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Focus on Failures of Compounding Pharmacies

P&T Journal...January 2013

    On April 11, 2011, Lisa Cornett, an inspector for the Colorado Board of Pharmacy, wrote a "special report" memo to the board detailing her inspection seven days earlier of the Sky Ridge Medical Center pharmacy in Lone Tree, Colorado. Cornett had found 15 vials of methachlorine (y) phenol (kit) solution, 5x5 ML, all of them shipped from the New England Compounding Center (NECC). That "bulk" shipment of compounded drugs caused Cornett to check with the Food and Drug Administration (FDA) to see whether the NECC was registered as a "manufacturer." Compounders who sell drugs in bulk to hospitals are suppose to be licensed by the FDA as manufacturers. Regina Barrell, an FDA official, e-mailed back to say "no," the NECC was not licensed. As a result Colorado issued a cease and desist order to the NECC on April 15, 2011. 

       That notification triggered an enforcement action by the Colorado Pharmacy Board which resulted in Sky Ridge paying a $5500 fine based on its purchase of multiple doses without providing individual prescriptions, as state law requires. One would have thought that other Colorado hospital pharmacies would have gotten the message. But one year later, a second Colorado investigator, Susan Martin, found 46 vials of hyaluronidase 150u/ML, 1 ML injection at Delta County Memorial Hospital in Delta, CO. The vials were shipped by the NECC. That find sparked a communication from the Colorado Board to the Massachusetts Board of Pharmacy alerting it to the fact that NECC, a non-manufacturer, was selling bulk, compounded drugs to hospital pharmacies. The Massachusetts board ignored that alert. Had it conducted an immediate inspection of the NECC's facilities in Framingham, Mass., it might have discovered the non-sterile conditions which led to the bacterial contamination of the methylprednisolone acetate (MPA) doses which have so far led to 32 deaths and over 400 illnesses. Massachusetts and the FDA eventually shut down the NECC and Ameridose, a second compounder which is licensed by the FDA but linked to the NECC via management.

      Meanwhile, the Colorado Pharmacy Board has not taken final action against the Delta hospital pharmacy, nor against a third pharmacy, Exempla Good Samaritan Medical Center in Lafayette, CO, which received repeated bulk shipments from the NECC prior to the Sky Ridge purchases in 2011. Cory Everett-Lozano, spokesman for the Colorado Pharmacy Board and the larger state department in which it is housed, says, "The Board has not yet decided what to do with the hospital in Delta.  It's complicated for a couple reasons which are not public at this time.  The Board will decide what to do in the near future."

     There are two primary issues, each with thorny complexities, concerning hospital pharmacy use of compounded drugs arising from the NECC contamination disaster, none of which have really been answered, nor elevated to headline-level issues. The obvious one has to do with hospital purchases of compounded drugs from outside vendors. New federal and state laws may diminish access to those drugs, and increase their costs, as outside vendors spend capital (or go out of business) to comply with new regulations. But hospitals themselves are significant compounders, and their adherence to United States Pharmacopeial Convention (USP) standards, and enforcement of those standards and other state laws, is likely to emerge into the spotlight, too. 

     So far, press and congressional criticism has focused narrowly on the NECC and on enforcement failures in that regard by Massachusetts and the Food and Drug Administration. But Members of Congress have now sought explanations from state boards of pharmacy about their policies and enforcement actions regarding compounding. These could well lead to boards in states such as Colorado having to explain how they police hospital pharmacies, and enforce (or not) compounding laws, which of course vary from state to state.
     Hospitals depend heavily on compounding. At hearings on November 15, 2012 in the Senate Health, Education, Labor and Pensions (HELP) Committee, David Miller, R. Ph., IACP Executive Vice-President and CEO, the International Academy of Compounding Pharmacists (IACP), said: "Many, if not most, of the lifesaving intravenous drugs given in hospitals and clinics are compounded. Because hospital patients are often on multiple medications, compounding them into one treatment saves the hospital personnel time and the patient multiple injections or administrations."

