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State Pharmacy Boards Are Advocating for Clarity Regarding Overseeing Custom-Drug Makers

David W. Hodges
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Partner at Kennedy Hodges LLP practicing pharmacy error, medical malpractice and personal injury law

After the 2012 meningitis outbreak that spread across 20 states, killing 64 people and injuring about 750 others, it doesn’t seem like much has been done to regulate the types of facilities making custom-made drugs. For example, unique, complex medications are still being produced in large factory-like pharmacies across this nation with little or no federal or state oversight.

Although the FDA oversees licensed drug manufacturers, and state pharmacy boards regulate consumer pharmacies and smaller compounding pharmacies, somehow large-scale custom-drug facilities have remained unregulated. However, state pharmacy boards are now turning their attention to custom-drug makers—to make sure these facilities don’t fall in between state and federal oversight.

The Need for Regulatory Oversight

Because no authoritative group tracks these types of facilities, no one really knows how many large drug-compounding pharmacies there are in the nation. According to the FDA, it is believed that there are approximately 700 to 1,000 of these large facilities. As a result, many of these pharmacies were producing drugs in an unsanitary, poor environment. For this reason, a federal Drug Quality and Security Act was enacted in November to regulate these facilities.

While federal and state officials have struggled to regulate large compounding pharmacies in the past, they are hoping this new law will cause these types of facilities to opt in. By opting in, a large compounding facility would be considered an “outsourcing facility” and would be held to the same standards that drug manufacturers are held to under federal law.

State and Federal Oversight

Because of the voluntary nature of this law and because only 42 companies have opted in as of May 16, 2014, state pharmacy boards are feeling the pressure. When state inspectors find facilities that qualify as outsourcing facilities, they will have to notify the FDA of their findings.

While facilities might not want to opt in and be regulated, it will be in their best interest because doctors, clinics, and hospitals will be more likely to order custom medications from compounding facilities that are registered as outsourcing facilities. Because registered facilities have to follow guidelines, be regulated closely and inspected, the new law will help keep consumers safer from tainted medications and pharmacy errors.

Since outsourcing facilities aren’t required to be registered as a pharmacy in the state in which they are located, state pharmacy boards wouldn’t oversee such facilities. Because the FDA is asking state boards to notify them of concerns with potential outsourcing facilities, state pharmacy boards want to clarify their roles. In fact, regulators from Texas, Virginia, Nevada, Minnesota, and Idaho have requested that their states be given the authority to inspect these facilities.

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