[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE


                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                             JULY 16, 2013


                           Serial No. 113-70

      Printed for the use of the Committee on Energy and Commerce


86-394                    WASHINGTON : 2014
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                          FRED UPTON, Michigan
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado               PETER WELCH, Vermont
MIKE POMPEO, Kansas                  BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois             PAUL TONKO, New York
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                GENE GREEN, Texas
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                             C O N T E N T S

Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................    16
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    17
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................    18
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, prepared statement...............   140
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   143


Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, Food and Drug Administration.........................    20
    Prepared statement...........................................    22
    Answers to submitted questions...............................   155
B. Douglas Hoey, Chief Executive Officer, National Community 
  Pharmacists Association........................................    57
    Prepared statement...........................................    60
    Answers to submitted questions...............................   165
Kasey Thompson, Vice President, American Society of Health-System 
  Pharmacists....................................................    67
    Prepared statement...........................................    69
    Answers to submitted questions...............................   173
Jeffrey Francer, Assistant General Counsel, Pharmaceutical 
  Research and Manufacturers of America..........................    74
    Prepared statement...........................................    76
    Answers to submitted questions...............................   177
David Gaugh, Senior Vice President for Sciences and Regulatory 
  Affairs, Generic Pharmaceutical Association....................    88
    Prepared statement...........................................    90
    Answers to submitted questions...............................   181
Allan Coukell, Senior Director, Drug and Medical Devices, The Pew 
  Charitable Trusts..............................................   102
    Prepared statement...........................................   104
    Answers to submitted questions...............................   185
David G. Miller, Executive Vice President and CEO, International 
  Academy of Compounding Pharmacists.............................   109
    Prepared statement...........................................    60
    Answers to submitted questions \*\
Carmen Catizone, Executive Director, National Association of 
  Boards of Pharmacy.............................................   123
    Prepared statement...........................................   125
    Answers to submitted questions...............................   189

\*\ Mr. Miller did not respond to submitted questions.

                           Submitted Material

Discussion draft.................................................     3
Statement of Express Scripts, submitted by Mr. Griffith..........   145
Statement of the National Association of Chain Drug Stores, 
  submitted by Mr. Griffith......................................   147
Statement of Public Citizen, submitted by Mr. Griffith...........   152



                         TUESDAY, JULY 16, 2013

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 3:05 p.m., in 
room 2322, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the subcommittee) presiding.
    Present: Representatives Pitts, Burgess, Shimkus, Murphy, 
Blackburn, Lance, Griffith, Bilirakis, Ellmers, Dingell, 
Schakowsky, Green, Barrow, Christensen, Castor, and Waxman (ex 
    Staff Present: Clay Alspach, Chief Counsel, Health; Sean 
Bonyun, Communications Director; Noelle Clemente, Press 
Secretary; Paul Edattel, Professional Staff Member, Health; 
Julie Goon, Health Policy Advisor; Sydne Harwick, Legislative 
Clerk; Carly McWilliams, Professional Staff Member, Health; 
Andrew Powaleny, Deputy Press Secretary; Chris Sarley, Policy 
Coordinator, Environment and Economy; Heidi Stirrup, Health 
Policy Coordinator; John Stone, Counsel, Oversight; Alli Corr, 
Minority Policy Analyst; Eric Flamm, Minority FDA Detailee; 
Elizabeth Letter, Minority Assistant Press Secretary; Karen 
Lightfoot, Minority Communications Director and Senior Policy 
Advisor; Karen Nelson, Minority Deputy Committee Staff Director 
for Health; and Rachel Sher, Minority Senior Counsel.


    Mr. Pitts. The time of 3 o'clock having arrived, we will 
call the meeting of the subcommittee to order.
    The chair will recognize himself for an opening statement.
    As we all know, in the summer and fall of 2012, a 
Massachusetts company, the New England Compounding Center, 
NECC, shipped over 17,000 vials of an injectable steroid 
solution from three contaminated lots to healthcare facilities 
across the country. And after receiving injections of NECC's 
contaminated steroid, over 50 people died from complications 
associated with fungal meningitis and 700 others were stricken 
with meningitis and other persistent fungal infections. The 
outbreak ranks as one of the worst public health crises 
associated with contaminated drugs in the history of the United 
    Shortly after the contamination came to light, the 
committee began an investigation into the matter, requesting 
documents from the Food and Drug Administration and the 
Massachusetts Department of Public Health, examining whether 
the outbreak could have been prevented and reviewing existing 
Federal and State regulatory authority over compounding 
pharmacies acting as manufacturers.
    Both this subcommittee and the Oversight and Investigations 
Subcommittee have held multiple hearings on the issues 
surrounding compounded drugs. Today's witnesses are here to 
discuss three legislative proposals released since the 
outbreak, including a discussion draft authored by my 
colleague, Morgan Griffith.

    [The discussion draft follows:]

    Mr. Pitts. The Griffith draft includes targeted provisions 
that both clarify FDA's authority as it relates to Section 503 
of the Food, Drug, and Cosmetics Act, while ensuring that 
traditional compounding remains within the purview of State 
boards of pharmacy.
    I would like to welcome our witnesses.
    And I will yield the balance of my time to Representative 
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    As we all know, in the summer and fall of 2012, a 
Massachusetts company, the New England Compounding Center 
(NECC), shipped over 17,000 vials of an injectable steroid 
solution from three contaminated lots to health care facilities 
across the country.
    After receiving injections of NECC's contaminated steroid, 
over 50 people died from complications associated with fungal 
meningitis, and 700 others were stricken with meningitis or 
other persistent fungal infections.
    The outbreak ranks as one of the worst public health crises 
associated with contaminated drugs in the history of the United 
    Shortly after the contamination came to light, the 
Committee began an investigation into the matter, requesting 
documents from the Food and Drug Administration (FDA) and the 
Massachusetts Department of Public Health; examining whether 
the outbreak could have prevented; and reviewing existing 
federal and state regulatory authority over compounding 
pharmacies acting as manufacturers.
    Both this subcommittee and the Oversight and Investigations 
Subcommittee have held multiple hearings on the issues 
surrounding compounded drugs.
    Today's witnesses are here to discuss three legislative 
proposals released since the outbreak, including a discussion 
draft authored by my colleague, Morgan Griffith.
    The Griffith draft includes targeted provisions that both 
clarify FDA's authority as it relates to Section 503 of the 
Food, Drug and Cosmetics Act while ensuring that traditional 
compounding remains within the purview of state boards of 
    I would like to welcome our witnesses, and I would yield 
the remainder of my time to Rep. Griffith.

    Mr. Griffith. Thank you, Mr. Chairman. I appreciate that 
very much.
    The fungal meningitis outbreak that was associated with the 
tainted sterile compounded drugs from the NECC is something 
that I have followed since the beginning. Obviously, you are 
always concerned when something affects anybody in the United 
States but particularly when it has the impact that it had in 
my district and in the areas immediately around my district, 
where we had 2 deaths, 50 confirmed cases, approximately 1,400 
patients that were notified that they had gotten the tainted 
injects, creating great concern.
    Now, I do acknowledge, and we have had hearings on it--and, 
Dr. Woodcock, you have been very good about answering my 
questions, and I appreciate that--where we looked into it and 
found that the split in the circuits was caused by the issue on 
the advertising portions of the original bill. And as we 
previously discussed, it is a shame that this issue wasn't 
taken up sometime ago, but it wasn't. And we are here now, and 
we are going to try to clarify the law to make sure that we 
don't have this problem again. And I appreciate the fact that 
you are going to help us work on that.
    You know, we have been following this. And what we want to 
do is make sure that we do, as the chairman said, protect 
public health and ensure that small businesses, like the 130 
legitimate community pharmacists that are located in my area, 
are not subject to unnecessary and burdensome Federal 
regulations. I also recognize the importance, as a former State 
legislator, that we continue to have the States be primary over 
the true local compounding pharmacies.
    We have before us a draft. We are still working on it. We 
want to clarify the FDA's authority in this realm, particularly 
in regard to compounders who try to pretend that they are not 
manufacturers. And that is sometimes difficult, and I 
understand that, but we think that we have a bill that will 
help on that.
    There are still questions that we are trying to get 
answered from stakeholders to complete the legislation. That is 
why in the draft you will see a couple of places where we have 
some blanks. I am proud to be trying to work out those 
differences with my colleagues across the aisle, Congressman 
Green and Congresswoman DeGette, to see if we can reach a 
bipartisan consensus and something that works to protect the 
health of Americans and protect the interests of small 
compounding pharmacies, which provide a great service to our 
    My goal has always been to draw a clear line on defining 
what a traditional compounding pharmacy is, and that should be 
regulated by the States, and what a manufacturer, a drug 
manufacturer is, which properly should be regulated by the FDA.
    I look forward to today's hearing and from hearing from all 
of our witnesses as we continue this process to clarify FDA's 
authority when it comes to compounding pharmacies.
    And I thank you, Mr. Chairman, for this opportunity and 
yield back my time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, for 5 minutes for an opening statement.


    Mr. Waxman. Thank you, Mr. Chairman.
    It has been 10 months since we saw the tragic fungal 
meningitis outbreak caused by the New England Compounding 
Center in Massachusetts. More than 60 people have died, over 
740 people were sickened, and more than 13,000 others in 20 
States are still waiting to see whether they will get 
meningitis. This is the largest outbreak of healthcare-
associated infections in U.S. history and one of the Nation's 
worst public health disasters in recent memory.
    We have learned a lot through our investigation, especially 
that FDA's authorities over compounding pharmacies are broken 
and inadequate. And I am glad we have finally begun the process 
of repairing them.
    FDA has repeatedly testified that the agency desperately 
needs new authority to protect the public from another 
contamination incident. The agency has described how circuit 
court decisions have forced FDA to cobble together a piecemeal 
approach to regulating compounding pharmacies that are 
different in some parts of the country that in others. This has 
created loopholes that companies, like the New England 
Compounding Center, have been able to exploit.
    FDA has also described the fact that the pharmacy 
compounding industry has changed dramatically since 1997, when 
Congress last legislated. Hospitals have grown dependent on so-
called outsourcers, which are very large compounding pharmacies 
that mix batches of customized drugs for a particular hospital.
    FDA says it is not enough to simply fix the defect in the 
current statute. We need a new paradigm to handle this new 
state of affairs. The reason we need a new paradigm is that the 
new class of outsourcers does not fit neatly within the binary 
structure that exists in the current statute. They are neither 
traditional compounders nor drug manufacturers, so we need to 
tailor FDA's authorities to fit the reality that the agency 
    But we also need to ensure that we properly circumscribe 
what these outsourcers can make so that they cannot become an 
avenue for undercutting FDA's gold-standard drug approval 
process. FDA needs strong records-inspection authority to be 
able to determine whether a compounding pharmacy is performing 
only a traditional compounding or has crossed the line into 
becoming an outsourcer or even a drug manufacturer.
    In addition, these nontraditional compounders or 
outsourcers need to register with the FDA and tell FDA what 
drugs they are producing. They should be required to follow 
good manufacturing practices as set by the FDA and label their 
products as compounded so that healthcare providers and 
patients know that the products are not FDA-approved drugs.
    As illustrated by the recent tragedy, these entities should 
also be required to promptly report adverse events to FDA so 
that FDA and the States can work together to identify dangerous 
compounded drugs and prevent them from reaching consumers.
    In order for FDA to be successful at carrying out these new 
authorities, we need to ensure that FDA has a steady stream of 
resources. We will not have accomplished much if we enact a new 
statutory scheme but deny the FDA the dollars it needs to use 
its new authorities.
    We have learned that there is a gaping hole in our drug 
safety laws. American families expect us to work together to 
develop an effective legislative response, and we need to do 
this as quickly as possible. We know that, otherwise, it will 
not be if another dangerous catastrophe occurs with compounded 
medicines, but when.
    Thank you, Mr. Chairman. I yield back the balance of--
unless any of my colleagues on the Democratic side would like 
the minute?
    OK. I yield back the time.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the vice chairman of the committee, Dr. Burgess, for 5 minutes 
for an opening statement.


    Mr. Burgess. Thank you, Mr. Chairman.
    You and the ranking member have said it very well. This is 
a continuation in this committee's examination of the 
meningitis outbreak that was caused by contaminated 
methylprednisolone acetate prepared in a preservative-free 
fashion that killed 53 Americans and harmed over 700, many of 
whom will suffer for the remainder of their lives with 
significant medical complications.
    So 53 Americans are no longer here because the Food and 
Drug Administration refused to use their statutory authority to 
enforce existing regulations. I am willing to update the 
authority that the FDA already has. I don't know that I am 
willing to vest the FDA with new authority.
    Besides refusing to use their existing statutory authority, 
the Food and Drug Administration is stalling the process to 
clarify existing regulations. We have been meeting for weeks 
now, both this subcommittee and the Oversight and 
Investigations Subcommittee, trying to determine how best to 
clarify existing regulations.
    The Food and Drug Administration refuses to give an inch. 
They say they want clarity. Well, when we ask what kind of 
clarity, there is no answer. When we suggest a volume 
limitation by which to define a manufacturer, they say it is 
not workable. When we suggest a time period to determine 
whether an entity is a manufacturer, we get back, ``It is not 
    So my ask to the FDA is: Stop telling us it is not 
workable, and start helping us with a practical solution. If 
you are holding out for a power grab for a vast, new, unfunded 
authority, I am not going to help you get there.
    So far, the only thing I have heard from the Food and Drug 
Administration are complaints about sequestration. I get it. 
They complain that user fees don't address their financial 
needs, especially under sequestration. I really get it. But to 
have the Food and Drug Administration come to Congress, seeking 
completely new user fees and authorizations to inspect 
facilities, when existing regulations clearly give the 
authority to inspect anyone who is a manufacturer, I have to 
tell you, I just don't get it.
    The fact that the Food and Drug Administration has 
continued to inspect facilities--they have closed facilities. 
How are they inspecting these facilities if they have no 
authority to do so?
    Representative Griffith's bill represents the best effort 
to date to address some of the FDA concerns while adhering to 
the spirit of the law. And I am comfortable supporting that 
bill. But, honestly, all the laws in the world are not going to 
save a single patient if there is no one enforcing the law.
    We read the chain of emails from two administrations of the 
Food and Drug Administration. It was painful to read those 
emails. They would come right up to the edge, right up to the 
point where they might close someone down, and then say, well, 
we can't send another warning letter because we have already 
sent too many, so we don't know what to do. Well, I know what 
to do: Close the place down. It was the right answer, and it 
still is today.
    Who at the Food and Drug Administration has been fired over 
this incident? Again, 53 Americans died, 700 are living with a 
disability. Who has been fired in this exercise?
    So I would say enough is enough. Let's put pen to paper and 
make sure the bad actors are not able to hide from clear 
enforcement authority, but let's make sure the enforcement 
authority is actually going to be enforced.
    Mr. Chairman, I thank you for the time, and I yield back to 
    Mr. Pitts. The chair thanks the gentleman.
    I would like to thank all of our witnesses for coming.
    On our first panel today, we have Dr. Janet Woodcock, 
director of the Center for Drug Evaluation Research of the U.S. 
Food and Drug Administration.
    Thank you very much for coming, Dr. Woodcock. You will have 
5 minutes to summarize your testimony. Your written testimony 
will be entered into the record. So, at this time, you are 
recognized for 5 minutes for your opening statement.


