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[Senate Hearing 113-756]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-756

                      PHARMACEUTICAL COMPOUNDING: 
                     PROPOSED LEGISLATIVE SOLUTION

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON

     EXAMINING PHARMACEUTICAL COMPOUNDING, FOCUSING ON A PROPOSED 
                          LEGISLATIVE SOLUTION

                               __________

                              MAY 9, 2013

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland          LAMAR ALEXANDER, Tennessee  
PATTY MURRAY, Washington               MICHAEL B. ENZI, Wyoming
BERNARD SANDERS (I), Vermont           RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania     JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina           RAND PAUL, Kentucky
AL FRANKEN, Minnesota                  ORRIN G. HATCH, Utah       
MICHAEL F. BENNET, Colorado            PAT ROBERTS, Kansas
SHELDON WHITEHOUSE, Rhode Island       LISA MURKOWSKI, Alaska
CHRISTOPHER S. MURPHY, Connecticut     MARK KIRK, Illinois    
ELIZABETH WARREN, Massachusetts        TIM SCOTT, South Carolina
                                      

                      Pamela Smith, Staff Director
        Lauren McFerran, Deputy Staff Director and Chief Counsel
               David P. Cleary, Republican Staff Director

                                  (ii)

  

                            C O N T E N T S

                               __________

                               STATEMENTS

                         THURSDAY, MAY 9, 2013

                                                                   Page

                           Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee     2
    Prepared statement...........................................     3
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................     6
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......     6
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    16
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming..    20
Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin..    22
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    24

                           Witnesses--Panel I

Woodcock, Janet, M.D., Director, Center for Drug Evaluation and 
  Research, Food and Drug Administration, U.S. Department of 
  Health and Human Services, Silver Spring, MD...................     7
    Prepared statement...........................................     8

                          Witnesses--Panel II

Catizone, Carmen S., M.S., RPh, DPh, Executive Director, National 
  Association of Boards of Pharmacy, Mount Prospect, IL..........    27
    Prepared statement...........................................    28
Coukell, Allan, Director, Medical Programs, The Pew Charitable 
  Trusts, Washington, DC.........................................    31
    Prepared statement...........................................    33
Miller, David G., Executive Vice President and CEO, International 
  Academy of Compounding Pharmacists, Missouri City, TX..........    38
    Prepared statement...........................................    40
Thompson, Kasey K., PharmD, Vice President, Office of Policy, 
  Planning and Communications, American Society of Health-System 
  Pharmacists, Bethesda, MD......................................    44
    Prepared statement...........................................    46

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Response to questions of Senator Enzi by:
        Sally Howard for Janet Woodcock, M.D.....................    58
        Melissa Madigan, PharmD, JD, for Carmen S. Catizone, 
          M.S., RPh, DPh.........................................    59
        Allan Coukell............................................    59
        Kasey K. Thompson, PharmD................................    60

                                 (iii)
 
       PHARMACEUTICAL COMPOUNDING: PROPOSED LEGISLATIVE SOLUTION

                              ----------                              

                         THURSDAY, MAY 9, 2013

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:12 a.m., in 
room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Alexander, Mikulski, Casey, 
Franken, Baldwin, Murphy, Warren, Enzi, and Roberts.

                  Opening Statement of Senator Harkin

    The Chairman. Good morning. The Senate HELP Committee will 
come to order. I'm sorry for being late. I have excuses, but I 
won't use them.
    Last November, this committee convened a hearing to better 
understand what caused one of the worst public health crises 
this country has experienced in recent years, the meningitis 
outbreak that has claimed the lives of 53 Americans and 
sickened over 700. Through that hearing and the efforts of our 
investigation teams, we have developed a better understanding 
of the legal and regulatory gaps that allowed owners and 
managers at the New England Compounding Center to disregard 
basic procedures to ensure that the products they were 
manufacturing were sterile. This gross negligence had 
heartbreaking consequences for families nationwide.
    Following that hearing, members of this committee initiated 
a bipartisan investigation involving all of our offices. We met 
several times a week to identify and examine the various issues 
around compounding and to conduct discussions with stakeholders 
with a goal of developing a draft proposal.
    Today, we have convened this hearing to look forward. We 
want to talk about solutions. As most of you know, almost 2 
weeks ago, we released a bipartisan draft proposal designed to 
improve the safety of compounded human and animal drugs. Our 
purpose today is to gather key stakeholder input about that 
draft so that we can refine it as we move toward markup.
    As we talk to our witnesses today, I will be asking them 
how well the draft fulfills the purposes which we want it to, 
to make clear the compounding oversight responsibilities of 
State and Federal authorities; second, to provide FDA the tools 
it needs to oversee the entities for which it will be primarily 
responsible. And, again, we want to see how well our bill does 
fulfill those responsibilities. Does it really give FDA the 
tools it needs? Does it clarify responsibilities? Does it 
improve the safety of compounded drugs so that patients 
nationwide can trust the quality and safety of their medicines?
    So with what we learn today, we will then proceed to modify 
and improve the draft as necessary with the goal of a markup 
before Memorial Day. So I look forward to working again, as we 
have in the past, with members of this committee to refine our 
draft to better ensure the quality of compounded drugs.
    With that, I'll yield to Senator Alexander.

                 Opening Statement of Senator Alexander

    Senator Alexander. Thanks, Mr. Chairman. Thanks to you and 
to Senator Roberts, Senator Franken, and other Senators and the 
staff, all those who have worked on this. This has been a good 
process. The outbreak of fungal meningitis was a nightmare for 
Tennesseans. We've had 150 cases with 15 deaths. There was some 
heroism on the part of some of our State officials who 
discovered the problem, helped alert other States about it, and 
worked with the FDA.
    When we met to discuss this in November, I made it clear 
that I have a single goal here, or at least a primary goal. 
That is to make sure who is on the flagpole, who is 
accountable, to eliminate any confusion about responsibility.
    Let me take just a minute on that. When I was a new 
Governor, I remember a cabinet meeting, and we had a very 
important bill to pass. We all agreed we'd go to work on it, 
and we passed it during the week in the legislature. We got 
back together a week later and nothing had happened. So I said, 
``Let's try something else.''
    Granville Hinton was a member of the cabinet, and I said, 
``Granny's on the flagpole, so we'll all help him, but if it 
passes, it's to his credit, and if it doesn't, it's his 
fault.'' And you'd be surprised. We got back together the 
following week, and it had passed because Granville knew that.
    That happens in a lot of lines of work. Hyman Rickover 
understood it with the nuclear Navy in the 1950s. He told the 
captains of every nuclear submarine--he personally hired them, 
and he told them they had two responsibilities. One was the 
ship, and the second was the reactor, that if anything went 
wrong with the reactor, the captain was personally responsible 
for it, and his career in the Navy was probably in the dust if 
anything happened.
    As a result, during that entire time since the 1950s, 
there's never been a death as a result of a nuclear reactor on 
a Naval submarine. I'd like to see that kind of accountability 
here when we talk about pharmacies. We've developed a bill, 
working with FDA, pharmacists, doctors, hospitals, and very 
many members of this committee, that passes that test, that 
tries to set clear lines for who is in charge and when they're 
in charge. I hope to hear from the witnesses today what they 
think about this and how we can improve it.
    To very briefly summarize it, it creates three categories. 
One is the traditional drug manufacturer. FDA would continue to 
regulate that. The second category is a new category defined as 
compound manufacturers. These are businesses that make sterile 
products in advance of a prescription and sell them across 
State lines. They fill a need when the products made by the 
drug manufacturers need to be tailored or combined for certain 
hospital patients. Hospitals increasingly turn to compounding 
manufacturers to make those changes to the drugs. This new 
category of compounding manufacturers will be regulated by the 
FDA.
    The third category is the traditional pharmacy, defined as 
pharmacies that sell compound non-sterile products, such as 
lotions, that only sell in their State or receive prescriptions 
before beginning the compounding. States will continue to 
oversee and regulate these traditional pharmacies. So when you 
walk into a facility, it will be clear who is in charge of 
regulating that facility, or if in the draft regulation it's 
not, we would like your advice about how to make it clear.
    We heard a lot in our discussions, some that we expected to 
hear, some more than we expected. For example, we heard more 
than we expected to hear, I think, about drug shortages. We 
have tried to address that, and we know that compounded 
products are not the answer to drug shortages. But we don't 
want drug shortages, and we want to deal with that, and we can.
    There are a number of other suggestions that we heard that 
we tried to incorporate. We can deal with that in the questions 
of several Senators who want to be involved. So, Mr. Chairman, 
I'd like to submit my entire statement for the record and let 
us proceed with the hearing.
    [The prepared statement of Senator Alexander follows:]

                Prepared Statement of Senator Alexander

    Thank you, Mr. Chairman. I'm very glad to be here and to be 
having this important hearing.
    The ongoing outbreak of fungal infections stemming from 
contaminated product from the New England Compounding Center 
has been a nightmare for Tennessee. As of May 6, there have 
been 741 cases of fungal infections, including 55 deaths. 
Tennessee has seen over 150 cases and 15 deaths.
    When we met to discuss this tragedy last November, I made 
it clear that my goal was to work on crafting legislation that 
would clarify who is in charge and on the flagpole for 
regulating compounding facilities. I wanted to ensure that 
something like last year's outbreak never happens again--to 
make sure we can walk into any one of our 60,000 drugstores or 
pharmacies, or go to our doctors or pain clinics, and not have 
to worry about whether the medicines we get there are safe.
    For the past several months Senator Harkin and I, along 
with Senator Roberts and Senator Franken and all of the 
Senators on the committee, have been working together on this 
draft legislation. I truly believe we have developed a bill 
that sets clear lines for who is in charge of what and when.
    With input from the Food and Drug Administration (FDA), 
State boards of pharmacy, pharmacists, doctors, hospitals, 
consumer groups, and others, we have developed a system to 
define three different categories of facilities and to make it 
clear who regulates the businesses in each one.
    The first category is drug manufacturers. The FDA would 
continue to regulate traditional drug manufacturers and approve 
their drugs for safety and efficacy before being marketed.
    The second category is a new one, defined as ``compounding 
manufacturers'' in our draft legislation. These are businesses 
that make sterile products in advance of a prescription and 
sell them across State lines. These compounding manufacturers 
fill a need when the products made by drug manufacturers need 
to be tailored or combined for specific hospital patients. 
Hospitals increasingly turn to compounding manufacturers to 
make those modifications to the drugs. In our draft 
legislation, this new category of compounding manufacturers 
will be regulated by the FDA. Compounding manufacturers will 
register and list their products with the FDA, and be inspected 
by the FDA. Compounding manufacturers will also have to 
investigate and report when things go wrong.
    The third category is the traditional pharmacy, defined as 
pharmacies that compound non-sterile products (such as 
lotions), or only sell in their State, or receive prescriptions 
before beginning the compounding. States will continue to 
oversee and regulate these traditional pharmacies. State boards 
of pharmacy will have clear guidance on which facilities to 
license as a pharmacy.
    If, during an inspection, the State board realizes that a 
pharmacy business has grown and started shipping sterile 
products out of State and does not have prescriptions for those 
products, the State board of pharmacy will know that facility 
should be under FDA jurisdiction and not licensed as a 
pharmacy. The goal is that when you walk into a facility, it 
will be clear who is in charge of regulating that facility.
    We are making clear distinctions between these businesses 
to enable clear regulation of each one. This means that 
businesses currently operating in the first and third 
categories will have to make a change. For example, a facility 
that currently sells only a few sterile products without a 
prescription across State lines will have to decide whether to 
upgrade that facility and meet FDA requirements, or change 
their business model to get prescriptions before compounding. 
This is necessary to ensure that consumers and doctors know 
that the products they are using are safe.
    Our bill also mandates increased communication between 
States and the FDA. We know that a lack of communication was a 
major factor in the case with NECC. Many States sent red flags 
about NECC to FDA, but we do not know if the Massachusetts 
Board of Pharmacy received those same complaints. The FDA 
assumed that the Massachusetts Board of Pharmacy was in charge, 
and the State board assumed that the FDA was in charge. Under 
our proposal, if the FDA receives a complaint from a State 
board about an out-of-state traditional pharmacy, the FDA has 
to notify the State board where the facility is located of the 
complaint within 15 days.
    I know that some people advocate for allowing the FDA to 
have access to records of all pharmacies, but I believe that 
would blur the lines of accountability when the purpose of this 
bill is to clarify accountability. If States and the FDA can 
communicate effectively, there is no need for duplicative 
inspections. I hope to hear ideas from both the FDA and the 
National Association of the Boards of Pharmacy today about how 
to improve coordination and communication in our proposal.
    Throughout the process of writing this legislation, we 
heard about the impact drug shortages are having on patient 
care. We want to ensure that nothing we're doing makes drug 
shortages worse. Continued access to patient specific 
compounded products is very important, and we need to do all we 
can to alleviate current shortages of manufactured drugs.
    Compounded products are not the answer to drug shortages. 
We would prefer for patients to receive drugs approved by the 
FDA and manufactured in a FDA facility. However, in the case of 
drug shortages where no other manufacturer can step in and 
there is not an option to import products, patients and 
providers need access to compounded products.
    We received over 100 comments on this draft last week, so I 
understand there are ways to improve and clarify the proposal. 
We want to work with stakeholders to improve the bill. One 
provision that I look forward to discussing is the ability of 
the FDA to designate product categories and bulk materials as 
not suitable for compounding. We received comments that this 
authority undermines State regulation of traditional pharmacy, 
and I want to make sure that we clarify how and when these 
authorities can be used.
    Tennessee recently passed a law allowing office use of 
certain compounded products. I do not want this bill to change 
how Tennessee chooses to regulate its traditional compounding 
pharmacies. I look forward to discussing how the authorities 
for the FDA would complement the State approaches, how to 
improve State and FDA coordination, and some other provisions 
with our first witness, Janet Woodcock from the FDA. I also 
want to thank her for all the time her staff has put into this 
discussion. If they had been on top of it a year ago we may not 
be in this situation, but I'm glad the Agency is working with 
us now.
    We received lots of comments on how hospitals should be 
treated under this proposal, and I look forward to a good 
discussion with Dr. Kasey Thompson on our second panel on how 
to ensure quality products in every care setting.
    Last, I want to thank everyone who took the time last week 
to comment and read the bill. I believe we all share the same 
goal that each patient should be able to access the product 
prescribed by his or her doctor, and have assurance that the 
product is made to a suitable quality standard. To ensure safe 
compounding and manufacturing practices, we must be clear about 
who is accountable for regulating those practices.

    The Chairman. Thank you, Senator Alexander.
    Senator Mikulski has to recuse herself as the chair of the 
Appropriations Committee. She has to go and work to get our 
allocations and get our appropriations bills in line. And since 
she's been so much involved in this effort, and so much of this 
takes place in her State with the FDA and others, I yield to 
Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Just a few quick words, Mr. Chairman. 
Thank you. I'm not recusing myself. I'm excusing myself. Recuse 
acts like I'm a party to the bad part of the situation.
    [Laughter.]
    Let's not parse recuse, excuse. The fact is there's no 
excuse if we don't act on this legislation. And I'd like to 
compliment you, Mr. Chairman, and Senator Alexander for the 
bipartisan way that you've led this committee to come up with 
this solution.
    It is, indeed, a dire problem. My own State was affected--
26 confirmed cases, three deaths. The Maryland General Assembly 
acted, but as our Commissioner of Health and Governor said, a 
State solution requires a national solution. I'm going to 
continue to work with you, because we need prevention, which 
will be the legislative framework. We need enforcement, which 
is how we make sure FDA is funded to do the job with the kind 
of accountability that you and Senator Alexander talk about.
    I will be excusing myself so we can work to begin to get 
our appropriations allocations done so the subcommittees can do 
their work. So forward together. I'll leave at the conclusion 
of Dr. Woodcock's testimony.
    The Chairman. Thank you, Senator. You're excused but never 
recused. I got that.
    Apart from the normal procedure--usually, the procedure of 
this committee is always Chair and Ranking Member. But because 
this basically is his bill and it's one that he's been involved 
in for so long, I'm going to ask the indulgence of the 
committee to recognize for 5 minutes or so the Senator from 
Kansas, Senator Roberts.

                      Statement of Senator Roberts

    Senator Roberts. Well, thank you, Mr. Chairman. First, let 
me say that I've never known the distinguished Senator from 
Maryland to recuse herself from anything. I affectionately call 
the Senator Princess Leia. On occasion, she calls me Luke. But 
she is a Jedi Knight, and she will go do her very best in her 
role on the Appropriations Committee.
    Mr. Chairman, I just have a very brief opening statement, 
and then during the questioning, if you would grant me some 
extra time to clear up some misinformation on this bill that's 
out there--unfortunately, the same folks that were active to 
prohibit our efforts to address the compounding issue in 2002 
and 2007 are back at it again.
    And I think that's most unfortunate, and I want everyone 
listening, everyone here in this committee room--and I know all 
of my colleagues know this--to know that our legislation does 
not prohibit access to lifesaving medication and therapies for 
patients. And it does everything, everything, to ensure an open 
and transparent process to make sure that doesn't happen.
    I know every member on this committee wants more 
transparency with regards to any bill and a process to make 
sure that that doesn't happen. I would yield back my time at 
this point. When we have time for questions, there are several 
myths I would like to clear up with what I think is factual 
information. All witnesses and all those present, there will be 
a test after my comments and after we adjourn, and the penalty 
for not understanding this will be to go to Dodge City where 
you'll be hung by the neck until you are dead.
    [Laughter.]
    The Chairman. All right. Proceeding on----
    [Laughter.]
    The Chairman [continuing]. Our first witness is Dr. Janet 
Woodcock, Director of the FDA's Center for Drug Evaluation and 
Research, called CDER. Under Dr. Woodcock's direction, CDER 
evaluates and monitors the safety and effectiveness of drugs, 
helps provide doctors and patients with the information they 
need to make wise decisions about medication use and takes 
action against products that are unapproved, contaminated, or 
fraudulent.
    Dr. Woodcock joined the FDA in 1986 and previously served 
as FDA's Deputy Commissioner and Chief Medical Officer. She has 
led many of FDA's drug initiatives such as the introduction of 
risk management to drug safety and the modernization of drug 
manufacturing. Dr. Woodcock testified at our hearing earlier 
last year.
    We welcome you back again, Dr. Woodcock. Your statement 
will be made a part of the record in its entirety. Please 
proceed as you desire.

 STATEMENT OF JANET WOODCOCK, M.D., DIRECTOR, CENTER FOR DRUG 
  EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, U.S. 
   DEPARTMENT OF HEALTH AND HUMAN SERVICES, SILVER SPRING, MD

    Dr. Woodcock. Thank you, Mr. Chairman, Ranking Member, and 
members of the committee. We're here because of an appalling 
tragedy that resulted from tainted medicine that was given to 
unsuspecting patients. It's unbelievable that this happened in 
the 21st century. This tragedy was only the worst in a series 
of outbreaks involving compounded products over the past 
decade, a large series of outbreaks.
    In retrospect, FDA, we think, should have been more 
aggressive in applying our existing authorities to this 
industry, in spite of the ambiguous statute and multiple 
challenges by industry. We are being more aggressive now. We're 
inspecting pharmacies that we know about that we think pose the 
highest risk, and we're seeing serious quality issues at these 
pharmacies.
    Even in the light of recent events, some of these firms are 
actually challenging our authority, delaying or denying full 
access to their records. Twice, we've had to get administrative 
warrants from the courts and have U.S. marshals accompany our 
inspectors in order to get into the facilities. We've had to 
threaten warrants in other cases to get cooperation from these 
facilities.
    Just because we're inspecting doesn't mean we will succeed 
in getting them to comply. Lack of clarity in our statutory 
authorities is not the only concern. The current legal 
framework is the wrong fit for this industry, which has evolved 
and grown tremendously over the past 12 years and really 
wouldn't be recognizable as a traditional pharmacist of, say, 
25 years ago.
    Make no mistake. I'm here to tell you that in the absence 
of changes, these tragedies will happen again. There is no 
doubt of this. Since the NECC outbreak, we have found fungal 
organisms in additional compounded products, some of which were 
about to be given to patients and were only stopped by alert 
health personnel before they were actually administered to 
cancer patients. That's why the work you're doing to draft 
legislation is so critically important. We must have changes or 
this is going to happen again.
    The draft the committee released last week would give us 
really important new oversight tools that would better protect 
the public. For the very highest risk products, the ones 
implicated in most of these outbreaks, it would require Federal 
registration so we know who the compounders are, where they 
are, and what they're making. It would require compliance with 
Federal quality standards and require reporting to FDA of 
serious adverse events so we can act before these potential 
problems really get out of hand.
    It would provide us with clear authority to inspect records 
and would require clear labeling of compounded drugs to allow 
prescribers and consumers to make more informed choices. In 
fact, we've heard from prescribers. They had no idea where 
these drugs really were coming from and that there might be 
additional risks.
    For all compounders, it would allow us to prohibit 
compounding of the most complex, high-risk drug products and to 
restrict the starting materials that could be used to those 
that are known to have high quality. We also appreciate that 
the draft would provide funding to help defray the cost to us 
of these additional oversight activities.
    We are concerned, however, about a couple of things. As 
currently drafted, the bill might blur the line between a 
compounding manufacturer and a conventional manufacturer. Those 
conventional manufacturers' products must undergo FDA review 
and approval before marketing, and this could create incentives 
on the other side for those types of firms to try to slip into 
being considered a compounding manufacturer.
    In addition, the discussion draft does not provide us clear 
access to records of all firms engaged in compounding. This is 
critical to our effectively investigating outbreaks and also 
determining whether a firm is posing as a traditional 
compounder or actually is a compounding manufacturer, and to 
determine whether traditional compounders are violating any 
other Federal requirements that the discussion draft places on 
all compounders, including prohibition of compounding of 
certain drugs that are very risky.
    So let me reiterate the importance of the bill that you're 
working on and the importance of your efforts. If, in fact, 
action is not taken, this will happen again. It's really not a 
matter of whether. It's a matter of when. So we want to keep 
working with you. We really commend you. This bill is a huge 
step in the right direction, and we hope that our testimony 
will help clarify any existing issues.
    Thank you.
    [The prepared statement of Dr. Woodcock follows:]
               Prepared Statement of Janet Woodcock, M.D.
                              introduction
    Mr. Chairman and members of the committee, I am Dr. Janet Woodcock, 
Director of the Center for Drug Evaluation and Research at the Food and 
Drug Administration (FDA or the Agency), which is part of the 
Department of Health and Human Services (HHS). Thank you for the 
opportunity to be here today to discuss important issues related to 
pharmacy compounding. We appreciate the leadership this committee has 
shown in drafting legislation to try to address the limitations and 
ambiguities in current law.
    We are at a critical point where we must work together to improve 
the safety of drugs produced by compounding pharmacies. As the 
compounding industry has grown and changed, we have seen too many 
injuries and deaths over many years caused by unsafe practices. Dr. 
Margaret Hamburg, Commissioner of Food and Drugs, testified in front of 
this committee on November 15, 2012, soon after the emergence of a 
tragic fungal meningitis outbreak associated with compounded 
methylprednisolone acetate (MPA), a steroid injectable product 
distributed by the New England Compounding Center (NECC). To date, that 
outbreak has been associated with 55 deaths and over 740 people 
sickened in 20 States. Sadly, NECC was not an isolated incident. 
Indeed, over the past 20 years we have seen multiple situations where 
compounded products have caused deaths and serious injuries. For 
example:

     In 1997, two patients were hospitalized with serious 
infections after administration of contaminated riboflavin injection 
prepared by a Colorado pharmacy.
     In 2001, 13 patients in California were hospitalized and 
22 received medical care following injections from contaminated vials 
of a steroid solution. Three patients died as a result.
     In 2002, five patients in North Carolina suffered from 
fungal meningitis resulting from contaminated methylprednisolone 
acetate made by a South Carolina pharmacy. One person died.
     In 2005, contaminated cardioplegia solution, made by a 
firm located in Maryland, resulted in five cases of severe system 
inflammatory infections; three of these patients died. In 2007, three 
people died from multiple organ failure after a Texas compounder sold 
superpotent colchicine that was as much as 640 percent the labeled 
strength.
     In 2010, FDA investigated a cluster of Streptococcus 
endophthalmitis bacterial eye infections in patients who received 
injections of Avastin repackaged by a pharmacy in Tennessee.
     In 2011, there were 19 cases of Serratia marcescens 
bacterial infections, including nine deaths, associated with 
contaminated total parenteral nutrition products.
     In 2012, 43 patients developed fungal eye infections from 
contaminated sterile ophthalmic drug products. At least 29 of these 
patients suffered vision loss.
     Recently, in 2013, FDA investigated reports of five cases 
of eye infections in patients who received Avastin repackaged by a 
pharmacy in Georgia. The Avastin was contaminated with bacteria.

