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  5. Inter-governmental Working Meeting on Drug Compounding | November 7-8, 2023
  1. Human Drug Compounding

Inter-governmental Working Meeting on Drug Compounding | November 7-8, 2023

Summary of Proceedings

FDA virtually convened its 12th intergovernmental working meeting on drug compounding with state government officials on November 7 and 8, 2023. Attendees included officials from state regulators, representatives from the National Association of Boards of Pharmacy (NABP), and representatives from FDA.

The purpose of the meeting was to continue discussing:

  • compounding oversight,
  • efforts to support the implementation of the Compounding Quality Act (CQA) and
  • opportunities to protect the public health through federal-state collaboration and regulatory discussions.

Officials from 41 states, the District of Columbia and the U.S. Virgin Islands participated in the 2023 intergovernmental working meeting on compounding.

FDA initiated these meetings after the 2012 fungal meningitis outbreak associated with contaminated compounded drugs, which led to deaths and serious illnesses across the country.

FDA Policy Updates

The intergovernmental meeting began with a discussion of FDA’s recent policy and rulemaking updates. FDA described in detail the process for identifying and adding bulk drug substances to the lists contemplated in sections 503A and 503B of the Federal Food, Drug, and Cosmetic (FD&C) Act, including the categorization of nominated substances under FDA’s interim policies on compounding using bulk drug substances under sections 503A and 503B.

FDA also provided an update on the number of substances categorized since October 2022:

  • For the 503A bulks list, two substances were added to category 1, 19 to category 2 and 45 to category 3.
  • For the 503B bulks list, 58 substances were added to category 1, three to category 2 and 92 to category 3.

The agency reviewed three Federal Register notices related to the 503B bulks list:

  • November 2022 Federal Register notice, which proposes to include on the 503B bulks list arginine hydrochloride (HCl) for oral use only, lysine HCl for oral use only and lysine HCl in combination with FDA-approved, single ingredient arginine HCl injection for intravenous use only.
  • April 2023 Federal Register notice, which proposes to include on the 503B list quinacrine HCl for oral use only, and proposes not to include on the list hydroxyzine HCl, mannitol, methacholine chloride, metoclopramide HCl, nalbuphine HCl, potassium acetate, procainamide HCl, sodium bicarbonate, sodium nitroprusside and verapamil HCl.
  • August 2023 Federal Register notice, which proposes not to include on the 503B bulks list hydroxychloroquine sulfate and ephedrine sulfate.

FDA reviewed the provisions of sections 503A and 503B related to shortages, as well as supply disruption-related guidance for industry, including Compounding Certain Beta-Lactam Products in Shortage Under Section 503A of the Federal Food, Drug, and Cosmetic Act and Compounding Certain Ibuprofen Oral Suspension Products Under Section 503B of the Federal Food, Drug, and Cosmetic Act. FDA also reviewed a draft guidance on the Prohibition of Wholesaling Under Section 503B which was published June 2023.

State Legislative and Regulatory Updates

Two states regulators presented state-level legislative and regulatory updates:

  • One state regulator discussed issues they have encountered, particularly around the regulation of IV hydration clinics. They noted that there are limitations to their authority to regulate in these settings which has necessitated increased collaboration with their state board of nursing and medical board. The state regulator mentioned they are also pursing legislative updates that would increase their ability to regulate directly. The state regulator said counterfeit drugs, including the use of counterfeit drugs for compounding, were also identified as an issue in their state.
  • The second state regulator also discussed issues in regulating IV hydration clinics, and added that along with issues around semaglutide compounding, the root cause appears to be an economic incentive for non-pharmacy compounders to enter the space that did not previously exist. They similarly noted issues with regulatory authority that necessitates collaboration with other regulatory entities within their state but said sometimes these entities have been less willing to collaborate.

