[Federal Register Volume 89, Number 55 (Wednesday, March 20, 2024)]
[Proposed Rules]
[Pages 19776-19788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05801]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 216

[Docket No. FDA-2023-N-0061]
RIN 0910-AI31


Drug Products or Categories of Drug Products That Present 
Demonstrable Difficulties for Compounding Under Sections 503A or 503B 
of the Federal Food, Drug, and Cosmetic Act

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration is proposing to establish 
criteria for the lists of drug products or categories of drug products 
that present demonstrable difficulties for compounding (Demonstrable 
Difficulties for Compounding Lists or DDC Lists) under certain sections 
of the Federal Food, Drug, and Cosmetic Act. Additionally, the Agency 
is proposing to identify the first three categories of drug products on 
both DDC Lists. Drug products or categories of drug products that 
appear on the DDC Lists cannot qualify for certain statutory 
exemptions, and therefore may not be compounded under, either section 
503A or section 503B, respectively.

DATES: Either electronic or written comments on the proposed rule must 
be submitted by June 18, 2024.

ADDRESSES: You may submit comments as follows. Please note that late, 
untimely filed comments will not be considered. The https://www.regulations.gov electronic filing system will accept comments until 
11:59 p.m. Eastern Time at the end of June 18, 2024. Comments received 
by mail/hand delivery/courier (for written/paper submissions) will be 
considered timely if they are received on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. Comments submitted 
electronically, including attachments, to https://www.regulations.gov 
will be posted to the docket unchanged. Because your comment will be 
made public, you are solely responsible for ensuring that your comment 
does not include any confidential information that you or a third party 
may not wish to be posted,

[[Page 19777]]

such as medical information, your or anyone else's Social Security 
number, or confidential business information, such as a manufacturing 
process. Please note that if you include your name, contact 
information, or other information that identifies you in the body of 
your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential 
information that you do not wish to be made available to the public, 
submit the comment as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets 
Management Staff, FDA will post your comment, as well as any 
attachments, except for information submitted, marked and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No. 
FDA-2023-N-0061 for ``Drug Products or Categories of Drug Products That 
Present Demonstrable Difficulties for Compounding Under Sections 503A 
or 503B of the Federal Food, Drug, and Cosmetic Act.'' Received 
comments, those filed in a timely manner (see ADDRESSES), will be 
placed in the docket and, except for those submitted as ``Confidential 
Submissions,'' publicly viewable at https://www.regulations.gov or at 
the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through 
Friday, 240-402-7500.
     Confidential Submissions--To submit a comment with 
confidential information that you do not wish to be made publicly 
available, submit your comments only as a written/paper submission. You 
should submit two copies total. One copy will include the information 
you claim to be confidential with a heading or cover note that states 
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will 
review this copy, including the claimed confidential information, in 
its consideration of comments. The second copy, which will have the 
claimed confidential information redacted/blacked out, will be 
available for public viewing and posted on https://www.regulations.gov. 
Submit both copies to the Dockets Management Staff. If you do not wish 
your name and contact information to be made publicly available, you 
can provide this information on the cover sheet and not in the body of 
your comments and you must identify this information as 
``confidential.'' Any information marked as ``confidential'' will not 
be disclosed except in accordance with 21 CFR 10.20 and other 
applicable disclosure law. For more information about FDA's posting of 
comments to public dockets, see 80 FR 56469, September 18, 2015, or 
access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents, the 
plain language summary of the proposed rule of not more than 100 words 
as required by the ``Providing Accountability Through Transparency 
Act,'' or the electronic and written/paper comments received, go to 
https://www.regulations.gov and insert the docket number, found in 
brackets in the heading of this document, into the ``Search'' box and 
follow the prompts and/or go to the Dockets Management Staff, 5630 
Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500.

FOR FURTHER INFORMATION CONTACT: Dorcas Ann Taylor, Center for Drug 
Evaluation and Research, Food and Drug Administration, 10903 New 
Hampshire Ave., Silver Spring, MD 20993-0002, 301-796-0611.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
    A. Purpose of the Proposed Rule
    B. Summary of the Major Provisions of the Proposed Rule
    C. Legal Authority
    D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
    A. FDA's Current Regulatory Framework and Need for DDC Lists
    B. History of This Rulemaking and Request for Nominations
IV. Legal Authority
V. Description of the Proposed Rule
    A. Criteria for Evaluating Drug Products or Categories of Drug 
Products for the DDC Lists (Proposed Sec.  216.25(a))
    B. Description of Criteria for the Evaluation of Drug Products 
or Categories of Drug Products for Inclusion on the DDC Lists
    C. Evaluation of Drug Products or Categories of Drug Products 
Proposed for Inclusion on the DDC Lists
    D. Drug Products or Categories of Drug Products Proposed for 
Inclusion on the DDC Lists
VI. Proposed Effective Date
VII. Preliminary Economic Analysis of Impacts
VIII. Analysis of Environmental Impact
IX. Paperwork Reduction Act of 1995
X. Federalism
XI. Consultation and Coordination With Indian Tribal Governments
XII. References

I. Executive Summary

A. Purpose of the Proposed Rule

    The Food and Drug Administration (FDA, Agency, or we) is proposing 
to implement parts of the Federal Food, Drug, and Cosmetic Act (FD&C 
Act) to establish criteria the Agency will use in evaluating drug 
products or categories of drug products considered for inclusion on the 
lists of drug products or categories of drug products that present 
demonstrable difficulties for compounding (DDC Lists) under each 
section. FDA also proposes to identify three categories of drug 
products on both DDC Lists. Drug products or categories of drug 
products that appear on the DDC Lists cannot qualify for the statutory 
exemptions under the applicable section. Additional drug products or 
categories of drug products are under consideration and may be 
addressed in future rulemaking.

B. Summary of the Major Provisions of the Proposed Rule

    FDA is proposing to amend its regulations to add two lists 
identifying drug products or categories of drug products that present 
demonstrable difficulties for compounding under the FD&C Act. FDA is 
also proposing to establish criteria for evaluating drug products or 
categories of products for inclusion on one or both of these lists.
    For evaluating drug products or categories of drug products for 
inclusion on the DDC Lists, FDA is proposing to establish the following 
criteria: the formulation complexity, drug delivery mechanism 
complexity, dosage form complexity, complexity of achieving or 
assessing bioavailability, compounding process complexity, and 
complexity of physicochemical or analytical testing of the drug product 
or category of drug products. FDA proposes to consider these criteria 
and the risks and benefits to patients of the compounded drug product 
or category of drug products in determining whether to add the drug 
product or category of drug products to one or both lists.
    Based on the results of FDA's evaluation of certain categories of 
drug products that the public has nominated for consideration as 
presenting demonstrable difficulties for compounding, as well as in 
consultation with the Pharmacy Compounding Advisory Committee (PCAC), 
FDA is proposing to include the following three categories of drug 
products on the DDC Lists: (1) oral solid modified-release

[[Page 19778]]

drug products that employ coated systems (MRCs), (2) liposome drug 
products (LDPs), and (3) drug products produced using hot melt 
extrusion (HMEs). Before finalizing this rulemaking, FDA intends to 
consider whether any changes to the proposed criteria would alter FDA's 
analysis of whether the categories of drug products addressed in this 
notice of proposed rulemaking present demonstrable difficulties for 
compounding within the meaning of sections 503A or 503B of the FD&C 
Act. As discussed below, the final rule may include some or all of the 
categories of drug products proposed here for inclusion on the DDC 
Lists, depending on the comments received.

C. Legal Authority

    Sections 503A and 503B of the FD&C Act, in conjunction with our 
general rulemaking authority in the FD&C Act, serve as our principal 
legal authority for this proposed rule.

D. Costs and Benefits

    FDA evaluated three categories of drug products for this proposed 
rule (MRCs, LDPs, and HMEs) and is currently proposing to place all 
three of these categories of drug products on the DDC Lists. We expect 
that this proposed rule may create benefits for compounders by reducing 
regulatory uncertainty. At this time, we are not aware of any 
compounding and marketing of the three proposed categories of drug 
products for human use. Therefore, we expect that the proposed rule 
would only create administrative costs to read and understand the rule. 
We estimate that, over 10 years, the annualized costs of the proposed 
rule would equal $0.42 million at a 7 percent discount rate and $0.36 
million at a 3 percent discount rate.