    These incidents are emblematic of long-standing issues associated 
with the practice of compounding and the public health concerns that 
can result from unsafe practices in compounding pharmacies.
    Since the NECC outbreak, nine additional firms have voluntarily 
recalled sterile compounded or repackaged drug products through FDA as 
of May 6, 2013. In one very recent incident, the presence of floating 
particles, later identified to be a fungus, was reported in five bags 
of magnesium sulfate intravenous solution, resulting in a nationwide 
recall of all sterile drug products produced by the pharmacy (over 100 
products). Fortunately, we have not received reports of patient injury 
from these products. In another recent recall, all sterile drug 
products (approximately 60 products) from a second pharmacy were 
recalled as a result of reports that five patients were diagnosed with 
serious eye infections associated with the use of repackaged Avastin. 
Moreover, we believe that presently, there are hundreds of other firms 
operating as compounding pharmacies, producing what should be sterile 
products and shipping across State lines in advance of or without a 
prescription. However, the current legal framework does not provide FDA 
with the tools needed to identify and adequately regulate these 
pharmacies to prevent product contamination.
    The history of this issue shows that there is a need for 
appropriate and effective oversight of this evolving industry. It is 
clear that the industry and the health care system have evolved and 
outgrown the law, and FDA's ability to take action against compounding 
that exceeds the bounds of traditional pharmacy compounding and poses 
risks to patients has been hampered by limitations and ambiguities in 
the law, which have led to legal challenges to FDA's authority to 
inspect pharmacies and take appropriate enforcement actions.
    The fungal meningitis outbreak has caused the Agency to review our 
past practices with regard to our oversight of compounding pharmacies, 
and has led to some preliminary conclusions.
    In my view, even in the face of litigation and continuous 
challenges by industry to our authorities, we can nonetheless be more 
aggressive in pursuing enforcement actions against compounding 
pharmacies within our current limited authority. I can assure you that 
we are being more aggressive now. We have established an agency-wide 
steering committee to oversee and coordinate our efforts, and we have 
taken several important steps to identify and inspect high-risk 
pharmacies that are known to have engaged in production of sterile drug 
products.
    Using a risk-based model, we identified 29 firms for priority 
inspections focused on their sterile processing practices. During these 
29 inspections, in two instances, FDA identified secondary firms 
associated with the priority inspections, for a total of 31 firms. We 
have taken investigators who would normally be doing inspections of 
conventional drug manufacturers and assigned them to conduct 
inspections of those pharmacies whose history suggests a greater risk 
of potential quality issues with their compounded products. We have 
coordinated our inspections with State officials, who have accompanied 
our investigators in most cases. At the same time, we have also 
continued to conduct for-cause inspections, often at the request of our 
State counterparts who invited us to accompany them on the inspections. 
Since the fall, FDA has conducted 26 for-cause inspections in addition 
to the 31 described above. When we identified problems during any of 
the inspections, at the close of the inspection, we issued an FDA Form 
483 \1\ listing our inspection observations. We have issued an FDA-483 
at the close of 47 of the 57 inspections we have conducted since last 
fall. We have seen some serious issues, including quality concerns that 
have led to product recalls. Observations have included: lack of 
appropriate air filtration systems, insufficient microbiological 
testing, and other practices that create risk of contamination.
---------------------------------------------------------------------------
    \1\ A form FDA-483 is issued when investigators observe any 
significant objectionable conditions. It does not constitute a final 
Agency determination of whether any condition is in violation of the 
Federal Food, Drug, and Cosmetic Act (FD&C Act) or any of our relevant 
regulations, but the observations often serve as evidence of a 
violation of the FD&C Act and its implementing regulations.
---------------------------------------------------------------------------
    Notably, even in light of recent events, and even though we are 
often working with the State inspectors, our investigators' efforts are 
being delayed because they are denied full access to records at some of 
the facilities they are inspecting. Just during the recent inspections, 
several pharmacies delayed or refused FDA access to records, and FDA 
had to seek administrative warrants in two cases. And although we have 
been able to eventually conduct the inspections and collect the records 
that we have sought, our ability to take effective regulatory action to 
obtain lasting corrective action with regard to substandard sterility 
practices remains to be seen.
    As we have noted in the past, our ability to take action against 
inappropriate compounding practices has been hampered by ambiguities 
regarding FDA's enforcement authority, legal challenges, and adverse 
court decisions, and we have learned that the law is not well-suited to 
effectively regulate this evolving industry. For example, hospitals 
have come to rely on compounding pharmacies that function as 
``outsourcers'' producing sterile drugs previously made by hospital in-
house pharmacies. If FDA brings charges against a pharmacy, alleging 
that it is manufacturing a ``new drug'' that cannot be marketed without 
an approved application, the pharmacy will have to either obtain 
individual patient-specific prescriptions for all of its products or 
stop distributing the products until it obtains approved new drug 
applications for them, something most outsourcers are unlikely to do. 
Several of the pharmacies FDA inspected are some of the largest 
outsourcers in the country. These pharmacies supply large numbers of 
sterile drugs produced in relatively large quantities to hospitals 
nationwide, and a shut-down at these firms is likely to cause 
disruptions in the supply of drugs to hospitals and other health care 
providers. FDA should have more tailored authorities appropriate for 
this type of compounding pharmacy.
    In the Commissioner's last appearance before this committee, she 
presented a framework that could serve as a basis for the development 
of a risk-based program to better protect the public health, improve 
accountability, and provide more appropriate and stronger tools for 
overseeing this evolving industry. We have since met with over 50 
stakeholder groups, including pharmacy, medical, hospital, payer, and 
consumer groups, and State regulators, to help further our 
understanding and inform our framework. Today, I will first provide 
background on FDA's current legal authority over compounded drugs, then 
provide additional details about the framework, and suggest specific 
actions that Congress can take to help us better do our job and prevent 
future tragedies like this one.

              FDA's Legal Authority over Compounded Drugs

    FDA regards traditional pharmacy compounding as the combining or 
altering of ingredients by a licensed pharmacist, in response to a 
licensed practitioner's prescription for an individual patient, which 
produces a medication tailored to that patient's special medical needs. 
In its simplest form, traditional compounding may involve reformulating 
a drug, for example, by removing a dye or preservative in response to a 
patient allergy. It may also involve making an alternative dosage form 
such as a suspension or suppository for a child or elderly patient who 
has difficulty swallowing a tablet. FDA believes that pharmacists 
engaging in traditional compounding provide a valuable medical service 
that is an important component of our health care system. However, by 
the early 1990s, some pharmacies had begun producing drugs beyond what 
had historically been done within traditional compounding.
    After receiving reports of adverse events associated with 
compounded medications, FDA became concerned about the lack of a policy 
statement on what constituted appropriate pharmacy compounding. In 
March 1992, the Agency issued a Compliance Policy Guide (CPG), section 
7132.16 (later renumbered as 460.200) to delineate FDA's enforcement 
policy on pharmacy compounding. It described certain factors that the 
Agency would consider in its regulatory approach to pharmacies that 
were producing drugs.
    The compounding industry objected to this approach and several 
bills were introduced, some with significant support, to limit the 
Agency's oversight of comp-
ounding.\2\ In November 1997, S. 830, the Food and Drug Administration 
Modernization Act of 1997 (FDAMA), was signed into law as Public Law 
105-115. \3\ FDAMA added section 503A to the FD&C Act, to address FDA's 
authority over compounded drugs. \4\ Section 503A exempts compounded 
drugs from three critical provisions of the FD&C Act: the premarket 
approval requirement for ``new drugs''; the requirement that a drug be 
made in compliance with current good manufacturing practice (cGMP) 
standards; and the requirement that the drug bear adequate directions 
for use, provided certain conditions are met. These provisions were the 
subject of subsequent court challenges, which have produced conflicting 
case law and amplified the perceived limitations and ambiguity 
associated with FDA's enforcement authority over compounding 
pharmacies. In 2002, immediately after a Supreme Court ruling that 
invalidated the advertising provisions of section 503A, FDA issued a 
revised compliance policy guide on compounding human drugs. Several 
additional legal challenges and court decisions then followed. More 
recently, FDA made significant progress toward issuing another CPG. In 
fact, FDA was on track to publish a revised draft CPG in the fall of 
2012, but the fungal meningitis outbreak intervened and we are now 
reevaluating the draft. It is important to note, however, that a CPG is 
not binding on industry and updating the CPG would not alleviate all 
issues with section 503A.
---------------------------------------------------------------------------
    \2\ H.R. 5256, Pharmacy Compounding Preservation Act of 1994, 
introduced Oct. 7, 1994, 1 cosponsor; H.R. 598, Pharmacy Compounding 
Preservation Act of 1994, introduced Jan. 20, 1995, 141 cosponsors; 
H.R. 3199, Drug and Biological Products Reform Act of 1996, introduced 
March 29, 1996, 205 cosponsors; H.R. 1060, Pharmacy Compounding Act, 
introduced March 13, 1997, 152 cosponsors; H.R. 1411, Drug and 
Biological Products Modernization Act of 1997, introduced April 23, 
1997, 16 co-sponsors.
    \3\ Public Law 105-115, FDAMA, 111 Stat. 2296 (Nov. 21, 1997), 
available at http://www.gpo.gov/fdsys/pkg/PLAW-105publ115/pdf/PLAW-
105publ115.pdf.
    \4\ Id.
---------------------------------------------------------------------------
    A look at FDA's attempts to address compounding over the last 20 
years shows numerous approaches that were derailed by constant 
challenges to the law. As a result, presently, it is unclear where in 
the country section 503A is in effect, and section 503A itself includes 
several provisions that have impeded FDA's ability to effectively 
regulate pharmacy compounding practices including those relating to 
prescription orders, medical need, and copying FDA-approved products.
    Apart from section 503A, there are additional provisions in the 
statute that have impeded effective pharmacy compounding regulation. 
For example, if certain criteria are met, the FD&C Act exempts 
compounding pharmacies from registration and the obligation to permit 
access to records during an inspection. As a result, FDA has limited 
knowledge of pharmacy compounders and compounding practices and limited 
ability to oversee their activities.
                             looking ahead
    The Administration is committed to working with Congress to address 
the threat to public health from limitations in authorities for 
effective oversight of certain compounding practices. To that end, FDA 
has developed a framework that could serve as the basis for the 
development of a risk-based program to protect the public health.
                          risk-based framework
    Recognizing the history of compounding practice, FDA supports the 
long-standing policy that all compounding should be performed in a 
licensed pharmacy by a licensed pharmacist (or a licensed physician), 
and that there must be a medical need for the compounded drug.
    Further, we believe there should be a distinction between two 
categories of compounding: traditional and non-traditional. Traditional 
compounding would include the combining, mixing, or altering of 
ingredients to create a customized medication for an individual patient 
with an individualized medical need for the compounded product, in 
response to a valid patient-specific prescription or order from a 
licensed practitioner documenting such medical need. Traditional 
compounding, while posing some risk, plays an important role in the 
health care system, and should remain the subject of State regulation 
of the practice of pharmacy.
    Non-traditional compounding would include certain types of 
compounding for which there is a medical need, but that pose higher 
risks. FDA proposes working with Congress to define non-traditional 
compounding based on factors that make the product higher risk such as 
any sterile compounding in advance of or without receiving a 
prescription, where the drug is distributed out of the State in which 
it was produced. Non-traditional compounding would be subject to 
Federal standards adequate to ensure that the compounding could be 
performed without putting patients at undue risk, and FDA would inspect 
against and enforce these Federal standards. Such a definition focuses 
on the highest risk activities and offers a uniform degree of 
protection across all 50 States, for highest-risk compounding 
activities.
    Non-traditional compounding should, because of the higher risk 
presented, be subject to a greater degree of oversight. Sterile 
products produced in advance of or without a prescription and shipped 
interstate should be subject to the highest level of controls, 
established by FDA and appropriate to the activity, similar to cGMP 
standards applicable to conventional drug manufacturers.
    In addition, FDA believes that with noted exceptions, certain 
products are not appropriate for compounding under any circumstances. 
These products would include: (1) what are essentially copies of FDA-
approved drugs, absent a shortage justification based on the drug 
appearing on FDA's shortage list; and (2) complex dosage forms such as 
extended release products; transdermal patches; liposomal products; 
most biologics; and other products as designated by FDA. Producing 
complex dosage forms would require an approved application and 
compliance with cGMP standards, along with other requirements 
applicable to manufactured drug products.
    FDA believes that there are other authorities that would be 
important to support this new regulatory paradigm. For example, FDA 
should have clear ability to collect and test samples of compounded 
drugs and to examine and collect records in a compounding pharmacy, 
just as the Agency does when inspecting other manufacturers. FDA should 
also have clear ability to examine records such as records of 
prescriptions received, products shipped, volume of operations, and 
operational records such as batch records, product quality test 
results, and stability testing results. Such inspections are necessary 
to determine when a pharmacy exceeds the bounds of traditional 
compounding, to respond to public health threats, and to enforce 
Federal standards.
    FDA also believes that an accurate inventory of pharmacies engaged 
in non-traditional compounding would facilitate appropriate oversight 
and coordination with State regulators. In addition, FDA looks forward 
to working with the Congress on potential improvements that may include 
label statements and adverse event reporting that have proven useful in 
other areas. A user-fee-funded regulatory program may be appropriate to 
support the inspections and other oversight activities outlined in this 
framework. We look forward to working with Congress to explore the 
appropriate funding mechanisms to support this work, which could 
include registration or other fees, as Congress has authorized and FDA 
has successfully implemented in other settings.

                               Conclusion

    Given our experiences over the past 20 years and the recent fungal 
meningitis outbreak, we must do everything we can to clarify and 
strengthen FDA's authority in this area. We appreciate the bipartisan 
efforts of the committee to clarify the law regarding the oversight of 
compounding pharmacies and look forward to the opportunity to work with 
the committee to address remaining issues. Thank you for your 
leadership in taking this important first step.
    I am happy to answer any questions you may have.

