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Polsinelli - Environmental and Natural Resources

November 2013


Key Points: Compounding Quality Act


Life Sciences Professionals:


Kevin R. Sweeney

Practice Area Chair


Ari M. Bai
Mary Beth Blake
Yu Cai
Elton F. Dean III
Kathryn J. Doty
Robert O. Enyard Jr.
Anita R. Estell
Geoffrey D. Fasel
Ron Galant
Melissa Gilmore
Kimberly A. Honeycutt
Andrew T. Hoyne
J. Morgan Kirley
Gregory M. Kratofil
Jane K. McCahill
Cortney E. Mendenhall
Tara A. Nealey
Jay E. Pietig
Andrea M. Porterfield
Rebecca C. Riley-Vargas
Thomas J. Schenkelberg
Kelley A. Schnieders
Teddy C. Scott
Christopher P. Simpson
Timothy D. Steffens
James M. Stipek
Steven K. Stranne
Kevin R. Sweeney
Tracey S. Truitt
Brian G. Wallace
Michael A. Williamson
Patrick C. Woolley


To learn more about our Life Sciences practice, or to contact one of our Life Sciences attorneys, click here.


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The Compounding Quality Act (CQA) amends the U.S. Food, Drug & Cosmetic Act (Act) to create a new, voluntary category of compounders called "outsourcing facilities" (OF). Compounded drugs are those mixed by a pharmacist that differ from commercially available drugs according to individual needs. If a pharmacy chooses to register as an OF, it will be exempt from the new drug application, labeling, and track and trace requirements imposed on pharmaceutical manufacturers. In addition, the OF will be permitted to dispense drugs without an individual patient prescription.

In order to register as an OF, the facility must do the following:

  • Compound by or under the direct supervision of a licensed pharmacist;
  • Pay a $15,000 annual fee (small business fee TBD);
  • Register annually with FDA;
  • Report to FDA every June and December:
    • what drugs have been compounded in the facility in the prior 6 months
    • adverse events;
  • Allow FDA inspections
    • on a risk-based frequency schedule, depending on prior safety performance
    • additional fees to be assessed if reinspection is necessary.

OFs are prohibited from:

  • Compounding from any bulk substance that does not appear on a list of APIs deemed permissible by FDA;
  • Compounding any drugs that appear on a list of drugs deemed by FDA to be demonstrably difficult to compound;
  • Reselling a compounded drug;
  • Intentionally falsifying a prescription for a compounded drug.

Under the CQA, state boards of pharmacy are required to notify FDA of:

  • any disciplinary actions taken against compounding pharmacies or any recall of a compounded drug, and
  • intentionally falsifying a prescription for a compounded drug.

The CQA also:

  • Removes former prohibitions on advertising, promotion, and solicitation of prescriptions by compounding pharmacies;
  • Requires the GAO to issue report on pharmacy compounding and the adequacy of state and federal efforts to assure the safety of compounded drugs.

If a business chooses to register as an OF, it will continue to be subject to state pharmacy regulations as supported by Section 503A of the Act. The next article in this series will address businesses that choose to remain non-OF compounding pharmacies.

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