Drug Supply Chain Security Act Updates and Panel Discussion

FDA provided an update on implementing the Drug Supply Chain Security Act (DSCSA), including the enhanced drug distribution security provisions which went into effect on November 27, 2023. FDA also reviewed recent guidance for industry, including two guidance documents:

These established a one-year stabilization period (until November 27, 2024) that may be needed to continue developing and refining appropriate systems and processes to meet the enhanced drug distribution security provisions while helping ensure continued patient access to prescription drugs. FDA stressed that these compliance policies should not be viewed as justification for trading partners to delay efforts to implement the requirements during the one-year stabilization period.

In response to an attendee question, FDA clarified the difference between DSCSA illegitimate product reporting using Form FDA 3911 and medical product safety reporting through the MedWatch program. FDA also provided an overview of Proposed Regulation 21 CFR 205, which would, when finalized, establish national standards for the licensure of wholesale drug distributors and third-party logistics providers, and reviewed a recent request for comments for the Development of Small Dispensers Assessment.

Following the FDA presentation, a panel of representatives from state boards of pharmacy discussed their experiences with implementing the DSCSA:

  • Panelists highlighted internal efforts to educate their staff about DSCSA requirements and to update their inspection procedures.
  • Panelists also noted the external outreach they have done to educate dispensers about DSCSA requirements.
  • One state regulator discussed their outreach to state law enforcement agencies to foster collaboration during the investigation of counterfeit drugs.
  • State regulators noted several challenges, including varying stages of dispenser and distributor readiness and the potential need for additional legislation at the state level.
  • One attendee noted that NABP has updated their universal inspection form to include aspects of DSCSA compliance for state regulators to take advantage of.
  • NABP also has made DSCSA training materials available to state regulators, and an NABP representative highlighted their Pulse platform for sharing trading partner information between states.

Wholesaling Presentations and Panel Discussion

Expanding on a brief review in the FDA Policy Updates session, FDA described the draft guidance for the Prohibition on Wholesaling Under Section 503B of the Food, Drug, and Cosmetic Act in detail, including:

  • FDA’s interpretation of the terms “sold or transferred,”
  • “entity other than the outsourcing facility” and
  • language in the provision that it “does not prohibit administration of a drug in a health care setting or dispensing a drug pursuant to a prescription executed in accordance with section 503(b)(1).”

FDA walked through examples of activities that would and would not be prohibited by the Prohibition on Wholesaling.

Following the presentation, a panel of representatives from state boards of pharmacy discussed their impressions of the Prohibition on Wholesaling draft guidance. Panelists noted the need to reconcile what is allowed and prohibited under the draft guidance with how the various entities involved are regulated within their states.

Semaglutide, Tirzepatide and Similar Products Presentations and Panel Discussion

FDA presented on the statutory framework for preparing compounded semaglutide, tirzepatide and similar products, including considerations for when a drug is listed on FDA’s drug shortage list. FDA reviewed an FDA.gov page on post-market drug safety information regarding medications containing semaglutide, and letters sent to NABP and the Federation of State Medical Boards (FSMB) to provide information about compounded semaglutide drug products.

FDA also presented warning letters sent to compounders that cite unapproved or misbranded semaglutide and tirzepatide, noted reports of counterfeit Ozempic and provided resources for reporting suspected illegal products to the FDA.

Following the presentation, a panel of representatives from FDA and state boards of pharmacy discussed experiences with these compounded products considering the high level of demand relative to the supply:

  • One state regulator said that while compounders within their state have been receptive to information about concerns with semaglutide salt forms, patients have turned to out-of-state sources.
  • State regulators indicated that compounding of these products within their states was mostly occurring at compounding pharmacies but noted that the number of doses coming from out-of-state sources was unknown.
  • Another state regulator warned of clinics purchasing research grade versions of these bulk drug substances.
  • Panelists highlighted DSCSA-related education efforts with a variety of healthcare providers to provide information on how to find safe drugs and how to validate their drug sources.

