Policies,Clinical,UWHC Clinical,Department Specific,Pharmacy,Purchasing and Inventory

Outsourcing of Compounded Drug Products (9.7)

Outsourcing of Compounded Drug Products (9.7) - Policies, Clinical, UWHC Clinical, Department Specific, Pharmacy, Purchasing and Inventory



Effective Date:

February 2005
⌧Pharmacy Policy Manual
Chapter: Purchasing - Inventory
Operations Procedure Manual

Policy #: 9.7

⌧Revision 2/13
Page 1
of 13
Title: Outsourcing of Compounded Drug

I. PURPOSE: To establish guidelines for the purchase of compounded drug products from outside

A. Any compounded product or any product that falls under the United States Food and Drug
Administration (FDA) Good Manufacturing Practices (GMP) standards must be approved for use
by the UW Hospital and Clinics (UWHC) Pharmacy and Therapeutics Committee or Institutional
Review Board prior to purchase by the UWHC Pharmacy Department.
B. Definitions
1. Compounded drug: A product containing commercially available ingredients that have
been compounded to prepare a new drug product.

C. USP High Risk Product: A compounded drug product that is defined by the United States
Pharmacopoeia (USP) Chapter 797 as part of the high risk category. Generally, these products
incorporate nonsterile ingredients or use nonsterile device prior to terminal sterilization. The
UWHC Pharmacy Department will not purchase any item for general (non-patient specific) use
from any source unless the following conditions are met:
1. The manufacturer of the product is registered by the FDA as a manufacturer and
2. The manufacturer of the product complies with the FDA Good Manufacturing Practice
3. The manufacturer of the product is licensed by the Wisconsin Pharmacy Examining
Board as a distributor and may ship product to the state of Wisconsin.

D. The UWHC Pharmacy Department may purchase a USP high risk product from a compounding
pharmacy under the following conditions only if the risks and benefits of use at UWHC have
been reviewed and approved by the UWHC Pharmacy and Therapeutics Committee or
Institutional Review Board.
1. The USP high risk product is obtained pursuant to a valid prescription or order.
2. The USP high risk product is purchased for anticipatory need based upon current
utilization patterns at UWHC.
3. The USP high risk product is purchased to replace an FDA approved product that is not
commercially available due to a drug shortage or product recall until the product become
available again. High risk products can also be purchased to obtain products which are
not commercially available but which have an established therapeutic purpose for which
the benefit of use exceeds the risk. Each product must be temporarily approved for
purchase by UWHC Pharmacy and Therapeutics Committee or Institutional Review


Effective Date:

February 2005
⌧Pharmacy Policy Manual
Chapter: Purchasing - Inventory
Operations Procedure Manual

Policy #: 9.7

⌧Revision 2/13
Page 2
of 13
Title: Outsourcing of Compounded Drug

E. The UWHC Drug Product Selection and Supply (DPSS) Committee will evaluate and select an
acceptable compounding pharmacy for each high risk product that is considered for purchase
based upon the following process:
1. The UWHC Drug Product Selection and Supply (DPSS) Committee will maintain request
for proposal (RFP) criteria upon which the selection of an acceptable compounding
pharmacy will be made for each high risk product that is considered for purchase (see
Attachment A). The DPSS Committee evaluates compounding pharmacies for contract
based upon their RFP criteria responses.
2. UWHC Pharmacist representatives will visit the selected compounding pharmacies as
identified by RFP criteria. The site visits will be completed by a minimum of two UWHC
pharmacists with expertise in sterile product preparation and operations.
3. Every high risk product (along with documentation of DPSS approval of associated
manufacturing compounding pharmacy) will be reviewed and approved by the Pharmacy
and Therapeutics (P&T) Committee or Institutional Review Board on a product-by-
product basis.
4. The UWHC DPSS Committee will review the compounding pharmacy’s standing with
the FDA and the appropriate state board of pharmacy as well as relevant quality
assurance reports annually and as needed in order to approve continued use of the
pharmacy for purchase of the approved products.
5. If any contracted compounding pharmacy at any time does not meet expected
performance criteria as stated in the RFP response or contract, all purchasing will be
suspended until adequate corrective action is taken as determined by UWHC DPSS
and/or P&T Committee. If corrective action is found to be inadequate the contract will
terminate immediately.
6. The UWHC Pharmacy Department will not routinely compound high-risk products.
a. Exceptions to this will be made only at the discretion of the Director of Pharmacy
or designee.
F. No other department of the UW Hospital and Clinics may purchase a compounded drug product
from any outside source. All requests for drug products must be routed to the Department of

