As FDA Begins to Implement DQSA, Questions About Enforcement Discretion go Unanswered

| 03 December 2013 | By Alexander Gaffney, RAC •

Significant questions remain about the implementation of certain compounding-related provisions of the Drug Quality and Security Act (DQSA) meant to prohibit the compounding of "copies" of lawfully approved drugs.

Background

The DQSA, a long-sought piece of legislation intent on reforming the regulation of compounding pharmacies and the pharmaceutical supply chain, was signed by President Barack Obama on 26 November 2013.

The law's compounding provisions were born out of an outbreak of fungal meningitis in late 2012 that was eventually traced back to a Massachusetts-based compounding pharmacy whose products were determined to have been contaminated with the fungus. In the wake out the outbreak, which killed dozens, Congress and the US Food and Drug Administration (FDA) both worked to crack down on deficient practices.

The DQSA's Compounding Quality Act

What eventually emerged was Title I of the DQSA, the Compounding Quality Act (CQA). The CQA, born of significant compromise, offers no single standard to elicit compounding compliance. Rather, it offers compounders a choice: Either they can be regulated by the states, or they can register as an "outsourcing facility" and be regulated by FDA.

While compounders that operate under state licenses will be subject to varying degrees of oversight and regulation, outsourcing facilities will be subject to a standard set of conditions. For example, a compounded product must:

• be made for an individual identified patient based on a valid prescription by a practitioner
• be made by a licensed pharmacist in a licensed (state or federal) facility or by a licensed individual physician
• be compounded in compliance with US Pharmacopoeia standards or in compliance with an established monograph or other FDA bulk drug substance list
• be accompanied by valid certificates of analysis
• not be a compounded version of a drug that has been withdrawn from the market due to reasons of safety or efficacy
• not be a product identified by FDA as being unsuitable for compounding

While several other limitations apply, perhaps the most notable is this: A drug compounded by an outsourcing facility must not be an exact copy of a commercially available drug product (Section 503B(a)(5), "essentially a copy of an approved drug").

Definitional Clarity

The DQSA take is that the term, "essentially a copy," means either of two definitions:

1. a drug that is identical or nearly identical to an approved drug, or a marketed drug not subject to section 503(b) and not subject to approval in an application submitted under section 505, unless, in the case of an approved drug, the drug appears on the drug shortage list in effect under section 506E at the time of compounding, distribution, and dispensing
2. a drug, a component of which is a bulk drug substance that is a component of an approved drug or a marketed drug that is not subject to section 503(b) and not subject to approval in an application submitted under section 505, unless there is a change that produces for an individual patient a clinical difference, as determined by the prescribing practitioner, between the compounded drug and the comparable approved drug

"Approved Drug" is further defined as a product that has obtained approval under Section 505 of the Federal Food, Drug and Cosmetic Act (FD&C Act) and retains an active approval status (i.e. has not been removed from the market for reasons of safety or efficacy).

But this raises numerous questions. For example, what is "nearly" identical under the law? For the purposes of generic drugs, FDA defines identical as a drug that exhibits bioequivalence and the same bioavailability, but it is not clear if the same standards would apply here and, if they did, if compounding facilities would need to show that each compounded drug was not identical to a legally marketed drug.

While Focus was unable to find any significant FDA guidance or policy guides on the subject, there are some enforcement actions taken with respect to the topic (See: Letter to Wedgewood Pharmacy from June 2012) and a compliance policy guidance (460.200) that briefly touches on the topic.

What about Enforcement Discretion?

Another question regards FDA's longstanding use of what it calls "enforcement discretion," or essentially its ability to choose which provisions of the law it wishes to enforce and in which specific cases. While FDA recently lost a major case on its authority to use the discretion, it nevertheless has a long history associated with the use of enforcement discretion in pharmaceutical compounding issues.

Perhaps the most notable instance of this authority being used was in the case of KV Pharmaceutical, a company which brought a preterm birth drug known as Makena (hydroprogesterone captroate injection) to market under the Orphan Drug Act provisions under the FD&C Act. The company obtained approval for the drug, which had been used informally by doctors for the same purpose for years, and forced all other companies supplying the drug to remove it from the market after dramatically increasing the price.

After weathering fierce public outcry about the new cost of the drug, FDA made an unusual announcement: It would permit small-scale pharmaceutical compounders to continue to manufacture the drug. It would, in other words, exercise enforcement discretion and permit those compounders to continue marketing the drug.

FDA: No Comment

So, Focus asked FDA this week, will the agency continue to permit small-scale compounders-even outsourcing facilities-to continue manufacturing this drug in light of its history?

No comment, said FDA, citing an ongoing lawsuit with KV Pharmaceutical, which sued it to reverse its enforcement policy.

We re-phrased the question, asking an FDA spokeswoman if she could elaborate on how the agency planned to use its enforcement capabilities in general.

Again, no comment.

Market-Moving Change or Paper Tiger?

The agency's eventual use or non-use of its enforcement capabilities are likely to be crucial not just to the implementation of this section of the law, but also to the stock prices of many major companies as well.

KV's market share was decimated in the wake of FDA's decision to allow compounding competition, forcing it to declare bankruptcy. It would then stand to reason that a reversal of this policy might benefit the company and others like it, like Roche, the owner of the much-compounded Avastin (bevacizumab).

Then again, there could be little in the way of eventual changes. Section 503A(b)(1)(B) of the FD&C Act has long contained a similar provision to the DQSA's "essentially a copy" provision, albeit with a slightly different definition. But because FDA has had little in the way of inspection authority or resources, it has largely been unable to police the practice of compounding copies of drugs.

And even under the new authorities given to it under the DQSA, states will initially regulate the majority of all compounding pharmacies, potentially leading to a wildly inconsistent application of the law depending on the state in which a compounding pharmacy operates.

It is, in other words, an area to watch closely.