FDA Compounding Quality Center of Excellence Cross-Sector Stakeholder Group
The FDA established a cross-sector stakeholder group to engage on issues that affect outsourcing facilities, health care providers that purchase and use their products, and other stakeholders in the ecosystem. The purpose of these meetings is to convene industry experts to share individual perspectives on compounded drug quality, production, demand, and clinical use.
Facilitated Discussion on the Future Role of 503B Outsourcing Facilities
- The group discussion began with an overview of the current role 503B outsourcing facilities serve for their customers. Participants discussed types of services provided as well as the benefits and challenges of using 503B outsourcing facilities.
- Participants noted that 503B outsourcing facilities provide key services to hospitals and health systems such as admixtures or parenteral medications not commercially available or experiencing a shortage, sterile as well as non-sterile, and topical formulations (most often for dermatologic use). Participants noted common benefits that 503B outsourcing facilities deliver to their clients, such as relieving staffing and space constraints.
- Key challenges that hospitals and health systems face in using 503B outsourcing facilities include cost of outsourced products (compared to the material costs of compounding in house) as well as managing unplanned interruptions of supply from outsourcing facilities driven by production issues, quality issues, vendor supply chain issues, and pending FDA regulatory actions (e.g., 483 observations, warning letters, recalls).
- Meeting facilitators provided an overview of the history of the 503B outsourcing facility industry. Participants discussed the relative youth of the industry and continuing improvements in customer and other stakeholder understanding of 503B outsourcing facilities (e.g., differences between 503A and 503B outsourcing facilities, states’ understanding of 503B outsourcing facility requirements).
- Participants noted a common desire for the 503B industry to serve customers in times of drug shortage. They also expressed the view that, currently, 503B outsourcing facilities are constrained in producing shortage products for a variety of reasons, including the high cost of startup (e.g., stability testing) and uncertainties surrounding the time of onset and length of some shortages.
- The group discussed the economic challenges of production in specialized practice areas such as dermatology and ophthalmology where there is no product standardization and the batch size is generally smaller than what is required by hospitals and health systems.
- Participants noted considerations the 503B industry will navigate as it continues to grow. Key considerations discussed include: potentially restrictive reimbursement policies, different interpretations of essential copies guidance across the industry, and states’ interpretation of the wholesaling prohibition (e.g., in some circumstances 503B outsourcing facilities report being unable to sell to pharmacies and physicians).
- Meeting participants acknowledged that a shared understanding of wholesaling across the 503B ecosystem remains a priority for all stakeholders.
Quality in Outsourcing Facility Compounding
Discussion questions included:
- Are CGMP compliance and “quality” synonymous for some 503Bs?
- What do providers want in understanding quality when assessing a 503B?
- Where is the industry heading on quality?
- How can stakeholders advance a shared understanding of quality in the 503B ecosystem
Facilitated Discussion on Quality and Compliance in the 503B Outsourcing Facility Industry
- The group discussion began with review of the 2012 meningitis outbreak caused by contaminated compounded products released by the New England Compounding Center (NECC).
- Participants proposed as a framework for discussion that the 503B ecosystem can be characterized by four types of understanding of compounding quality: (1) compounding veterans who understand compounding quality as contingent upon CGMP compliance, (2) compounding veterans who believe compounding quality is not contingent upon CGMP compliance and seek greater regulatory flexibility, (3) compounding novices who are largely unfamiliar with CGMP compliance as a necessity for compounding quality, and (4) compounding novices who understand compounding quality as contingent upon CGMP compliance. Participants noted groups (2) and (3), though well-intentioned, can be vulnerable to decreased compounding quality without consistent CGMP compliance.
- Participants noted that customers seek greater transparency and insight into quality of each outsourcing facility to allow for benchmarking. However, participants highlighted that there is currently no standardized means of quality transparency for 503Bs to meet customer demand.
- Various stakeholders noted that the American Society of Hospital Pharmacists (ASHP) recently released a digital tool to enable customers to assess quality.
- Participants further noted the challenges of sharing sensitive information with customers in a digital world where security and privacy of information is critical. To address this challenge, one participant noted their organization temporarily shares sensitive customer-requested data in a secured digital space for greater transparency.
- Another discussion point raised was the challenge of maintaining a profitable business with quality (e.g., greater investments in quality can lead to increased costs).
- Participants discussed automation in compounding as one way to reduce costs associated with human error as well as product standardization to reduce development costs of multiple products and enable agility in production.
