FDA warns of a substandard compounding pharmacy--the latest of many notifications

On Oct. 8, FDA sent a warning letter to Qualgen LLC, a compounding pharmacy in Edmond, OK, recommending that it suspend compounding operations until sanitation and sterility issues were addressed. The next day, the pharmacy announced a voluntary recall of certain lots of drugs compounded before Sept. 1, but also told FDA that it was not suspending operations. The day after that, FDA issued a public alert that patients and healthcare professionals “quarantine any drug products marketed as sterile from Qualgen or Amerilab LLC, the facility’s former name, and not administer them to patients.” It also noted that to date, the agency was unaware of any adverse events.

Although the alert sounds ominous, it is only the most recent of a steady stream of such announcements which accelerated in the aftermath of the New England Compounding Center scandal. That incident played out over 2012-3 and caused the deaths of dozens and injuries to dozens more from compounded steroids that caused fungal meningitis in patients across the country. The disaster led to the passage of Title 1 of the Drug Quality and Security Act, which set up an administrative system at FDA where bulk compounding pharmacies could opt to have FDA facility inspections. (Qualgen is one such facility.) About a half-dozen warnings or alerts have been issued by FDA and state boards of pharmacy in the past month; FDA lists 256 warning letters, mostly issued during 2014-5 to a wide variety of small or large compounding pharmacies—and including well-known brands like Walgreens, PharMEDium and Onco360.

The “outsourcing facility” program of FDA, under which inspections occur, has been up and running for exactly a year now. As of early October, 57 facilities have opted in. This special category is meant to address compounding pharmacies that make prescriptions in bulk (i.e., not for a named patient), as opposed to nearly any pharmacist who can compound a product for an individual customer. The voluntary nature of the program exists because FDA is not authorized to regulate pharmacies per se (that is left to the state level); however, bulk compounding is akin to being a pharma manufacturer. Outsourcing facilities pay a fee ($15,000, with minor adjustments) to belong; in theory, healthcare providers that use compounding pharmacies will prefer to work with those with the FDA certification.

There’s a mixed message on the business front: on the one hand, Diplomat Pharmacy (Flint, MI), the largest independent specialty pharmacy has sold off its compounding business to Restore Health (Madison, WI) for an undisclosed price; on the other, AmerisourceBergen, a Big Three wholesaler, has purchased PharMEDium Healthcare Holdings for approximately $2.6 billion from Clayton, Dubilier & Rice, a private investment firm. PharMEDium is the largest compounding-outsourcing facility in the US, serving 3,000 hospitals nationally from compounding centers in Tennessee, Mississippi, Texas and New Jersey.

Many compounded products are generics reformulated or repackaged for such reasons as making a pill into a powder suspension for patients unable to swallow solids. Certain drugs, such as oncolytics, need to be formulated for specific patient dosages. At the same time, there have been dustups over branded drugs being repositioned, or competed against, by compounding pharmacists: Genentech’s oncolytic, Avastin, for example, is sold at a lower price than Lucentis, a macular degeneration treatment, driving some doctors to prescribe compounded Avastin for eye patients (both drugs have the same biologic, although Genentech argues that their formulation as products is different.) Compounding is mostly legal and ethical, but the field tends to draw aggressive healthcare marketers—for example, over the summer, the US Dept. of Defense has been dealing with a skyrocketing cost of compounded treatments of questionable value to patients. (According to press reports, compounding prescribers found that Tricare, the DoD prescription benefit, hadn’t been monitoring compounded-product prescriptions as closely as private insurers have been.)

The inability of FDA to shut down Qualgen points to an ongoing gap in regulating compounding pharmacies; in theory, the OK Board of Pharmacy would step in (the Board did issue a notification earlier this year that non-patient-specific compounding could only be done by FDA-inspected outsourcing facilities).