    Dr. Woodcock. Thank you.
    Since the last hearing before this subcommittee, which was 
just 7 weeks ago, we have had another multi-State outbreak 
involving contaminated methylprednisolone acetate, 
preservative-free. Even with all the publicity and attention 
surrounding this problem, we are still seeing multiple 
contaminated compounded products on the market.
    We really appreciate the committee's interest in exploring 
legislative options to try to help prevent future tragedies. 
And I would like to start with what I think are the common 
legislative goals I hope we all share.
    Any legislation that is passed should provide clarity so 
that people know who is on first--FDA, the States, compounders, 
and healthcare providers all know their roles and 
responsibilities and obligations under the law.
    We feel that there should be a legal framework that is a 
better fit for the industry that has now evolved and is well 
beyond compounding by a corner pharmacy for a single patient, 
by prescription, in response to a practitioner from a medical 
need. It has gone well beyond that. We have outsourcers who 
supply large amounts of sterile products to hospitals across 
the country.
    Enforceability: We need legislation that we can implement 
on the ground, that we can actually make work, and is resourced 
to be successful.
    We need to preserve the benefits of traditional 
compounding. We have always recognized these benefits, where 
there is a medical need not met by the products that are FDA-
approved. And we need to preserve the ability of pharmacists to 
compound and physicians and other prescribers to order 
compounded products to meet those medical needs.
    And, most importantly, we need better protection of the 
public by bringing the highest-risk practices under Federal 
oversight. This includes really focusing on prevention rather 
than reaction when outbreaks are occurring.
    We want to work with you to achieve those goals. We believe 
that for the highest-risk compounding pharmacies we do need 
legislation that requires Federal registration so we know who 
they are and where they are, that holds them to Federal quality 
standards, which we call the GMPs, for production, that also 
requires the compounders to tell us when serious adverse events 
related to their products are reported to them so that we can 
intervene before these problems get out of hand.
    And we think for all pharmacy compounding, certain basic 
protections should be in place, including clear authority for 
us to inspect records so we can determine the cause of an 
outbreak or decide whether a compounder actually fits into the 
highest-risk category; restrictions on compounding complex 
products that even conventional drug manufacturers, who test 
their products, find difficult to produce safely; and a 
requirement to start with safe and high-quality ingredients 
when you are compounding.
    And, finally, we feel that clear labels on compounded drugs 
to allow prescribers and patients to make informed choices are 
    We appreciate the leadership of Mr. Griffith, Mr. Markey, 
and the Senate HELP Committee in drafting legislation to try 
and tackle these issues. It is not easy. While the 
administration has not taken a position on any of these bills, 
I am happy to provide my views on the extent to which they 
address the goals that we have for any new compounding 
    The fungal meningitis outbreak has been a nightmare that 
continues for over 700 people sickened by these drugs and their 
families. And it is just the worst of a long series of 
outbreaks over the past 2 decades that include deaths, 
blindness, and hospitalizations.
    And this continues. As we proceed with our inspections--we 
have had 61 and counting--of the industry, we continue to see a 
pattern of profoundly disturbing lapses in basic sterile 
practices that should be in place to assure the sterile drugs--
the drugs that are injected in the blood, the spine, the eye, 
and so forth--are actually sterile.
    So I reiterate my statement from the hearing you held 7 
weeks ago. It is a matter of when this is going to occur, not 
whether it is going to occur. We owe it to the public and the 
victims of this incident and the numerous other outbreaks over 
the years to enact legislation that provides better protection 
in the future.
    I look forward to answering your questions.
    [The prepared statement of Dr. Woodcock follows:]
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    Mr. Pitts. The chair thanks the gentlelady.
    And I will begin the questioning and recognize myself for 5 
minutes for that purpose.
    Dr. Woodcock, isn't it true that, assuming the circuit 
split ambiguity is resolved, FDA now has the authority to 
regulate nontraditional compounders as manufacturers?
    Dr. Woodcock. Yes, that is true.
    Mr. Pitts. Doesn't that mean that FDA could already require 
that such compounders pay user fees and submit applications to 
show that they can produce drugs under GMP conditions?
    Dr. Woodcock. That is a possible outcome. We would have to 
find out who they are, because they don't register, and where 
they operate. And it is possible even if we close one entity 
down, another could quickly grow up.
    There is no real preventive structure here; this is a 
reactive structure that would rely upon us finding these folks 
and taking action. And it isn't clear in the judiciary if we 
would prevail because of still-remaining ambiguities in the 
    Mr. Pitts. In your testimony, you note that there is need 
for appropriate and effective oversight of the pharmacy 
compounding industry. According to the FDA, this industry and 
the healthcare industry have evolved and outgrown the law.
    How do you recommend we draft this legislation to ensure 
that this industry does not outgrow this legislation?
    Dr. Woodcock. Well, I think one of the keys--and I 
recognize it is very hard--is making that distinction between 
traditional pharmacy compounding, which was for a single 
patient, medical need, prescription for that compounded 
product, and the kind of practices that are going on now. And 
those practices involve making large batches often, small to 
large batches, and of course shipping them many places, often 
without a prescription.
    Mr. Pitts. Now, are large-scale compounders, compounding 
manufacturers we would call them, more similar to pharmacies or 
manufacturers? What qualities do they share with manufacturers?
    Dr. Woodcock. They share with manufacturers the fact that 
they are manipulating drug products and making them in batches, 
large to small batches, and shipping them to various places.
    They share with pharmacies that many of the practices that 
they are doing used to be done in the hospital pharmacy, and 
the hospital pharmacies have outsourced much of these 
operations because they don't have the appropriate facilities. 
But, frankly, no one is looking to see if these new outsourcers 
have the appropriate facilities and practices.
    Mr. Pitts. Considering that they are more similar in 
function to manufacturers, should they be regulated within the 
manufacturing framework?
    Dr. Woodcock. They are similar but not identical. Most of 
them make large numbers of different products in much smaller 
amounts than a pharmaceutical manufacturer would make. Many of 
them are starting from FDA-approved products and putting them 
in syringes or little IV bags and all sorts of things for the 
particular doctor or practice or hospital and what their needs 
are, all right?
    So if you wish to have NDAs and the entire panoply of the 
FDA review process, what we do for regular pharmaceutical 
manufacturers, this industry could probably not exist, all 
right? So that is a choice that you have to make. Do you create 
a new framework that encompasses this, or do you want to stick 
to the current binary structure that we have?
    Mr. Pitts. Would it be better to regulate large-scale 
compounders under the manufacturing standards rather than 
establishing a new category?
    Dr. Woodcock. We believe that the main issue with these 
large-scale, especially sterile, compounders is that they are 
not following what we call aseptic processing practices that 
are appropriate, which are part of our good manufacturing 
processes, OK, and practices.
    And we feel that if that was required, to use appropriate 
sterile processing and certain other aspects of the good 
manufacturing practices, that they could make quality products 
that would be safe.
    Mr. Pitts. Under the proposed Senate framework, FDA would 
be barred from requiring compounding manufacturers to submit 
NDAs and ANDAs pre-inspection and labeling requirements before 
these drugs reach patients.
    Would any of these tools be available to FDA as it relates 
to compounding manufacturers, even if agency regulators 
identified high-risk compounding manufacturers where they, upon 
inspection, thought such tools were appropriate to utilize in 
order to protect public health?
    Dr. Woodcock. Well, we need to have tools that prevent this 
industry in general from subverting the new drug review process 
and the generic drug review processes that were established by 
Congress a long time ago and have served us very well. So there 
have to be provisions that make a distinction between what 
constitutes manufacturing a new drug or a generic drug and 
these practices. And that is not easy or straightforward to do.
    But we have proposed that for all compounding pharmacies 
that there be certain things that they would not be doing. They 
would not be making copies of FDA-approved drugs, for example. 
Why would you need a higher-risk product if there were approved 
drugs available?
    We have also proposed that medical need might be a 
criterion. That is really the reason you use a compounded drug, 
is because there isn't an FDA-approved drug available for that 
medical need. And so that is the reason that compounding 
exists, to meet that need.
    Mr. Pitts. Thank you. My time has expired.
    The chair recognizes, filling in for Ranking Member 
Pallone, Mr. Green of Texas, for 5 minutes for questions.
    Mr. Green. Thank you, Mr. Chairman.
    Dr. Woodcock, thank you for continuing your willingness to 
advise the subcommittee on this subject. The question that has 
been at the forefront of our policymaking is how to establish a 
bright line between State and Federal jurisdiction between the 
traditional compounders and those operating closer to 
manufacturers. No approach is without its challenges, and 
certainly none are perfect.
    I understand that a lot of the FDA answers are premised on 
the fact that you cannot know what you don't know before you 
know it. However, under the assumption that you get the records 
inspection authority necessary to look at the records of the 
suspect entities, that there are other factors that Congress 
gives you to establish risk, such as sterility, interstate 
commerce, and the existence or not of a prescription.
    With that in mind, how can we go about setting a production 
volume level threshold as a proxy for assessing risk? Other 
than the options that are on the table from the Markey, 
Griffith, and Senate drafts, how else can we go about targeting 
our regulations toward the highest-risk entities?
    Dr. Woodcock. Well, one thing we don't want to do, in 
talking about volume or those types of things, is create a 
large loophole so that manufacturers can actually circumvent 
the entire legislation.
    The problem with volume is that the traditional compounding 
volume unit is one. It is one compounded product that is made 
in response to one patient's medical need----
    Mr. Green. Which is currently regulated under State law.
    Dr. Woodcock. Yes. And that is the way it should be, we 
feel. That is a traditional pharmacy practice.
    The risk of that is limited by many things. If you make one 
sterile product, one transfer, you have less personnel, you 
have less manipulations. Obviously, the exposure, if you make a 
lot, 17,000 or 7,000, then the risk is spread across many 
people. But the actual risk as you go from 1 to 10 to 100 
increases, and so it is hard to make a bright line on----
    Mr. Green. OK. There is other criteria other than volume. 
Length of time. I have seen 7 days, we have seen 10 days. 
Because if you are warehousing this product on a shelf, it can 
deteriorate and bacteria can grow, which is, I assume, what 
happened up in Massachusetts. So we are looking at, also, some 
kind of timeframe for the use of that drug; is that correct?
    Dr. Woodcock. Timeframe could be a criterion that could be 
used. You know, we have put forth criteria----
    Mr. Green. Well, we are looking at multiple criteria, I 
    Dr. Woodcock. Certainly, the longer any sterile drug 
product is stored, or any drug product for that matter, the 
riskier it becomes.
    And one of the reasons the hospitals gave the IG, when they 
did their survey, of why they outsourced the products is they 
say that compounded products have a longer beyond-use date. 
They might have up to 6 months. But, in our inspections, what 
we found is they didn't establish that by testing. They just 
maybe looked in a compendium or something and said, well, 6 
months looks like a good beyond-use date. They had no data to 
back it up.
    Mr. Green. OK.
    Dr. Woodcock, the National Association of Boards of 
Pharmacy are testifying on our second panel, and they suggest a 
revision of the FDA's proposed statutory framework for 
traditional compounders. Their goal is to allow patients to 
access limited amounts of compounding products made by 
traditional compounders in advance of a prescription when they 
are in clinics, doctors' offices, or other healthcare settings. 
And I would use the example of a hospital, for example, made by 
from a compounder because of, you know, the volume.
    Specifically, one of the limitations they suggest is to 
limit the total quantity provided to a healthcare provider to a 
10-day patient supply. What are your views on that?
    Dr. Woodcock. Well, my understanding is that 10 days would 
be the amount that that entity, healthcare entity or clinic, 
whatever, needed for 10 days. Right? And so, say they needed 50 
vials; they used up 50 vials in 10 days. And then the clinic 
shifted to 100 providers. That would be 5,000, right?
    So I don't know that that is a very good--and then you 
would make a batch of 5,000 and that would be OK. So I am not 
sure that is OK.
    Mr. Green. Well, the other concern from your earlier 
testimony is that we want to make sure that that longevity, the 
efficiency of that compounding substance is actually 10 days 
instead of whatever you guess it is. Other pharmaceuticals have 
to show that their shelf life----
    Dr. Woodcock. Yes. Under the GMPs, if we had Federal 
regulation of a sector, we would require that stability be 
    Mr. Green. Well, again, I am out of time, but I appreciate 
you working with both Congressman Griffith Congresswoman 
DeGette and I and our ranking members to see how we can get 
this right.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the vice chairman, Dr. Burgess, for 5 minutes for 
    Mr. Burgess. I thank the chairman.
    So, Dr. Woodcock, you know, we have these large 
outsourcers. And is that part of the problem, you don't know 
who they are?
    Dr. Woodcock. We have large outsourcers; we don't know who 
they are. They are doing a variety of things, including making 
a lot of convenience dosage forms for hospitals and clinics. 
They are also compounding from bulk for shortages, making 
hyperalimentation and so forth----
    Mr. Burgess. Let me ask you a question about that then. Are 
they not already required to register with the Food and Drug 
Administration under Section 510 of the act?
    Dr. Woodcock. Not according to them.
    Mr. Burgess. But according to you. I mean, you are the 
    Dr. Woodcock. If we can find them and we can conclude that 
they are, you know, violating--that they are required to 
register. But, according to them, they are registered 
pharmacies in their--whatever State, doing pharmacy operations.
    Mr. Burgess. Those small pharmacies that compound as a 
result of receipt of a prescription, I mean, they are exempt 
under the law.
    Dr. Woodcock. Yes.
    Mr. Burgess. And there is value in that. I mean, we all get 
it, that if a kid needs Tamiflu and there is no pediatric 
formulation available, someone needs to be able to crush up the 
tablet and mix it with the cherry favoring so that the kid gets 
it. We all want that.
    But this is not that situation. These are companies that 
make a large volume, and they make it not on receipt of a 
prescription. They make it well in advance of anyone ordering 
it. So, for all the world, they look like a manufacturer to 
anyone else.
    Dr. Woodcock. Well, I wish the distinction were that 
simple. However, as I just stated, if you have a pharmacy that 
is making office stock and they are going to give that clinic 
50 vials a week, all right, in response to a usual need, which 
is a practice in many States that is allowed, all right, and 
they have 100 customers, then they are going to be making a 
batch every week or perhaps every 2 weeks of 5,000 to 10,000 
    Mr. Burgess. But----
    Dr. Woodcock. And is that different? I mean, they are 
allowed under the State pharmacy laws to have anticipatory 
    Mr. Burgess. So they would be regulated by the State boards 
of pharmacy, would they not?
    Dr. Woodcock. Yes. They have to have a pharmacy license, 
    Mr. Burgess. So they are licensed and regulated. Now, when 
they engage in interstate sales, that seems like it would come 
under your jurisdiction, would it not?
    Dr. Woodcock. My understanding is there are reciprocal 
licensing agreements amongst the various boards of pharmacy in 
all the different States.
    Mr. Burgess. I just have to tell you, it doesn't sound like 
a gap in the statute, it sounds like an enforcement issue. And 
from everything that we received on the events leading up to 
the New England Compounding Center disaster, I mean, there were 
people within your agency over and over again that said, 
``Well, we can't just send them another warning letter. We have 
to actually do something.'' And then they would get to the 
point of doing something, and no one would do it.
    Let me just ask you again. I mean, I assume there has been 
some sort of internal look at the breakdowns in the system as 
they existed in the Food and Drug Administration; am I correct?
    Dr. Woodcock. Yes.
    Mr. Burgess. And have there been disciplinary actions taken 
against any individuals?
    Dr. Woodcock. Well, this is more a collective failure than 
an individual failure. We are now using our authorities very 
    Mr. Burgess. OK, let me stop you for a second. A collective 
failure, and we want to give you new authority? I mean, 
honestly, do you see the problem with that logic?
    Dr. Woodcock. I understand your problem. However, we are 
right now being very aggressive in using our existing 
    Mr. Burgess. Correct. And you are using that existing 
authority, and you are using it to the end that you are 
inspecting people, and you have closed some people down, have 
you not? I mean, before Main Street Pharmacy, you had closed 
other entities down. When either you or Dr. Hamburg came here 
earlier this year, you probably told us about some people you 
had closed down.
    Dr. Woodcock. We have taken actions. You know, basically, 
the State boards of pharmacy have closed a number of entities 
down. We have taken other judicial actions. It remains to be 
seen if these are contested.
    Mr. Burgess. Right. But the Food and Drug Administration 
has--I mean, they have shown up with their official FDA jackets 
and seized records and seized product and closed facilities 
down, did you not?
    Dr. Woodcock. We have done 61 inspections, and we found 
many serious violations of sterile practices and many products 
that are posing risk to the public.
    Mr. Burgess. So this is what I just don't get. You have the 
authority, since October of 2012 or whenever it was that we 
decided to do this, but you didn't have it the year before. And 
nothing has changed in statute over that time. So you had the 
authority in 2006, 2007, 2008, 2009, did you not?
    Dr. Woodcock. We had the authority we have now. We feel----
    Mr. Burgess. Yes.
    Dr. Woodcock [continuing]. Our authority is limited. But we 
can do the things that you say, and we are doing those.
    Mr. Burgess. It doesn't look limited to somebody looking 
from the outside. It looks like you are exercising your 
authority and it is working.
    Dr. Woodcock. Well, for example, we have received reports 
of contaminated products and injuries of people from pharmacies 
we have never heard of. Now, it is hard for me to imagine--you 
know, I am somebody who is an executive. OK, manage things. How 
am I going to find these and anticipate that they are going to 
cause problems and shut them down if I have never even heard of 
    Mr. Burgess. Well, Mr. Chairman, I know my time has 
    I may ask you this question in writing. I would just really 
like to know how you expect to do that under the new authority 
that the Senate bill is proposing or that Mr. Markey has 
    But I will yield back my time, Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, for 5 minutes for questions.
    Mr. Waxman. Thank you, Mr. Chairman.
    There was a provision, Dr. Woodcock, in the bill that Mr. 
Griffith introduced that I want to ask you about. It says that 
so long as a company holds a valid State pharmacy license and 
receives assurances from the healthcare providers to whom they 
are sending compounded drugs that the providers will send back 
prescriptions within 7 days after administering the compounded 
drug, that the company is considered to be doing traditional 
pharmacy compounding within the scope of State law.
    In other words, regardless of the quantity of compounded 
medicines a company is making and whether the company is 
shipping those medicines all over the country, so long as that 
company receives prescriptions from their customers within 7 
days after the medicines are actually given to the patient--who 
knows when that will be--there will be no Federal oversight of 
that company.
    This seems like a particularly dangerous structure to me. 
It would allow a company like NECC, which caused the fungal 
meningitis outbreak, to operate freely without FDA oversight so 
long as it made a relatively minor change in its business 
practice: keeping copies of prescriptions sent to it after the 
    Now, I am sure that wasn't the intent of the provision. 
And, actually, this provision is based on FDA's unreleased 
compliance policy guide, which was part of the documents that 
FDA provided in the context of the Oversight and Investigations 
Subcommittee investigation. FDA has indicated that this 
guidance was never released because the NECC meningitis 
outbreak made the agency rethink its approach.
    Can you describe why FDA included this provision in the 
draft policy guidance? Do you still believe there is some merit 
in this provision, in the wake of the NECC outbreak?
    Dr. Woodcock. Well, like the Members here and in the 
Senate, we are struggling to put some type of quantitative 
limits on what can be done. And we are working within the 
framework that existed at the time and still exists.
    We have learned a lot since then. And one of the things we 
have learned is that this approach can be worked around, as you 
said. And you can do the math on that and see that you can get 
up to a very large volume of shipping if you are able to 
receive names back, similar to if you have a 10-day limit or 
whatever, you are able to get up to a very large volume if you 
have enough customers. And then that raises the risk up very 
    I don't think we have, you know, the magic answer about how 
to identify those highest-risk facilities and what 
characteristics they should have. And we want to work with the 
Congress on this because it is a difficult line to draw.
    But I feel that the 7-day--there is a loophole there that 
would allow a proliferation, a very large volume of shipping as 
long as there was receipt of those names. And that would be 
very difficult for us to enforce. So we go into a pharmacy, we 
look, there are lists of names. You know, what are we going to 
do then?
    It really puts the onus, actually, the way I think the bill 
is drafted, on whoever receives the stuff to send it back, to 
kind of promise to send the names back in 7 days.
    Mr. Waxman. It appears to me that you are operating within 
the confines of the current statutory framework and doing the 