    The Chairman. Thank you, Dr. Woodcock, and your suggestions 
are, believe me, under serious consideration. We'll take those 
into account as we refine and put this bill together. I think 
they're great suggestions, and, as I said, we've discussed 
those recently. Hopefully, we'll be able to incorporate those 
in the draft.
    Let me just ask a few questions, and you touched on this. 
But just develop a little bit more about keeping traditional 
manufacturers from deciding to become a compounding 
manufacturer, because you said that might happen. What could we 
do to ensure against that?
    Dr. Woodcock. We had advised that any compounding 
manufacturer would also have to hold a pharmacy license in the 
State in which they were located. And I understand the reason 
for not doing that was to make the flagpole clear.
    However, the evolving industry is really doing pharmacy 
operations. To a great extent--and I'm sure you've heard from 
the hospitals--hospitals are outsourcing their pharmacy 
operations. Clinics, pain clinics, as well as many other 
clinics that maybe are now office buildings--they don't have a 
pharmacy located in their office building, so they buy these 
products from a pharmacy, right now a compounding pharmacy.
    These are regular pharmacy operations, most of the 
operations that are being done. And I think having the State 
board oversee that, requiring that to be a pharmacy, clearly 
distinguishes that from a drug manufacturer that is an entity 
that really has to apply for an application for each--an NDA to 
market any given product. So there has to be a clear 
separation, we think.
    Also, those personnel in the compounding manufacturers 
should have appropriate qualifications for pharmacy operations, 
which means pharmacists, pharmacy technicians. The States 
oversee much of that. They license pharmacists in their States.
    The Chairman. Very good. Thank you. How important is it 
that this legislation be effective immediately upon enactment? 
If we pass this bill with, say, a transition period or a 
delayed effective date, would that compromise your current 
efforts at overseeing pharmacy compounding?
    Dr.. Woodcock. We feel there would have to be a delayed 
effective date. That would be the most appropriate. We could 
work on guidance for the industry, those who would be moving 
into the compounding manufacturing status, about what they 
would have to comply with.
    The Chairman. So you're saying it shouldn't be effective 
immediately.
    Dr. Woodcock. We think that would cause disruption if all 
of it were effective immediately. And we would be happy to work 
with you on how that could be set up.
    The Chairman. If we delayed it, that would not compromise 
your efforts at overseeing?
    Dr. Woodcock. We would continue to do what we're doing now, 
aggressively----
    The Chairman. What we're doing now is not effective.
    Dr. Woodcock. What we're doing now is--we would inspect and 
enforce standards for human safety, all right, according to our 
current statute. It is complicated, and I think we should work 
with you on this.
    The Chairman. I'd like to work with you on that, because 
I'm not certain that we see eye to eye on this one. I just 
think that a delayed period creates a lot of problems, but 
we'll be glad to discuss that.
    Let me ask you this. Does the draft provide the FDA the 
tools it needs, in terms of both authorities and resources, to 
oversee pharmaceutical compounding?
    Dr. Woodcock. The user fee proposal that's in there, or the 
fee proposal, would probably provide about, we estimate, 60 
percent of the resources that would be needed, and we really 
appreciate the committee putting that in. We recognize that 
right now, the resources to do this are primarily coming from 
our inspectors who inspect the traditional drug industry, both 
the generics and the innovator, and so, over the long term, 
that would decrease our effectiveness.
    As far as the provisions, as I said, we would like to have 
broader records authority than what is put in the bill right 
now, because we feel we really need to get into pharmacies to 
make sure they're not posing as traditional pharmacies or 
they're not committing practices that are forbidden under the 
legislation.
    But, particularly, if there's an outbreak, we have reports, 
and we go in, and they say, ``No, you can't come into our 
pharmacy.'' And we need to find out who they've shipped to. We 
need to get samples and test them. And so not having the 
ability to look at their records and so forth could, in an 
outbreak, impede our ability to protect the public health.
    The Chairman. That's an area that we're really going to 
have to look at, too, and that's accessibility of records.
    My time is up. I'll turn to Senator Alexander.
    Senator Alexander. Thanks.
    Dr. Woodcock, it seems to me the most important thing about 
this bill is the new category, compounding manufacturer. To me, 
clarity is what I'm--the flagpole is what I'm looking for. And 
a compounding manufacturer would be one that makes a sterile 
product in advance of a prescription and sells it across a 
State line. So if you do that, you're in that category. Right? 
Is that the way you understand it?
    Dr. Woodcock. Yes.
    Senator Alexander. And then the compounding manufacturer 
would be inspected by and registered and list their products 
with the FDA.
    Dr. Woodcock. That's correct.
    Senator Alexander. Now, what we're recommending--the draft 
recommendation--is that you be totally in charge of that 
facility, that you be on the flagpole for that facility. But 
your testimony suggests that the State have some role, too. 
Doesn't that just leave us where we are, which is confusion 
between what the State--can't you then say, ``Well, the State 
should have done that,'' and they can say, ``Well, I thought 
the FDA was doing it''?
    Dr. Woodcock. No. We would take full responsibility. 
However, we feel that this is a pharmacy operation. It's almost 
like a Federal pharmacy operation. In some sense, it is a 
pharmacy operation, because what would keep a traditional 
manufacturer--if they don't have to be a pharmacy, then they 
can say they're a compounding pharmacy and begin to make 
perhaps unapproved drugs.
    So the rationale for this third category is really that 
these are pharmacies that are doing operations that are beyond 
the scope of ordinary pharmacy practice----
    Senator Alexander. Right.
    Dr. Woodcock [continuing]. And really need Federal 
intervention. But they still are pharmacies. They're still 
doing pharmacy operations.
    Senator Alexander. Well, the bill requires that they have a 
licensed State pharmacist in there.
    Dr. Woodcock. Yes.
    Senator Alexander. But why shouldn't--I mean, that's 
confusing to me. It seems to me that it's important for a 
facility to know that if I make a sterile product in advance of 
a prescription and I sell it across the State line, I've got 
one regulator, and that regulator is the FDA, period. And then 
the doctor knows that, the customer knows that, the patient 
knows that--everybody knows, and the FDA knows that, that it's 
your job to make sure that place is safe.
    Dr. Woodcock. And we agree that we would take full 
responsibility, that the registration and listing provisions 
that you've put in the bill enable us to know who those folks 
are and----
    Senator Alexander. But then why do you need to have the 
State involved?
    Dr. Woodcock. Well, it's on the other side, like the people 
who are traditional manufacturers, which distinguishes this 
facility from any----
    Senator Alexander. Traditional manufacturers or 
pharmacists?
    Dr. Woodcock. Traditional manufacturers. It's the other 
side. It's not the pharmacy that is----
    Senator Alexander. Well, you regulate traditional 
manufacturers.
    Dr. Woodcock. We do. Well, I believe we could have more 
conversation about this. I understand----
    Senator Alexander. I just think--to me, it's very 
important. I mean, I think Admiral Rickover was onto something, 
and we could probably apply it in a lot more aspects of the 
Federal Government. Just in my human experience, I've 
discovered that if it's absolutely clear who's on the flagpole, 
who's in charge, that reduces the risk of failure, and it 
improves the chances of success. I'm more comfortable with your 
being in charge of compounding manufacturers, just like you are 
with traditional manufacturers, so there's no confusion.
    If I could ask one other question, the draft bill includes 
an exemption to the compounding manufacturer category for 
interstate shipments within a hospital system. Now, could you 
comment on why you believe interstate shipments of sterile 
products within hospital systems don't pose the same public 
health risks as other compounders?
    Dr. Woodcock. They pose certain risks, and, certainly, 
intra-state shipment of sterile products and sterile products 
that are used intra-state alone pose certain risks. And, 
certainly, non-sterile products have caused deaths. So making 
medicines and shipping them around is not without risk. We've 
tried to pick the highest risk category, which is where a 
manufacturer not associated with taking care of the patients is 
manufacturing sterile products and shipping them all around to 
other entities.
    Senator Alexander. But why would----
    Dr. Woodcock. A hospital system is already in charge of 
their patients, and they may wish to centralize their pharmacy 
operations. But if they had a pharmacy operation, say, in one 
State, within that hospital system, they would be doing that 
and giving it to their own patients. So they already have 
responsibilities for the care and safety of their patients 
within their hospital system.
    Senator Alexander. What if they contract that out? What if 
the hospital system contracts that out?
    Dr. Woodcock. If they contract it out, then it's to a 
different entity, and if that entity is shipping intra-state, 
then that is a compounding manufacturer.
    Senator Alexander. If they contract it out, it becomes 
outside the exemption, and they're regulated by the FDA.
    Dr. Woodcock. That is correct, and that is what much of 
these operations are. They're outsourcing operations that once 
occurred in the hospital pharmacy to sort of----
    Senator Alexander. But if Vanderbilt Hospital has its own--
--
    Dr. Woodcock. Hospital pharmacy.
    Senator Alexander [continuing]. Hospital pharmacy, then all 
the parts of the Vanderbilt Hospital is exempt from this.
    Dr. Woodcock. That's correct.
    Senator Alexander. If it contracts it out to the Harkin, 
Incorporated, then Harkin or Alexander are regulated by the 
FDA.
    Dr. Woodcock. That's how we understand the current 
proposal, and that's what we would agree with.
    The Chairman. I hope we make that clear in our draft. Thank 
you very much.
    In order, I have Senator Warren, Senator Roberts, Senator 
Mikulski--no, she's not--Senator Enzi, Senator Murphy, Senator 
Baldwin.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman. As the senior 
Senator from Massachusetts, I feel a special duty to ensure 
that we do everything possible to protect people from unsafe 
drugs. Massachusetts was home to the New England Compounding 
Center, the compounding pharmacy that was responsible for the 
fungal meningitis outbreaks that killed 53 people and made 733 
people sick. This outbreak was in part the result of 
longstanding failures in government regulation at both the 
State and Federal levels, a lack of coordination between State 
and Federal oversight, and a lack of clarity in the existing 
regulations.
    This unregulated industry is not a Massachusetts problem. 
It is a national problem. The current state of our oversight of 
the compounding industry is outdated and inadequate. And as the 
data make clear, it represents a continuing threat to public 
health. I take this threat seriously. Those drugs can go 
anywhere, and a patient has no way to assess the safety of the 
pills that a pharmacist hands out or the drugs that a doctor 
injects into a patient.
    People count on us to put laws in place that will protect 
our citizens from this sort of harm. This is one of the most 
basic functions of regulation. I think a lot of members of this 
committee recognize that. I'm very pleased that Democrats and 
Republicans on this committee have been able to come together 
over the last several months to develop this draft legislation. 
I'm pleased because we all agree that a tragedy like this 
should not happen again, that it can be prevented, and it's our 
job to prevent it.
    So the question I want to understand--I want to get a 
little transparency behind this--is exactly the scope of the 
problem that we're dealing with. We've all concentrated on the 
New England Compounding Center, and we should. It attracts our 
attention. But can you tell the committee, Dr. Woodcock, how 
many patients have been harmed by injury, by infection, or by 
death since 1997, when Congress first acted to prevent harms 
associated with compounding?
    Dr. Woodcock. Certainly. I think the real problem is we 
don't know. Pew in their testimony today has a chart of known 
outbreaks and known deaths going back over a decade, and also 
other problems such as blindness, severe injuries, and so forth 
from compounded products. But because we don't have an 
inventory or identification of these firms, and it's difficult 
sometimes to detect the harm at an individual level, we 
actually don't know.
    What we do know is that many of these practices that we 
have uncovered cannot assure sterility of the sterile products. 
I'd like to read from a recent hearing that New Jersey had, all 
right?
    Senator Warren. Go ahead, Dr. Woodcock.
    Dr. Woodcock. This was from Dr. David Newton, who is an 
expert and a pharmacy professor, and he was chair of the 
Sterile Compounding Committee of USP numerous times. What he 
said was the following. He said that the statistical likelihood 
of contamination in a medium-risk sterile compounding 
environment is approximately 1 percent. That's 1 in 100.
    Now, that's tolerable if you're in the basement of the 
hospital in the pharmacy there, and you send it right up to the 
floor, or you're making it up right beside the patient, and you 
inject it right in the patient. But if these are made in mass 
quantities, and 1 percent of them may be contaminated, 
statistically, and they are shipped all around, and they're put 
in inventory, and they're sitting, this allows organisms to 
grow, and that's kind of the root cause of this problem.
    We have grown multiple organisms out of samples we have 
taken when we've done these inspections of compounding 
pharmacies.
    Senator Warren. Dr. Woodcock, I just want to push on a 
point. I very much appreciate that what you're identifying is 
that there are some really bad practices out there, and the 
assumption is that those bad practices are causing illness, 
injury, and possibly even death.
    The question I wanted to know the answer to is how much, 
and you've told me you don't know. Why don't you know? You're 
the Federal Drug Administration. Why don't you know how many 
people have been killed from these drugs?
    Dr. Woodcock. There is no requirement right now for 
registration and listing, which would be telling us who they 
are, where they are, and what they're making.
    Senator Warren. So no one has to tell you.
    Dr. Woodcock. No.
    Senator Warren. What happens when you ask?
    Dr. Woodcock. Sometimes we can't get their records, 
particularly their shipping records, and so doing 
investigations can be difficult or impeded by refusal to allow 
us access.
    Senator Warren. So we're here today because of one tragedy 
that became public. We don't know how many other people have 
been made sick. We don't know how many other people have died.
    Dr. Woodcock. We know there have been multiple other 
outbreaks and multiple other episodes of fatalities from 
compounded products.
    Senator Warren. But, basically, the compounding industry 
doesn't tell, and as long as they don't tell, we don't have the 
kind of public scrutiny that causes us to move forward with 
this kind of legislation.
    Thank you, Dr. Woodcock. I just want to say I think it's 
unconscionable that we have failed to regulate this industry 
for so long and put the public at risk. I'm very much committed 
to working with you and with everyone on this committee to make 
sure that we put a stop to this.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warren.
    Senator Roberts.
    Senator Roberts. Thank you, Mr. Chairman, and my 
colleagues, and with your indulgence, I might go a little over 
time with what I hope is a factual response to some 
misinformation that I think is out there. I would remind the 
committee that way back in 
2002-3, we had a pharmacist in Kansas City, MO, who was 
diluting cancer drugs and selling them as if they were fully 
potent. That was exposed with the help of the Kansas City Star, 
by the way, and a young man named Mark Morris.
    He's in prison now, and he's serving time, and that was one 
of the reasons I got into this some 10 years ago. Lately, as 
the Senator from Massachusetts has indicated, we've had this 
tragedy with 53 deaths and 700 illnesses. If anything, that 
really galvanized the committee, and I appreciate everybody's 
participation and leadership.
    To address some specific information now being circulated, 
Myth No. 1: Under the proposal, traditional compounders would 
be subject to current good manufacturing practices--that's 
called cGMP. That's the acronym--the quality standards that 
apply to pharmaceutical manufacturers.
    Fact: Traditional compounders are exempt from cGMP 
requirements. The draft exempts traditional compounders from 
the cGMP requirements--read section 501(a)(2)(B); adequate 
directions for use, section 502(f)(1); and the new drug-
approval requirement, section 505 for human drugs and section 
512 for animal new drug approvals. See page 5, lines 12 to 22.
    I think, everybody, if you wanted to write that down, we 
can certainly give that to you and proceed from there.
    Myth No. 2: The proposal prohibits the use of liposomal or 
trans-
dermal products.
    This draft does not ban the compounding of any specific 
products. The proposal does direct the FDA to establish a list 
of products, however, that are too complex to currently be 
compounded. But that list will be developed through an open 
transparent regulatory process with input from stakeholders.
    I realize this kind of process may represent an endangered 
species in the overall regulatory process of the Federal 
Government. But with this committee, we're going to conduct 
oversight and make sure that that happens.
    Myth No. 3: The proposal creates loopholes for 
pharmaceutical companies to manufacture new drugs without new 
drug applications, i.e., the NDAs.
    Fact: Under current law, compounded drugs are considered 
new drugs. As is true with all new drugs, the new drug 
application requirements apply unless an entity meets the 
criteria to be either a traditional compounder or a compounding 
manufacturer. Under the proposal, neither a traditional 
compounder nor a compounding manufacturer can make a product 
from a book unknown to USP--that's the book that all the 
pharmacists use--or FDA and distribute it in an interstate 
commerce without an investigational new drug exemption, NDA or 
ANDA.
    Myth No. 4: The proposal creates a loophole for hospital 
com-
pounding pharmacies that will allow them to compound outside of 
industry best practices.
    Fact: Hospital-based pharmacies are treated as traditional 
compounders under the proposal. They are subject to the same 
restrictions as other traditional compounders. Hospital-based 
com-
pounding will continue under the exact same State Pharmacy 
Board, Joint Commission, and Center for Medicare and Medicaid 
Services standards that exist today.
    Myth No. 5: By categorizing all compounded drugs as new 
drugs, the burden will be so great that it is impractical to 
compound even to fill a specific prescription.
    Fact: Under current law, FDA already categorizes all 
compounded drugs as new drugs, and this proposal affirms that 
principle. The proposal exempts traditional compounders from 
the new drug approval requirements, cGMP standards, and 
adequate directions for use requirements so they are not 
subject to the major requirements applicable to most new drugs. 
Similarly, compounding manufacturers are exempt from the new 
drug approval requirements and the adequate directions for use 
requirements.
    Myth No. 6: The proposal prohibits traditional compounders 
near State lines to ship products interstate because of 
arbitrary boundaries.
    Fact: The traditional compounders can ship non-sterile 
products across State lines without receiving a prescription 
before compounding the product or ship any product, sterile or 
non-sterile, across State lines if they receive a prescription 
before compound-
ing.
    Myth No. 7: The proposal will make drug shortages worse.
    Fact: The proposal allows for compounding of products on 
the FDA drug shortage list.
    Myth No. 8: The proposed limits eliminates doctors' options 
to prescribe the most beneficial treatment, in their medical 
opinion, for a patient.
    Fact: The day of enactment, FDA is directed to create a 
list of products too complex to compound. Only after a 
transparent and regulatory process, again, with a comment 
period for the public and doctors, can FDA add any product to 
that list.
    Finally, Myth No. 9: The proposal eliminates drug 
compounding for animals.
    Fact: The exemptions from new drug requirements for 
traditional compounders and compounding manufacturers apply to 
drugs compounded for humans and animals. The proposal allows 
compounding of animal drugs from FDA-approved products or from 
bulk chemicals subject to restrictions. Any FDA-approved 
product for either humans or animals can be compounded to treat 
the animal, except for drugs on the do-not-compound list 
established by the FDA.
    In addition, the FDA will establish a list of bulk 
chemicals that can be used to compound a drug for major species 
and food for animals while any bulk that meets USP standards 
can be used for minor species.
    I hope this clears up some misinformation that's been out 
there, Mr. Chairman. I thank you for your indulgence. I'll have 
additional questions for the panel.
    The Chairman. I want to thank you, Senator Roberts, for 
reading that list. I've had that before. My staff has informed 
me that over 2,000 e-mails have come in to Senators' offices. 
One Senator--I don't know that I need to mention his name--said 
that he alone got over 200 e-mails basically propounding all of 
these myths, that that was going to happen.
    So the same forces, as I say to my good friend from Kansas, 
that sunk your bill in 2007 are back out there again. So I 
appreciate your highlighting the myths and the facts that are 
in this bill. I thank you for that.
    Senator Enzi.

                       Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman. The more I hear 
about this, the more confused I get. I thought that the FDA, 
the CDC, and the HMS has a pretty good system of locating 
things when they went awry. In fact, I remember a spinach 
outbreak that we had, and the three of them showed unusual--no, 
I think as we investigated, it was usual cooperation. And with 
as few as 20 cases spread over three States, they were able to 
isolate that there was a problem, and they were able to trace 
it back to the farm where it happened.
    I don't understand how this one got so far out of hand 
before anything was discovered. But, at any rate, you're 
reaching into a whole area here that boards of pharmacies, 
which are State-based, have been operating on. Obviously, there 
was a breakdown in it, and if you say these other cases 
happened, there's been a breakdown in that, too.
    But that's kind of the people on the flagpole right now, 
those State boards of pharmacy. And they're supposed to go into 
these records, and they ought to have the ability to let you 
know if somebody is a manufacturer. But it doesn't seem like we 
need to expand the FDA operation in order to do what is already 
supposed to be done by the States.
    There are a lot of things that we give out primacy for. 
OSHA is one of them, and that saves the Federal Government 
having a lot of inspectors. But the Federal Government is very 
inefficient. They seem to be able to do about three inspections 
a month, and at that rate, it would take 500 years for them to 
get around to all the businesses. And I could see where, if we 
keep expanding FDA, we can run into that same kind of a 
problem.
    I do think these things need to be reported faster. I think 
that we ought to make sure that the people in the States are 
trained well to be able to tell whether it's a manufacturing 
facility or whether they're doing their normal thing. And 
pharmacists checking on pharmacists--I don't think we have 
enough pharmacists in the whole United States.
    But could you clarify whether the FDA believes that under 
the draft bill, the compounding manufacturers should follow 
good manufacturing procedures, GMPs, or whether the FDA intends 
to establish new standards more appropriate for the scope and 
scale of their operations?
    Dr. Woodcock. We would intend if the bill is passed to 
establish specific requirements, similar to what we've done for 
positron emission tomography, where that's a very specialized 
area, and we've put forth specific requirements. Those drugs 
have to be made with a cyclotron because they're radioactive. 
We put forth very specific requirements, and that industry is 
operating under those requirements. We would hope to tailor, 
again, specific requirements to the issues raised by sterile 
compounding.
    Senator Enzi. And those aren't just GMPs?
    Dr. Woodcock. GMPs have a very broad range of scope of all 
parts of drug manufacturing. For example, manufacturing 
compounders would not be doing drug synthesis or making new 
drugs sort of from scratch, which is what the generic and 
innovator industry does.
    Senator Enzi. So we're going to have a new regulatory 
regime for large-scale drug compounders and establish new 
restrictions on what traditional pharmacists can and cannot 
compound. This new framework will require rulemaking, then. I 
think you just said that. The pharmacists in my State have 
commented that they hope the FDA will communicate any new 
requirements to them in a user-friendly manner. What Senator 
Roberts read wasn't hardly user-friendly to me, but maybe it is 
to a pharmacist.
    Can you commit that the FDA will provide an open and 
transparent process for this rulemaking associated with the 
bill? And can you provide your thoughts on how we can make 
everyone aware of the products on the do-not-compound list?
    Dr. Woodcock. Yes. We will have extensive public discussion 
and comments. We would propose to put out interim guidance on 
things so that people would understand. We work with the 
National Board of Pharmacies as well as with the States and the 
State Board of Pharmacies so that we can get out to the 
professional societies, and we can work with all the different 
associations of pharmacists. So we have many ways to get the 
word out.
    I can't stress enough, though, that the industry we're 
talking about regulating here with the Federal Government is 
not traditional compounding as people would have thought of it, 
say, 20 years ago. It is very large scale and is not in 
response to individual prescriptions.
    We have long recognized at FDA the value of pharmacy 
compounding and the way it can tailor medications to different 
unmet medical needs. However, this industry has changed and 
grown up, so this is a new type of practice that has evolved. 
And it raises the stakes on risk, because they're doing large-
scale, sterile processing of drugs.
    And as I read earlier, the way it is being done now and the 
standards that apply, there is a finite chance of 
contamination. We've seen this contamination happen again and 
again and again. And this industry is not required to not only 
identify themselves to us, but submit adverse event reports if 
anything goes wrong. So we don't have a good way with this new 
industry, this evolving industry, of finding out what's going 
on with it.
    Senator Enzi. It seems like if we have a requirement for 
vitamin manufacturers to report adverse events----
    Dr. Woodcock. We do.
    Senator Enzi [continuing]. That we certainly ought to do it 
for almost everything. I've used my time up. Sorry.
    The Chairman. Let's see. Senator Murphy is not here.
    Senator Baldwin.

