Sec. 3. Outsourcing facilities
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Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 351 et seq. ) is amended— by redesignating section 503B as section 503C; and by inserting after section 503A ( 21 U.S.C. 353a ) the following new section: Sections 502(f)(1) and 505 of this Act and section 351 of the Public Health Service Act shall not apply to a drug product compounded for human use by a licensed pharmacist in an outsourcing facility if each of the following conditions is met: The facility is in compliance with the registration and reporting requirements of subsection (b). The facility does not compound drug products in violation of paragraphs
(3)through
(8)of section 503A(a). The facility has paid all fees owed by such facility pursuant to section 744K. The facility does not compound, from bulk drug substances, standardized dosages that are not otherwise commercially available of a marketed and approved drug product. The label of a drug product compounded by an outsourcing facility shall include— the statement This is a compounded drug. or a reasonable comparable alternative statement (as specified by the Secretary) that prominently identifies the drug as a compounded drug product; the name, address, and phone number of the applicable outsourcing facility; and with respect to the compounded drug product— the lot or batch number; the established name of the drug product; the dosage form and strength; the statement of quantity or volume, as appropriate; the date that the drug product was compounded; the expiration date; storage and handling instructions; the National Drug Code number, if available; the Not for resale statement required under section 503A(a)(1)(C)(v); and subject to subparagraph (B)(i), a list of active and inactive ingredients, identified by established name and the quantity or proportion of each ingredient. The container from which the individual units of a drug product compounded by an outsourcing facility are removed for dispensing or for administration (such as a plastic bag containing individual product syringes) shall include— the information described under subparagraph (A)(iii)(X), if there is not space on the label for such information; the following information to facilitate adverse event reporting: www.fda.gov/medwatch and 1–800–FDA–1088; and directions for use, including, as appropriate, dosage and administration. The label and labeling of a drug product compounded by an outsourcing facility shall include any other information as determined necessary and specified in regulations promulgated by the Secretary During the period beginning on October 1 and ending on December 31 each year, each outsourcing facility— shall register with the Secretary its name, place of business, and unique facility identifier (which shall conform to the requirements for the unique facility identifier established under section 510), and a point of contact e-mail address; and shall indicate whether the outsourcing facility intends to compound a drug product that appears on the list in effect under section 506E during the subsequent calendar year. Each outsourcing facility, upon first engaging in compounding pursuant to this section, shall immediately register with the Secretary and provide the information described in paragraph (1)(A). The Secretary shall establish a timeline for registration for the first calendar year following the effective date of the Compounding Clarity Act of 2013. In no case may registration be required until at least 60 calendar days following publication of the timeline in the Federal Register. The Secretary shall make available for inspection, to any person so requesting, any registration filed pursuant to this paragraph. The Secretary shall make available on the public Internet Web site of the Food and Drug Administration a list of the name of each facility registered under this subsection as an outsourcing facility, the State in which each such facility is located, whether the facility compounds from bulk drug substances, and whether any such compounding from bulk drug substances is for sterile or non-sterile drug products. Upon initially registering as an outsourcing facility, once during the month of June of each year, and once during the month of December of each year, each outsourcing facility that registers with the Secretary under paragraph
(1)shall submit to the Secretary a report— identifying the drug products compounded by such outsourcing facility during the previous 6-month period; and with respect to each drug product identified under clause (i), providing the active ingredient; the source of such active ingredient; the National Drug Code number, if available, of the source drug product or bulk active ingredient; the strength of the active ingredient per unit; the dosage form and route of administration; the package description; the number of individual units produced; and the National Drug Code number of the final product, if assigned. Each report under subparagraph