Q&A with FDA

FDA Office of Compounding Quality and Compliance leadership participated in a Q&A session with attendees. In response to a question about policy priorities, FDA pointed attendees to the Unified Agenda and the most recent CDER Guidance Agenda.

FDA specifically highlighted policy work around compounded drugs that are essentially copies of a commercially available drug product under sections 503A and of approved drugs under 503B, drug products that present demonstrable difficulties for compounding and continuing work on the 503A and 503B bulks lists.

One attendee asked if FDA had received any adverse event reports related to compounded hormone pellets and whether relevant guidance was being considered. FDA responded that no specific policies focused on hormone products have been announced but indicated that FDA was aware of related adverse event reports.

When asked about updates on compounding inspections, FDA highlighted continuing efforts to streamline the inspection compliance review process, including process changes implemented in mid-2023.

A related question was posed about how FDA prioritizes inspections of compounders. FDA responded that the prioritization is risk-based and recognized that states have primary oversight for the day-to-day regulation of state-licensed pharmacies, but that FDA may work with the state and conduct oversight for drugs compounded by a state-licensed pharmacy following reports of serious adverse events or product quality issues.

Attendees also wondered if upcoming USP <795> and <797> revisions would change FDA’s approach to inspections of state-licensed pharmacies compounding drugs under section 503A. FDA clarified that the agency focuses on the insanitary conditions provision during inspections of these pharmacies and the revisions to USP <797> and <797> would not necessarily change the agency’s approach.

When asked to shed light on what should be included by outsourcing facilities on drug product reports, FDA clarified that any human compounded drug produced should be included, whether it is intended for marketing/distribution or not. FDA also noted that issues or questions regarding product reporting can be sent to Compounding@fda.hhs.gov.

To round out the session, FDA answered a question about FDA’s organization structure and division of responsibilities. FDA advised attendees to visit the FDA organization webpage for additional information.

United States Pharmacopeia (USP) Updates

The United States Pharmacopeia (USP) joined as a guest presenter for a special session on changes to general chapters:

  • <795>, Pharmaceutical Compounding – Nonsterile Preparations
  • <797>, Pharmaceutical Compounding – Sterile Preparations

The <795> presentation covered flavoring and establishing beyond-use dates. The <797> presentation covered immediate-use, hazardous drugs, radiopharmaceuticals, allergenic extracts, handling blood derived products, categorization and beyond-use dates.

Insanitary Conditions and Adulteration with Panel Discussion

FDA reviewed the Insanitary Conditions at Compounding Facilities Guidance for Industry and discussed recently revised USP <797> standards alongside related insanitary conditions that FDA has observed.

Topics discussed involved gowning, facilities, cleaning, environmental monitoring, bacterial endotoxins testing, stock solutions, risk assessment, recalls and component selection. NABP and two states further presented challenges with implementing USP standards, preparation for implementing USP <795> and <797> revisions, and insanitary conditions that they have encountered during their own inspection activities.

Following the presentation, a panel of representatives from NABP and state boards of pharmacy addressed additional questions about implementing the revised USP standards:

  • State regulators noted efforts to educate both compounding pharmacies and their own staff about the revisions.
  • One state regulator said the education they provide to compounding pharmacies uses a one-on-one approach, while another state regulator said they include an educational aspect during their inspection activities.
  • One state regulator noted that while they do provide some basic educational resources on their website, they refer those with questions on more advanced topics to USP’s website.
  • State regulators were in agreement that FDA’s insanitary conditions guidance covered the range of insanitary conditions they observed during inspections.
  • When asked whether compounders were becoming more familiar with the FDA guidance in addition to the USP standards, state regulators noted that it was resource dependent, with larger compounders having a greater ability to gain familiarity.


FDA presented inspection and regulatory action updates, including a 58.6% reduction in the average number of days from end of inspection to regulatory action (e.g., warning letter, untitled letter, regulatory meeting) or inspection closeout (i.e., FMD-145) over a five-year period.