II. Table of Abbreviations/Commonly Used Acronyms in This Document

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        Abbreviation/ acronym                    What it means
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ANDA................................  Abbreviated New Drug Applications.
API.................................  Active Pharmaceutical Ingredient.
CGMP................................  Current Good Manufacturing
                                       Practice.
CFR.................................  Code of Federal Regulations.
DDC.................................  Demonstrable Difficulties for
                                       Compounding.
FD&C Act............................  Federal Food, Drug, and Cosmetic
                                       Act.
FDA.................................  Food and Drug Administration.
GI..................................  Gastrointestinal.
HME.................................  Hot Melt Extrusion.
LDP.................................  Liposome Drug Product.
MRC.................................  Oral Solid Modified-Release Drug
                                       Product That Employs Coated
                                       Systems.
PCAC................................  Pharmacy Compounding Advisory
                                       Committee.
NDA.................................  New Drug Application.
PEG.................................  Polyethylene Glycol.
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III. Background

A. FDA's Current Regulatory Framework and Need for DDC Lists

    Under sections 503A and 503B of the FD&C Act (21 U.S.C. 353a and 
353b), certain conditions must be satisfied for compounded drug 
products to qualify for the exemptions set forth in each section from 
statutory requirements that may otherwise apply. Section 503A of the 
FD&C Act describes the conditions that must be satisfied for a human 
drug product compounded by a licensed pharmacist in a State licensed 
pharmacy or a Federal facility, or by a licensed physician, to qualify 
for exemptions from section 501(a)(2)(B) (concerning current good 
manufacturing practice (CGMP) requirements), section 502(f)(1) 
(concerning the labeling of drugs with adequate directions for use), 
and section 505 (concerning the approval of drugs under new drug 
applications (NDAs) or abbreviated new drug applications (ANDAs)) of 
the FD&C Act (21 U.S.C. 351(a)(2)(B), 352(f)(1), and 355). Section 503B 
of the FD&C Act describes the conditions that must be satisfied for a 
drug product compounded by or under the direct supervision of a 
licensed pharmacist in an outsourcing facility to qualify for 
exemptions from section 502(f)(1) (concerning the labeling of drugs 
with adequate directions for use), section 505 (concerning the approval 
of drugs under NDAs or ANDAs), and section 582 (concerning drug supply 
chain security requirements) of the FD&C Act (21 U.S.C. 360eee-1). Both 
sections contain conditions that concern whether the compounded drug 
product is one identified by the Secretary of Health and Human Services 
(the Secretary) as presenting demonstrable difficulties for compounding 
(see generally sections 503A(b)(3)(A) and 503B(a)(6) of the FD&C 
Act).\1\ A drug product that the Secretary has identified as presenting 
demonstrable difficulties for compounding pursuant to section 
503A(b)(3)(A) or section 503B(a)(6) may not be compounded under either 
section 503A or section 503B.
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    \1\ The functions of the Secretary described herein have been 
delegated to FDA. Delegations of authority are available on FDA's 
website at https://www.fda.gov/about-fda/staff-manual-guides/delegations-authority-volume-ii-1400. Please see Delegations of 
Authority to the Commissioner of Food and Drugs in Staff Manual 
Guide 1410.10.
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    Specifically, a condition for the statutory exemptions in section 
503A of the FD&C Act is that a drug product is not identified by the 
Secretary by regulation as a drug product that presents demonstrable 
difficulties for compounding that reasonably demonstrate an adverse 
effect on the safety or effectiveness of that drug product (see section 
503A(b)(3)(A) of the FD&C Act). Section 503A(c)(1) of the FD&C Act 
provides that before issuing regulations to implement paragraph 
(b)(3)(A), the Secretary shall convene and consult an advisory 
committee on compounding unless the Secretary determines that the 
issuance of such regulations before consultation is necessary to 
protect the public health.
    Similarly, a condition for the statutory exemptions in section 503B 
of the FD&C Act is that a drug compounded by an outsourcing facility is 
not identified (directly or as part of a category of drugs) on a list 
published by the Secretary of drugs or categories of drugs that present 
demonstrable difficulties for compounding that are reasonably likely to 
lead to an adverse effect on the safety or effectiveness of the drug or 
category of drugs, taking into account the risks and benefits to 
patients, or the drug is compounded in accordance with all applicable 
conditions identified on the list as conditions that are necessary to 
prevent the drug or category of drugs from presenting such demonstrable 
difficulties (see section 503B(a)(6) of the FD&C Act). Section 503B(c) 
of the FD&C Act provides that the Secretary will implement the list 
described in paragraph (a)(6) through regulations and that before 
issuing regulations to implement paragraph (a)(6), the Secretary will 
convene and consult an advisory committee on compounding.
    This proposed rule, if finalized, would implement sections 
503A(b)(3)(A) and 503B(a)(6) of the FD&C Act.

B. History of This Rulemaking and Request for Nominations

    In July 2000, the PCAC discussed and provided FDA with advice about 
the Agency's efforts to develop a list of drugs that present 
demonstrable difficulties for compounding. FDA published a notice of 
that meeting in the Federal Register of June 29, 2000 (65 FR 40104). 
However, before a list could be developed, the constitutionality of 
provisions of section 503A of the FD&C Act concerning restrictions on 
the advertising or promotion of the compounding of any particular drug, 
class of drug, or type of drug and the solicitation of prescriptions 
for compounded drugs were challenged in court. These provisions were 
held unconstitutional by the U.S. Supreme Court in 2002 (see Thompson 
v. Western

[[Page 19779]]

States Med. Ctr., 535 U.S. 357 (2002)). After the court decision, FDA 
suspended its efforts to develop the difficult-to-compound list.
    The Drug Quality and Security Act, enacted in 2013, removed from 
section 503A of the FD&C Act the provisions that had been held 
unconstitutional and added new section 503B to the FD&C Act. In the 
Federal Register of December 4, 2013 (78 FR 72840), FDA established a 
docket and invited interested persons to nominate drug products or 
categories of drug products to be identified as ones that present 
demonstrable difficulties for compounding under sections 503A and 503B 
of the FD&C Act. Approximately 70 unique drug products or categories of 
drug products were nominated. In the Federal Register of July 28, 2017 
(82 FR 35214), FDA established another public docket so that interested 
parties could nominate drug products or categories of drug products 
that were not previously nominated, resubmit previous nominations with 
additional supporting information, or submit comments. Since 
establishing the new public docket, several new unique drug products or 
categories of drug products have been nominated and additional 
information regarding previous nominations and general comments has 
been submitted.
    On June 18, 2015, March 9, 2016, November 3, 2016, May 9, 2017, and 
November 21, 2017, FDA consulted with the PCAC (see sections 503A(c)(1) 
and 503B(c)(2) of the FD&C Act) about criteria for evaluating whether 
drug products and categories of drug products present demonstrable 
difficulties for compounding under sections 503A and 503B of the FD&C 
Act and the three categories of drug products that are addressed in 
this proposed rule (Refs. 1 to 10). The criteria were presented and 
discussed at the June 2015 PCAC meeting. The criteria were subsequently 
revised to clarify the description of each factor and were then 
presented and discussed at the March 2016 PCAC meeting (Ref. 7). In 
general, the PCAC agreed with the proposed criteria and the approach 
taken by the Agency in evaluating the proposed categories of products 
that present demonstrable difficulties for compounding under sections 
503A and 503B. In addition, the PCAC agreed with FDA's recommendation 
to identify each of the categories of drug products described in this 
proposed rule as ones that present demonstrable difficulties for 
compounding. Since the PCAC meetings, FDA is not aware of information 
regarding the difficulties presented by compounding the categories of 
drug products addressed in this proposed rule that would change the 
analysis the Agency last presented to the PCAC. The Agency has 
considered the PCAC's recommendations in developing this proposed rule, 
and the Agency intends to continue to consult with the PCAC in 
evaluating drug products or categories of drug products for the DDC 
Lists.

IV. Legal Authority

    Section 503A of the FD&C Act describes the conditions that must be 
satisfied for a human drug product compounded by a licensed pharmacist 
in a State licensed pharmacy or a Federal facility, or by a licensed 
physician, to qualify for exemptions from section 501(a)(2)(B) 
(concerning CGMP requirements), section 502(f)(1) (concerning the 
labeling of drugs with adequate directions for use), and section 505 
(concerning the approval of drugs under NDAs or ANDAs) of the FD&C Act. 
Section 503B of the FD&C Act describes the conditions that must be met 
for a drug product compounded by or under the direct supervision of a 
licensed pharmacist in a facility registered as an outsourcing facility 
to qualify for exemptions from section 502(f)(1) (concerning the 
labeling of drugs with adequate directions for use), section 505 
(concerning the approval of drugs under NDAs or ANDAs), and section 582 
(concerning drug supply chain security requirements) of the FD&C Act. 
Sections 503A and 503B of the FD&C Act contain conditions concerning 
drug products that have been identified as presenting demonstrable 
difficulties for compounding and address how lists of drug products or 
categories of drug products that present demonstrable difficulties for 
compounding must be established under each section. Specifically, 
section 503A(c)(1) of the FD&C Act requires that FDA issue regulations 
to implement paragraph (b)(3)(A), which refers to the DDC List under 
section 503A, and section 503B(c)(1) of the FD&C Act states that FDA 
must implement the list described in paragraph (a)(6) that refers to 
the DDC List under section 503B, through regulations. Thus, sections 
503A and 503B of the FD&C Act, in conjunction with our general 
rulemaking authority in section 701(a) of the FD&C Act (21 U.S.C. 
371(a)), serve as our principal legal authority for this proposed rule.

