I 

113TH CONGRESS 

1ST SESSION H. R. 3089 

To amend section 503A of the Federal Food, Drug, and Cosmetic Act with 

respect to pharmacy compounding. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2013 

Mr. GRIFFITH of Virginia (for himself, Ms. DEGETTE, and Mr. GENE GREEN

of Texas) introduced the following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To amend section 503A of the Federal Food, Drug, and 

Cosmetic Act with respect to pharmacy compounding. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Compounding Clarity 

5 Act of 2013’’. 

6 SEC. 2. TRADITIONAL PHARMACY COMPOUNDING. 

7 Section 503A of the Federal Food, Drug, and Cos8 metic Act (21 U.S.C. 353a) is amended to read as follows: 


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1 ‘‘SEC. 503A. TRADITIONAL PHARMACY COMPOUNDING. 

2 ‘‘(a) IN GENERAL.—Sections 501(a)(2)(B), 

3 502(f)(1), and 505 of this Act and section 351 of the Pub4 lic Health Service Act shall not apply to a drug product 

5 for human use if each of the following conditions is met: 

6 ‘‘(1) IDENTIFIED PATIENT AND RECEIPT OF

7 PRESCRIPTION.—The drug product is compounded 

8 in accordance with one of the following: 

9 ‘‘(A) IN GENERAL.—The drug product is 

10 compounded by a licensed pharmacist in a 

11 State-licensed pharmacy or a Federal facility, 

12 or by a licensed physician, for an identified in13 dividual patient based on the receipt of a valid 

14 prescription. 

15 ‘‘(B) ANTICIPATORY COMPOUNDING.—The 

16 drug product is compounded by a licensed phar17 macist in a State-licensed pharmacy or a Fed18 eral facility, or by a licensed physician, in lim19 ited quantities before the receipt of a valid pre20 scription for an identified individual patient, 

21 based on— 

22 ‘‘(i) historical demand for the drug 

23 product; and 

24 ‘‘(ii) a history of prescriptions for the 

25 drug product generated solely within an es26 tablished relationship between the licensed 


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1 pharmacist or licensed physician who is 

2 performing the compounding and— 

3 ‘‘(I) the individual patient; or 

4 ‘‘(II) the physician or other li5 censed practitioner who writes the 

6 prescription. 

7 ‘‘(C) COMPOUNDING FOR OFFICE USE.— 

8 The drug product is compounded by a licensed 

9 pharmacist in a State-licensed pharmacy or a 

10 Federal facility, or by a licensed physician, pur11 suant to a non-patient-specific purchase order 

12 and— 

13 ‘‘(i) the drug product will be adminis14 tered by a health care practitioner within 

15 a physician’s office, a hospital, or another 

16 health care setting; 

17 ‘‘(ii) valid patient-specific prescrip18 tions or, when a compounded drug product 

19 is administered within the same health sys20 tem in which it was compounded, valid pa21 tient names— 

22 ‘‘(I) are submitted, electronically 

23 or otherwise, to the pharmacist or 

24 physician who performs the com25 pounding, not later than 7 business 


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1 days after the drug product is admin2 istered; and 

3 ‘‘(II) will, in the aggregate, ac4 count for the total volume of drug 

5 product compounded pursuant to the 

6 non-patient-specific purchase order; 

7 ‘‘(iii) during any 6-month period, of 

8 the total drug products dispensed from the 

9 facility at which the drug product was 

10 compounded, not more than 5 percent are 

11 compounded sterile drug products that 

12 are— 

13 ‘‘(I) dispensed pursuant to this 

14 subparagraph; and 

15 ‘‘(II) shipped interstate; 

16 ‘‘(iv) records of the compounding will 

17 be kept for not less than 3 years; and 

18 ‘‘(v) the statement ‘Office Use Only’ 

19 and the statement ‘Not for resale’ appear 

20 on the compounded drug product. 

21 Compounding under this subparagraph shall 

22 not be considered to be in violation of clause (ii) 

23 because of the failure of a pharmacist or a phy24 sician to account for valid patient-specific pre25 scriptions or valid patient names as required by 


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1 such clause, so long as the pharmacist or physi2 cian makes a good faith, reasonable effort to 

3 account for the prescriptions or names, as ap4 plicable, and does not continue to compound 

5 drug products under this subparagraph for a 

6 health care practitioner or facility with a his7 tory of failing to submit such prescriptions or 

8 patient names. 

9 ‘‘(2) QUALITY STANDARDS.—Irrespective of 

10 whether a drug product is compounded under sub11 paragraph (A), (B), or (C) of paragraph (1), the 

12 drug product is compounded, stored, and dated in 

13 compliance with the United States Pharmacopoeia 

14 chapters that are applicable to pharmaceutical 

15 compounding (including the chapter on sterile prep16 arations). 

