	Background

Traditionally, drug compounding is the process of combining, mixing, or  altering ingredients to create a customized medication for an individual  patient. An outbreak of fungal meningitis in 2012 linked to contaminated  compounded drugs led to questions about the safety and quality of  compounded drugs, and raised concerns about state and federal  oversight of drug compounding. The act established a new type of facility,  an outsourcing facility, that prepares sterile compounded drugs and which  may compound drugs without patient-specific prescriptions. Drugs Are Compounded in a Variety of Settings; FDA and Some States Collect Data on the Number of Drug Compounders, but Not the Volume of Compounded Drugs

Our survey of state pharmacy regulatory bodies found that drugs are  compounded in a variety of pharmacy and other health care settings,  including outsourcing facilities. National data on the extent of drug compounding, as measured by the  number of prescriptions or the volume of compounded drugs (e.g.,  number of units), were not available from our survey, as only one state  reported collecting these data, and its data were limited to sterile  compounded drugs. Nearly All States Reported Having Drug Compounding Laws, Though Few Apply to Nonpharmacists, and States Conduct Inspections and Can Take Actions to Enforce These Laws

Respondents in almost all of the states we surveyed reported having  laws, regulations, or policies specific to the practice of drug compounding. To help  ensure compliance with state laws, regulations, or policies specific to drug  compounding, respondents in most states reported inspecting  pharmacies and other drug compounders, and most reported their state  can take several types of actions against noncompliant pharmacies or  other drug compounders. About Three Quarters of States Reported Participating in FDA- Sponsored Activities and Obtaining FDA Drug Compounding Information; Some States Reported Challenges with This Communication

FDA has communicated with states on compounding issues in a variety of  ways, including FDA-sponsored activities, such as intergovernmental  meetings; most states reported this communication was helpful. FDA has issued  numerous guidance documents related to drug compounding, and  conducted more than 300 inspections of drug compounders. FDA has also taken action, including  issuing warning letters, when issues have been identified in these  inspections. For outsourcing facilities, which register with  FDA, the agency is required to inspect them on a risk-based schedule. Some Stakeholder Organizations said the Amount of Time it Takes FDA to Finalize Draft Documents Related to Drug Compounding is Challenging

Officials from 6 of the 25 stakeholder organizations we interviewed said  the amount of time it takes FDA to finalize guidance and other relevant  documents, including the list of drugs that are difficult to compound, is  challenging. Some states and stakeholder organizations reported differences between  the protocols that some states and FDA use when inspecting pharmacies  engaged in drug compounding that are not outsourcing facilities. Agency Comments

We provided a draft of this report to the Secretary of Health and Human  Services. HHS also provided technical comments, which we  incorporated as appropriate. Appendix II: Objectives, Scope, and Methodology

The Drug Quality and Security Act (DQSA), enacted in November 2013,  included a provision for GAO to review drug compounding. We examined  (1) the settings in which drugs are compounded, and the extent of drug  compounding in each state; (2) state laws, regulations, and policies  governing drug compounding, and how they are enforced; (3) how  communication is conducted between states and FDA, as well as among  states, regarding compounding, and any associated challenges; and (4)  steps FDA has taken to implement its responsibilities to oversee drug  compounding since enactment of the DQSA, and any challenges that  have been reported with these efforts. Finally, to address steps FDA has  taken to implement its regulatory responsibilities to oversee drug  compounding and related challenges, we reviewed relevant laws and  analyzed FDA data on inspections of drug compounders and actions  taken related to its inspections of these entities. 2016 Survey of State Pharmacy Regulatory Bodies on Drug Compounding

We administered a web-based survey to the state pharmacy regulatory  bodies in the 50 states, the District of Columbia, Guam, Puerto Rico, and  the U.S. Virgin Islands. Interviews with Officials in Stakeholder Organizations, State Government Agencies, and FDA