     William W. Churchill MS, R.Ph., Chief of Service, Department of Pharmacy, Brigham and Women's Hospital in Boston, says his hospital provides approximately 8 million doses of drugs to its patients annually. Of that total, about 1.5 million are compounded sterile products, about 300,000 of those are provided by outside vendors. Those outside compounded drugs typically fall into a several categories, including total parenteral nutrition PCA syringes, epidural solutions, and intrathecal pain medications. "We have a group of chronic pain patients who can only be treated with compounded medications because we cannot get them in the concentrations the patients need from commercial suppliers," Churchill explains.

     In an interview with the Associated Press, Daniel Ashby, the Director of the Johns Hopkins Hospital pharmacy in Baltimore, said he buys 26 drugs out of a total of 3,000 from three compounding companies, including Ameridose. The other two are AnazaoHealth in Tampa and PharMEDium of Lake Forest, Ill. As is the case with many hospital pharmacies, Hopkins buys compounded drugs when there is a shortage of the commercial alternative manufactured by an FDA-regulated manufacturer. Ameridose, which ceased operations on October 12, 2012 in the wake of an FDA and state inspection, sold six drugs which are on the FDA's shortage list: sodium bicarbonate injection, succinylcholine injection, atropine sulfate injection, bupivaccine hydrochloride injection, lidocain hydrochloride injection and furosemide injection.
      But despite that dependence, hospital pharmacists are often unaware of state and federal laws regarding compounding, the U.S. Pharmacopeia "chapters" governing on-site compounding, and the conditions at compounding vendors such as NECC. Churchill says BWH was using the NECC mostly for intrathecal pain medications and compounded “topical use”-only solutions.  Many of these solutions were compounded and sterilized from raw chemicals in order to meet patient medication needs. Brigham and Women's was using Ameridose for "sterile-to-sterile” compounded products, and had been doing so for many years. Brigham and Women's had conducted its own, scheduled on-site audits of both of these facilities, and had been satisfied with their services until the recent issues came to light. However, the audits were not as extensive as the FDA or state regulatory agencies because the hospital lacks legal authority. 

      Theoretically, Churchill could have checked to see whether the NECC and Ameridose were accredited by the Pharmacy Compounding Accreditation Board (PCAB), which has been in existence since 2004. It was founded by a group of pharmacy organizations such as the American Pharmacists Association, National Community Pharmacists Association, and IACPs. Churchill says, "I was previously unaware that the PCAB existed.  Furthermore, the value of their accreditation would have been unclear given our lack of familiarity with the agency, its past performance, or how rigorous their accreditation process is.” 

     Joe Cabaleiro R.Ph., Executive Director, PCAB, says neither the NECC nor Ameridose are accredited. The organization lists accredited pharmacies on its website at: http://www.pcab.org/accredited-pharmacies. The organization has a 50-page manual which describes the conditions and procedures it requires pharmacies to maintain. (see:
In the section of "Compliance Indicators," one of the two elements is "The pharmacy demonstrates that it has access to all current and applicable standards of the United States Pharmacopeial Convention (USP)." The section on "Sterile Compounding" takes up about half of one page. It contains the only mention of USP 797 in the manual, requiring that "sterile portions of the compounding process such as weighing must, at a minimum, be performed in equipment meeting the requirements above for nonsterile compounding. The equipment must be situated in an environment meeting USP 797 standards." There are no references in the manual to USP 71 or 795.


USP General Chapter 797 describes conditions and practices to prevent harm to patients that could result from microbial contamination, excessive bacterial endotoxins, variability in intended strength, unintended chemical and physical contaminants, and ingredients of inappropriate quality in compounded sterile preparations.

General Chapter 795 provides guidance on applying good compounding practices in the preparation of nonsterile compounded formulations for dispensing and/or administration to humans or animals. The latest revision which became official May 1, 2011 includes categories of compounding (simple, moderate, and complex); definitions for terms (e.g., beyond-use date, hazardous drug, stability); and criteria for compounding each drug preparation (e.g., suitable compounding environment, use of appropriate equipment).

