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New Legislation Redefines Oversight for Compounding Pharmacies

By: Davidta Brown, Senior Staff Editor

As the world of healthcare and its provision evolves, laws which organize and oversee the ways that patients receive health services must develop at the same pace. Last November, a new bill establishing clearer protocol for the compounding and tracking of medications became national law. The Drug Quality and Security Act intends to answer some of the questions unearthed nearly two years ago about the extent to which compounding pharmacies should be regulated.

The Drug Quality and Security Act is divided into two sections, Title I being “Drug Compounding” and Title II, “Drug Supply Chain Security.”1 In the first segment, which amends the Food, Drug, and Cosmetic Act, compounding facilities are given the option to register with the government, in which case they would be called “outsourcing facilities,” and would receive a special license.1,2 Outsourcing facilities must adhere to the standards created in this legislation, but are otherwise “exempt from new drug requirements, labeling requirements, and track-and-trace requirements” on what they produce.1 Among the regulations which outsourcing facilities must obey is a requirement to re-register annually with the Secretary of Health and Human Services and to report biannually on production and on any adverse events.1,2

Under Title I, the HHS Secretary is also responsible for publishing a list of drugs that may present risks to the patient when they are compounded.1 What is to be done with the list once it is compiled remains unclear, but outsourcing facilities under regulation would assumedly receive further instructions regarding these substances. State boards of pharmacy receive the new duty of reporting any disciplinary actions taken against a compounding facility, or any suspicions of poor adherence to the Food, Drug, and Cosmetic Act, to the Secretary’s office.1,2

The focus of Title II is the establishment of an electronic identification and tracking system for drug packages, a procedure that is to be gradually introduced over the next ten years.1-3 In order to ease the exchange of information between manufacturers, wholesale distributors, dispensers, and others along the drug supply chain, the Secretary of Health and Human Services will implement standardized documentation as well as procedures for sharing said documentation.1 In addition, individual drug packages will receive a unique identifier, such as a bar code that can be read electronically, so that each package can be monitored as needed.3 Currently the tracking system is still being conceived, but the law anticipates its implementation in the next few years. In the event of a tainted or otherwise harmful drug, this new system would theoretically allow an individual shipment of drugs or sterile compounded materials to be traced from the patient to its source, thus helping prevent additional harm.

In summary, the Drug Quality and Security Act addresses the questions of who oversees medium-sized compounding facilities and of how to monitor drugs that are shipped across state lines. Title I of the new legislation places the Secretary of Health and Human Services in the role of a supervisor for compounding facilities, and Title II creates the means to potentially follow one harmful package of drugs from the patient, all the way back to the compounder or manufacturer.

Even before the Drug Quality and Security Act was officially signed into law on November 27th, it received a significant amount of positive feedback. Among those who expressed support for the legislation while it awaited Congressional approval were the American Society of Health System Pharmacists, Pfizer, and the Generic Pharmaceutical Association.4

A statement from the National Community Pharmacists Association, another early supporter, expressed an appreciation for the Drug Quality and Security Act’s consideration for small business pharmacies, which often “struggle to meet many regulatory requirements and can ill afford needless new mandates.”4 For these supporters, the voluntary outsourcing facility licensing system is an ideal compromise between ensuring high standards of quality and preventing smaller establishments from being regulated out of the market completely.

However, it is possible that this leniency will weaken the law to the point of ineffectiveness. If the majority of large compounders nationwide decide not to register, all of the regulations and compounding policies created by the law will amount to a tree falling in a forest unheard.

A solution to this hypothetical dilemma has been described as a “market-based response,” and calls on healthcare providers to be a pillar in support of tighter standards.5 Providers who demand that their sterile compounded products only come from licensed outsourcing facilities would more effectively guide compounders toward this choice than any law ever could. On the other hand, if the consumers of compounded prescriptions only sought the lowest costs, compounders that elected not to register with the HHS Secretary would be at a great advantage.

It is evident, then, that pharmacists and healthcare providers have as much liberty to influence the Drug Quality and Security Act as the legislation has to affect them. Dispensers and recipients of compounded medications are given the choice to accept the standards established under the law, or to continue adhering to the older regulations. In an attempt to maintain the delicate balance between regulation and freedom, the Drug Quality and Security Act creates new rules, but leaves the decision between new and old regulations up to healthcare providers.



  1. Library of Congress. Drug quality and security act. 2013. Congress.gov Website. Available at: http://beta.congress.gov/bill/113th-congress/house-bill/3204. Accessed February 26, 2014.
  2. H.R. 3204: drug quality and security act. Govtrack.us Website. Available at: https://www.govtrack.us/congress/bills/113/hr3204/text. Published November 21, 2013. Accessed February 26, 2014.
  3. Drug supply chain security act: title II of the drug quality and security act of 2013. US Food and Drug Administration Website. Available at: http://www.fda.gov/drugs/drugsafety/drugintegrityandsupplychainsecurity/drugsupplychainsecurityact/default.htm. Updated February 19, 2014. Accessed February 26, 2014.
  4. Broad range of stakeholders agree: bipartisan, bicameral drug quality and security act will improve drug safety, should be enacted as soon as possible. US Senate Committee on Health Education Labor and Pensions Website. Available at: http://www.help.senate.gov/newsroom/press/release/?id=049ab377-a426-4dd1-90dd-b9b770de7a65. Published September 28, 2013. Accessed February 26, 2014.
  5. Outterson K. The drug quality and security act – mind the gaps. N Engl J Med. 2014;370:97-99. doi: 10.1056/NEJMp1314691. Accessed February 26, 2014.
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