17 ‘‘(3) BULK DRUG SUBSTANCES.—If the drug 

18 product is compounded using bulk drug substances 

19 (as defined in regulations of the Secretary published 

20 at section 207.3(a)(4) of title 21 of the Code of Fed21 eral Regulations (or any successor regulations))— 

22 ‘‘(A) the bulk drug substances— 

23 ‘‘(i) if an applicable monograph exists 

24 under the United States Pharmacopoeia, 

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1 pendium or pharmacopeia recognized 

2 under Federal law, each comply with the 

3 monograph; 

4 ‘‘(ii) if such a monograph does not 

5 exist, each are drug substances that are 

6 components of drug products approved or 

7 licensed by the Secretary for human use; 

8 or 

9 ‘‘(iii) if such a monograph does not 

10 exist and the drug substance is not a com11 ponent of a drug product so approved or li12 censed, each appear on a list published by 

13 the Secretary (through regulations issued 

14 under subsection (e)); 

15 ‘‘(B) the bulk drug substances are each 

16 manufactured by an establishment that is reg17 istered under section 510 (including a foreign 

18 establishment that is registered under section 

19 510(i)); and 

20 ‘‘(C) the bulk drug substances are each ac21 companied by a valid certificate of analysis. 

22 ‘‘(4) INGREDIENTS (OTHER THAN BULK DRUG

23 SUBSTANCES).—If any ingredients (other than bulk 

24 drug substances) are used in compounding the drug 

25 product, such ingredients comply with the standards 


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1 of an applicable United States Pharmacopoeia or 

2 National Formulary monograph. 

3 ‘‘(5) DRUG PRODUCTS WITHDRAWN OR RE4 MOVED BECAUSE UNSAFE OR NOT EFFECTIVE.—The 

5 drug product does not appear on a list published by 

6 the Secretary of drug products that have been with7 drawn or removed from the market because such 

8 drug products or components of such drug products 

9 have been found to be unsafe or not effective. 

10 ‘‘(6) ESSENTIALLY A COPY OF A MARKETED

11 AND APPROVED DRUG PRODUCT.—The licensed 

12 pharmacist or licensed physician does not compound 

13 any drug product that is essentially a copy of a mar14 keted and approved drug product. 

15 ‘‘(7) DRUG PRODUCTS PRESENTING DEMON16 STRABLE DIFFICULTIES FOR COMPOUNDING.—The 

17 drug product is not identified (directly or as part of 

18 a category of drug products) in a list published by 

19 the Secretary (through regulations issued under sub20 section (e)) as a drug product that presents demon21 strable difficulties for compounding that reasonably 

22 demonstrate an adverse effect on the safety or effec23 tiveness of that drug product. 

24 ‘‘(8) PROHIBITION ON WHOLESALING.—The 

25 drug product will not be sold by an entity other than 


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1 the pharmacy or physician that compounded such 

2 drug product. 

3 ‘‘(b) STATE REGULATION.—Nothing in this section 

4 shall prevent a State from— 

5 ‘‘(1) imposing restrictions on the type of 

6 compounding described in subparagraph (B) or (C) 

7 of subsection (a)(1) that are in addition to the re8 strictions applicable under this section; or 

9 ‘‘(2) enforcing requirements or restrictions con10 tained in the chapters or standards described in sub11 section (a)(2). 

12 ‘‘(c) NOTIFICATION SYSTEM.— 

13 ‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 

14 The Secretary shall develop and implement a system 

15 for receiving and reviewing submissions from State 

16 boards of pharmacy— 

17 ‘‘(A) describing actions taken against 

18 compounding pharmacies; or 

19 ‘‘(B) expressing concerns that a com20 pounding pharmacy may be acting in violation 

21 of one or more requirements of this section. 

22 ‘‘(2) CONTENT OF SUBMISSIONS FROM STATE

23 BOARDS OF PHARMACY.—An action referred to in 

24 paragraph (1)(A) is, with respect to a pharmacy 

25 that compounds drug products, any of the following: 


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1 ‘‘(A) The issuance of a warning letter, or 

2 the imposition of sanctions or penalties, by a 

3 State for violations of a State’s pharmacy regu4 lations pertaining to compounding. 

5 ‘‘(B) The suspension or revocation of a 

6 State-issued pharmacy license or registration. 

7 ‘‘(C) The recall of compounded drug prod8 ucts due to concerns relating to the quality or 

9 purity of such products. 