Approved By: ____________________________
Director of Pharmacy Services


9.7a 1
Request for Proposal (RFP) for Contracted Compounding Pharmacy Services
The University of Wisconsin Hospital and Clinics (UWHC) is licensed for 566 beds and
ranks among the finest academic medical centers in the United States.
The UWHC Pharmacy and Therapeutics Committee has developed a formal process to
identify which products will (and which products will not) be prepared by the compounding
pharmacy, based on the therapeutic needs of patients and inherent risks associated with using
a compounding pharmacy (see attached policy 9.7).
Attachment A is a listing of current products for which compounded product will be prepared
by the compounding pharmacy. It is estimated that between ****Volume**** products per
year will be ordered from compounding pharmacy.
UWHC reserves the right to cancel this RFP and solicitation for compounding services at any
time and may reject any and all proposals. UWHC is inviting vendors to respond to this RFP
to provide compounded pharmaceuticals for UWHC patients. Interested vendors should
complete one copy of the attached RFP document including the submission of requested
documents to:
600 Highland Avenue
Madison, WI 53792


All requests must be received by ****Date****and be signed by a representative of the
compounding pharmacy who is authorized to initiate a contract.
A written contract with the selected pharmacy is expected to be signed by
*****Date*****and compounding services are expected to begin *****Date*****.
Essential Terms and Conditions
Orders for compounded products for UWHC patients will be provided to a contracted
compounding pharmacy on medication order/prescription form via FAX. The content and
format of the order/prescription form will be developed jointly by compounding pharmacy
and UWHC.
Orders placed will be fulfilled (e.g., from receipt of the medication order/prescription by the
compounding pharmacy to delivery to the contracting pharmacy) within forty-eight hours.
Deviations from the agreed-upon schedule for unusual circumstances must be communicated

9.7a 2
to UWHC within twenty-four hours of order placement and shall only be for situations
beyond the control of the contracted compounding pharmacy (e.g., raw product availability
problems, unique end-product testing requirements, compounded product stability
characteristics, etc…).
The compounding pharmacy will supply a detailed invoice to the UWHC for each order.
Payment will be made within thirty (30) days of receipt of invoice by the UWHC Accounts
Payable (A/P) department. Resolution of disputed invoices will be handled by the UWHC
A/P department in coordination with UWHC Pharmacy Department and contracted
compounding pharmacy.
Contracted compounding pharmacy will comply with UWHC HIPAA business associate
UWHC will have the right to inspect the premises of the compounding facility at any time,
including the right to inspect quality control reports.
Liability for errors made by the contracted compounding pharmacy will be assumed by the
contracted compounding pharmacy through an indemnity agreement and maintaining
insurance with UWHC as a named insured. The contracted compounding pharmacy will not
require UWHC to provide indemnity or insurance.
Contracted compounding pharmacy will have established product recall procedures (to the
patient level) should a product need to be recalled by the compounding pharmacy.
On an annual basis and as changed or renewed or as requested by UWHC, documentation of
regulatory and/or accreditation compliance will be provided to the UWHC pharmacy
department related to compounding processes and compounded product considerations
described in Sections I-VII below.
The contracted compounding pharmacy will agree to the UWHC Standard Terms and
The compounding pharmacy will provide required documentation and affirm
compliance with all regulatory requirements listed in section I-VII below.

9.7a 3
I. Please answer the following questions regarding the characteristics of the compounding
a. When did the pharmacy begin offering sterile compounding services?
1. What is the pharmacy’s regular business hours and/or hours of operation?
2. Please provide the location of the compounding pharmacy’s offices and other facilities that
would provide compounding services to UWHC.
3. What methods are available to contact the pharmacy at times outside of regular business
4. Please provide a written copy of the pharmacy’s mission, vision, and values.
5. Please provide documentation of the results of all accreditation or regulatory surveys
conducted of the compounding pharmacy’s sites and include copy(ies) of all regulatory
6. What healthcare organizations and/or pharmacies have been served by the pharmacy, and
what type of sterile compounded products have been provided?
a. Please include the total number of clients served since opening and the current
number of clients served.
b. Please include a list of all reference accounts served within the past two years and
the reasons for all, if any, terminations of services.
c. Please provide the names, addresses, and telephone numbers of current clients of
similar sizes or receiving similar types of compounded preparations, with written
references and copies of annual performance improvement reports.
7. Provide a detailed price listing (include all product and freight costs) and the methodology for
the billing calculation.
a. Please provide a billing schedule and a copy of a sample bill for each of the
preparations compounded by the compounding pharmacy.
b. Please include the cost of emergency preparation and delivery of products.
8. Please describe the standard process for requesting new preparations from the compounding
9. Please provide the names, addresses, telephone numbers, and resume/background information
on individuals who will provide the outsourced services.

