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Pharmacy Attorneys for Outsourcing Facilities (503B)

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503B Pharmacy Outsourcing Facilities Lawyer

Outsourcing Facilities are one of the compounding pharmacy categories, which allow patients to receive unique prescription drugs, supplements, and other medications that are not commercially available. An Outsourcing Facility creates compounded sterile drugs at one location and then provides those drugs to third parties, such as hospitals, 503A pharmacies, and other licensed prescribers for office use only.

Outsourcing Facilities are described in Section 503B of the Federal Food, Drug, and Cosmetic Act (FDCA).

Why Hire a 503B Outsourcing Facility Attorney

Outsourcing Facilities, like any pharmacy company, are subject to significant state and federal regulations. These regulations are complex and cover business, employment, healthcare, and pharmacy regulations. Both state and federal laws that regulate pharmacy businesses can change rapidly, and it can be difficult to ensure compliance. Outsourcing Facilities and compounding pharmacies have seen a recent expansion of regulatory law. This can make it more challenging to comply with these laws. Especially since these laws vary from state to state.

It’s important for pharmacies to comply with the added regulatory changes, as they are necessary for the health and safety of the pharmacy’s patients. Any regulation noncompliance can also lead to significant consequences for an Outsourcing Facility. This includes license discipline for  pharmacists and pharmacy technicians, facility registration revocation, fines, and even criminal consequences.

Because scrutiny of Outsourcing Facilities and compounding pharmacies is increasing, it is vital that these facilities protect themselves. Your Outsourcing Facility needs policies for regulation compliance, and these policies need to be effective. Working with a pharmacy attorney for 503B Outsourcing Facilities can help mitigate the risk of noncompliance. An attorney can also be a valuable business partner in monitoring and continuing compliance as laws evolve.

Helping Outsourcing Facilities Maintain Compliance

At Boesen & Snow Law, our experienced attorneys can work with your Outsourcing Facility to create or review the policies and programs that outline regulation and compliance. Outsourcing Facilities provide an essential service to patients who need unique prescriptions. They also provide a service to healthcare providers who receive sterile compound drugs from Outsourcing Facilities. Compounded prescription drugs are subject to several laws to ensure that they are safe for patient consumption, and Outsourcing Facilities must comply with those requirements as well as Current Good Manufacturing Practices (CGMP).

Creating a policy is not enough to ensure compliance. There must be employee training, monitoring of procedures, and internal reviews to be sure that the policies are being implemented in day-to-day business. Without these checks, your facility is vulnerable to tort liability and governmental action.

The attorneys at Boesen & Snow have more than 50 years of combined experience in business, healthcare, and pharmacy law. We have various backgrounds in pharmacy, pharmaceutical industry, and business management, professional audits, and healthcare work. This experience and focus on pharmacy law make our team exceptionally qualified to handle your facility’s needs. We understand the challenges of leading a pharmaceutical business because we’ve been where you are.

Our team aims to help you grow your facility and create a profitable business while remaining compliant with local, state, and federal laws.

The Difference Between 503A and 503B Facilities

The Food and Drug Administration (FDA) divided compounding pharmacies into 503A and 503B entities, providing some pharmacies the option to become Outsourcing Facilities. The main difference between 503A compounding pharmacies and 503B Outsourcing Facilities is that 503B facilities are subject to more regulation and authority by the FDA and other agencies.

503A pharmacies are exempt from certain regulations in the FDCA and exempt from some FDA authority. 503A pharmacies are required to follow the regulations covered by the 503A section of the FDC Act and state laws governing the practice of pharmacy. The FDA can conduct inspections of these pharmacies if they have cause to and limit their scope to regulated medications. This is to ensure they meet the requirements to be exempt and to ensure sanitary conditions.

How Are 503A Pharmacies Exempt?

In order for 503A pharmacies to be considered exempt, they must show a record of each individual patient for whom each prescription is made. These pharmacies can only compound individual prescription orders and cannot create large batches of compounds that could be used for commercial sale.

503B Outsourcing Facilities do not have exemptions like 503A pharmacies. They must comply with the FDC Act, FDA regulations, the CGMPs, and other authorities. FDA inspections do not need cause and can be conducted as a surprise inspection or as part of a regular occurrence.

Understanding 503B Outsourcing Facilities

A compounding pharmacy can become an Outsourcing Facility, which removes the requirement to have individual patient prescriptions for each compounded drug. The legal definition of a 503B outsourcing facility is that:

  1. It is at one location or address that creates sterile compound drugs,
  2. It has chosen to register as an Outsourcing Facility, and
  3. It complies with all 503B requirements and regulations.

These facilities can make a larger number of compound drugs without needing prescriptions, which can be sold to healthcare providers and facilities for office use.

What Is the Primary Purpose of a 503B Outsourcing Pharmacy?