V. Description of the Proposed Rule

    FDA is proposing to add Sec.  216.25 to title 21 of the Code of 
Federal Regulations (CFR) (21 CFR 216.25) to establish criteria to 
evaluate drug products and categories of drug products for inclusion on 
one or both of the DDC Lists in Sec.  216.25(a), and to codify the 
initial DDC List for section 503A and the initial DDC List for section 
503B of the FD&C Act in Sec.  216.25(b) and (c), respectively. FDA is 
proposing to create two separate DDC Lists, a 503A DDC List and a 503B 
DDC List, that would implement the DDC statutory provisions and reflect 
the differences in compounding standards under each section. Having two 
separate lists will make it easier to address situations that could 
arise where a drug product or category of drug products would present 
demonstrable difficulties for compounding under section 503A but may 
not present demonstrable difficulties for compounding under section 
503B of the FD&C Act. For example, in certain situations, FDA may 
determine in its consideration of the DDC criteria that a drug product 
or category of drug products presents demonstrable difficulties for 
compounding unless it is made in accordance with the manufacturing 
controls over safety, identity, strength, quality, and purity required 
under CGMP. In such cases, because drug products compounded in 
accordance with the conditions of section 503A, but not section 503B, 
are exempt from CGMP requirements, FDA may decide to include a drug 
product or category of drug products on the DDC List for section 503A 
but not the DDC List for section 503B of the FD&C Act.\2\ The initial 
lists, if finalized as proposed, would include three categories of drug 
products that present demonstrable difficulties for compounding under 
both sections 503A and 503B of the FD&C Act and, therefore, would not 
qualify for the exemptions in either section. The proposed criteria and 
categories of drug products are described below.
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    \2\ See section 501(a)(2)(B) of the FD&C Act.
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    As discussed below, to determine whether a drug product or category 
of drug products presents demonstrable difficulties for compounding FDA 
may consider the criteria in this proposed rule individually and 
collectively, and take into account the risks and benefits to patients 
of the compounded drug product or categories of drug products. 
Additionally, FDA is proposing three categories of drug products that 
were, independently of each other, evaluated by FDA and presented to 
the PCAC to be included on the DDC List for section 503A and the DDC 
List for section 503B of the FD&C Act. In the event of a stay or 
invalidation of any criterion or of any entry on a DDC List, those 
criteria and entries that remain in effect would

[[Page 19780]]

continue to function sensibly \3\ to advance the statutory objectives. 
It is FDA's intent to preserve each of the criteria and entries on the 
DDC Lists, if finalized, to the fullest possible extent, to help 
advance the objectives described in section III.A.
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    \3\ See, e.g., Belmont Mun. Light Dep't v. FERC, 38 F.4th 173, 
188 (D.C. Cir. 2022) (finding severability of portion of an 
administrative action, applying principle that severability is 
appropriate where ``the agency prefers severability to overturning 
the entire regulation'' and where the remainder of the regulation 
``could function sensibly without the stricken provision'') 
(citations omitted).
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A. Criteria for Evaluating Drug Products or Categories of Drug Products 
for the DDC Lists (Proposed Sec.  216.25(a))

    FDA has identified six criteria it proposes to consider in 
determining whether drug products or categories of drug products 
present demonstrable difficulties for compounding under sections 503A 
and 503B of the FD&C Act:
    1. Complex formulation,
    2. Complex drug delivery mechanism,
    3. Complex dosage form,
    4. Bioavailability achievement complexity,
    5. Compounding process complexity, and
    6. Physicochemical or analytical testing complexity.
    In evaluating drug products or categories of drug products for the 
DDC Lists, the Agency proposes to consider these criteria individually 
and collectively, and to take into account the risks and benefits to 
patients of the compounded drug product or categories of drug products. 
The criteria are not mutually exclusive. A drug product or category of 
drug products may meet one or more of these criteria that indicate it 
presents demonstrable difficulties for compounding. FDA proposes to 
apply the same criteria when considering drug products or categories of 
drug products for inclusion on either the DDC List for section 503A or 
the DDC List for section 503B of the FD&C Act, although the application 
of the criteria may lead to different conclusions for each list. The 
three categories of drug products identified in this proposed rule are 
proposed to be included on both the initial 503A and 503B DDC Lists, 
but this may not always be the case given the differences in the 
statutory standards that apply to compounding under sections 503A and 
503B of the FD&C Act. We also note that these criteria for determining 
whether a drug product presents demonstrable difficulties for 
compounding are not intended to provide FDA's interpretation of which 
drugs are considered complex products in other circumstances, including 
for purposes of determining whether a proposed generic drug is a 
complex product as defined in the Generic Drug User Fee Amendments 
Commitment Letters and which, as appropriate, may use scientifically 
valid in vivo or in vitro test methods to demonstrate bioequivalence.
    In its evaluations for the DDC Lists, FDA intends to take into 
account the risks and benefits to patients of the compounded drug 
product or category of drug products under consideration. In doing so, 
FDA may use available information such as reports submitted to FDA 
about adverse drug experiences and FDA's scientific and medical 
expertise to inform its analysis, as well as information about FDA-
approved drug products. FDA may consider actual or potential risks and 
benefits to patients posed by a drug product or category of drug 
products. In particular, FDA intends to consider actual or potential 
risks to patients in connection with the six criteria described in this 
proposed rule.
    The Agency does not intend to consider cost and convenience as 
factors that would be relevant to the risk-benefit analysis for the DDC 
Lists.
    There may be situations in which FDA's findings, with respect to 
whether a drug product or category of drug products presents 
demonstrable difficulties for compounding, indicate that the difficulty 
in compounding is limited to a subset of such drug products or 
categories of drug products. In those cases, the Agency may tailor the 
entry on the DDC Lists to reflect its findings and conditions that the 
Agency determines are necessary to prevent the drug or category of 
drugs from presenting the demonstrable difficulties. For example, if 
the Agency were to find a drug product or category of drug products 
presents demonstrable difficulties for compounding at a specific 
strength for topical use, it could choose to limit the entry of that 
drug product or category of drug products on the DDC Lists to a 
specified strength for topical use.

B. Description of Criteria for the Evaluation of Drug Products or 
Categories of Drug Products for Inclusion on the DDC Lists 4
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    \4\ These proposed descriptions of terms apply only to those 
terms when used in proposed 21 CFR part 216 for purposes of 
determining whether drug products or categories of drug products 
present demonstrable difficulties for compounding.
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    The following is a discussion of the criteria the Agency proposes 
to codify, in proposed Sec.  216.25(a), for including a drug product or 
category of drug products on the section 503A or section 503B DDC List. 
A drug product or category of drug products that meets one or more of 
the criteria may present demonstrable difficulties for compounding 
under section 503A or 503B of the FD&C Act.
1. Complex Formulation
    Complex formulation refers to a formulation in which the 
ingredients (active pharmaceutical ingredients (APIs) or excipients) 
possess (or are required to possess) certain physicochemical 
characteristics or properties that are necessary to achieve or maintain 
the proper performance of the drug product. Generally, these attributes 
may include the solid state (crystalline, amorphous, or a combination 
thereof), chirality, molecular weight (dispersity/distributions), or 
particle size distribution of ingredients. For example, for some APIs, 
the solid state, chirality, or particle size might be critical to the 
safety and efficacy of certain drug products, whereas for some 
excipients, the molecular weight, intrinsic viscosity, or relative 
proportion of the release controlling polymer to an API might be 
critical to the safety and efficacy of certain drug products. The 
compatibility or stability (physical and chemical) of the API(s) or 
excipients in the final dosage form may also contribute to determining 
whether the compounded drug product has a complex formulation.
2. Complex Drug Delivery Mechanism
    Complex drug delivery mechanism refers to the way in which the drug 
is released from the dosage form or targeted for delivery in the body 
to achieve the desired therapeutic effect. Complex drug delivery 
mechanisms include, for example, formulations designed to release the 
drug at specific onset, rate, and extent through specific region(s) 
within the gastrointestinal (GI) tract; formulations designed to 
achieve permeation through the skin at a specific rate; and 
formulations containing coated beads or liposomes.
3. Complex Dosage Form
    Complex dosage form refers to physical dosage units with unique 
characteristics that are difficult to consistently achieve or maintain. 
Complex dosage form also refers to container closure systems that may 
interact with the compounded drug and affect its intended use, either 
through physical (inconsistent dose administration) or chemical 
interactions between the compounded drug and the

