to regulate drug compounding that goes beyond the scope of state-regulated practice of pharmacy; establish a new category of compounding entity, termed "outsourcing facility," which would apply to entities that compound sterile drugs, volunteer to register with FDA, and follow practice and reporting requirements; require that the label of a drug from an outsourcing facility state "This is a compounded drug"; dictate user fees to fund outsourcing facility registration and reporting; advisory committee activities; annual reports; the issuing of regulations; and a study by the Government Accountability Office (GAO); and direct enhanced communication among state boards of pharmacy and between those boards and the FDA. 3204 would amend that section by removing the provision in current law that restricts a compounder from advertising or promoting a compounded drug. It involves compounding by a licensed pharmacist or physician in response to a prescription for an individual patient. A drug that is compounded in a registered outsourcing facility would have to meet the following conditions:
may not be made from bulk drug substances unless they comply with limitations specified in this bill on use of bulk drug substances and other ingredients; may not be a drug that has been withdrawn or removed from the market because it was found to be unsafe or not effective; may not be "essentially a copy of one or more approved drugs"; may not be on the Secretary's list 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; if it 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 relevant" REMS; may be sold or transferred only by the outsourcing facility that compounded it; must be compounded in an outsourcing facility that has paid fees (as would be established in this Act); must have a label that includes the statement "This is a compounded drug." It also would direct the Secretary to promulgate implementing regulations. The Secretary would be required to consult with the National Association of Boards of Pharmacy in implementing the submission requirement and to immediately notify state boards of pharmacy when receiving submissions or when the Secretary determines that a pharmacy is acting contrary to FFDCA Section 503A. Title II, the proposed Drug Supply Chain Security Act, would, among other things, require
the creation and continuation of transaction information , transaction history , and transaction statements (beginning no later than January 2, 2015 for manufacturers, wholesale distributors, and repackagers; beginning July 1, 2015 for dispensers); a product identifier on each package and homogeneous case of a product, to include a standardized numerical identifier (SNI), lot number, and product expiration date (beginning no later than four years after enactment of this bill); required verification of the product identifier at the package level (with staggered starting dates: manufacturers four years after enactment of this bill, repackagers five years after enactment, wholesale distributors six years after enactment, and dispensers seven years after enactment); registration of wholesale distributors and third-party logistics providers in the states from which they distribute or by the Secretary if the state does not offer such licensure; that the Secretary develop standards for that registration; specific activities, following a specified timeline, to implement an interoperative unit-level traceability system ten years after enactment; and the development and maintenance of a uniform national policy for the tracing of drug products through the supply chain. These include the exchange of transaction histories among supply chain entities that would be required by proposed FFDCA Section 582. H.R.
The proposed Drug Quality and Security Act, H.R. 3204, is the current focus of congressional efforts to protect the public from unsafe, ineffective, or otherwise subquality compounded drugs and from the risks of counterfeit and subquality drugs entering the supply chain between the manufacturer and the dispenser. Majority and minority leadership of the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions announced an agreement on September 25, 2013, following years of bicameral and bipartisan efforts. On September 27, 2013, Representative Fred Upton, the chair of the House committee, introduced the text, which would amend the Federal Food, Drug, and Cosmetic Act (FFDCA), as H.R. 3204. The House passed it by voice vote on September 28, 2013, sending it to the Senate on September 30, 2013. The bill now awaits Senate action.
Title I, the Compounding Quality Act, would create the term outsourcing facility to apply to an entity that compounds sterile drugs in circumstances that go beyond activities that the FFDCA allows pharmacies to do under state regulation. As such, the proposed category could be conceptualized somewhere between a state-regulated pharmacy and a federally regulated drug manufacturer. The bill would direct the Secretary of Health and Human Services (HHS) to consult with the National Association of Boards of Pharmacy regarding submissions from states that concern a compounding pharmacy that may be acting outside what the FFDCA allows. The bill would also maintain the FFDCA section that addresses what is referred to as traditional compounding—wherein a pharmacist or physician compounds a drug to fill a prescription written for an individual patient. It would remove the provision, which has been challenged in court, that forbids a compounder from advertising or promoting a compounded drug.
An entity that compounds sterile drugs and that may not obtain prescriptions for identified individual patients would be able to voluntarily register as an outsourcing facility. If it also complies with a set of listed requirements, an outsourcing facility would be exempt from certain FFDCA requirements on drug manufacturers: adequate directions for use labeling, sale only after FDA approval of a new drug application, and compliance with supply chain activities (that would be added by Title II of H.R. 3204). An outsourcing facility would have to label the product to include the statement "This is a compounded drug," list active and inactive ingredients, report annually to the HHS Secretary on drugs compounded, be subject to inspection, submit adverse event reports, and pay annual fees (that would be established by this bill) to cover the cost of overseeing outsourcing facilities.
Title II, the Drug Supply Chain Security Act, would add FFDCA requirements to be implemented over the next few years. These include that manufacturers and repackagers put a product identifier, including a standardized numerical identifier, on each package or homogenous case. With certain exceptions, exchange of transaction information, histories, and statements would be required when a manufacturer, wholesale distributor, dispenser, or repackager transfers or accepts a drug. Also required would be a system of verification and notification when the Secretary or a trading partner within the supply chain suspects that a product may be illegitimate. The bill would require national standards for the licensing of wholesale distributors and third-party logistics providers. Requirements for the Secretary would include guidance documents, regulations, public meetings, and pilot projects.
The act also would include a timetable and tasks involving the development of an interoperable, electronic, package-level tracking system to begin 10 years after enactment.