FDA shared trends in inspection classifications, inspection types, the issuance of Form FDA 483s, top Form FDA 483 observations, letters to state boards of pharmacy and advisory actions for compounders operating under sections 503A and 503B of the FD&C Act.

NABP presented changes to inspection forms associated with the USP <795> and <797> revisions.

State regulators also presented on inspection-related challenges that they face, including an increase in time required to complete inspections, educating regulated entities about compliance with recent USP revisions, non-resident pharmacies, multiple sources of inspection forms with differing perspectives, variation among individual investigators and legal action threatened or taken against the regulator.

Letters FDA Sends to States

FDA presented information about the various types of letters that FDA sends to states:

  • incident state notification letters
  • incident stakeholder correspondence letters
  • state handoff letters
  • state referral letters
  • state cover letters
  • state actions letters
  • notification of unlicensed, non-resident pharmacy letters

For notification of unlicensed, non-resident pharmacy letters, which were implemented in November 2021, FDA shared that 22 such letters were issued in 2023, up from four in 2021 and five in 2022.

FDA also indicated the response to this letter type has been positive. In response to an attendee question, FDA noted these letters facilitate increased collaboration and information sharing with state regulators.

Center for Veterinary Medicine Update

FDA’s Center for Veterinary Medicine (CVM) presented an update on animal drug compounding. CVM discussed the April 2022 Compounding Animal Drugs from Bulk Drug Substances guidance, which includes FDA’s enforcement priorities and identifies circumstances under which, at this time, FDA generally does not intend to take action against drugs compounded from active pharmaceutical ingredients or bulk drug substances.

CVM detailed the differing considerations under the guidance between compounding for food-producing animals and compounding for nonfood-producing animals.

CVM also shared information about reporting adverse events and product defects associated with compounded animal drugs, which differs from the process for human drug compounding.

Drug Shortages Presentation and Breakout Sessions

Another FDA presentation covered outsourcing facility production of drugs in shortage. Under section 503B of the FD&C Act, outsourcing facilities may be able to compound drugs that are identical or nearly identical to FDA-approved drugs that are on the FDA drug shortages list at the time of compounding, distribution and dispensing.

FDA shared results from a 2022 survey where 43% of responding outsourcing facilities indicated they produce products on the shortage list.

From 2021 survey data, some of the most frequently cited reasons why outsourcing facilities decide to produce drugs in shortage are:

  • high demand signal
  • high expected time on the drug shortage list
  • availability of production line capacity
  • low level of drug product complexity
  • high frequency on the drug shortage list
  • low ramp up time to production.

FDA also shared the top 10 active ingredients of drugs in shortage produced as a percentage of total outsourcing facility product volume based on 2022 data:

  • fentanyl citrate
  • norepinephrine bitartrate
  • vancomycin hydrochloride
  • hydromorphone hydrochloride
  • morphine sulfate
  • epinephrine
  • sodium chloride
  • ketamine
  • midazolam hydrochloride
  • sodium bicarbonate

In 2022, 18.7% of total outsourcing facility product volume were drugs on shortage, continuing an upwards trend over the last five years.

Outsourcing facilities have indicated to FDA that barriers they face for producing drugs in shortage are:

  • time required to development
  • cost and time required for stability studies
  • uncertainty around shortage timing making business decisions difficult
  • the short “tail period” to stop marketing when a drug is removed from the shortage list
  • an inability to obtain starting material if the FDA-approved product is in shortage for sterile to sterile production

A presentation by FDA Drug Shortage Staff (DSS) more broadly covered FDA’s role in preventing and mitigating drug shortages. FDA discussed the notification requirements that manufacturers and applicants of certain finished drugs and biological products must adhere to.

DSS detailed the process they follow when they are made aware of a potential or actual drug shortage. DSS also shared what FDA can require – notification by manufacturers for supply disruptions, delays, discontinuations and certain manufacturing changes – and what FDA cannot require – a company to make a drug, a company to make more of a drug, how much drug is distributed, and which purchasers will be given priority.