9.7a 4

a. Please provide notarized statements for all pharmacists and pharmacy technicians
stating they have never been convicted of a drug-related misdemeanor or felony
and proof that it is up-to-date, on file, and available for review.
10. Evidence of licensure of pharmacists employed at the compounding pharmacy and verification
that they are in good standing on file and available for review.
11. Evidence of registration of pharmacy technicians employed and verification that they are in
good standing on file and available for review.
II. Regulatory Compliance
The Pharmacy must be able to supply UWHC with all documentation confirming the
requirements listed below.
1. The compounding pharmacy is licensed in all states in which the pharmacy has locations and
conducts compounding and the compounding pharmacy is licensed to ship products to the state
of Wisconsin.*
2. If the pharmacy compounds a significant amount of non-patient specific preparations (>5% of
its volume) the pharmacy is registered by the FDA as a drug manufacturer and able to produce
supporting documentation.*
3. If the pharmacy compounds non-patient specific controlled substance preparation the
pharmacy is registered by the DEA as a drug manufacturer and able to produce supporting
4. The pharmacy carries at least the minimum required product liability insurance required by
a. Will UWHC be covered by this insurance in the event that there is no written
contract with the pharmacy?*
5. Please provide proof of professional liability, general liability, and workers’ compensation
insurance coverage (including the names, address, and telephone number of the insurance
6. The pharmacy is able to produce licensure documents as proof that all pharmacists are licensed
in all states he/she practices.*
7. The pharmacy is able to produce licensure documents as proof of pharmacy technician
licensure in all states of practice, if required by respective practicing states.*
8. The pharmacy is compliant with or exceeds state requirements for pharmacist-to-technician
ratio set forth by the state in which compounding occurs.*

9.7a 5
9. Does the pharmacy compound FDA-approved products that are commercially available with
non-sterile powders or other components?*
a. In the event that a product is not commercially available, does the pharmacy use
USP grade bulk ingredients that were obtained from a GMP compliant source? If
yes, please provide a certificate of analysis and potency testing of all bulk
ingredients used.*
III. Current Licensure and Registration
1. What percentage of the outsourcer’s technical staff is certified by an authoritative board
such as the Pharmacy Technician Certification Board?
2. Does the pharmacy provide pedigree information that confirms that they do not purchase
product outside of traditional drug distribution networks or secondary wholesalers?
3. In the instance that a product component becomes unavailable to the compounding
pharmacy, can a certification of analysis, potency testing and proof that all other
requirements are met for High Risk Level Compounding as set forth by USP <797>.
4. Does the pharmacy meet or exceed ASHP guidelines and standards for compounding
sterile products and for handling of hazardous agents?
5. Does the pharmacy meet or exceed NIOSH guidelines for handling of hazardous agents?
6. Does the pharmacy meet or exceed USP <797> guidelines for compounding sterile
products and for handling of hazardous agents?
7. Is the pharmacy compliant with or exceeding applicable state board of pharmacy rules and
regulations in all states where compounding activities take place?
8. Is the pharmacy compliant with or exceeding applicable CMS and Joint Commission
regulations, rules, and standards?
9. Is the pharmacy compliant with or exceeding applicable DEA regulations?
10. Is the pharmacy compliant with or exceeding applicable State, Federal, and municipal
a. Can the pharmacy ensure that the labeling of the compounded product is in
accordance with State and Federal Law?

