US lawmakers introduced a bill in the US House of Representatives that would clarify FDA's authority over large-scale compounding pharmacies.
Traditional compounding, which is done on a patient-specific basis and Fagron’s core market, would remain exempt.
Our View:
Under the Compounding Clarity Act, large-scale compounding pharmacies would be required to register with FDA annually and would be subject to adverse event reporting, inspections and user fees. The pharmacies also would be required to report and list compounded drugs. Traditional compounding, which is done on a patient-specific basis, would remain exempt.
The Senate is also considering a bill that would clarify FDA's authority over compounding manufacturers. The joint bill would define compounding manufacturers as entities that make sterile products without or in advance of a prescription and sell those products across state lines. The bill, which also would create an electronic, unit-level system for tracking and tracing pharmaceutical products, has been placed on the Senate calendar but has not yet been scheduled for a vote. From previous discussions, we understand Fagron’s US compounding activities are not considered compounding manufacturers.
In March, the FDA called for legislation to establish minimum federal standards for compounding firms. The agency has repeatedly asked Congress to give FDA new authorities to regulate pharmacy compounding after the nationwide outbreak of fungal meningitis linked to products manufactured at the New England Compounding Center (NECC).
Conclusion:
US lawmakers are making progress on professionalizing the pharmaceutical compounding activities. The first focus is on the so-called compounding manufacturers, and leaves the traditional patient-specific compounding activities unchanged. More regulatory control usually results in filtering out the ‘cowboys’ and may drive the sector to consolidation. Consolidation is of benefit to bigger groups such as Arseus, which is today no 2 in its segment. While there is no immediate impact for Arseus to be expected, we believe further FDA regulation over compounding is positive for Fagron.