In November 2013, a new federal law outlined in The Drug Quality and Security Act (DQSA) went into effect in an effort to increase quality and purity of compounded prescription drugs. Because of growing concern about compounding pharmacies not being held to the same standards as drug manufacturers, the new law allows for compounding pharmacies to voluntarily register for federal oversight by becoming outsourcing facilities and paying for regular federal inspections. In recent years, compounded drug impurities have sickened and killed patients, and increased legal and financial risks for hospitals who depend on compounding pharmacies.


Compounding pharmacies have been the source of many accidental illnesses and deaths; a few instances are examined here.

In the summer of 2012, the New England Compounding Center in Framingham, MA distributed 17,000 vials of injectable steroid that was contaminated with fungus. Pain clinics and hospitals throughout the United States used the steroid for injections into painful joints; a common treatment for arthritis and back pain. Fungal infections developed in 751 people who received the contaminated steroid from New England Compounding Center, 64 of them died due to fungal infections in their brain and spinal cord (fungal meningitis).

In July of 2013, Specialty Compounding in Cedar Park, TX was named as a source of contaminated intravenous calcium supplements after 15 hospital patients who received the product developed bacterial blood infections.

In March of 2011, Meds IV in Bessemer, AL was the source of 19 cases of bacterial blood infection that was caused by contaminated IV nutrition solution.

In November of 2002, a compounding pharmacy in North Carolina was inspected after their contaminated steroid injections caused deadly fungal infections. The pharmacy was found to have no procedure manual for performing sterile processing, no sterility testing of final products, and an autoclave that did not function properly among other sterile product compounding violations.

Compounding pharmacies are now operating under tighter federal regulation as the DQSA limits the scale and marketing of production according to the pharmacy’s registration status. Compounding pharmacies may continue to operate without registering with the FDA and becoming outsourcing facilities under  Title 1, section 503a of the DQSA. In order to operate as a non-outsourcing compounding pharmacy (NOCP) and be exempt from manufacturing regulations, the requirements in brief are listed here:

•              compounding must take place after a physician’s order or prescription has been submitted

•              no compounding of drugs already removed from the market by the FDA due to safety or effectiveness

•              no compounding of commercially available products in large quantities

•              no advertising of a compounded product

•              only compounding in small quantities in to prepare for expected physician orders

•              no sales of a single product that is more than 5% of total sales

•              all compounding to be done according to current good manufacturing practices (cGMP) stipulated by the United States Pharmacopeial Convention (USP)

Regular inspections will occur if mandated by state law and they would be performed by state officials. Random federal inspections will continue to occur.

Title I, Section 503b gives compounding pharmacies the opportunity to register with the FDA as an outsourcing facility and be exempt from manufacturing regulations. Outsourcing facilities will be monitored by the FDA, inspected regularly, report any harmful drug reactions patients may experience, and they are required to practice cGMP as outlined by USP.


Should hospitals buy sterile products from compounding pharmacies that are not registered with the FDA as outsourcing facilities?


Hospitals should purchase from a NOCP in a particular state if the state is effectively inspecting its compounding pharmacies as indicated by all NOCPs in the state passing random federal inspections and the absence of product recalls from that state’s NOCPs in the last year.


Compounding pharmacies that were found selling contaminated sterile products were operating with valid state licenses and passing their state inspections. Federal inspections conducted in compounding pharmacies that were sources of injury found major violations in cGMP processes. With DQSA, NOCPs are inspected and regulated by state government. Relying on state inspectors alone to monitor NOCPs does not ensure safe sterile products. Hospitals should use the record of NOCPs that fail random federal inspection as an indicator of state oversight and inspection. Federal inspections search for compliance with cGMP guidelines, while many state laws do not require cGMP or inspect accordingly.

Since 2008, FDA inspections have resulted in citations of 91 compounding pharmacies that failed to meet cGMP. Federal compounding pharmacy inspections are random and infrequent as are state inspections. In 2013, FDA compounding pharmacy inspections in 33 states resulted in citations, warning letters, and several product recalls. A total of 66 compounding pharmacies were cited in 2013 during random federal inspections.

NOCPs failing random federal inspections:

  • 8 in Texas
  • 5 each in Florida and New Jersey
  • 4 in North Carolina
  • 3 each in Michigan, Massachusetts, and California
  • 2 each in New York, Arizona, Connecticut, Alabama, Missouri, Ohio, Mississippi, Nevada, Pennsylvania, and Tennessee
  • 1 each in Wisconsin, Arizona, Michigan, Illinois, Indiana, Georgia, Colorado, Utah, Louisiana, Kansas, Arkansas, Oklahoma, South Carolina, Tennessee, Virginia, and New Mexico

In the last year, NOCPs in 32 states did not pass random federal inspections indicating previous state inspections failed to assure safe practices in its NOCPs.

Product recalls were issued by NOCPs in 13 states in 2013. Some of the recalls were issued following random federal inspections. The states with the most NOCPs were Texas (4), Florida (3) and Arizona (2). The following states had 1 NOCP that recalled products in 2013:

  • Alabama
  • Georgia
  • Indiana
  • Kansas
  • Michigan
  • New Jersey
  • Nevada
  • North Carolina
  • Tennessee
  • Pennsylvania

The states with NOCPs that recalled products in 2013 were also on the list of states with NOCPs that failed random federal inspections. States with NOCPs that must issue product recalls indicate previous state inspections failed to assure safe practices in its NOCPs.


Hospitals should purchase from NOCPs in a particular state if the state is effectively inspecting and regulating them, this is indicated by NOCPs in the state passing random federal inspections and having no product recalls in the last year.