Outsourcing Facilities Must Be Registered as Pharmacies in California to Compound or Dispense Within or Into California

We understand that facilities currently or previously licensed as pharmacies have been informed or have come to believe that federal licensure as an “outsourcing facility” under Section 503B (21 U.S.C. § 353b) of the federal Food Drug and Cosmetic Act (FDCA) to perform sterile compounding may exempt or except them from the requirement of licensure with the California State Board of Pharmacy that is otherwise a prerequisite to pharmacy activities including compounding or dispensing dangerous drugs within or into California.

This is not correct.  As has been made clear at previous quarterly Board meetings, California statutory requirements that any person or entity wishing to compound or dispense dangerous drugs within or into California must be licensed in California as a (resident or non-resident) pharmacy remain in effect.  (See Calif. Bus. & Prof. Code, §§ 4037, 4110, 4112.)

Federal law in this area does not interfere with state licensure requirements.  Title I (the Compounding Quality Act) of the Drug Quality and Security Act (DQSA), signed into law November 27, 2013, sets up Section 503B licensure for “outsourcing facilities” and revives Section 503A (21 U.S.C. § 353a) exemptions for pharmacy compounding from certain federal requirements and prohibitions.  The general impact of these provisions is to move compounds, which had previously been subject to federal requirements applicable to manufactured (finished) drugs, into a new category with separate federal requirements.  Neither the Compounding Quality Act (CQA) nor the provisions it amends contain any language stating or implying any preemption of existing state licensure requirements with regard to compounding facilities (previously and currently) licensed as pharmacies.  Nor is there any language in Section 503B or the CQA that would conflict with such state licensure requirements. 

Indeed, the structure and language of the CQA presumes the continuing existence of (state) pharmacy licensure requirements.  First, Section 503A clearly contemplates that compounding will continue to take place in state-licensed pharmacies.  It would hardly be necessary to have continuing exemptions from federal requirements and prohibitions for pharmacy compounding if Section 503B rendered such licensure obsolete.  Second, Section 503B itself contemplates continuing pharmacy licensure of at least some outsourcing facilities.  Subdivision (d)(4)(B) thereof states that, for purposes of federal registration, an outsourcing facility “is not required to be a licensed pharmacy.”  (21 U.S.C. § 353b(d)(4)(B).)  In other words, state licensure is not a prerequisite for federal registration, but nor does state licensure disqualify a facility from federal registration as an outsourcing facility.  And nowhere does Section 503B state or imply the converse:  that federal registration as an outsourcing facility substitutes for or exempts a facility from state licensure as a pharmacy.  In sum, Section 503B sets up the prerequisites and requirements for a separate, federal, registration, that entitles the holder to exemptions from federal requirements and prohibitions that would otherwise apply to compounded sterile medications.  It has no impact on separate, existing, state pharmacy licensure requirements.

Absent federal preemption, California law is unchanged. To compound or dispense drugs within or into California, a facility must be licensed in California as a (resident or non-resident) pharmacy

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