10 ‘‘(3) CONSULTATION.—The Secretary shall de11 velop the system under paragraph (1) in consulta12 tion with the National Association of Boards of 

13 Pharmacy. 

14 ‘‘(4) REVIEW AND DETERMINATION BY SEC15 RETARY.—The Secretary shall review each submis16 sion received under paragraph (1) and such other in17 formation as the Secretary determines necessary (in18 cluding information collected through an inspection 

19 or maintained in the Adverse Event Reporting Sys20 tem database) and make a determination as to 

21 whether the pharmacy involved may be in violation 

22 of one or more requirements of this section. 

23 ‘‘(5) NOTIFYING STATE BOARDS OF PHAR24 MACY.—The system under paragraph (1) shall be 


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1 designed to immediately notify State boards of phar2 macy when— 

3 ‘‘(A) the Secretary receives a submission 

4 under paragraph (1); or 

5 ‘‘(B) the Secretary makes a determination 

6 that a pharmacy may be in violation of one or 

7 more requirements of this section. 

8 ‘‘(6) TIMING.—Not later than one year after 

9 the date of enactment of the Compounding Clarity 

10 Act of 2013, the Secretary shall begin implementa11 tion of the system under paragraph (1). 

12 ‘‘(d) INSPECTION AUTHORITY.—In accordance with 

13 section 704(a), the Secretary may inspect a pharmacy’s 

14 records to determine whether the pharmacy is in violation 

15 of one or more requirements of this Act if— 

16 ‘‘(1) the inspection is conducted in coordination 

17 with the relevant State board or boards of phar18 macy; or 

19 ‘‘(2) the Secretary has evidence that the phar20 macy may be in violation of such a requirement. 

21 ‘‘(e) REGULATIONS.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall issue 

23 regulations to implement this section. 

24 ‘‘(2) ADVISORY COMMITTEE ON

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1 plement subsections (a)(3)(A)(iii) and (a)(7), the 

2 Secretary shall convene and consult an advisory 

3 committee on compounding. The advisory committee 

4 shall include representatives from the National Asso5 ciation of Boards of Pharmacy, the United States 

6 Pharmacopoeia, pharmacists having current experi7 ence and expertise in compounding, physicians hav8 ing background and knowledge in compounding, and 

9 consumer organizations with an expertise in 

10 compounding. 

11 ‘‘(3) INTERIM LISTS.—Before the date on which 

12 final regulations are issued to implement subsections 

13 (a)(3)(A)(iii) and (a)(7), if the Secretary determines 

14 it is necessary to protect the public health, the Sec15 retary may designate drug products or substances as 

16 described in such subsections, by— 

17 ‘‘(A) publishing a notice of such drug 

18 products or substances proposed for designa19 tion, including the rationale for such designa20 tion, in the Federal Register; 

21 ‘‘(B) providing a period of not less than 60 

22 calendar days for comment on the notice; and 

23 ‘‘(C) publishing a notice in the Federal 

24 Register designating such drug products or sub25 stances. 


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1 ‘‘(4) UPDATING LISTS.—The Secretary shall 

2 update the regulations containing the lists of drug 

3 products and substances described in subsections 

4 (a)(3)(A)(iii) and (a)(7) regularly, but not less than 

5 once every three years. 

6 ‘‘(5) SUNSET OF NOTICE.—Any notice pub7 lished under paragraph (3) shall not be effective 

8 after the earlier of— 

9 ‘‘(A) the date that is 3 years after the date 

10 of Compounding Clarity Act of 2013; and 

11 ‘‘(B) the effective date of the final regula12 tions issued to implement subsections 

13 (a)(3)(A)(iii) and (a)(7). 

14 ‘‘(f) DEFINITIONS.—In this section: 

15 ‘‘(1) The term ‘compounding’ includes— 

16 ‘‘(A) the combining, admixing, mixing, di17 luting, reconstituting, or otherwise altering of a 

18 marketed drug product, except when performed 

19 in accordance with specific directions for such 

20 acts contained in approved labeling provided by 

21 the product’s manufacturer or otherwise pro22 vided by that manufacturer consistent with that 

23 labeling; 

24 ‘‘(B) the combining, admixing, mixing, di25 luting, reconstituting, or otherwise altering a 


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1 bulk drug substance to create a drug product; 

2 and 

3 ‘‘(C) repackaging. 

4 ‘‘(2) The term ‘essentially a copy of a marketed 

5 and approved drug product’ does not include— 

6 ‘‘(A) a drug product in which there is a 

7 change, made for an identified individual pa8 tient, which produces for that patient a clinical 

9 difference, as determined by the prescribing 

10 practitioner, between the compounded drug 

11 product and the comparable marketed and ap12 proved drug product; or 

13 ‘‘(B) a drug product that appears on the 

14 drug shortage list in effect under section 506E. 

15 ‘‘(3) The term ‘licensed pharmacist’ includes 

16 any individual who compounds drug products under 

17 the supervision of a practitioner licensed to com18 pound drug products under State law. 