To further address our objectives, we interviewed officials from 25  stakeholder organizations that have a stake or an interest in drug  compounding to obtain information such as reviews on the extent of drug  compounding; reviews of state laws, regulations, and policies on drug  compounding; their perspectives on any challenges in communication  between FDA and states, as well as among states, related to drug  compounding; and their perspectives on FDA’s implementation of the  DQSA.
Why GAO Did This Study

Drug compounding is the process of combining, mixing, or altering ingredients to create a drug tailored to the needs of an individual patient. An outbreak of fungal meningitis in 2012 linked to contaminated compounded drugs raised concerns about state and federal oversight of drug compounding. The Drug Quality and Security Act, enacted in 2013, helped clarify FDA's authority and included a provision for GAO to report on drug compounding.
This report examines (1) the settings in which drugs are compounded, and the extent of drug compounding; (2) state laws and policies governing drug compounding, and how they are enforced; (3) communication between states and FDA, as well as among states, regarding drug compounding, and the associated challenges; and (4) steps FDA has taken to implement its responsibilities to oversee drug compounding, and challenges that have been reported with these efforts.
GAO surveyed state pharmacy regulatory bodies in the 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands (all but 4 completed the survey); reviewed documents and interviewed officials from FDA, 25 stakeholder organizations (including national pharmacy and medical associations), and agencies in 3 states selected for having differing laws and policies; reviewed relevant laws; and examined FDA data on drug compounding inspections and actions taken.
HHS provided general comments on a draft of this report, as well as technical comments, which were incorporated as appropriate.

What GAO Found

GAO's survey of state pharmacy regulatory bodies found that drugs are compounded in a variety of health care settings, and some data are collected on the number of entities that compound drugs (drug compounders), but not the volume of compounded drugs. In addition to pharmacies, drug compounding settings include physicians' offices and outsourcing facilities—a new type of facility established by law in 2013, which can compound sterile drugs without patient-specific prescriptions and register with and are inspected by the Food and Drug Administration (FDA), an agency within the Department of Health and Human Services (HHS). While FDA and some states collect data on drug compounders, only one state reported collecting data on the number of prescriptions or the volume of compounded drugs. In addition, states GAO surveyed and stakeholders GAO interviewed did not collect data specific to the extent of compounding performed by nonpharmacists, such as physicians.
Nearly all of the states GAO surveyed reported having drug compounding laws, regulations, or policies, though few apply to nonpharmacists, and states conduct inspections and can take actions to enforce them. Less than 20 percent of states reported having laws, regulations, or policies specific to compounding by nonpharmacists (e.g., physicians), and these state laws varied. To help ensure compliance, most states reported inspecting drug compounders, such as pharmacies and outsourcing facilities, and most states can take several types of actions against pharmacies, including monetary fines, and suspension and revocation of a license or registration.
Most states reported being satisfied with their communication with FDA and other states, although some reported challenges. About three quarters of the states reported participating in FDA-sponsored activities, such as intergovernmental meetings, and obtaining information from FDA's website. Some states reported challenges with this communication, such as getting FDA to respond to requests for information. In terms of communication between states, most survey respondents reported that they are satisfied with this communication, which occurs through conferences and other activities.
FDA has taken steps to implement its regulatory responsibilities to oversee drug compounding, but states and stakeholder organizations have cited challenges and concerns. FDA has issued numerous draft and final guidance documents related to drug compounding, and conducted more than 300 inspections of drug compounders, which resulted in actions such as FDA issuing warning letters and voluntary recalls of potentially contaminated compounded drugs. Some stakeholder organizations said the amount of time it takes FDA to finalize the guidance and other documents—including those required by the 2013 law—is challenging. FDA officials noted that reviewing the large number of comments received has contributed to the time the agency has taken to finalize them. States and stakeholder organizations also cited concerns related to access to compounded drugs and differences between states and FDA on the appropriate inspection protocols to use when inspecting drug compounders. In August 2016, FDA changed its procedures to address concerns about the appropriate protocols to use for these inspections.