Outsourcing sterile compounding can help ASCs maximize value-based care

Increasing competition and decreasing reimbursement for services provided are driving healthcare organizations to seek innovative value-based, patient-safety focused solutions. Hospitals and Ambulatory Surgery Centers (ASCs) are examining their processes to eliminate inefficiencies and take advantage of savings opportunities. One opportunity that hospitals and ASCs should evaluate as a strategic decision for advancing patient safety and operational efficiency is outsourced sterile compounding.

Outsourcing the preparation of compounded sterile preparations (CSPs) provides safeguards and may augment compliance and quality initiatives within the ASC. Healthcare organizations that perform sterile drug compounding in-house have recently been facing new, heightened quality and patient safety requirements and intensive regulatory oversight to assure compliance with the standards. Until late 2013, sterile compounding had largely been governed by the standards set forth in the United States Pharmacopoeia (USP) at Chapter <797> (2004) which had been incorporated into many state pharmacy practice laws and regulations. Chapter <797> established risk classifications based on the varying degrees of complexity in sterile compounding scenarios, providing incremental controls for higher risk preparations.

Though compliance with its requirements was considered essential to the safe compounding of sterile pharmaceuticals, it was essentially impossible for USP <797> to provide safeguards for every conceivable drug compounding scenario. Moreover, its effectiveness depended upon strict adherence by practitioners, measured through rigorous pharmacy inspections by state regulatory agencies. “Although an ostensibly promising regulatory regime at its inception, it was not long until a number of adverse events and deadly sequelae stemming from poor compounding practices gave rise to intense public outcry and demand for change in the regulatory framework for compounding,” said Andrew Harrison, Vice President of Legal & Compliance at PharMEDium Services, LLC.

In fact, the order and magnitude of the injuries to patients caused by compounders in 2011 and 2012 alone was unprecedented. That period witnessed the emergence of such malefactor compounders as the New England Compounding Center where, according to the Centers for Disease Control, the firm’s contaminated products led to the injury of hundreds of people and over sixty deaths across twenty states. “The aftermath of the NECC tragedy highlighted a major public health crisis and garnered the attention of mainstream media – [NECC] exploited a fragmented regulatory system for personal gain, jeopardizing the unassuming public,” said Harrison. With the media attention and public outcry over the NECC situation, lawmakers acted quickly, responding with sweeping congressional reforms for the sterile pharmaceutical compounding industry.

DQSA and the new Outsourcing Facility sector

The federal Drug Quality and Security Act (DQSA) was enacted on November 27, 2013, with Title I of DQSA containing the Compounding Quality Act. Together, these acts amended certain requirements in the federal Food, Drug & Cosmetic Act applicable to traditional compounding pharmacies, namely the requirement that the pharmacy compound pursuant to a prescription. The Act also created a new, voluntary class of compounding facilities under Section 503B, known as Outsourcing Facilities, which could provide custom compounded sterile preparations without receipt of a prescription (provided certain critical criteria, including compliance with good manufacturing practices (cGMP) for finished pharmaceuticals, were met).

Under the law, Outsourcing Facilities must register with and be inspected by the FDA against stringent regulatory standards for the production of finished pharmaceuticals. The heightened requirements, coupled with federal regulatory oversight, provide a higher degree of quality assurance for healthcare organizations and ASCs. Practitioners have been informed by the FDA that they should rely on registered 503B outsourcing facilities to supply routine, ready-to-use preparations and also individual or unique preparations, to ensure all are prepared with the same quality standards. “Substantial compliance with cGMP requirements is a defining obstacle for those entities considering registering as Outsourcing Facilities. The FDA is looking to regulate 503B entities as sterile drug manufacturers. Transitioning from the USP <797> compliance standards to that of drug manufacturing regulations sets a very high bar. Compounding facility inspection results from 2013 forward provide evidence of the difficulty of moving from Chapter <797> standards to cGMP,” said Harrison.

During 2013 and 2014, FDA issued at least 350 reports citing egregious and repeated instances of non-compliance and urged compounders to issue voluntary recalls due to inadequate safeguards to assure the sterility of their preparations. In November 2016, the Government Accountability Office reported 72 recalls associated with the inspection of 503A and other drug compounders that are not outsourcing facilities due to insanitary conditions and sterility assurance concerns. In other cases, the FDA alerted healthcare professionals of its concerns about certain compounding operations, referred select compounders to their resident state regulatory agencies for further action, and obtained administrative warrants to inspect facilities.

With the FDA descending on the compounding industry with new authority and intensive inspections on both 503A and 503B compounders, investigators documented certain insanitary conditions that were so significant that the Agency ultimately issued draft guidance for industry to define what the FDA views as objectionable practices and conditions. This guidance was issued amid a flurry of other compounding industry related FDA guidance documents between 2014 and 2016. Without question, the regulatory responsibilities of compounders have undergone a major paradigm shift – one intended to ensure adherence to strict safety standards and controls.