Outsourcing Facilities, under section 503B of the FDCA, create compounded prescriptions for healthcare office use. This means altering, combining, and mixing pharmacologic  substances, supplements, and other ingredients to create prescriptions that are unique and not FDA-regulated. These prescriptions can help those with specific allergies to a commercial medication, provide a lower dosage for those who need it, or meet other unique patient needs. Unlike 503A pharmacies, outsourcing facilities can create larger amounts of these compounds rather than only compound pursuant to a patient specific prescription.

503B Outsourcing Facilities Regulation and Requirements

The compounds made in Outsourcing Facilities have higher regulatory standards than those in 503A compounding pharmacies.

The USP  is a nonprofit organization of professionals who set guidelines for dietary supplements, prescription drugs, controlled substances, material handling, and sterility requirements among other things. USP standards are exceptionally relevant to the work done by compounding pharmacies and outsourcing facilities. Certain USP standards ensure that the ingredients, controlled substances, and food ingredients used for compounding prescriptions are quality, potent, pure, and correctly identified.

503B Outsourcing Facilities must comply with the following regulations:

  • The compounding of sterile and nonsterile prescriptions has to be done under the direct oversight and review of a licensed pharmacist or physician.
  • The facility has to comply with all CGMP requirements. If an Outsourcing Facility does not comply with CGMPs, compounded drugs are considered adulterated.
  • The facility must register and comply with the state’s Board of Pharmacy.
  • The facility must register with the DEA, if producing controlled substances.
  • The facility must register with the FDA, provide a product list to the FDA biannually, and is subject to inspection by the FDA based on cause.
  • The facility has to maintain an internal quality control department.
  • The compounded drugs are not made for resale and must be labeled as such.

When a 503B outsourcing facility reports to the FDA regarding their compounded prescriptions, they must include all information about the products made on site, including:

  • An inventoried list of all prescriptions or products made in the past six months
  • A list of the ingredients used in the products and the source of those ingredients
  • Any adverse effects the products had when used or made

USP standards are sometimes enforced by the FDA and each state’s Board of Pharmacy. The guidelines are sometimes considered to be the minimum standard for pharmacy operations. Noncompliance with FDA regulation or any other state and federal laws may result in penalties against an outsourcing facility.

Benefits of a 503B Outsourcing Facility

An Outsourcing Facility has several benefits for business owners, patients, and medical practitioners. This includes:

  • The ability to provide compounded prescriptions for in-office use. This allows providers to distribute these compounded prescriptions without the limitations imposed by a compounding pharmacy that can only carry patient-unique compounds.
  • 503B Outsourcing Facilities must have their own quality control department.
  • The ability to compound medications listed on the FDAs drug shortage list..

Types of FDA Inspections

The FDA conducts different types of inspections on 503B outsourcing facilities. These include:

·   Surveillance Inspections

These are considered routine and regular inspections to determine regulatory compliance. Surveillance inspections are not usually conducted on 503A compounding pharmacies.

·   For-Cause Inspections

These inspections occur when the FDA has reason to investigate the compliance of an outsourcing facility or compounding pharmacy. It may have received a complaint, or it may have concerns over sterility and drug contamination or about the facility’s process. The FDA may also be investigating internal or external reports of adverse events about compounded prescriptions.

·   Follow-Up Inspections

After a for-cause inspection or after a surveillance inspection that determines noncompliance, the FDA may conduct a follow-up inspection. These are also considered a form of for-cause inspections. This inspection may determine if the noncompliance has been effectively solved with policy or implementing correction.

How Does an Attorney for a 503B Outsourcing Facility Help?

Operating an Outsourcing Facility is not easy. Like any pharmacy facility, it is highly regulated in several sectors. Though regulatory law is essential, it can be incredibly challenging to manage a profitable Outsourcing Facility while also ensuring proper regulation compliance.

Ensuring your business is regulated and compliant has several benefits. It provides for the care, health, and safety of the patients and healthcare facilities that receive and dispense your compounded prescriptions. It also protects you, your staff, and your business from liability. Violations and noncompliance can result in administrative, civil, and criminal penalties. Penalties from federal or state agencies may include fines, actions against the registration or license of the facility and staff, and even jail time.

You can limit your business’s risk for these issues by letting an attorney handle the creation and implementation of a comprehensive compliance policy. Your attorney can create training for employees across various job duties and internal monitoring to ensure compliance within the outsourcing facility. They can review any current policies or create a program from the beginning.

In Addition

A healthcare and business attorney can ensure that regulatory compliance fits within your business model and that regulation works with your company goals. The sooner a complete policy binder is created, the better protected your Outsourcing Facility will be from noncompliance violations during inspections and reviews.