- Participants noted that newer facilities may proactively request FDA pre-operational evaluations before starting up to proactively obtain feedback on production and quality plans, which could save on later costs associated with compliance issues.
- The group members also discussed development of advanced trainings and continuous education on developing quality drug products. Means of continuous education discussed included advanced trainings delivered through the CoE or other body and leveraging the CoE conference.
Presentation and Facilitated Discussion About Education and Messaging on Outsourcing Facilities
- A group member outlined key points for discussion on education and messaging that impact the 503B ecosystem: target audiences, FDA Compounding Quality Center of Excellence messaging on 503Bs and outsourced drugs, 503As v. 503Bs, CGMP, 503B inspections, 483 observations, and state regulations and licensure.
- For target audience, the presenting group member asked the rest of the group how they may use FDA Compounding Quality Center of Excellence trainings to reach and educate target audiences with different knowledge levels. They discussed the importance of distinguishing 503Bs from 503A compounding, noted that FDA Compounding Quality Center of Excellence trainings have been very useful for industry personnel, and highlighted the need for greater distribution channels to amplify the trainings’ presence so all 503B stakeholders may benefit from them.
- Group members offered several options to promote trainings, including ASHP’s Compounding Resource Center, Vendor Assessment Tool, and a webinar to launch the week following the meeting; and distribution through professional academies/organizations listed on the Council of Medical Specialty Societies.
- The group discussion underscored the importance that customers understand the critical differences between 503A and 503B facilities. A group member discussed the value in communicating to customers that 503As are primarily managed by a pharmacist, whereas 503Bs are primarily managed by quality systems. Another discussion point highlighted that 503As, such as those located within a hospital, compound drugs for more immediate consumption whereas 503Bs produce compounded drugs over a longer term, necessitating different regulations.
- The group discussed one potentially harmful impact of inaccurately using “investigational” and “experimental” terms to describe 503B compounded drugs. Members of the group expressed concern that the terminology can create confusion for providers and patients. To address confusion, group members discussed the potential utility in developing a visual tool to differentiate pharmaceutical companies, 503As, 503Bs, and hospitals. Other group members proposed a Frequently Asked Questions (FAQ) document for non-clinicians to understand key differences.
- The presenting group member introduced discussion on the difference between 503B inspections completed by FDA versus state boards of pharmacy.
- Some have experienced confusion from customers, and some individual group members expressed interest in having the FDA Compounding Quality Center of Excellence develop a CGMP inspection process training targeted for state regulators. FDA provided a link to current, on-demand FDA Compounding Quality Center of Excellence trainings and mentioned that state regulators have been included in previous virtual trainings on a limited basis and that the FDA Compounding Quality Center of Excellence has a training and discussion session scheduled this fall for state regulators.
- The participants observed that FDA Form 483 observations are not infrequently interpreted as violations or sanctions by some customers. Some participants expressed the view that observations should be instead interpreted as feedback for continuous quality improvement. One participant noted that the Form 483 observations were akin to the inspections that the Joint Commission conducts in hospital pharmacies.
- 503B participants raised discussion on the diversity in state regulatory requirements for 503Bs. Participants observed that there exists no coordinated effort of 503Bs with state boards to address this issue, citing low visibility into the inefficiency of maintaining licensing across states as a potential cause. Group members proposed solutions, including 503B ownership of education and discussion of this issue with state regulatory bodies and related stakeholders (e.g., ISPE, NSDE; OFA collaboration with NABP) and/or development of a visual (e.g., table) amended to NABP summary of laws that breaks down state licensing information for centralized access and increased visibility.
- Participants discussed potential FDA Compounding Quality Center of Excellence role in promoting language and materials with a broader audience.
- Group members expressed concern that currently, words such as dispense, distribute, sell, and resell may be insufficiently understood, challenging understanding of the industry.
Drug and Staff Shortages Presentation
- A group member presented data on the impact of drug and staff shortages. The discussion focused on both recent data and historical trends.
- Recent ASHP data suggests that 66% of new shortages in 2021 and 2022 are injectable drug products, and there are approximately 240 active drug shortages in Q4 2021 and Q1 2022. ASHP historical data indicates that the earliest currently active drug shortage tracked by ASHP dates to 2008. It was noted there was a significant and consistent increase in the number of ASHP-tracked shortages that remain active for shortages beginning in 2016 to present with a peak in 2019-2020.
- It was reported that hospitals are perceiving increased workforce shortages for both entry-level and experienced pharmacy technicians. As of 2021 the shortage of pharmacy technicians is at the highest level since data collection began in 2007.