(A)shall be prepared in such form and manner as the Secretary may prescribe by regulation or guidance. Reports submitted under this paragraph shall be exempt from inspection under paragraph (1)(C), unless the Secretary finds that such an exemption would be inconsistent with the protection of the public health. Registrations and drug product reporting under this subsection (including the submission of updated information) shall be submitted to the Secretary by electronic means unless the Secretary grants a request for waiver of such requirement because use of electronic means is not reasonable for the person requesting waiver. Outsourcing facilities— shall be subject to inspection pursuant to section 704; and shall not be eligible for the exemption under section 704(a)(2)(A). The Secretary, acting through one or more officers or employees duly designated by the Secretary, shall inspect outsourcing facilities in accordance with a risk-based schedule established by the Secretary. In establishing the risk-based schedule, the Secretary shall inspect outsourcing facilities according to the known safety risks of such outsourcing facilities, which shall be based on the following factors: The compliance history of the outsourcing facility. The record, history, and nature of recalls linked to the outsourcing facility. The inherent risk of the drug products compounded at the outsourcing facility. The inspection frequency and history of the outsourcing facility, including whether the outsourcing facility has been inspected pursuant to section 704 within the last 4 years. Whether the outsourcing facility has registered under this paragraph as an entity that intends to compound a drug product that appears on the list in effect under section 506E. Any other criteria deemed necessary and appropriate by the Secretary for purposes of allocating inspection resources. Outsourcing facilities shall be required to submit adverse event reports to the Secretary in accordance with the content and format requirements established through guidance or regulation under section 310.305 of title 21, Code of Federal Regulations (or any successor regulations) or section 600.80 of title 21, Code of Federal Regulations (or any successor regulations). In this section: The term outsourcing facility means a facility at one geographic location or address that compounds sterile drug products for office use in excess of the limitation set forth in section 503A(a)(1)(C)(iii). The terms compounding , essentially a copy of a marketed and approved drug product , licensed pharmacist , and marketed and approved drug product have the meanings given such terms in section 503A(f). . Subchapter C of chapter VII of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 379f et seq. ) is amended by adding at the end the following: In this part: The term affiliate has the meaning given such term in section 735(11). The term gross annual sales means the total worldwide gross annual sales, in United States dollars, for an outsourcing facility, including the sales of all the affiliates of the outsourcing facility. The term outsourcing facility has the meaning given to such term in section 503B(c). The term reinspection means, with respect to an outsourcing facility, one or more inspections conducted under section 704 subsequent to an inspection conducted under such provision which identified noncompliance materially related to an applicable requirement of this Act, specifically to determine whether compliance has been achieved to the Secretary’s satisfaction. — For fiscal year 2015 and each subsequent fiscal year, the Secretary shall, in accordance with this subsection, assess and collect— an annual establishment fee from each outsourcing facility; and a reinspection fee from each outsourcing facility subject to a reinspection in such fiscal year. An outsourcing facility subject to multiple reinspections in a fiscal year shall be subject to a reinspection fee for each reinspection. The Secretary shall— establish the amount of the establishment and reinspection fee to be collected under this section for each fiscal year based on the methodology described in subsection (c); and publish such fee amounts in a Federal Register notice not later than 60 calendar days before the start of each such year. For each outsourcing facility in a fiscal year— except as provided in paragraph (4), the amount of the annual establishment fee under subsection
(b)shall be equal to the sum of— $15,000, multiplied by the inflation adjustment factor described in paragraph (2); plus the small business adjustment factor described in paragraph (3); and the amount of any reinspection fee (if applicable) under subsection
(b)shall be equal to $15,000, multiplied by the inflation adjustment factor described in paragraph (3). For fiscal year 2015 and subsequent fiscal years, the fee amounts established in paragraph
(1)shall be adjusted by the Secretary by notice, published in the Federal Register, for a fiscal year by the amount equal to the sum of— one; the average annual percent change in the cost, per full-time equivalent position of the Food and Drug Administration, of all personnel compensation and benefits paid with respect to such positions for the first 3 years of the preceding 4 fiscal years, multiplied by the proportion of personnel compensation and benefits costs to total costs of an average full-time equivalent position of the Food and Drug Administration for the first 3 years of the preceding 4 fiscal years; and the average annual percent change that occurred in the Consumer Price Index for urban consumers (U.S. City Average; Not Seasonally Adjusted; All items; Annual Index) for the first 3 years of the preceding 4 years of available data multiplied by the proportion of all costs other than personnel compensation and benefits costs to total costs of an average full-time equivalent position of the Food and Drug Administration for the first 3 years of the preceding 4 fiscal years. The adjustment made each fiscal year under subparagraph
