Drug Quality and Security Act Addresses Compounding Pharmacies

A year after an outbreak killed dozens, the FDA is taking steps to update oversight.

Drug Quality and Security Act Addresses Compounding Pharmacies

A year after an outbreak killed dozens, the FDA is taking steps to update oversight.


President Barack Obama signed the Drug Quality and Security Act (DQSA) last November, slightly more than one year after an outbreak that killed 64 individuals and sickened 751 rocked the compounding pharmacy community. The DQSA is a direct response to the aftermath of the deadly fungal meningitis outbreak, linked to the New England Compounding Center (NECC), and a few other highly publicized cases.

The Centers for Disease Control and Prevention (CDC) traced the fungal meningitis infection back to a batch of preservative-free MPA steroid injections that NECC made. The compounding pharmacy industry is now grappling with both the fallout from the NECC tragedy and the resulting government regulations.

Some, fearing a shift toward unobtainable FDA-imposed standards, are dropping out of the sterile compounding game altogether, while others are bemoaning the DQSA as a weak regulatory response to the outbreak.

This article reviews specific points about the DQSA and how compounders are preparing their facilities and practices.


Restoring FDA Oversight

Boston University law professor Kevin Outterson, JD, LLM, is mostly concerned about two provisions of the law that add to the Federal Food, Drug, and Cosmetics Act (FD&C Act). The first, known as section 503.A, reenacts provisions of the FD&C Act that were revoked in 2002. These provisions address:

    • current good manufacturing practice (cGMP);

    • labeling of drugs with adequate directions for use; and

    • approval of drugs under new drug applications (NDAs) or abbreviated new drug applications (ANDAs).

Mr. Outterson, whom Massachusetts Gov. Deval Patrick appointed to the Special Commission on Compounding Pharmacies that investigated NECC following the outbreak, says this provision clearly outlines what the FDA views to be a “traditional compounder” and allows them to operate without fear of additional federal enforcement.

“Traditionally, there is a triad between physicians, pharmacists, and patients,” explains Mark Baum, CEO of Imprimis Pharmaceuticals, San Diego, CA, a company that commercializes proprietary compounded drugs, among other formulations. “That relationship will stand under 503.A. The law basically says that physicians have the right to prescribe drugs to their patients and that pharmacies have the right to make those drugs, under the doctor’s prescription, and give them to the patients.

“The law says as long as there’s one physician writing a prescription for one patient, that’s OK,” Mr. Baum continues. “However, you can’t have a pharmacy sending out a bunch of drugs to a hospital without a patient prescription. So, for example, for all our ophthalmology products, physicians know who they’re operating on, so we just fill that order.”

He adds that this part of the DQSA preserves the historic relationship among physicians, pharmacists, and patients. This section of the law prohibits three types of drugs: those withdrawn from the market for safety or efficacy concerns; those the FDA has determined are unsuitable for compounding; and those identical to drugs already commercially available.

With a deadly outbreak only a year in the past, compounding pharmacies are subject to new regulations.

The FDA will also use these criteria to determine which pharmacies qualify as traditional compounders:

    • they must have a licensed pharmacist;

    • their drugs must be compounded in compliance with the US Pharmacopeial convention; and

    • they must include a valid certificate of analysis with their compounded drugs.

A ‘Voluntary’ License

The second key component of the law creates the opportunity for sterile compounders, or “outsourcing facilities,” to volunteer for an FDA license, a provision Mr. Outterson says is “troublingly watered-down.” The FDA will treat these facilities similarly to conventional manufacturers. That means they must comply with cGMP, the standards big pharmaceutical manufacturers must meet, and accept surprise FDA inspections.

Compounding pharmacies also must submit to the FDA each June and December a list of all the drugs they’ve manufactured over the previous six months. This list must include the active ingredient of each drug, its strength and source, and the number of individual units produced.

If a compounding pharmacy accepts the inspections and other provisions, the FDA awards it two benefits, according to Mr. Baum: permission to compound drugs on the drug shortage list; and permission to distribute drugs across state lines without a prescription. This is key, Mr. Baum says, because pharmacies may jump at the chance to ship out-of-state, even if it means embracing the inspections.

One potential danger of the voluntary license, Mr. Baum says, is that states may relax their own regulations, thinking the FDA has taken the reins when, in fact, “it’s incumbent on the states to regulate and pick up the slack.”


Sterile Facilities

Charles Leiter, PharmD, president and secretary-treasurer of Leiter’s Compounding Pharmacy in San Jose, CA, is not taking any chances. When news about the fungal meningitis outbreak first broke, Dr. Leiter was already in the process of building a new pharmacy. When he heard the news, he says, he “stopped and re-geared as a cGMP pharmacy.”

