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Pharmaceutical Technology Regulatory Sourcebook October 2020 47 maceuticals developed the product, says ValSource LLC consultant Chris Smalley, a licensed pharma- cist with manufacturing and compounding experi- ence, including years working in the military. From oral solid dosage to topical form Topical erythromycin was another lucrative com- pounding market for a while. Sold in tablet form, the drug was typically made with an insoluble coating. In order to make the topical form, com- pounders would remove the coating and run it through a coffee filter. Conditions didn't have to be sterile, Smalley notes. However, when compound- ers started to get into sterile drug compounding, "Use of a mortar and pestle and a coffee filter just wasn't going to cut it anymore," he says. In the late 1990s, as demand for sterile and more complex compounding services began to grow, drug compounding became an area of greater focus for FDA and the industry, Dana says. Be- fore then, it had been regulated primarily by state boards of pharmacy, based on USP 's General Chapter <797 >(1). USP General Chapter <800> (2), which covered compounding of hazardous ingre- dients, posed new capital costs and requirements, and was more prescriptive regarding the engineer- ing controls that needed to be in place. A number of compounders left the business. When Congress made change to the US Food Drug and Cosmetic (FD&C) Act in 1997, Clause 503A was added to address compounding, Dana explains. Five years later, the Supreme Court struck down part of the clause that kept compounders from advertising their services. As a result, he says, a lot of 503A was left up in the air. "FDA's ability to regulate the com- pounding segment came into question," he states. Change was accelerated after a tragic event in 2012, when 64 patients died and 793 became seriously ill after taking contaminated drugs that had been compounded at the New England Compounding Center, a sterile compounding facility in Massa- chusetts. This event underscored trends that were later highlighted in a 2013 US Senate Committee report (3), which also noted that: • FDA tests in 2001 and 2006 found that one third of the compounded pharmaceuticals failed quality tests (compared with 2% of tra- ditionally manufactured drugs). • Between 2001 and 2011, at least 25 patients in the US died and 36 were hospitalized as a re- sult of quality problems with drugs produced at large-scale drug compounding companies. FDA moved to clarify its authority with the Safe Drug Supply Chain Act, in which the agency im- proved definitions and distinctions between two different types of compounders: • 503 A, small compounders that work in re- sponse to a single prescription for a single pa- tient. These facilities must maintain sanitary conditions but needn't comply with FDA's current good manufacturing practices regu- lations (CGMPs). • 503 B, for facilities that handle larger quanti- ties of drugs for shelf stock and sale to other distributors, and must meet CGMPs. FDA passed draft guidance in September 2018 spell- ing out its expectations for sanitary process conditions at compounding facilities (e.g., use of sterile gowning procedures and air-control systems) (4). Neverthe- less, a large chasm remains between As and Bs, says Smalley, since B compounders don't have to be run by pharmacists, and are actually small manufactur- ers that meet a need without having to submit new or abbreviated new drug applications (NDAs or ANDAs).