19 ‘‘(4) The term ‘marketed and approved drug 

20 product’ means a drug product that— 

21 ‘‘(A) is currently marketed; and 

22 ‘‘(B) is approved under section 505 of this 

23 Act or licensed under section 351 of the Public 

24 Health Service Act. 


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1 ‘‘(5)(A) The term ‘repackaging’ means taking a 

2 drug approved under section 505 of this Act or li3 censed under section 351 of the Public Health Serv4 ice Act from the container in which the drug is dis5 tributed by the original manufacturer and placing 

6 such drug in a different container of the same or 

7 smaller size without further manipulating the drug 

8 (such as by diluting it or mixing it with another, dif9 ferent drug or drugs). 

10 ‘‘(B) Such term does not include removing the 

11 drug from its original container for immediate ad12 ministration to an identified individual patient, such 

13 as withdrawing a drug into a syringe for immediate 

14 injection or removing the drug from its original con15 tainer within a health care entity by a practitioner, 

16 or other licensed individual under the supervision or 

17 direction of such practitioner, for administration 

18 within the same day within such health care entity.’’. 

19 SEC. 3. OUTSOURCING FACILITIES. 

20 (a) IN GENERAL.—Subchapter A of chapter V of the 

21 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 

22 et seq.) is amended— 

23 (1) by redesignating section 503B as section 

24 503C; and 


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1 (2) by inserting after section 503A (21 U.S.C. 

2 353a) the following new section: 

3 ‘‘SEC. 503B. OUTSOURCING FACILITIES. 

4 ‘‘(a) IN GENERAL.—Sections 502(f)(1) and 505 of 

5 this Act and section 351 of the Public Health Service Act 

6 shall not apply to a drug product compounded for human 

7 use by a licensed pharmacist in an outsourcing facility if 

8 each of the following conditions is met: 

9 ‘‘(1) REGISTRATION AND REPORTING.—The fa10 cility is in compliance with the registration and re11 porting requirements of subsection (b). 

12 ‘‘(2) DRUG PRODUCT AND SUBSTANCE LIMITA13 TIONS.—The facility does not compound drug prod14 ucts in violation of paragraphs (3) through (8) of 

15 section 503A(a). 

16 ‘‘(3) FEES.—The facility has paid all fees owed 

17 by such facility pursuant to section 744K. 

18 ‘‘(4) STANDARDIZED DRUG PRODUCTS FROM

19 BULK.—The facility does not compound, from bulk 

20 drug substances, standardized dosages that are not 

21 otherwise commercially available of a marketed and 

22 approved drug product. 

23 ‘‘(5) LABELING OF DRUG PRODUCTS.— 


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1 ‘‘(A) LABEL.—The label of a drug product 

2 compounded by an outsourcing facility shall in3 clude— 

4 ‘‘(i) the statement ‘This is a com5 pounded drug.’ or a reasonable comparable 

6 alternative statement (as specified by the 

7 Secretary) that prominently identifies the 

8 drug as a compounded drug product; 

9 ‘‘(ii) the name, address, and phone 

10 number of the applicable outsourcing facil11 ity; and 

12 ‘‘(iii) with respect to the compounded 

13 drug product— 

14 ‘‘(I) the lot or batch number; 

15 ‘‘(II) the established name of the 

16 drug product; 

17 ‘‘(III) the dosage form and 

18 strength; 

19 ‘‘(IV) the statement of quantity 

20 or volume, as appropriate; 

21 ‘‘(V) the date that the drug prod22 uct was compounded; 

23 ‘‘(VI) the expiration date; 

24 ‘‘(VII) storage and handling in25 structions; 


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1 ‘‘(VIII) the National Drug Code 

2 number, if available; 

3 ‘‘(IX) the ‘Not for resale’ state4 ment required under section 

5 503A(a)(1)(C)(v); and 

6 ‘‘(X) subject to subparagraph 

7 (B)(i), a list of active and inactive in8 gredients, identified by established 

9 name and the quantity or proportion 

10 of each ingredient. 

11 ‘‘(B) CONTAINER.—The container from 

12 which the individual units of a drug product 

13 compounded by an outsourcing facility are re14 moved for dispensing or for administration 

15 (such as a plastic bag containing individual 

16 product syringes) shall include— 

17 ‘‘(i) the information described under 

18 subparagraph (A)(iii)(X), if there is not 

19 space on the label for such information; 

20 ‘‘(ii) the following information to fa21 cilitate adverse event reporting: 

22 www.fda.gov/medwatch and 1–800–FDA– 

23 1088; and 

24 ‘‘(iii) directions for use, including, as 

25 appropriate, dosage and administration. 