best you could under that regime. Now, you have suggested that 
Congress should enact an updated statutory framework that would 
be better tailored to this new class of large compounding 
    If we adopt a framework like the one you have described, do 
you think this 7-day reconciliation provision is still 
necessary or useful in some way?
    Dr. Woodcock. It depends on probably how the definition of 
``traditional compounding'' is taken forward. Because we feel 
that for the large-volume outsourcers, they are really not 
getting prescriptions. That is not the business they are in. As 
I said, much of their business is doing what the hospital 
pharmacies did in their pharmacy years ago. And that has been 
outsourced--that is why we call them outsourcers--to larger 
    Mr. Waxman. Are you worried, though, that this 7-day 
provision might become a loophole?
    Dr. Woodcock. Well, it could be a loophole. It absolutely 
could be a loophole. And so I think, collectively, we have to 
think very clearly about how we draw those lines so that 
something like NECC does not happen again.
    Mr. Waxman. Yes. OK. Thank you.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Virginia, Mr. Griffith, for 5 
minutes for questions.
    Mr. Griffith. Thank you, Mr. Chairman. I appreciate that 
very much.
    Let's talk about this 7-day issue and related to the 
volume. One of the frustrations that we have had with some 
other folks is that we have actually been asking--and you will 
see some blanks in the bill, because we are trying to sort that 
out, which is why sometimes it is nice to have hearings and you 
can ask these questions in public.
    We are trying to figure out at what volume do you all 
consider them to be large enough that they ought to be 
considered manufacturers, no matter what they call themselves, 
that they are, in fact, manufacturers.
    And what I have heard from your testimony today is, you 
said that under the bill, you know, there could be 5,000 to 
10,000 vials a week being sent out, and that is too much. So 
now we have a number at least of 250,000 a year. I multiplied 
it by 50 instead of 52, figuring there might be a little break 
in there somewhere. But we have that minimum of 250,000.
    So the question is, we are not trying to just say the 7 
days; we are looking for something else that we can identify?
    Dr. Woodcock. Yes.
    Mr. Griffith. Crossing States lines doesn't do it, because 
in my district, I have two cities that are shared, Bristol, 
Virginia/Tennessee, Bluefield, Virginia/West Virginia, and all 
kinds of places where the lines--you know, you can get from 
West Virginia, Kentucky, Tennessee, and North Carolina all in 
the span of about an hour and a half if you drive the right 
routes. And so, you know, saying that just crossing the State 
line won't do it.
    So we are looking for some help from you all as the 
experts. And you indicated that is a difficult line to draw. 
And I understand that, but we have to draw it. And I think it 
is our responsibility, with your help, to draw that line.
    So I would say to you, do you have an answer to that 
question today? And if not today, can you give me one?
    Because if the right number is, if you produce more than 
20,000 vials, then I think we have something we can work with 
and we can discuss. And I understand you may not be able to 
give me an exact answer today, but I think that is part of what 
we need.
    Because Congressman Waxman is absolutely right; I don't 
think 7 days, acting alone, works. With a volume or some other 
qualifier and the 7 days--the 7 days is to make sure we don't 
put everybody out of business who is trying to do it right. But 
the volume number would really help us a lot.
    Or if you have some other fix that works besides, you know, 
just crossing over State lines when you have small-town 
pharmacies that could be hit when they are in a split city. 
What do you say to that, and what can you help us on?
    Dr. Woodcock. Well, we----
    Mr. Griffith. We are just trying to get this thing worked 
out and do it right.
    Dr. Woodcock. Yes. We would really like to work with you. 
Any number that we come up with, any set of limits, have 
challenges, right, as far as how they are defined. The 
    Mr. Griffith. But here is the problem: We are not going to 
get it perfect. We----
    Dr. Woodcock. Right.
    Mr. Griffith [continuing]. Are never going to get it 
perfect. But, you know, in that football field analogy, let's 
get it 80, 90 yards down the field. Then we can start worrying 
about how we get the last 10 yards. Right now we don't have any 
yards on that.
    And I am just trying to, you know, solve a problem. And 
let's not throw out the really good, trying to get to the 
    Dr. Woodcock. Well, the traditional definition of 
``compounding,'' the number is one. I would just like to make 
that very clear. It is a pharmacist compounding in response to 
a prescription for an individual patient need.
    So, as we get above one, we start going into practices that 
are batch manufacturing, basically. And what your pharmacy 
community will probably say is, well, we like to do that 
because we have multiple----
    Mr. Griffith. It is not just the pharmacies. It is the docs 
and some of the hospitals.
    Dr. Woodcock. Yes.
    Mr. Griffith. Because if you are an ophthalmologist and you 
need those drugs, if you have an emergency eye surgery going on 
and you need something right away, you can't wait for it to be 
compounded up, so you do want to have a supply.
    Now, in that regard, as well, you know, we are looking for 
some help on that number. If 120 days is just picked out of the 
air and it is the wrong number, help us find the right number 
for how long, you know, these drugs have a shelf life, or give 
us some guidelines on how we figure that out.
    Because, again, we are not trying to make it hard on 
anybody. We want the ophthalmologist to be able to provide 
emergency services. We want the hospitals to be able to have 
what they need there. But we also want the safeguards that the 
American public expects and it has a right to expect when we 
are doing something this complicated.
    Dr. Woodcock. Well, with regard to the stability numbers or 
the shelf-life numbers, all right, for pharmaceuticals, those 
are generated using the actual product and doing actual 
testing. So then we have a hard number; we know how long it is 
stable, whether it deteriorates with the stopper that is used 
and, you know, the degree of the bacterial contamination and so 
forth, which is not supposed to be in there anyway.
    So, other than doing testing like that, you are going to 
need a very short shelf life to retain confidence that the 
products are still good.
    Mr. Griffith. And I think that is something that we can 
work out, is a short shelf life. If you can give us some help 
on what that should be, whether it is 10 days or 20 days. As 
long as the hospitals and the people doing those emergency 
surgeries know, then they can adapt to that. But, you know, 
that is one of those issues that we are trying to figure out.
    You know, I know this is difficult, and I really appreciate 
the work that you have done and the fact that you have given us 
what I believe to be very clear and honest answers. But 
sometimes we have to pull the trigger and figure out what the 
numbers are.
    Dr. Woodcock. Yes, we do have to act.
    Mr. Griffith. So if you could help us with that, I would 
greatly appreciate it.
    This is not, as you know, a Republican or a Democrat issue. 
This is just trying to get it right.
    But I do agree with Dr. Burgess that we can clarify but I 
don't think that there is new authority that is needed. But 
clarifying the authority that we believe exists will help you, 
will it not? And we only have time for a ``yes'' or ``no.''
    Dr. Woodcock. Yes.
    Mr. Griffith. All right. I appreciate that and yield back.
    Thank you, Mr. Chairman.
    Mr. Waxman. Mr. Chairman, may I ask unanimous consent----
    Dr. Woodcock. Without objection, so ordered.
    Mr. Waxman [continuing]. To submit a statement?
    Mr. Griffith. And, Mr. Chairman, I did, likewise, forget to 
do a unanimous consent on a couple of documents, if I might.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Waxman. And I have a document also. And I also wanted 
to thank Mr. Griffith for his willingness to talk this through 
and work it out.
    Mr. Pitts. All right. At this time, the chair recognizes 
the ranking member emeritus, Mr. Dingell, for 5 minutes for 
    Mr. Dingell. Mr. Chairman, thank you. I commend you for 
holding this hearing.
    Dr. Woodcock, welcome. My questions will require ``yes'' or 
``no'' answers.
    Nearly 9 months after the initial outbreak of fungal 
meningitis from contaminated steroid injections at New England 
Compounding Center, it is clear to me that Food and Drug needs 
strong and clear authority over compounding pharmacies, which 
it now lacks.
    My home State of Michigan has been especially hard-hit. To 
date, there have been 264 cases related to NECC and 17 deaths 
in Michigan alone, the most in the Nation.
    I am confident we can come together in a bipartisan manner 
to clarify and strengthen the authority of FDA over compounding 
    Today we have three bills before us which take different 
responses and answers to solving the problem. Each has its 
strengths and weaknesses. I am going to focus my questions on 
important authorities that I believe should be included.
    Question one: Does FDA believe that classifying an entity 
according to the existing statutory scheme of either a 
traditional compounding pharmacy or a conventional drug 
manufacturer could cause disruptions in our healthcare system, 
yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Does FDA have the authority to require all 
compounding pharmacies to register with the agency, yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. No?
    Dr. Woodcock. No.
    Mr. Dingell. Would you submit for the record what authority 
you need?
    Dr. Woodcock. Certainly.
    Mr. Dingell. Does FDA have authority to require all 
compounding pharmacies to report adverse events, yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. Does it need that authority?
    Dr. Woodcock. Yes.
    Mr. Dingell. Submit to us, please, what you think you need, 
for the purposes of the record.
    Does the FDA have the authority to require all compounding 
pharmacies to follow good manufacturing practices, yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. Do you need it, yes or no?
    Dr. Woodcock. ``All'' might be an overstatement. Yes, for 
    Mr. Dingell. All right. I would like to have you define 
what it is you happen to feel you have need of.
    Does FDA believe nontraditional compounders should be 
subject to appropriate good manufacturing practices like 
manufacturers are, yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Please elaborate for the record.
    Dr. Woodcock. Certainly.
    Mr. Dingell. Does FDA believe a risk-based inspection 
schedule is appropriate for nontraditional compounders, yes or 
    Dr. Woodcock. Yes.
    Mr. Dingell. Tell us why for the record, if you please.
    Next question: Does FDA have full authority to see all 
records when inspecting any compounding pharmacy, yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. Does it need it?
    Dr. Woodcock. Yes.
    Mr. Dingell. Please define for the record what you think 
you have need of.
    Has FDA faced litigation regarding its ability to inspect 
records in pharmacies, yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Please describe for the record what you feel 
you have need of.
    Now, do you need this authority to effectively regulate 
compounding pharmacies, yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Please state why for the record.
    I have long believed that we must provide agencies like FDA 
with the necessary authorities and researchers and resources to 
properly protect public health. FDA has a user-fee system for 
the approval of pharmaceuticals and medical devices, amongst 
others. If we give FDA increased authority in this area, which 
I believe we should, then I believe we should also have a 
stronger user-fee program.
    Now, would the user-fee provisions contained in the Senate 
bill provide FDA with the necessary resources to carry out 
these authorities, yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Would you discuss for the record, please?
    Now, the American people deserve a response to the NECC 
outbreak so that we can ensure that this never happens again. I 
am committed, like most of my colleagues here, to seeing to it 
that we work towards a proper bipartisan solution to the 
problem. And I plan on continuing my discussions with my 
friends on both sides of the aisle until we reach agreement on 
the best way forward.
    I would like to have you discuss a little further some of 
the comments that you made in response to Mr. Griffith's rather 
excellent questions.
    I have a curiosity. Is the number of shipments by the 
compounder as important as to whom they are shipped and what 
the compounding might happen to be and who the individual is 
that is making the shipments?
    Dr. Woodcock. We feel that the highest risk relates to 
sterile products. So that is number one. Things are going to be 
injected into your body, right? And the contamination, that----
    Mr. Dingell. So you need authority to define those things, 
don't they?
    Dr. Woodcock. That is one.
    We propose using interstate commerce as a proxy for risk, 
because if you are shipping all over the country, you are 
making more, it is taking longer, right? So the shelf life is 
going to be longer, and there is time for bacteria or fungi to 
grow and so forth. And your batches are probably larger, and 
that increases the risk of errors, and, also, it just simply 
increases the number of people who could be harmed.
    Mr. Dingell. I am running out of time. And out of respect 
for my colleagues, would you please submit for the record a 
statement on this particular point?
    Dr. Woodcock. Certainly.
    Mr. Dingell. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from Tennessee, Ms. Blackburn, for 5 
minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    And thank you for being with us. We appreciate your time 
and coming back. I know that you probably and your staff 
probably feels like we have talked about this issue nonstop, 
but it is of tremendous concern to us. For those of us in 
Tennessee, it is especially concerning. We have 14 individuals 
that lost their lives and so many who are still suffering.
    And I will just associate myself with Mr. Burgess's remarks 
in regard to it being a collective failure. We do realize that 
there were actions that you all should have and could have 
taken, and it is of concern to us.
    A couple of things I just want to ask you about. Looking at 
drug shortages, are there any instances where FDA is permitting 
compounding pharmacies to make products on that drug-shortage 
list without having those facilities go through the inspections 
and qualifications?
    And, then, are there people that are on the ANDA list that 
have submitted those applications where you have not gotten 
around to approving those applications?
    Dr. Woodcock. Well, first of all, we prioritize any generic 
drug application that is related to a shortage and try to get 
it through the process as quickly as possible.
    As far as compounding pharmacies, yes, they are making 
drugs to address shortage issues, but, no, we have no real 
oversight of that right now. That is not the scheme that is in 
place. That is regulated primarily by the State boards of 
    Mrs. Blackburn. OK. On the ANDAs, you said you prioritize 
those applications. How long does it take to get one of those 
through the process?
    Dr. Woodcock. Well, it varies tremendously, whether or not 
the application is in good shape. If there are multiple foreign 
facilities involved in production of the drug that we haven't 
inspected before, we may have to go to other countries and 
inspect those facilities. So that sometimes can be a rate 
limiting step.
    Mrs. Blackburn. On average.
    Dr. Woodcock. I could get back to you on that. I don't have 
    Mrs. Blackburn. OK. I would love that. I think that it 
would be instructive to us.
    Mr. Griffith mentioned something about limitations. I 
understand that many States have used some form of volume 
limitation for anticipatory compounding to determine whether an 
entity is acting within the scope of their license.
    So do you think that a volume limitation in conjunction 
with other factors from 503(a) could help distinguish between 
entities that are engaged in large-scale compounding similar to 
manufacturing or in traditional compounding?
    Dr. Woodcock. It is possible. The States have a patchwork 
of laws which are different. Some allow anticipatory 
compounding; some allow office stock. So there are a variety of 
interpretations or laws across the different States.
    Clearly, volume is another proxy for risk. And the larger 
the volume of the batch or lot you are making, the higher the 
risk that is imposed if you are not using good manufacturing 
    So that is possible, but we have struggled with this, and 
we have had a very difficult time coming up with a coherent 
scheme that would use volume. And then that would have to be 
usually enforced by the States, because it would apply to all 
the compounding pharmacies. It wouldn't be a uniform Federal 
standard, or it would be very difficult for us to enforce it 
even if it were, because, as the testimony shows, there may be 
23,000 pharmacies or something that are doing compounding of 
different types.
    Mrs. Blackburn. OK. Thank you for that. I would think that 
volume could be one of those indicators that may be a bit more 
illuminating as you try to work through this process. It would 
seem it would be a key indicator.
    With that, I will yield back.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentlelady from the Virgin Islands, Dr. 
Christensen, for 5 minutes for her questions.
    Mrs. Christensen. Thank you, Mr. Chairman.
    And welcome back, Dr. Woodcock.
    Dr. Woodcock. Thank you.
    Mrs. Christensen. Some of these questions have been asked 
one way or another, but I want to just to be clear. And I would 
like to talk about one of the concerns we have been hearing a 
lot about, having to do with the proposed statutory framework.
    As has been said, FDA has suggested that Congress should 
revise its statute to clearly delineate which compounding 
entities should be subject to Federal oversight and which ones 
should remain the purview of States. Specifically, you have 
recommended that facilities be subject to FDA oversight if they 
conduct sterile compounding, which you said is the highest 
risk; second, whether they compound medicines in advance of or 
without a prescription, which I don't understand; or if they 
ship compound medicines across State lines.
    One of the problems, according to some of the stakeholders, 
is that this construct would prevent doctors' offices from 
obtaining limited amounts of compounded medication without a 
prescription that would be kept as office stock. So they feel 
that these medicines need to be in their office so that they 
can be given to a patient who needs them right then.
    It is my understanding from your answers that FDA doesn't 
support this. So could you explain the rationale for not 
allowing some limited amount of office stock to be exempt from 
the triad of requirements?
    Dr. Woodcock. Certainly.
    We are not--we aren't wedded to anything. We need to find a 
workable scheme, right? Each doctor's office or clinic may say, 
as I said, they may say, we only use 25 of these vials a week. 
OK? But if the compounding pharmacy has 1,000 customers, right, 
then that is 25,000 vials. And would you say that is too many?
    So if you simply use that and allow a certain amount of 
anticipatory office stock, that is what you could end up with. 
And so you just have to kind of play out this scenario in your 
mind and what this would look like. And I don't know, maybe you 
think that them making 25,000 sterile vials is OK, is not 
manufacturing, right?
    Mrs. Christensen. I think that anything that goes beyond a 
specific compound for a specific patient is too much, trust me. 
    Dr. Woodcock. Could I say one more thing?
    Mrs. Christensen. Sure.
    Dr. Woodcock. We are not proposing that this be prohibited. 
We are saying that it should go into a category that involves 
good manufacturing practices so that there would be oversight 
of the aseptic processing so that we would be assured it would 
be done correctly and at least these products would not be 
    Mrs. Christensen. Got it. And are there certain types of 
compounded drugs for which some limited amount would not be 
subject to the limitation? Are there specific drugs that you 
could conceive of that could be compounded without--for which 
some limited amount should not be subject to the extra 
    Dr. Woodcock. Well, we have proposed that the category of 
federally regulated would be, you know, interstate commerce 
without a prescription of sterile drugs, right? And that leaves 
a large variety of other things to the States, including 
intrastate sterile drugs, which still, arguably, can be of high 
risk, and all other compounded products, which would be the 
oral, the creams, the lotions, all those sorts of things.
    Now we have proposed that there be a floor that you should 
not be able to compound drugs, say, that FDA pulled off the 
market because they weren't safe, OK, and that you shouldn't 
compound drugs from a monograph, you know, from a appropriate 
source OK, and so forth. So we had certain criteria we think 
should apply to all pharmacies who compound. However that vast 
majority of nonsterile, non-injectables so we really are not 
proposing to have under this broad scheme, this new scheme that 
we were talking about.
    Mrs. Christensen. And are there any exemptions to the 
across State line borders for pharmacies that are close to 
State borders or that routinely operate across State borders 
    Dr. Woodcock. Right, well that is, I think, the question 
that we just heard that that creates some unfairness like any 
scheme we are going to apply there would be some disparities. 
We weren't proposing that there would be that exemption for 
States that were close by or four corners or whatever.
    Mrs. Christensen. The question has been raised that you all 
had a lot of authority that you hadn't exercised before so, and 
you said that FDA took some aggressive action and when you have 
taken that aggressive action, is it that FDA has gone over out 
on a limb in the interests of public health risking court 
challenges? Or did you find some authority that you didn't 
think you had before?
    Dr. Woodcock. Well, as I said, we, I think we may get court 
challenges. I think in some cases, the States have taken action 
because we have brought this to their attention, and they are 
the holders of the, you know, they issue the pharmacy licenses. 
And so although we have even inspected 61 pharmacies, now if 
you think of the universe that we are talking about, it is a 
much larger universe, and new ones can grow up all the time.
    So although we are taking aggressive action, the fact that 
we do have to think through the judicial consequences and so 
forth meaning each of these actions, as I would call them 
pretty lawyer intensive, all right, and we don't have unlimited 
legal resources.
    Mrs. Christensen. I have gone over my time, thank you.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentlelady from North Carolina, Mrs. Ellmers, 
for 5 minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman, and thank you, Dr. 
Woodcock, for being with us again.
    To the best of my knowledge this is about the fourth 
hearing that we have had in the subcommittee on this issue, 
especially in relation to the New England Compounding Center, 
and I think there are still some questions out there that many 
of us have about how that process is moving forward.
    It seems to me, after looking at all the information that 
the FDA did have some authority at that point to shut down 
NECC, and of course, that is not the possess that went forward 
and we obviously need to clarify, of course, the FDA authority 
as been discussed many times here already today.
    Dr. Woodcock, in your opinion, would you agree with my 
statement and might you have anything to add? What can we do to 
bridge this? Because as we are having this conversation, there 