Transitioning from the mom-and-pop "apothecary houses" of yesteryear to sterile drug manufacturing standards

With heightened compliance requirements comes the need for personnel trained in sterile drug manufacturing, robust facility designs, testing equipment and instrumentation and, above all, definitively sound sterility assurance practices. Although registration as a 503B outsourcing facility may be an option for some willing to adopt the more stringent regulatory regime, it is not without its challenges. According to Andrew Harrison, "The financial impact of becoming a cGMP-compliant 503B outsourcing facility can be truly staggering for a small to mid-size pharmacy contemplating [503B] registration. Supposed “turn-key” compliance solutions may not address applicable components of 21 CFR 210/211 or fail to incorporate key procedural and engineering controls for compounded drugs produced by aseptic processing. Prior experience in the regulated industry, particularly in sterile parenteral drug manufacturing, is a near-must.”

While healthcare providers are able to include immediate-use compounding as an in-house function, most in-house compounded admixtures have a short shelf-life and can quickly contribute to waste and staff diversion from patient-care focused activities. Additionally, most in-house compounding facilities are not designed to achieve maximum throughput efficiency, sometimes taking weeks to deliver testing outcomes (i.e. sterility testing results) that certain outsourcing facilities can provide within hours due to their use of advanced testing instrumentation and industry-recognized rapid methods. Lastly, current draft guidance for industry furnished by the FDA would operate to restrict the way hospitals and health systems may distribute in-house compounded sterile preparations to their patients. Outsourcing facilities, by virtue of their commitment to good manufacturing practices, are not similarly restricted. Other factors, such as the need for large quantities of ready-to-use sterile preparations frustrate the purpose of in-house compounders, particularly when space and facility design considerations are considered. “Some of the larger outsourcing facilities have acted to further reduce the human element in sterile compounding as an additional sterility assurance measure, opting instead to use process automation and robotics to produce sterile preparations. This automation facilitates large order fulfillment while minimizing manual aseptic processing – the result is scaled efficiency and maximized patient safety.”

Insurance companies are also paying more attention to quality scores and demanding their members receive high-quality care for a reasonable price. Although ASCs are already lower cost providers, many facilities suffer a financial squeeze between low reimbursement and ever-increasing overhead costs. Contracting to outsource sterile compounding needs may help the center realize additional efficiencies, eliminate waste, and mitigate compliance risks.

Primary considerations an ASC may have in deciding to outsource sterile compounding:

  • Ensuring the highest quality standards are employed in delivering safe compounded sterile preparations
    • Asking the intended outsourcing facility if they compound exclusively from FDA-approved sterile drugs in their finished dosage form or whether compounding occurs using non-sterile bulk drug substances
  • Resolving operational inefficiencies associated with in-house compounding
  • Ensuring compliance with state and national accrediting bodies
  • Maintaining practitioner focus on patient-focused care and away from compounding
    • Accessing additional benefits of professional pharmacy headcount mitigation and labor cost control
  • Reducing infrastructure costs associated with designing proper in-house compounding areas—minimizing or even eliminating remodeling costs and maintenance

Not all outsourced sterile compounding pharmacies are the same and facilities could lose short- and long-term control over the decisions about and expertise in sterile compounding. These concerns underscore the need to thoroughly investigate the outsourcing facilities with which a healthcare provider intends to collaborate.

After conducting an internal analysis, healthcare organizations that decide to outsource sterile compounding have several options. The organization should lead a search for the appropriate sterile compounding partner based on the organization's needs and sterile compounding pharmacy's historical reliability, reputation, regulatory posture and overall product quality. The sterile compounding partner should hold register with the FDA as a 503B Outsourcing Facility, comply with all applicable requirements, and most importantly, agree to adhere to current Good Manufacturing Practices. The FDA typically inspects facilities shortly after they open and on a risk-based basis thereafter, but that registration and inspection alone do not serve as an “approval” by the FDA of any given outsourcing facility. Providers should understand that an outsourcing facility has systems in place to sustainably adhere to all of the federal and state regulatory requirements, so seek out those 503B registrants that exhibit top-level service. For example, high quality outsourcing facilities will:

  • Have a strong culture for quality and compliance and be adequately resourced to discharge their regulatory responsibilities as producers of pharmaceutical products;
  • Not be subject to enforcement action by the FDA or state regulatory agencies;
  • Employ engineering controls that minimize sterility assurance risks such as:
    • Compounding solely from already approved sterile drugs in their finished dosage form,
    • Employing process automation over manual aseptic processing by humans where practicable,
    • Implementing measures for continuous monitoring of areas where aseptic manipulations of compounded preparations actually occur.
  • Not have record of product recalls due to any lack of sterility assurance relating to their products;
  • Implement a consistent and reliable ordering process, with on-demand customer service support;
  • Be transparent about the quality of their products and continuous improvement initiatives;
  • Support customer visits of their operations and provide an opportunity for dialogue with facility and corporate leadership

PharMEDium is committed to patient safety. We have four large-scale 503B Outsourcing Facilities registered with the FDA and state Boards of Pharmacy nationwide, with the primary goal of consistently delivering high quality sterile products. PharMEDium compounds exclusively from FDA approved sterile drugs in their finished dosage form and uses only FDA-cleared drug delivery devices in its compounding process. Additionally, PharMEDium has a dedicated Customer Service Center and Customer Visit Program which offers in-depth tours of its facilities to foster transparency about its operations and quality processes.

This article is sponsored by PharMEDium.

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