[[Page 19781]]

container closure system. Drug products may have very simple 
formulations, such as a single API, and a simple delivery mechanism, 
such as an injection, but the drug product may be complex because the 
physical properties of the dosage form are difficult to achieve or 
maintain. Examples of complex dosage forms include coated beads, 
osmotic-controlled release systems, and liposomes.
4. Bioavailability Achievement Complexity
    Bioavailability refers to the rate and extent to which the active 
ingredient or active moiety is absorbed from a drug product and becomes 
available at the site of action. Drug products may present demonstrable 
difficulties for compounding if bioavailability is challenging to 
achieve because of the characteristics of the API or compounded 
formulation such as low permeability or low solubility. Examples of 
drug products for which consistent bioavailability is difficult to 
achieve include Biopharmaceutics Classification System Class 2 drugs 
(e.g., naproxen, lansoprazole, rifampin, and carbamazepine) and Class 4 
drugs (e.g., azathioprine, clarithromycin, oxcarbazepine, and 
modafinil).
5. Compounding Process Complexity
    Compounding process complexity refers to whether compounding the 
drug requires multiple, complicated, or interrelated steps or 
specialized facilities or equipment to achieve the appropriate drug 
product. An example of a complex compounding process includes multistep 
and highly interrelated processes such as wet granulation, extrusion, 
spheronization, fluid bed drying, coating, compression, or curing 
before processing into the final dosage form.
6. Physicochemical or Analytical Testing Complexity
    Physicochemical or analytical testing complexity refers to the 
challenges presented with confirming the drug product will perform as 
expected with regard to certain characteristics. Drug products may 
demonstrate testing complexity when specialized analytical instruments 
or special training is necessary to show that the drug product will 
perform as expected. Some examples of complex testing include cell-
based assays and use of nuclear magnetic resonance, mass spectrometry, 
or X-ray powder diffraction to identify constituents of complex 
formulations.

C. Evaluation of Drug Products or Categories of Drug Products Proposed 
for Inclusion on the DDC Lists

    FDA is proposing three categories of drug products that were 
evaluated by FDA and presented to the PCAC to be included on the 
initial DDC List for section 503A and the initial DDC List for section 
503B of the FD&C Act. The following three categories of drug products 
are being proposed to be included in Sec.  216.25(b) and (c): MRCs, 
LDPs, and HMEs. FDA may propose additional drug products or categories 
of drug products for inclusion on the DDC Lists as it continues its 
evaluations.
    The information that FDA assessed under each of the proposed 
evaluation criteria for each of the categories of drug products 
included in this proposed rule was obtained from publicly available 
sources, including peer-reviewed medical literature. Some of this 
information was referenced in the nominations, and the remainder was 
gathered through independent searches of medical and pharmaceutical 
databases. The nature, quantity, and quality of the information FDA 
assessed varied considerably from drug product category to drug product 
category. For some categories of drug products, reports in the 
literature were more plentiful and sometimes comprised hundreds or 
thousands of articles. In those cases, generally, the Agency limited 
its review to a sample of the best literature sources available (e.g., 
review articles in widely known, peer-reviewed journals; meta-analyses; 
reports of randomized controlled trials). The Agency intends to use a 
similar process when evaluating other drug products or categories of 
drug products for inclusion on the DDC Lists in future rulemakings.
    Three categories of drug products that were nominated as presenting 
demonstrable difficulties for compounding under sections 503A and 503B, 
and that FDA evaluated in consultation with the PCAC, are not included 
in this proposed rule: (1) drug products that employ transdermal or 
topical delivery systems; (2) metered-dose inhalers; and (3) dry powder 
inhalers. FDA may address these categories in future rulemaking.
    After evaluating the comments on this proposed rule, FDA intends to 
issue the evaluation criteria and DDC Lists as a final rule, which will 
be codified at Sec.  216.25. The final rule may include some or all of 
the categories of drug products proposed here for inclusion on the DDC 
Lists, depending on the comments received.
    Individuals and organizations may nominate drug products or 
categories of drug products for the DDC Lists or comment on nominated 
categories of products. For access to the docket to nominate products 
or comment on nominated products, go to https://www.regulations.gov and 
insert Docket No. FDA-2017-N-2562 into the ``Search'' box and follow 
the prompts.
    FDA intends to consider reevaluating products or categories of 
products for the DDC Lists if there is a change in circumstances that 
alters the Agency's analysis. FDA may consider reevaluating products or 
categories of products for the DDC Lists at any time on its own 
initiative. Requests for updates to the DDC Lists may be submitted to 
FDA at any time. With respect to a drug product or category of drug 
products that has not been addressed in rulemaking, individuals and 
organizations may submit nominations of new substances or comments on 
nominated substances to Docket No. FDA-2017-N-2562. With respect to a 
drug product or category of drug products addressed in a final rule, 
individuals and organizations may petition FDA to amend the DDC Lists 
(see 21 CFR 10.30). FDA will review the section 503B DDC List at least 
once every 4 years and update the DDC List as necessary.\5\
---------------------------------------------------------------------------

    \5\ See section 503B(c)(4) of the FD&C Act.
---------------------------------------------------------------------------

D. Drug Products or Categories of Drug Products Proposed for Inclusion 
on the DDC Lists

1. Oral Solid Modified-Release Drug Products That Employ Coated Systems 
(MRCs)
    For purposes of this proposed rule, the Agency defines MRCs as oral 
solid drug products that consist of, or are intended to consist of, a 
drug-containing core enclosed within a polymeric coating to release an 
API at specified rates, patterns, or onsets through the GI tract to 
produce systemic, enteric, or local action.\6\ There are two types of

[[Page 19782]]

MRCs that affect the rate of API release: diffusion and osmotic 
systems. The diffusion systems consist of a hydrophilic and/or water-
insoluble polymeric coating enclosing a core tablet or multiple cores 
of active ingredient and excipient. The osmotic systems consist of a 
semipermeable polymeric membrane coating enclosing a compressed core 
that is composed of active ingredient, osmotic agent, and other 
excipients, and one or more mechanical or laser drilled orifices for 
drug release.
---------------------------------------------------------------------------

    \6\ Modified release solid oral dosage forms include both 
delayed and extended release drug products. See FDA's guidance for 
industry on ``(SUPAC-MR) Scale-Up and Postapproval Changes for 
Modified Release Solid Oral Dosage Forms.'' For this proposed 
rulemaking, the Agency does not consider matrix-type tablets and 
capsules to be MRCs, provided that drug release and delivery of an 
active ingredient from such products is controlled solely by 
disintegration or dissolution through the polymeric matrix. 
Moreover, with regard to certain fillable capsules, the Agency does 
not consider enteric coated capsules of immediate release 
formulations to be MRCs because of the fact that such enteric 
coating is designed to control disintegration onset of the coated 
capsule and not the release rate of active ingredient at a targeted 
location in the GI tract. In addition, as noted above, this proposed 
rule is not intended to provide FDA's interpretation of which drugs 
are considered complex products in other circumstances, including 
for purposes of determining whether a proposed generic drug is a 
complex product.
---------------------------------------------------------------------------