are many times that you say that we did have authority, we did 
not have authority, but we have got to fix this problem. So 
what is your solution? What do you want to see done?
    Dr. Woodcock. Well, what FDA has proposed is that we have 
different legislation, I won't say it is quote, that the large 
scale industry that has grown up especially that is making 
sterile products be subject to Federal regulation. It is 
basically a new type of industry, the scale, the fact that it 
is sterile and so forth, and it is not the traditional corner 
drugstore making----
    Mrs. Ellmers. And that, I guess at that point is now where 
we have the question of the amount that is being compounded, 
meaning each individual vial, or, you know, sterile unit, I 
know I have heard shelf life be discussed, and of course, I 
think that does have more to do with the actual make-up of the 
compounded prescription, which leads me again to the question, 
I know when we have a traditional pharmacy, we have a 
prescription, and that is filled for the patient. Then we, as 
you pointed, out have this situation where we have hospitals 
and different, you know, maybe outpatient surgery clinics that 
use those compounded products as well.
    Why can't--I guess my question is rather than concentrating 
so much on the number, obviously there is a safety issue there, 
we want to make sure we are producing a sterile product, but 
when it comes to going to a hospital or an outpatient surgery 
center, why can it not stay under the same category that it is 
right now rather than moving into a larger manufacturing label 
or status?
    Dr. Woodcock. Because they make--the people who supply 
these outpatient clinics like NECC, OK, make large scale 
volume, which Dr. Burgess has said, well, that clearly is 
manufacturing, we know it when we see it, right, the question 
is how do you distinguish that.
    Mrs. Ellmers. Well, and that leads me to my next thought, 
and I realize that we are talking about legislation that is 
already being proposed, but if we know that an outpatient 
clinic does a number, a particularly an average number of cases 
every month, and they were to receive that compounding product 
for that amount, would that not essentially be kind of a large-
scale prescription when you think about it? Is there not 
another avenue we can take here rather than just add more 
regulation and more costs, but at the same time, continue to 
produce a very safe product?
    Dr. Woodcock. Well, that is the issue, continuing to 
produce a safe product. As I said, we have had another outbreak 
since the last time this body had a hearing, all right.
    Mrs. Ellmers. I am going to stop you there, thank you, I do 
have about 50 seconds which leads me to my next question. At 
the time of the outbreak, the NECC outbreak, there was a 
compliance policy guide that the FDA was preparing, but I think 
that had been put on hold.
    Has that now been, has that policy been evaluated? And what 
is the FDA doing?
    Dr. Woodcock. We have learned since then, and as I told Dr. 
Burgess we are aggressively applying our existing authorities 
under the law to these pharmacies. Existing authorities require 
    Mrs. Ellmers. So the question, again, is has the agency 
evaluated the compliance policy guide? Has that been----
    Dr. Woodcock. Yes.
    Mrs. Ellmers. Is that being implemented now as this 
    Dr. Woodcock. No, we feel that parts of that are actually 
unfeasible based on what we have learned. We have learnt a lot 
since the NECC outbreak all right and we have revised our 
approach to be more practical.
    Mrs. Ellmers. Thank you and my time has run out thank you.
    Mr. Pitts. The chair thanks the gentlelady. I recognize the 
gentlelady from Illinois, Ms. Schakowsky 5 minutes for 
    Ms. Schakowsky. I am over here, Dr. Woodcock.
    Dr. Woodcock. I am sorry.
    Ms. Schakowsky. Did I hear you at some point say that there 
ought to be labels of dates certain and information for the 
consumer on compounded products?
    Dr. Woodcock. Yes, after this NECC outbreak, many of the 
FDA staff who had to go in the hospital they said, well, we 
don't even know what products we are getting that are 
compounded when they are having a procedure or something. There 
is no label that is required now that identifies a product as a 
compounded product.
    Ms. Schakowsky. Here is my question problem, that I began 
my activism decades ago to get expiration dates on products 
sold in the supermarket. I am for consumer information. But 
when it comes to prescription drug, particularly if you are in 
the hospital, are you suggesting that in some way, we leave 
this up to an informed consumer to be able to make decisions on 
whether or not they want that or that it be suitable for them?
    Dr. Woodcock. Not really. We think that this simply raises 
awareness about the use of compounded drugs. The use of, there 
are beyond use dates on compounded products now. Our issue with 
them is that they aren't based on evidence, based on 
experiments that are done on that compounded product from what 
we have seen in our inspection.
    Ms. Schakowsky. Well, let me ask you about all the 
prescriptions that we get. They all now have a date on them and 
I regularly go through my shelf and dispose of----
    Dr. Woodcock. Excellent.
    Ms. Schakowsky. Outdated drugs. Are all of those, do we 
know that those are accurate?
    Dr. Woodcock. Absolutely. They have to perform experiments 
on stability and dating period and submit all that information 
to FDA and we have to agree with it.
    Ms. Schakowsky. OK, so that is not part of the requirement 
and something that you would need the authority to require 
    Dr. Woodcock. Performing stability testing, so forth, on 
products is part of good manufacturing practices.
    Ms. Schakowsky. And so that would, under your new 
categories, would be required of these compounders?
    Dr. Woodcock. We are proposing that for the highest risk 
facilities that make sterile drug products and ship them inter 
    Ms. Schakowsky. So if we are not doing it by quantity, what 
are we doing it by? What do you recommend we do it by?
    Dr. Woodcock. We propose by risk and simply pulling off the 
highest risk class of products which is the sterile products 
that are shipped inter State so they are going, causing multi 
State outbreaks, and that are without a prescription and the 
prescription--without a prescription is a proxy for mass 
production, OK, because it is not one pharmacy making one 
sterile product for a person, say, in another State. They are 
making large batches and then shipping them all around.
    Ms. Schakowsky. So the FDA has talked a lot about medical 
need as a condition for compounding a product. So how should we 
incorporate this concept into legislation?
    Dr. Woodcock. We feel that is a fundamental concept for 
compounding. It is the reason--why else would you give people 
products that didn't go through the system that Congress has 
established for drugs, right, which is they are tested for 
safety and efficacy, and they have applications and everything, 
and the reason is there is a medical need that is not met by 
existing products. And so we feel to raise practitioners' 
awareness that they would indicate that there was a medical 
need for this product, and why are we doing this? Because when 
we talk to people who bought products from NECC, the 
practitioners, what they said, well, there was just the order 
form online, and we just ordered like any other order that you 
would make. And so there was no awareness, there was no 
practitioner awareness that this was a higher risk product.
    Ms. Schakowsky. I see. In your testimony, you explain that 
certain products with limited exceptions are not appropriate 
for compounding under any circumstances. Would you include this 
situation that we are just talking about, that, you know, the 
practitioner just went online, found this to be available? 
Should those products not have been compounded under any 
    Dr. Woodcock. No, we have very specific criteria for what 
we think shouldn't be compounded under any circumstances, and 
that would be, for example, the drugs that FDA has pulled off 
the market because they dangerous. We don't think they should 
be compounded. Very complex dosage forms, our, the 
pharmaceutical manufacturers have trouble making certain dosage 
forms right. For example, extended release may cause dose 
dumping and get all the dose in the body at once and could kill 
you, for example, and they have to do extensive testing on 
their products to make sure they have been manufactured 
correctly. So we don't think some of these very risky products 
should be compounded either.
    Ms. Schakowsky. Thank you. I appreciate it. I yield back.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentleman from Florida, Mr. Bilirakis, 5 minutes 
for questioning.
    Mr. Bilirakis. Thank you, Mr. Chairman I appreciate it very 
much. Thank you for your testimony. Dr. Woodcock, you mentioned 
that copies of FDA-approved drugs should never be compounded. 
What about the drug progesterone, which, for years, was 
compounded by pharmacists for pregnant women to prevent 
premature births? In 2011, FDA approved Makena, which is a 
manufactured form of progesterone. The manufacturer sent a 
cease and desist letter to compound pharmacies, and FDA weighed 
in and said pharmacies could continue to compound this drug 
even though a more expensive manufactured drug is available.
    If we explicitly prevent compound pharmacies from making 
copies of FDA-approved drugs, what will happen to pregnant 
women's access to achieve drugs, affordable medication to 
prevent premature births?
    Dr. Woodcock. You know, I can't comment specifically on 
that instance because of ongoing litigation issues. However, I 
think in general, Congress set up a system that required new 
drugs to go through the FDA review process, and that was 
because of the many abuses and many deaths and many problems 
there were long ago when there wasn't a system to make sure 
drugs are safe and effective. So there were many outbreaks in 
the past as well as like the thalidomide crisis and so forth, 
all of which led Congress to do this.
    Now, if we feel, in general, if there is a safe and 
effective drug available to the public, people should not be 
exposed to drugs that are of lower quality unless there is a 
medical need for that other product.
    Mr. Bilirakis. Next question, you mentioned needing the 
power to access pharmacy records. Are you looking for the 
authority over pharmacy records in general, or just the 
nontraditional compound pharmacies?
    Dr. Woodcock. Well, we would like to, so to speak, be able 
to distinguish, more or less, the sheep from the goats. We need 
to know, people have said, well, why don't you act on this or 
that or other, haven't we acted if we can't demonstrate that a 
pharmacy is shipping large quantities of drugs that violate 
whatever scheme Congress comes up with, right, then we won't 
have the power to use our authorities. And the way we do that, 
you look at their shipping records and say if there is a 
requirement for names or prescriptions, we would need to be 
able to verify that, otherwise we--there are bad actors out 
there and there are people who say oh get all that stuff or we 
don't do this, and if we can't verify that then it really ties 
our hands.
    Mr. Bilirakis. How about, you mentioned using the 
administrative warrants to compel access to records.
    Can you explain what this process is and how do you go 
about getting the records, the warrants?
    Dr. Woodcock. Well, I am not a lawyer, all right. But my 
understanding, I have asked the lawyers and we have to go to a 
court and we have to ask the court. And sometimes it can be 
done rapidly, but often it averages about 2 weeks. And we are 
concerned, first of all, of course, if there is an outbreak, 
that is too long because lives are at stake.
    Another thing, a problem we can have is that people can 
clean up and destroy their records in the time that it takes 
for us, and, of course, we don't have evidence that they have 
destroyed records because they may be destroyed, but when our 
investigators are in some of these firms, they have had a very 
strong smell of bleach which we think means that the mold has 
been bleached off of the counters and so forth, and that there 
was a lot of cleanup during the time we went and tried to get a 
warrant to get in.
    Mr. Bilirakis. Thank you. We all, of course, want to ensure 
the safety and sterility of compounded drugs. We must also not 
lose the sight of the important role that compounded drugs play 
in patient care. Some physicians keep a supply of compounded 
drugs available for anticipatory office use because in waiting 
for the drug to get compounded for the patient, that waiting 
period could endanger the patient's health. I know we touched 
about upon this, but some of the bills we are reviewing today 
include patient specific prescription requirements for certain 
compounded drugs.
    Do these prescription requirements really address and 
improve the safety and sterility of compounded drugs? Are there 
other measures that can be taken to improve the safety of these 
products that also ensure physician and patient access to 
compounded drugs for use in the office setting?
    Dr. Woodcock. Well, our proposal doesn't preclude lack of 
prescriptions in the anticipatory compounding. What we are 
saying is when you do that for sterile products, you should 
make the products under good manufacturing practices, proper 
aseptic processing so you don't contaminate them. Now, that is 
one way to deal with this. That is what we are proposing is if 
you wish to ship products, sterile products around and not get 
prescriptions, then you should make them under good 
manufacturing practices because you are likely to be making 
batches of sterile products, and that really doesn't look like 
compounding, it looks more like manufacturing when you are 
making batches.
    Mr. Bilirakis. Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from Florida, Ms. Castor, 5 minutes 
for questions.
    Ms. Castor. Thank you, Mr. Chairman, and thank you Dr. 
Woodcock for being here. The last time you were here you were 
kind of to allow me to change the subject and ask you about one 
of the serious drug shortages facing our country, and that 
involves the injectables, injectable nutrition that primarily 
affects premature infants and our children's hospitals continue 
to raise the issue and practitioners and scared parents across 
the country. I know at the end of May, FDA acted to allow some 
imports of those nutrition elements.
    Can you give us an update on how it is going? Is the 
situation improving? Have you hit any roadblocks.
    Dr. Woodcock. It took longer than we had hoped and when I 
talk to you last, I thought it was imminent and it took longer 
than what we hoped to get those products in. We believe we are 
alleviating these shortages, but we are not out of the woods 
yet. We do not have a U.S. manufacturer online to my knowledge 
that can give us a stable supply but we are working on that.
    Ms. Castor. Are there prospects for U.S. manufacturers to 
come online?
    Dr. Woodcock. That is what we believe, yes.
    Ms. Castor. And what would that time frame would be?
    Dr. Woodcock. Pardon me.
    Ms. Castor. What do you think the time frame would be?
    Dr. Woodcock. I don't know. We can get back to you with 
details if you would like.
    Ms. Castor. Good. I look forward to that, thank you very 
much. And you really have clarified over the number of hearings 
that we have had back on this topic on reforming drug 
compounding, we have had a series of hearings, and your message 
is sinking in, I believe. We now have three bills that are out 
there, you have got a Senate bill by Senator Harkin, you have 
got one that is kind of on the other end of the spectrum by 
former Representative Markey, you have Mr. Griffith's bill now 
that he is working on.
    When you look at the three bills that have been drafted, 
can you point to a section of any of those bills that you say 
boy, that is really the most important thing that could be 
accomplished here or that would be one of our priorities going 
forward for FDA and protection of the public health?
    Dr. Woodcock. Well, we do feel the Senate bill has the 
right framework. There is still issues about, but you know it 
does provide registration so we can find out who the people 
are, it provides reporting of adverse events so that if any 
compounding pharmacy starts getting into trouble, we can react 
quickly. It does have a user fee program, it does carve out a 
section of a sterile manufacturers who would be subject to 
higher standards and it does provide some other Federal 
standards. So we feel that is a good start, but all--this is a 
very difficult issue to draw these lines correctly and they are 
trade-offs that have to be made, and we recognize that everyone 
is struggling with this and we want to work with you all.
    Ms. Castor. In that Senate bill, is it clear to you when 
you read it that the traditional neighborhood pharmacist that 
are not in the, not making thousands of batches or even 
hundreds of batches are clearly exempt.
    Dr. Woodcock. Yes, the Senate bill has State law prevail on 
the traditional pharmacy compounding, and we feel, 
unfortunately, there is a bit of a patchwork there because each 
State has a different set of laws, so your two pharmacies are 
20 miles apart in different States may be operating under 
totally different frameworks, and we think that will be 
difficult for us to enforce, pending one might be regulated by 
us, and the other on the other State regulated by the State, 
and that is very difficult.
    Ms. Castor. Well, thank you very much. I was thinking about 
this earlier today reading over the testimonies and I think if 
we just put ourselves in the shoes of the average American 
consumer, I think what they want most of all is to be assured 
that especially the highest-risk drugs, the ones that are being 
injected, like you said, are being manufactured in a way that 
is safe and that the government at least has the authority to 
know who they are, where they are, so that we can ensure that 
no one is harmed to the extent of what happened with NECC. So 
thank you very much. I yield back.
    Dr. Woodcock. Thank you.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from New Jersey, Mr. Lance, for 5 minutes for 
    Mr. Lance. Thank you, Mr. Chairman.
    Dr. Woodcock, your opinion should entities making 
nonsterile products in advance of prescription shipping 
interstate be regulated by the FDA as traditional manufacturers 
or by States as traditional compounders?
    Dr. Woodcock. So should traditional, should manufacturers 
who are making nonsterile products and shipping them 
    Mr. Lance. Interstate?
    Dr. Woodcock. Interstate, perhaps in very large quantities 
be regulated as manufacturers or.
    Mr. Lance. Or as traditional compounders.
    Dr. Woodcock. I think that is a policy call. There are 
trade-offs there; there are is far more of that. These are 
lower risk products, and what we have proposed is other 
restrictions like not copying FDA-approved product and only 
working from certain bulk product, API's and so forth, that 
would put some boundaries on these practices but I think there 
is some danger of folks going into business as a kind of shadow 
generic company without FDA oversight, if they could ship 
    Mr. Lance. If they were regulated under the FDA what would 
the proposed framework be? As opposed to being regulated by the 
    Dr. Woodcock. Well, we haven't proposed anything for that 
group. Generally speaking, doing those practices, you would 
have to, right now under the current law, which we have been 
talking about, you have to file an application for every single 
form that you are shipping, and often, of course, these are 
customized to different doctors' preferences and so forth, and 
these groups make thousands of different dosage forms, they 
would have to file an application for each one with extensive 
documentation and pay user fees.
    Mr. Lance. Thank you. I know that you have recently 
conducted a series of inspections compounding pharmacies and as 
I understand it, you have done that in conjunction with State 
officials; is that accurate, Dr. Woodcock?
    Dr. Woodcock. Yes, in almost all cases, we have gone in 
with the State.
    Mr. Lance. And you have stated that the agency needs full 
record inspections authority for every pharmacy in the country 
and in that, if you are conducting these inspections with State 
Pharmacy Board officials, do you believe as well that you need 
independent authority independent from the State boards?
    Dr. Woodcock. We have had some cases where the State 
officials, due to resource constraints, have not been able to 
go in with us and we are concerned that might be even more 
happen more often in emergency where we feel that we really 
need the ability to get in there. We do always try to have the 
State officials come with us because they have we have joint 
    Mr. Lance. Are some States better at this than others 
traditionally, or does it just vary based upon State resources 
at the moment.
    Dr. Woodcock. I don't think we have a large enough sample 
size to say which States, you know, we know some States as the 
Board of Pharmacy Association has testified, some States are 
better staffed and so forth than others for their board of 
pharmacy operations.
    Mr. Lance. Thank you. I would be happy to yield to any 
other member who wishes to speak.
    Mr. Green. If I could, we are looking, and I think I share 
it with my colleague, Congressman Griffith, we are looking at 
multiple things that gives the FDA the authority to do it, 
because we don't want this to happen again, and I have to admit 
having served there a good while, that first hearing we had 
neither the FDA nor the compounders nor the State agencies 
showed that they were actually do the doing the job, so we want 
to make sure you have the tools, so it will be multiple and I 
would be glad to my colleague from New Jersey to yield to my 
colleague, Mr. Griffith.
    Mr. Griffith. If I could have a minute of that time I would 
appreciate it, and one of the things we are also working on in 
the bill that I think is helpful and I think you would agree is 
that we set up a facilitating process where there are 
complaints from the State where they can work a little more 
efficiently with the FDA, and likewise, if you hear something 
go on from State A that the FDA can then communicate that it to 
that to State B and C, that this particular group may be having 
a problem.
    Dr. Woodcock. Yes, we would like to have, perhaps, a 
message board or something but we don't want to turn into the 
telephone operator.
    Mr. Griffith. I understand that, but anything we can do to 
facilitate, because one of the problems is those who were here 
for the hearings know is that we had a couple of States that 
were blowing the whistle, and no action was taken, so we want 
to try to make sure we facilitate in making sure that the next 
time when Colorado or Ohio or some other State is, in fact, 
raising red flags that that message is getting through, and I 
do appreciate and yield back to----
    Mr. Lance. Thank you very much.
    Mr. Pitts. The chair thanks the gentlemen. That concludes 
questions from the members. I am sure they will have written 
questions. We ask that you please respond promptly. Dr. 
Woodcock, as always, you have been a very excellent witness. 
Thank you for your testimony.
    Dr. Woodcock. Thank you. I am pleased to respond.
    Mr. Pitts. Thank you. I will call the second panel up at 
this time and introduce them as they come forward. In this 
order they will testify: Dr. Doug Hoey, chief executive 
officer, National Community Pharmacists Association; Dr. Kasey 
Thompson, vice president, American Society of Health-System 
Pharmacists; Mr. Jeffrey Francer, assistant general counsel, 
Pharmaceutical Research and Manufacturers of America; Dr. David 
Gaugh, Senior Vice President for Sciences and Regulatory 
Affairs, Generic Pharmaceutical Association; Mr. Allan Coukell, 
Senior Director Medical Programs, the Pew Charitable Trust; Dr. 
David Miller, Executive Vice President and CEO, International 
Academy of Compounding Pharmacists; and, finally, Dr. Carmen 
Catizone, Executive Director, National Association of Boards of 
    Thank you all for coming.
    You will each have 5 minutes to summarize your testimony. 
Your written testimony will be placed in the record.
    Dr. Hoey, we will start with you for an opening statement.


