Congress Considers Legislation to Secure Drug Supply Chain

Published on: 
BioPharm International, BioPharm International-06-01-2013, Volume 26, Issue 6
Pages: 40–45

Bills to regulate drug compounding and establish a national track and trace system face political and policy differences.

Concerns about unsafe products from large pharmacy compounders, continued emergence of counterfeit medicines, and the prospect of diverse state tracking requirements for prescription drugs are spurring action on Capitol Hill. House and Senate leaders are crafting legislation to address these issues, but divergent Republican and Democrat approaches for revising FDA authority threaten to stymie timely legislative action.

Jill Wechsler

Meanwhile, reports keep piling up about adulterated and unauthorized drugs. FDA recently uncovered Internet sales of a foreign version of Allergan's cosmetic treatment Botox (onbotulinumtoxinA), a sterile product, and Teva Pharmaceuticals has reported fraudulent versions of its generic Prilosec (omeprazole). Pfizer is challenging widespread Viagra (sildenafil) counterfeiting by marketing its product directly to consumers through its own website, with CVS Caremark filling the orders.



Reports of more than 50 deaths and widespread serious medical problems from fungal meningitis linked to contaminated products from a large compounder makes action most likely on legislation to curb large-scale compounding of high-risk drugs. Public outrage over the failure of state and federal agents to detect and prevent the outbreak has generated support for proposals to enhance FDA authority over compounding. Granting FDA more authority, however, will require House Republicans to shift from blasting FDA for inaction and tackle the regulatory challenges directly.

At an April 2013 hearing before the House Energy and Commerce Committee (E&C), Republicans criticized FDA commissioner Margaret Hamburg for not cracking down on the New England Compounding Center (NECC) in Massachusetts, despite NECC's long history of failed inspections and contamination problems. Democrats echoed these concerns but supported legislation that would clarify and strengthen FDA's ability to inspect and bring action against compounders, which now fall primarily under state pharmacy regulation. Hamburg noted that some compounders denied FDA inspectors access to facilities and records during a recent FDA inspection campaign, forcing the agency to seek court warrants.

FDA supports legislation that distinguishes local, traditional pharmacy compounders that prepare drugs to treat specific patients with specialized needs in response to individual prescriptions, from large compounders that produce drugs in advance of any patient-specific prescription and market drugs across state lines. States would continue to oversee traditional compounders and license compounding pharmacists, but large operators would be considered a new class of drug manufacturer and have to comply with GMPs, submit to regular FDA inspections, and report adverse events related to their products. These firms also would pay registration fees to FDA to support federal oversight and clearly label products as compounded drugs. Unlike pharmaceutical manufacturers, though, they would not need approved new drug applications (NDAs) for products they compound. FDA would develop a list of products banned from all compounding, such as complex dosage forms and most biologics.

Some of the challenges in reaching agreement among compounders, pharmacists, and state regulators were discussed at a hearing held on May 9 by the Senate Health, Education, Labor & Pensions Committee. A Senate bill that essentially supports FDA's approach for distinguishing between "traditional" compounders and "compounding manufacturers" received generally strong support. But there were questions about whether a hospital pharmacy that sends compounded products to a satellite facility in another state would fall under FDA's purview, and whether FDA should have access to records of traditional compounders to ensure that no illegal activity is taking place.

FDA has pressed for legislation to clarify its authority to regulate pharmacy compounders, which has been mired in legal debate for some 20 years, with FDA largely on the losing end. After the Supreme Court tossed out an FDA compounding regulation in 2002, the agency essentially gave up and directed its resources to other pressing issues. When signs of malfeasance at NECC appeared, "we allowed ourselves to be far too cautious due to fear of litigation that would further undermine our authority," Hamburg told the E&C panel.

FDA recently conducted dozens of inspections of large-scale firms making sterile products and has issued FDA-483 inspection reports that reveal an array of contamination and quality failures. The agency has instigated numerous product recalls, and some of the worst offenders, such as NECC, have shut down.

Some Republicans claim that FDA has sufficient power to inspect and bring charges against clearly violative compounders, and that new legislation won't help an agency that fails to protect the public health when it should do so. FDA also is wary that cracking down harder on compounders could aggravate shortages of sterile products. Moves by FDA and states to shut down large compounders could disrupt the supply of necessary drugs to hospitals and providers, Hamburg acknowledged, emphasizing the need for "tailored authorities" appropriate for compounders.


There's even more political disagreement over legislation to better secure the nation's drug supply chain by establishing a system to track pharmaceuticals from production to patient. Several senators sought to have a track-and-trace bill included in the FDA Safety and Innovation Act (FDASIA) last year, but agreed to pull it to avoid delay on the broader FDA measure. A comprehensive tracking policy in California that goes into effect in 2015, however, is spurring efforts to establish a national drug-tracking system that would supersede diverse state requirements—a key goal for manufacturers that benefit from a uniform national distribution process for medical products.

Bills crafted by House and Senate leaders generally agree on lot-level tracking, plus national standards and licensing for wholesale distributors. Both bills pre-empt state pedigree laws, with the Senate measure giving states more leeway to enact more stringent requirements.

The main point of dispute is the approach to product serialization and tracking. FDA seeks tracking to the drug unit level, with an interoperable electronic data system able to support efficient recalls and quick identification of illegal and substandard products. While most manufacturers now accept that approach, they side with distributors and pharmacists that want to start with lot-level product serialization and tracking as a more affordable and practical first step. The Senate proposal sets a 10-year schedule for establishing a unit-level tracing system, phasing in lot-level serialization over seven years, followed by adoption of product verification at the unit level. The current House bill has no provision for a future shift to unit-level tracking, a shortcoming that was roundly criticized by Democrats at an April E&C Committee hearing. At a minimum, FDA and Democrats want to delay state pre-emption until some kind of national tracking system is fully operational.

Pharmaceutical manufacturers such as Johnson & Johnson are moving to comply with the California law by applying standardized, serialized two-dimensional bar codes to packages and establishing processes to exchange serialized data with distributors and pharmacies, explained J&J Vice-President Michael Rose at the House hearing. However, these efforts would be wasted, Rose noted, if other states adopt different standards. "What we need is a clear end-game," said Rose, "where the goal posts are fixed."

E&C Chairman Fred Upton (R-Mich) initiated efforts to "mark up" the Republican-backed bill with an eye to approving legislation by August 2013. Without some provision for unit-level serialization in the not-to-distant future, though, Congress probably will reject drug-tracking legislation in 2013.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, Read Jill's blogs at