    MRCs were evaluated using the six criteria that FDA proposes to use 
to determine whether drug products or categories of drug products 
present demonstrable difficulties for compounding under sections 503A 
and 503B of the FD&C Act explained in section V.A. above. MRC 
formulations are complex because they are required to release a 
specified amount of active ingredient over a specified period of time 
for a given therapy. Developed properly, MRCs must be physically stable 
and exhibit consistent functional properties of active ingredient 
release rate, pattern, and location within the GI tract. If MRCs are 
not produced correctly, sub- or supra-therapeutic release, GI mucosa 
irritation, and variability in performance within and across batches 
may occur. The mechanism by which active ingredient is released from 
the MRCs throughout the GI tract is complex because, to perform 
properly, it requires the design and formation of a system that 
delivers a specific amount of active ingredient per unit time and, in 
some cases, in specific regions of the GI tract. Depending on the type 
of MRC systems, the drug (API) delivery mechanism for an MRC can either 
be diffusion controlled through polymeric coating or osmotic controlled 
through a polymeric semipermeable membrane, and, in either case, the 
delivery mechanism depends on several factors, including the intended 
time/location of API release in the GI tract and the types of materials 
used for coating. In addition, because the dose-release profile is 
impacted by several factors, precise control of the attributes of raw 
materials, the manufacturing process, and the final product is 
necessary for ensuring the specifications of the drug product are met.
    MRCs' complex formulations and complex drug delivery mechanisms 
also affect the complexity of their dosage forms for compounding. They 
require well-designed controls of component attributes and process 
parameters for predictable release of the active ingredient. In 
addition, MRCs are designed to maintain their integrity in vivo to 
minimize local irritation to the GI tract and to ensure that dose 
dumping does not occur. Various components play a critical role in the 
dosage form performance. Extensive product development and precise 
control over raw material selection and the production process are 
essential for evaluating the active ingredient release mechanism and 
profile, and overall MRC performance characteristics. Characterizing 
and controlling bioavailability of MRCs are also critical. Subtle 
changes to any of the product's components or manufacturing processes 
could significantly impact its bioavailability and performance 
characteristics. In general, for MRCs, in vitro assessments, such as in 
vitro dissolution testing, alone are insufficient to accurately predict 
bioavailability and overall clinical effect; rather, in vivo 
assessments are needed.
    Because specialized equipment under appropriate controls is 
critical for the automated processing and precise control over the 
manufacturing process, the compounding processes for MRCs are also 
complex. These processes include technically complex mixing, 
fluidization coating and drying, compression, filling, and orifice 
drilling. Poor technique or control during any of these processes will 
likely result in variable performance of the drug product. MRCs 
additionally require complex physicochemical and analytical testing of 
raw material, product quality/performance, and stability because 
evaluating the physical and chemical properties of the raw materials 
and finished dosage form, as well as the product-critical performance 
parameters, requires specialized analytical devices and procedures for 
accurate measurement. Furthermore, to assess and ensure consistent 
purity of the drug product, chemical impurities must be quantitated 
through various sensitive analytical techniques developed specifically 
for these impurities.
    With respect to the risks and benefits to patients, compounded MRCs 
present a significant safety risk given the complexities described 
above. MRC design and the relationship between excipient and active 
ingredient directly impact release rate and pattern and performance. 
Release rate and pattern and performance in turn affect drug product 
effectiveness and safety. Substituting or removing excipients, such as 
release retarding polymers, plasticizers, solubilizers, and permeation 
enhancers, would likely change the release characteristics of the 
product and, in turn, may adversely impact product performance. Also, 
precise and consistent quality controls of raw materials, the 
manufacturing process, and final product are essential for predictable 
and reproducible active ingredient release, performance, and safety 
profiles. MRCs are designed to release a specified amount of active 
ingredient to a specific region of the GI tract over a specified period 
of time, for a given therapy. MRCs are designed to maintain their 
integrity in vivo to minimize local irritation to the GI tract and to 
ensure that dose dumping does not occur. The complexities associated 
with the manufacture of MRCs create a heightened risk that compounded 
products would not deliver the active ingredient as intended, which 
would present a safety concern to patients. The Agency is not aware of 
compounded MRCs for human use. However, FDA requests comments regarding 
availability of and potential access to compounded MRCs. FDA is also 
not aware of a rationale for why a patient would have a medical need 
for compounded MRCs, as opposed to an FDA-approved product, nor is it 
aware of any actual or potential benefit that would outweigh the risks 
to patient safety that would be presented by compounded MRCs.
    Based on an analysis of the evaluation criteria, taking into 
account the risks and benefits to patients, FDA proposes to include 
MRCs on the lists of drug products or categories of drug products that 
present demonstrable difficulties for compounding under sections 503A 
and 503B of the FD&C Act. On May 9, 2017, FDA proposed to the PCAC that 
MRCs be identified as presenting demonstrable difficulties for 
compounding under sections 503A and 503B of the FD&C Act (Ref. 9). The 
PCAC voted to agree with FDA's proposal (Ref. 4).
    In applying the six criteria discussed above, FDA considered 
whether MRCs should be added to the 503A DDC List and to the 503B DDC 
List. FDA has tentatively concluded that MRCs meet the statutory 
criteria for inclusion on both lists. As discussed above, MRCs are 
solid oral dosage form drug products that consist of, or are intended 
to consist of, a drug-containing core enclosed within a polymeric 
coating to release an active ingredient at specified rates, patterns, 
or onsets through the GI tract to produce systemic, enteric, or local 
action. The complexities associated with the manufacture of MRCs create 
a

[[Page 19783]]

heightened risk that compounded products would not deliver the active 
ingredient as intended, which would present a safety concern to 
patients. FDA does not believe an outsourcing facility's compliance 
with CGMP requirements would address the concerns described above 
regarding formulation complexity, drug delivery mechanism complexity, 
dosage form complexity, complexity of achieving or assessing 
bioavailability, compounding process complexity, and complexity of 
physicochemical or analytical testing of the drug product or category 
of drug products. FDA's CGMP regulations contain the minimum current 
good manufacturing practice for methods to be used in, and the 
facilities or controls to be used for, the manufacture, processing, 
packing, or holding of a drug to assure that such drug meets the 
requirements of the FD&C Act as to safety, and has the identity and 
strength and meets the quality and purity characteristics that it 
purports or is represented to possess (see 21 CFR 210.1(a)). The 
potential quality and safety concerns raised by MRCs would typically be 
evaluated as part of the premarket approval process, based on the 
assessment of a broader range of drug development data including 
certain safety, clinical, and bioavailability or bioequivalence 
information as appropriate. Since compounded drug products that meet 
the conditions of sections 503A and 503B are exempt from premarket 
approval requirements, compounded MRCs would not be subject to such 
evaluation based on a broader range of drug development data. 
Therefore, compliance with CGMP standards, alone, is unlikely to 
provide sufficient assurance that compounded MRCs can deliver product 
of intended characteristics with reliable quality and consistent 
performance. However, FDA is soliciting comments about whether this 
entry should be added to only the 503A DDC List or only the 503B DDC 
List.
2. Liposome Drug Products (LDPs)
    For this proposed rule, the Agency defines an LDP as a drug product 
in which the API is generally contained in or intended to be contained 
in liposomes.\7\ The Agency has broadly evaluated LDPs, including those 
containing liposomes that would not fall within what is commonly 
considered to be the nanoscale-size range, for inclusion on the DDC 
Lists.\8\
---------------------------------------------------------------------------

    \7\ With respect to FDA-approved liposome drug products, see the 
guidance for industry ``Liposome Drug Products: Chemistry, 
Manufacturing, and Controls; Human Pharmacokinetics and 
Bioavailability; and Labeling Documentation.'' See also FDA's final 
guidance for industry ``Drug Products, Including Biological 
Products, That Contain Nanomaterials.''
    \8\ Within the context of this rule, preparations such as 
liposomal creams or gels are not considered LDPs, provided that, the 
principal use of amphipathic molecules such as phospholipids in the 
form of liposome alone or in combination with other inactive 
components (i.e., other than the drug or active pharmaceutical 
ingredient) in such preparations is intended for other than cure, 
mitigation, treatment or prevention of any underlying human disease; 
or intended not to affect, the structure or any function of a human 
body.
---------------------------------------------------------------------------