                      Statement of Senator Baldwin

    Senator Baldwin. Thank you, Mr. Chairman and Ranking 
Member. I appreciate the fact that you're holding this hearing, 
and I want to thank you, in particular, for managing a very 
open process. I know that this committee has been working on 
this issue for many, many months now, even before I joined this 
committee, and that individuals on this committee have been 
working on this issue for many years, and I appreciate that 
work. There's a very encouraging sense of an open and 
collaborative process, and everyone has seemed welcome at the 
table.
    Last year's tragic meningitis outbreak underscored the 
importance of updating Federal compounding policy. And at the 
same time, compounded drugs are an important part of patient 
care. For some patients, these specially tailored drugs are the 
only medicines that can work effectively. It's critical that 
patients continue to have access to these treatments, but it is 
also important to make sure that the compounded drugs that 
people count on are safe, and that our regulatory system does 
not allow bad actors to exploit loopholes and jeopardize 
patient safety.
    I believe this bipartisan draft proposal represents 
significant progress toward striking the right balance between 
patient safety and patient access to compounded treatments. And 
I look forward to the process that we're going to undertake as 
we move this forward.
    Dr. Woodcock, I really appreciate you sharing your 
expertise on this subject with us. The draft proposal 
appropriately focuses FDA regulation on large entities that 
compound the riskiest products. It also includes minimum 
standards for all compounding practices to help ensure patient 
safety when somebody gets a customized drug from their 
neighborhood pharmacy.
    The proposal would require pharmacists to use recognized 
chemical ingredients to compound a drug and allows the FDA to 
publish a list of ingredients that may not be used for 
compounding. I wonder if you can explain why it would be 
necessary to restrict the use of some chemical bulk 
ingredients. And, in particular, can you discuss how the FDA 
would determine what goes on that list?
    Dr. Woodcock. Certainly. There are a variety of risks that 
can be introduced that these provisions are directed at. First, 
the bulk ingredients are generally made overseas in India or 
China. If they have not been subject to FDA inspection, if 
they're simply purchased, say, from some supplier, they may not 
be what they purport to be, or they may be contaminated with 
chemicals or other impurities.
    Second, for some of the very complex dosage forms that we 
have, for example, certain patches that release drugs, even the 
innovator manufacturers have trouble making these. And 
sometimes they will dump drugs into circulation and you could 
die, because you have an extended release patch on, and maybe 
it gets a little warm, or you have a lot of covers on, and they 
haven't made it properly, and the warmth causes all the drug to 
go into your circulation, and you get a massive overdose.
    There's some very, very--and we work with our manufacturers 
to try and deal--we had another one where if people took a 
drink of alcohol, it would dissolve the extended release 
mechanism, and the whole thing would release into the blood 
stream all at once, and people would get serious side effects. 
So the more complex the dosage form, the more difficult it is 
to manufacture.
    Then we have another category which is--we're seeing this 
in dietary supplements now, where drugs we've taken off the 
market because they're too dangerous have been introduced into 
dietary supplements. And those types of drugs that actually 
have been removed for safety, we wouldn't want to be compounded 
and have our population exposed.
    Senator Baldwin. Because I have such limited time, let me 
just ask that this list, as you put it together, is compiled 
for safety purposes only and not for other reasons. And if that 
is the fact, what sort of procedural safeguards will be in 
place while you're developing this list to ensure that any 
restricted bulk ingredients are, in fact, dangerous or pose 
some safety risk to patients----
    Dr. Woodcock. We certainly would have safety as our 
principal objective here.
    Senator Baldwin. Any other objectives?
    Dr. Woodcock. Safety. That's really the primary objective.
    Senator Baldwin. There's anecdotal information, at least, 
that there will be folks who will be interested in that list 
for competitive purposes and competitive advantage, and I want 
to make sure the FDA won't be manipulated in that way.
    Dr. Woodcock. That's fair. In my world, there's always 
issues of competitive advantage, and we try to stick strictly 
to our objectives.
    Senator Baldwin. On a related issue, you highlighted the 
importance of prohibiting the compounding of copies of FDA-
marketed approved drugs except for during drug shortages. I'm 
concerned about patient access when the approved drug is not 
available for reasons other than a shortage.
    As one example, I think about a compound called 17-P, which 
was brought to market by a drug company at prohibitively high 
prices. This is a drug used to prevent preterm birth. And as a 
result, the compounded version of the drug is the only 
available option for many women. What tools does the FDA have 
or need to allow patient access to needed medicines in unique 
circumstances like this other than drug shortages?
    Dr. Woodcock. The FDA really doesn't usually balance human 
safety considerations against economic considerations. This 
proposed statute, though, is attempting to make sure that there 
isn't widespread compounding of generic drugs and that generic 
drug firms simply enter the market without pre-market 
requirements, without going to the FDA and having 
bioequivalence testing and having their product approved and 
proper labeling, and simply marketing their drugs as compounded 
drugs, so that there's a big loophole that allows those drugs 
to enter the market and compete with the established industry 
and undermine the Federal process for introducing generic drugs 
into the market. That's the reason for those provisions.
    The Chairman. Thank you, Senator Baldwin.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Chairman Harkin, Ranking Member Alexander, 
thank you for convening this important hearing and for all your 
work on pharmacy compounding in the wake of the meningitis 
outbreak last fall. You've led a transparent, as Senator 
Baldwin said, and productive process on an extremely complex 
issue. Thank you both for your leadership.
    If my child or my wife urgently needed medicine, I'd ask 
many questions. Will my loved one get well? What's going to 
happen? But I should never have to ask the question whether the 
medicine that my family is given is safe or whether it is 
actually what the doctor said it should be.
    But more than 1,000 patients and their families across 
Minnesota had to ask that question last year, because the 
contaminated medicine that they received could have caused 
enormous harm. More than 50 patients across the country died 
from these contaminated injections produced by a large-scale 
compounding pharmacy in Massachusetts that was essentially an 
unregulated drug manufacturer.
    I come from Minnesota where we specialize in medical 
innovation. We have some of the best doctors and healthcare 
systems and biomedical pioneers anywhere in the world. Our 
Nation has an incredible capacity for innovation and 
development in this field. There is no possible justification 
for allowing more than 17,000 vials of contaminated medicine to 
be shipped to providers throughout our country.
    That's why my colleagues and I have worked so hard over the 
past several months to make sure that this never happens again. 
And I'll be the first to say that the draft we released 2 weeks 
ago isn't perfect, and that's why we asked for stakeholder 
comments, and that's why we're working very hard to update the 
draft based on the hundreds of pages of comments that we 
received. And I'd like to thank the many stakeholders who have 
worked productively with us to help improve our proposal.
    Dr. Woodcock, there have been broad concerns among 
community pharmacists that our proposal would cause them to be 
regulated by the FDA and comply with manufacturer-level quality 
standards. Can you clarify whether traditional mom-and-pop 
pharmacies that do not compound batches of sterile products and 
ship them over State lines would have to change their current 
practices under this proposal?
    Dr. Woodcock. They are left within the scope of traditional 
pharmacy compounding, and they would not be subject to the 
manufacturing rules of the FDA or many of the other provisions. 
Some of the do-not-compound issues that we've been talking 
about would apply, and that is a safeguard that actually has 
been in place to some extent over the years anyway. So, no, the 
traditional pharmacy compounding will not substantively change.
    Senator Franken. Dr. Woodcock, if our draft were to pass 
into law, do you believe that FDA would have the authority to 
prevent another company from behaving in the same manner as the 
New England Compounding Center did before the meningitis 
outbreak?
    Dr. Woodcock. Firms shipping sterile products intra-state 
without receipt of a prescription, which would be the case for 
these large-scale shipments, would be subject to Federal 
registration, would be required under the law to register and 
list with the FDA. We would inspect them, and we would make 
sure they were complying with the proper accepted practices so 
that these drugs would be sterile.
    Senator Franken. Thank you. Dr. Woodcock, our draft gives 
the FDA the authority to produce a list of complex drugs that 
should not be compounded. I'll note that in the process of 
producing this list the FDA is required to go through the full 
notice and comment rulemaking process, which means that the FDA 
must get input from pharmacists and other experts on their 
proposal before it goes final.
    Can you tell us if you believe that this list is important, 
and, if so, why?
    Dr. Woodcock. Yes, I believe it's very important. I believe 
the scope of traditional pharmacy compounding is extremely 
important to patients, to practitioners. But it's also 
important that that remain safe, and that it not stray into 
areas where the risk is very high. That's why we're addressing 
the interstate shipment of sterile products.
    But we're also addressing very risky practices where the 
risk would be too high. I think that is also very important. 
However, the goal is to not impede the traditional compounding 
practices.
    Senator Franken. Thank you, Dr. Woodcock. Thank you for 
your testimony, and my time is expired.
    Thank you both, Mr. Chairman and Senator Alexander.
    The Chairman. Thank you, Senator Franken.
    Dr. Woodcock, thank you very, very much again for your 
testimony. I'm sure we'll have some followup questions perhaps 
in writing to submit to you. But thanks for your input on this 
as we continue to refine this draft.
    Dr. Woodcock. Thank you, and we're delighted to work with 
you.
    The Chairman. Thanks, Dr. Woodcock.
    Now we'll call our second panel. First is Mr. Carmen 
Catizone, who is the executive director of the National 
Association of Boards of Pharmacy. They assist the State boards 
of pharmacy in protecting the public health, aids in interstate 
licensing, and helps develop competency standards for the 
practice of pharmacy.
    Previously, Mr. Catizone was a president of the National 
Pharmacy Manpower Project of the National Conference of 
Pharmaceutical Organizations, as well as a past member of the 
U.S. Pharmacopeia Board of Directors.
    Allan Coukell is here, the director of Medical Programs in 
The Pew Health Group, a division of the Pew Charitable Trusts. 
Mr. Coukell oversees initiatives related to medical products 
and services, including Pew's Drug Safety Project. In February, 
Mr. Coukell's group helped to convene a summit to discuss 
pharmaceutical compounding which included representatives from 
health professional organizations, compounding pharmacies, 
quality experts, and the Center for Disease Control and 
Prevention as well as FDA.
    We thank you for doing that.
    Mr. Coukell is both a pharmacist and a consumer advocate, 
and we welcome his perspective today.
    Next is David Miller, executive vice president and CEO of 
the International Academy of Compounding Pharmacists, an 
association which represents pharmacists who focus on 
pharmaceutical compounding. Previously, Mr. Miller served as 
the executive director of the Maryland Pharmacists Association 
and the director of Pharmacy Affairs at Merck. Mr. Miller also 
testified at our hearing last November.
    We welcome you back again, Mr. Miller.
    Dr. Kasey Thompson currently serves as the vice president 
of the Office of Policy, Planning, and Communications at the 
American Society of Health-System Pharmacists, an organization 
which advises its members on the responsible use of compounded 
medications. Dr. Thompson has extensive knowledge regarding the 
safe use of compounded drugs, as he previously served as the 
American Society of Health-System Pharmacists' Director of the 
Center of Patient Safety. Dr. Thompson was also part of our 
panel in November.
    We welcome you back again, Dr. Thompson.
    As before, all of your statements will be made a part of 
the record. We ask that you summarize those in 5 minutes, and 
we'll move ahead to questioning.
    First, we'll start with Mr. Catizone.
    Thank you for being here and please proceed.

  STATEMENT OF CARMEN S. CATIZONE, M.S., RPh, DPh, EXECUTIVE 
  DIRECTOR, NATIONAL ASSOCIATION OF BOARDS OF PHARMACY, MOUNT 
                          PROSPECT, IL

    Mr. Catizone. Thank you, Senator. Good morning, Chairman 
Harkin, Ranking Member Alexander, and committee members. I 
represent the State agencies, the State boards of pharmacy, 
that regulate pharmacists, pharmacies, technicians, and 
traditional compounding.
    In regard to the Chairman's questions earlier, is the 
legislation effective, does it clarify the differences, does it 
address the needs of the States? The answer to all those 
questions is yes. We agree with the FDA that the situation can 
and will happen again. It's not a question of whether.
    But some things have changed since the last hearing and 
since the unfortunate incident. One, the FDA has stepped up 
their inspections. That has made a significant difference to 
the landscape that existed prior to that time. It has also 
greatly assisted the State boards of pharmacy in trying to 
fulfill their mission to protect the public and regulate 
compounding.
    Taking the lead from the Chairman's State of Iowa, we 
partnered with the Iowa Board of Pharmacy and to date have 
inspected 150 pharmacies across the United States in regard to 
compounding activities. Those inspections have involved not 
only the Iowa Board of Pharmacy, but the home State where that 
pharmacy is based. We will complete all 600 of Iowa's non-
resident pharmacies before the end of 2013 and will have 
physically inspected those facilities with both our own trained 
staff as well as representatives from the Iowa Board of 
Pharmacy and the resident board of pharmacy as well.
    We have also contracted recently with another State to 
inspect 150 of their in-state compounding pharmacies, and there 
are four other States that have pending legislation to 
recognize NABP to assist with the inspection of compounding 
pharmacies or to conduct those inspections on behalf of the 
State board of pharmacy.
    The legislation presents and we support a clear distinction 
between compounding and manufacturing. The separation of 
compounding from manufacturing is critical to maintain the 
present authority of the States and address one of the 
contributing factors of the NECC crisis, specifically, what the 
FDA regulates and what the States regulate.
    The provision in the proposed legislation that specifies a 
compounding manufacturer cannot be licensed as a pharmacy is 
essential to distinguishing from State-regulated compounding 
and FDA regulated manufacturing. If a compounding manufacturer 
is allowed to hold that dual licensure or registration, it will 
be more difficult to separate the two enterprises and could 
provide a veil for unscrupulous entities to obfuscate their 
activities.
    NABP strongly supports the FDA receiving full and unlimited 
authority to access and seize any and all records related to 
the oversight and regulation of compounding manufacturers. We 
are concerned, however, that allowing the FDA access to 
pharmacy records for activities that are regulated by the 
States could create a confusing situation, could take people 
off the flagpole, could change one of Senator Roberts' myths, 
could change the response to Senator Harkin's question about 
whether or not the FDA has authority over traditional 
compounding pharmacies.
    We ask the committee to keep this provision intact and to 
help recognize and differentiate between compounding and 
manufacturing and State authority and Federal authority. The 
answer to remedy that situation is enhanced communication. We 
have built a database of electronic profiles for all pharmacies 
in the United States. We're including the inspection reports in 
those profiles and making that available real-time to States, 
and we'll make it available to the FDA and provide something to 
the public as well so they'll be able to search that database 
and decide whether or not they want to use that pharmacy for 
their services.
    The other revision that we ask the committee to consider is 
the exemption of intra-state sterile compounding pharmacies, 
the intra-state. We believe that the same risks exist with 
intra-state compounding as with interstate. The operations that 
we've observed in intra-state are sometimes as large or larger 
than the interstate operations, and, therefore, we ask the 
committee to consider this provision and instead include the 
preparation of non-
patient specific sterile prepared products for intra-state 
activities as a defining component of a compounding 
manufacturer and fall within the scope and authority of the 
FDA.
    As stated earlier in our statement, the other provisions of 
the proposed legislation that address the safe preparation of 
medications and products for patients align well with the 
approaches suggested and requested by the States. The 
legislation proposed by the committee reflects the hard work 
conducted to understand a complex area of pharmacy practice, 
compounding, and a complex but necessary area of pharmacy 
practice to ensure that patients receive the appropriate 
medications.
    But, most importantly, even though it is necessary and 
complex, compounding must be regulated effectively. The 
proposed legislation distinguishes between compounding and 
manufacturing, defines a new category of manufacturing that 
balances effective regulation with reality, and carefully 
constructs allowances and prohibitions on the scope and 
activities of a compounding manufacturer in order to meet 
patient needs while maintaining the necessary protections.
    Thank you.
    [The prepared statement of Mr. Catizone follows:]
        Prepared Statement of Carmen S. Catizone, M.S., RPh, DPh
                                summary
    On behalf of the State boards of pharmacy and NABP, I extend our 
appreciation to the committee for the proposed legislation that 
addresses the critical concerns identified by the States and validated 
by NABP through its inspections of compounding pharmacies. We welcome 
the clarifications provided by the proposed legislation to the 
regulatory uncertainties that currently exist--uncertainties that were 
a primary factor leading to the recent meningitis tragedy. Most 
importantly, the clarifications provide the needed distinction between 
compounding and manufacturing and provide a safe and equitable 
environment for both compounding and manufacturing to occur in the best 
interest of the patient.
                        authority of the states
    NABP supports a clear separation of ``compounding manufacturer'' 
from traditional pharmacy practice and compounding. The provision of 
the proposed legislation that specifies a compounding manufacturer 
cannot be licensed as a pharmacy is essential to distinguishing from 
State-regulated compounding and FDA regulated manufacturing. Our 
experience, and most recently our inspections of compounding 
pharmacies, affirms the importance of this prohibition in clarifying 
what activities fall under Federal jurisdiction and what entities can 
engage in compounding and operate under State jurisdiction.
      transition period to ensure uninterrupted patient care and 
                          necessary exceptions
    Equally tantamount to the recognition of State authority is the 
need to ensure an appropriate transition period with the States as well 
as to recognize exceptions for activities such as the preparation of 
radiopharmaceuticals. An appropriate transition period is needed so 
States will have sufficient time to alert pharmacists and other 
practitioners and ensure that patient care is continued and not halted 
by new requirements that may no longer allow certain activities that 
were previously permitted under State laws.
   intra-state exemption from definition of compounding manufacturer
    NABP is concerned with the exemption for intra-state distribution 
of non-patient-specific sterile compounded products. It is our finding 
that non-patient-specific, sterile prepared products distributed intra-
state bear the same risk levels to patients as products that are 
introduced into interstate commerce. In fact, some intra-state 
operations are as large or larger than interstate distributors of 
products and therefore the volume of products distributed, and the 
associated risk, can be equal to or greater than the interstate 
distribution of similar products. The differentiation between intra-
state and interstate activities to define a compounding manufacturer 
could create patient safety concerns by unintentionally creating a safe 
haven for entities and individuals engaging in intra-state activities 
who have the intent to simply avoid the different and Federal-based 
requirements for interstate activities.
                                 ______
                                 
    Good morning Chairman Harkin, Ranking Member Alexander, and 
committee members. I am Carmen Catizone, executive director of the 
National Association of Boards of Pharmacy (NABP). NABP thanks you for 
the opportunity to appear today and comment on the bipartisan Draft 
Proposal on Pharmaceutical Compounding. NABP commends the Senate HELP 
Committee for its diligence on this issue and the thoughtful approach 
taken in the draft proposal.
    NABP is the impartial organization founded in 1904 whose members 
are the State agencies that regulate the practice of pharmacy. NABP 
supports the State boards of pharmacy by developing, implementing, and 
enforcing uniform standards for the purpose of protecting the public 
health. NABP also helps State boards of pharmacy to ensure the public's 
health and safety through its pharmacist license transfer, pharmacist 
competence assessment, and accreditation programs.
    Following the tragic meningitis outbreak caused by contaminated 
injectable drugs, several States implemented compounding pharmacy 
inspections or conducted surveys of pharmacies, focusing especially on 
those engaged in sterile compounding. As part of the NABP Compounding 
Action Plan that was developed in November 2012 and implemented in 
December 2012, NABP partnered with the Iowa Board of Pharmacy and other 
States to begin conducting inspections of all nonresident pharmacies 
delivering compounded drugs into Iowa. Our initial inspections 
confirmed that what occurred at NECC was also occurring at other 
facilities in other States. To date, NABP has inspected approximately 
150 pharmacies across the States and will continue our inspections 
until all of Iowa's approximately 600 non-resident pharmacies are 
inspected. In addition to the inspection program with Iowa, NABP 
recently executed an agreement with the State of New Jersey to assist 
with the inspection of in-state compounding pharmacies and the 
prosecution of any pharmacy or individual illegally engaged in the 
practice of compounding. Four other States have legislation pending or 
are in the process of designating NABP to conduct or assist with 
inspections of pharmacies for, or in their States.
    The States thank the committee for the proposed legislation that 
addresses the critical concerns identified by the States and validated 
by NABP and its inspections of compounding pharmacies. As such, we 
welcome the clarifications provided by the proposed legislation to the 
regulatory uncertainties that currently exist and were one of the 
primary factors leading to the recent meningitis tragedy. Most 
importantly, the clarifications provide the needed distinction between 
compounding and manufacturing and provide a safe and equitable 
environment for both compounding and manufacturing to occur in the best 
interest of the patient.
                        authority of the states
    NABP supports a clear separation of ``compounding manufacturing'' 
from traditional pharmacy practice and compounding. Although we would 
prefer that ``compounding'' not be included in the proposed designation 
because of the inference to traditional compounding and the confusion 
that could result, we understand that some terminology must be employed 
that describes the activity being regulated.
    The separation of compounding from manufacturing is also critical 
to maintain the present authority of the States and address one of the 
contributing factors to the NECC crisis, ambiguous authority between 
the States and the Food and Drug Administration (FDA). The provision of 
the proposed legislation that specifies a compounding manufacturer 
cannot be licensed as a pharmacy is essential to distinguishing from 
State-regulated compounding and FDA-regulated manufacturing. Our 
experience, and most recently our inspections of compounding 
pharmacies, affirms the importance of this prohibition in clarifying 
what activities fall under Federal jurisdiction (FDA) and what entities 
can engage in compounding and operate under State jurisdiction (State 
boards of pharmacy).
    If a compounding manufacturer is allowed to hold dual licensure/
registration, it will be more difficult to separate the two enterprises 
and will provide a veil for unscrupulous entities to obfuscate their 
activities. NABP supports FDA receiving authority to access any and all 
documents and records required for the oversight and regulation of 
compounding manufacturers. We are concerned about allowing the FDA 
access to pharmacy records for activities that are regulated by the 
States. If an entity is manufacturing or compound manufacturing, then 
under the proposed legislation and current authority, the FDA will have 
access to all documents and records concerning these activities. 
Authorizing the FDA access to pharmacy records could create 
jurisdictional conflicts with the States and impede the States from 
investigating or prosecuting a case because the FDA has seized evidence 
or information needed by the State(s). What is needed in lieu of 
allowing such access is increased communication between the States and 
FDA.
    NABP is collecting and maintaining data on the compounding 
pharmacies identified by the Iowa Board as well as those indicated by 
other boards of pharmacy. Our electronic data base of e-Profiles for 
pharmacies is being expanded and enriched to include all pharmacies 
licensed or registered in the United States by State boards of pharmacy 
and comparable State agencies. Data collected from the boards and the 
inspection reports provided by the States and through NABP's activities 
with, or on behalf of the States, will be stored in an NABP Pharmacy e-
Profile, allowing us to disseminate pertinent information among State 
boards and the FDA. States are now able to submit inspection reports 
and other related information to NABP for inclusion in pharmacies' e-
Profiles. The e-Profiles for Pharmacies will be made available at no 
cost to boards for use in making licensure and registration 
determinations for pharmacies, the FDA, and to the public for their use 
in selecting an appropriate pharmacy.
      transition period to ensure uninterrupted patient care and 
                          necessary exceptions
    Equally tantamount to the recognition of State authority is the 
need to ensure an appropriate transition period with the States as well 
as to recognize exceptions for activities such as the preparation of 
radiopharmaceuticals. An appropriate transition period is needed so 
States will have sufficient time to alert pharmacists and other 
practitioners and ensure that patient care is continued and not halted 
by new requirements that may no longer allow certain activities that 
were previously permitted under State laws. One such example is the 
compounding ``for office use'' that is currently allowed in some 
States. It is our understanding that the proposed legislation addresses 
this concept in different provisions and that overall the 
classification of such activities is a State matter when the products 
prepared are distributed intra-state and a Federal matter when the 
products prepared are distributed in interstate commerce. If the 
proposed legislation is adopted and these distinctions are correct and 
implemented, States will need some time to make the adjustments in 
State laws in order to ensure uninterrupted patient care and close any 
regulatory gaps that might result.
   intra-state exemption from definition of compounding manufacturer
    NABP is also concerned with the exemption of the intra-state 
distribution of non-patient-specific sterile compounded products. We 
support the logic of establishing a delineation point in order to more 
readily identify and regulate large-scale operations that conceivably 
pose more risk to patients than smaller operations. However, it is our 
finding that non-patient-specific, sterile prepared products 
distributed intra-state bear the same risk levels to patients as 
products that are introduced into interstate commerce. In fact, some 
intra-state operations are as large and larger than interstate 
distributors of products and therefore the volume of products 
distributed, and the associated risk, can be equal to or greater than 
the interstate distribution of similar products. The differentiation 
between intra-state and interstate activities to define a compounding 
manufacturer could create patient safety concerns by unintentionally 
creating a safe haven for entities and individuals engaging in intra-
state activities who have the intent to simply avoid the different and 
Federal-based requirements for interstate activities.
    We ask the committee to reconsider this provision and instead 
include the preparation of non-patient-specific, sterile prepared 
products for intra-state activities as a defining component of a 
compounding manufacturer and within the scope of authority of the FDA.
                               conclusion
    As stated earlier in our statement, the other provisions of the 
proposed legislation that address the safe preparation of medications 
and products for patients align well with the approaches suggested and 
recommended by the States. The legislation proposed by the committee 
demonstrates the hard work conducted to understand a complex area of 
pharmacy practice that is necessary to ensure that patients receive the 
appropriate medications but must also be regulated effectively. The 
legislation distinguishes between compounding and manufacturing, 
defines a new category of manufacturing that balances effective 
regulation with reality, and carefully constructs allowances and 
prohibitions on the scope and activities of a compounding manufacturer 
in order to meet patient needs with the necessary protections. NABP 
appreciates this opportunity for input and is available to discuss our 
comments and the proposed legislation in greater detail.
    Thank you.

    The Chairman. Thank you very much, Mr. Catizone.
    Mr. Coukell, again, welcome and please proceed.