9.7a 6

11. Does the pharmacy hold voluntary accreditation or certifications? Please provide
certification documents if applicable.
IV. Reports and Technical Summaries
1. Provide a copy of the following documents:
a. Standard operating procedures manual.
b. Pharmacist training manual.
c. Pharmacy Technician training manual.
2. Provide documentation that demonstrates the pharmacy is classified as a USP <797> high-
risk (Level-3) compounding facility, and provide evidence with documentation that all
processes and testing for this classification are followed.
3. Does the pharmacy have product liability claims filed against it for products compounded
by the pharmacy?
a. If yes, provide a description of the claim(s) filed, the date of the filed claims(s), and
the outcome of the review of the claim(s) filed.
4. Has the pharmacy disclosed any disciplinary/punitive action by any regulatory agency
(FDA warning letters, state board of pharmacy) in the past 36 months?
5. Has the pharmacy ever recalled any of its compounded products?
a. If the pharmacy has ever recalled any of its compounded products, provide the
date(s) of recall, the product(s) recalled, the reason(s) for the recall(s), and
corrective action taken in response to the recall(s).
b. Provide copy of policy for product recalls (to the patient level).
6. Does the pharmacy provide quality control history and quality assurance reports on a
regular basis and upon request (within 72 hours of request) with ability to drill down to
product lot number or prescription compounded and purchased?
a. Provide examples of batch reports for all products being considered for purchase by
UWHC as listed in Attachment A.
7. Demonstrate that USP/NF grade products are used to prepare sterile products.

9.7a 7

a. If the pharmacy uses products that are not USP/NF grade in the preparation of
sterile products, will the compounding pharmacy be able to provide a list of the
non-USP/NF products used, the grade of the products used, and the reason the
USP/NF grade product was not used.
b. If the pharmacy uses products that are not USP/NF grade in the preparation of
sterile products, will the compounding pharmacy be able to provide a certificate of
analysis and potency testing of the bulk ingredient at the time of dispensing.
8. Provide a listing of references available to pharmacists and pharmacy technician involved
in the compounding process.
V. Quality and Patient Safety Measures
Personnel Competency
1. Provide documentation to confirm that staff are qualified to produce sterile compounded
products including proper garbing, hand hygiene, aseptic technique, cleaning and
disinfection procedures prior to compounding actual drug preparations.*
a. Provide a list of required competencies for staff involved in the compounding
process, the frequency of competency reassessment, and methods used to document
successful completion of these competencies.
b. Provide evidence that individuals involved in drug compounding have
demonstrated competency for their specific work assignment.
2. Documentation of staff compliance with gowning, gloving, and glove-tip process
consistent with USP <797> standards.*
3. Provide documentation to confirm the pharmacy tests the aseptic technique of
compounding personnel by conducting media fill tests as recommended by USP <797>
standard in the following areas:*
a. Documents to confirm pharmacists and pharmacy technicians are qualified by use
of media fill test prior to compounding of actual drug preparations.*
b. Documentation of staff requalification using media fill tests including proof of
adherence to USP <797> recommended schedule.*
c. Rate of positive media fill tests during employee requalification.
d. Policy and operating procedure followed in the event of a positive media fill
occurrence including details surrounding investigation to identify root cause,
measure to correct and prevent further positive media fills, and employee

9.7a 8
e. Detailed reports on incidence of positive media fill test results and follow-up retests
after mandatory corrective action has been completed.
4. Proof that media used for media fill testing is certified by manufacturer to be sterile and
guaranteed to promote growth.
Maintenance of Sterility
5. Be able to provide visual description of all products purchased from the compounding
pharmacy for inspection by UWHC Pharmacists upon product receipt.
6. Describe the methodology(ies) used to establish and document evidence-based product
assigned beyond-use dates.
a. Documents to support beyond-use dates of compounded sterile products that
exceed USP <797> recommendations.*
b. Documentation of validated, evidence-based stability and sterility testing for
products with no evidence for extended beyond-use dating.*
c. For validated, evidence-based stability and sterility testing include procedures
followed to evaluate each preparation’s potency at room temperature or refrigerated
temperature as applicable including consideration regarding drug, diluents, and
storage device/container.
d. Provide evidence that the pharmacy follows USP <797> guidelines with respect to
the range of extreme temperature testing while doing product specific stability
testing to determine the impact on the compound (evaporation, precipitation,
degradation, concentration, etc).
e. Proof that the pharmacy follows validated, evidence-base testing procedures for
product specific stability testing (including drug, diluents, and storage
device/container) with respect to chemical characteristics such as pH, particulate
matter, color, sterility, and integrity of container during testing.
f. Please provide stability documents and clinical references as well as any other
materials that are used to determine beyond-use dates.
7. Policies and procedures for sterility testing of compounded product documenting
compliance with USP <797> standards.
a. Describe the method(s) used to validate the sterility of compounded sterile products
produced, the documentation format, and the time period the documentation is