(A)shall be added on a compounded basis to the sum of all adjustments made each fiscal year after fiscal year 2014 under subparagraph (A). The small business adjustment factor referred to in paragraph (1)(A)(ii) shall be an amount established by the Secretary for each fiscal year based on the Secretary’s estimate of— the number of small businesses that will pay a reduced establishment fee for such fiscal year; and the adjustment to the establishment fee necessary to achieve total fees equaling the total fees that the Secretary would have collected if no entity qualified for the small business exception in paragraph (4). In the case of an outsourcing facility with gross annual sales of $1,000,000 or less in the 12 months ending April 1 of the fiscal year immediately preceding the fiscal year in which the fees under this section are assessed, the amount of the establishment fee under subsection
(b)for a fiscal year shall be equal to 1/3 of the amount calculated under paragraph (1)(A)(i) for such fiscal year. To qualify for the exception under this paragraph, a small business shall submit to the Secretary a written request for such exception, in a format specified by the Secretary in guidance, certifying its gross annual sales for the 12 months ending April 1 of the fiscal year immediately preceding the fiscal year in which fees under this subsection are assessed. Any such application shall be submitted to the Secretary not later than April 30 of such immediately preceding fiscal year. In establishing the small business adjustment factor under paragraph
(3)for a fiscal year, the Secretary shall— provide for the crediting of fees from the previous year to the next year if the Secretary overestimated the amount of the small business adjustment factor for such previous fiscal year; and consider the need to account for any adjustment of fees and such other factors as the Secretary determines appropriate. The Secretary shall make all of the fees collected pursuant to subparagraphs
(A)and
(B)of subsection (a)(1) available solely to pay for the costs of oversight of outsourcing facilities. Funds received by the Secretary pursuant to this section shall be used to supplement and not supplant any other Federal funds available to carry out the activities described in this section. Fees authorized under this section shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts. Such fees are authorized to remain available until expended. Such sums as may be necessary may be transferred from the Food and Drug Administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation. The sums transferred shall be available solely for the purpose of paying the costs of oversight of outsourcing facilities. An outsourcing facility shall remit the establishment fee due under this section in a fiscal year when submitting a registration pursuant to section 503B(b) for such fiscal year. The Secretary shall specify in the Federal Register notice described in subsection (b)(2) the manner in which reinspection fees assessed under this section shall be collected and the timeline for payment of such fees. Such a fee shall be collected after the Secretary has conducted a reinspection of the outsourcing facility involved. An outsourcing facility shall not be considered registered under section 503B(b) in a fiscal year until the date that the outsourcing facility remits the establishment fee under this subsection for such fiscal year. All drug products manufactured, prepared, propagated, compounded, or processed by an outsourcing facility for which any establishment fee or reinspection fee has not been paid, as required by this section, shall be deemed misbranded under section 502 until the fees owed for such outsourcing facility under this section have been paid. In any case where the Secretary does not receive payment of a fee assessed under this section within 30 calendar days after it is due, such fee shall be treated as a claim of the United States Government subject to provisions of subchapter II of chapter 37 of title 31, United States Code. Not later than 120 calendar days after each fiscal year in which fees are assessed and collected under this section, the Secretary shall submit a report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives, to include a description of fees assessed and collected for such year, a summary description of entities paying the fees, a description of the hiring and placement of new staff, a description of the use of fee resources to support inspecting outsourcing facilities, and the number of inspections and reinspections of such facilities performed each year. For fiscal year 2015 and each subsequent fiscal year, there is authorized to be appropriated for fees under this subsection an amount equivalent to the total amount of fees assessed for such fiscal year under this section. .
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