Compounding Pharmacy Bill Clears Senate Procedural Hurdle

Legislation that would broaden federal regulation of compounding pharmacies like the one linked to last year’s meningitis deaths cleared a procedural hurdle in the U.S. Senate and could be on the desk of President Barack Obama within days.

The Senate voted 97-1 to advance H.R. 3204, removing an obstacle to eventual passage of the measure that would subject large compounding pharmacies to Food and Drug Administration oversight. The House has already passed the bill.

“This legislation is truly a matter of life and death,” Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor.

The measure would bar large compounding pharmacies from copying drugs approved by the FDA and marketed by other pharmaceutical companies.

That provision may help boost sales of drugs made by Regeneron Pharmaceutical Inc. (REGN) and Roche Holding AG (ROG), which make macular degeneration drugs that face competition from medicines made by compounders, according to an Oct. 2 report by Bloomberg Government analyst Brian Rye.

In addition, the bill would establish an electronic “track and trace” system to protect the safety of the nation’s pharmaceutical supply chain.

Meningitis Outbreak

The compounding-pharmacy language was drafted in response to a fatal outbreak of fungal meningitis that was traced to contaminated vials of an injectable painkilling steroid. The outbreak, which killed 64 people and infected more than 750 in 20 states, forced the steroid’s manufacturer, New England Compounding Pharmacy Inc. in Framingham, Massachusetts, to close.

The FDA was criticized for not acting quickly enough to close New England Compounding Pharmacy; once the outbreak subsided, the agency asked Congress to clarify its authority over compounding pharmacies.

The legislation will subject larger companies, known as “outsourcing facilities,” to FDA oversight if they agree to be inspected. Supporters said they were counting on market forces to prod these companies to submit to FDA regulation.

Small compounders that mix ingredients for individual prescriptions will continue to be regulated by states.

At a Nov. 5 Bloomberg Government conference, FDA Commissioner Margaret Hamburg called the bill “a step in the right direction,” adding, “I don’t think it’s going to be as comprehensive as we had hoped.”

Vitter Amendment

Today’s Senate vote removed a roadblock to passage posed by an objection from Senator David Vitter, who tried to force a vote on an amendment related to the 2010 health-care law.

The Louisiana Republican, who was the only senator to oppose advancing the bill, is seeking to force lawmakers to disclose which staff members are identified as working in their “official office.” Under the law, as of Jan. 1 the only health insurance those employees can get through the federal government is through the newly created insurance exchanges in each state. Congressional staff members not listed as working in the “official office” can continue to purchase insurance through the federal employees’ benefits program. The law failed to define “official office,” and an Obama administration ruling left that determination up to individual lawmakers.

Vitter had rejected an offer by Senate Majority Leader Harry Reid, a Nevada Democrat, for a vote on his amendment if he promised not to try to attach the proposal to other legislation. Vitter has said he would offer it as an amendment when the Senate debates the $625 billion defense authorization bill, S. 1197, possibly as early as tomorrow.

To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

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