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1 ‘‘(C) ADDITIONAL INFORMATION.—The 

2 label and labeling of a drug product com3 pounded by an outsourcing facility shall include 

4 any other information as determined necessary 

5 and specified in regulations promulgated by the 

6 Secretary 

7 ‘‘(b) REGISTRATION OF OUTSOURCING FACILITIES

8 AND REPORTING OF DRUG PRODUCTS.— 

9 ‘‘(1) REGISTRATION OF OUTSOURCING FACILI10 TIES.— 

11 ‘‘(A) ANNUAL REGISTRATION.—During the 

12 period beginning on October 1 and ending on 

13 December 31 each year, each outsourcing facil14 ity— 

15 ‘‘(i) shall register with the Secretary 

16 its name, place of business, and unique fa17 cility identifier (which shall conform to the 

18 requirements for the unique facility identi19 fier established under section 510), and a 

20 point of contact e-mail address; and 

21 ‘‘(ii) shall indicate whether the out22 sourcing facility intends to compound a 

23 drug product that appears on the list in ef24 fect under section 506E during the subse25 quent calendar year. 


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1 ‘‘(B) NEW OUTSOURCING FACILITIES.— 

2 Each outsourcing facility, upon first engaging 

3 in compounding pursuant to this section, shall 

4 immediately register with the Secretary and 

5 provide the information described in paragraph 

6 (1)(A). The Secretary shall establish a timeline 

7 for registration for the first calendar year fol8 lowing the effective date of the Compounding 

9 Clarity Act of 2013. In no case may registra10 tion be required until at least 60 calendar days 

11 following publication of the timeline in the Fed12 eral Register. 

13 ‘‘(C) AVAILABILITY OF REGISTRATION FOR

14 INSPECTION; LIST.— 

15 ‘‘(i) REGISTRATIONS.—The Secretary 

16 shall make available for inspection, to any 

17 person so requesting, any registration filed 

18 pursuant to this paragraph. 

19 ‘‘(ii) LIST.—The Secretary shall make 

20 available on the public Internet Web site of 

21 the Food and Drug Administration a list 

22 of the name of each facility registered 

23 under this subsection as an outsourcing fa24 cility, the State in which each such facility 

25 is located, whether the facility compounds 


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1 from bulk drug substances, and whether 

2 any such compounding from bulk drug 

3 substances is for sterile or non-sterile drug 

4 products. 

5 ‘‘(2) DRUG PRODUCT REPORTING BY OUT6 SOURCING FACILITIES.— 

7 ‘‘(A) IN GENERAL.—Upon initially reg8 istering as an outsourcing facility, once during 

9 the month of June of each year, and once dur10 ing the month of December of each year, each 

11 outsourcing facility that registers with the Sec12 retary under paragraph (1) shall submit to the 

13 Secretary a report— 

14 ‘‘(i) identifying the drug products 

15 compounded by such outsourcing facility 

16 during the previous 6-month period; and 

17 ‘‘(ii) with respect to each drug prod18 uct identified under clause (i), providing 

19 the active ingredient; the source of such 

20 active ingredient; the National Drug Code 

21 number, if available, of the source drug 

22 product or bulk active ingredient; the 

23 strength of the active ingredient per unit; 

24 the dosage form and route of administra25 tion; the package description; the number 


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1 of individual units produced; and the Na2 tional Drug Code number of the final prod3 uct, if assigned. 

4 ‘‘(B) FORM.—Each report under subpara5 graph (A) shall be prepared in such form and 

6 manner as the Secretary may prescribe by regu7 lation or guidance. 

8 ‘‘(C) CONFIDENTIALITY.—Reports sub9 mitted under this paragraph shall be exempt 

10 from inspection under paragraph (1)(C), unless 

11 the Secretary finds that such an exemption 

12 would be inconsistent with the protection of the 

13 public health. 

14 ‘‘(3) ELECTRONIC REGISTRATION AND REPORT15 ING.—Registrations and drug product reporting 

16 under this subsection (including the submission of 

17 updated information) shall be submitted to the Sec18 retary by electronic means unless the Secretary 

19 grants a request for waiver of such requirement be20 cause use of electronic means is not reasonable for 

21 the person requesting waiver. 

22 ‘‘(4) RISK-BASED INSPECTION FREQUENCY.— 

23 ‘‘(A) IN GENERAL.—Outsourcing facili24 ties— 


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1 ‘‘(i) shall be subject to inspection pur2 suant to section 704; and 

3 ‘‘(ii) shall not be eligible for the ex4 emption under section 704(a)(2)(A). 