DSS stressed that early notification is key to preventing or mitigating the most severe impacts of drug shortages, but also noted that drug shortages cannot always be prevented due to unanticipated events, alternative manufacturers inability to make up production shortfalls and systemic issues that necessitate a plant closure for repairs.

DSS shared the reasons for new drug shortages in 2022, with the top reasons being quality issues/manufacturing delays (46%) and increase in demand (29%). FDA also shared what industry can do to help prevent and mitigate drug shortages.

Following the presentations, attendees from FDA, NABP and the states participated in breakout room discussions on the topic of drug shortages.

IV Hydration Clinics Update

NABP and two state regulators presented an update on IV hydration clinics – a topic that had significant interest and engagement during the previous intergovernmental working meeting.

One conclusion from the previous meeting was that more collaboration was needed with regulatory entities beyond state boards of pharmacy and FDA. To that end, NABP highlighted an IV hydration webinar that was held July 2023 with NABP, FSMB, the National Council of State Boards of Nursing (NCSBN), FDA and the Federal Trade Commission (FTC). More 700 regulators attended this webinar.

One state regulator presented that since the last intergovernmental working meeting, they have begun performing joint visits of IV hydration clinics with other regulators in their state. The state regulator noted continued issues with regulating IV hydration clinics and the drugs they compound:

  • the variety of settings where IV hydration operations are taking place
  • incorrect patient information, non-compliance with valid prescription requirements
  • lack of proper licensure

A second state regulator discussed similar issues, and shared a list of some questions they consider when interacting with IV hydration operations:

  • Where are they obtaining their products?
  • Are they properly licensed?
  • Are they maintaining awareness about counterfeit products?
  • Do they have refrigerators?
  • Are they checking temperatures and temperature excursions?
  • Is the patient being evaluated?
  • Is a medical history being completed; Do they document a patient’s medication list?
  • Is an evaluation completed and did it include if the patient was coherent enough to make a decision?
  • Do you consider contraindications?
  • Are you compounding with more than two ingredients?
  • Do they have full policies and procedures and are they available for the patient?

DQSA Anniversary and Looking Ahead

In the final session, representatives from FDA and NABP reflected on the progress made in the 10 years since the passage of the Drug Quality and Security Act (DQSA) and shared their thoughts on the future of compounding.

Participants noted how far we have come with regards to compounding and associated regulation but said that there is still more that can be done to enhance communication and collaboration:

  • Adverse event reporting and the creation of uniform standards also emerged as areas for improvement.
  • Continuing to move from a reactive posture to a proactive posture was highlighted as a goal.
  • Increased communication and collaboration between FDA and state boards of pharmacy have been vital to quality and consistency across the regulatory landscape.
  • Collaboration is important beyond simply spreading awareness of the challenges we face. It enables collective problem-solving that allows for not only the effective regulation of compounding, and also improved quality of compounded drug products for patients.

Looking ahead to the next 10 years, representatives highlighted the importance of continued collaboration between FDA and state regulators across the healthcare spectrum, not just boards of pharmacy. FDA and NABP recognized the need to keep compounders educated about changes to compounding-related laws, rules and guidance.

Other key goals are:

  • reducing the number of adverse events,
  • strengthening adverse event reporting and
  • ensuring inspectors are well-versed in the latest compounding practices and fostering a focus on quality among compounders.

November 7-8, 2023, Intergovernmental Working Meeting Action Items

  • FDA will continue to work with states and NABP to identify, understand and enhance pathways for information sharing about adverse events, complaints and product quality issues related to compounded drugs.
  • FDA will work with outsourcing facilities and other stakeholders to understand barriers to producing products that appear on the FDA drug shortages list.
  • FDA will work to strengthen collaboration with federal agency partners and state regulators outside of boards of pharmacy.
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