Regulatory Focus™ > News Articles > FDA Guidance Sets up User Fee System for Pharmaceutical Compounders

FDA Guidance Sets up User Fee System for Pharmaceutical Compounders

Posted 31 March 2014 | By Alexander Gaffney, RAC

The US Food and Drug Administration (FDA) has published a new guidance document intended to establish user fees to fund its inspections of a new category of compounding pharmacy established under the Drug Quality and Security Act (DQSA) of 2013.

Background

In late 2012, a massive outbreak of fungal meningitis was traced to deficient manufacturing at a Massachusetts compounding pharmacy. In the wake of the outbreak, which killed more than 60 and left hundreds more injured, regulators and legislators scrambled to determine how future outbreaks might be avoided.

At the heart of the controversy were two factors: authority and funding.

FDA claimed that years of conflicting legal decisions had made it unclear if it had the authority to inspect compounding pharmacies, and that even if it had such authority, it lacked the resources to do so at scale.

Legislators ultimately passed the DQSA in November 2013, reflecting a compromise of sorts. While state regulators would continue to oversee many smaller compounding pharmacies, such as those that might operate within a hospital, compounding pharmacies could regulate as "outsourcing facilities" and be regulated by FDA.

Legislators said they hoped many compounders would seek to be voluntarily regulated as outsourcing facilities, as FDA oversight might be seen as a proxy for quality products.

Existing Guidance

FDA has previously published two guidance documents on outsourcing pharmacies, which are regulated under Section 503B of the Federal Food, Drug and Cosmetic Act (FD&C Act).

The first, Registration for Human Drug Compounding Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act, is meant to clarify the definition of what a compounding pharmacy is and how to register as a compounding pharmacy.

The second, Interim Product Reporting for Human Drug Compounding Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act, clarifies how compounding pharmacies should submit information to FDA on the products they manufacture.

New Guidance: What to Pay FDA

Now FDA is out with a third guidance document on outsourcing facilities regulated under 503B: Fees for Human Drug Compounding Outsourcing Facilities Under The Federal Food, Drug and Cosmetic Act.

As its title implies, the guidance establishes a response to the second challenge originally faced by legislators: funding. Under the DQSA, FDA is authorized to collect user fees from outsourcing pharmacies in order to fund its operations.


Outsourcing Facility Fees under the DQSA

Type of FeeAmount (FY2015)
Annual Establishment Fee$15,000
Annual Establishment Fee - Small Business$5,000
Reinspection Fee$15,000

*All fees subject to annual inflation adjustment


The guidance explains that outsourcing facilities that register prior to 1 October 2014-the end of the government's 2014 fiscal year-will not have to pay a fee for FY2014. They will, however, need to pay the fee for FY2015.

Payments should be submitted each year by 31 December.

Entities which register outside the established registration period (1 October through 31 December) will not be granted a pro-rated fee, but will instead be required to pay the full amount.

Failure to pay a user fee will result in the facility losing its status as an outsourcing facility, FDA said.

Refunds are not available. Disputes involving user fees, such as contested small business status, will be handled by the Center for Drug Evaluation and Research's (CDER) Division of User Fee Management and Budget Formulation under 21 CFR 10.75.


Fees for Human Drug Compounding Outsourcing Facilities Under The Federal Food, Drug and Cosmetic Act (FR)


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