Clinical Contractor Pharmacies

by Expert Advice

Clinical Contractor Pharmacies

by Expert Advice

by Expert Advice

There is an increased scrutiny on clinical contractor pharmacies.

Our previous newsletters detail sterile compounding and the more rigorous compliance evaluation with USP Chapter 797.

Again this month in the “Consistent Interpretation” column, details the leadership contracting standards with clinical contractor pharmacies. Yet again, it requires hospitals to evaluate clinical contractor pharmacies. And, raises the bar for hospital oversight of these contractors.

In fact, you may contract with two types of pharmacies:

  1. Those providing services under a Federal definition as a 503A pharmacy
  2. Those providing services as a 503B pharmacy.

These two terms define pharmacies licensed by the state boards of pharmacies.

Clinical Contractor Pharmacies

503A provides patient specific compounding. And 503B, is both licensed by the state board and is subject to the FDA’s good manufacturing principles. This also includes an FDA inspection process conducted on a frequency based risk assessment.

In the past, the CMS provided the clearest guidance on the evaluation required for these contracted services. SC memo 16-01 on Pharmaceutical Services detailed this information for hospitals. The memo described the rigor of the FDA oversight process for 503B pharmacies. We interpreted this guideline to mean that the hospital evaluated the 503A pharmacy quality. And then, the FDA evaluated the 503B registered outsourcing pharmacy.

However, we find this is not the case. In the TJC Consistent Interpretation column this month, they state the following:

  • The hospital must evaluate the contractual use of either a 503A and 503B pharmacy.
  • The contract with the 503A pharmacy must stipulate that the vendor follows USP chapters 797 and 795.

TJC 503B Vendor Advice

The TJC describes their advice on 503B vendors in the discussion of EP’s 5 and 6 for LD.04.03.09. In the discussion of EP 5 (the communicating expectations EP) TJC states that:

  • “If the organization utilizes a 503B pharmacy, quality metrics should be submitted to the compounding pharmacy in writing to ensure appropriate compliance with sterile compounding practices.”

Whereas additional TJC advice for EP 5 stated that if the hospital uses a 503A pharmacy:

  • “It should ensure compliance by requesting in writing the receipt and ongoing testing and certification performed in the compounding pharmacy to include appropriate testing of the engineering controls and taking appropriate action when testing components do not meet minimum requirements.”

In the discussion of EP 6, (leaders monitor compliance with expectations) TJC states:

  • If the hospital uses a 503B pharmacy “quality metrics should be monitored to ensure appropriate compliance with sterile compounding practices.”

In reality, this seems like a new and expanded requirement. And, it is redundant with steps the FDA already takes with 503B pharmacies.

TJC 503A Vendor Advice

Additionally, TJC states that if the hospital utilizes a 503A pharmacy:

  • “It should ensure compliance with USP chapter 797 and have documentation of receiving qualitative data and evaluating the results.”

What’s Next?

We assume by now most readers are somewhat confused by all this and wondering, “what do I have to do now?” We recommend three specific actions:

  1. Look at your list of clinical contractors. Ask your pharmacy leadership if they use any offsite compounders registered as either 503A or 503B vendors. If you use such compounders, then add them to your list of clinical contractors. It is likely that you use 503B vendors who were not included in your list. That’s because the CMS treated them more like a drug manufacturer than an offsite pharmacy.
  2. Look at your written contracts for the services with both 503A and 503B vendors. Verify that those with 503A vendors state they will be compliant with USP chapters 797 and 795. In addition, require the vendor to submit evidence of the evaluation of the engineering controls for the compounding environment. And, you find deficiencies, include the actions taken. If you contract with a 503B vendor, you must include the quality metrics you define in the contract.
  3. Verify you have an evaluation of the contractor’s performance during the prior year. Make sure senior leaders and medical staff review and approve the performance evaluation.

Lastly, this column expands the potential applicability of the contracting standards beyond existing CMS and TJC requirements and has some redundancy with FDA responsibilities for the 503 these expanded requirements. Again, stay tuned. Just subscribe to the Patton Healthcare Consulting monthly email newsletter and regular blog posts.

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