STATEMENT OF ALLAN COUKELL, DIRECTOR, MEDICAL PROGRAMS, THE PEW 
               CHARITABLE TRUSTS, WASHINGTON, DC

    Mr. Coukell. Chairman Harkin, Ranking Member Alexander, and 
members of the committee, thank you for the opportunity to 
testify. My name is Allan Coukell. I'm a pharmacist and 
director of drug and medical device work at the Pew Charitable 
Trusts, an independent research and public policy organization. 
Pew has a long focus on drug quality issues. I am pleased to be 
able to support the bipartisan proposal before you today.
    Pharmacists have always compounded medicines, but the 
activities you seek to address are far removed from the 
traditional preparation of an individualized medicine for a 
single patient. Some compounding pharmacies now produce large 
volumes of drugs and ship thousands of units of high-risk or 
sterile products to clinics and hospitals across the country.
    The fungal meningitis outbreak caused by contaminated 
steroid injections highlights the risk to patients. But it's 
only one recent case. Included with my written testimony is a 
summary of 19 more pharmacy compounding errors from the past 
decade. It includes 22 additional deaths, as well as 
meningitis, bloodstream infections, and at least 38 patients 
blinded or suffering vision loss caused by a compounded drug.
    And it notes toxicities caused by super-potent products. 
For example, three people died in 2007 after receiving 
intravenous injections for back pain that were eight times the 
labeled strength.
    Recent FDA inspections raise further concerns. For example, 
a New Jersey compounder 2 months ago recalled all of its 
products because of potential mold and particulates in the 
vials. Another case this year involved a Georgia compounder 
that conducted a nationwide recall because of serious eye 
infections.
    Congress has long grappled with these risks. Section 503(A) 
of the Food, Drug, and Cosmetic Act was passed in 1997 and 
later partially struck down by the courts. Members of this 
committee have tried again. In 2007, legislation was strongly 
opposed by the compounding industry and did not pass. Today, 
FDA's legal authority remains unclear.
    The proposal before you offers the opportunity to finally 
address some high-risk compounding activities, and it has the 
following strengths: It addresses sterile products, which are 
especially high risk. It includes facilities that sell in 
multiple States and, therefore, captures many of the largest 
operations, though not all of them. And it contains safeguards 
that will help prevent compounders undermining gold standard 
FDA-approved drugs.
    Under this legislation, a new category of compounding 
manufacturers would need to comply with applicable good 
manufacturing practices, as do pharmaceutical companies making 
FDA-approved drugs. This would be an improvement on the USP 
standards used in many States which were not designed for 
large-scale anticipatory production.
    This point was stressed strongly by experts who spoke at a 
recent compounding summit hosted by Pew, ASHP, and the American 
Hospital Association. The current proposal recognizes that FDA 
is the appropriate agency to oversee this higher quality 
standard.
    While the goal is to ensure the quality of compounded 
products, patients, doctors, and pharmacists should prefer FDA-
approved drugs whenever possible. Only the latter go through 
premarket review to establish safety, efficacy, bioequivalence, 
along with the pre-approval of manufacturing methods and 
facilities. So it's important that this new regulatory scheme 
not encourage compounding at the expense of traditional 
manufacturing.
    This draft contains a number of important safeguards. 
First, it clarifies that certain products may not be compounded 
by anyone, and that certain ingredients may not be used in 
compounding. It's also clear that the compounder may not make a 
copy or a variation of a marketed drug unless that drug is in 
shortage. We support the prohibition on wholesaling compounded 
drugs which will further reduce incentives to circumvent the 
FDA approval process.
    Appropriately, these safeguards apply to all compounders 
and not just compounding manufacturers. Therefore, to support 
FDA's enforcement, we urge the committee to allow FDA to access 
records during inspections of all pharmacies, which will also 
allow the Agency to investigate whether a pharmacy is actually 
a compounding manufacturer.
    Let me note that there are some important areas of risk not 
addressed by this proposal. First, companies that sell products 
within a single State will continue to operate without FDA 
oversight. That means that identical products produced under 
identical conditions in identical volumes will be subject to 
different regulatory schemes. No State enforces GMP, and States 
vary widely in their ability to oversee large-scale 
compounding.
    Second, this proposal does not address non-sterile 
compounding regardless of scale, even though improperly 
compounded tablets or capsules also have the potential to cause 
harm. Despite the areas not addressed, this bipartisan proposal 
is an important step toward addressing a longstanding risk to 
patients.
    I thank you for your leadership and welcome any questions.
    [The prepared statement of Mr. Coukell follows:]
                  Prepared Statement of Allan Coukell
    Dear Chairman Harkin, Ranking Member Alexander and members of the 
committee, thank you for the opportunity to testify on your proposal to 
improve the safety of pharmaceutical compounding.
    My name is Allan Coukell. I am a pharmacist and director of drug 
and medical device work at the Pew Charitable Trusts, an independent, 
nonpartisan research and public policy organization.
    Pharmacists have always compounded medicines--it is the origin of 
the profession--but the activities you seek to address today are far 
removed from the traditional practice of preparing individualized 
medicines for one patient at a time.
    Today, some compounders produce large volumes of drugs, often 
manufacturing them before a prescription is received, shipping many 
thousands of units--high-risk or sterile products--to clinics and 
hospitals across the country.
    The regulatory framework has not kept up with this changing 
industry. Traditionally, States oversee pharmacy practice and the FDA 
oversees drug manufacturing. But compounding falls into a grey zone. In 
a very broad sense, FDA has the authority to regulate some compounding 
activities, but it is not at all clear how far that authority goes. Nor 
are there formalized mechanisms to divide the oversight of compounding 
between the States and FDA.
                          examining the risks
    The epidemic caused by the New England Compounding Center is but 
the most recent case highlighting the risks to patients.
    That outbreak has been associated with 53 deaths so far and nearly 
700 serious infections. Included with my testimony is a Pew summary 
that describes 19 additional pharmacy compounding errors since 2001.\1\
    The list includes 22 additional deaths, as well as serious 
infections--meningitis, bloodstream and at least 38 patients who 
suffered partial or complete loss of vision--but also patients harmed 
by sub-potent or super-potent doses. For example, in 2007 three people 
died after receiving intravenous colchicine that was eight times the 
labeled strength.\2\
    Recent inspections of compounders raise further concern: Two months 
ago, the FDA announced a recall of all of the products manufactured by 
a New Jersey compounder because of potential mold contamination. The 
FDA press release referred to ``visible particulate contaminants'' in 
what was supposed to be a sterile product.\3\ Also this year, a Georgia 
compounder conducted a nationwide recall of sterile products after 
reports of serious eye infections.\4\
              appropriate oversight and quality standards
    Congress has long grappled with these risks. The current section 
503(A) of the Food, Drug and Cosmetic Act was passed in 1997. After the 
courts struck down parts of that provision, members of this committee 
tried again to create meaningful Federal oversight of certain 
compounding activities. But that legislation was strongly opposed by 
the compounding industry, and did not pass. Today, FDA's legal 
authority remains unclear. Even as the Agency steps up its oversight of 
compounders, its ability to access records has been challenged.\5\
    The proposal before you today offers an opportunity to finally 
address some, though not all, high-risk compounding activities. It has 
the following strengths:

     It addresses sterile products, which are particularly high 
risk;
     By including facilities that sell in multiple States, it 
will capture many of the largest operations; and
     It contains safeguards that will help prevent compounders 
from undermining ``gold-standard,'' FDA-approved drugs.
                      increased federal oversight
    The legislation creates a new category of FDA-regulated 
``compounding manufacturers''--compounders that produce sterile 
products in anticipation of a prescription and who sell product outside 
the State in which it is created.
    The bill would require compounding manufacturers to comply with the 
same manufacturing quality standards, known as good manufacturing 
practices (GMPs), that apply to pharmaceutical companies making FDA-
approved drugs.
    This recognizes that the U.S. Pharmacopeial standards (chapter 797) 
used in many States are unsuited to large-scale anticipatory 
production. Pew recently joined with the American Hospital Association 
(AHA) and the American Society of Health-System Pharmacists (ASHP) to 
co-host a pharmacy compounding summit that heard from experts who 
stressed this point strongly. The FDA, and not State pharmacy boards, 
is the appropriate agency to enforce GMPs.
    Using limited resources wisely necessitates addressing the largest 
potential public health problems first. That means, in part, ensuring 
quality standards at facilities that produce large numbers of doses. 
While not perfect, we believe that the proposed framework for 
interstate sales would capture a meaningful portion of the highest risk 
compounding.
    However, we urge the committee to not exclude mixing and 
reconstituting of drugs in accordance with manufacturer label from the 
definition of compounding manufacturer. If these ostensibly sterile 
products are mixed in large volume under unsanitary conditions, it 
could represent a significant public health risk.
    In addition, the definition of compounding manufacturer should 
include repackagers of preservative-free syringes and mini-bags or 
other units of sale and should not be limited to repackagers of 
preservative free vials.
        compounded products must not displace fda-approved drugs
    It is important to note that while compounding manufacturers will 
be subject to FDA oversight of and quality standards, their products 
will not have gone through the pre-market approval process that brand 
and generic drug companies go through to demonstrate safety, efficacy 
and bioequivalence, along with pre-approval of manufacturing methods 
and facilities.
    Because of those differences, compounded medicines can never be an 
adequate substitute for FDA-approved drugs. It is important this new 
regulatory scheme not encourage compounding at the expense of 
traditional manufacturing, and we believe the draft contains a number 
of important safeguards.
    First, the bill clarifies that certain products may not be 
compounded by anyone, and that certain ingredients may not be used in 
compounding. It gives the FDA the authority to specify these products 
and ingredients, and restricts compounding from bulk to ingredients 
that are described by a USP monograph or are in an already-approved 
product.
    The draft is also clear that a compounder may not make a copy or a 
variation of a marketed drug, except when that drug is in shortage. An 
exception allows variations compounded from bulk drugs to address 
specific medical needs, but only when a prescriber communicates in 
advance of the compounding that the drug would make a serious 
difference for the patient.
    We also support the provisions that prohibit the wholesale of 
compounded drugs, which further reduces incentives to circumvent the 
FDA drug-approval process.
    Appropriately, these important safeguards apply to all compounders, 
not just to compounding manufacturers. Therefore, to support FDA's 
enforcement of these safeguards, we urge the committee to allow the FDA 
to access records during inspections of all pharmacies, not just 
compounding manufacturers. Further, the Agency must be able to 
investigate a company to determine whether it is, in fact, a self-
identified ``traditional compounder'' or is actually a compounding 
manufacturer. A critical tool within such an investigation is access to 
records.
                 areas of risks that are not addressed
    It is important to understand which activities FDA would not 
regulate under this legislation, and the potential risks to patients.
    First, large-scale sterile compounding operations that operate 
within a single State will continue to operate without FDA oversight. 
This means that identical products produced under identical conditions 
in identical volumes will be subject to different regulatory schemes, 
depending on the accident of whether or not they are sold in one State 
or two. And, as our compounding summit heard, State pharmacy regulators 
vary widely in their ability to oversee large-scale compounding. 
Indeed, some States have elected not to register or provide oversight 
to such facilities. No State enforces quality standards equivalent to 
Good Manufacturing Practices.
    Second, this proposal does not address non-sterile compounding, 
regardless of scale. Pew supports prioritized oversight of sterile 
products, but we note that there are a number of non-sterile compounded 
drugs, such as compounded ``bioidentical'' hormone replacement pills, 
that are widely distributed. Compounded oral dosage forms have the 
potential to cause harm by both impurities and sub- or super-
potency.
                          jurisdictional issues
    Finally, we recommend that the committee consider allowing both 
Federal and State jurisdiction for entities that wish to engage in 
compounding manufacturing and pharmacy practice. We believe FDA's 
oversight responsibility would still be clear, driven by the framework 
outlined in this bill. Entirely preventing a compounding manufacturer 
from engaging in any traditional pharmacy practice may be difficult, 
and where any entity engages in pharmacy practice, they must be 
licensed and overseen by appropriate State authorities.
                               conclusion
    The business of compounding has changed dramatically over the last 
30 years and the regulatory framework has not kept pace. The lines of 
authority are unclear and there are significant gaps in oversight that 
leave much high risk, high volume pharmacy compounding almost 
unregulated. The lack of a meaningful regulatory framework may have 
guaranteed the kind of tragedy seen last fall, and that we will see 
again if Congress does not enact meaningful and enforceable rules to 
govern compounding. This bi-partisan draft legislation is an important 
step forward.
    We thank you for your bipartisan leadership, and urge swift action 
to protect patients and avoid further senseless deaths.
    Thank you for the opportunity to testify, and I welcome your 
questions.
                               References
    1. The Pew Charitable Trusts. U.S. Illnesses and Deaths Associated 
With Compounded Medications (2001-Present). April 15, 2013. http://
www.pewhealth.org/other-resource/us-illnesses-and-deaths-associated-
with-compounded-medications-85899468587.
    2. U.S. Centers for Disease Control and Prevention. ``Deaths from 
Intravenous Colchicine Resulting from a compounding Pharmacy Error--
Oregon and Washington, 2007,'' Morbidity and Mortality Weekly Report. 
October 12, 2007. 56(40): 1050-52. http://www.cdc.gov/mmwr/preview/
mmwrhtml/mm5640a3.htm. Access-
ed January 8, 2013.
    3. Medprep Consulting Inc. ``Medprep Consulting Inc. Announces 
Voluntary Nationwide Recall of All Lots of All Compounded Products Due 
To Potential Mold Contamination.'' Press Release. March 20, 2013. 
http://www.fda.gov/Safety/Recalls/ucm344787.htm.
    4. U.S. Food and Drug Administration. ``FDA alerts health care 
providers and patients of the nationwide recall of all lots of sterile 
products distributed by Clinical Specialties Compounding Pharmacy''. 
Press Release. March 21, 2013. http://www.fda.gov/NewsEvents/Newsroom/
PressAnnouncements/ucm345019.htm.
    5. Hamburg, Margaret A. ``FDA Must Have New Authorities to Regulate 
Pharmacy Compounding.'' FDA Voice. March 22, 2013. http://
blogs.fda.gov/fdavoice/index.php/2013/03/fda-must-have-new-authorities-
to-regulate-pharmacy-compound-
ing/.

                                                                The Pew Charitable Trusts
                             Appendix B--U.S. Illnesses and Deaths Associated With Compounded Medications  (2001-Present) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Reported  Reported
                Year                          States            cases    deaths       Adverse events         Compounding error            Product
--------------------------------------------------------------------------------------------------------------------------------------------------------
2012................................  FL, GA, ID, IL, IN,          733        53  Fungal meningitis and   Contamination \1\.....  Spinal injections:
                                       MD, Ml, MN, NC, NH,                         other infections.                               preservative-free
                                       NJ, NY, OH, PA, RI,                                                                         sterile
                                       SC, TN, TX, VA.                                                                             methylprednisolone
                                                                                                                                   acetate.
2012................................  CA and six other              33            Fungal eye infection;   Contamination \2\.....  Eye injections:
                                       States.                                     23 cases of partial                             Brilliant Blue-G
                                                                                   to severe vision loss.                          (BBG) retinal dye and
                                                                                                                                   triamcinalone.
2011................................  FL, TN................        21            Bacterial eye           Contamination \3\.....  Eye injections:
                                                                                   infection; one case                             intravitreal
                                                                                   of meningitis and                               bevacizumab (Avastin)
                                                                                   encephalitis; four                              injections.
                                                                                   cases of loss of
                                                                                   eyesight; three
                                                                                   patients had eye
                                                                                   removals.
2011................................  CA....................         5            Blindness.............  Unintended presence of  Eye injections:
                                                                                                           another medication      intravitreal
                                                                                                           \4\.                    bevacizumab (Avastin
                                                                                                                                   injections.
2011................................  AL....................        19         9  Bacterial bloodstream   Contamination \5\.....  Parenteral nutrition
                                                                                   infection.                                      solution.
2010................................  IL....................         1         1  Fatal overdose........  Dose of sodium 60       IV solution: sodium
                                                                                                           times stronger than     chloride.
                                                                                                           ordered \6\.
2007................................  WA, OR................         3         3  Fatal overdose........  Dose of colchicine      IV solution:
                                                                                                           eight times stronger    colchicine.
                                                                                                           than labeled
                                                                                                           concentration \7\.
2007................................  MD, CA................         8            Bacterial bloodstream   Contamination \8\.....  IV solution: fentanyl.
                                                                                   infection.
2004-6..............................  MI, MO, NY, SD, TX, WY        80            Bacterial bloodstream   Contamination \9\.....  IV flush syringes:
                                                                                   infection.                                      heparinized saline.
2006................................  OH....................         1         1  Fatal overdose........  Dose of sodium          Chemotherapy infusion.
                                                                                                           chloride stronger
                                                                                                           than ordered \10\.
2006................................  NV....................         1         1  Fatal overdose........  Dose of zinc 1,000      Neonatal parenteral
                                                                                                           times stronger than     nutrition solution.
                                                                                                           ordered \11\.
2005................................    ....................         2            Bacterial bloodstream   Contamination \12\....  IV flush vials:
                                                                                   infection.                                      preservative-free
                                                                                                                                   heparinized saline.
2005................................  MN and one other State         6            Bacterial eye           Contamination \13\....  Eye solution: trypan
                                                                                   infection; all cases                            blue.
                                                                                   had partial or
                                                                                   complete loss of
                                                                                   vision; two patients
                                                                                   had eye removals.
2005................................  VA....................         5         3  Systemic inflammatory   Contamination \14\....  Heart infusion:
                                                                                   response syndrome.                              cardioplegia.
2005................................  CA, NJ, NC, NY, MA....        18            Bacterial bloodstream   Contamination \15\....  IV solution: magnesium
                                                                                   infection.                                      sulfate.
2004................................  CT....................         2            Bacterial bloodstream   Contamination \16\....  IV flush syringes:
                                                                                   infection.                                      heparin-vancomycin.
2004................................  MO, NY, TX, Ml, SD....        64            Bacterial bloodstream   Contamination \17\....  IV flush syringes:
                                                                                   infection.                                      heparinized saline.
2002................................  NC....................         5         1  Fungal meningitis and   Contamination \18\....  Spinal injections:
                                                                                   sacroiliitis.                                   methylprednisolone
                                                                                                                                   acetate.
2001................................  CA....................        11         3  Five cases of           Contamination \19\....  Spinal or joint
                                                                                   bacterial meningitis;                           injections:
                                                                                   five cases of                                   betamethasone.
                                                                                   epidural abscess; one
                                                                                   patient had an
                                                                                   infected hip joint.
2001................................    ....................         4            Bacterial bloodstream   Contamination \20\....  IV infusion:
                                                                                   infection.                                      ranitidine.
                                     ---------------------------------------------
  Total.............................    ....................     1,022        75
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Pew Charitable Trusts has identified 20 pharmacy compounding errors associated with 1022 adverse events. including 75 deaths, since 2001.
  Contamination of sterile products was the most common compounding error, though some incidents were the result of pharmacists' and technicians'
  miscalculations and mistakes in filling prescriptions.

    Pew's drug safety project works to ensure a safe, reliable 
pharmaceutical manufacturing and distribution system. For more 
information, visit www.pewhealth.org/drugsafety.
                               References
    1. U.S. Centers for Disease Control and Prevention. Multistate 
Meningitis Outbreak Investigation. http://www.cdc. gov/HAI/outbreaks/
meningitis.html. Accessed January 29, 2013.
    2. U.S. Centers for Disease Control and Prevention. ``Notes from 
the field: Multistate outbreak of postprocedural fungal endophthalmitis 
associated with a single compounding pharmacy--United States, March-
April 2012,'' Morbidity and Mortality Weekly Report. May 2012. 61(17): 
310-1. http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6117a5.htm. Accessed 
December 21, 2012.
    3. Based on two separate outbreaks: 12 in Florida, 9 in Tennessee. 
Respective cites below.
    Goldberg RA, Flynn HW Jr, Isom RF, Miller D, Gonzalez S. ``An 
outbreak of streptococcus endophthalmitis after intravitreal injection 
of bevacizumab,'' American Journal of Ophthalmology. February 2012. 
153(2): 204-08.e1.
    Frost BA, Kainer MA. ``Safe preparation and administration of 
intravitreal bevacizumab injections.'' New England Journal of Medicine. 
December 2011. 365(23): 2238.
    4. Department of Veterans Affairs Office of Inspector General. 
``Healthcare Inspection Oversight Review of Ophthalmology Adverse Drug 
Events VA Greater Los Angeles Healthcare System Los Angeles, 
California.'' Report No. 12-01515-151 April 12, 2012. http://
www.va.gov/oig/pubs/VAOIG-12-01515-151.pdf. Accessed January 8, 2013.
    5. Thompson, Cheryl A. ``Bacteremia outbreak tied to improper 
filtration by compounding pharmacy.'' American Journal of Health System 
Pharmacy. November 2011. 68(22): 2110-11. http://www.ashp.org/menu/
News/PharmacyNews/News
Article.aspx?id=3628. Accessed January 8. 2011.
    6. Vitello, Barbara. ``Lutheran General to pay $8.25 million in 
baby's death,'' Daily Herald. April 5, 2012. http://
www.dailyherald.com/article/20120405/news/704059806/. Accessed January 
8, 2012.
    7. U.S. Centers for Disease Control and Prevention. ``Deaths from 
Intravenous Colchicine Resulting from a Compounding Pharmacy Error--
Oregon and Washington. 2007,'' Morbidity and Mortality Weekly Report. 
October 12, 2007. 56(40): 1050-52. http://www.cdc.gov/mmwr/preview/
mmwrhtml/mm5640a3.htm. Access-
ed January 8, 2013.
    8. Maragakis LL, Romanee C, Srinivasan A, et al. ``Sphingomonas 
paucimobilis bloodstream infections associated with contaminated 
intravenous fentanyl,'' Emerging Infectious Diseases. January 2009. 
15:12-8. http://wwwnc.cdc.gov/eid/article/15/1/08-1054_intro.htm. 
Accessed January 9, 2013.
    9. Gershman MD, Kennedy DJ, Noble-Wang J, et al. ``Multistate 
outbreak of Pseudomonas fluorescens bloodstream infection after 
exposure to contaminated heparinized saline flush prepared by a 
compounding pharmacy.'' Clinical Infectious Diseases. December 2008. 
47(11): 1372-9. http://cid.oxfordjournals.org/content/47/11/
1372.full.pdf+html. Accessed January 9, 2013.
    10. Institute for Safe Medication Practices. Medication Safety 
Alert. ``Failed check system for chemotherapy leads to pharmacist's no 
contest plea for involuntary manslaughter.'' April 23, 2009. http://
www.ismp.org/newsletters/acute-care/articles/20090423.asp. Accessed 
January 9, 2013.
    11. Grissinger, Matthew RPh, FASCP. ``A Fatal Zinc Overdose in a 
Neonate. Confusion of Micrograms With Milligrams,'' Pharmacy and 
Therapeutics. July 2011; 36(7): 393-94, 409. http://
www.ncbi.nlm.nih.gov/pmc/articles/PMC3171817/. Accessed January 9, 
2013.
    12. Perz, Joseph F, et al. ``Pseudomonas putida Septicemia in a 
Special Care Nursery Due to Contaminated Flush Solutions Prepared in a 
Hospital Pharmacy,'' Journal of Clinical Microbiology. October 2005. 
43(10): 5316-18. http://jcm. asm.org/content/43/10/5316.long. Accessed 
January 9, 2013.
    13. Sunenshine, Rebecca, et al. ``An Outbreak of Postoperative 
Gram-Negative Bacterial Endophthalmitis Associated with Contaminated 
Trypan Blue Ophthalmic Solution.'' Clinical Infectious Diseases. April 
2009. 48(11): 1580-83. http://cid.ox-
fordjournals.org/content/48/11/1580.full. pdf+html. Accessed January 9, 
2013.
    14. Maryland State Board of Pharmacy. ``Order for Summary 
Suspension.'' In the matter of Central Admixture Pharmacy Services, 
Inc. http://www.dhmh
.maryland.gov/pharmacy/docs/FormalOrders/C/C.A.P.S%2011-15-05.pdf. 
Accessed January 9, 2013.
    15. Sunenshine, Rebecca H, et al. ``A Multistate Outbreak of 
Serratia marcescens: Bloodstream Infection Associated with Contaminated 
Intravenous Magnesium Sulfate from a Compounding Pharmacy,'' Clinical 
Infectious Diseases. July 2007. 45: 527-33. http://
cid.oxfordjournals.org/content/45/5/527.full.pdf. Accessed January 9, 
2013.
    16. Held MR, Begier EM, Beardsley DS, et al. ``Life-threatening 
sepsis caused by Burkholderia cepacia from contaminated intravenous 
flush solutions prepared by a compounding pharmacy in another state,'' 
Pediatrics. July 2006. 118:e212-5. http://
pediatrics.aappublications.org/content/118/1/e212.long. Accessed 
January 9, 2013.
    17. Based on two sets of infections, one immediate and one delayed. 
Immediate infection cases included nine in Missouri, 12 in New York, 14 
in Texas, and one in Michigan. Delayed infection cases included 15 in 
Michigan and 13 in South Dakota. Respective cites below.
    U.S. Centers for Disease Control and Prevention. ``Pseudomonas 
Bloodstream Infections Associated with a Heparin/Saline Flush--
Missouri, New York, Texas, and Michigan, 2004-5,'' Morbidity and 
Mortality Weekly Report. March 2005. 54(11): 269-72. http://
www.cdc.gov/mmwr/preview/mmwrhtml/mm5411a1.htm. Accessed January 9, 
2013.
    U.S. Centers for Disease Control and Prevention. ``Update: Delayed 
Onset Pseudomonas fluorescens Bloodstream Infections After Exposure to 
Contaminated Heparin Flush--Michigan and South Dakota, 2005-6,'' 
Morbidity and Mortality Weekly Report. September 2006. 55(35): 961-63. 
http: www.cdc.gov/mmwrm/preview/mmwrhtml/mm5535a2.htm. Accessed January 
9, 2013.
    18. U.S. Centers for Disease Control and Prevention. ``Exophiala 
Infection from Contaminated Injectable Steroids Prepared by a 
Compounding Pharmacy--United States, July-November 2002.'' Morbidity 
and Mortality Weekly Report. December 2002. 51(49): 1109-12. http://
www.cdc.gov/mmwr/preview/mmwrhtml/mm5149a1.
htm. Accessed January 9, 2013.
    19. Civen R, Vugia DJ, Alexander R, et al. ``Outbreak of Serratia 
marcescens infections following injection of betamethasone compounded 
at a community pharmacy.'' Clinical Infectious Diseases. August 2006. 
43: 831-7. http://cid.oxford
journals.org/content/43/7/831.full.pdf+html. Accessed January 9, 2013.
    20. Selenic, D., et al. ``Enterobacter cloacae bloodstream 
infections in pediatric patients traced to a hospital pharmacy,'' 
American Journal of Health System Pharmacy. July 2003. 60(14) 1440-6.