5 ‘‘(B) RISK-BASED SCHEDULE.—The Sec6 retary, acting through one or more officers or 

7 employees duly designated by the Secretary, 

8 shall inspect outsourcing facilities in accordance 

9 with a risk-based schedule established by the 

10 Secretary. 

11 ‘‘(C) RISK FACTORS.—In establishing the 

12 risk-based schedule, the Secretary shall inspect 

13 outsourcing facilities according to the known 

14 safety risks of such outsourcing facilities, which 

15 shall be based on the following factors: 

16 ‘‘(i) The compliance history of the 

17 outsourcing facility. 

18 ‘‘(ii) The record, history, and nature 

19 of recalls linked to the outsourcing facility. 

20 ‘‘(iii) The inherent risk of the drug 

21 products compounded at the outsourcing 

22 facility. 

23 ‘‘(iv) The inspection frequency and 

24 history of the outsourcing facility, includ25 ing whether the outsourcing facility has 


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1 been inspected pursuant to section 704 

2 within the last 4 years. 

3 ‘‘(v) Whether the outsourcing facility 

4 has registered under this paragraph as an 

5 entity that intends to compound a drug 

6 product that appears on the list in effect 

7 under section 506E. 

8 ‘‘(vi) Any other criteria deemed nec9 essary and appropriate by the Secretary 

10 for purposes of allocating inspection re11 sources. 

12 ‘‘(5) ADVERSE EVENT REPORTING.—Outsourc13 ing facilities shall be required to submit adverse 

14 event reports to the Secretary in accordance with the 

15 content and format requirements established 

16 through guidance or regulation under section 

17 310.305 of title 21, Code of Federal Regulations (or 

18 any successor regulations) or section 600.80 of title 

19 21, Code of Federal Regulations (or any successor 

20 regulations). 

21 ‘‘(c) DEFINITIONS.—In this section: 

22 ‘‘(1) OUTSOURCING FACILITY.—The term ‘out23 sourcing facility’ means a facility at one geographic 

24 location or address that compounds sterile drug 


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1 products for office use in excess of the limitation set 

2 forth in section 503A(a)(1)(C)(iii). 

3 ‘‘(2) OTHER DEFINITIONS.—The terms 

4 ‘compounding’, ‘essentially a copy of a marketed and 

5 approved drug product’, ‘licensed pharmacist’, and 

6 ‘marketed and approved drug product’ have the 

7 meanings given such terms in section 503A(f).’’. 

8 (b) FEES.—Subchapter C of chapter VII of the Fed9 eral Food, Drug, and Cosmetic Act (21 U.S.C. 379f et 

10 seq.) is amended by adding at the end the following: 

11 ‘‘PART 9—FEES RELATING TO OUTSOURCING 

12 FACILITIES 

13 ‘‘SEC. 744J. DEFINITIONS. 

14 ‘‘In this part: 

15 ‘‘(1) The term ‘affiliate’ has the meaning given 

16 such term in section 735(11). 

17 ‘‘(2) The term ‘gross annual sales’ means the 

18 total worldwide gross annual sales, in United States 

19 dollars, for an outsourcing facility, including the 

20 sales of all the affiliates of the outsourcing facility. 

21 ‘‘(3) The term ‘outsourcing facility’ has the 

22 meaning given to such term in section 503B(c). 

23 ‘‘(4) The term ‘reinspection’ means, with re24 spect to an outsourcing facility, one or more inspec25 tions conducted under section 704 subsequent to an 


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1 inspection conducted under such provision which 

2 identified noncompliance materially related to an ap3 plicable requirement of this Act, specifically to deter4 mine whether compliance has been achieved to the 

5 Secretary’s satisfaction. 

6 ‘‘SEC. 744K. AUTHORITY TO ASSESS AND USE OUTSOURC7 ING FACILITY FEES. 

8 ‘‘(a) ESTABLISHMENT AND REINSPECTION

9 FEES.—— 

10 ‘‘(1) IN GENERAL.—For fiscal year 2015 and 

11 each subsequent fiscal year, the Secretary shall, in 

12 accordance with this subsection, assess and collect— 

13 ‘‘(A) an annual establishment fee from 

14 each outsourcing facility; and 

15 ‘‘(B) a reinspection fee from each out16 sourcing facility subject to a reinspection in 

17 such fiscal year. 

18 ‘‘(2) MULTIPLE REINSPECTIONS.—An outsourc19 ing facility subject to multiple reinspections in a fis20 cal year shall be subject to a reinspection fee for 

21 each reinspection. 

