When considering outsourcing, pharmacies should use a multistakeholder team to weigh pros and cons.
Health-system pharmacies have grappled with ways to address high drug costs, shortages, and technician labor.1-3 One common strategy is using 503B compounding facilities to outsource some of pharmacy’s labor intensive compounding needs.
Pharmacies historically compounded sterile products in-house or used specialized pharmacies guided by outsourcing facility compounding regulations. After reported infection outbreaks, including fungal meningitis, regulatory oversight was increased.4,5
The most impactful piece of legislation for outsourced compounding was the Drug Quality and Security Act. This regulation created a new section, labeled 503B, under the Federal Food, Drug, and Cosmetic Act.4
Under this section, a pharmacy compounding product for use in another facility can become a registered outsourcing facility. A registered facility is defined as a geographic location or address engaged in the compounding of sterile drugs that has elected to register as an outsourcing facility and complied with requirements of section 503B.4
A registered 503B outsourced pharmacy can qualify for exemptions from the FDA approval requirements and the requirement to label products with adequate directions for use but must comply with federal and state rules, meet strict current good manufacturing practices (cGMPs), and be routinely inspected by the state board of pharmacy and FDA.6 In addition, it must provide additional reporting to the FDA on products compounded in the previous 6-month period.4
Legislative intent was that registered facilities following the requirements and meeting strict standards as FDA-approved 503B outsourcers would provide high-quality, safe preparations for patients. Added benefits of registered facilities include availability, cost savings (bulk), increased oversight, and ready-to-use format.7
The FDA clarified cGMP requirements for compounding facilities, posted frequently asked questions, and published guidance documents for Section 503B.6 Based on original guidance, a drug was considered adulterated if not produced in accordance with cGMP (21 CFR [Code of Federal Regulations] Part 210 [cGMP in manufacturing, processing, packing, or holding] and Part 211 [cGMP for finished pharmaceuticals]).6
The FDA attempted clarification, noting it would release more specific cGMP regulations for 503B outsourcing facilities.6 Until those regulations were released and clarified, the FDA required outsourcing facilities to adhere to the 21 CFR Part 210 and Part 211 rules.6
The FDA released updated draft guidance for 503B pharmacies in 2021. The agency “recommended” use of “FDA-registered 503B facilities.”8,9
However, it “required” that health systems meet standards minimizing contamination risk and risks associated with low-risk compounding conditions. For example, bulk substances (active pharmaceutical ingredients) may be compounded if they are on a list identifying bulk drug products (eg, the FDA 503B bulks list) or the FDA’s drug shortage list. If an applicable United States Pharmacopeia-National Formulary monograph exists, bulk drug substances must comply with the monograph.10,11
When considering outsourcing, pharmacies should use a multistakeholder team to weigh the pros and cons of each process and vendor, reduce risk, minimize cost, and ensure patient safety. A great resource is the American Society of Health-System Pharmacists Guidelines on Outsourcing Sterile Compounding Services.12
Evaluations of vendors and agreements should include a review of licensure and any boards of pharmacy, the FDA, or other licensing body actions. Pharmacies can review any inspection documents from the FDA as public records. If FDA Form 483 has been filed, it means substandard conditions were found during an inspection.
More in-depth questions should be asked, such as those about clean room certifications and documentation, compounding or training records, and review of audit documents. Pharmacies should also review cGMP procedures and their quality assurance (QA) processes if they are accredited by an outside body.
They also should include information about monitoring microorganisms and particles, primary engineering controls, environmental monitoring, and suppliers or vendors of materials and how they were qualified. Within the domain of QA, the goal has been ensuring consistently produced, high-quality compounds. The final consideration is best practices.
Although 503B vendors are relatively new to the health care world, the importance of authority, honesty, and transparency within QA departments is unchanged.6 Critical questions for this domain include the QA department’s authority and role, the process for reporting adverse effects to patients, and whether the QA department can reject or release products.
Pharmacies evaluating a 503B outsourcing service continue to face challenges. In 2023, supplier and supply chain issues emerged at Nephron Pharmaceuticals Corp, one of the country’s largest facilities, furloughing workers and facing possible closure after it received cGMP violations from the FDA.13-15 In addition, Akorn Pharmaceuticals LLC has shut down all operations.16-18
Pharmacies must ensure they thoroughly review vendors and agreements and stay abreast of regulatory challenges. Liability likely remains with the dispensing pharmacy, even if it is an outsourced pharmacy product, and pharmacies must ensure they have done due diligence to ensure a safer process. Pharmacies must balance cost, drug shortages, labor, and patient safety when making decisions related to outsourcing.