    The Chairman. Thank you, Mr. Coukell.
    And now we'll turn to Mr. Miller. Welcome back. Please 
proceed.

STATEMENT OF DAVID G. MILLER, EXECUTIVE VICE PRESIDENT AND CEO, 
  INTERNATIONAL ACADEMY OF COMPOUND-ING PHARMACISTS, MISSOURI 
                            CITY, TX

    Mr. Miller. Thank you very much, Mr. Chairman. My name is 
David Miller, and on behalf of the International Academy of 
Compounding Pharmacists, it is a pleasure to be back before the 
committee and also to have been actively involved with your 
committee and staff in the creation of this draft proposal.
    I want to keep my comments today focused on three major 
points. One is consistency, one is accountability, and one is 
on patient protection. First and foremost, I want to commend 
the committee for preparing this draft in a manner that gained 
the input of the pharmacy and physician community, the 
veterinary community, and the Food and Drug Administration. I 
think we're close. We're not there yet, but we're close.
    I want to speak first and foremost to the issue of 
consistency and clarity. In the current draft bill, we see that 
there are some significant discrepancies between proposed 
language and what we've already seen either at the State level 
or has been enacted at the State level in the first few months 
of 2013.
    Since the tragedy in Massachusetts began back in October, 
there have been 53 individual State bills introduced and 
actively considered, and some have already been enacted. As 
Senator Mikulski said, in my home State of Maryland, we have 
already moved forward there. Twenty-seven State boards of 
pharmacy are actively overhauling all of their regulations. 
It's very important as we look at this draft language that we 
ensure that the definitions used in the Federal statute that 
will eventually be enacted are consistent with how pharmacy is 
regulated at the State level.
    I'll give you a couple of quick instances. We have talked 
about the preparation of medications in advance of a 
prescription as being one of the potential tests, especially in 
the sterile medication environment, that would place someone 
into this non-traditional manufacturing category, this 
compounding manufacturing category.
    It's important to understand that as compounding 
pharmacists, we do prepare medications before prescriptions are 
received in our practices. The reason we do that is that our 
national standards under the U.S. Pharmacopeia require us to 
prepare batches and test them so that we can be confident in 
their quality.
    So we have to make sure that our definitions and our 
language are consistent from the Federal level and then down 
into the State level. We see that also with a lack of 
recognition of physician office use prescribing, which many 
States have available, and yet the current language that we 
have before us would essentially ignore the existence of that 
and raise questions about the consistency and clarity of the 
application of this language.
    Finally, I also want to point out, under the category of 
clarity, that we have proposed in this legislation that 
veterinary drugs would be regulated in a markedly different way 
than we would humans. For example, on the human side, we would 
continue to have in some manner an expanded do-not-compound 
list. Yet on the veterinary side, we're creating something 
completely different and, again, inconsistent by having a--
these are the ones you can compound.
    So we believe, based especially upon our conversations and 
the testimony that you heard back in November, consistency in 
law at the Federal and State level must be addressed. We're 
close, but not quite there, and some of our recommendations, we 
hope, will be taken into consideration.
    Accountability. I think one of the things that we discussed 
back in November was the simple fact that the pharmacists at 
the New England Compounding Center let their patients down, 
they let their system down, and they let their regulators down. 
We also now know, based on testimony back in November and then 
again most recently from Commissioner Hamburg before the House 
Energy and Commerce Committee, that our regulatory agencies 
also let us down.
    We need to be, in this bill, ensuring that there is 
accountability and transparency of action. Specifically, we are 
very concerned as an organization about the do-not-compound 
list. The Food and Drug Administration has had such a list 
since 2003. That's the last time it's been updated. That's 10 
years ago.
    We now know that there are medications that have been 
withdrawn from the market from traditional manufacturers that 
represent serious public health and safety issues. They don't 
appear on the do-not-compound list. IACP has recommended in its 
comments to the committee that accountability--first and 
foremost, congressional oversight of the agency--must be 
included to assure that everyone's feet are being held to the 
fire.
    Last, patient protection. Our objective as a professional 
organization, as pharmacists that take care of patients on a 
daily basis, is that this does not happen again. No patient, 
regardless of where they are, should expect to have any 
variation in the quality and safety of the medication they 
receive.
    That is one of the reasons we are also strongly opposed to 
any exemption of any type of pharmacy practice. Hold us all 
accountable. Hold us all to the same consistent law. And with 
that, all of us together will be ensured that we can provide 
patients with the protection that they should receive.
    Thank you, sir.
    [The prepared statement of Mr. Miller follows:]
                 Prepared Statement of David G. Miller
    Good morning Chairman Harkin, Ranking Minority Member Alexander and 
Senate HELP Committee members. On behalf of the International Academy 
of Compounding Pharmacists (IACP), I am pleased to stand before your 
committee to offer the insights of the International Academy of 
Compounding Pharmacists (IACP) and our recommendations about the draft 
legislation put forward by the committee. Specifically, IACP wants to 
take this opportunity to comment on the compounding pharmacy 
legislation and how it will likely impact our industry, patients and 
practitioners.
    IACP applauds the steps the committee and the U.S. Senate are 
taking to ensure that compounded medications are as safe as they can 
be. IACP believes that the safety of patients must always be the first 
consideration of any pharmacy-oriented public policy.
    We have reviewed the draft and we see that there are some aspects 
that will need further discussion and refinement, and we intend to work 
with the committee on these. The draft does not contain any provisions 
that speak directly to USP standards, which are aimed at raising the 
quality of compounded medications. Additionally, IACP is concerned that 
some provisions may reduce patient and physician access to customized 
medications, the very services that compounding pharmacists provide.
    IACP reiterates its position that State boards of pharmacy are 
responsible for the licensing and oversight of compounding pharmacies 
and the FDA is responsible for overseeing and regulating pharmaceutical 
manufacturers. We think the term ``compounding manufacturer'' and 
several of the definitions of that new category create more confusion 
and further blur the jurisdictional authority of regulators. IACP will 
recommend improvements in the draft language to make the proposed 
categories more clear.
    Most importantly, IACP is gravely concerned that compounding 
pharmacies located in hospitals and health systems have been exempted 
from many of the proposed changes. Such an exemption denies patients 
and their families the assurance, regardless of where they receive 
their medications, of the quality and safety that they deserve.
    IACP appreciates the opportunity to work with the Senate HELP 
Committee to ensure that a tragedy like the one that occurred last 
year, when compounded preparations dispensed by a Massachusetts 
licensed pharmacy caused an outbreak of fungal meningitis, never 
happens again. It is with that crisis in mind that we have reviewed the 
draft legislation to determine if it will likely prevent a future 
scenario similar to that which occurred with NECC.
    IACP is a non-profit professional association representing more 
than 2,700 pharmacists, technicians, students, and members of the 
compounding community who focus on the specialty practice of pharmacy 
compounding. The IACP is and has been committed to working in 
collaboration with State and Federal officials to ensure the safe 
practice of pharmacy compounding. Our ultimate goal is to ensure 
patient safety, while ensuring continued patient access to compounded 
medication necessary for their particular medical condition.
    In December 2012, the Academy issued a series of recommended 
changes to State pharmacy laws and regulations that it believes will 
both enhance the protection of public health while preserving the 
professional decisionmaking of pharmacists in the selection and 
preparation of customized medication solutions.
    These proposed changes address three key areas: inspection 
authority and adequate funding of all State Boards of Pharmacy; 
compliance with laws and regulations by all pharmacists and pharmacy 
technicians in all practice settings, as well as other health care 
practitioners involved in compounding; and adherence to nationally 
recognized quality standards. As you know, many States have already 
been working to enact or establish new laws and rules governing the 
practice of pharmacy compounding. IACP has been actively involved in 
those efforts in an attempt to strengthen and clarify appropriate and 
safe pharmacy practices. As a matter of fact, IACP has been actively 
engaged in these discussions--not to lessen oversight on pharmacy 
practices, but to encourage maximum patient safety protections, while 
ensuring that compounded medications do not become distinct as a result 
of what NECC--a rogue manufacturer--did.
    IACP take strong issue with the terminology used throughout the 
bill to define the new category of manufacturer as a ``compounding 
manufacturer.'' Not only do we think this causes confusion, but it also 
seems to make the very practice of compounding synonymous with that of 
manufacturing. In fact, the practice of compounding is at the very root 
of pharmacy practice. Thus, IACP recommends that the new category be 
called ``non-traditional manufacturing'' and we have made those edits 
in the attached draft bill.
    We ask the committee to keep in mind that a significant number of 
people have unique health needs that off-the-shelf, one-size-fits-all 
prescription medicines cannot meet. These include children, the 
elderly, and those for who manufactured drug products are not available 
in the appropriate strength, dosage form, or composition. For them, 
customized medications are the only way to better health and those 
valuable preparations are available only by compounding. Thus, there is 
a medical need for variations in medical dosages, delivery forms, the 
removal of excipients, etc. for various patient groups. That is why the 
very practice of compounding exists. IACP urges the committee to 
recognize this and not prohibit physicians from prescribing medications 
needed by both their human and animal patients.
    Unfortunately, there are significant parts of the draft bill that 
have nothing to do with safety, but have to do with curtailing 
competition. IACP is aware that a good part of the anti-competitive 
language (not allowing dosage variations) comes from the large 
pharmaceutical manufacturers on both the human and animal side who wish 
to curtail compounding altogether. IACP hopes that the bill will remain 
focused on the end goal--that being patient safety, not getting rid of 
competition in the marketplace. It is not the time to attack 
compounding pharmacies from a commercial perspective as a result of 
other (monetary) motives. Safety should remain the objective of this 
bill.
    IACP wants to make sure that any final bill moving through the 
Senate balanced in a manner that does not restrict a doctor's ability 
to prescribe and obtain compounded medications for those patients who 
require them as part of their necessary therapy. Moreover, 
manufacturers often discontinue a number of FDA-approved drugs that 
serve a limited population. In many of these cases, the only option 
left for doctors and their patients is to have a compounding pharmacist 
make the discontinued drug pharmaceutical grade ingredients obtained 
from an FDA-registered supplier.
    IACP remains concerned about language in the bill that further 
brings practices under the domain of manufacturing.

          (ii) that repackages a drug using sterile preservative-free 
        single-dose vials or by pooling sterile drugs.

    This is problematic for several reasons. Under this language, 
physicians who repackage in their offices would automatically become 
manufacturers. Additionally, this language was clearly added at the 
behest of a pharmacy manufacturer which has been trying to deter 
doctors from prescribing one of their drugs in lieu of another of their 
more expensive products. This language seems to have been added for 
competitive reasons, rather than safety reasons. This provision would 
also include a large number of home infusion pharmacies who fall under 
these criteria (the pooling provision) for administration of parenteral 
nutritional therapies. They would, under this provision, have to 
register and comply with the law as a manufacturer. IACP strongly 
recommends that this section be stricken.
    While the IACP continues to strongly believe that the regulation of 
compounding should continue to be overseen by State Boards of Pharmacy 
and that improvements may need to be made to current State pharmacy 
laws (many States have already made changes, which IACP urges the 
Senate not to make moot), we understand the importance in determining 
what greater clarity in differentiating between drug compounding and 
drug manufacturing may be needed.
    What we find interesting about this bill is the fact that you are 
taking away two existing regulatory authorities and streamlining it 
under one--the FDA (whose track record is not at all impressive--take 
Ameridose and their many problems as an example).
    State Boards of Pharmacy, through their ongoing regular 
inspections, knowledge of unique State laws, regulations and rules, as 
well as having practicing pharmacists as their members who are engaged 
in day-to-day patient care, are in the best possible position to 
determine whether a pharmacy has exceeded its scope of practice or 
engaged in activities that may constitute manufacturing. That said, 
IACP recognizes that the oversight and regulation of prescription drug 
manufacturing rests with FDA, and that the Agency has the authority to 
identify and require the registration of any entities it believes are 
engaged in such activity.
    IACP believes that language should be included in the legislation 
which requires a clear (and formal) exchange of information from the 
FDA to the State Boards and in the reverse--from the State Boards to 
the FDA if and when a pharmacy may be suspected of operating outside 
the parameters of pharmacy practice. Efficient and effective 
communication with State Boards of Pharmacy is essential to prevent the 
Agency's unilateral determination that a pharmacy's professional and 
business activities exceed the State specified scope of practice. 
Without such coordination any proposal is unlikely to achieve its goal 
or to improve public health safety.
    The Academy also believes that some language contained in the bill 
micromanages the State Boards of Pharmacy on issues related to ``office 
use'' and ``anticipatory compounding.'' Since many States have already 
taken action to address these issues, IACP does not believe it is 
appropriate for the Federal Government to regulate the practice of 
pharmacy. By specifically requiring only patient-specific prescriptions 
as part of the ``test'', the FDA appears to circumvent those individual 
State's laws, regulations and rules that enable prescribers to obtain 
compounded preparations for administration to or treatment of patients 
within their practices.
    Office-use dispensing is the preparation, labeling, and dispensing 
of a medication by a pharmacist and pharmacy upon the receipt of a 
prescription or medical order from an identified authorized prescriber 
(e.g. physician, nurse practitioner, dentist, veterinarian, etc.) for 
that prescriber's use in the treatment of or administration to a 
patient during their normal course of medical practice. Office-use 
dispensing includes both manufactured prescription drug products and 
compounded preparations. Many States currently have provisions 
permitting office-use dispensing and other States are actively 
reviewing, clarifying, and issuing regulations on this very issue. 
Under the FDA concept, those appropriate State actions would 
essentially be nullified.
    With regard to anticipatory compounding, the mere act of preparing 
a compounded medication prior to the receipt of a valid prescription or 
medical order issued by an authorized prescriber incorrectly places the 
focus on the preparation, rather than on the dispensing, shipment or 
distribution of a compounded medication. The true test should be 
whether or not a pharmacy has distributed a prescription medication in 
the absence of such a prescriber directive as defined within State law. 
This is a much more appropriate test as it provides a potentially more 
accurate indicator of activities that may be deemed drug manufacturing.
    IACP strongly opposes the draft bill's exclusion of health system 
pharmacies. We would note that health systems were the primary client 
of NECC and they purchased these injections in large quantities, 
without a patient script and without a doctor's order. In addition, 
they purchased these medications due to their low cost--not because of 
their quality. All legislation or regulation pertaining to compounding 
should cover all pharmacy practices, whether they are free-standing or 
located within a hospital or health care facility. There is no reason 
that patients within a hospital system should receive a substandard of 
care and safety. Indeed, many hospital patients assume they are more 
protected in health system environments when this has simply not been 
the case. ALL patient populations should be equally protected either 
within or without a hospital system. Exempting any practice site, such 
as hospitals, creates two distinctly different categories of patient 
safety protection. This is especially questionable in light of the 
volume and types of compounding done in hospital pharmacies, a 
substantial amount of which includes sterile compounded preparations.
    Additionally, by creating a large loophole in a law designed to 
enhance safety for patients, the true goal of patient care is not 
achieved for all patients. Additionally, health systems are actively 
purchasing and acquiring other practices--they would, thus, fall into a 
different category and would no longer have to be compliant with this 
Act. The language also creates a potential concern for the Federal 
Trade Commission regarding restraint of trade and one could argue that 
this language allows for an uneven playing field and potential danger 
to patients in those health systems. Please see the attached documents 
discussing the rate of infection in health systems and the sheer volume 
of sterile compounding done in these institutions.
    IACP urges the committee (if the goal is to truly enhance safety 
for all patients) to consider the implications of such an exemption on 
public safety and the perception of exempting any entity on the mere 
basis that it is located in a hospital or health care facility. While 
we understand that the application of any new rules and regulations may 
have to be modified to take into consideration other existing 
regulatory agencies and quality assurance agencies that oversee 
hospital safety and practices (i.e., the Joint Commission), such a 
challenge is manageable and should not outweigh the overall interest in 
ensuring patient safety.
    With respect to an identifying label, IACP has formal guidelines 
for its members that requires all compounded preparations be labeled as 
such so that the prescriber and/or patient is readily aware that the 
medication has been compounded. IACP supports the labeling language 
included in the draft bill.
    The IACP continues to point out that the recommendation to create 
and maintain a ``do not compound'' list by the FDA based upon patient 
safety already exists under FFDCA section 503A(d)(1). Such a list was 
created by the Agency and is continually promoted to the compounding 
profession by the IACP to educate its members and others. The Academy 
respectfully points out to the committee that even given such authority 
under section 503A(d)(1), the Agency has not updated the current ``do 
not compound'' list in more than 10 years. The draft bill neglects to 
require a regular review and update of this list (allowing for public 
comment). IACP recommends that--given the fact the FDA has largely let 
this list lapse, that such language be included in the bill. In fact, 
several manufactured FDA-approved drug products have been withdrawn 
from the market for reasons of significant threat to patient safety; 
the Agency has never included those medications on the existing ``do 
not compound'' list. IACP believes that any changes to this list must 
be done in an open, structured and, most importantly, timely manner 
that solicits and accepts the position and opinions of the medical and 
pharmacy community. IACP also believes that if the collective 
professional community and the FDA determine that a product should not 
be compounded due to evidence of patient safety, it should also not be 
available from a manufacturer.
    With regard to animal drug compounding, IACP strongly believes that 
the laws and regulations governing human compounding should be 
synonymous with those governing animal drug compounding. IACP believes 
that the bill should include language to statutorily permit compounding 
with bulk ingredients for both human and animals. The FDA should be 
allowed to continue to produce a list of permitted bulk drugs in food-
producing animals only. IACP does not believe there should be a 
``positive list'' developed by the FDA to allow certain specified 
ingredients from which animal compounds could be formulated. Rather, it 
should maintain the same ``negative'' list it does for the human side 
detailing those ingredients which have been removed from the market for 
safety or efficacy reasons and, thus, which should not be used in 
veterinary compounding. This would make human and veterinary 
compounding laws and regulations consistent and far less confusing.
    IACP applauds the steps the committee and the U.S. Senate are 
taking to ensure that compounded medications are as safe as they can 
be. IACP believes that the safety of patients must always be the first 
consideration of any pharmacy-oriented public policy.
    We have reviewed the draft and we see that there are some aspects 
that will need further discussion and refinement, and we intend to work 
with the committee on these. The draft does not contain any provisions 
that speak directly to USP standards, which are aimed at raising the 
quality of compounded medications. Additionally, IACP is concerned that 
some provisions may reduce patient and physician access to customized 
medications, the very services that compounding pharmacists provide.
    IACP reiterates its position that State boards of pharmacy are 
responsible for the licensing and oversight of compounding pharmacies 
and the FDA is responsible for overseeing and regulating pharmaceutical 
manufacturers. We think the term ``compounding manufacturer'' and 
several of the definitions of that new category create more confusion 
and further blur the jurisdictional authority of regulators. IACP will 
recommend improvements in the draft language to make the proposed 
categories more clear.
    Most importantly, IACP is gravely concerned that compounding 
pharmacies located in hospitals and health systems have been exempted 
from many of the proposed changes. Such an exemption denies patients 
and their families the assurance, regardless of where they receive 
their medications, of the quality and safety that they deserve.
    In closing, IACP applauds the committee for addressing areas of 
Federal law that may need to be updated and clarified. Again, IACP 
would also urge you to not lose sight of the fact that pharmacy 
compounding is vital to our health care system and to ensuring patient 
access to appropriate medications for a variety of medical conditions. 
We appreciate the opportunity to provide our testimony to the committee 
on its draft bill and look forward to continuing our work with you on 
this important issue.

