VAWD Accreditation Benefits

Understandably, OptumRx’s decision in August 2016 to only accept billed claims for products purchased from a Verified-Accredited Wholesale Distributor (VAWD) prompted mixed reactions. It caused pharmacies to question their suppliers, and consequently, forced many wholesalers and distributors to make some tough decisions.
One of our healthcare clients who was grappling with the OptumRx decision last August recently completed NABP’s VAWD accreditation process. They found the experience to be very valuable, and said they were glad that they opted to seek VAWD accreditation.
Why? Now they are a more engaged stakeholder in the drug supply chain. It has raised their awareness about contaminated, diverted, or counterfeited drugs. They strengthened the education and training of their employees. They implemented quality standards that have improved the culture within their company. They have a much better comprehension and appreciation of their role in helping protect the public. They are proud of the role they play in the supply chain ecosystem, and the enhanced value they are providing their customers. They also came to realize that VAWD accreditation through NABP complements the Drug Quality Security Act (DQSA/DSCSA).
Need assistance with obtaining VAWD accreditation? Write or give us a call. Our experience in regulatory compliance, combined with our methodology will organize, prepare, and transform your business to meet your goal of VAWD accreditation.

To Compound or Not to Compound

If you are currently compounding, or are exploring whether to add compounding to your pharmacy services then this is must reading.
The Drug Quality and Security Act (DQSA) has far reaching implications for compounders, and the regulators who are charged with rulemaking and subsequent enforcement of the DQSA Title I provisions. Still to be finalized is the relationship the FDA will have with individual states and the respective roles FDA and state boards of pharmacy will share in carrying out their responsibilities regarding compounders.
Signed into law on November 27, 2013, the DQSA creates a new section 503B in the Federal Food, Drug, and Cosmetic Act (FDCA). Under section 503B, a compounder can become an “outsourcing facility.” The law defines an “outsourcing facility” as a facility at one geographic location or address that is engaged in the compounding of sterile drugs for human use; has elected to register as an outsourcing facility; and complies with all of the requirements of section 503B. Outsourcing facilities must comply with current good manufacturing practice (CGMP) requirements; they will be inspected by FDA according to a risk-based schedule; and must meet certain other conditions, such as reporting adverse events and providing the FDA with certain information about the products they compound. Outsourcing facilities operating under section 503B are not subject to volume restrictions on interstate distribution.
An outsourcing facility is not required to be a licensed pharmacy and may or may not obtain prescriptions for identified individual patients. FDA clarifies in its guidance that “an outsourcing facility cannot dispense a prescription drug to a patient without a prescription”. The DQSA provides that human drug product compounded by or under the direct supervision of a licensed pharmacist in a registered outsourcing facility can qualify for exemptions from the drug approval requirements in section 505 of the FDCA, the requirement to label products with adequate directions for use in section 502(f)(1) of the FDCA, and the track and trace requirements in section 582 of the FDCA. Under the regulatory framework in states today if an entity fills prescriptions it must be licensed as a pharmacy. Pharmacists and pharmacies are licensed by the states. Because of this licensure authority state boards of pharmacy will have oversight responsibilities at outsourcing facilities.
There are no exceptions to the outsourcing facility meeting CGMP requirements. A pharmacy engaged in compounding is required by the state in which they are licensed to meet that state’s mandated requirements, which are often United States Pharmacopeia (USP) standards. CGMP requirements and USP standards differ, which creates challenges for both compounders and regulators. Compounders who perform patient specific prescriptions and outsourced products at the same location will be inspected to the higher standard of CGMP.
The relationship between the FDA and the individual states is to be determined by a memorandum of understanding (MOU). The statutory basis for the MOU is Section 503A. The law creates a baseline 5% limit on interstate distribution under 503A. Unless the drug product is compounded in a state that has entered into an MOU with the FDA, a pharmacist, pharmacy, or physician cannot distribute or cause to be distributed compounded drug products outside of the state in which they are compounded in quantities that exceed 5% of the total prescription orders dispensed or distributed by that pharmacy or physician. Congress did not intend for compounders operating under the exemptions in section 503A to grow into conventional manufacturing operations making unapproved drugs and operating a substantial portion of their business interstate. If a substantial proportion of a compounder’s drugs are distributed outside of a State’s borders, adequate regulation of those drugs can pose logistical, regulatory, and financial challenges to state regulators.
FDA has proposed a 30% upper limit for pharmacies operating under 503A and located in a state that signs the MOU. On February 19, 2015 the FDA published and made available for public comment the draft standard memorandum of understanding (MOU) entitled “Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products Between the State of [insert State] and the U.S. Food and Drug Administration” The draft standard MOU describes the responsibilities of the state that chooses to sign the MOU in investigating and responding to complaints related to compounded human drug products distributed outside the state and in addressing the interstate distribution of inordinate amounts of compounded human drug products. Individual states are evaluating the draft MOU proposed by the FDA. Public comments on the draft MOU are due by June 19, 2015. Comments on this document are being accepted at
For more information about outsourcing facilities and the draft MOU visit the FDA website. If you are a compounder and want to more fully understand your obligations and options please contact us.