In contrast to Section 503A, Section 503B is an entirely new section of the FDCA. Section 503B creates a new entry point for medications into the drug supply chain: the outsourcing facility. Outsourcing facilities can be used to fill the gap between traditional pharmacy compounding and industrial manufacturing where compounded products are needed for administration by health care facilities. The requirements that must be satisfied to qualify as a registered 503B facility, as well as implications of the provisions for both pharmacies considering obtaining 503B registration or contracting for services with a 503B facility, are discussed below. Registration and compliance with Section 503B exempts outsourcing facilities from the following FDCA requirements imposed on drug manufacturers:
- Compliance with extensive product labeling materials (Section 502(f)(1)), Section 503B does, however, impose other outsourcing facility-specific labeling requirements; they are discussed below
- Proof of safety and efficacy of the drug product for its intended use through NDAs or ANDAs filed with FDA
- Compliance with track-and-trace requirements created by DQSA Title II
A compounding entity may have multiple locations, but an individual registration is required for each location; there is no corporate registration option. Unlike pharmacies that compound under Section 503A, outsourcing facilities may compound drug products without receipt of a valid, individual patient prescription. Outsourcing facilities may also accept prescriptions for individual patients, but are not required to do so.
Also, an entity engaged in compounding that is not governed by Section 503A may elect not to register as a 503B outsourcing facility, since registration is voluntary. Although outsourcing registration is voluntary, compounding prescription drugs other than pursuant to individual patient prescriptions is only legal if the facility doing so is a 503B outsourcing facility. (Note that there is concern that while compounding without meeting the requirements of 503A or registering as a 503B is illegal, registration is voluntary. Nothing about this prevents "bad actors" from compounding without registering. FDA is aware of this problem and has stated that they hope market forces will prevent this problem since pharmacies, physicians and other HC entities will only do business with 503B registered facilities.) Regulators anticipate that pharmacies, hospitals, physicians’ practices, and outpatient care centers that currently need or prepare products that are not patient-specific will now obtain them from registered 503B facilities. This is an important consideration for organizations and facilities that purchase compounded products. Purchasers must note that upon initial registration and payment of all applicable fees, an outsourcing facility can be listed on FDA’s Registered Outsourcing Facilities list. This means that a facility can be listed before it is inspected.2
Outsourcing facilities must comply with cGMPs applicable to drug manufacturers. This is an important distinction between Sections 503A and 503B. Recall that under Section 503A, pharmacies compounding products pursuant to valid, patient-specific prescriptions and satisfying other conditions are exempt from cGMP compliance and instead subject to USP compliance.
Compounded products from outsourcing facilities, while exempt from FDCA’s manufacturer labeling requirements, must nonetheless meet labeling requirements that go beyond those required of products from pharmacies in compliance with Section 503A. The labels of all products that are compounded by outsourcing facilities must include a statement that it is a compounded drug, and the lot or batch number of the drug, the established name of the drug, the dosage form and strength, the quantity or volume of drug, the date the drug was compounded, the expiration date, storage and handling instructions, the National Drug Code number (if available), the statement "Not for Resale," the statement "Office Use Only" (if applicable), and a list of active and inactive ingredients. The container of a compounded product must also include directions for use and instructions for reporting adverse events related to the compounded product.3
Outsourcing facilities may not sell or transfer compounded products to a wholesaler for redistribution. All products must be distributed within a health care setting (i.e., clinic, physician’s office, hospital) or dispensed directly to a patient or prescriber pursuant to a prescription. Outsourcing facilities cannot sell through wholesalers, but they can dispense to a practitioner for "office use." Again, a pharmacy compounding in compliance with Section 503A may not dispense compounded products except pursuant to a valid, patient specific prescription.1
An outsourcing facility must comply with any FDA-required Risk Evaluation and Mitigation Strategy (REMS) applicable to a product produced at the facility. Such reporting is voluntary for pharmacies that compound in compliance with Section 503A.1
Finally, an outsourcing facility must renew its registration with FDA annually. It must submit reports that list the drugs compounded by the facility twice a year. The outsourcing facility must also pay all applicable fees for registration—an annual establishment fee of $15,000 multiplied by an inflation adjustment factor, a small business adjustment factor, and reinspection fees.3 The annual registration period is October 1 through December 31 for the subsequent year. Failure to pay fees by December 31st of the year previous will result in loss of outsourcing facility status. Forms and information concerning outsourcing facility registration are available on FDA website.4
FDA inspects outsourcing facilities under a risk-based schedule, which includes consideration of the facility’s history, recall history, level of risk for drugs compounded, and if compounding from the drug shortage list.5
- 1. 21 USC §353b: Outsourcing Facilities. U.S. Code. Accessed at http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title21-section353b&num=0&edition=prelim, July 12, 2016.
- 2. 21 USC §353B(d)(4).
- 3. U.S. Food and Drug Administration. Guidance for Industry: Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act. Rockville, MD: U.S. Dept of Health and Human Services, U.S. Food and Drug Administration, Center for Drug Evaluation and Research; 2014. Accessed at http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm391102.pdf, July 12, 2016.
- 4. U.S. Food and Drug Administration. Information concerning outsourcing facility registration. Accessed at http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm389118.htm, July 12, 2016.
- 5. 21 USC §353B(d)(10).
- 6. U.S. Food and Drug Administration. Registered outsourcing facilities. Accessed at http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm378645.htm, June 25, 2015.
- 7. U.S. Food and Drug Administration. Facilities registered as human drug compounding outsourcing facilities under section 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Accessed at http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm378645.htm, July 16, 2016.