Registered 503B outsourcing facilities—pharmaceutical compounding establishments authorized to produce large batches of sterile drugs without patient-specific prescriptions—are widely utilized. For 73% of hospitals, these vendors serve an important role in mitigating shortages, reducing burdens on hospital staff, and lowering compounding costs.1

Nevertheless, navigating the risks associated with engaging outsourced compounders can be challenging for pharmacy leaders. Each pharmacy is responsible for ensuring its vendors operate safely to provide high-quality products while meeting the requirements of a dynamic regulatory landscape. Pharmacy Purchasing & Products’ October 2024 article, Evaluate 503B Outsourcing Facilities, discusses best practices for conducting and maintaining evaluations for these facilities, ensuring that accreditation requirements and patient safety needs are met. Similarly, the following tips and tools can be utilized in conjunction with that information to help guide processes when selecting 503B outsourced compounding vendors.

Tip 1. Review Guiding Legislation

Before engaging potential vendors, it is important to be familiar with the legislation that helps guide the relationship between outsourced compounders and their clients (see the Table). As a direct response to the aftermath of the deadly compounded medication contamination at the New England Compounding Center, the 2013 Drug Quality and Security Act (DQSA) expanded the Food, Drug, and Cosmetic (FD&C) Act to provide clarification surrounding 503B facilities.2 This act outlines exceptions to provisions of the FD&C Act for these facilities such as “labeling with adequate directions for use, premarket approval requirements, and drug supply chain security requirements.”3 As such, these facilities are required to follow Current Good Manufacturing Practices (CGMP). While the FDA intends to promulgate more specific CGMP regulations for outsourcing facilities, until these are finalized, outsourcing facilities are subject to GMP requirements in 21 CFR parts 210 and 211.4

21 CFR parts 210 and 211 outline the base or minimum expectations in the United States for pharmaceutical manufacturing GMP requirements; in addition, the industry can leverage guidance documents to ensure CGMP compliance. GMP requirements are based in providing evidence, typically through validation efforts, documentation, monitoring, and maintaining a sanitary environment. The requirements provide broad statements as to the what, but not necessarily the how. For example, 21 CFR 211.22(b) addresses the responsibilities of the quality control unit as “the quality control unit shall have the responsibility for approving or rejecting all procedures or specifications impacting on the identity, strength, quality, and purity of the drug product.”5 To determine how to execute this requirement, industry guidance can be helpful, such as the FDA guidance document entitled “Sterile Drug Products Produced by Aseptic Processing—Current Good Manufacturing Practice”.6

Tip 2. Understand FDA Actions and Observations

Key to evaluating a 503B facility’s performance is a thorough review of its regulatory interactions. This is important, as the best predictor of a vendor’s commitment to quality and resiliency is their regulatory history. Exploring FDA inspection documents can be a daunting task; however, familiarizing oneself with the common terms defined below can help facilitate a smooth review.

A careful approach to summating the collected information is warranted: avoid falling into the trap of measuring quality based only on the number of 483s or observations a vendor has received. It is more important to quantify how each FDA audit is classified, the criticality and scope of each observation, and evidence of the vendor’s commitment to continuous quality improvement. The latter can be determined from the vendor’s response to each observation, which is usually not part of the public record and must be requested directly. Note whenever a vendor is continuously cited for the same issues (ie, repeat observations), as this may point to a lack of commitment to improvement. If a vendor has a poor regulatory history, this may be indicative of poor leadership, given that quality culture cascades from the top of the organization.

The following critical documents should be reviewed as part of the vendor evaluation:

• Insanitary Conditions: FDA guidance published and finalized in November 2022 is essential as it enforces legal requirements, not mere recommendations, for maintaining sanitary environments in all settings where drugs are prepared, pursuant to section 501(a)(2)(A) of the FD&C Act. Under this act, any drug produced under conditions that may lead to contamination is considered adulterated—a serious violation that mandates compliance. This guidance underscores that adherence to sanitary conditions is obligatory across various practice settings, including pharmacies and compounding facilities, to prevent drug adulteration and protect public health. Suppliers that fail to maintain sanitary conditions will be subject to FDA action (eg, recalls, Warning Letters, etc).7
• Form FDA 483: During an inspection, FDA investigators may observe conditions they deem to be objectionable, and if present, list observations in a Form FDA 483. The observations are listed in order of risk of significance by the investigator.8 The FDA will classify each inspection into one of 3 categories:9
  • Official Actions Indicated (OAI): Given when the FDA inspection has found significant violations of the regulatory standards. These violations are of a nature that necessitates regulatory action by the FDA. Facilities face enforcement actions, which could include warning letters, product seizures, injunctions, or consent decrees. The organization must take corrective actions to address the identified issues.
  • Voluntary Actions Indicated (VAI): Assigned when the inspectors have found violations, but the issues are not severe enough to require formal regulatory action. The facility is expected to voluntarily correct these issues. While there are no immediate regulatory actions taken by the FDA, the facility is responsible for addressing the issues. The FDA expects the facility to implement corrective measures and may revisit to ensure compliance.
  • No Actions Indicated (NAI): Given when the FDA inspection finds that the facility meets the regulatory requirements; no violations or only minor violations are observed. This is the most favorable outcome of an FDA inspection. No regulatory or compliance follow-up actions are needed, as the facility is considered to be in compliance with FDA regulations based on observed conditions and practices during the inspection.
• Warning Letters: At the conclusion of an inspection, the FDA may deem there to be significant violations of federal regulations and notify the outsourcing facility with a Warning Letter. This letter outlines the identified concerns, the potential impact of such conditions, and requests a response from the facility within a certain timeframe, usually within 15 business days.10
• Establishment Inspection Report (EIR): This comprehensive report is prepared by FDA inspectors following an inspection of a manufacturing facility, including 503B outsourcing facilities. The EIR documents the inspection process, findings, observations, and any actions taken during the inspection. The EIR is much more detailed than a Form FDA 483 and contains additional information such as notes from interviews and discussions with the firm’s leadership, specific documents reviewed, and recommendations for improvement (which may not always rise to the level of a 483 observation). These documents are not made publicly available and thus, must be requested directly from the 503B facility.11
• Field Management Directive (FMD-145): Issued if the FDA does not intend to pursue further action and determines the inspection is closed. This important document clarifies that the FDA is satisfied with the firm’s response and corrective actions (if indicated) and the inspection is closed.11
• Recalls12
  • Class I is the most serious type of recall. It is issued when there is a reasonable probability that the use of, or exposure to, the recalled product will cause serious adverse health consequences or death (eg, contamination with a harmful substance, presence of a toxic ingredient, or a serious labeling error that could result in misuse).
  • Class II recall is used when the use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences, or where the probability of serious adverse health consequences is remote (eg, products that might be less potent than labeled or that contain minor labeling errors that do not pose a significant risk).
  • Class III is the least severe type of recall. It is issued when the use of, or exposure to, a violative product is not likely to cause adverse health consequences (eg, minor container defects, some labeling inconsistencies that do not affect the product’s safety or usage).

Tip 3. Facilitate Impactful Internal and External Communication

While some documents are publicly available to assist in evaluating a 503B outsourcing facilities, a significant number—and arguably the most valuable— must be obtained directly from the vendor. This requires clear communication, setting expectations, and relationship building between the vendor and your organization. The following sample communication can be used to facilitate this request:

• For the [INSERT DOCUMENT TITLE (eg, FDA Form 483)] that was issued on [DATE], can you please provide documentation for how your organization responded to the FDA?
• Can you please provide your latest quality report? Please advise on how our organization can obtain these at least quarterly on an ongoing basis.

Establishing a strong relationship with the vendor is crucial, so your organization is aware—in a timely manner—of any critical information, such as an unannounced FDA site audit, state board of pharmacy audit, DEA audit, etc. There is usually a significant delay of weeks to months before FDA 483s and other documents become publicly available as they undergo review and redactions of confidential or proprietary information. Establishing a quality agreement with the vendor can set expectations for timely communication of critical information (eg, citations, shutdowns, recalls, etc).