He hopes his new facility will be something of a gold standard in the industry. “We were able to design the layout” to comply with cGMP standards, he says. “When drugs come in, according to cGMP, they have to come through a separate entrance than the ones going out. And the ones coming in have to be certified as to what they are, so we have two separate rooms: one for quarantine of raw materials and one for certification.”

The facility also has a separate storage area for compounded drugs. “Our clean room is state-of-the-art,” Dr. Leiter says. “My entire staff is in ‘bunny suits’ ” — industry vernacular for protective clothing.

Testing Practices

“We are absolutely laser focused on quality,” Mr. Baum of Imprimis Pharmaceuticals says. “Obviously, quality and efficacy has to be paramount for anyone in compounding.”

Imprimis, which holds sway over many compounding pharmacies because it connects the physicians who develop drug formulas and the compounders that make them, supports the legislation, Mr. Baum says. “Its important that companies build drugs under the highest US Pharmacopeial convention, but it also comes down to making sure that the individual drug substances are tested and that they’re all made in FDA-regulated facilities,” he says.

Quality and efficacy are paramount to Dr. Leiter, and he also seeks to achieve them through a rigorous drug testing process. “A lot of people think you test the drugs and that’s it, but you have to test 17% of the drugs to get a 95% accuracy rate on the fact that it’s a sterile product,” he says. “Those odds still aren’t great, so we’re also going through and doing procedures on everything and validations on all our procedures. That’s expensive and time consuming, but it’s what the manufacturers do.”

An independent laboratory conducts testing for Leiter’s and meets the good manufacturing practice standards, Dr. Leiter says. “And it’s very expensive,” he adds. “If you make 10 items a day, you’re doing 10 sets of plates a day, and then you’re sending them in to be incubated. That department’s probably going to cost me $1 million a year. The refreshing thing is, I raised my prices around 15% to cover all this and I’ve had no complaints.”


Where DQSA Works

“My personal opinion is that anybody shipping outside of the state, sterile or nonsterile, should be under the auspices of the FDA. That way, there’s one law for everybody. I firmly believe one law for the whole country would save a lot of money and make things a lot simpler,” Dr. Leiter says.

“I have three friends who do a lot of nonsterile compounding but quit sterile compounding altogether because they don’t want the FDA coming into their facility, and they don’t want to be under the FDA’s jurisdiction,” he adds.

But DQSA does not simply impose FDA inspections; it seeks to change the culture of compounding pharmacies by offering them the opportunity to volunteer for inspections, according to sources interviewed. In effect, this creates a divergence in the market between FDA-inspected and uninspected compounders. “If large hospital systems insist on getting drugs from federally licensed facilities, the market might convince” compounding pharmacies to embrace the government’s inspections, Mr. Outterson says.

A Flawed Law

According to Mr. Outterson, the problem with the DQSA is that it is a weak federal law that overrides existing or proposed state laws, some of which were stricter.

He offers the example of California’s proposed track-and-trace requirements, scheduled to go in effect in 2015. Those requirements were designed to secure the state’s pharmaceutical supply chain by instituting an electronic pedigree tracking system to record data on each transaction a drug undergoes.1 Now, the DQSA has preempted that regulation, according to Mr. Outterson’s December piece in the New England Journal of Medicine.2

Under DQSA, the track-and-trace requirement will be phased in over the next decade.


“Clearly, the NECC tragedy is the largest health-care associated mortality infection outbreak since the CDC started keeping track,” says Mr. Outterson. Of course, it wasn’t the first. For example, in the ophthalmic realm, Brilliant Blue-G dye made at Franck’s Compounding Pharmacy in Ocala, FL, was the subject of an FDA safety alert in March 2012. In that case, the CDC identified 39 cases of vision loss associated with the compound.3 Today, Franck’s Pharmacy is out of business.

Stories like these show the FDA is aiming to heal an industry marred by tragedy. Is the FDA’s intention to limit the ability of small-time operations like Franck’s?

“Probably, but that’s a good thing,” says Dr. Leiter. “The little mom-and-pop stores, nothing against them, but sterile compounding has left typical compounding in the dust, and it’s gone up to a whole new level. Hospitals aren’t going to be buying from them. I’ve already had many hospitals call to ask if I planned to register for the FDA.” RP


1. Barlas S. Track-and-trace drug verification. Pharm Therapeut. 2011;36:203-204, 208, 231.

2. Outterson K. The Drug Quality and Security Act — mind the gaps. N Engl J Med. 2014;370:97-99.

3. Mikosz CA, Smith RM, Kim M, et al. Fungal endophthalmitis associated with compounded products. Emerg Infect Dis. [Internet]. 2014:20:248-256.