In addition to regulations specific to Outsourcing Facilities, you may be subject to other healthcare, business, and pharmaceutical laws. At Boesen & Snow, we can manage all the regulatory requirements and determine which apply to your company. We can help with:

  • DEA registration, and renewals
  • FDA regulation compliance
  • EPA regulation compliance
  • Healthcare fraud and abuse claims
  • Anti-Kickback laws
  • Stark Law
  • False Claims Act
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Health Information Technology for Economic and Clinical Health Act (HITECH)
  • Pharmacy audits and investigations
  • Employment law and background checks
  • Local, state, federal, and corporate regulatory compliance

At Boesen & Snow, we can protect your company from regulatory violations across business and pharmacy requirements.

USP General Chapters That Deal with the Practice of Pharmacy

The USP standards that are relevant to the practice of pharmacy include:

·   USP General Chapter <797>

USP <797> covers compounded sterile prescription drugs.. These guidelines are intended to ensure that sterile drug preparations are held to a quality standard and are prepared in a safe and sterile way. These guidelines are generally applied to any healthcare facility or pharmacy that makes sterile compounds. This includes hospitals, retail pharmacies, operating rooms, physician offices, veterinary practices, long-term care facilities, and other medical centers. Any professional who handles these compounds may be required to comply with these standards.

USP <797> enables agencies to regulate the unsanitary or unsterile creation of these compound medications. Potential health concerns include microbial contamination, inaccurate ingredients, bacterial endotoxins, and inaccurate dosage or strength of ingredients. These guidelines are intended to protect the health and safety of patients. A compounding pharmacy outsourcing facility that fails to comply could face violations of law if enforced in the jurisdiction in which the pharmacy operates.

·   USP General Chapter <795>

USP <795> also attempts to set guidelines and standards for health, safety, and cleanliness. These standards may apply to compounding pharmacies making compounded nonsterile prescription drugs.

These guidelines include employee training, nonsterile environment regulation, hand hygiene, accurate beyond-use dating (BUD), cleaning surfaces and equipment, and ingredients quality control and storage.

Compliance With USP General Chapter <797>

Compliance with any USP standard requires similar steps:

  1. Determining the categorization of the facility and which regulations apply,
  2. Creating policies to reflect those regulations, and
  3. Ensuring the policies are implemented completely through employee training.

How these steps apply depends on the specific pharmacy facilities.

Complying with USP <797> may be essential if your facility compounds sterile compounds. Because sterility is so important to ensure patient safety, these regulations are taken seriously. Compliance with these standards can be complex, but an attorney can help you implement policies and programs that keep your business compliant. Compliance steps for USP <797> include:

1. Making Policy to Meet Regulation Requirements

A pharmacy has to have policies, programs, and implementation of those plans to comply with any regulation, including USP <797>. To comply with USP <797>, programs should cover regulatory issues such as:

  • How sterile compounds and their ingredients are stored
  • The sterilization of surfaces, equipment, and the rest of the location daily and prior to releasing sterile compounds
  • Guidelines for controlling the quality of the environment, compounds, ingredients, and other products
  • How to ensure accurate BUDs
  • The creation of systems to monitor patients
  • Reporting systems for adverse effects of sterile compound prescriptions

An attorney can help determine which regulations are necessary for your facility and create a plan for compliance.

2. Monitoring and Implementing Policy in Employee Training

Regular employee training is essential to ensure that USP <797> regulation is being followed. An inspection by the FDA or other agency checks policy and how it’s being carried out. Staff in a pharmacy has to have compulsive and frequent training that covers the appropriate care and sterility for these compounds. Training has to be tailored to each type of employee at the facility and may cover issues such as:

  • Measures for sterility, including antiseptic hand hygiene, personal protective wear, and disinfecting of surfaces
  • How ingredients are stored and used in sterile compound preparation
  • The inventory, measurement, and identification of ingredients used
  • How the location should be prepared and sterilized
  • How products, ingredients, and sterile compounds should be handled, labeled, and packaged
  • Guidelines for protecting staff, locations, and the environment from contaminating agents

Policy covering these aspects is only useful if the pharmacy staff follows and implements the regulation in their daily work. Depending on the type of facility and the regulatory needs, these policies may need to be reviewed annually or semi-annually.

Boesen & Snow Law: Your Business Partners for Pharmacy Compliance

Pharmacies are facing increasing scrutiny from state and federal regulatory bodies. For business owners of pharmacies, compliance is a must to provide safe pharmaceutical compounds and maintain a profitable and registered facility.

The team with Boesen & Snow understands the complexities of running a pharmacy business and wants to make your job easier. We know how business, healthcare, and pharmaceutical regulations intersect for pharmacies. Our attorneys can defend you during inspection or investigation to ensure your rights are protected. We can review your current regulatory policies and update and strengthen them to reflect your company’s needs and the current regulatory laws. Contact Boesen & Snow today for help with your facility’s compliance.

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