9.7a 9

b. Provide documentation of end-product testing indicating that compounded sterile
products are sterile.
8. Policies and procedures for pyrogen testing of compounded product documenting
compliance with USP <797> standards.
a. Describe the method(s) used for pyrogen testing, the documentation format, and the
time period the documentation is maintained.
b. Provide documentation of end-product testing indicating that compounded sterile
products are pyrogen-free.
9. Describe the method(s) used to sanitize vials and ports to prevent spore growth. Is a
sporicidal agent used?
Environmental Monitoring
10. Documentation of routine surface microbiological and fungal environmental monitoring in
efforts to minimize contamination.*
a. Provide schedule of nonviable and viable particle testing in primary engineering
controls, room air quality, and proof of compliance with USP <797> standards.*
b. Example of process used to investigate out-of-limit findings, identification of root-
cause, and plan for correction and prevention of future occurrence as recommended
in USP <797>.*
11. Documentation of cleaning methods and agents are effective in preventing contamination
of the sterile preparations area.
12. Describe the action and alert limits used by the pharmacy for environmental monitoring.
13. Policy surrounding implementation of new or changed facilities, equipment, processes, or
container types to ensure sterility and reproducibility.*
a. For systems that require validation, does the outsourcer initiate corrective and
preventative actions based upon a formal review process? If yes, please describe.
b. Provide the policies and procedures used by the pharmacy to manage the change
control process during times of preventative maintenance, or equipment/software
upgrade installation.
VI. Medication Administration Safety Features
1. Provide readily accessible information regarding the status of latex, Bis(2-ethylhexyl)
phthalate (DEHP) and preservatives in the compounded sterile preparations.*

9.7a 10
a. Information on latex, DEHP, and preservative products is available 24 hours a day,
7 days a week.
Quality Labeling
2. Provide examples of product labeling to ensure the following are met:
a. Drug name differentiation in the form of TALL MAN lettering for look-alike and
sound-alike drugs are used.
b. Visual cues on the label differentiate drug names and drug concentrations within a
therapeutic class.
c. Labeling provides total drug amount and concentration to ensure administration of
the correct dose.
d. Auxiliary cautionary labeling is present to indicate contraindicated routes of
e. For anesthesia syringes, American Society for Testing and Materials (ASTM) color
coding is used on labeling.
f. Additional risk cues are placed on anesthesia syringe labels to differentiate drugs
within a therapeutic class and/or concentration.
g. Barcodes include national drug code (NDC) when available, lot number, and
expiration date.
h. Label format and barcode placement allows visualization of drug name and
concentration when used in UWHC automated infusion & syringe pumps.
i. All labels are equipped with machine-readable bar codes.
Tamper Evidence
3. Product guarantee from compounding pharmacy as documented by certificate to
accompany each product which attests that the product is sterile according to
professionally established and accepted quality monitoring data ensuring product shelf life
upon delivery.
a. Provide documented processes and procedures including shipping validation
studies to ensure that preparations leaving the site retain their integrity and stability
throughout the entire shipping cycle.
4. Guarantee, as documented in writing, that all compounded products will be delivered in
tamper-resistant packaging, and in containers that will maintain proper storage temperature
during the delivery process until receipted by UWHC pharmacy staff.

9.7a 11
a. Tamper-evidence options for delivery include overwrap, shrink wrap, tamper-
evident foil, and/or tamper-evident caps.
VII. Service Excellence
1. The pharmacy packages products in container types to meet the needs of UWHC (syringes,
minibags, pump-specific cassettes, etc.)*
2. Please provide a plan for business continuity in the event of a natural or man-made disaster
or public health emergency.*
3. Please provide the routine delivery schedule (daily times) and options for non-routine
delivery (later that same day, after hours, weekends, holidays, inclement weather, etc.)
4. Please provide a list of all products the compounding pharmacy cannot provide and the
reasons for its inability to provide them.
5. Please provide information relating to the compounding pharmacy’s financial status and
stability (e.g., balance sheets, and audited financial statements for the past three years,
bank references, lists of principal equity owners).
6. Accreditation by the Pharmacy Compounding Accreditation Board (PCAB) is strongly
preferred; please provide documentation to support this certification if applicable.
Adapted from ASHP Guidelines on Outsourcing Sterile Compounding Services, ASHP Foundation Outsourcing Sterile
Preparation Contractor Assessment Tool, USP <797>, and Joint Commission specification LD.04.03.09.
The responses on this Request for Proposal is submitted on behalf of the organization
below, and all essential terms and conditions will be met and the responses listed above are

Name of Organization

Printed Name / Tile

Signature Date