Senate Finalizes Drug Compounding, Tracking Legislation

Congress gave final approval this week to new legislation to strengthen Food and Drug Administration authority to oversee large pharmacy compounders of sterile injectibles and to require more comprehensive tracking of prescription drugs moving through the global supply chain. The House passed the the Drug Quality and Security Act in late September, but Senate action was delayed, first by the federal government shut-down in October and then by individual efforts to force a vote related to Obamacare.

But continued public outrage over deaths from contaminated injectibles produced by large compounding pharmacies, along with rising concerns about counterfeit and unauthorized drugs entering the U.S. market, managed to overcome the partisan stalemate on Capitol Hill to win strong approval for the measure. No one gets all they wanted from, but it provides more clarity and predictability to drug oversight programs and moves forward initiatives designed to enhance the safety and quality of medicines in the U.S.

Alan Coukell, senior director of drugs and medical devices at The Pew Charitable Trusts, praised the bill as “meaningful” and that efforts to block counterfeit and contaminated drugs will “help protect lives and alleviate these costs by ensuring that prescription drugs are safe, effective and of the highest quality.”  President Obama is expected to sign the bill fairly quickly.

Voluntary system

As previously noted here, the first section of the bill clarifies FDA’s authority over drug compounding, which resolves questions raised by diverse federal court rulings on the issue. Pharmaceutical manufacturers gained legislative language specifying that compounders cannot produce drugs that are “essentially a copy of a marketed drug.” But the bill is not as strong as FDA and patient advocates had hoped, as it fails to set specific criteria to differentiate large commercial operations from local compounding pharmacies. The legislation instead relies on a voluntary registration system for large-scale compounders, which will have an impact only if large purchasers of compounded drugs insist that their suppliers meet FDA standards.

Pre-empting states

The main gain for manufacturers from the drug supply chain security section of the act is to pre-empt state pedigree laws, including the comprehensive California statute slated to go into effect in 2015. The new bill generally follows the Senate’s 10-year time-line for establishing an electronic, interoperable, unit-level drug tracking system. All drug packages will have to carry serial numbers in four years, and FDA will establish verification and traceability standards and provisions for data exchange.

The tracking system will include manufacturers, wholesaler/distributors and pharmacies, with some exceptions for small firms. In addition, third-party logistics providers such as Federal Express and UPS get a pass on keeping records and participating in investigators, which could create serious gaps in the tracking process.

Some critics blasted the bill for giving industry so much time to establish unit-level tracking and for imposing fairly weak oversight of compounders. But FDA, manufacturers and policy makers seem pleased to gain enactment of any legislation at all. The long-term impact remains to be seen.