    Liposomes are vesicles composed of a bilayer and/or a concentric 
series of multiple bilayers separated by aqueous compartments formed by 
amphipathic molecules such as phospholipids that enclose a central 
aqueous compartment. LDPs were evaluated using the six criteria 
explained in section V.A. above. Because of: (1) the attributes of 
lipids, including chemistry and structure; (2) the attributes of 
inactive ingredients (e.g., cholesterol and polyethylene glycol (PEG) 
or PEG derivatives), including grade, ratio, and concentration range; 
and (3) the stability of the liposome, which can be affected by a 
number of formulation-related factors (e.g., the size and size 
distribution of the lipid vesicles, morphology, surface coating, pH, 
buffer, or counter ions), LDPs have complex formulations. LDPs also 
have a complex drug delivery mechanism. The mechanism by which an API 
is released from an LDP is complex because it involves precisely 
designing and formulating a system that delivers a specific amount of 
API per unit time and, in most cases, in a specific region (e.g., tumor 
tissues, intracellular compartments). In addition, because the in vivo 
biodistribution and release characteristics are affected by several 
factors, precise control of raw materials, the manufacturing process, 
and the final product is critical to achieving a safe and effective 
drug product.
    LDPs are complex dosage forms because they have complex 
formulations and mechanisms by which the API is delivered in vivo. 
Characteristics of the physical dosage units of liposome suspensions or 
lyophilized powders for suspension are difficult to consistently 
achieve or maintain, including: (1) well-defined and controlled 
particle size and particle size distribution; (2) the status of the API 
(e.g., whether it is contained within the liposome); and (3) the 
surface chemistry of the liposomes. These characteristics have a 
significant impact on the safety and effectiveness of LDPs. In 
addition, various formulation components play a critical role in dosage 
form performance and product stability. Such components can vary for 
different drug products that have different routes of administration. 
For example, the components of an injectable drug product may include 
different inactive ingredients than potential topical or inhalation 
drug products. Extensive product development and precise control over 
raw materials and optimization of the process parameters are essential 
to produce safe, effective, and high-quality LDPs.
    Characterizing and controlling the bioavailability of LDPs is also 
a contributing factor to the complexity of LDPs. Subtle changes to the 
formulation composition, lipid raw material purity, or manufacturing 
processes could significantly impact the biodistribution and release 
characteristics of an API from liposomes, which in turn influence the 
availability of an API in systemic circulation at tissue or subcellular 
targets. Different API forms may have different absorption, 
distribution, metabolism, and elimination, and the difficulty in 
determining the amount of various forms of API makes it complex to 
characterize and control bioavailability. Depending on the types of 
lipids used in formulating liposomes, interactions between liposome 
surface and blood proteins may affect the drug release and 
pharmacological properties of a liposome drug product in vivo. Such 
interactions can have safety implications because of ``dose dumping.'' 
For parenteral LDPs, in vitro assessments (e.g., in vitro drug release 
testing) are often used in conjunction with in vivo testing to predict 
the availability of drug at its intended target. LDPs involve complex 
compounding processes. The production of LDPs is complex because of 
unique equipment and unit operations involved and the critical need for 
in-process controls to ensure consistent product quality. Poor control 
over these unit operations may lead to variability in product quality, 
which may potentially lead to a negative impact on product efficacy and 
safety. In addition, LDPs involve comprehensive and complex 
physicochemical testing to ensure quality of the raw material, 
consistency of the product quality, and predictable in vivo 
performance. Furthermore, suitable analytical methods need to be 
employed to properly characterize LDPs, which can often be difficult 
given the complexity of liposome formulations. Use of inappropriate 
methods could produce false results,

[[Page 19784]]

thereby calling data reliability and, hence, product quality into 
question.
    With respect to the risks and benefits to patients, compounded LDPs 
present a significant safety risk for compounding given the 
complexities described above. Many of the APIs used in LDPs are 
cytotoxic. In addition, improper selection of inactive ingredients or 
improper mixing of liposomes with APIs present safety risks that the 
APIs will not be encapsulated properly or be released prematurely, 
causing the drug product to be potentially ineffective or hazardous. 
LDPs are used to alter the biodistribution of an API and can improve 
drug dissolution, stability, deliverability, biodistribution, and 
bioavailability. The Agency is not aware of compounded LDPs for human 
use; however, FDA requests comments regarding availability of and 
potential access to compounded LDPs for human use. FDA is also not 
aware of any actual or potential benefit that would outweigh the risks 
to patient safety that would be presented by compounded LDPs.
    Based on an analysis of the evaluation criteria, taking into 
account the risks and benefits to patients, FDA proposes to include 
LDPs on the lists of drug products or categories of drug products that 
present demonstrable difficulties for compounding under sections 503A 
and 503B of the FD&C Act. On November 21, 2017, FDA proposed to the 
PCAC that LDPs be identified as presenting demonstrable difficulties 
for compounding under sections 503A and 503B of the FD&C Act (Ref. 10). 
The PCAC voted to agree with FDA's proposal (Ref. 5).
    In applying the six criteria discussed above, FDA considered 
whether LDPs should be added to the 503A DDC List and to the 503B DDC 
List. FDA has tentatively concluded that LDPs meet the statutory 
criteria for inclusion on both lists. As discussed above, LDPs are drug 
products in which the active ingredient is generally contained in or 
intended to be contained in liposomes, which are vesicles composed of a 
bilayer and/or a concentric series of multiple bilayers separated by 
aqueous compartments formed by amphipathic molecules such as 
phospholipids that enclose a central aqueous compartment. Among FDA's 
concerns are that many of the active ingredients used in LDPs are 
cytotoxic and that there is a risk that improper selection of inactive 
ingredients or improper mixing of liposomes with active ingredients 
could cause the drug product to be potentially ineffective or 
hazardous. FDA does not believe an outsourcing facility's compliance 
with CGMP requirements would address the concerns described above 
regarding formulation complexity, drug delivery mechanism complexity, 
dosage form complexity, complexity of achieving or assessing 
bioavailability, compounding process complexity, and complexity of 
physicochemical or analytical testing of the drug product or category 
of drug products. FDA's CGMP regulations contain the minimum current 
good manufacturing practice for methods to be used in, and the 
facilities or controls to be used for, the manufacture, processing, 
packing, or holding of a drug to assure that such drug meets the 
requirements of the FD&C Act as to safety, and has the identity and 
strength and meets the quality and purity characteristics that it 
purports or is represented to possess (see 21 CFR 210.1(a)). The 
potential quality and safety concerns raised by LDPs would typically be 
evaluated as part of the premarket approval process, based on the 
assessment of a broader range of drug development data including 
certain safety, clinical, and bioavailability or bioequivalence 
information as appropriate.\9\ Since compounded drug products that meet 
the conditions of sections 503A and 503B are exempt from premarket 
approval requirements, compounded LDPs would not be subject to such 
assessment based on a broader range of drug development data. 
Therefore, compliance with CGMP standards, alone, is unlikely to 
provide sufficient assurance that compounded LDPs can deliver product 
of intended characteristics with reliable quality and consistent 
performance. However, FDA is soliciting comments about whether this 
entry should be added to only the 503A DDC List or only the 503B DDC 
List. FDA is aware that certain FDA-approved liposome drug products may 
have instructions in their approved labeling for certain manipulations. 
Accordingly, FDA is also soliciting comments about whether the entry 
for the 503B DDC List should include any limitations, such as, for 
example, to address certain LDPs that an outsourcing facility compounds 
from FDA-approved liposome drug products.
---------------------------------------------------------------------------

    \9\ For more information see the guidance for industry 
``Liposome Drug Products: Chemistry, Manufacturing, and Controls; 
Human Pharmacokinetics and Bioavailability; and Labeling 
Documentation.'' See also FDA's final guidance for industry ``Drug 
Products, Including Biological Products, That Contain 
Nanomaterials.''
---------------------------------------------------------------------------

3. Drug Products Produced Using HMEs
    For this proposed rule, the Agency defines HME as a continuous 
process operation that achieves or is intended to achieve the molecular 
mixing of APIs and inactive ingredients (e.g., polymers) at 
temperatures above their glass transition temperatures and/or melting 
temperatures within an extruder. The objective of an HME process is to 
enhance the solubility of poorly water-soluble drugs by converting the 
formulation components into an amorphous phase (not crystalline) 
product with uniform content.
    HME is a process by which heat and shear are applied to melt a 
mixture of API and inactive ingredients within an extruder that is then 
pushed through an orifice with the objective of converting the 
ingredients into an amorphous phase material with uniform content, 
referred to as the ``extrudate.'' HMEs were evaluated using the six 
criteria that FDA proposes to use to determine whether drug products or 
categories of drug products present difficulties for compounding under 
sections 503A and 503B of the FD&C Act explained in section V.A. above. 
HMEs have complex formulations because the extrudate must remain a 
stable and amorphous solid solution of API within a matrix throughout 
the shelf life of the final drug product in order to achieve proper 
product performance. This formulation is necessary to ensure that the 
API has higher solubility, resulting in the desired bioavailability of 
the drug product. To avoid a negative impact on the safety and efficacy 
of the product, the extrudate should have a uniform distribution of API 
in the matrix and a controlled level of impurities. It is critical for 
these formulations to be thermally stable during the extrusion process 
and physically stable afterwards. Raw material selection and control 
and ingredient ratios influence several attributes of the extrudate 
and, in turn, the final product. If HMEs are not formulated correctly, 
taking into account the principles discussed above, it could lead to 
significant variability in performance within and across batches, and 
may impact bioavailability. The drug delivery mechanism, or the 
mechanism by which API is released from the HMEs, can also be complex 
because it is dependent on a product design (e.g., immediate or 
sustained) that implicates API dissolution and solubility in an 
amorphous state within the extrudate to ensure appropriate drug 
delivery. Product design involves achieving and maintaining an 
amorphous state of the API in the extrudate, extrudate incorporation 
into the final dosage form, and selection of a carrier/API matrix that 
will release the drug at a predetermined rate. In addition, in order to 
achieve a proper dose-release profile, precise control of

