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5 rules for a compounding pharmacy facing an FDA inspection

The FDA has put greater scrutiny on compounding pharmacies since August 2016, with inspectors making preliminary assessments on compliance for patient-specific prescriptions and other rules under Section 503A of the federal Food, Drug and Cosmetic Act.

The change allows investigators to cite deviations from the current good manufacturing practices when it appears the pharmacy does not qualify for exemptions. So a compounding pharmacy, operating under the belief that it is exempt from certain requirements, can now suddenly find itself criticized for failing to adhere to those requirements.

One reason for this change appears to be the FDA’s perception that compounding pharmacies are not doing a good job of meeting the 503A exemptions. During the last decade the FDA has inspected hundreds of compounding pharmacies across the country, after having previously left the regulation of compounding pharmacies largely to the states.

Here are five rules to keep in mind when federal inspectors come calling.

  1. Don’t EVER Lie to a Government Agent.

When talking with FDA inspectors, never attempt to lie or even “fudge: facts, even if your purpose in doing so is no more malevolent than to make yourself look a little better in their eyes. Lying to federal agents is, by itself, illegal. Remember that Martha Stewart went to prison for lying — not for any substantive act of securities fraud. You should be candid, but careful. And it is better to say nothing than to lie.

All employees should understand the importance of remaining professional and courteous to FDA inspectors. But you don’t need to offer additional information.

It is always better to request that your attorney be present. If you decline to answer questions, or ask to have an attorney present, do it politely, calmly and reasonably.

Receptionists are likely to be the first to greet FDA inspectors when they walk through the door. Plan to take them from public areas such as office lobbies to a more private setting such as a conference room. The pharmacy will not want customers, vendors or employees coming through the front door asking why the FDA is there. The pharmacy should request that the inspection not begin until counsel is present. Often, the FDA will agree to this request if will not unreasonably delay the inspection.

  1. Have a Response Plan and Execute it. 

As part of your response plan, you should train key employees. It is important to anticipate potential scenarios and train employees how they should respond.

Avoid having on the response team employees involved in compounding practices, pricing, marketing, finance or other areas likely to be confidential. The FDA may want to interview these employees and it would be preferable to have a plan that is not disruptive.

The response plan should address:

  • who is responsible for receiving the inspection request,
  • who should be notified upon receipt of an inspection request,
  • how the relevant personnel are to examine and understand the inspection request,
  • how pharmacy personnel should deal with federal inspectors,
  • the applicable rights of the pharmacy and the employees during the process of the execution of the inspection,
  • how the relevant personnel are to handle privileged documents,
  • how to monitor and document the inspection process,
  • what steps should be taken to minimize disruption of the pharmacy’s regular business, and
  • how to conduct post-inspection debriefing.

As part of the planning process, the response team should have everyone’s contact information. You must have a notification tree that must be followed as soon as the first person learns of the arrival of any inspector.

As soon as inspectors show up, you should send a prepared email or text to all employees. The email should notify employees of the presence of inspectors. In addition, the email should advise employees to avoid disrupting or obstructing the inspectors and to communicate through designated members of the response team.

  1. Identify the Lead Agents.  

FDA agents carry government-issued photo identification. The pharmacy should assign one or more employees the task of checking credentials. The name and title of each government employee conducting the inspection should be recorded.

A good working relationship should be established with the lead agents so that you can discuss and resolve issues as they arise. Be firm, but reasonable. Do not let the agents just rush off without establishing some ground rules for the inspection. You need to stress the need to minimize the disruption to the business. Assign specific employees to deal with specific agents in particular places to be inspected. This will help facilitate the inspection going quietly, quickly and smoothly.

You should inform employees that if an inspector asks to interview them, they are not required to speak to him but are free to do so if they choose. The notice should include the pharmacy’s offer to provide the employee with in-house counsel representing the interests of the pharmacy, or even separate outside counsel, if appropriate, who should collaborate closely with in-house counsel. Employees should be advised that counsel, whether in-house or external, retained by the pharmacy represents the interest of the pharmacy.

  1. Monitor the Inspection. 

It is critically important to document the actual inspection. There are three issues you need to closely monitor:

  • physical and substantive scope,
  • privileged and trade secret information, and
  • employee interviews.

An inspection does not necessarily permit inspectors to seize privileged information. While the inspection is in process, the pharmacy should attempt to identify privileged documents. Pharmacy personnel monitoring the inspection should identify documents or data containing trade secrets and should catalog all such documents or data. Pharmacy personnel should monitor the inspection and record everything that is copied.

  1. Follow up after the inspection.  

Once the inspection is completed, all employees should be debriefed about the inspection. Remember that destruction of documents, data or information is never appropriate. Efforts to tamper with or destroy evidence almost never goes undetected.

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    The Hasson Law Group, LLP, is an Atlanta, GA law firm dedicated to two principal practice areas: winning high stakes disputes in the areas of business litigation, insurance recovery, and complex criminal defense, and tax, corporate and regulatory law mechanisms affecting family businesses, tax-exempt organizations and the individuals who support or serve them.

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