General Chapter 71 specifies how sterility testing of a compounded drug should be done.

     While the three USP chapters are good as far as they go, many hospital pharmacists are still unfamiliar with them. Moreover, neither state nor federal regulatory bodies inspect either hospital or retail compounding pharmacies for compliance with those standards. The IACP's Miller told the Senate Health, Education, Labor and Pensions Committee, " The IACP believes that all states must adopt mandatory compliance with USP 795 and 797 standards." Only 17 states have done so. While some accreditation bodies appear to use the USP standards, there is no assurance that those bodies go back to pharmacies once they are accredited to make sure facilities still have floors which can be eaten off of.
     With regard to in-house compounding, which averages about 1 million doses a year, Churchill says his pharmacy adheres to USP 797, 795 and 71. He is fortunate because hospital leadership has supported his use of an outside expert consultant to assist his leadership team in assuring that Brigham and Women's is complying with those USP regulations. "The USP chapters 797, 795 and 71 have many intricate details and nuances and that is why our consultant is so valuable to us," he explains. "But there is a lack of process and lack of resources to ensure compliance," Churchill explains.

       One might expect The Joint Commission or the federal government--because of Medicare conditions of participation, for example--to survey hospital pharmacies for adherence to USP standards. "The federal government doesn't walk into a lot of hospital pharmacies," notes Churchill.
     The Joint Commission doesn't look at that issue when it visits hospital pharmacies, according to one hospital pharmacist. "They don't have the resources," he explains.
     One former USP official, who declines to be identified, says, The Joint Commission's last official statement on USP 797 was in 2004. " I am not sure they will even know what USP 795 or 17 are," he adds. Amy Panagopoulos RN, MBA, Senior Director, Quality, Evaluation and Strategy, Division of Healthcare Quality Evaluation, The Joint Commission, failed to provide any information on The Joint Commission inspections of hospital pharmacies with regard to USP standards.

      Complicating the issue of USP compliance further is confusion over whether the Food and Drug Administration has the authority to enforce the three USP standards, even if it did have the inspection staff to do so, either at places like the NECC or in hospitals. What is clear is that the FDA has the authority to regulate "manufacturers" of compounded drugs, whether non-sterile-to-sterile, or sterile-to-sterile. Ameridose was licensed as a manufacturer. Compounders such as the NECC who consider themselves "non-manufacturers" are not licensed by the FDA and are not allowed, theoretically, to supply compounded drugs to a physician or hospital pharmacy without getting an individual prescription for that dose in advance. It is the responsibility of the state board of pharmacy to blow the whistle when violations of the individual prescription law occur. FDA-licensed manufacturers can supply compounded drugs in bulk. In the middle of those two scenarios is "anticipatory compounding," where a hospital or an outside vendor can make or supply multiple doses in "reasonable quantities" without a prescription based on "historical need" of a hospital or other health care facility, such as a pain clinic, according to Miller of the IACP.

     But testimony at House and Senate hearings in November produced numerous allusions to the grey areas in federal law. Margaret Hamburg, Commissioner of the FDA, explained that the FDA first published a compliance guide on compounding in 1992. The compounding industry had objections to it, and went to Congress looking for changes. The Food and Drug Administration Modernization Act of 1997 added a new section to the Food, Drug and Cosmetic Act exempting compounded drugs from three critical provisions of the existing law. The new sections also limited advertising of compounded drugs, and solicitation by compounders of prescriptions. "These provisions were the subject of subsequent court challenges, which have produced conflicting case law and amplified the perceived gaps and ambiguity associated with the FDA's authority over compounding pharmacies," Hamburg explained.

     Lauren Smith, MD, MP, Interim Commissioner, Massachusetts Department of Public Health (MDPH), says there is a "black hole" between state and federal regulation of compounding pharmacies.