                  STATEMENT OF B. DOUGLAS HOEY

    Mr. Hoey. Thank you and good afternoon, Chairman Pitts and 
Vice Chairman Burgess and Ranking Member Pallone, members of 
the subcommittee, the National Community Pharmacists 
Association greatly appreciates the opportunity to testify 
today and share the community pharmacy perspective on 
legislation addressing pharmacy compounding.
    NCPA represents the interests of America's community 
pharmacists, including the small business owners of more than 
23,000 independent community pharmacies.
    Almost 86 percent of independent community pharmacies 
compound medications. Our members perform a wide variety of 
compounding services, including working with physicians to 
create medications to help patients needing hormone replacement 
medications, help pediatric patients, and those with severe 
nausea and vomiting where commercially available medications 
are unresponsive or unavailable to give just a few examples.
    NCPA commends members of this committee for taking a closer 
look at what actions and inactions led to the tragic NECC 
event. We believe this committee has taken the proper steps by 
focusing on investigations into clarifying existing oversight 
to ensure that the appropriate regulatory bodies are exercising 
their full authority.
    NCPA is also grateful to Congressman Griffith for the 
tireless efforts to prevent a tragedy like NECC from occurring 
again. NCPA supports the approach of Representative Griffith's 
discussion draft as it is not a broad expansion of FDA power 
over historically State regulated pharmaceutical compounding. 
To the contrary, the draft strikes the proper balance of making 
certain that future tragedies are avoided while also preserving 
patients' access to vital compounds.
    In addition, NCPA fully supports the discussion draft to 
preserve State Board of Pharmacy oversight of pharmacy 
compounding. NCPA has historically, and continues to advocate 
that pharmacy compounding is best regulated by the State Boards 
of Pharmacy. Conversely, manufacturing is overseen by the FDA. 
If the FDA has a concern about an appropriately licensed 
pharmacy, then the FDA currently has the authority to ask the 
State Board of Pharmacy to work with them to address the issue. 
NCPA also strongly supports efforts by Representative 
Griffith's discussion draft to preserve office use and 
anticipatory compounding where State laws allow such practices.
    In order to preserve access to compounds, the discussion 
draft acknowledges that pharmacies should not be hindered in 
their ability to engage in anticipatory compounding as long as 
it is reasonable and based on a historical pattern of 
prescriptions, or for specific patients served by that 
    Furthermore, NCPA strongly supports the efforts of the 
discussion draft in recognizing that strengthening 
communication between FDA and State Boards of Pharmacy is 
    NCPA believes one of the leading contributors to the NECC 
tragedy was the failure of the FDA to exert its existing 
authority to oversee entities going beyond pharmacy 
compounding. Communication and coordination between State 
Boards of Pharmacy and the FDA is imperative.
    While NCPA appreciates all efforts on this very important 
issue, we do have strong concerns with other legislative 
proposals, including granting FDA additional authority to 
create ``do not compound'' lists.
    Contrary to the discussion draft, other legislative 
proposals grant the FDA unrestricted authority to designate 
drugs or specific categories of drugs to a ``do not compound'' 
list. This would be an unnecessary expansion of FDA authority 
over the practice of pharmaceutical compounding while doing 
nothing to prevent another tragedy like NECC.
    A second concern is requiring community pharmacies to 
notify FDA when compounding short supply medications. While the 
discussion draft adequately addresses the concern that 
shortages of prescription drugs have tripled during the last 5 
years, other legislative proposals place burdensome FDA 
notification requirements on compounding pharmacies.
    Mandating all compounding pharmacies to bypass their State 
Board of Pharmacy does nothing to prevent another NECC.
    And, third, exempting pharmacies within health systems from 
compounding standards, while the discussion draft holds all 
compounding pharmacies to the same compounding standards, other 
legislative proposals exempt all pharmacies within health 
systems from the proposed compounding requirements.
    A recent OIG report found that almost half of hospitals 
stated that cost and space limitations would be major 
challenges to achieve USP 797 compliance. Thus, as Congress 
addresses this very important issue, the intent should be to 
ensure all patients receive safe and quality compounded 
    In conclusion, NCPA is committed to working with Members of 
Congress in order to make certain that a tragedy such as the 
New England Compounding Center does not occur in the future, 
while also preserving patients' access to customized and safe 
compounded medications.
    Thank you for inviting NCPA to testify and to share the 
view points of independent community pharmacy owners and 
operators across the country on compounding. I look forward to 
answering any questions you may have. Thank you.
    Mr. Pitts. Thank you, Dr. Hoey.
    [The prepared statement of Mr. Hoey follows:]
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    Mr. Pitts. Dr. Thompson, you are recognized for 5 minutes 
for an opening statement.


    Mr. Thompson. Good afternoon, and thank you, Chairman Pitts 
and distinguished members of the committee for holding this 
hearing. I am here today to provide ASHP's perspective as a 
professional society that represents over 42,000 pharmacists 
who practice in hospitals, health systems and ambulatory 
clinics, and has been a recognized leader for over 20 years in 
the development of guidelines on sterile compounding, 
nonsterile compounding and guidelines on working with 
outsourcers. The event caused by the New England Compounding 
Center resulted in 61 unnecessary deaths and more than 700 
meningitis cases.
    ASHP strongly believes that the authority and 
accountability between the FDA and State Boards of Pharmacy 
needs to be clarified. We believe that compounding outsourcers 
that prepare customized sterile preparations that are not 
commercially available should be held to the highest standards 
for quality, including relevant current good manufacturing 
practices and should be required to be registered with and 
routinely inspected by the FDA.
    Further, we believe that these entities should not copy 
commercially available products except in the cases of drug 
shortages or to make a medically necessary variation that meets 
patient specific needs. The drug approval process in the United 
States is the gold standard and should be maintained as such. 
However, it is important to recognize that there are many 
legitimate and medically necessary compounded sterile 
preparations that simply are not available from a brand or 
generic manufacturer in the strength or dosage forms that 
patients need.
    U.S. hospitals prepare a vast array of compounded sterile 
preparations from FDA-approved products every day in order to 
meet patient-specific needs. The compounded medications that 
hospitalized patients need range from simple intravenous 
admixtures to complex customized medications that are not 
available off the shelf, such as multi-ingredient cardioplegia 
solutions for heart surgery, epidural pain medications for 
women in labor and delivery, concentrated pain medications for 
cancer patients, and adult medications prepared in 
concentrations that can be safely administered to babies and 
    Where necessary, hospitals enlist the services of qualified 
compounding outsourcers for some preparations for several 
reasons. For example, some hospitals may not have the necessary 
equipment or facilities to prepare some high risk sterile 
preparations, which is sometimes the case in small and rural 
hospitals. Or they may face medication shortages for commercial 
products that can only be replicated by outside suppliers that 
provide customized compounded sterile preparations. They may 
also enlist the help of outsourcers to prepare FDA-approved 
sterile products in ready-to-administer packages in the 
strength and dosage forms they need.
    The evolution of the compounding outsourcing industry over 
the past decade has outpaced the ability of State and Federal 
laws to keep up, creating legal and regulatory gray areas 
between State and Federal Government.
    Unfortunately, it just isn't as simple as calling these 
large scale anticipatory compounding entities a pharmacy, a 
repackager or a pharmaceutical manufacturer. They are something 
in between each of these but no one category fits them 
    Recent bipartisan Senate legislation addresses the need for 
clarity and distinguishing between compounding by a pharmacy 
and the activities of a compounding outsourcer. It assigns 
responsibility and accountability to the FDA for regulating 
compounding manufacturers while preserving the accountability 
for pharmacy compounding to State Boards of Pharmacy. It also 
establishes a user fee program to help ensure that the FDA has 
the resources it needs to effectively regulate compounding 
    Because of the potential nationwide scale of these 
operations, we are concerned that State Boards of Pharmacy may 
not be able to provide adequate oversight of these facilities. 
Many State boards may not have the resources or expertise to 
evaluate whether a pharmacy has crossed the line and become a 
    With respect to the regulatory framework proposed in the 
draft legislation by Representative Griffith, ASHP is concerned 
that the regulatory environment that allowed the New England 
Compounding Center to operate as a pharmacy would remain 
intact. In other words, if authority between State Boards of 
Pharmacy and FDA is unclear due to lack of accountability, we 
would be concerned that neither FDA nor State boards could be 
held accountable if an entity were licensed as a pharmacy, but 
was also preparing sterile compounded preparations without a 
prescription and selling across State lines.
    In addition, our understanding of the draft legislation is 
that FDA would only be permitted to inspect a pharmacy that may 
be operating as a large scale compounding entity if FDA has 
received a submission from the State Board of Pharmacy.
    This ability for FDA to have the necessary access to 
records and inspect a compounding entity would be contingent 
upon State boards being properly equipped with trained 
personnel to determine if an activity appears to approach 
manufacturing. We are concerned that FDA may not be fully 
accountable if the State board does not notify the agency.
    Further, this approach would imply that State boards would 
inspect all prescription records and sales transactions of each 
licensed pharmacy in their State to identify those entities 
that may be acting outside the scope of traditional pharmacy 
compounding. Therefore, it would be referred to the FDA. We do 
not see that as realistic for many State boards, and therefore 
believe that these types of compounding outsourcers would be 
more appropriately regulated by FDA.
    In conclusion, ASHP remains completely committed to working 
with Congress, the FDA and other stakeholders in developing a 
reformed regulatory framework for pharmacy compounding. Thank 
you, Chairman Pitts, for holding this hearing on this very 
important public health topic.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Thompson follows:]
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    Mr. Pitts. Mr. Francer, you are recognized 5 minutes for an 
opening statement.


    Mr. Francer. Thank you, Mr. Chairman and members of the 
subcommittee. I am Jeff Francer, I serve as assistant general 
counsel of the Pharmaceutical Research and Manufacturers of 
America. Thank you for the opportunity to present our views 
this afternoon.
    PhRMA is a voluntary, nonprofit association that represents 
the country's leading pharmaceutical research and biotechnology 
companies. In 2012, PhRMA's members alone invested nearly $50 
billion in discovering and developing new medicines. PhRMA 
shares the committee's goal of advancing public health and 
protecting patient safety by ensuring that FDA's statutory 
authority and safety standards for pharmacy compounding are 
strong enough to protect patients against the risks 
demonstrated over the past year.
    There is no higher priority for biopharmaceutical companies 
than patient safety. We commend the committee's diligence in 
investigating the causes of the recent tragedies and examining 
potential solutions.
    PhRMA believes that medicines manufactured by our member 
companies as well as those manufactured by nontraditional 
pharmacies and manufacturers should be regulated by FDA using a 
consistent, risk-based approach. This approach best serves 
public health because products that present similar risks 
should be regulated in a similar manner.
    In light of the incidents surrounding the New England 
Compounding Center, it is clearly appropriate for Congress to 
revisit the FDA's authority to regulate compounding of 
prescription drugs. And consistent with the goals of clarifying 
FDA's authority and protecting patient safety, PhRMA would 
support legislation that would include the following seven 
    First, clarify that FDA retains its strong existing 
authority to regulate as a new drug any medicine that is 
compounded outside of traditional compounding. Large-scale, 
commercial manufacturing of prescription medicine should be 
governed by the same high standards, whether the commercial 
producer is designated as a pharmacy or as a manufacturer.
    Second, the legislation would provide express inspection 
and registration authority for nontraditional compounders as 
manufacturers, including to the extent that such authority is 
not clear the ability to inspect records to determine whether 
pharmacies are actually engaging in nontraditional compounding.
    Third, provide user fee authority which we believe already 
exists, to ensure that FDA has adequate resources to regulate 
nontraditional compounders as manufacturers.
    Fourth, ensure that nontraditional compounders may not 
compound copies of marketed drugs and thus subvert FDA's 
generic and bio similar approval processes.
    Fifth, prohibit the compounding of specific drugs or drug 
categories for safety reasons.
    Sixth, appropriately limit the channels of distribution of 
compounded drugs, including through a prohibition on wholesale 
    And finally, any new legislation should resolve any 
ambiguity in FDA's current authority by deleting the section of 
the Federal Food, Drug, and Cosmetic Act at issue in the 
Western States case.
    Within this framework, FDA could and should take a risk-
based approach to the regulation of nontraditional compounding 
using the same approach that FDA now takes to pharmaceutical 
manufacturing. However, complex legislation that creates a 
whole new classification of compounder, so-called compounding 
manufacturers, is unnecessary. Such an approach could result in 
regulatory confusion and the application of different 
regulatory standards for similar types of manufacturing. In 
fact, such a third class would actually decrease FDA's current 
statutory standards for regulating nontraditional compounders.
    Finally, PhRMA is concerned about risks to patient safety 
that could result from proposals to allow compounding of copies 
of marketed pharmaceuticals in the event of a drug shortage. 
This potential exception could expose patients to unsafe drugs 
because the compounder need not establish that the compounded 
version has a safety and efficacy profile equivalent to the 
FDA-approved product.
    In conclusion, Mr. Chairman, PhRMA thanks the subcommittee 
for the opportunity to provide testimony this afternoon 
regarding how to clarify FDA's existing authority to regulate 
nontraditional compounding. Biopharmaceutical companies are 
committed to patient safety. The same safety standards that 
govern pharmaceutical manufacturing should also protect 
patients who are treated with medicines manufactured by large-
scale compounders. And we look forward to continuing the work 
with the subcommittee as it continues this important task.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Francer follows:]
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    Mr. Pitts. Dr. Gaugh, you are recognized for 5 minutes for 
opening statement.