    The Chairman. You meant in terms of intra-state as well as 
interstate?
    Mr. Miller. Intra-state.
    The Chairman. Yes, I just wanted to make that clear.
    Dr. Thompson, welcome back. Please proceed.

STATEMENT OF KASEY K. THOMPSON, PharmD, VICE PRESIDENT, OFFICE 
  OF POLICY, PLANNING AND COMMUNICATIONS, AMERICAN SOCIETY OF 
            HEALTH-SYSTEM PHARMACISTS, BETHESDA, MD

    Mr. Thompson. Good morning, and thank you, Chairman Harkin, 
Ranking Member Alexander, and distinguished members of the 
committee, for holding this hearing. My name is Kasey Thompson, 
and I serve as vice president for Policy, Planning, and 
Communications with the American Society of Health-System 
Pharmacists. I'm here today to provide ASHP's perspective on 
the committee's draft proposal on pharmaceutical compounding.
    As stated in previous testimony, in the interest of patient 
safety, ASHP supports closing the regulatory gaps for a 
category of commercial compounding outsourcers we are now 
referring to as compounding manufacturers. We applaud the 
committee's efforts to accomplish closing these gaps.
    We believe this proposed legislation addresses the 
regulatory uncertainties that were caused through various 
challenges to Section 503(A) of the Food and Drug 
Administration Modernization Act of 1997. Importantly, the 
committee's proposal leaves traditional compounding as a core 
component of the practice of pharmacy under the purview of 
State boards of pharmacy.
    ASHP strongly supports the creation of a category known as 
compounding manufacturer, which would fall completely within 
the purview of the FDA. We further agree that not allowing a 
compounding manufacturer to register as a pharmacy in any State 
establishes a clear boundary between FDA jurisdiction and the 
jurisdiction of State boards of pharmacy. Being under the 
purview of the FDA gives the public the certainty of knowing 
exactly which regulatory body is accountable and will help 
prevent an entity like the New England Compounding Center from 
inappropriately operating as a pharmacy ever again and harming 
our patients.
    The proposed legislation assures hospital and health system 
pharmacists, physicians, and other purchasers of compounded 
products that compounding manufacturers that prepare sterile 
products have taken the necessary steps to ensure their 
facilities meet the most rigorous current good manufacturing 
practices, have been inspected by the FDA, and, most 
importantly, do not pose a threat to the patients due to 
inadequate regulatory oversight.
    ASHP agrees that commercially available products should not 
be compounded except to meet specific medical needs or if they 
are placed by the FDA on its drug shortage list. Furthermore, 
there should not be any loopholes in the law that would enable 
an entity to circumvent the drug approval process. We believe 
that the current drug approval process for new and generic 
drugs should be preserved as the gold standard and in no way 
minimized or circumvented.
    ASHP supports the provision that exempts health systems 
from being designated as compounding manufacturers. We believe 
it is critical to make the distinction between health systems, 
which are fully accountable for the comprehensive care of the 
patient, and a compounding manufacturer that prepares and sells 
its products across State lines without a prescription or 
knowledge of the patient to a third party for administration.
    In a hospital or health system, the same entity that 
compounds the medication is also responsible for the care of 
the patient. No medication compounded or otherwise prepared is 
administered to the patient unless there is a patient specific 
medication order.
    Compounded medications prepared by pharmacy departments and 
all other medications used in hospitals and health systems are 
prescribed or ordered based on established relationships with 
the medical staff and other prescribers, all of whom are 
formally credentialed and privileged by the hospital or health 
system. Further, hospitals and health systems are not engaged 
in the retail sale of compounded products to other entities, 
but instead prepare and purchase compounded products for use on 
the patients being cared for in their hospital, health systems, 
and clinics.
    Now, in the highly unlikely event that a hospital or health 
system ever did want to sell a sterile compounded product by 
engaging in interstate commerce to an outside entity that is 
not part of their system, then we believe the proposed 
legislation as it is currently written would require them to 
become listed as a compounding manufacturer, which we would 
support.
    What makes this scenario highly unlikely is that a hospital 
or health system that becomes a compounding manufacturer would 
then not be allowed to be a pharmacy, which would prevent them 
from accomplishing their patient care mission. Hospitals are in 
the business of caring for patients, not manufacturing 
pharmaceuticals.
    Hospitals also have pharmacy and therapeutics committees 
comprised of medical, administrative, and pharmacy staff that 
allow safe and effective products to be placed on their 
approved drug formularies. They also have well-established 
quality improvement, infection control, and risk management 
committees, as well as adverse event monitoring and reporting 
systems.
    Another distinguishing factor for health systems is that 
they must comply with CMS Hospital Conditions of Participation 
and are accredited by quality improvement organizations such as 
the Joint Commission. These are just a few of the examples of 
how hospitals and health systems function differently from 
other care settings and are, therefore, appropriately excluded 
from the class of compounding manufacturer in the draft 
legislation.
    In closing, I want to thank you, Chairman Harkin and 
Ranking Member Alexander, for the bipartisan leadership that 
you have demonstrated in the interest of protecting the public 
health and for holding this hearing and putting forth a 
thoughtful and well-developed proposal. ASHP believes this 
proposal provides the proper pathway forward to protect 
patients and to ensure that a harmful event like the meningitis 
outbreak of 2012 will never happen again. We are completely 
committed to working with you and the committee to see that 
this legislation gets passed into law.
    Thank you.
    [The prepared statement of Mr. Thompson follows:]
            Prepared Statement of Kasey K. Thompson, PharmD
                                summary
    The American Society of Health-System Pharmacists (ASHP) supports 
the draft legislation put forth by the Senate Committee on Health, 
Education, Labor, and Pensions in the wake of the Meningitis Outbreak 
of 2012 caused by tainted sterile products prepared by the New England 
Compounding Center. We believe the draft addresses the regulatory 
uncertainty that currently exists between State boards of pharmacy and 
the Food and Drug Administration (FDA) over sterile preparation 
entities that engage in interstate commerce of their products and do so 
without a prescription. In addition, the committee's proposal leaves 
traditional compounding as a core component of the practice of pharmacy 
under the sole purview of the State boards of pharmacy.
    ASHP strongly supports the creation of a category known as 
``compounding manufacturer,'' which would fall completely within the 
purview of FDA. We further agree that not allowing a compounding 
manufacturer to register as a pharmacy in any State establishes a clear 
boundary between FDA jurisdiction and the jurisdiction of State boards 
of pharmacy. The proposed legislation assures hospital and health-
system pharmacists, physicians and other purchasers of compounded 
products that compounding manufacturers that prepare sterile products 
have taken the necessary steps to ensure their facilities meet rigorous 
standards and have been inspected by the FDA.
    ASHP supports the provision that appropriately exempts health 
systems from being designated as a compounding manufacturer. Hospitals 
are fully accountable for the comprehensive care of their patients and 
do not introduce compounded products into interstate commerce. Further, 
we support the do not compound list, user fees, adverse event 
reporting, and the prohibition of compounding commercially available 
drugs except for those in shortage.
                                 ______
                                 
    Good morning and thank you Chairman Harkin, Ranking Member 
Alexander, and distinguished members of the committee, for holding this 
hearing. My name is Kasey Thompson, and I serve as vice president of 
Policy, Planning and Communications at the American Society of Health-
System Pharmacists (ASHP). I am here today to provide ASHP's 
perspective on the committee's draft proposal on pharmaceutical 
compounding.
    As stated in previous testimony, in the interest of patient safety, 
ASHP supports closing the regulatory gaps for a category of commercial 
compounding outsourcers that we now refer to as ``compounding 
manufacturers,'' and we applaud the committee's effort to accomplish 
closing these gaps.
    We believe this proposed legislation addresses the regulatory 
uncertainties that were caused through the various challenges to 
Section 503A of the Food and Drug Administration Modernization Act of 
1997. Importantly, the committee's proposal leaves traditional 
compounding as a core component of the practice of pharmacy under the 
sole purview of State boards of pharmacy.
    ASHP strongly supports the creation of a category known as 
``compounding manufacturer,'' which would fall completely within the 
purview of FDA. We further agree that not allowing a compounding 
manufacturer to register as a pharmacy in any State establishes a clear 
boundary between FDA jurisdiction and the jurisdiction of State boards 
of pharmacy. Being under the purview of the FDA gives the public the 
certainty of knowing exactly which regulatory body is accountable, and 
will help prevent an entity like the New England Compounding Center 
from inappropriately operating as a pharmacy ever again.
    Simply put, we believe the committee got it right with this 
proposed legislation. The proposed legislation assures hospital and 
health-system pharmacists, physicians, and other purchasers of 
compounded products that compounding manufacturers that prepare sterile 
products have taken the necessary steps to ensure their facilities meet 
the most rigorous Current Good Manufacturing Practices, have been 
inspected by the FDA, and most importantly, do not pose a threat to our 
patients due to inadequate regulatory oversight.
    Under the proposal, health care providers will have the assurance 
that if they purchase an out-source sterile product from a compounding 
manufacturer, wherever it is located throughout the country, that the 
product they purchase has come from an FDA-inspected and FDA-approved 
facility. We also agree that a compounded drug sold to a health care 
entity by a compounding manufacturer should be labeled ``not for 
resale.''
    ASHP agrees that commercially available products should not be 
compounded except to meet specific medical needs or if they are placed 
by the FDA on its drug shortage list. Furthermore, there should not be 
any loopholes in the law that would enable an entity to circumvent the 
drug approval process. We believe that the current approval processes 
for new and generic drugs should be preserved as the gold standard, and 
in no way minimized or circumvented.
    ASHP supports the provision that exempts health systems from being 
designated as compounding manufacturers. We believe it is critical to 
make the distinction between health systems--which are fully 
accountable for the comprehensive care of the patient--and a 
compounding manufacturer that prepares and sells its products across 
State lines without a prescription or knowledge of the patient to a 
third party for administration.
    In a hospital or health system, the same entity that compounds the 
medication is also responsible for the care of the patient. No 
medication, compounded or otherwise prepared, is administered to the 
patient unless there is a patient-specific medication order. Compounded 
medications prepared by pharmacy departments and all other medications 
used in hospitals and health systems are prescribed or ordered based on 
established relationships with the medical staff and other prescribers, 
all of whom are formally credentialed and privileged by the hospital or 
health system. Further, hospitals and health systems are not engaged in 
the retail sale of compounded products to other entities, but instead 
prepare and purchase compounded preparations for use on the patients 
being cared for in their hospital, health system, and clinics.
    Hospitals also have Pharmacy and Therapeutics Committees comprised 
of medical, administrative, and pharmacy staff that only allow safe and 
effective products to be placed on their approved drug formularies. 
They also have well-established quality improvement, infection control, 
and risk management committees as well as adverse event monitoring and 
reporting systems. Another distinguishing factor for health systems is 
that they must comply with CMS Hospital Conditions of Participation, 
and are accredited by quality improvement organizations such as The 
Joint Commission and DNV Healthcare, both of whom have deemed status 
with Medicare. These are just a few examples of how health systems 
function differently than other care settings and are therefore 
appropriately excluded from the class of compounding manufacturers in 
the draft legislation.
    We support the definition of ``health system'' in the provision in 
the bill that defines traditional compounder. However, it may need to 
be revised to reflect contemporary health systems that include 
ambulatory clinics and infusion centers under their common control. We 
have submitted comments to the committee that raise this point and look 
forward to working with other hospital organizations and committee 
staff to resolve this need for language that reflects the various 
components of today's health systems.
    ASHP supports the provisions in the draft legislation that grant 
FDA the authority to designate a list of drugs that should not be 
compounded. There are complex medications with mechanisms of action or 
delivery systems that should not ever be compounded. In addition, we 
agree that the FDA should identify bulk substances that should not be 
used in compounding.
    We agree with the draft language requiring compounding 
manufacturers to report adverse drug events to the FDA MedWatch program 
and to have a licensed pharmacist directly supervising the compounding 
operations.
    Finally, we support the establishment of user fees for compounding 
manufacturers in order to provide the FDA with adequate resources to 
regulate their activities. We also ask that Congress continue to 
consider increasing FDA's budget appropriation so that it can fulfill 
its vast global public health mission.
    In closing, I want to again thank you Chairman Harkin and Ranking 
Member Alexander for the bipartisan leadership you have demonstrated in 
the interest of protecting the public health, and for holding this 
hearing and putting forth a thoughtful and well-developed legislative 
proposal. ASHP believes this proposal provides the proper pathway 
forward to protect patients and ensure that a harmful event like the 
meningitis outbreak of 2012 will never happen again. We are completely 
committed to working with you to help get this important legislation 
passed into law.
    Thank you.

    The Chairman. Thank you very much, Dr. Thompson.
    We'll now start a round of 5-minute questions. I'll start 
with Mr. Catizone and go right down.
    Does this legislation create a clear line regarding which 
entities FDA would regulate?
    Mr. Catizone. Yes, sir.
    The Chairman. Mr. Coukell.
    Mr. Coukell. Yes.
    The Chairman. Mr. Miller.
    Mr. Miller. Yes, with some definitions.
    The Chairman. Dr. Thompson.
    Dr. Thompson. Yes.
    The Chairman. Does the draft provide FDA the tools it needs 
in terms of both authorities and resources to oversee the 
pharmaceutical compounding?
    Mr. Catizone. Yes, sir.
    Mr. Coukell. It provides some of the tools and a mechanism 
for resources. As I mentioned in my testimony, we think that 
the FDA may need greater access to records to be able to 
oversee the facilities it is charged with.
    The Chairman. Mr. Miller.
    Mr. Miller. We believe so.
    The Chairman. And Dr. Thompson.
    Dr. Thompson. We think it provides the adequate resources 
through user fees. However, we continue to have concerns about 
the general funding to the FDA through appropriations to 
fulfill its public health mission, in general.
    The Chairman. We all have that concern.
    Mr. Catizone, let me ask you this now. When a State 
identifies a problem with a compounding pharmacy that is 
regulated by another State, what's the best way for that 
problem to be communicated to the regulating State? Does FDA 
have a role? Should the States talk directly to each other? Is 
this where the National Association of Boards of Pharmacy could 
be helpful? Help me to think this thing through.
    Mr. Catizone. Yes, sir. Prior to the NECC situation, that 
communication channel was not effective. What we've now done is 
built the communication channels between the States through 
NABP, so when that happens, it's immediately reported to us, 
and we report it to all the other States. We will continue to 
implement and operate that system.
    The Chairman. There is one lingering thing here, and maybe 
between Mr. Miller and Dr. Thompson--I can't remember exactly 
who. But Mr. Miller has testified that health systems should 
not be exempt--that we should put them all together--from being 
compounding manufacturers. Dr. Thompson testified in support of 
the exemption.
    Mr. Catizone, where do you weigh in on this?
    Mr. Catizone. We support the exemption because of the 
safety nets and oversight processes that exist within that 
shared one-ownership system among the hospitals.
    The Chairman. Mr. Coukell, do you have a view on this?
    Mr. Coukell. If the question is whether a hospital pharmacy 
should be a pharmacy or a compounding manufacturer, clearly, 
they should be a pharmacy. As Dr. Thompson has mentioned, there 
are a number of additional mechanisms within a health system 
that ensure quality.
    The Chairman. I'm not sure I understand that. If they are 
compounding, if a hospital is compounding, and they're not 
shipping it interstate or anything like that, but it's within 
their system, should they be exempted from being a compounding 
manufacturer?
    Mr. Coukell. Yes. We support the exemption.
    The Chairman. I see.
    Mr. Miller, you don't? Or what?
    Mr. Miller. If we go upon the definitions that have been 
created in the draft legislation to define a compounding 
manufacturer--the preparation of a sterile medication, the 
dissemination of that product intra-state, and without a 
previously issued prescription--then it doesn't matter whether 
that's a community-based pharmacy or a pharmacy that's 
affiliated with a health system. It should be consistently 
applied across the board. That is how you've defined a 
manufacturer as opposed to a traditional compounding pharmacy, 
be it local, be it in a hospital. I think we need to keep 
consistent.
    The Chairman. Dr. Thompson.
    Dr. Thompson. We clearly support the exemption. And, as I 
noted, I don't think hospitals are completely exempt here. If a 
hospital were to engage in preparing a product for commercial 
sale, and they sold that outside of their system, clearly, they 
should be required to be registered as a compounding 
manufacturer.
    The Chairman. We understand that. But I think Mr. Miller is 
talking about a hospital that compounds for its own internal 
use.
    Dr. Thompson. Yes. I don't agree with that, obviously. I 
mean, I think a hospital that----
    The Chairman. Why shouldn't they? Give me some help here. 
Why not?
    Dr. Thompson. As I just stated in my testimony, a hospital 
is fully accountable for the care of that patient. This is an 
apples to oranges comparison. A hospital is not a manufacturer. 
A hospital is a patient care entity that's preparing a product 
and doing procedures for the patients they serve. They're not 
preparing large amounts of product and storing it in a 
warehouse for long periods of time. They're preparing that 
product in clean room conditions, taking it to the floor, 
administering it to that patient by licensed healthcare 
professionals that are accountable for that patient.
    The Chairman. Do you have anything to add to that, Mr. 
Miller?
    Mr. Miller. Fundamentally, Mr. Chairman--and I thank you 
for pushing this issue. We have an image of a hospital as being 
the red brick building in our local community, and that's where 
hospital pharmacists practice, and we take care of patients 
within the facility. Today's modern health system is markedly 
different. For example, Johns Hopkins University now has 
hospitals throughout the State of Maryland, clinics, and home 
infusion and long-term care subsidiaries that operate 
throughout the mid-Atlantic region.
    If we are to stop what happened at NECC where a business 
shipped medications interstate without prescriptions and not 
following the State law, whether that was a hospital pharmacy 
transferring it from the Baltimore campus to a clinic in 
Richmond, VA, we believe that that action is the same as you 
have defined for a compounding manufacturer.
    My colleague at ASHP referenced retail or commercial sale. 
It shouldn't matter whether it's a sale associated with 
dollars. It is the movement and accountability of who is 
responsible ultimately for that medication. So, no, we would 
oppose the exemption.
    Mr. Catizone. Mr. Chairman, may I add, please?
    The Chairman. Mr. Catizone, my time has run out, but--fine. 
Go ahead.
    Mr. Catizone. Two quick points as to why we think it should 
be exempted. No. 1, there is a patient prescription. It's 
within that closed system. It exists. Every aspect of that 
prescription is reviewed by the hospital. Drug interactions and 
contraindications are reviewed prior to that being dispensed.
    No. 2, there are systems within that hospital system to 
make sure the product is properly prepared. And if there's a 
problem, there are infectious disease committees and other 
mechanisms to contain that within that system, react to that, 
identify the cause, and act appropriately.
    The Chairman. Thank you. My time has run out.
    Senator Alexander.
    Senator Alexander. Mr. Catizone, just so I understand our 
own draft here, if I'm a local drugstore in Tennessee, and I'm 
compounding a drug, and it's a sterile drug, and I have a 
specific prescription, and it's not on the do-not-compound 
list, I can still do that. Is that correct?
    Mr. Catizone. Yes, sir.
    Senator Alexander. Is that right, Mr. Miller?
    Mr. Miller. Yes, sir.
    Senator Alexander. So we're not interfering with that with 
the draft bill.
    Mr. Catizone, you say that you think the FDA also ought to 
take over the shipment within a State, intra-state shipment, of 
sterile compounded drugs without a prescription.
    Mr. Catizone. Yes, sir.
    Senator Alexander. Do you want to amplify that?
    Mr. Catizone. Yes, sir. As I said, we've been in over 150 
pharmacies, and we've seen intra-state pharmacies as well as 
interstate pharmacies, and the risks are the same--large 
quantities, not following standards. And so if we just exempt 
the intra-state, we're going to put people at risk in that 
State to the same problems that we encountered before this 
incident.
    Senator Alexander. Mr. Miller, do you have an opinion?
    Mr. Miller. Senator Alexander, I'm sorry, but I feel like 
I'm on your flagpole, because that was a point you made before 
today and back in November. Intra-state shipment, intra-state 
compounding, is regulated by the State board of pharmacy.
    Senator Alexander. Within a State.
    Mr. Miller. Within, intra. That's right. And that's how the 
staff has worked, and this draft legislation appears to 
adequately define a traditional compounder. I disagree with my 
colleague at NABP. If it's intra-state, it belongs to the 
State.
    At the same time, the minute it goes over the State line, 
then we have someone else on the flagpole, and that becomes the 
Food and Drug Administration. And that's, again, why we 
disagree with the concept of exempting a hospital. You move it 
out of the State, over the State line, that's when it becomes 
somebody else's regulatory authority.
    Senator Alexander. Mr. Catizone, you thought the FDA 
should--basically, there are some things in the draft that the 
FDA still could do with local drugstores that you thought ought 
to be out of the draft. Right?
    Mr. Catizone. Yes, sir.
    Senator Alexander. Say that again. And I gather your point 
was that--that was the clarity point, to keep them--either 
they're going to be there, or they're not going to be there. 
Was that it?
    Mr. Catizone. Yes, sir.
    Senator Alexander. Say that again.
    Mr. Catizone. Yes, sir. By allowing the FDA access to 
records and giving them some authority over the State regulated 
activities, that's going to cause confusion. And let me use Dr. 
Miller's example that he used with the hospital exemption. If 
they're engaged in manufacturing, whether it's a hospital or a 
community pharmacy, he said that they should be regulated the 
same.
    We're making the same contention with the exemption for 
intra-state. If they're manufacturing, they're not compounding. 
If there's not a prescription, and if it's sterile, it's not 
compounding. If they're compounding intra or inter, that should 
be State authority. But if they're manufacturing, inter or 
intra, that's the FDA.
    Senator Alexander. But on the first point, you say that if 
the FDA is given the authority to come in and inspect records 
of a local pharmacy that it doesn't otherwise regulate, that 
that adds confusion.
    What do the rest of you think about that point?
    Mr. Coukell. I think if the Agency goes into a pharmacy as 
it does now, and it sees a product sitting in a sterile hood, 
they can't tell by looking at that product whether there's a 
prescription, whether it's being sold across State lines. So 
it's hard to carry out the responsibilities here without the 
ability to access those records.
    Senator Alexander. Mr. Miller, Dr. Thompson.
    Mr. Miller. Two thoughts, Senator. First, section 704(A) 
has been in the statute since 1962, and the Agency has always 
had the ability through a regulatory administrative practice to 
obtain a court order or a subpoena or an administrative warrant 
to access those records. In the current environment, the State 
boards of pharmacy, who already have access to those records, 
are in cooperation with the FDA. We don't believe additional 
changes to a statute that has actually worked for a very long 
time are really mandated.
    Senator Alexander. Dr. Thompson.
    Dr. Thompson. I think records, for the sake of inspecting 
records, should stay within the State. I think if the FDA has 
cause, if there's an identified risk, a contamination or 
something like that, that they shouldn't be prohibited from 
inspecting records.
    Mr. Catizone. Senator Alexander, could I just add one 
point, please?
    Senator Alexander. Yes.
    Mr. Catizone. The FDA has justification for making this 
request. So I would ask a consideration of the committee and 
then make a commitment to the committee. The States have not 
followed through in making that distinction between compounding 
and manufacturing in all the cases. And the FDA has been faced 
with dealing with that situation, and that's why they're 
requesting access. We see that situation, and we know we have 
to work with the States to repair that.
    The consideration is the legislation as written is 
excellent. If we can move forward, and we can work with the 
States to repair that situation, then we would like a try to do 
that. If we can't, the commitment we're making is that we would 
come back to this committee and say, ``The States have failed. 
They're not doing what they're supposed to be doing in this 
regard. Please turn this over to the FDA.''
    Senator Alexander. Mr. Chairman, I want to ask just one 
question of Mr. Miller.
    Mr. Miller, do you support this new category of compounding 
manufacturing? Do you just object to the name, or do you object 
to the new category?
    Mr. Miller. No, sir. We kind of object to the name, which 
is why we refer to them as a non-traditional manufacturer.
    Senator Alexander. But you don't object to the new category 
as a way to create accountability.
    Mr. Miller. With some minor modifications to the 
definitions. The conceptual--absolutely. In fact, in our 
original testimony and as we have consistently stated, the FDA 
has authority over drug manufacturing in the United States, 
period. There's no question about that. We need to refine that 
flagpole, or that bright, clear line that says when does a 
compounding pharmacy exceed its scope of practice, as was the 
case in Massachusetts.
    The board of pharmacy makes that determination and says, 
``You're a manufacturer. You're no longer being a pharmacist.'' 
And that is the privilege of the board to tell me when my 
license has been exceeded, and then turn me over to the FDA as 
a manufacturer.
    The Chairman. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman. I just want to 
examine some more of the role that State boards should play in 
overseeing the traditional compounding pharmacies. Obviously, 
this law anticipates that for intra-state work, this is going 
to be done entirely at the State level, and the same for 
interstate shipment of non-sterile products.
    So following the outbreak at NECC in Massachusetts and the 
terrible events that resulted from that, my colleague, 
Congressman Ed Markey, from Massachusetts and his colleagues in 
the house launched an investigation just to determine what 
State pharmacies are doing in terms of overseeing these 
compounding labs.
    I just want to read you some of the findings from the 
Markey report.

