Bipartisan Agreement Reached on Drug Compounding Safety Bill

A bipartisan group of House and Senate legislators have reached agreement on legislation that would increase oversight on the drug compounding industry in an effort to improve drug safety and the U.S. pharmaceutical supply chain. In 2012, a fungal meningitis outbreak linked to contaminated compounded drugs resulted in hundreds of illnesses and 60 deaths in 23 states. Since that outbreak, the FDA has issued warnings or notices regarding several compounding pharmacies. In April, the FDA inspected 29 firms identified for priority inspections on the basis of either reports of death or two of the following: serious adverse event reports, historical inspection data, or reports of product quality problems.

Drug Compounding

Drug compounding, the process by which a pharmacist combines, mixes, or alters ingredients to create a tailor-made drug to address an individual patient’s medical needs, is a traditional component of pharmaceutical practice. Some pharmacies compound large quantities of drugs in anticipation of future prescriptions. The compounding industry makes up 1 to 3 percent of the prescription drug market in the United States, though the exact number of pharmacies creating compound drugs is unknown. Outsourcing compound drug manufacturing has increased in the last decade, with most hospitals purchasing compounded drugs from at least one outside pharmacy. State pharmacy regulatory bodies are responsible for overseeing pharmaceutical practice. Drug compounding is described in laws and regulations for all 50 states, but specifics vary, as do resources to provide the necessary oversight.

In July, the Government Accountability Office (GAO) reported that the FDA’s limited and inconsistent ability to oversee pharmacies engaged in creating large quantities of compound drugs posed a significant threat to public health (GAO Report, GAO-13-702, July 31, 2013).


The bill, the “Drug Quality and Security Act,” clarifies current federal law regarding pharmacy compounding and resolves the patchwork of current federal regulation by applying a uniform standard nationwide.

Further, compounders may decide to register as outsourcing facilities, but those who choose to remain traditional pharmacies will continue to be regulated primarily by state boards of pharmacy, as they are in current law. Outsourcing facilities would be subject to oversight by the U.S. Food and Drug Administration (FDA) in much the same way as traditional manufacturers are monitored.

The legislation also replaces existing state prescription-drug tracing laws by creating a new uniform framework for tracking drugs from the manufacturer to the pharmacy. According to a release from the Senate Health, Education, Labor and Pensions Committee, “There is currently no system for tracking the drugs that make up some four billion prescriptions per year in the United States, which means drugs that are stolen or counterfeit may not be discovered before reaching consumers.”