22 ‘‘(b) ESTABLISHMENT AND REINSPECTION FEE SET23 TING.—The Secretary shall— 

24 ‘‘(1) establish the amount of the establishment 

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1 tion for each fiscal year based on the methodology 

2 described in subsection (c); and 

3 ‘‘(2) publish such fee amounts in a Federal 

4 Register notice not later than 60 calendar days be5 fore the start of each such year. 

6 ‘‘(c) AMOUNT OF ESTABLISHMENT FEE AND REIN7 SPECTION FEE.— 

8 ‘‘(1) IN GENERAL.—For each outsourcing facil9 ity in a fiscal year— 

10 ‘‘(A) except as provided in paragraph (4), 

11 the amount of the annual establishment fee 

12 under subsection (b) shall be equal to the sum 

13 of— 

14 ‘‘(i) $15,000, multiplied by the infla15 tion adjustment factor described in para16 graph (2); plus 

17 ‘‘(ii) the small business adjustment 

18 factor described in paragraph (3); and 

19 ‘‘(B) the amount of any reinspection fee (if 

20 applicable) under subsection (b) shall be equal 

21 to $15,000, multiplied by the inflation adjust22 ment factor described in paragraph (3). 

23 ‘‘(2) INFLATION ADJUSTMENT FACTOR.— 

24 ‘‘(A) IN GENERAL.—For fiscal year 2015 

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1 tablished in paragraph (1) shall be adjusted by 

2 the Secretary by notice, published in the Fed3 eral Register, for a fiscal year by the amount 

4 equal to the sum of— 

5 ‘‘(i) one; 

6 ‘‘(ii) the average annual percent 

7 change in the cost, per full-time equivalent 

8 position of the Food and Drug Administra9 tion, of all personnel compensation and 

10 benefits paid with respect to such positions 

11 for the first 3 years of the preceding 4 fis12 cal years, multiplied by the proportion of 

13 personnel compensation and benefits costs 

14 to total costs of an average full-time equiv15 alent position of the Food and Drug Ad16 ministration for the first 3 years of the 

17 preceding 4 fiscal years; and 

18 ‘‘(iii) the average annual percent 

19 change that occurred in the Consumer 

20 Price Index for urban consumers (U.S. 

21 City Average; Not Seasonally Adjusted; All 

22 items; Annual Index) for the first 3 years 

23 of the preceding 4 years of available data 

24 multiplied by the proportion of all costs 

25 other than personnel compensation and 


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1 benefits costs to total costs of an average 

2 full-time equivalent position of the Food 

3 and Drug Administration for the first 3 

4 years of the preceding 4 fiscal years. 

5 ‘‘(B) COMPOUNDED BASIS.—The adjust6 ment made each fiscal year under subparagraph 

7 (A) shall be added on a compounded basis to 

8 the sum of all adjustments made each fiscal 

9 year after fiscal year 2014 under subparagraph 

10 (A). 

11 ‘‘(3) SMALL BUSINESS ADJUSTMENT FACTOR.— 

12 The small business adjustment factor referred to in 

13 paragraph (1)(A)(ii) shall be an amount established 

14 by the Secretary for each fiscal year based on the 

15 Secretary’s estimate of— 

16 ‘‘(A) the number of small businesses that 

17 will pay a reduced establishment fee for such 

18 fiscal year; and 

19 ‘‘(B) the adjustment to the establishment 

20 fee necessary to achieve total fees equaling the 

21 total fees that the Secretary would have col22 lected if no entity qualified for the small busi23 ness exception in paragraph (4). 

24 ‘‘(4) EXCEPTION FOR SMALL BUSINESSES.— 


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1 ‘‘(A) IN GENERAL.—In the case of an out2 sourcing facility with gross annual sales of 

3 $1,000,000 or less in the 12 months ending 

4 April 1 of the fiscal year immediately preceding 

5 the fiscal year in which the fees under this sec6 tion are assessed, the amount of the establish7 ment fee under subsection (b) for a fiscal year 

shall be equal to 1 8 ⁄3 of the amount calculated 

9 under paragraph (1)(A)(i) for such fiscal year. 

10 ‘‘(B) APPLICATION.—To qualify for the ex11 ception under this paragraph, a small business 

12 shall submit to the Secretary a written request 

13 for such exception, in a format specified by the 

14 Secretary in guidance, certifying its gross an15 nual sales for the 12 months ending April 1 of 

16 the fiscal year immediately preceding the fiscal 

17 year in which fees under this subsection are as18 sessed. Any such application shall be submitted 

19 to the Secretary not later than April 30 of such 

20 immediately preceding fiscal year. 

21 ‘‘(5) CREDITING OF FEES.—In establishing the 

22 small business adjustment factor under paragraph 

23 (3) for a fiscal year, the Secretary shall— 

24 ‘‘(A) provide for the crediting of fees from 

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1 retary overestimated the amount of the small 

2 business adjustment factor for such previous 

3 fiscal year; and 

4 ‘‘(B) consider the need to account for any 

5 adjustment of fees and such other factors as 

6 the Secretary determines appropriate. 

