An Update On 503B Outsourcing Facilities

In response to the 2012 fungal meningitis outbreak that occurred at the New England Compounding Center (NECC), the U.S. Congress amended the Food, Drug, and Cosmetics Act in 2013 to cover pharmacy compounding under the Drug Quality and Security Act (DQSA). Under section 503B, a human drug compounding pharmacy could choose to register as an outsourcing facility. This makes outsourcing facilities subject to GMPs.

Now, seven years later, what is the current state of 503B outsourcing facilities? What is the regulatory landscape like? And how can 503B outsourcing facilities improve their quality and compliance? 

On July 30, Jason McGuire, Vice President of Global Quality, Fagron, and Redica Systems’ Senior GMP Quality Expert Jerry Chapman presented the webinar “Delivering Personalized Medicine and Helping Mitigate Drug Shortages: The 503B Outsourcing Story.”

[Related: Download the webinar, “Delivering Personalized Medicine and Helping Mitigate Drug Shortages: The 503B Outsourcing Story,” here.]

FDA Keeps Pace on Compounding

McGuire began his talk by covering the differences between 503A and 503B requirements. 503A covers traditional pharmacy compounding whereby a pharmacy produces a drug product prescribed to an individual patient.  503B outsourcing facilities produce large batches of products for distribution to healthcare facilities. These facilities can register with FDA.

Since 2013, McGuire said, “The agency has been extremely busy to ensure risk is mitigated through establishing certain quality standards and also to ensure compliance by monitoring the 503B industry through inspections” (Figure 1).

While 2020 saw few 503B-related FDA documents (guidances, regulations, etc.), FDA did hold a listening session in June for stakeholders. 

“At that listening session they covered many topics,” McGuire said. “Of particular interest was the 503B role that they are playing in the current COVID-19 pandemic.”

Sterility assurance, a critical factor in the 2012 fungal meningitis outbreak, remains a top priority for the agency. Other areas of concern for FDA are Corrective and Preventive Actions (CAPAs), investigations, and facility design.

In addition, the listening session addressed FDA’s Compounding Quality Center of Excellence launched in January. 

Historically, the relationship between pharmacy compounders and FDA has been tenuous. Instead of a quality director interacting with the agency like at a large pharmaceutical company, pharmacies would often send lawyers to meet with FDA. 

“I think we have grown up from this particular idea and practice,” McGuire said of the adversarial mindset.  

He then detailed current and future FDA compounding policies, focusing on what he calls “impact policies.” The agency is currently looking at compounded drugs that are essentially copied and compounding from bulk drug substances.

Potential Compounding CFR Coming?

“Something I’ve heard of in some circles is that FDA may be considering a policy specific to the outsourcing facility industry. There may be a possible CFR 213,” McGuire said. “I haven’t heard too much of it. I’ve only heard of it at one particular conference last year or the year before. But I haven’t heard anything on this particular action at this point.”

Next, he delved into the recent FDA GMP guidance on outsourcing. This one is more expansive than the initial 2013 guidance on compounding, featuring:

• Heavy focus on quality control
• Specificity to stability testing requirements
• Detailed expectations on Quality Agreements
• More science-based rationale for the decisions behind certain guidelines

“Something else the industry had to come into was what I would call a reality check and a reset,” he said. “Those [outsourcing facilities] serious about providing high-quality, safe medicines have a super focus on quality.”

Lack of expertise about GMPs was an initial challenge. But with this change in mindset, “there had to be a holistic approach to quality management.”

McGuire added, “It was more than just testing.” 

A Business Case for Quality Culture

Leadership emphasizing quality culture was essential to this sea change.

“Quality culture is essential to maintaining long-term success,” he said.  “When you have the right mindset on quality, you’re going to deliver good products.”

McGuire pointed to the FDA’s Quality Metrics Program, a voluntary reporting program to transparently share key metrics/key performance indicators (KPIs) across the pharma industry. FDA is also working with the University of St. Gallen, an academic institution based in Switzerland, to research quality metrics and quality culture. So far, their findings show that quality metrics are good business practice—for example, sites without a good quality culture tend to have higher batch failures and customer complaints. 