[[Page 19785]]

raw materials, the extrusion process, and the final product is 
critical.
    Some dosage forms of HMEs are complex because of the structural 
arrangement or distribution of the extrudate within the dosage form, 
the function or role of the extrudate in the dosage form's drug 
delivery mechanism, or the interaction of extrudate with other 
ingredients within the dosage form. HMEs require well-designed controls 
of ingredient attributes and process parameters for predictable API 
release from a dosage form. These controls may vary from dosage form to 
dosage form, depending on what downstream incorporation steps the 
extrudate will undergo. Extensive product development and precise 
control over raw material selection and the production process are 
essential to evaluating the API release mechanism and profile, and 
other product performance characteristics. Characterizing and 
controlling the bioavailability of HMEs is also a contributing factor 
to the complexity of HMEs. Subtle changes to any components or 
production processes could significantly impact a drug product's 
solubility and intrinsic dissolution, which may in turn influence local 
and systemic bioavailability. In general, for compounded HMEs, in vitro 
assessments, such as dissolution testing, alone are insufficient to 
accurately predict bioavailability and overall clinical effect. Rather, 
in vivo assessments are needed.
    The manufacturing process for HMEs typically requires specialized 
equipment under sophisticated controls, critical for ensuring product 
quality, and thereby making compounding of HMEs complex. To achieve and 
maintain critical product quality attributes, the extruder must be 
properly calibrated based on the characteristics of the ingredients fed 
into the extruder and desired characteristics of the extrudate. Poor 
technique or control at any step will likely result in a product that 
does not achieve or maintain critical quality attributes. 
Physicochemical and analytical testing before, during, and after HME to 
evaluate thermal properties, recrystallization, dissolution, and 
uniformity requires specialized analytical devices and procedures for 
accurate measurement. A rigorous characterization of the ingredients 
processed by HME is important to avoid a negative impact on the safety 
and effectiveness of HMEs. Physicochemical characterization of the 
extrudate formed during HME is complex and necessary to properly assess 
its properties and performance in the finished drug product. In 
addition, the measurement system to properly characterize the extrudate 
is complex because it incorporates multiple complementary methods to 
interpret similar properties, such as a limit of detection for 
crystallinity and thermal history of amorphous phase. Ensuring the 
stability of an HME is a major challenge during production, storage, 
and administration.
    With respect to the risks and benefits to patients, compounded HMEs 
present a significant safety risk given the complexities described 
above, which include HME process-design complexities and the 
relationship between inactive ingredient and API of HMEs, which 
directly impacts bioavailability, release, and performance. 
Bioavailability, release, and performance in turn affect drug product 
effectiveness and safety. Substituting or removing inactive 
ingredients, such as polymers, plasticizers, or surfactants, would 
likely change the solubility and release characteristics of the product 
and, in turn, may adversely impact product performance. Also, 
consistent quality controls for raw materials, the extrusion process, 
and final product are essential for predictable and reproducible API 
release, which directly affects the safety and effectiveness of the 
product. HMEs can have enhanced bioavailability, controlled delivery 
rates, and stabilized formulations. Such products can be produced with 
taste-masking properties suitable for children or are in dosage forms 
that are suitable for patients with swallowing difficulties. The Agency 
is not aware of compounded HMEs for human use; however, FDA requests 
comments regarding availability of and potential access to compounded 
HMEs for human use. FDA is also not aware of a rationale for why 
patients would have a medical need for compounded HMEs, as opposed to 
an FDA-approved product; or of any actual or potential benefit that 
would outweigh the risks to patient safety that would be presented by 
compounded HMEs.
    Based on an analysis of the evaluation criteria, taking into 
account the risks and benefits to patients, FDA proposes to include 
HMEs on the lists of drug products or categories of drug products that 
present demonstrable difficulties for compounding under sections 503A 
and 503B of the FD&C Act. On November 21, 2017, FDA proposed to the 
PCAC that HMEs be identified as presenting demonstrable difficulties 
for compounding under sections 503A and 503B of the FD&C Act (Ref. 10). 
The PCAC voted to agree with FDA's proposal (Ref. 5).
    In applying the six criteria discussed above, FDA considered 
whether HMEs should be added to the 503A DDC List and to the 503B DDC 
List. FDA has tentatively concluded that HMEs meet the statutory 
criteria for inclusion on both lists. As discussed above, HME is a 
process by which heat and shear are applied to melt a mixture of API 
and inactive ingredients within an extruder that is then pushed through 
an orifice to convert the ingredients into an amorphous phase material 
with uniform content. FDA has identified, among other things, process-
design complexities and found that the relationship between inactive 
ingredient and active ingredient of HMEs impacts bioavailability, 
release, and performance, which could affect safety and effectiveness. 
FDA does not believe an outsourcing facility's compliance with CGMP 
requirements would address the concerns described above regarding 
formulation complexity, drug delivery mechanism complexity, dosage form 
complexity, complexity of achieving or assessing bioavailability, 
compounding process complexity, and complexity of physicochemical or 
analytical testing of the drug product or category of drug products. 
FDA's CGMP regulations contain the minimum current good manufacturing 
practice for methods to be used in, and the facilities or controls to 
be used for, the manufacture, processing, packing, or holding of a drug 
to assure that such drug meets the requirements of the FD&C Act as to 
safety, and has the identity and strength and meets the quality and 
purity characteristics that it purports or is represented to possess 
(see 21 CFR 210.1(a)). The potential quality and safety concerns raised 
by HMEs would typically be evaluated as part of the premarket approval 
process, based on the assessment of a broader range of drug development 
data including certain safety, clinical, and bioavailability or 
bioequivalence information as appropriate. Since compounded drug 
products that meet the conditions of sections 503A and 503B are exempt 
from premarket approval requirements, compounded HMEs would not be 
subject to such evaluation based on a broader range of drug development 
data. Therefore, compliance with CGMP standards, alone, is unlikely to 
provide sufficient assurance that compounded HMEs can deliver product 
of intended characteristics with reliable quality and consistent 
performance. However, FDA is soliciting comments about whether this 
entry should be added to only the

[[Page 19786]]

503A DDC List, or only the 503B DDC List.

VI. Proposed Effective Date

    The Agency proposes that any final rule based on this proposal 
become effective 30 days after the date of publication of the final 
rule in the Federal Register.

VII. Preliminary Economic Analysis of Impacts

    We have examined the impacts of the proposed rule under Executive 
Order 12866, Executive Order 13563, Executive Order 14094, the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866, 
13563, and 14094 direct us to assess all benefits, costs, and transfers 
of available regulatory alternatives and, when regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). Rules are 
``significant'' under Executive Order 12866 Section 3(f)(1) (as amended 
by Executive Order 14094) if they ``have an annual effect on the 
economy of $200 million or more (adjusted every 3 years by the 
Administrator of the Office of Information and Regulatory Affairs 
(OIRA) for changes in gross domestic product); or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, territorial, or tribal governments or communities.'' OIRA has 
determined that this proposed rule is not a significant regulatory 
action under Executive Order 12866 Section 3(f)(1).
    The Regulatory Flexibility Act requires us to analyze regulatory 
options that would minimize any significant impact of a rule on small 
entities. Because we expect that the proposed rule would have a small 
impact, if any, on small entities, we propose to certify that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities.
    The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires 
us to prepare a written statement, which includes an assessment of 
anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The 2022 threshold after adjustment for 
inflation is $177 million, using the 2022 Implicit Price Deflator for 
the Gross Domestic Product. This proposed rule would not result in an 
expenditure in any year that meets or exceeds this amount.
    We evaluated three categories of drug products for this proposed 
rule. We are proposing to place all three of these categories of drug 
products on the DDC Lists for sections 503A and 503B of the FD&C Act. 
We expect that this proposed rule may create benefits for compounders 
by reducing regulatory uncertainty. Currently, we are not aware of any 
marketing of compounded drugs in the three proposed categories of drug 
products for human use. Therefore, we expect that the proposed rule 
would only create administrative costs for compounders to read and 
understand the rule. We seek comments on these assumptions.
    In table 1, we summarize the impacts of the proposed rule. The 
present value of the costs of the proposed rule would equal $4.22 
million at a 7 percent discount rate and $4.22 million at a 3 percent 
discount rate. The proposed rule would result in annualized costs of 
$0.56 million at a 7 percent discount rate, or $0.48 million at a 3 
percent discount rate.