                    STATEMENT OF DAVID GAUGH

    Mr. Gaugh. Thank you, Chairman Pitts and members of the 
House Energy Subcommittee on Health, and thank you for inviting 
me to testify before the subcommittee on this very important 
topic of drug compounding.
    My name is David Gaugh. I am senior vice president for 
Sciences and Regulatory Affairs at the Generic Pharmaceutical 
Association and a licensed pharmacist.
    GPhA represents the manufacturers and distributors of 
finished dose generic pharmaceuticals, bulk pharmaceuticals and 
suppliers of other goods and services to the generic industry.
    The quality and affordability of generic medicines is vital 
to the public health and sustainability to the health care 
system. Prior to joining GPhA, I was general manager of a 
generic injectable manufacturing company. I also served a 
leadership role in a major group purchasing organization and 
was assistant director of pharmacy in a hospital system in the 
Midwest where one of my responsibilities was oversight of 
traditional compounding performed by my staff.
    GPhA supports the goal of clarifying the FDA's authority 
over compounding in order to protect patient safety and prevent 
another health care crisis like the fungal meningitis outbreak 
that was caused by the substandard compounded drugs.
    Traditional compounding plays a vital role for patients and 
any new regulation should maintain that role. GPhA firmly 
believes that pharmacy compounding should adhere to the 
standard of one patient, one prescription, one drug. Patient 
safety is the highest priority for approved pharmaceutical 
manufacturers who comply with quality and sterile manufacturing 
processes and procedures as defined by the current good 
manufacturing practices, or cGMP. These regulations and 
associated guidances apply to all prescription drugs approved 
by the FDA for sale in the U.S.
    The FDA's regulations and guidance are based on the 
fundamental principles that quality cannot be inspected or 
tested into a finished product, but quality must be designed 
into the product and the manufacturing process.
    The large-scale manufacturing of sterile medicines, no 
matter who performs the functions, must involve similar 
activities as they have similar potential risks. In order to 
ensure the safety of the American public, the large-scale 
manufacturer of these sterile medicines should be regulated by 
the FDA in a consistent risk-based manner at the same high 
standards, including submitting documentation to the FDA and 
submitting to both preapproval and routine risk-based cGMP 
    A sterile injectable drug should not be the object of 
compounding unless these aforementioned regulations and 
guidances are enforced by the FDA or if the product is 
compounded for an individual patient by an individual 
    GPhA strongly supports established standards for the 
quality of bulk substances used in compounding. We believe it 
is critical that these standards should include a requirement 
to the bulk substance used in compounding be from FDA inspected 
cGMP-compliant facilities, and that should be done prior to the 
compounding. GPhA recognizes that many in Congress believe that 
there should be an exemption to these requirements for certain 
medically necessary sterile products and shortage. We believe 
that the requirements for any category of large-scale 
compounding of sterile products should be the same FDA 
standards that apply to pharmaceutical manufacturers.
    To solve a drug shortage of sterile injectable marketed 
drugs by lowering oversight, safety and quality standards is 
not in the best interests of the American public.
    GPhA believes any drug substance exemption should include 
explicit language clarifying that the large scale compounder 
that is compounding marketable products on the FDA drug 
shortage list must immediately stop both the compounding and 
the distribution once notified by the FDA through established 
processes that the shortage has ended.
    GPhA strongly supports the requirement for large scale 
compounding pharmacies or compounding manufacturers that plan 
to compound a marketed drug on the official FDA drug shortage 
list notify the FDA prior to starting that compounding.
    We do not believe it is appropriate for notification only 
after initial large scale compounding has started. 
Additionally, the FDA should be given the authority to deny the 
request for compounding of a drug on the drug shortage list.
    GPhA strongly supports providing the FDA with the 
additional resources needed to conduct inspections and do 
effective oversight through the fees on large-scale 
compounders. These fees should be sufficient to ensure that 
resources are not diverted from other areas within the agency.
    In the interest of providing health care professionals and 
patients with complete information, any product compounded 
outside of the institution in which it is administered should 
be appropriately labeled as determined by the FDA and 
identified as a compounded product.
    GPhA believes large-scale compounding pharmacies should be 
held to same adverse events reporting requirements as 
pharmaceutical manufacturers to allow the FDA ability to 
earlier identify and prevent any future health crisis.
    In conclusion, Mr. Chairman, GPhA and our member companies 
are committed to ensuring both the role of the traditional 
compounders for patients, that need these patients are used and 
are safe for the patients and we look forward to working with 
the committee on this very important factor. Thank you.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Gaugh follows:]
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    Mr. Pitts. Mr. Coukell, you are recognized for 5 minutes 
for an opening statement.


    Mr. Coukell. Chairman Pitts and members of the 
subcommittee, thank you for the opportunity to testify on 
pharmacy compounding and the need for legislation to protect 
    My name is Allan Coukell. I am a pharmacist and director of 
drug and medical device work at the Pew Charitable Trust, 
independent research and policy organization with a 
longstanding focus on drug quality issues.
    This subcommittee has heard previously about the risks of 
substandard compounded medicines and I won't reiterate those 
today, except to say that the recent fungal meningitis outbreak 
was far from an isolated incident, and even now, FDA 
inspections reveal alarming ongoing quality problems.
    Today, I would like to propose ways for Congress to reduce 
these risks, and at the same time, ensure that patients have 
access to the medicines they need. Current law is inadequate 
for this purpose both because the courts have created 
uncertainty about the status of section 503A of the FDCA and 
because 503A does not recognize the emergence ofa large scale 
compounding industry that is far removed from traditional 
pharmacy practice.
    So let me begin with two points that I think all 
stakeholders should endorse. First, patients, doctors and 
pharmacists should prefer FDA-approved drugs over compounded 
medicines whenever possible. Only FDA-approved drugs have 
demonstrated their safety, efficacy and bioequivalence and have 
preapproved manufacturing facilities and methods. New 
legislation must not encourage compounding at the expense of 
traditional manufacturing.
    Second, the preparation of customized medicines in response 
to a prescription for an individual patient is an established 
part of State-regulated pharmacy practice. But now let me make 
a third point, which is that there is a large-scale compounding 
sector that fits neither of the above categories. Instead, it 
does batch production of products, often high risk sterile 
products and admixtures of FDA-approved drugs for use in 
hospitals and clinics.
    And the Inspector General recently reported that 85 percent 
of hospitals, hospitals of all sizes, large and small, 
purchased some intravenous drugs from outside pharmacies, 
sometimes thousands of doses a day. Together with the American 
Hospital Association and ASHP, Pew recently convened a pharmacy 
sterile compounding summit that brought together hospitals, 
purchasing organizations, compounders, regulators and pharmacy 
    It also included experts on pharmacy and manufacturing who 
emphasized the enormous differences between the standards 
developed for pharmacy practice and the good manufacturing 
practices that apply to manufacturing. These experts stressed 
that only GMPs are adequate to ensure the safety of large 
scale, standardized production.
    Oversight of such standards is a role for the FDA and not 
for State boards of pharmacy. Section 503A already recognizes 
FDA's responsibility to oversee some compounding, but merely 
reinstating the section would leave a lack of clarity about 
which facilities were subject to FDA oversight, and it would 
not clearly give FDA the ability to ensure that large-scale 
compounders comply with applicable GMPs. And shutting down a 
facility or requiring the filing of an NDA may not always be in 
the public interest.
    So which facilities should be subject to FDA oversight? 
There is no single ideal solution, but a potential framework 
could include some of the following: Volume of production. 
Clearly larger scale operations expose more patients to risks. 
Those risks are not mitigated by an after the fact 
prescription. Large-scale operations should be subject to GMP. 
The nature of the products, manipulating a sterile product is a 
high-risk activity. Sterile drugs made from nonsterile raw 
ingredients are especially high risk.
    Expiration dates. The longer a product sits before use, the 
more likely it is to degrade or sustain bacterial or fungal 
growth. Longer beyond use dating calls for higher quality 
standards and may also serve as a mechanism to distinguish 
between traditional pharmacy and this new compounding sector.
    My written testimony contains additional recommendations 
for a practical and enforceable framework. In particular, 
facilities under FDA oversight must be required to register and 
to avoid an unfunded mandate to pay a fee. Compounded drugs 
should be clearly labeled as such and wholesale distribution 
prohibited. Current law gives FDA the authority to create a 
list of drugs that may not be compounded and to inspect 
pharmacies as necessary, and these authorities must be 
    I thank you for your leadership on this important issue. It 
is time to update the FDCA to remove ambiguities and create a 
clear, workable framework for patient safety. And I welcome 
your questions.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Coukell follows:]
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    Mr. Pitts. Dr. Miller, you are recognized for 5 minutes for 
your opening statement.

                  STATEMENT OF DAVID G. MILLER

    Mr. Miller. Good afternoon, Chairman Pitts, ladies and 
gentlemen of the committee, it is a pleasure on behalf of the 
International Academy of Compounding Pharmacists to appear 
before you today to talk about a situation that started with 
one pharmacy in Framingham, Massachusetts, but fundamentally 
has uncovered a real gap in our laws.
    Now, I have been listening this afternoon to testimony, and 
you have the written testimony of my colleagues and myself, but 
I have heard six different terms used to define this thing that 
we are attempting to address and regulate.
    Members of the International Academy of Compounding 
Pharmacists are pharmacists. We work in small drug stores, we 
work in large chain drug stores, at CVS, at a Publix grocery 
store in Florida, in hospitals.
    Compounding is an essential core component of the filling 
and care of prescription medications for patients throughout 
this country. One of the challenges that we have found 
ourselves in is that the core concept of filling a prescription 
ordered by a physician either for the treatment of that patient 
in his or her home, or the use of that medication in the 
doctor's office for administration and treatment of a patient 
on site has somehow been clouded by the evolution of this other 
    Tonight, this afternoon, we have heard that thing referred 
to as repackagers, traditional compounders, nontraditional 
compounders, outsourcing pharmacies, outsourcing admixture 
pharmacies, manufacturers, compounding manufacturers, batch 
    Now, again, I am a pharmacist. I look at this relatively 
simple. I get a prescription from a physician to take care of 
an individual patient, or I get a prescription to send a 
medication to a doctor's office so he or she can take care of 
that patient. IACP believes that currently section 503A is very 
clear that the Food and Drug Administration does have authority 
over the distribution of drugs in the United States, either 
through manufacturing or wholesaler distribution, and that our 
States have authority over the practice of pharmacy.
    We believe at IACP that a great deal of confusion over this 
other entity that appears to not want to be regulated either by 
the FDA or falls within the gap of the regulation of the 
States, that is a separate group from pharmacy. And one of the 
things that we have seen as we have looked and worked with the 
Senate HELP committee on S. 959 is the core concept of 
preserving the integrity of the drug distribution system under 
FDA oversight, and on that side of the body it has been deemed 
a compounding manufacturer, unfortunately has gotten into the 
day-to-day practice of pharmacy and practice of medicine.
    For example, on the Senate side, we now know that one of 
the things that we must have to ensure the protection, the 
safety and access of medications for patients is quality 
assurance. There is no language in S. 959 requiring all 
pharmacies or these other things to adhere by the nationally 
published standards of the United States pharmacopeia. There is 
no quality assurance.
    There are specific language that intrudes on the practice 
of medicine and the practice of pharmacy. Most recently, the 
version of S. 959 that was distributed now includes a 
requirement that a pharmacist who fills a medication that may 
be a medication that is in drug shortage must inform the Food 
and Drug Administration within 3 days of filling that 
prescription. And we believe that is a significantly 
troublesome precedent.
    There are also questions about whether or not all 
pharmacies would be actually required to participate and be 
overseen under this process and indeed within Senate 959 as my 
colleague from NCPA said previously, all hospitals and health 
system pharmacists are actually exempted from the Senate's new 
approach to regulating this issue.
    Fortunately, Congressman Griffith has introduced a draft 
piece of legislation that we believe is really the closest 
solution to solving the questions that arose because of NECC's 
activities. We look forward to continuing to work with him and 
with this body on helping craft legislation that does a few 
most critical things: One, preserve patient access to 
medication; two, assure the American public of the safety of 
the medicines that they receive, that there are swift and 
accountable actions by our regulators at both the State and the 
Federal level to carry those laws out.
    Thank you very much.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Miller follows:]
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    Mr. Pitts. Dr. Catizone, you are recognized for 5 minutes 
for your opening statement.