“Quality maturity attributes have a positive correlation with quality behavior attributes,” he said, explaining that a mature quality culture can increase the profitability of a business.

Quality Culture in Action

McGuire used a small case study from his company to illustrate how a 503B outsourcing facility can benefit from using quality metric KPIs. Fagron provides 503B pharmacy compounding services at many sites throughout North America and around the world, including Fagron Sterile Services US.  At the time of the case study, he was the Director of Quality for North American sites. In 2017, his company began looking at how they could improve and maintain quality. 

He conceded that the initiative did not go smoothly in the beginning. Yet his team did gain some lessons learned:

• Engagement with stakeholders needed to be better managed
• Quality and operations needed better communication on KPI strategy
• Each site’s organization and structure was different resulting in a “mixed bag” of metrics reporting
• Transitions in leadership along with reorganizations potentially disrupted data collection
• The company needed staff with strong data analysis skills

In early 2019, his team started collecting data from two sites using the KPI of “the right first time.” At that time, they had a “Houston, We Have a Problem” moment: the goal was 90% but some sites were as low as 14%.

“This is a point in time where I thought, ‘what was going on? Why are we not successfully achieving our targets?” he said. “You had to get to the ‘why?’ What was the real issue?”

In the end, it boiled down to a lack of quality culture and a lack of alignment between operations and QA. This led to a “restart.”

“Once we restarted, we had a tremendous level of effort between both teams,” McGuire said. Both sites worked to meet an average of 95% of right-first-time metrics. The change required extensive training of staff. Anecdotally, the company also noticed an increase in profitability after the restart.

“That was a win-win at the end of the day,” he said. “And once I was able to show our other sites this opportunity we also decreased our cost of non-conformance.”

The Future is Digital

For the remainder of the webinar, Chapman showed how to use artificial intelligence to data-mine 503B Warning Letters. First, he showed the number of Warning Letters FDA issued to both 503A and 503B facilities between 2014 and part of 2019 (Figure 2). 503A and 503B facilities received the second-highest number of Warning Letters in that time frame at 36%, with pharmaceutical manufacturing higher at 37%.

“Moving into the 503B space requires new systems that need to be developed and managed,” he said. 

Chapman investigated whether 503B companies are successfully meeting the challenges observed in FDA Warning Letters.

Using the Redica platform, he searched the number of Warning Letters by facility type. Compounding pharmacies (both 503A and 503B) received the second most number of Warning Letters between 2014 and 2019. The number of Warning Letters peaked in 2017 for compounding pharmacies but have tapered down since then. 

But he wanted to probe further. 

“The question that I asked was, if you look at FDA’s inspections of specifically 503B, how successfully have they been meeting these challenges,” Chapman asked. 

For analysis, he used the search parameters of 503B Warning Letters issued since 2014, the number with CFR citations, and all FDA drug GMP Warning Letters in the last five years. Chapman then searched by CFR citation.

Over 80% of 503B CFR citations were for aseptic processing validation. Environmental monitoring violations were also over 80%.

Compared to all drug GMP Warning Letters, the number of aseptic processing validation and environmental monitoring violations were significantly higher for 503B facilities in the past five years (Figure 3). 

Chapman also used a proprietary algorithm developed by Redica Systems to search the 503B warning letters for issues that appear in the example text but were not cited by the agency. This analysis indicated that several areas should be more closely evaluated by 503B firms to see if they may be problematic. These include material sampling and testing, cleaning validation, cleaning of sterile equipment, and laboratory method validation.

In looking at the future of 503B compounding firms, both McGuire and Chapman see tools like the Redica Systems platform as critical to ensuring safe and effective products to patients. 

“If you are really wanting a second check,” McGuire said, “this could be another tool that would give you the insight to make that robust response the agency expects.”

[Related: Download the webinar, “Delivering Personalized Medicine and Helping Mitigate Drug Shortages: The 503B Outsourcing Story,” here.]