Internal review and communication within your own organization is also key. Upon obtaining the quarterly quality reports from each 503B outsourcing facility utilized, ensure that the document is reviewed with key stakeholders internally. To clarify that there is a “state of control” in the organization, a number of elements should be included in the quality report:

• Environmental monitoring results (eg, temperature, pressure, humidity, particulates)
• Microbial monitoring results (eg, surface sampling, air sampling)
• Personnel monitoring results (eg, gloved fingertip and thumb sampling, media-fill results)
• Finished drug product release testing results (eg, sterility tests, endotoxin tests)
• Complaints
• Identification of trends
• Certain end product tests (eg, particulate matter)
• Contamination recovery rate; not just actionable levels (see USP <1116> Microbiological Control and Monitoring of Aseptic Processing Environments)
• Discrepancies, failures, and yield variation statistics

If the report demonstrates significant issues (eg, out of specifications) or developing trends, these should be addressed and clarified with the vendor. The quarterly quality documents allow your organization to maintain assessments in between performing onsite evaluations and should be viewed as a critical, and timely, part of the evaluation process. If a review of a 503B outsourcing facility results in uncertainty or concern about the quality of the products that rise above the threshold for action, timely and effective communication of decisions (eg, pausing purchasing, removing vendor from the approved list, etc) should be transmitted across the organization to key stakeholders, including pharmacy or supply chain personnel involved in purchasing 503B products.

Kevin N. Hansen, PharmD, MS, BCSCP, is the senior director of pharmacy compounding services at Premier Inc. He earned his doctor of pharmacy degree from LECOM, completed a PGY1/PGY2/MS health system pharmacy administration and leadership residency program at the University of North Carolina Medical Center, and is a board certified sterile compounding pharmacist.

References

1. Outsourced Compounding. Pharm Purch Prod. 2024;21(4):34.
2. Gabay M. The drug quality and security act. Hosp Pharm. 2014;49(7):615-76.
3. US FDA. FD&C Act Provisions that Apply to Human Drug Compounding. Available at: www.fda.gov/drugs/human-drug-compounding/fdc-act-provisions-apply-human-drug-compounding
4. US Food and Drug Administration. Current Good Manufacturing Practice—Guidance for Human Drug Compounding Outsourcing Facilities Under Section 503B of the FD&C Act Guidance for Industry. Draft Guidance for Industry. www.fda.gov/regulatory-information/search-fda-guidance-documents/current-good-manufacturing-practice-guidance-human-drug-compounding-outsourcing-facilities-under. January 2020. Accessed December 20, 2024.
5. Code of Federal Regulations. Part 211—Current Good Manufacturing Practice for Finished Pharmaceuticals. www.ecfr.gov/current/title-21/chapter-I/subchapter-C/part-211. December 31, 2024. Accessed January 6, 2025.
6. US Food and Drug Administration. Sterile Drug Products Produced by Aseptic Processing—Current Good Manufacturing Practice. May 4, 2020. Accessed January 6, 2025.
7. US Food and Drug Administration. Insanitary Conditions at Compounding Facilities. Guidance for Industry. Final Guidance Document. www.fda.gov/regulatory-information/search-fda-guidance-documents/insanitary-conditions-compounding-facilities-guidance-industry. November 2020. Accessed December 20, 2024.
8. US Food and Drug Administration. Inspectional Observations and Citations. www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/inspection-references/inspectional-observations-and-citations. March 20, 2024. Accessed December 20, 2024.
9. US Food and Drug Administration. Inspection classifications. www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/inspection-basics/inspection-classifications. April 18, 2024. Accessed December 20, 2024.
10. US Food and Drug Administration. About Warning and Close-Out Letters. www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/about-warning-and-close-out-letters. March 20, 2024. Accessed December 20, 2024.
11. US Food and Drug Administration. FMD-145 – Release of the Establishment Inspection Report (EIR). www.fda.gov/media/83055/download. July 31, 2019. Accessed December 20, 2024.
12. US Food and Drug Administration. Recalls Background and Definitions. Available at: www.fda.gov/safety/industry-guidance-recalls/recalls-background-and-definitions. July 31, 2014. Accessed December 20, 2024.