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Drug Compounding: Clear Authority and More Reliable Data Needed to Strengthen FDA Oversight

GAO-13-702 Published: Jul 31, 2013. Publicly Released: Jul 31, 2013.
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What GAO Found

The authority of the Food and Drug Administration (FDA), an agency within the Department of Health and Human Services (HHS), to oversee drug compounding is unclear. Two federal circuit court decisions have resulted in differing FDA authority in different parts of the country. According to FDA officials, these inconsistent decisions and the agency's limited inspection authority over pharmacies have created challenges in FDA's ability to inspect and take enforcement action against entities engaging in drug compounding. For example, from 2002 through 2012, in order to inspect some facilities engaged in drug compounding, FDA officials said they had to obtain 11 warrants to gain access to drug compounders' facilities that had challenged FDA's inspection authority. GAO also found that while FDA and national pharmacy organization officials generally agreed that states regulate the practice of pharmacy and FDA regulates drug manufacturing, there was no consensus on whether compounding drugs in large quantities--in anticipation of individual prescriptions or without prescriptions--and selling those drugs across state lines falls within the practice of pharmacy or is a type of drug manufacturing that should be overseen by FDA. This lack of consensus and differing FDA authority to oversee compounded drugs across the country has resulted in gaps in oversight of drug compounding.

FDA lacks timely and reliable information to oversee the entities that compound drugs, but has found problems through its limited oversight. Specifically, FDA's inspection database cannot identify all of the agency's inspections of compounding pharmacies, or the final classification of inspection results, for all of the inspections. Until 2013, FDA limited its inspections of compounding pharmacies to those conducted in response to complaints or adverse events. However, the agency recently inspected compounding pharmacies that it identified as posing a significant threat to public health from poor sterile drug production practices in the past and found problems, such as concerns about a lack of sterility, which resulted in recalls of compounded drugs. In addition, drug manufacturers are required to register with FDA and are subject to FDA's inspection and drug approval processes; pharmacies meeting certain requirements are generally exempt from registration. However, some compounding pharmacies may have registered with FDA to market themselves as "FDA-registered" which may lead some purchasers to assume that FDA has inspected or approved their compounded drugs; whereas, according to FDA officials, this is generally not the case.

The states GAO reviewed--California, Connecticut, Florida, and Iowa--have each taken actions to enhance their oversight of drug compounding. For example, Florida required all pharmacies--both those located in the state and out-of-state that sell drugs in Florida--to notify the board of their compounding activities. In addition, national pharmacy organizations have undertaken efforts to help states oversee drug compounding. For example, a national pharmacy organization is working with Iowa to inspect out-of-state pharmacies that ship drugs into the state. However, according to national pharmacy organizations and officials from state boards of pharmacy, some states do not have the resources to inspect pharmacies on a regular basis. Instead, these states inspect pharmacies only in response to a complaint or a reported adverse drug event.

Why GAO Did This Study

Drug compounding is the process by which a pharmacist combines, mixes, or alters ingredients to create a drug tailored to the medical needs of an individual. An outbreak of fungal meningitis in 2012 linked to contaminated compounded drugs has raised concerns about state and federal oversight of drug compounding. GAO was asked to update its 2003 testimony on drug compounding. Specifically, this report addresses (1) the status of FDA's authority to oversee drug compounding, and the gaps, if any, between state and federal authority; (2) how FDA has used its data and authority to oversee drug compounding; and (3) the actions taken or planned by states or national pharmacy organizations to improve oversight of drug compounding. GAO reviewed relevant statutes and guidance; reviewed FDA data; and interviewed officials from FDA, national pharmacy organizations, and four states with varied geography, population, and pharmacy regulations.

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To help ensure that the entities that compound drugs have appropriate oversight, Congress should consider clarifying FDA’s authority to oversee drug compounding. In addition, FDA should ensure its databases collect reliable and timely data on inspections associated with compounded drugs, and differentiate drug compounders from manufacturers. HHS's comments support the need to clarify FDA's authority, and stated that the information in its inspection database could be improved and that it would consider whether it can differentiate compounding pharmacies from manufacturers.

Matter for Congressional Consideration

Matter Status Comments
To help ensure appropriate oversight of the safety of products from the entities that prepare and distribute compounded drugs that have a high potential to adversely affect public health, Congress should consider clarifying FDA's authority to regulate entities that compound drugs.
Closed – Implemented
In November 2013, Congress passed and the President signed into law the Drug Quality and Security Act, which clarified FDA's authority to oversee drug compounding nationally and gave sterile drug compounders the option to register with FDA as an outsourcing facility

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services The Secretary of Health and Human Services should direct the Commissioner of the FDA to take steps to consistently collect reliable and timely information in FDA's existing databases on inspections and enforcement actions associated with compounded drugs.
Closed – Implemented
We are closing this recommendation as implemented based on updated information received in July 2017 from the Department of Health and Human Services' Food and Drug Administration (FDA). In this information, FDA reported that the agency has taken a number of steps to improve the accuracy and timeliness of the final inspection classification in its database. FDA provided documentation that the agency is holding quarterly meetings to evaluate data for compounding inspections, and reported that these meetings include checking the accuracy and timeliness of data and the updating of final decisions in its inspections database. FDA also held a formal training in June 2016 that included a discussion of accurate data entries for inspections, and provided the speaker notes from that training. In addition, FDA reported that the agency held a second training on accurate data entries for inspections in August 2017, and provided a PowerPoint presentation for that training that included a slide on entering the final inspection classification.
Department of Health and Human Services The Secretary of Health and Human Services should direct the Commissioner of the FDA to clearly differentiate in FDA's database, those manufacturers of FDA approved drugs that FDA inspects for compliance with good manufacturing practices from those entities compounding drugs that are not FDA-approved and that FDA does not routinely inspect.
Closed – Implemented
We are closing this recommendation because the Drug Quality and Security Act, which was enacted in 2013, created a new category of drug compounders called outsourcing facilities--facilities that meet certain FDA requirements, including compounding sterile drugs, and register with and are inspected by FDA. In addition, FDA has been using a risk-based model to inspect pharmacies and other drug compounders that are not outsourcing facilities.

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