FDA Outlines Policies for Compounding Drug Products That Are Essentially Copies of Approved Drugs Under Section 503B of the FD&C Act

In our preceding FDA News article, we focused on the content of the first draft guidance, which addresses restrictions concerning the compounding of drug products that are essentially copies of commercially available drugs under section 503A of the Federal Food, Drug, and Cosmetic (FD&C) Act.  Now, we shift our focus to the second draft guidance published on July 7^th, which focuses on drug products compounded under section 503B.

For additional information on this draft guidance, view our FDA News article, entitled “FDA Outlines Policies for Compounding Drug Products That Are Essentially Copies of Commercially Available Drugs Under Section 503A of the FD&C Act.”

Draft Guidance #2

In order for a product compounded by an outsourcing facility to qualify for exemptions under 503B of the FD&C Act, FDA states that “it must not be ‘essentially a copy of one or more approved drug products,’ and must meet the other conditions in section 503B.”  As such, the Agency’s recent draft guidance, entitled “Compounded Drug Products That Are Essentially Copies of Approved Drug Products Under Section 503B of the Federal Food, Drug, and Cosmetic Act,” outlines the policies governing this condition of section 503B.

Section 503B of the FD&C Act

The Drug Quality and Security Act, enacted in 2013, created a new section to the FD&C Act, 503B.  This new section introduced a new category of compounders – outsourcing facilities – and “describes the conditions that must be satisfied for human drug products compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility to qualify for exemptions from the following three sections of the FD&C Act:

• Section 502(f)(1) (concerning the labeling of drugs with adequate directions for use)
• Section 505 (concerning the approval of drugs under new drug applications (NDAs) or abbreviated new drug applications (ANDAs))
• Section 582 (concerning drug supply chain security requirements).”

Drug products compounded by outsourcing facilities (and thus subject to section 503B) are not exempt from FDA’s current good manufacturing practice (cGMPs) requirements.  “Outsourcing facilities are also subject to FDA inspections according to a risk-based schedule, specific adverse event reporting requirements, and other conditions that help to mitigate the risks of the drug products they compound.”

In order for a compounded drug to qualify for the exemptions under section 503B, it cannot be “essentially a copy of one or more approved drugs.”  According to section 503B(d)(2), essentially a copy of an approved drug is defined as follows:

• “A drug that is identical or nearly identical to an approved drug, or a marketed drug not subject to section 503(b) and not subject to approval in an application submitted under section 505, unless, in the case of an approved drug, the drug appears on the drug shortage list in effect under section 506E at the time of compounding, distribution, and dispensing (section 503B(d)(2)(A)).”
• "A drug, a component of which is a bulk drug substance that is a component of an approved drug or a marketed drug that is not subject to section 503(b) and is not subject to approval in an application submitted under section 505, unless there is a change that produces for an individual patient a clinical difference, as determined by the prescribing practitioner, between the compounded drug and the comparable approved drug (section 503B(d)(2)(B)).”

Only drug products that are compounded by an outsourcing facility that compounds all of its drugs, both sterile and non-sterile, according to all of the conditions of section 503B qualify for the exemptions set forth in the section.  A complete list of the conditions that must be met in order for a drug product to qualify for the exemptions in section 503B can be found in FDA’s guidance, entitled “For Entities Considering Whether to Register As Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act.”

Compounded Drugs That Are Essentially Copies of Approved Drug Products

While it is important to note that compounded drugs “serve an important role for patients whose clinical needs cannot be met by an FDA-approved drug product,” it is equally important to recognize the increased risks that accompany these products.  Drugs that are compounded by outsourcing facilities under section 503B are not required to meet all of the same requirements as drugs that go through FDA’s entire approval process.  Because of this, these products “have not undergone FDA premarket review for safety, effectiveness, and quality.  Although outsourcing facilities must comply with CGMP requirements and are inspected by FDA according to a risk-based schedule, their drugs also lack a premarket inspection and finding of manufacturing quality that is part of the drug approval process.”