1. Hennessy M Jr. Pharmacy technician shortage reaches critical level. Pharmacy Times. November 1, 2022. Accessed April 10, 2023. https://www.pharmacytimes.com/view/pharmacy-technician-shortage-reaches-critical-level
2. Pharmacy technician shortage survey findings executive summary. American Society of Health-System Pharmacists. March 2022. Accessed March 13, 2023. https://www.ashp.org/-/media/assets/pharmacy-technician/docs/Technician-Shortage-Survey-Exec-Summary.pdf
3. Hospitals and health systems experiencing a severe shortage of pharmacy technicians. News release. American Society of Health-System Pharmacists. March 15, 2022. Accessed March 13, 2023. https://www.ashp.org/news/2022/03/15/hospitals-and-health-systems-experiencing-severe-shortage-of-pharmacy-technicians?loginreturnUrl=SSOCheckOnly
4. Information for outsourcing facilities. FDA. March 29, 2022. Accessed March 13, 2023. https://www.fda.gov/drugs/human-drug-compounding/information-outsourcing-facilities
5. January 31, 2018: New England compounding center pharmacist sentenced for role in nationwide fungal meningitis outbreak. News release. FDA. January 31, 2018. Accessed March 14, 2023. https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/press-releases/january-31-2018-new-england-compounding-center-pharmacist-sentenced-role-nationwide-fungal
6. Current good manufacturing practice (CGMP) regulations. FDA. November 16, 2022. Accessed March 14, 2023. https://www.fda.gov/drugs/pharmaceutical-quality-resources/current-good-manufacturing-practice-cgmp-regulations
7. Gianturco SL, Yoon S, Yuen MV, Mattingly AN. Outsourcing facilities and their place in the U.S. drug supply chain. J Am Pharm Assoc (2003). 2021;61(1):e99-e102. doi:10.1016/j.japh.2020.07.021
8. US Department of Health & Human Services, FDA, Center for Drug Evaluation and Research. Current Good Manufacturing Practice—Guidance for Human Drug Compounding Outsourcing Facilities Under Section 503B of the FD&C Act: Guidance for Industry. FDA; 2020. Accessed March 16, 2023. https://www.fda.gov/media/88905/download
9. Issue brief: FDA revised hospital and health system interim draft guidance. American Society of Health-System Pharmacists. October 6, 2021. Accessed March 16, 2023. https://www.ashp.org/advocacy-and-issues/key-issues/other-issues/compounding/issue-brief-fda-revised-hospital-and-health-system-interim-draft-guidance?login-returnUrl=SSOCheckOnly
10. Bulk drug substances used in compounding. FDA. December 21, 2022. Accessed March 16, 2023. https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding
11. USP monographs for bulk substances. United States Pharmacopeial Convention. Accessed March 16, 2023. https://www.usp.org/compounding/bulk-drug-substances-monographs
12. Rinehart JR, Chan D, Cunningham M, et al; American Society of Health-System Pharmacy. ASHP guidelines on outsourcing sterile compounding services. Am J Health Syst Pharm. 2010;67(9):757-765. doi:10.2146/sp100005
13. Nephron SC Inc. FDA. October 11, 2022. Accessed March 16, 2023. https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/nephron-sc-inc-634647-10112022
14. 503B outsourcing with cGMP quality. Nephron Pharmaceuticals Corporation. Accessed March 16, 2023. https://www.nephronpharm.com/outsourcing
15. Folks W. Layoffs, furloughs at Nephron Pharmaceuticals. FITSNews. February 17, 2023. Accessed March 16, 2023. https://www.fitsnews.com/2023/02/17/layoffs-furloughs-at-nephron-pharmaceuticals
16. Akorn Pharmaceuticals. Accessed March 16, 2023. https://www.akorn.com/
17. Thompson D. Shortages of asthma drug albuterol ongoing after supplier shuts down. United Press International. March 10, 2023. Accessed March 16, 2023. https://www.upi.com/Health_News/2023/03/10/albuterol-shortage-asthma-drug/3801678385818/
18. Becker Z. Bankrupt Akorn Pharma calls it quits and closes all US sites, laying off entire workforce. Fierce Pharma. February 23, 2023. Accessed March 16, 2023. https://www.fiercepharma.com/manufacturing/akorn-pharma-bankrupt-calls-it-quits-closes-all-us-sites-and-cuts-entire-workforce
About the Authors
Ken Maxik, MBA, BSPharm, Pharm, is vice president of pharmacy operations at HealthTrust Supply Chain in Largo, Florida.
Craig Kimble, PharmD, MBA, MS, BCACP, is director of experiential learning, manager of clinical support services, and associate professor of pharmacy practice, administration, and research at Marshall University School of Pharmacy in Huntington, West Virginia.
Alberto Coustasse, DRPh, MD, MBA, PMh, is a professor of health care management and administration at Marshall University Lewis College of Business in Huntington, West Virginia.