                                  Table 1--Summary of Benefits, Costs, and Distributional Effects of the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Units
                                                                                                        ------------------------------------
                              Category                                 Primary       Low        High                               Period       Notes
                                                                      estimate    estimate    estimate      Year      Discount     covered
                                                                                                           dollars    rate (%)     (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized ($m/year).................................  ..........  ..........  ..........  ..........  ..........  ..........
                                                                     ..........  ..........  ..........  ..........  ..........  ..........
    Annualized Quantified..........................................  ..........  ..........  ..........  ..........  ..........  ..........
                                                                    ------------------------------------------------------------------------------------
    Qualitative....................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
    Annualized Monetized ($m/year).................................       $0.56       $0.51       $0.63        2021           7          10
                                                                           0.48        0.43        0.54        2021           3          10
    Annualized Quantified..........................................  ..........  ..........  ..........  ..........  ..........  ..........
                                                                    ------------------------------------------------------------------------------------
    Qualitative....................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers:
    Federal Annualized Monetized ($m/year).........................  ..........  ..........  ..........  ..........  ..........  ..........
                                                                     ..........  ..........  ..........  ..........  ..........  ..........
                                                                    ------------------------------------------------------------------------------------
                                                                     From:
                                                                     To:
                                                                    ------------------------------------------------------------------------------------
    Other Annualized Monetized ($m/year)...........................  ..........  ..........  ..........  ..........  ..........  ..........
                                                                     ..........  ..........  ..........  ..........  ..........  ..........
                                                                    ------------------------------------------------------------------------------------
                                                                     From:
                                                                     To:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects:
    State, Local, or Tribal Government: None.
    Small Business: None.
    Wages: None.
    Growth: None.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19787]]

    We have developed a comprehensive Preliminary Economic Analysis of 
Impacts that assesses the impacts of the proposed rule. The full 
preliminary analysis of economic impacts is available in the docket for 
this proposed rule (Ref. 11) and at https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations.

VIII. Analysis of Environmental Impact

    We have determined under 21 CFR 25.30(h) that this action is of a 
type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

IX. Paperwork Reduction Act of 1995

    FDA tentatively concludes that this proposed rule contains no 
collection of information as defined by the Paperwork Reduction Act of 
1995.

X. Federalism

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. We have determined that 
this proposed rule does not contain policies that have substantial 
direct effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Accordingly, 
we conclude that the rule does not contain policies that have 
federalism implications as defined in the Executive Order and, 
consequently, a federalism summary impact statement is not required.

XI. Consultation and Coordination With Indian Tribal Governments

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13175. We have tentatively 
determined that the rule does not contain policies that would have a 
substantial direct effect on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. The Agency solicits comments from tribal 
officials on any potential impact on Indian Tribes from this proposed 
action.

XII. References

    The following references are on display at the Dockets Management 
Staff (see ADDRESSES) and are available for viewing by interested 
persons between 9 a.m. and 4 p.m., Monday through Friday; they are also 
available electronically at https://www.regulations.gov. FDA has 
verified the website addresses, as of the date this document publishes 
in the Federal Register, but websites are subject to change over time.

1. FDA, Transcript of the June 18, 2015, Meeting of the Pharmacy 
Compounding Advisory Committee (available at https://wayback.archive-it.org/7993/20170403224128/https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/PharmacyCompoundingAdvisoryCommittee/UCM458514.pdf), accessed 
January 10, 2023.
2. FDA, Transcript of the March 9, 2016, Meeting of the Pharmacy 
Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/04-03-2022T19:30/https://www.fda.gov/media/98783/download), accessed January 10, 2023.
3. FDA, Transcript of the November 3, 2016, Meeting of the Pharmacy 
Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/04-03-2022T19:30/https://www.fda.gov/media/105599/download), accessed January 10, 2023.
4. FDA, Transcript of the May 9, 2017, Meeting of the Pharmacy 
Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/04-03-2022T19:30/https://www.fda.gov/media/106182/download), accessed January 10, 2023.
5. FDA, Transcript of the November 21, 2017, Meeting of the Pharmacy 
Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/04-03-2022T19:30/https://www.fda.gov/media/112399/download), accessed January 10, 2023.
6. FDA, Briefing Information for the June 17-18, 2015, Meeting of 
the Pharmacy Compounding Advisory Committee (available at https://wayback.archive-it.org/7993/20170404155225/https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/PharmacyCompoundingAdvisoryCommittee/UCM449535.pdf), accessed 
January 10, 2023.
7. FDA, Briefing Information for the March 8-9, 2016, Meeting of the 
Pharmacy Compounding Advisory Committee (available at https://public4.pagefreezer.com/browse/FDA/01-03-2022T00:42/https://www.fda.gov/advisory-committees/pharmacy-compounding-advisory-committee/briefing-information-march-8-9-2016-meeting-pharmacy-compounding-advisory-committee-pcac), accessed January 10, 2023.
8. FDA, Briefing Information for the November 3, 2016, Meeting of 
the Pharmacy Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/01-03-2022T00:42/https://www.fda.gov/media/100283/download), accessed January 10, 2023.
9. FDA, Briefing Information for the May 8-9, 2017, Meeting of the 
Pharmacy Compounding Advisory Committee (available at https://public4.pagefreezer.com/content/FDA/01-03-2022T00:42/https://www.fda.govmedia/104134/download), accessed January 10, 2023.
10. FDA, Briefing Information for the November 20-21, 2017, Meeting 
of the Pharmacy Compounding Advisory Committee (available at https://public4.pagefreezer.com/browse/FDA/01-03-2022T00:42/https://www.fda.gov/advisory-committees/pharmacy-compounding-advisory-committee/briefing-information-november-20-21-2017-meeting-pharmacy-compounding-advisory-committee-pcac), accessed January 10, 2023.
11. FDA, Preliminary Regulatory Impact Analysis, ``Drug Products 
That Present Demonstrable Difficulties for Compounding Under Section 
503A or 503B of the Federal Food, Drug, and Cosmetic Act '' 
(available at https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations).

List of Subjects in 21 CFR Part 216

    Drugs, Prescription drugs.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, we propose 
that 21 CFR part 216 be amended as follows:

PART 216--HUMAN DRUG COMPOUNDING

0
1. The authority citation for part 216 is revised to read as follows:

    Authority:  21 U.S.C. 351, 352, 353a, 353b, 355, and 371.

0
2. Add Sec.  216.25 to subpart B to read as follows:


Sec.  216.25  Drug products or categories of drug products that present 
demonstrable difficulties for compounding under section 503A or 503B of 
the Federal Food, Drug, and Cosmetic Act.

    (a) FDA will use the following criteria in evaluating drug products 
or categories of drug products considered for inclusion on the lists 
set forth in paragraphs (b) and (c) of this section:
    (1) The complexity of the drug product or category of drug 
products' formulation;
    (2) The complexity of the drug product or category of drug 
products' drug delivery mechanism;
    (3) The complexity of the drug product or category of drug 
products' dosage form;
    (4) The complexity of achieving or assessing bioavailability of the 
drug product or category of drug products;
    (5) The complexity of the drug product or category of drug 
products' compounding process; and

[[Page 19788]]

    (6) The complexity of physicochemical or analytical testing of the 
drug product or category of drug products.
    (b) After considering the criteria in paragraph (a) of this section 
and taking into account risks and benefits to patients, FDA has 
determined that the following drug products or categories of drug 
products present demonstrable difficulties for compounding that 
reasonably demonstrate an adverse effect on the safety or effectiveness 
of that drug product and therefore cannot be compounded under section 
503A of the Federal Food, Drug, and Cosmetic Act:
    (1) Drug products produced using hot melt extrusion.
    (2) Liposome drug products.
    (3) Oral solid modified-release drug products that employ coated 
systems.
    (c) After considering the criteria in paragraph (a) of this section 
and taking into account risks and benefits to patients, FDA has 
determined that the following drug products or categories of drug 
products present demonstrable difficulties for compounding that are 
reasonably likely to lead to an adverse effect on the safety or 
effectiveness of the drug or category of drugs, and therefore cannot be 
compounded under section 503B of the Federal Food, Drug, and Cosmetic 
Act:
    (1) Drug products produced using hot melt extrusion.
    (2) Liposome drug products.
    (3) Oral solid modified-release drug products that employ coated 
systems.

    Dated: March 12, 2024.
Robert M. Califf,
Commissioner of Food and Drugs.
[FR Doc. 2024-05801 Filed 3-19-24; 8:45 am]
BILLING CODE 4164-01-P