Due to the increased risk associated with compounded products, FDA states that drugs compounded by outsourcing facilities should only be used to fulfill the needs of those patients whose medical needs cannot be met by an FDA-approved drug.  To enforce this, the FDA has placed restrictions on the compounding of drugs that are essentially copies of approved products.

In addition, these restrictions have also been put into place to protect the integrity and effectiveness of the new drug and abbreviated new drug approval processes.

Compounded Drugs That Are Essentially Copies of Unapproved Non-Prescription Drug Products

As set forth in section 503B(d)(2), the definition of essentially a copy of an approved drug also refers to non-prescription drug products.  However, Congress did not provide exemptions for these drugs under section 503B, “which ensures that outsourcing facilities do not compound unapproved over-the-counter drug products under the exemptions in section 503B.”

Section 503B also protects the Agency’s drug monograph process, which is FDA’s ongoing process used to evaluate the safety and effectiveness of over-the-counter (OTC) products.  When an OTC drug is determined to be generally recognized as safe and effective, the FDA will publish a final monograph specifying those conditions.  Furthermore, the Agency states that “compounding copies of such drug products would undermine the process that drug manufacturers must comply with, which includes a set of specific regulatory requirements that limit the formulation of the drug product, and both the content and format of its labeling.”

Policies

In order to qualify for the exemptions under section 503B, “a compounded drug must not be essentially a copy of one or more approved drugs.”  According to its recent draft guidance, FDA states that “for purposes of this provision:

• Approved drug means a drug product that is approved under section 505 of the FD&C Act and does not appear on the list described in subsection 503B(a)(4) of drugs that have been withdrawn or removed from the market because such drugs or components of such drugs have been found to be unsafe or not effective.
• Marketed drug not subject to section 503(b) and not subject to approval in an application submitted under section 505 means any non-prescription drug product marketed without an approved application. We refer to these products as covered OTC drug products throughout the remainder of this guidance document.
• A drug appears on the drug shortage list in effect under section 506E if the drug is in “currently in shortage” status (and not in “resolved” status), as indicated in FDA’s drug shortage database.”

In its draft guidance, FDA states that “a compounded drug is essentially a copy of an approved drug if the compounded drug is identical or nearly identical to an approved drug.”  As such, the Agency considers a product to be identical or nearly identical to an approved drug if the compounded drug and the FDA-approved drug have the same:

1. Active ingredients
2. Route of administration
3. Dosage form
4. Dosage strength
5. Excipients

FDA also notes that “a compounded drug that is identical or nearly identical to an approved drug is not considered essentially a copy if the approved drug is in shortage at the time of compounding, distribution, and dispensing.”  If an outsourcing facility comes across this type of situation, it can compound the drug as long as it complies with all of the other conditions set forth in section 503B.

It could happen that a drug product may appear on the shortage list at the time of compounding, but the shortage is resolved before the compounded drug is distributed.  In such cases, FDA states that it will not “take action against an outsourcing facility for filling orders that it received for a compounded drug that is identical or nearly identical to an approved drug that was on FDA’s drug shortage list at the time that the outsourcing facility received the order, provided the drug also appeared on the FDA drug shortage list within 60 days of the outsourcing facility distributing or dispensing the drug.”

In addition, section 503B(d)(2)(B) states that a compounded drug is considered to be essentially a copy of an approved drug if a component of that drug is a bulk drug substance that is also the component of an approved drug or a covered OTC drug.  The exception to this condition is if there is a change that produces a clinical difference for an individual patient, as determined by the prescribing practitioner, between the compounded drug and the comparable approved drug.

Recordkeeping

FDA recommends that outsourcing facilities maintain records that demonstrate compliance with the essentially a copy provision of section 503B of the FD&C Act.  Furthermore, FDA states that if an outsourcing facility compounds a drug that is identical or nearly identical to an approved product that appeared on FDA’s drug shortage list, the facility should keep documentation regarding the drug’s status at the time of compounding, distribution, and dispensing.

For additional details on FDA’s policies regarding the compounding of drugs that are essentially copies of approved drugs, view the full draft guidance.