Discussion of Duke Margolis Center for Health Policy Drug Shortages Meeting
- Another group member attended the Duke Margolis Center for Health Policy meeting on drug shortages in Washington D.C. in November 2018 titled Identifying the Root Causes of Drug Shortages and Finding Enduring Solutions. They shared the meeting’s presentation slides and notes on the meeting with the group.
- The meeting was part of a federal inter-agency task force effort led by FDA and contributed to the publishing of the FDA report Drug Shortages: Root Causes and Potential Solutions in 2019 and updated in 2020.
- While the meeting was more than three years ago, CSS group participants noted the intensity and duration of drug shortages as described by the presentation and discussed continued relevance of some issues and themes.
- Participants discussed how the prevalent shortages of low-cost sterile injectable generic drugs could be related to their diminishing profitability and manufacturer exits from these markets as manufacturers increasingly shift production to newer, more profitable drug products.
- Participants discussed considerations which affect purchaser decision-making, such as reimbursement and budget, and those which impact 503B decision-making, such as the time required for process development and stability testing.
Facilitated Discussion on Drug Shortages
- Participants from hospital systems described the impact of acute drug shortages on their operations, including their need for daily internal meetings to discuss strategies to preserve patient care with limited supply of certain drugs.
- When facing a drug shortage, the hospital and health system stakeholders also described their supply chain decision-making process, including their need to consider the impact and duration of the shortage, and then determine whether they have the capacity to compound in-house or if a 503A or 503B has the capacity to meet their needs.
- Participants from 503B firms described the factors which influence whether a drug in shortage is a good fit for 503B production. Products that were identified as potentially viable included small molecule, injectable, or older generic drug products. Low-margin products like IV fluids and saline flushes that can be produced in greater volumes by contract manufacturers or generic drug companies were identified to be less ideal for 503B production.
- 503B participants mentioned the financial and time commitment required to conduct stability studies and the risk of having to cease production after a short tail period when a drug in shortage becomes available from the manufacturer as key factors in their decision-making.
- There was also discussion that being able to predict shortages in a proactive manner would be helpful regarding both purchasing and production-related decision making.
- Participants also discussed examples where non-profit foundations have collaborated with 503Bs to enable their production of certain drugs predicted to be in shortage by funding stability studies. Hospital and health system participants mentioned they are less able to fund stability studies or commit to purchasing a certain volume of 503B drug shortage products due to financial constraints.
- Both 503B and hospital and health system participants discussed potential collaboration opportunities to identify specific drugs in shortage that have high clinical need, are good fits for 503B production.
Participants discussed the following:
- Feedback on the goals and focus areas of the group
- One goal is to foster an improved understanding of the outsourcing facility sector now and in the coming years, including how the industry serves providers and patients.
- Outsourcing facility representatives mentioned their hopes to share best practices with each other, such as strategies to better understand and meet demand and lessons learned from deploying automation or other manufacturing practices at outsourcing facilities.
- Drug and workforce shortages, lack of public awareness of the industry, and lack of transparency were mentioned as ongoing problems affecting the industry.
- The hospital and clinical representatives mentioned their hopes to raise awareness about the impact of drug shortages, to learn more about the manufacturing side of the industry, and to have a more streamlined process for finding, evaluating, and purchasing 503B drug products.
- Future discussion topics
- Demand and Patient Need
- Drug shortages
- Current and future role of 503B Outsourcing Facilities
- Education and messaging about the 503B industry
- Initial discussion on demand and patient need
- Participants discussed what key questions are useful to address when examining demand/patient need, such as, “Which products would providers like to buy from 503B outsourcing facilities but cannot?” “What challenges do you face in forecasting demand?” and “What tools could help providers better understand 503B product availability?”
- Hospital and clinical stakeholders mentioned they purchase products from multiple 503B outsourcing facilities, but some products may only be available from one 503B outsourcing facility, which can lead to gaps in meeting patient need if the outsourcing facility has downtime due to shortage or shutdowns.
- Also discussed was the impact of clinical use guidelines in production and purchase decision-making; these guidelines are followed by prescribers and may vary across clinical specialties. Participants noted knowledge gaps may exist, such as a lack of real-time awareness of product availability and lack of purchaser knowledge of 503B outsourcing facility capacity for certain products.
- Participants discussed gaps that exist within demand transparency, such as a lack of real-time awareness of product availability and lack of purchaser knowledge of 503B outsourcing facility capacity for certain products.
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