Clarifying Protocols – Answers to Common FAQs About Veterinary 503B Dispensing

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Confused about 503B drug dispensing regulations and their impact on your practice?

You're not alone—our team breaks it down for you.

503B rules and regulations for the veterinary industry are muddled, creating confusion for veterinary professionals. Because 503B facilities are relatively new compared to 503As, there is still a lack of state-by-state legislation surrounding 503Bs. Veterinarians understandably have questions regarding the protocols surrounding office use and dispensing of 503B products.

To provide insight and offer understanding around 503B dispensing regulations, our team of experts  answers some of the top FAQs surrounding 503B outsourcing and how it applies to your veterinary practice:

Q: Does the “prohibition on wholesaling” section of the Drug Quality and Security Act (DQSA) provide an exception that allows a veterinarian to dispense an outsourcing facility product to a patient?

A: Yes. The section clearly allows a veterinarian to dispense 503B medications pursuant to a prescription. This mirrors the typical way 503B products are dispensed to patients in human hospitals.

The relevant section of the statute that created outsourcing facilities, 21 USCS § 353b, reads as follows:

(8) Prohibition on wholesaling. The drug will not be sold or transferred by an entity other than the outsourcing facility that compounded such drug. This paragraph does not prohibit administration of a drug in a health care setting or dispensing a drug pursuant to a prescription executed in accordance with section 503(b)(1) [21 USCS § 353(b)(1)] (emphasis added). 

The bold exception above clearly allows a veterinarian to dispense an outsourcing facility product to a patient provided that the veterinarian writes a prescription for the patient in the patient’s chart. This prescription writing process is the same way that practitioners who treat human patients dispense 503B drugs to patients in hospitals. The human hospital 503A pharmacy purchases the outsourcing facility product, the practitioner writes a prescription for the product, which is processed at the hospital’s pharmacy, and the product is then dispensed by the pharmacy to the patient’s floor.

While this process is clearly allowed by federal law, state law, if it addresses this situation and is more restrictive, would need to be followed instead. Because outsourcing facilities are relatively new, most states have not addressed this situation in their laws or regulations. States may defer to federal law if a situation is not addressed by state law.  

Q: What does the prohibition on the wholesaling section of Drug Quality and Security Act (DQSA) Section 503B seek to prohibit?

A: The section prohibits a wholesaler from distributing, rather than dispensing, outsourcing facility products. The definition of a wholesaler in most states is ‘an entity that distributes a product to another entity other than the ultimate consumer.’ Without a prohibition on wholesaling, an outsourcing facility could sell to a wholesaler who could sell to another wholesaler who could sell to another wholesaler, and so on. This would make any potential recall of outsourcing facility products very difficult to conduct. That is why federal law limits an outsourcing facility product to one sale before the drug is administered, or dispensed pursuant to a prescription, to the end consumer.

Q: May a 503B outsourcing facility legally manufacture drugs for animal use?

A: Yes. The FDA has primary oversight of outsourcing facilities and has never indicated that an outsourcing facility may not produce drugs for animal use. The states and their agencies may also regulate outsourcing facilities to varying degrees and no state agency has ever indicated an outsourcing facility product cannot be manufactured for animal health. The following facts are all indicative that FDA and the state agencies that regulate outsourcing facilities allow outsourcing facilities to manufacture drugs for animal health:

  • In their 2017 Outsourcing Facility Information brochure, the FDA specifically noted about outsourcing facilities that, Many [outsourcing facilities] compound both sterile and non-sterile drugs for both humans and animals. This language definitively states that the FDA is aware that outsourcing facilities manufacture animal drugs. This was repeated during the FDA’s Compounding Center of Excellence webinar in September 2020 by Elizabeth Miller, the assistant commissioner at the FDA’s Office of Regulatory Affairs. The brochure is accessible on the FDA’s website at:  
  • The FDA has held listening sessions with outsourcing facilities and other stakeholders to gather information and answer questions. When the FDA was asked during one of these listening sessions whether outsourcing facilities should report animal use only drugs, they responded that outsourcing facilities are encouraged to report the animal use drugs they manufacture.
  • Outsourcing facilities are required to report the products they have manufactured over the previous 6 months to the FDA twice per year. Many drugs that are exclusively used for animal health have been reported to the FDA; cisapride is a good example. Veterinarians may access the list of drugs manufactured by outsourcing facilities, which is searchable by active ingredient and by outsourcing facility name at: 
  • FDA guidance requires a facility to produce one sterile human-use product to register as an outsourcing facility. The guidance goes on to require that any other products the facility produces, once the facility is registered, whether those products are non-sterile, animal, human, dietary supplements, or anything else, must meet CGMP standards. The guidance can be accessed at:
  • FDA has primary oversight of outsourcing facilities, but state boards of pharmacy and state veterinary associations have also issued rules and regulations that apply to outsourcing facilities. The states of Michigan and Connecticut recognize that companion animal patients are deserving of office-use medications that possess the same assurances of safety and quality required for human, office-use medications. Both states have issued rules that require veterinarians to obtain their office-use drugs from outsourcing facilities.
Q: Why hasn’t the FDA issued a guidance document that specifically addresses outsourcing facilities manufacturing medication for animal use?

A: The FDA did issue guidance in 2015 that addressed outsourcing facilities manufacturing animal drugs from bulk substances. However, following the issuance of the guidance, Congress reminded the FDA that the DQSA was enacted to address human health, and therefore, any money FDA spends on referencing the DQSA should be spent on human health. Taking note of this, FDA redrafted the guidance without referencing the DQSA. The FDA does not include outsourcing facilities in the redrafted guidance because the DQSA created outsourcing facilities.

Q: Why does a product manufactured by an outsourcing facility contain the words “this is a compounded drug” on its label?

The federal statute that created outsourcing facilities requires that an outsourcing facility include the statement “this is a compounded drug” on its product labels. This creates confusion among purchasers because traditional 503A pharmacies compound preparations in accordance with USP standards while outsourcing manufacture drugs abide by CGMP standards. Although the word compound means simply, “to put together into a whole; [to] combine”, in the case of producing drugs, labeling both a USP preparation and a CGMP product a “compound” creates a dangerous false equivalency. USP compounded drugs are designed to be safe for dispensing to a single patient, while CGMP drugs are safe for widespread dispensing typical of office-use. FDA has been made aware of this danger and is currently considering allowing outsourcing facilities to use an alternate labeling statement. Among the alternate statements being considered are “manufactured at a 503B outsourcing facility”, “produced at a registered outsourcing facility” and “produced at a CGMP facility.” Each of these is more informative for the consumer and avoids confusion with compounded 503A preparations.

For more help understanding 503B guidance, connect with our team of experts:

Note: the information may vary from state to state, and checking with your state board website is another useful source.

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