          ``No State boards of pharmacy require the pharmacies 
        to disclose the amount of drug they are compounding or 
        whether they're sold across State lines. Thirty-seven 
        State boards don't track which pharmacies are 
        performing sterile compounding. On average, States 
        employ five inspectors with responsibility for 
        inspecting all pharmacies, including the compounding 
        pharmacies.''

    That's five.
    In Massachusetts, that's 1,179 pharmacies. In larger 
States, the number can be upwards of 2,000 pharmacies, with 
five inspectors, on average. And here's the one that really got 
me. ``Less than a quarter of the State boards provide 
inspectors any training to detect problems with sterile 
compounding.''
    So, given that that's the current state, my question is: 
What permanent changes do the States need to make in order to 
coordinate with the Federal law so that we really have some 
assurance that we have a comprehensive system that keeps all of 
our patients safe?
    You're nodding your head, Mr. Miller. So I'll start with 
you.
    Mr. Miller. Thank you, Senator Warren. And I have to tell 
you the Commonwealth of Massachusetts actually had in place 
some of the best and most restrictive compounding pharmacy laws 
in the entire country. It is, indeed, a tragedy that this 
pharmacy intentionally concealed some of its actions from both 
State and Federal inspectors, and then even more so continued 
to operate in violation of those laws. How do we fix this?
    Senator Warren. But I have to interrupt you there, Mr. 
Miller, just to point out that we've done subsequent 
inspections and found that there continue to be--even after 
this tragedy, even after all the heightened awareness, there 
continue to be substantial violations of the basic rules of 
keeping these products clean and safe for consumers. So this is 
not a one off that we have a problem with.
    Mr. Miller. No, I agree. Within the Commonwealth itself, 
and also in some of the other States, as Congressman Markey's 
report showed, we did not have regular inspections of 
compounding pharmacies. What we are seeing now in Massachusetts 
and in other States--where the boards are taking this 
seriously, hiring the necessary individuals with the proper 
training to conduct those inspections--is that we are 
uncovering things that should have been uncovered long ago.
    So IACP, as a professional organization, immediately, in 
the fall, began putting out positions that our States need to 
take, fully fund, and hold our boards of pharmacy accountable 
for performing their responsibility, which is protecting the 
patients within the State.
    Senator Warren. And how many States are now in compliance 
with your suggestions?
    Mr. Miller. I don't know how many we have right now, 
Senator, because, as I mentioned before, we literally have 
bills rolling through various State legislatures. Maryland just 
passed theirs 2 weeks ago. Maine just introduced theirs 2 weeks 
ago. So it's something that is definitely in process.
    Senator Warren. Do you know that it's in process in all 50 
States?
    Mr. Miller. Yes. That I can tell you. It is.
    Senator Warren. So we know it's in process. Here's what I 
want to know. What assurance do we have that what happens will 
be adequate, that it will happen in every State, and that there 
will continue to be enforcement after the lights have dimmed 
and the tragedy has faded from the memory of many people?
    Mr. Miller. Senator, I think that's a challenging question 
from the standpoint that those of us who are involved in this 
today will not forget it. Our boards of pharmacy, the 
individual pharmacists, the professional and public members 
that serve on those boards are committed to ensure that the 
systems are put into place--and I know Dr. Catizone can talk 
about that a little bit better than I can--that we set up a 
system that does not allow this to continue.
    I do believe, however, you're right in asking the question: 
How do we know 10 years from now that we don't slack off?
    Senator Warren. We're not even to the point of slacking 
off. We haven't gotten there to be able to think about slacking 
off yet. And I want to ask if there is anything in the Federal 
law that says we will depend only on the States that have 
passed adequate laws to make sure that there is full safety for 
our patients. In other words, if the States fail to act, if 
there are loopholes, if only some of the States act, we're 
still going to be relying on those States. Is that right, under 
the statute that----
    Mr. Miller. With the regulation of the practice of pharmacy 
and the issuance of licenses for pharmacies and pharmacists, 
yes, you will continue to be reliant upon the States.
    Senator Warren. So we are only assuring patient safety in 
cases in which the State acts as well as the Federal Government 
acting. Is that right?
    Mr. Catizone. No.
    Senator Warren. I'm getting yeses and nos. I'm sorry. I'm 
over my time, Mr. Chairman, but perhaps this is something we 
should--is that all right?
    Go ahead, Mr. Catizone.
    Mr. Catizone. Sure. The answer is no, and I think this is a 
very complex issue, but it can be broken down into very basic 
concepts. And I think Congressman Markey's report emphasize 
that and your questions do as well. If it's manufacturing, it's 
going to require GMPs and the FDA, whether it's intra-state or 
interstate. That mechanism is being built.
    Senator Warren. I understand.
    Mr. Catizone. If it's traditional compounding, it's going 
to involve USP standards and the current State practice acts 
and regulations, which were not the problems with the NECC 
situation. It was the manufacturing of those products outside 
of that regulation. So the States are building the systems. 
They can regulate that. We're building the resources around 
them with it. If the FDA can do intra and interstate, you will 
have a permanent mechanism and the States will deal with it day 
to day.
    Senator Warren. I think we have a different response here.
    Mr. Coukell. Senator, the proposal will bring some 
facilities under FDA oversight using three tests, one of which 
is interstate sale. So facilities that sell within a single 
State that operate at the same scale would continue under State 
jurisdiction. One of the things that we heard strongly at the 
pharmacy compounding summit that we co-hosted with ASHP and the 
NABP participated in is that States vary widely in their 
ability to oversee this large-scale production. No doubt, 
there's activity going on, but it's very variable.
    Senator Warren. So you're telling me that we really have 
some serious gaps there, potentially.
    Mr. Coukell. Potentially.
    Senator Warren. Thank you very much.
    Sorry, Mr. Chairman.
    The Chairman. That's all right. Thank you, Senator Warren.
    Senator Roberts.
    Senator Roberts. Thank you, Mr. Chairman.
    Thanks to all the panel members. I know you're busy, and to 
come here--this has been very helpful, I think, as we get into 
all the ramifications of the draft bill. We really tried very 
hard to ensure that we don't make laws after this 10-year 
effort without knowing the impacts, such as restricting patient 
access to lifesaving medications.
    I know that the regulatory process in Washington is such 
that it's probably the No. 1 issue in my State in regards to 
overkill--sub-regulatory guidance, people not even knowing 
about it, final rules that happen within 30 days, Executive 
orders, so on and so forth. The President even has an Executive 
order that says we desperately need for all the agencies--that 
you put up a yardstick in regards to cost and benefit, and I 
appreciate all of you trying to help us in that respect.
    Mr. Miller, thank you especially. I thought there in 2007 
that we'd end up on Front Street with guns drawn, but you put 
yours in the holster, and I have all your comments right here. 
And I have your--you mentioned definitions. They're in italics 
so they stand out, and this committee will go over your 
definitions. I'm glad to have you on the stagecoach. I don't 
know who's driving. Hopefully, we're driving the stage, and you 
can ride shotgun and make sure everything is OK. So we're going 
to do that.
    I was going to ask you all if you're satisfied with the 
level of stakeholder input that has been allowed throughout the 
drafting process. All of your answers are yes. That saves a lot 
of time.
    I'm caught up with the comments by Senator Warren and 
Senator Enzi. The local pharmacist does not need Federal 
inspectors going around the State. Let me point out that the 
FDA has already inspected about 30 pharmacies based on solid 
evidence of misconduct. You can work with the State board and 
gain access to records. You can work, as Mr. Miller has pointed 
out, by simply going through the warrant process.
    You can get a warrant, you can work with the State board, 
and I think you could probably go into any pharmacy that has a 
very bad record, a lot of complaints, a lot of problems--
hopefully not a medical disaster like we had with meningitis. 
And since FDA is already going into about 30 pharmacies--and I 
think they were prompted by that when I asked them why they're 
not--you can do this.
    Now, Mr. Miller, there is a situation with Children's Mercy 
Hospital. They're located in Missouri, and they're a very well-
known hospital and do amazing work. Four blocks away in Kansas, 
there is an annex to that. Guess what, by your definition, is 
going to happen? They're under the Missouri State Pharmacy 
Board, but under your suggestion, they would be put in this one 
category. I can't imagine you'd want to do that.
    Mr. Miller. The pharmacy on the Missouri side has a license 
issued by the State of Missouri.
    Senator Roberts. That's correct.
    Mr. Miller. The pharmacy or the hospital on the Kansas side 
has a license issued by the State of Kansas.
    Senator Roberts. Right.
    Mr. Miller. For all intents and purposes, that is, going 
back and forth, interstate. So would we expect that the 
preparation of a medication on the Missouri side transferred 
over across State--and, believe me, I'm from this area, so we 
go back and forth amongst States all the time. If it is for an 
individual patient and labeled as such--and that's what we've 
included as one of our recommendations in the exemption 
language--then we're fine.
    If, however, the pharmacy on the Missouri side is preparing 
bulk--lots of sterile drugs to send down the street without any 
patient prescriptions prior to--that, essentially, is a 
duplicate of the definition of what we have for all other 
compounders.
    Senator Roberts. All right. You made that clear. Let me 
just add that it was Quantrill who came in from Missouri to 
Kansas. We would never do that in Kansas, going the other way.
    [Laughter.]
    Mr. Miller. As long as I'm not invited to Dodge City, I'm 
happy.
    Senator Roberts. OK.
    Thank you all for coming. I think my time is up, and I've 
used enough time, Mr. Chairman. Thank you so much.
    Thank you all for your input.
    Mr. Miller. Thank you, sir.
    The Chairman. Thank you all very, very much. This has been 
very informative, and I think I can safely say that no one has 
to be taken to Dodge City after this hearing. But I just want 
to thank you all very much.
    Just in hearing the testimonies and the Q&As back and 
forth, I think we're pretty close. I think we're pretty close. 
We'll look at some of the definitional things that you've 
suggested. When I hear that, I always think what's in a name, 
but sometimes, there's more than I think in a name. I don't 
know.
    But I think we're pretty close. Our staffs will work 
together again as we have in an open system and resolve what 
little matters need to be resolved. But I think from the 
general tone of what I hear, I think we're very, very close to 
knowing what we need to do. Hopefully, again, working with 
Senator Alexander and others, we can have a markup sometime 
soon and move this legislation.
    With that, the record will remain open for 10 days to allow 
members to submit questions and statements for the record. 
Thank you again very, very much for everything, and the 
committee will be adjourned.

                          ADDITIONAL MATERIAL

 Response to Questions of Senator Enzi by Janet Woodcock, M.D., Carmen 
  S. Catizone, M.S., RPh, DPh, Allan Coukell, and Kasey K. Thompson, 
                                 PharmD
             Department of Health & Human Services,
                      Food and Drug Administration,
                                   Silver Spring, MD 20993,
                                                 November 26, 2013.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510-6300.

    Dear Mr. Chairman: Thank you for providing the opportunity for the 
Food and Drug Administration (FDA or the Agency) to testify at the May 
9, 2013, hearing before the Committee on Health, Education, Labor, and 
Pensions entitled ``Pharmaceutical Compounding: Proposed Legislative 
Solution.'' This letter provides a response for the record to a 
question posed by Senator Mike Enzi, which we received on May 28, 2013.
    If you have further questions, please let us know.
            Sincerely,
                                              Sally Howard,
                                               Deputy Commissioner,
                                 Policy, Planning, and Legislation.
                                 ______
                                 
                 sally howard for janet woodcock, m.d.
    Question. FDA's comments on the discussion draft state that the 
Agency ``must have access to records at traditional compounders'' to 
enable the Agency to investigate traditional pharmacies who compound 
for potential violations of the new law. However, FDA has stated 
previously that traditional pharmacy must be preserved and FDA has 
previously never had access to pharmacy records to conduct enforcement 
actions. Can you please explain to me why FDA now believes that access 
to the records of traditional pharmacists is so necessary?
    Answer. It is critical that FDA have clear authority to inspect 
pharmacies to determine the scope and nature of their operations to 
determine whether they are operating as compounding pharmacies or 
conventional drug manufacturers--generally subject to more stringent 
Federal requirements. In addition, FDA must be able to inspect 
pharmacies and review records to determine the source of a complaint or 
outbreak associated with a compounded drug that may be adulterated or 
misbranded under the Federal Food, Drug, and Cosmetic Act (FD&C Act). 
FDA's ability to inspect in a timely manner any firm producing drugs is 
critical for effective oversight and regulation.
    FDA should have clear ability to examine records such as records of 
prescriptions received, products shipped, volume of operations, and 
operational records such as batch records, product quality test 
results, and stability testing results. Such inspections are necessary 
to determine when a pharmacy exceeds the bounds of traditional 
compounding, to respond to public health threats, and to enforce 
Federal standards.
    Under FDA's current inspection authority in section 704 of the FD&C 
Act, FDA's authority to inspect records at a pharmacy depends upon 
knowing certain facts about the pharmacy's operations that oftentimes 
can only be determined through inspection of records. The first of 
three criteria for being exempt from having records inspected is 
whether the pharmacy is operating in conformity with State law, a 
determination most readily made by a State and, in any case, likely 
dependent upon examining certain records. The second criterion concerns 
whether the pharmacy is dispensing prescription drugs without a 
prescription, but FDA must be able to inspect records to determine that 
fact. Similarly, the third criterion is whether the pharmacy is 
compounding drugs for sale other than in the regular course of its 
retail business, which is also something that would be difficult to 
determine without a full inspection of the facility, including an 
inspection of appropriate records. For each of these three criteria, 
FDA needs to examine records to determine whether the firm meets those 
criteria.
        National Association of Boards of Pharmacy,
                                  Mount Prospect, IL 60056,
                                                    March 13, 2014.

Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

    Your request for further information has been forwarded to my 
attention. Please feel free to let me know if you need additional 
information.
            Best wishes,
                               Melissa Madigan, PharmD, JD,
                                Policy and Communications Director.
                                 ______
                                 
   melissa madigan, pharmd, jd for carmen s. catizone, m.s., rph, dph
    Question. We intended, with this discussion draft, to preserve 
traditional pharmacy practice and compounding. However, we have 
received a number of comments indicating concern with the scope of 
compounding ``in limited quantities'' by traditional compounders. Can 
you please explain what you foresee as potential problems, if any, with 
this definition? How can the committee improve this language if it is a 
problem?
    Answer. At the time of the hearing, NABP was highly concerned with 
pharmacies compounding drug products, especially sterile drug products, 
in large quantities ``for office use'' for administration to patients 
in prescribers' office or clinics. As we all know, many States allowed 
this practice ``in limited quantities,'' but compounding pharmacies 
were either inadvertently or intentionally ignoring the ``limited 
quantity'' rule and compounding in extraordinarily large quantities. It 
was the type of practice that led to the widespread distribution of 
contaminated or unsafe compounded products, culminating with the NECC 
tragedy, which killed over 60 
patients and injured nearly 700. Not long after the hearing, the 
Pharmaceutical Compounding Quality and Accountability Act was 
introduced, which addressed the concern by creating a new category of 
compounder called ``compounding manufacturer'' and prohibiting ``for 
office use'' compounding by pharmacies that are not ``compounding 
manufacturers.''
                             allan coukell
    Question. We intended, with this discussion draft, to preserve 
traditional pharmacy practice and compounding. However, we have 
received a number of comments indicating concern with the scope of 
compounding ``in limited quantities'' by traditional compounders. Can 
you please explain what you foresee as potential problems, if any, with 
this definition? How can the committee improve this language if it is a 
problem?
    Answer. The threshold for allowable anticipatory compounding by 
traditional compounders (TCs) is a longstanding area of confusion. The 
terminology used in section 503(A), as well as this bill, permits 
anticipatory compounding in ``limited quantities'' based on prescribing 
history. FDA's compliance guide allows ``very limited quantities''. 
These terms are undefined, and are interpreted in widely different ways 
by different stakeholders.
    The definition of a traditional compounder in this legislation 
includes compounding limited amounts in anticipation of a prescription 
pursuant to State law, which by some assessments also permits 
compounding without a prescription (aka office stock or hospital 
supply) where allowed by States. While some States may limit office-
stock compounding, others may not. This would allow TCs to manufacture 
unlimited quantities of medicines.
    To ensure that State-licensed pharmacies operating as TCs do not 
become de facto unregulated manufacturers, clear limits on the amount 
of compounding permitted in anticipation or without a prescription 
should be established. To ensure clarity and enforceability, Congress 
should: (1) direct FDA to establish volume thresholds for compounding 
in anticipation of/without a prescription through regulation and (2) 
clarify that this is a uniform Federal standard not pursuant to State 
law.
    Alternatively, if a clear Federal standard is not established, 
compounding in anticipation or without a prescription should be 
regulated by States. However, this would undermine the protections 
established through the FDCA and put patients at risk from drugs made 
by unregulated manufacturers.
                       kasey k. thompson, pharmd
    Question. We intended, with this discussion draft, to preserve 
traditional pharmacy practice and compounding. However, we have 
received a number of comments indicating concern with the scope of 
compounding ``in limited quantities'' by traditional compounders. Can 
you please explain what you foresee as potential problems, if any, with 
this definition? How can the committee improve this language if it is a 
problem?
    Answer. Compounding in limited quantities is likely more applicable 
to community pharmacies that are largely retail but may also provide 
some compounded preparations to a local physician office or nursing 
facility, or even a hospital. It could be challenging to define 
``limited'' to fit all the various practice settings in which 
compounding is conducted.
    In the hospital setting, this is more difficult as many medications 
administered in a hospital are compounded preparations, either prepared 
in-house or out-source. This may vary among hospitals with children's 
hospitals engaging in a larger share of compounding given their patient 
type. It is important to note that medications administered to a 
patient are only done so pursuant to a physician order, however, some 
preparations may need to be made ahead of time, operating room 
medications for example need to be at the ready for a potential 
emergency situation.
    Anticipatory compounding should not be limited to such a degree 
that it compromises an efficient and safe compounding process or causes 
patients to have to wait for their drugs. However, ``limited 
quantities'' may need a more specific definition for the retail or 
community pharmacy setting.
    In the retail or community compounding pharmacy, anticipatory 
compounding may be based on historical compounding logs, dispensing 
records, or orders by physicians. Practitioners and inspectors need 
regulatory clarification on what historical prescription data will be 
required and how it will be used to determine quantities that can be 
compounded in advance. Otherwise, they won't know when the line is 
crossed and enforcement may be inconsistent. For example, would doses 
or units compounded in advance be approximately equal to those 
dispensed in the previous 60, 90, or 120 days?
    Hospitals, on the other hand, keep detailed records on patients and 
their episodes of care and can better predict what drugs and how many 
doses should be prepared in advance. The majority of compounding is 
compounded sterile preparations (CSPs), many of which are expensive or 
in scarce supply and have short beyond-use dates (BUDs). Because of 
these conditions, only quantities required for filling current orders 
and other doses the organization can reasonably assure will be 
administered before the BUD are compounded in advance.
    For the committee's consideration the following language may serve 
as a starting point in describing ``limited quantities'':

          ``limited quantities shall be based upon historical demand 
        from the previous year, the previous quarter and any documented 
        increased anticipated demand. The Secretary shall issue draft 
        guidance within 180 days of enactment and final guidance 1 year 
        after enactment.''

    [Whereupon, at 12:04 p.m., the hearing was adjourned.]

                                   [all]
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