    Mr. Catizone. Good afternoon, Chairman Pitts and members of 
the subcommittee. On behalf of the National Association of 
Boards of Pharmacy and the State boards across the country, 
thank you for the opportunity to be here today.
    NABP believes that the three legislative proposals provide 
the regulatory framework for us to address the issue of 
compounding manufacturing and to protect the public health. We 
support the Senate HELP bill and support the provisions that 
clearly distinguish traditional compounding, which should be 
regulated by the States and remain the purview of the States, 
and manufacturing, which should be the purview and remain the 
purview of the FDA. And we support the new category of 
compounding manufacturer that should fall within the purview 
and under the regulation of the FDA.
    We commend Mr. Griffith and the other authors of the House 
bills for their diligence and concern for patient safety. 
However, we must also caution that there are provisions in the 
House bills that may not be intended to but could take us in 
the wrong direction, in a direction different from the 
legislative intent and a direction that could lead us to 
another NECC tragedy.
    In regard to a primary issue identified by the House bill, 
NABP agrees that there is a bona fide but narrow need for 
pharmacists to compound a limited amount of products for 
administration to patients. The creation of the previously 
referenced third category, compounding manufacturer, seems to 
address the needs of the majority of patients. However, we are 
also sensitive to the fact that some stakeholders do not 
believe this is an appropriate category for this activity and 
would like to place this activity under the domain of 
traditional compounding and the purview of the State boards of 
    To respond to these concerns, specifically those of patient 
need, limiting the amounts of compounded products for direct 
administration in order to avoid any masking of manufacturing 
for compounding, we would support such an allowance provided 
there are limitations and qualifiers to those activities.
    Those qualifiers include: First, the State has to allow 
such activity. Once that is allowed, the other limitations 
follow. There must be a demonstrated medical need for the 
compounded product. A non-patient-specific order must be 
written by the practitioner who will be administering or is 
directly responsible for administering the compounded product.
    The total quantity provided at the clinic office or 
healthcare setting per patient cannot exceed a 10-day supply. 
The compounded medication cannot be resold. The compounded 
medication must be prepared in accordance with applicable USP 
standards or GMPs, depending upon the product, as determined by 
the FDA.
    There must be a limitation on the total quantity of 
compounded products that the pharmacy can prepare. Such 
quantity cannot exceed a certain percentage of or some other 
measure of the pharmacy's total number of prescriptions 
dispensed, dosage units, patient supply, or some other 
measurable and comparable factor.
    The pharmacy must notify the applicable State board or 
boards of pharmacy and FDA of their involvement in this area in 
accordance with an appropriate process and frame times to be 
determined. And the FDA must have full legal access to all 
records of the pharmacy engaged in this activity. And equally 
as important, there can be no prohibitions on the sharing of 
information between the States and the FDA on these activities, 
as presently exists.
    We want to note that these limitations and qualifiers for 
this activity does not erode the distinction between 
compounding manufacturing and compounding manufacturers created 
by the Senate HELP bill. They simply allow for an exemption 
with additional oversight under the category of traditional 
    Generalizing to a large extent, if the Senate HELP bill is 
used as a framework and modification from the House bills are 
employed, we would have three broad categories for compounding 
and manufacturing.
    Traditional compounding: Per patient, patient-specific, 
regulated by the States, and all requirements of the States and 
USP standards in place. The FDA's current enforcement authority 
and responsibilities would remain. And the FDA could act, as 
they have been able to act, in the recent past.
    Manufacturing and compound manufacturing: regulated by the 
FDA, complete access to all of those records, all of the 
requirements of the FDA, including GMPs.
    And then this exemption, under traditional compounding: for 
those activities for administration within a clinic, healthcare 
setting, or hospital, shared authority between the FDA and the 
States, access to those records, and communication between the 
FDA and the States.
    In closing, we appreciate the opportunity to be here today. 
We respectfully request that action be taken to develop and 
pass Federal legislation. We think it is important. We don't 
want to lose the opportunity.
    Thank you.
    Mr. Pitts. The chair thanks the gentleman.
    [The prepared statement of Mr. Catizone follows:]
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    Mr. Pitts. Thanks to all the witnesses for your opening 
    We will now begin questioning. I will recognize myself for 
5 minutes for that purpose.
    Mr. Hoey, the meningitis outbreak was a clear example of a 
communication breakdown between the FDA and the boards of 
pharmacy. How does Mr. Griffith's draft address strong lines of 
communication between boards of pharmacy and the FDA?
    Mr. Hoey. Thank you, Chairman Pitts.
    I think one of the key things that it does is that it 
requires the FDA to respond within 60 days when the board of 
pharmacy has sent a complaint or sent some kind of a warning to 
the FDA.
    Clearly, that did not happen in the NECC tragedy. Despite 
numerous heads-up, numerous warning signs sent to the FDA, 
there was not appropriate action taken. Representative 
Griffith's bill would require that action be taken within that 
60-day period.
    Mr. Pitts. Mr. Francer, the Senate bill establishes a third 
category: compounding manufacturers. Do you think establishing 
a new category would provide clarity or confusion?
    Mr. Francer. Chairman Pitts, we believe that a new 
provision like that would provide confusion and that it is not 
necessary. We believe that traditional compounding as it is now 
should be regulated by the States. And when there is not a 
prescription and we have a large-scale-type facility, it is 
manufacturing. And the FDA is quite good at regulating 
    Mr. Pitts. Mr. Gaugh, supporters of creating a compounding 
manufacturing category argue that the growing market from 
hospitals for outsourcers necessitates a need to exempt them 
from the new drug requirements of the FDCA.
    Wouldn't this change permanently preclude the FDA from 
requiring pre-inspection of some facilities engaged in large-
scale manufacturing from bulk API?
    Mr. Gaugh. It very well could. So it is not totally clear, 
but, to your point, yes, it could blur those lines.
    And even if you do outsource the product from a hospital to 
another provider, you still have that capability in 21st-
century electronics to provide that prescription for the 
patient to the compounding pharmacy to compound that product 
one by one, patient to prescription.
    Mr. Pitts. Now, in your testimony, you write about the 
importance of the drug manufacturing control processes written 
into the ANDA applications. Can you outline why this process 
between FDA and an applicant is critical to ensure the safety 
and efficacy of the product that will be ultimately marketed to 
the public?
    Mr. Gaugh. Yes. As I said earlier in my statement, the 
fundamental principles of quality can't be inspected and tested 
with the finished product. They need to be designed into that 
product and into the manufacturing process. And so the NDA and 
ANDA holders, as they develop these products, are designing 
that in for both the product and for the manufacturing process. 
That is not being done in compounding.
    Additionally, the ANDAs and NDAs that are filed contain 
specific specifications around stability, around impurities, 
around container closure, other manufacturing processes that, 
again, are not addressed by the compounding pharmacies.
    Mr. Pitts. Dr. Miller, a couple of questions for you. Can 
you explain the importance of traditional compounding in our 
Nation's healthcare system? And then would you explain your 
thoughts on the creation of an expanded do-not-compound 
authority list for the FDA?
    Mr. Miller. Yes. Thank you, Mr. Chairman.
    I think the easiest way to understand why we need 
compounded medications is just to look at all of us in the 
room. We are all different sizes, we are all different ages, we 
are all different sexes, and each one of us metabolizes and 
uses drugs in different ways. One of the advantages of having 
trained pharmacists and physicians who understand the use of 
having medications customized to each one of us, it helps us 
get the therapy that we need.
    The U.S. drug system is phenomenal. The vast majority of 
the products manufactured by my colleagues at PhRMA and the 
Generic Pharmaceutical Association meet most of our needs. But 
some of us require tweaks. So compounding pharmacists use 
techniques, tools, skills, and training to prepare medicines 
that are unique to a particular individual. Or, in some 
instances, as we have heard repeatedly this afternoon and I 
know that you will hear over and over again, compounding 
pharmacists in the short term can step in to fulfill drug-
shortage or backorder situations. That is first and foremost 
why we need compounds.
    Your question was, the second one?
    Mr. Pitts. Your thoughts on the creation of an expanded do-
not-compound authority list for the FDA.
    Mr. Miller. IACP's position on this has been fairly 
consistent, sir. The FDA has had the authority to create a do-
not-compound list based on a concern of safety or efficacy, and 
that we would leave in and strongly support.
    Unfortunately, the agency has not updated that list in more 
than 10 years, and the provision of expanded authority to say, 
well, we can add a drug based on that it is hard to compound, 
or, you know, we think that you shouldn't use this particular 
active pharmaceutical ingredient--there are some other clauses 
on the Senate side--IACP strongly disagrees with that.
    Because the fundamental reason for having a do-not-compound 
list is the agency should simply say, this medication is not 
safe, should not be used, is ineffective, it goes on the list.
    Mr. Pitts. My time has expired.
    The chair recognizes Mr. Green for 5 minutes for questions.
    Mr. Green. Thank you, Mr. Chairman.
    Dr. Thompson, in your testimony, you note that none of the 
classifications of ``repackage'' or ``pharmacy'' or 
``manufacturer'' fits neatly with the regulatory needs of the 
large-scale compound or outsourcer.
    Do you believe that asking the FDA to regulate these 
operations as manufacturers but leaving these specifics on how 
they are regulated up to the enforcement discretion of the FDA 
is a good policy?
    Mr. Thompson. Sir, you know, reflecting on the Senate bill 
and how they have defined a compounding manufacturer, they 
defined it as an entity that is not preparing product in 
response to a prescription, is engaged in interstate commerce, 
as a proxy for risk.
    We think as this industry has evolved over the last decade 
to provide necessary service to hospitals and clinics and 
others that it has really created this gray area that there 
isn't Federal legislation or regulation for. So we do think it 
is necessary to help clarify what those entities do, which 
provide very helpful services to healthcare organizations and 
    Mr. Green. Have you looked at the enforcement discretion 
that is in Congressman Griffith's bill?
    Mr. Thompson. Well, we don't think enforcement discretion 
is a good policy. And that is the thing now, that there are 
these companies out there that are selling products for 
anticipatory use that, under the law, really isn't allowed. But 
they do fill a need. They are doing it under, you know, under 
good standards in many cases, but those need to be clarified.
    What we think in the Griffith draft, that, you know, in 
some ways, it creates a third category without calling it that. 
It still allows entities to prepare large-scale products 
without Federal oversight. It leaves it to State boards of 
pharmacy--really, the same environment that exists now, that 
caused NECC--it leaves it to the State boards to call the FDA 
and identify something. The State boards are under-resourced, 
they don't have the expertise, and they are not manufacturing-
level inspectors.
    Mr. Green. And I agree, although I think the Griffith bill 
also has some enforcement at FDA to respond to those State 
boards when they just send a letter. Because we had a number of 
letters in this situation that was done.
    Mr. Miller, do you believe that using interstate commerce 
of sterile compounds in advance of a prescription is an 
adequate proxy to assess the highest-risk products?
    Mr. Miller. We have to be very careful with that, because 
as Congressman Griffith has pointed out in his own State and 
even here within the Washington, D.C., metro area, where I grew 
up in northern Maryland, the concept of interstate commerce as 
the end-all-be-all definition of when something goes over that 
line, we have to recognize that health care in the United 
States is not limited to within State borders. So I would 
challenge our thinking that just the movement of a medication 
across a State line should be the trigger for FDA oversight.
    Mr. Green. OK.
    Mr. Miller. The other portion----
    Mr. Green. I only have 2 minutes left. But I understand 
that, because, you know, people in Beaumont, Texas, people come 
from southeast Louisiana to buy from a pharmacy. But me, as an 
individual, I can do it. But if you are selling across, there 
may be an issue.
    But let me go on to another question. Of your members, how 
many are unquestionably small operations that would be caught 
up in a regulatory net created by establishing a proxy of 
interstate sterile and anticipatory compounding?
    Mr. Miller. Quite honestly, sir, we don't know. And we 
don't know because there is very little data on the amount of 
prescription compounding that occurs not only in compounding 
specialty pharmacies but hospitals, home infusion, long-term 
care, others. That data is unknown. This could have significant 
impact on practice.
    Mr. Green. The goal of this legislation would be primarily 
to protect the health and safety of our people and to also 
respect the various State laws in providing regulatory 
certainty to those who are regulated and to those who are 
purchasing regulated products.
    And I agree--some of us, I know the chairman has experience 
in State legislature. And we dealt with ours in Texas just like 
they dealt with in Pennsylvania. To me, our boards of pharmacy 
are certainly best equipped to regulate State agencies and the 
State-level activities.
    However, don't you agree that engaging in interstate 
commerce creates a regulatory gray area that justifies a 
Federal response?
    Mr. Miller. Well, you have to look at the model that has 
already been created by my colleague at the National 
Association of Boards of Pharmacy for the transfer of licenses 
between pharmacists across State lines. There is certainly a 
public-private partnership that can exist that currently shares 
information back and forth as pharmacies, say, in Texas wish to 
be licensed in the State of Louisiana.
    We don't necessarily believe that a Federal response is the 
only workable solution.
    Mr. Green. Well, and I think you are right, that it has to 
be a combination of State and Federal. But, you know, the 
problem we had in Massachusetts wasn't going across into 
Connecticut, necessarily. It was actually going across the 
country. And, again, traditional compounding is something we 
want to protect.
    I know I am out of time, Mr. Chairman. Thank you.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Virginia, Mr. Griffith, for 5 
minutes for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    I would say up front that I don't believe that our bill 
would have allowed the NECC situation to have occurred. I think 
the increased communications and the aspects that this bill has 
in it would have prevented that.
    I do think that there are some things that we left holes in 
there and we are trying to sort out, and I think that is 
important. I also want to make it clear that if there is any 
indication, we can always tweak the language. That is why it is 
a draft bill. We are not trying to take anything away from the 
current FDA authority. If there is something that they 
currently have, we are not trying to take anything away. But we 
are trying to clarify, without going too far, what their 
authority is and try to sort these things out.
    Mr. Coukell, I think you have it; we just have to figure 
out the combination. You listed in your testimony drawing the 
line, and you said some of the things we could look at were 
volume of production, nature of the products, percentage of 
sales, expiration dates, and interstate commerce.
    As you heard previously when I testified, I don't think 
that interstate commerce alone necessarily does it, because it 
creates problems in those border areas or where the States are 
very close together or smaller. But some combination thereof is 
probably the answer.
    What I would ask each of you to think about--and you can 
always get back to me later--is, what combination or which 
number of those factors do you think might be most important in 
figuring out that trigger to make that distinction? Because I 
think we all recognize, that is one of the issues we are trying 
to resolve.
    And if we could start with you, Mr. Catizone, if you have 
thoughts now, or just say, I will send them to you later.
    Mr. Catizone. Sure. Distinctions we make are: patient-
specific, whether it is interstate or intrastate, it is 
compounding. Non-patient-specific, inter- or intra-, quantity, 
volume doesn't matter, it is manufacturing.
    Mr. Griffith. Manufacturing. OK.
    Mr. Miller. Congressman, our perspective is, you have to be 
so careful with the issue of volume. It is an easy checkbox, 
you know, very easy to define. But, unfortunately, in health 
care, you can't usually rely upon easy----
    Mr. Griffith. Let me ask you this, though. If we had 
volume, plus maybe a percentage of the business crossing State 
lines, if you threw two or three of them together, do you think 
that gets us closer to where we need to be?
    Mr. Miller. Yes. And I think you have some precedence 
already in the Prescription Drug Marketing Act of 1987. That 
actually sets limits on retail pharmacies of 5 percent of sales 
to physician offices, hospitals, and clinics before they must 
register as a wholesaler--precedent.
    Mr. Griffith. All right. Let me keep moving down the line 
so that we don't use up all the time.
    Yes, sir?
    Mr. Coukell. Congressman, first, thank you for your 
leadership on that bill. We were heartened to see the 
placeholder language and would like to work with you on that.
    A couple of points just now. One is, you know, just to 
emphasize, I think everybody agrees that if somebody is filling 
a prescription for a patient, that is a traditional pharmacy 
practice, and nobody is talking about that. So the question is, 
how much product should people be able to make on spec ahead of 
    And, you know, I mentioned the summit we held with ASHP and 
AHA. One of the quality experts there said, if somebody is 
starting with a non-sterile bulk ingredient, they are buying a 
bottle of methylprednisolone over the Internet and making a 
sterile product, that ought to be under GMP, no matter what. So 
his threshold there was zero for that particular type of 
product. For something that starts with a sterile precursor, 
you would set a higher threshold.
    So I think it would be--I will finish.
    Mr. Griffith. Yes, I hate to--we are running out of time.
    Mr. Coukell. I think it would be impossible to say, 
basically, from a public health point of view, what is the 
limit at which we would not want people putting product out 
    Mr. Griffith. OK. And if we could, I hate to limit the 
folks at the other end of the table, but we are running out of 
    Mr. Gaugh. We would leave it at two categories: traditional 
compounding and----
    Mr. Griffith. Manufacturing.
    Mr. Gaugh [continuing]. Pharmaceutical manufacturing, yes. 
Pharmacists are trained to compound. They are not trained to 
manufacture. It doesn't mean they can't learn, but they are not 
trained to do that.
    Mr. Griffith. Right.
    Yes, sir?
    Mr. Francer. Yes, Congressman Griffith, the touchstone 
clearly is whether there is a prescription or not. However, the 
FDA's current guidance in terms of its compliance lists a 
number of criteria, including compounding finished drugs from 
bulk active ingredients, using commercial-scale equipment. And 
the FDA actually has a multiple-factor test that they use.
    Mr. Griffith. All right.
    Yes, sir?
    Mr. Thompson. Sir, we appreciate that the bill is a working 
draft, and we look forward to working with you to clarify key 
    You know, the notion of percent of business might be a way 
to look at it. You know, volume, as mentioned by others, is a 
moving target. Risk level is a really key one, too. You know, 
high-risk-level compounding, compounding from API, nonsterile 
to sterile, is a very important area to focus on
    Mr. Griffith. OK.
    Mr. Thompson. And I will leave it at that, and we will 
provide more----
    Mr. Griffith. I appreciate that. Thank you.
    Mr. Hoey. Thank you, Congressman.
    A valid prescription, individual valid prescription, is 
key. That is the starting point and possibly the ending point, 
as well.
    As far as interstate and percentage of prescriptions, 
percentage of volumes, those are possible, but they can be a 
slippery slope. And it is hard to have a one-size-fits-all in 
those categories.
    Mr. Griffith. Right.
    Thank you all very much. And I look forward to working with 
all of you in trying to sort this out at some point. We are 
going to have to make the difficult decision and draw that line 
somewhere. And I do appreciate it.
    I yield back, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member emeritus, Mr. Dingell, for 5 
minutes for questions.
    Mr. Dingell. Mr. Chairman, thank you for your courtesy.
    One main reason for the NECC outbreak was much confusion 
regarding FDA's authorities and the proper role of the States. 
This question is for all of the witnesses, ``yes'' or ``no.'' 
Do you believe that it is important to have clear lines of 
division between FDA and State boards of pharmacy when it comes 
to regulating compounding pharmacies, yes or no?
    Starting with you, Dr. Hoey.
    Mr. Hoey. Yes.
    Mr. Dingell. Next witness?
    Mr. Thompson. Yes, sir.
    Mr. Francer. Absolutely, yes.
    Mr. Gaugh. Yes.
    Mr. Dingell. Next witness?
    Mr. Coukell. Yes.
    Mr. Miller. Yes.
    Mr. Catizone. Yes.
    Mr. Dingell. Gentlemen, thank you.
    Would you each submit, if you please, to the record how 
that division of responsibility should be created in the 
    Now, Section 503(a) of FDA Modernization Act of 1997 has 
been subject to court challenges which have limited its 
effectiveness. Since that time, our medical system has changed 
    This question is for Kasey Thompson of the American Society 
of Health-System Pharmacists.
    Do you believe that our healthcare system has come to rely 
on what you call compounding outsourcers, yes or no?
    Mr. Thompson. To a greater extent, yes.
    Mr. Dingell. Now, in your testimony, you mention that your 
members also use compounded sterile preparations which are not 
available in an appropriate form from a manufacturer. Is that 
correct, yes or no?
    Mr. Thompson. Yes.
    Mr. Dingell. Now, can you please submit to the committee 
for the record a list of examples of these kinds of products?
    Mr. Thompson. Yes, sir.
    Mr. Dingell. Now, do you believe that these compounding 
outsourcers should be subject to current good manufacturing 
practices and risk-based inspections by FDA, yes or no?
    Mr. Thompson. Yes.
    Mr. Dingell. Do you believe that State boards of pharmacy 
could adequately regulate these compounding outsourcers, yes or 
    Mr. Thompson. No.
    Mr. Dingell. Now, these new compounding outsourcers are now 
routinely used by hospitals across the country. Any legislation 
must ensure that there are no unintended consequences which 
could have a negative impact on patient care.
    Now, these questions are for you, Mr. Coukell of Pew. How 
is it correct that a recent study by the Inspector General at 
HHS found that 85 percent of hospitals which administer IV 
drugs purchased some of the products from outside the 
pharmacies? Is that so, yes or no?
    Mr. Coukell. Yes.
    Mr. Dingell. Now, Mr. Coukell, does Section 503(a), as 
currently drafted and interpreted, recognize the existence of 
these compounding outsourcers and our reliance on them, yes or 
    Mr. Coukell. It does not, not as such.
    Mr. Dingell. Would you submit to us your thoughts on how 
that matter should be addressed?
    And if the other members of the panel would do the same 
thing, it would be appreciated.
    Now, do you believe that simply reinstating Section 503(a) 
would result in sufficient clarity regarding FDA's authority 
over compounding pharmacies, yes or no?
    Mr. Coukell. No.
    Mr. Dingell. Would you give us some comments for the 
purpose of the record on that particular point, if you please?
    Now, I want to thank you all.
    It is clear that we need to update and to significantly 
enhance FDA's authority in this area. I know there is 
bipartisan support for this issue. And we need, I know, to 
clearly define roles for the States and FDA concerning 
compounding pharmacies.
    This committee has done good bipartisan work on public 
health in the past, and I believe that we can do it again. And 
I am looking forward to continue working on this issue with my 
colleagues on both sides of the aisle.
    I want to commend each member of the panel for your 
excellent testimony. Gentlemen, you have done a superb job, and 
I want you to know how much I appreciate it.
    And to you, Mr. Chairman, I thank you and yield back the 
balance of my time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from North Carolina, Mrs. Ellmers, 
for 5 minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman.
    Dr. Thompson, a moment ago, one of my colleagues had asked 
you about whether or not you felt that State boards could 
actually continue to regulate any of the basically 
nontraditional compounders. What is your reason? I mean, 
keeping in mind, of course, safety and sterility and best 
practices. Do you not feel that they have the capacity to do 
    Mr. Thompson. I think it really comes down, ma'am, to 
resources and expertise. You know, just like pharmacists, we 
are not inspectors of pharmaceutical manufacturers, and----
    Mrs. Ellmers. Right.
    Mr. Thompson [continuing]. I don't think State boards tend 
to have that capacity either.
    Mrs. Ellmers. Right. I guess this gets to the--there again, 
we seem to get hung up on volume, and, you know, it seems to 
get back to the same things.
    And, you know, to Dr. Woodcock I had posed a question of, 
if the nontraditional compounder were to be providing to a 
hospital or an outpatient surgery clinic, where the drugs would 
be administered under the supervision, obviously, of a 
physician to a patient within a reasonable timeframe and even 
possibly with, you know, some certain guidelines, like on a 
monthly basis, is it that they would be providing that to 
multiple entities and the volume there would be too much to be 
    Mr. Thompson. Well, I think the reason we think that some 
version of CGMPs is important is because it would really get 
into the specifics of sterility and stability tests in this per 
FDA and compendial standards. And that would really determine 
whether it had a 30-, 60-, 90-day, or 12-month beyond-use date 
associated with it. And that would really determine the storage 
conditions and when it needs to be administered.
    But I think without, you know, a clearer process, whether 
it is CGMPs or some other process, that you just don't have 
that assurance in the current environment.
    Mrs. Ellmers. Dr. Gaugh, shouldn't large-scale compounders 
be required to prove that they can manufacture under GMP 
conditions before patients are put at risk?
    Mr. Gaugh. Yes, they should be.
    Mrs. Ellmers. OK. In your testimony, you write about the 
importance of the drug manufacturing control process. Can you 
outline why this process between the FDA and applicant is 
critical to ensure the safety and efficacy of the product that 
will be ultimately marketed?
    Mr. Gaugh. Again, it is all about the CGMP requirements 
that exist between the FDA and the manufacturer. And those 
requirements don't exist between the State boards of pharmacy 
and the compounders to the same degree and the same level. And, 
as Dr. Thompson stated, they are not typically trained to 
inspect to that, whereas the FDA is. So it needs to fall into 
that same category.
    Mrs. Ellmers. So can you explain, the similar scope of risk 
between ANDA holders manufacturing drugs and large-scale 
compounders in relation to, you know, explaining and creating 
two regulatory regimes for large-scale compounders and 
manufacturers. So I am concerned I don't understand that 
    Mr. Gaugh. So if I understand the question correctly, when 
you look at what the ANDA and the NDA holders are required to 
do, they have specifications they must meet around the potency 
of the product, around potential impurities and impurity growth 
around microbe growth. That doesn't exist currently in the 
compounding structure, in the compounding review. It would 
under CGMP requirements, but it doesn't under current 
    Mrs. Ellmers. So it would under--OK, again----
    Mr. Gaugh. It could, I should say.
    Mrs. Ellmers. It could.
    Mr. Gaugh. Yes.
    Mrs. Ellmers. But it does not at this time?
    Mr. Gaugh. It does not.
    Mrs. Ellmers. OK. And so, again, expanding on that, do you 
see risk in creating two more regulatory regimes? I mean, 
essentially, would there be two separate regulatory processes 
here or----
    Mr. Gaugh. In our opinion, that would be creating two 
different regulatory processes at the FDA, if they were the 
ones controlling this. They would be controlling a manufacturer 
process for CGMP----
    Mrs. Ellmers. For compounding and manufacturing.
    Mr. Gaugh [continuing]. To be different. And we don't see 
the manufacturing processes being different, so, therefore, the 
structure of control should not be different.
    Mrs. Ellmers. OK.
    I only have about 40 seconds left.
    To Dr. Miller, again, getting back to just the importance 
of the physician role in this, why is the anticipatory 
compounding important to physicians?
    Mr. Miller. Having medicine available. When the patient 
comes to you, you don't want to send that patient--give them a 
piece of paper, send them down to the compounding pharmacy, 
where it may take 2 to 14 days to prepare and test that, then 
come back to be treated.
    Mrs. Ellmers. Yes.
    Mr. Miller. Physicians want to treat you today. Pharmacists 
want to treat you today. We have to be able to prepare 
medicines in advance.
    Mrs. Ellmers. Very good.
    And I see that my time has run out, so thank you, Mr. 
    Thank you to the panel.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentlelady from the Virgin Islands, Dr. 
Christensen, for 5 minutes for questions.
    Mrs. Christensen. Thank you, Mr. Chairman.
    Mr. Catizone, in your testimony, one of the limitations you 
suggest on compounding in advance of a prescription for 
traditional compounders is that the total quantity provided to 
a healthcare provider not exceed a 10-day patient supply.
    I am interested in NABP's views on an alternative or 
additional approach to a limitation on compounding in advance 
of or without a prescription, of something like a 10- or 14-day 
expiration date from time of manufacture.
    As I understand it, one of the aspects of traditional 
pharmacy compounding that contributes to safety is that it 
ordinarily is performed for an individual patient at a time the 
patient needs and will use the drug. One of the problems with 
allowing traditional compounders to make drugs in advance or 
without a prescription is that the drugs can be made in 
unlimited quantities and allowed to sit on a shelf, either in 
the compounder's warehouse or in the healthcare provider's 
offices, for extended periods of time. During that time, any 
bacterial, fungal, or other biological contaminants have time 
to grow and make the product more dangerous.
    A relatively short expiration date from the time of 
manufacture would presumably limit the amount of drug that 
would be compounded in advance of an order, limit the size of 
orders that healthcare providers would request, and limit the 
amount of time any contaminants could grow.
    So what are your thoughts about such an approach?
    Mr. Catizone. Under the limitations we propose, there were 
two factors: one, the patient supply, as well as the total 
quantity the pharmacy would provide.
    The 10- to 14-day expiration date is another variable that 
we could support, provided that that expiration date coincides 
with what the beyond-use dates are with the product so that we 
didn't put a 10-day or a 14-day expiration when the product was 
only good for 2 or 3 days. So coinciding those two factors 
makes that another very viable factor to look at in this 
    Mrs. Christensen. Does anyone else have an opinion or want 
to comment on it?
    Mr. Hoey. The USP requirement for a USP 797 standards would 
also help to address some of the issues that you are talking 
    I would also mention an example of the importance of 
anticipatory compounding. There was a situation where there was 
a shortage of injectable atropine for crash carts, for 
emergency crash carts. And because that drug wasn't available, 
a compounding pharmacy was able to make that. Well, if a 
patient is crashing, you don't want to have to write a 
prescription at that moment while your patient is coding. When 
that patient has had the proper treatment from the nurses and 
the physicians and the pharmacists, then you can write the 
prescription. But not having that prescription available at the 
time could cause someone to die.
    So that is a situation where there is a shortage of the 
drug, and because compounding pharmacists have made that drug, 
it is available when the patient needs it immediately.
    Mrs. Christensen. Yes. I think in a situation like that, as 
I understood it from Dr. Woodcock's testimony, because it is an 
emergency drug not available, that that would be something that 
they would allow.
    Mr. Hoey. And there would have to be a stock on those crash 
carts that are on----
    Mrs. Christensen. Absolutely.
    Mr. Hoey [continuing]. Certain floors in the hospital.
    Mrs. Christensen. Absolutely.
    Mr. Hoey. And it wouldn't be just that drug. There would be 
several drugs that are on those crash carts.
    Mrs. Christensen. If there are no other comments, Mr. 
Chairman, I don't have another question.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentleman from Pennsylvania, Dr. Murphy, for 5 
minutes for questions.
    Mr. Murphy. Thank you, Mr. Chairman. Thank the panel.
    By the way, Mr. Chairman, I have an opening statement I 
would like to submit for the record, too.
    [The prepared statement of Mr. Murphy follows:]

