IG Finds Lack of Oversight in Hospital Use of Drug Compounders

By Walter F. Roche Jr.

More than two years after a nationwide outbreak of deadly fungal meningitis caused by a Massachusetts drug compounding firm, a federal audit has concluded federal regulators have not yet taken necessary steps to ensure adequate regulation of the industry.
In a 23-page report issued this week, the Inspector General for the Department of Health and Human Services found that surveyors, in most cases, don't even check to determine if drug compounding firms serving hospitals have registered with the U.S. Food and Drug Administration.
The report concludes that despite the outbreak which killed more than 64 patients across the country, agencies conducting hospital surveys have no plans to tight.en oversight. (A recent court filing states that the number of deaths has increased to 76)
"Despite outsourced compound injections' being responsible for the 2012 fungal meningitis outbreak, none of the oversight entities plan to change how their oversight addresses hospital contracts with standalone compounding pharmacies," the report states.
The 2012 outbreak has been blamed on the now defunct New England Compounding Center, a for-profit privately owned firm which supplied drugs that were supposed to be sterile to hundreds of hospitals and clinics from Massachusetts to California. Methylprednisolone acetate shipped by NECC was laden with fungus, sickening more than 750 patients. (778, according to a recent court filing)
The IG report focuses on those hospitals, some 80 per cent of those participating in the Medicare program, which contract with private firms to supply compounded drugs.
Officials of the Center for Medicare and Medicaid Services (CMS) did not dispute the findings and concurred with two recommended changes.
The report found that only one of five agencies conducting surveys for CMS reported that it always reviewed hospital contracts with so-called standalone pharmacies.
The report noted that such contract reviews could include determinations of whether the agreements included safety provisions such as appropriate recall, storage and testing requirements.
In another apparent lapse, the report found that surveyors for three of five review agencies did not check to determine whether the standalone pharmacies utilized by hospitals were registered with the FDA under the provisions of a new federal law enacted in the wake of the fungal meningitis outbreak.
 "Because most hospitals do not inspect the standalone pharmacies with which they contract, a satisfactory FDA inspection might be the only indicator of the conditions at a standalone pharmacy."
Other issues raised in the report include the training of surveyors in compounding pharmacy standards and in their ability to analyze supporting documents on hospital practices.
The IG recommended increased training for hospital surveyors and changing Medicare agreements with hospitals to cover standards for contracting with standalone compounding pharmacies.

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