     Nonetheless, the FDA did inspect the NECC in conjunction with Massachusetts in 2002 and 2006.  The FDA did the 2002 inspection based on MedWatch reports of meningitis symptoms in people taking MPA, and also because of complaints related to betamethasone. In the aftermath of the 2006 inspection, which looked at different issues, the FDA wrote a "warning letter" threatening to shut the facility down. That never happened. The Massachusetts Board of Pharmacy inspected the NECC facility in Framingham, MA in 2011, looking at sterile conditions, among other things, and rated the facility "satisfactory" based on that inspection. The FDA never inspected NECC after 2006. At the hearings in the House Energy and Commerce Subcommittee on Oversight and Investigations on November 14, Rep. Cliff Stearns (R-Fla.), Chairman of the subcommittee, complained that the FDA repeatedly documented problems at NECC, some identical to the same problem that caused the recent outbreak. Stearns asked Hamburg, the FDA Commissioner, whether the agency had the authority to shut down the NECC. "That is a very, very complex question," she answered. 

     Hamburg asked both the House and Senate to clarify that ambiguity by adopting legislation which would modify the Food, Drug and Cosmetic Act to recognize two categories of compounding pharmacies: traditional and non-traditional. Pharmacies in the latter category would have to comply with federal current good manufacturing practices (cGMPs), for example, from which they were exempted by the 1997 law. That would give the FDA more authority to deal with the kind of potential contamination that brought low the NECC and Ameridose. Besides mandating cGMP compliance for non-traditional pharmacies, the FDA-suggested reforms would bar compounding of certain products under any circumstance, with certain exceptions. These would include compounding of drugs which are copies of FDA-approved drugs absent a shortage designation and complex dosage forms such as extended release products.
  One congressional reform bill has already been introduced by Rep. Ed Markey (D-MA). It is called the Verifying Authority and Legality in Drug (VALID) Compounding Act (H.R. 6584). It will:
Ensure that compounding pharmacies that are operating as drug manufacturers are regulated by the FDA as drug manufacturers;
Allow compounding pharmacies with a legitimate reason to compound drugs before the receipt of a valid prescription to request a waiver to enable them to do so;
Allow the FDA to waive the requirement to compound drugs solely for individual patients with valid prescriptions in the event of a drug shortage or to protect public health;
Increases transparency to the public by mandating that compounded drugs be labeled to ensure that recipients know that the drugs have not been tested for safety or effectiveness, publishing a “Do Not Compound” list of unsafe or ineffective drugs, and reporting of bad reactions to compounded drugs or any drug that poses a safety risk.

      The American Society of Health System Pharmacists (ASHP) thinks the gray areas between state and federal regulation need to be eliminated. "Previous attempts to define compounding in federal law contained certain elements that should be examined in light of practice changes since 1997," says Kasey Thompson, Vice President of Policy, Planning and Communications for the ASHP. "Recent legislative proposals merit further discussion and exploration, since they may reflect those practice changes and allow for the regulatory flexibility among state boards of pharmacy and the FDA that would ensure that hospitals continue to be allowed to obtain compounded medications in anticipation of patient need."
     Congress has tried in the past to clear up some of this Federal-State enforcement confusion. At the Senate hearings, Sen. Pat Roberts (R-KS) noted the IACP itself had blocked remedial efforts. He asked the IACP's Miller and the ASHP's Thompson if they were willing to work with Congress this time to fill in the gaps between federal and state regulation of compounding pharmacies. Both answered affirmatively.
      However, Miller's testimony seemed to suggest his group had certain red lines it didn't want Congress to cross. He indicated that states had the authority to quickly address issues such as the NECC contamination issue, and that Massachusetts should have done so. He also noted that the FDA had plenty of reason--and authority--to force the NECC to become licensed as a manufacturer, thus making it easier for the FDA to inspect its premises. At the same time, though, he noted that state boards of pharmacy are underfunded.

     The spokeswoman for Sky Ridge Medical Center did not return a phone call. So it is hard to know whether that hospital knew it was breaking Colorado law by dealing with the NECC. But hospitals across the country, and their pharmacy directors, now have little excuse for claiming ignorance about state and federal compounding laws, which are likely to be tightened. If that is not done carefully, reform could complicate the already problematic drug shortage problem.