                 Prepared statement of Hon. Tim Murphy

    Thank you, Chairman Pitts, for holding this hearing to 
further the discussion about FDA's authority over drug 
    Soon after the fungal meningitis outbreak began in the fall 
of 2012, the Oversight and Investigations Subcommittee 
initiated a thorough investigation to determine whether this 
tragic outbreak--which has now claimed the lives of over 60 
people and sickened nearly 750 others--could have been 
    The Subcommittee found that the New England Compounding 
Center was not operating in the shadows; in fact, they were 
operating right under FDA's investigative nose for a decade. 
Our investigation highlighted several opportunities where the 
agency confronted a choice in dealing with NECC and its sister 
company, Ameridose. FDA repeatedly decided not to act. 
Furthermore, as FDA has recently confirmed to the Committee, 
not a single complaint the agency had independently received 
about these companies over the past decade was forwarded to the 
state pharmacy board.
    It is very hard to legislate cultural change into a large 
federal agency. However, Mr. Griffith's discussion draft makes 
important changes to address the breakdowns that occurred at 
FDA in the NECC case. His legislation is grounded in the facts 
uncovered by our investigation and makes it clear when FDA 
can--and must--put patients before process. I commend him for 
his efforts, and look forward to continue working with my 
colleagues to reform drug compounding rules so patients receive 
safe and effective medications.

    Mr. Murphy. All right. I am also the chairman of Oversight 
and Investigations, and we had a number of hearings on this to 
try and get the FDA to give us a straight answer. We didn't get 
it from Dr. Hamburg. I am going to try and ask you folks.
    If the FDA has reason to believe that a compounding 
pharmacist is acting like a manufacturer, do you believe the 
FDA should have the authority to inspect a facility to the 
extent necessary to determine if that is the case?
    Let's go down the panel. Dr. Hoey?
    Mr. Hoey. In cooperation with the State board of pharmacy, 
    Mr. Murphy. Dr. Thompson?
    Mr. Thompson. If they are truly acting as a manufacturer, 
    Mr. Murphy. Mr. Francer?
    Mr. Francer. Yes.
    Mr. Gaugh. Yes.
    Mr. Murphy. Mr. Coukell?
    Mr. Coukell. Yes, but of course they have to know that that 
facility is out there.
    Mr. Murphy. OK.
    Dr. Miller?
    Mr. Miller. Yes. And it already has that authority under 
    Mr. Murphy. Thank you.
    Mr. Catizone. Yes.
    Mr. Murphy. OK.
    So when we had our hearing before, I could not get an 
answer from Dr. Hamburg on that, because what it appeared was 
that they had, like, a 1-year moratorium against doing 
inspections without cause, it was said, that had made the 
medication that infected so many with meningitis.
    And I asked several times, six or seven times, about this, 
and her responses were--I said, ``For example, in terms of 
dealing with the definition of a compounding pharmacy, who is 
responsible for that?'' She said, ``Well, it is not the FDA, it 
is Congress.'' I said, ``But who keeps that definition?'' She 
said, ``Our chief counsel.'' ``So have you reviewed this 
definition with your chief counsel?'' She said, ``I think 
everyone agrees.'' And I said, ``I didn't ask you if you 
agree.'' She said, ``The law is clear.'' And I said, ``I want 
to know, have you reviewed with someone the definition of 
'compounding' versus 'drug manufacturing'? Have you reviewed 
that with someone? When did that take place?'' She said, ``You 
know, we have had a lot of discussions.'' I frustratingly said, 
``So has someone reviewed with you the definition of 
'manufacturer' versus 'compounding'?'' She says, ``You know, 
that is unfortunate. It is not clear.''
    It went on. I said, ``Well, wait a minute. If you are 
telling me you don't have the authority to inspect based upon 
whether or not someone is a compounder versus a manufacturer, 
someone must be advising the FDA on where you have jurisdiction 
and where you do not.'' At that point, she said it was too 
complex and we couldn't understand.
    Now, all of you answered that question pretty 
straightforward. You thought that there was authority with 
regard to this. But this is a key part of this issue and one 
that I want to find out. I mean, clearly, if we need more 
jurisdiction, we need to review that, in terms of the safety of 
patients and make sure people understand what is to be done 
here. But the way you all responded to me, it sounds like it 
already is there.
    So I am going to go into a little more detail with this. Do 
you all believe, yes or no, is there a clear definition of 
``manufacturing'' that defines when the FDA can come in and 
    Dr. Hoey?
    Mr. Hoey. Yes, there is a clear definition of 
``manufacturing.'' And the FDA, as my colleague from PhRMA 
mentioned, the FDA does a good job of monitoring CGMP, and they 
do a good job of regulating manufacturers.
    Mr. Murphy. Dr. Thompson?
    Mr. Thompson. I think there is, yes. But these large-scale 
entities aren't behaving like manufacturers that have an NDA or 
an ANDA.
    Mr. Murphy. When you say a large-scale entity, meaning 
    Mr. Thompson. Well, like the compounding-manufacturer-type 
entities. I mean, they are really big compounding pharmacies. 
They are registered as pharmacies in all 50 States. There are 
nonresident license agreements.
    Mr. Murphy. OK, so this is not a mom-and-pop. This is 
someone who makes a lot of----
    Mr. Thompson. Yes, but they are essentially compounding at 
a very----
    Mr. Murphy. On a large scale.
    Mr. Thompson [continuing]. Large scale. They are not, 
often, commercially available products, unless there is a 
shortage, that are customized dosage forms. They are just 
    Mr. Murphy. I see. And the FDA has the authority to go into 
    Mr. Thompson. I think they fall under the jurisdiction of 
the State boards under the current construct. And I think that 
is concerning for us, because these look more like 
manufacturing entities, but they are not. And I don't think the 
State boards have the capability to regulate them.
    Mr. Murphy. Mr. Francer?
    Mr. Francer. Congressman, I believe the FDA knows 
manufacturing when the agency sees it and that, as a matter of 
patient safety, they should be using their authority to the 
maximum extent possible.
    Mr. Murphy. Dr. Gaugh?
    Mr. Gaugh. Yes. Once identified, I think they have the 
authority to step in.
    Mr. Murphy. Mr. Coukell?
    Mr. Coukell. I think the authority to investigate after a 
problem has been identified is not the same as having the 
authority and the tools to proactively ensure quality. And that 
is what we are missing.
    Mr. Murphy. Yes, what we found in this case with NECC is 
that they complaints from everybody--patients, doctors, 
whistleblowers--who were all saying, there is a problem here, 
and the FDA didn't act. So that is a question, and I still 
think that is one of my concerns with this whole issue. Is it 
that we need a bill or do we need an FDA that takes action 
within that?
    Dr. Miller?
    Mr. Miller. I am going to answer backwards.
    Mr. Murphy. Yes.
    Mr. Miller. Yes, we believe they have adequate authority 
and a definition.
    However, the approach and the answers that you received 
from Commissioner Hamburg implies that any one of us could go 
into our garage, start an illegal drug company, put that 
medication out into the marketplace, and the FDA would not be 
able to shut me down? If that is indeed the case and that is 
the confusion, when we address this legislation, we have to 
make it very clear that illegal, inappropriate manufacturing 
falls under the jurisdictional authority of the FDA.
    Mr. Murphy. Thank you.
    Mr. Catizone. There is not a clear definition.
    Mr. Murphy. I see my time is up, and I am still seeking an 
    Thank you very much.
    Mr. Pitts. The chair thanks the gentleman.
    That concludes the questions from the Members who are here. 
We will have follow-up questions. I am sure other Members will 
have questions. We ask that you please respond promptly when we 
submit them to you.
    I will remind Members that they have 10 business days to 
submit questions for the record. And so Members should submit 
their questions by the close of business on Tuesday, July 30th.
    Superb hearing. Excellent testimony. Thank you all so much 
for coming.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 5:45 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    This legislative hearing is the product of the thorough, 
thoughtful, and bipartisan investigation that the committee 
launched in the wake of last fall's tragic meningitis outbreak. 
We were deliberate in our efforts as we wanted to know what 
went wrong and why before the committee acted legislatively. 
Sadly, Michigan has been hit hardest by the outbreak--according 
to CDC data last updated July 1, 2013, 264 of the 749 illnesses 
caused by the outbreak were in Michigan and we have endured 17 
of the 61 fatalities, including three from my own district.
    During our committee's investigation, under the leadership 
of Oversight and Investigations Subcommittee Chairman Tim 
Murphy, we found that the meningitis outbreak and the loss of 
innocent lives could have been prevented. The New England 
Compounding Center was operating in an unacceptable and 
unlawful manner for years. Yet, it took this outbreak and its 
tragic consequences for the Food and Drug Administration (FDA) 
to act. Although the facts demonstrate that the FDA had the 
authority to regulate the bad actors who harmed patients with 
unsafe products, we believe that clarifying FDA's regulatory 
authority in this area through legislation is a prudent step 
toward improving the safety of all Americans.
    In May, this subcommittee held a hearing on the drug 
compounding industry to understand its evolution and the 
current role it plays in our health care system. We learned 
that compounding is an integral part of our health care system 
that helps patients receive the treatments necessary for their 
unique medical needs. As we look to legislate in this area, we 
want to ensure that patients can continue to receive compounded 
drugs that are safe. I believe that everyone here today shares 
that goal.
    We also want to ensure that bad actors can no longer use 
the good name of pharmacies to hide activity that is 
essentially large-scale drug manufacturing. The FDA gold 
standard for approval should give patients the assurance that 
the drugs they use are safe and effective. Activities akin to 
large-scale manufacturing must be regulated as such in order to 
uphold the integrity of our nation's drug supply.
    Our hearing today is a result of thorough and collaborative 
investigative and policy work. While all of the bills before us 
today include ideas that we should consider carefully, I would 
like to thank Morgan Griffith for his dedication and leadership 
throughout both the committee's investigative and legislative 
process. The Griffith discussion draft before us today includes 
key provisions that serve the important goals of clarifying 
FDA's authority and protecting the role of traditional 
compounding. As we continue to work in a bipartisan manner, it 
is my belief that we will find common ground to advance 
legislation that achieves these goals.
    Thank you, Mr. Chairman. I yield my remaining time to ----