May 4, 2020

Compounding Pharmacies Offer a Sensible Way to Tackle Drug Shortages

But the FDA and states need to continue easing restrictions that hamstring pharmacies’ ability to help
James Broughel Senior Research Fellow

In early April, President Trump generated considerable controversy for seeming to endorse hydroxychloroquine, an antimalaria drug, which some claim has shown promising results in treating COVID-19. The FDA subsequently issued a warning about potential side effects from using the drug. But in the interim, media attention led to a surge of purchases of the drug, which in turn, has led to shortages affecting regular users who need hydroxychloroquine for other purposes, such as treating arthritis or lupus.

More generally, the pandemic is increasing demand for drugs of all kinds, from acetaminophen to asthma inhalers, raising concerns about shortages for a wide range of prescription medications needed in COVID-19 treatment. While the FDA has responded to these concerns by adding some drugs to its Drug Shortage List, just adding to a list doesn’t in itself resolve shortages. Thus far the agency’s response has been slow, both in terms of anticipating shortages before they become serious as well as doing anything to address them once they arise.

One source of potential assistance comes from compounding pharmacies, which produce individualized medications for patients with specific ailments. Mass marketed, FDA-approved drugs don’t always work for everyone; sometimes patients need medications that are tailor-made, using a distinctive mixture of pharmaceutical ingredients, to suit their specific needs. Compounding pharmacies meet this important social need. However, they are also perfectly capable of preparing some drugs that are essentially copies of FDA-approved drugs.

Usually, compounding pharmacies aren’t allowed to recreate mass-marketed drugs because their specific “recipe” would need to go through the FDA approval process for safety and efficiency. But during an emergency, such as now, their skills and expertise could be used to address shortages. Recognizing the value that compounding pharmacies can bring to the table, the FDA issued a series of guidance documents to the industry in April, creating a pathway for compounders to temporarily address shortages under narrowly proscribed circumstances.

This is part of a larger trend by the FDA since the pandemic began to relax restrictions on compounders. In March, the agency issued updated guidance stating that it would not take enforcement action against compounding pharmacies that produce alcohol-based hand sanitizer, so long as certain conditions are met. Importantly, the FDA also verbally waived the requirement on certain compounders to obtain a prescription for every order, which made the guidance more practical. Hand sanitizer has been hard to come by, so allowing qualified pharmacies to make it made sense.

Even so, the agency has remained wary of giving compounding pharmacies the same latitude it has allowed to others. For instance, in March, the FDA issued a separate guidance easing rules on manufacturers that want to make hand sanitizer. But while it required compounding pharmacies to use pharmacopeia-grade alcohol (which has been in short supply), the FDA gave manufacturers permission to use much more common food-grade alcohol. And although this double standard was eventually remedied and pharmacies were also given the permission to use food-grade alcohol, the experience shows that the FDA’s instinct is to hold compounding pharmacies to a different, tougher standard.

Part of the problem lies in the way the FDA regulates compounding pharmacies. Under the federal Food, Drug, and Cosmetic Act, the FDA makes a distinction between pharmacies producing patient-specific drugs for use by individuals in their homes and bulk “outsourcing facilities” that produce on a larger scale, mostly for medical offices. The latter group, known as 503Bs, are treated more like drug manufacturers, while the former group, called 503As, can only produce in response to a prescription.

The larger, outsourcing facilities have been responding to the emergency by producing in bulk in response to shortages. But sometimes these 503B firms are unable to make batches because the order is too small or because it is needed in a hurry. Outsourcing facilities are required to periodically conduct sterility testing, which can take multiple weeks and delay manufacturing, sometimes creating a gap in drug availability during emergencies. The FDA’s recent guidance extends emergency authority to 503A sterile pharmacies to compound for hospitals when an urgently-needed drug is unavailable commercially or from an outsourcing facility. The 503As can fill the order without a prescription for a specific patient; the hospital just needs to provide patient information to the pharmacy within one month after the drug is sent.

The recent action by FDA follows similar measures in the states. Georgia recently set up a system whereby a hospital that cannot find a 503B to meet its need for COVID treatment drugs can turn to 503A compounding pharmacies instead. 503As still need a patient-specific prescription in that state, but it can be provided by the hospital after the fact, within seven days after receipt of the drug.

The FDA is moving in the right direction, but progress has been slow at a time when every moment of delay could mean the difference between life and death. Even now, 503B facilities are still waiting for FDA approval on additional substances they can use for compounding, and 503A facilities need further permission from state boards of pharmacies before they can step in and take advantage of the new opening that FDA has created for them.

Compounding pharmacies are highly qualified, accredited institutions that are well positioned to respond swiftly and effectively to drug shortages as they arise, but they are being hamstrung by federal and state regulations at nearly every turn. Pharmacies currently need to ask permission from a regulator at every stage. And even when a federal agency such as the FDA provides permission, another layer of bureaucracy awaits at the state level before pharmacies can act.

When the COVID crisis eventually passes, the FDA as well as state boards of pharmacy should think carefully about whether the relaxation of restrictions during the emergency should be made permanent. The pandemic has revealed many shortcomings in the current system. If regulators don’t learn from this experience, they will have no one to blame but themselves the next time shortages develop in a crisis and red tape prevents compounding pharmacies from doing their part to help.

Photo by Mario Villafuerte/Getty Images

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