7 ‘‘(d) USE OF FEES.—The Secretary shall make all 

8 of the fees collected pursuant to subparagraphs (A) and 

9 (B) of subsection (a)(1) available solely to pay for the 

10 costs of oversight of outsourcing facilities. 

11 ‘‘(e) SUPPLEMENT NOT SUPPLANT.—Funds received 

12 by the Secretary pursuant to this section shall be used 

13 to supplement and not supplant any other Federal funds 

14 available to carry out the activities described in this sec15 tion. 

16 ‘‘(f) CREDITING AND AVAILABILITY OF FEES.—Fees 

17 authorized under this section shall be collected and avail18 able for obligation only to the extent and in the amount 

19 provided in advance in appropriations Acts. Such fees are 

20 authorized to remain available until expended. Such sums 

21 as may be necessary may be transferred from the Food 

22 and Drug Administration salaries and expenses appropria23 tion account without fiscal year limitation to such appro24 priation account for salaries and expenses with such fiscal 

25 year limitation. The sums transferred shall be available 


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1 solely for the purpose of paying the costs of oversight of 

2 outsourcing facilities. 

3 ‘‘(g) COLLECTION OF FEES.— 

4 ‘‘(1) ESTABLISHMENT FEE.—An outsourcing 

5 facility shall remit the establishment fee due under 

6 this section in a fiscal year when submitting a reg7 istration pursuant to section 503B(b) for such fiscal 

8 year. 

9 ‘‘(2) REINSPECTION FEE.—The Secretary shall 

10 specify in the Federal Register notice described in 

11 subsection (b)(2) the manner in which reinspection 

12 fees assessed under this section shall be collected 

13 and the timeline for payment of such fees. Such a 

14 fee shall be collected after the Secretary has con15 ducted a reinspection of the outsourcing facility in16 volved. 

17 ‘‘(3) EFFECT OF FAILURE TO PAY FEES.— 

18 ‘‘(A) REGISTRATION.—An outsourcing fa19 cility shall not be considered registered under 

20 section 503B(b) in a fiscal year until the date 

21 that the outsourcing facility remits the estab22 lishment fee under this subsection for such fis23 cal year. 

24 ‘‘(B) MISBRANDING.—All drug products 

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1 pounded, or processed by an outsourcing facility 

2 for which any establishment fee or reinspection 

3 fee has not been paid, as required by this sec4 tion, shall be deemed misbranded under section 

5 502 until the fees owed for such outsourcing fa6 cility under this section have been paid. 

7 ‘‘(4) COLLECTION OF UNPAID FEES.—In any 

8 case where the Secretary does not receive payment 

9 of a fee assessed under this section within 30 cal10 endar days after it is due, such fee shall be treated 

11 as a claim of the United States Government subject 

12 to provisions of subchapter II of chapter 37 of title 

13 31, United States Code. 

14 ‘‘(h) ANNUAL REPORT TO CONGRESS.—Not later 

15 than 120 calendar days after each fiscal year in which fees 

16 are assessed and collected under this section, the Sec17 retary shall submit a report to the Committee on Health, 

18 Education, Labor, and Pensions of the Senate and the 

19 Committee on Energy and Commerce of the House of 

20 Representatives, to include a description of fees assessed 

21 and collected for such year, a summary description of enti22 ties paying the fees, a description of the hiring and place23 ment of new staff, a description of the use of fee resources 

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1 ber of inspections and reinspections of such facilities per2 formed each year. 

3 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For fis4 cal year 2015 and each subsequent fiscal year, there is 

5 authorized to be appropriated for fees under this sub6 section an amount equivalent to the total amount of fees 

7 assessed for such fiscal year under this section.’’. 

8 SEC. 4. PROHIBITED ACTS. 

9 (a) INTENTIONAL FALSIFICATION OF PRESCRIPTION

10 ORDER FOR COMPOUNDED DRUG PRODUCT.—Section 

11 301 of the Federal Food, Drug, and Cosmetic Act (21 

12 U.S.C. 331) is amended by inserting after paragraph 

13 (bbb) the following: 

14 ‘‘(ccc) With respect to a drug product to be com15 pounded under section 503A or 503B, the intentional fal16 sification of a prescription, a purchase order, or patient 

17 name required under section 503A or 503B.’’. 

18 (b) INTENTIONAL FAILURE OF OUTSOURCING FACIL19 ITY TO REGISTER.—Section 301 of the Federal Food, 

20 Drug, and Cosmetic Act (21 U.S.C. 331), as amended by 

21 subsection (a), is further amended by inserting after para22 graph (ccc) (as added by such subsection), the following: 

23 ‘‘(ddd) With respect to any year in which an out24 sourcing facility is required to register with the Secretary 


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1 under section 503B(b), the intentional failure of the out2 sourcing facility to so register.’’. 

Æ 


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