Establishing a Successful Regional Compounding Program

October 2010 : Cleanrooms & Compounding - Vol.7 No. 10 - Page #20

According to Pharmacy Purchasing & Products’ 2010 State of Pharmacy Compounding survey, a majority (64%) of pharmacy directors outsource some part of their compounding activities to third parties. Furthermore, the study found that 26% plan to increase their use of contract compounders in the future. The effect on pharmacy budgets from the move to increasingly outsource more of the compounded sterile preparation (CSP) workload is driving a simultaneous search for increased efficiencies.

Until relatively recently, a health system’s only choice for CSP preparation was either to have each individual hospital compounding their own drugs, internally on an as-needed basis (ie, a prescription was written for a patient-specific CSP triggering the preparation of that CSP), or contracting with an outsourcer for patient-specific CSPs, with some leeway for batch CSP preparation. As challenges and issues continued to arise among these options, a third method came to light; regional compounding. While each state has it’s own rules and regulations regarding regional compounding, it is evident that regionalization of CSP production has the potential to provide an economical and safe alternative to single-facility outsourcing or in-sourcing, as long as the proper steps are taken.

Compliance and Regulatory Issues

Historically, pharmacies were only permitted to prepare and dispense CSPs to patients pursuant to a valid prescription written by an authorized prescriber. The Food and Drug Administration (FDA) and state boards of pharmacy have taken a keen interest in pharmacy operations that compound inordinate amounts of non-patient specific CSPs and/or operate outside of the classic physician-patient-pharmacist (triad) relationship. These pharmacies prepare CSPs under the guise of pharmacy practice but may not be able to evidentially demonstrate that a recognized relationship (physician-patient-pharmacist or physician-patient-pharmacist-pharmacist) exists.

The practice of pharmacy has evolved, as has the need to improve patient safety through the development and implementation of new and innovative pharmaceutical care models. However, state pharmacy practice acts have not always kept pace with these changes. This issue is most readily apparent in the desire of hospitals to outsource compounding of complex and/or large volume CSPs to specialty providers. Ostensibly, this practice allows hospitals more time to focus on the provision of clinical management of patients and other cognitive services. Though this trend appears to be growing, not all states recognize this service model in their pharmacy practice regulations.

The initial requirement that only patient-specific compounded preparations may be provided has slowly evolved in some states to allow the provision of limited numbers of non-specific compounded preparations to clients. The FDA has now accepted this service creep at institutions registered with the administration. It is important to note the understanding that these operations provide institutional-specific fixed formulas, which are prepared on the hospital’s behalf.

The Regional Compounding Alternative
A continuing search for increased efficiencies has driven the development of regional compounding. Regional compounding service models are usually characterized in one of two general ways:


  • A centralized compounding model where a hospital decides to compound a large segment of their routine, institutionally fixed formulation CSPs in a central location, on-campus, thereby mitigating compounding efforts in all on-campus satellites.
  • A centralized compounding model where a multi-site hospital
  • system decides to compound their routine, institutionally fixed formulation CSPs at one location and then distribute them to their assigned locations.

The governing concept is that regionalization of compounding efforts provides an opportunity for an organization to expand its current service model, utilizing resources within the organization.

The key issues with a regional compounding service model are accountability and the facility’s ability to recall CSPs, when necessary. The ability of regional compounding to operate depends in part on the production of doses that are properly labeled, but are not labeled as patient-specific preparations. This causes some boards of pharmacy to question their definitions of compounding versus manufacturing. Working with both federal and state authorities is critical when designing any health-system pharmacy service model that is both functional and compliant to prevailing regulations.

Developing a Regional Compounding Plan
Once a health system determines a need to re-engineer their pharmacy workflow for CSP production, whether it be to update processes for regulatory compliance, to allow redeployment of clinical resources, and/or to improve waste management and reduce drug preparation costs, the first step is to develop and implement a plan.

Before completing a needs assessment for the project, it is important to establish a baseline inventory of the human, capital, and other resources employed in the health system’s current CSP process. This step will determine the amount of CSP compounding that can take place considering the number of people, compounding space, physical IV room size, compounding equipment capacity, and physical limitations of moving materials in and out of the IV room. This assessment must also consider the organization’s current USP <797>-compliance readiness.

To assess the current state, or baseline, for CSPs within the organization, each pharmacy must review their compounding needs:

  • What CSPs can realistically be batched?
  • What is the USP <797> risk level for each CSP?
  • What is each unique CSP’s chemical stability?
  • What specific BUD for these CSPs can be documented?
  • Will a specific CSP’s BUD go beyond the USP <797> guidelines and if so, what is the cost related to CSP testing?
  • How much time is required to compound each unique CSP?
  • Is specialized equipment or automation required to prepare the CSP and, if so, what is the related cost?
  • What are the storage requirements related to each CSP?
  • Is there sufficient warehouse and/or refrigeration space available for the storage of CSPs?
  • Are the CSPs going to be transported and if so, are there any special shipping requirements for each unique CSP? What is the appropriate shipping container and what is the cost of procurement and storage of those containers?
  • What is the impact of CSP compounding on the overall pharmacy resources, that is, what clinical and cognitive services are needed from the pharmacy operation to support direct patient care?

Once the baseline resources, inventory, and CSP needs assessments have been documented, each pharmacy within the health system must establish requirements for each CSP, including but not limited to:

  • Compounding time
  • Compounding methodology
  • Documented BUD
  • Batch quantity
  • Dose stability
  • Risk level
  • Testing requirements
  • Physical size
  • Storage requirements

These baseline data points, collected from all individual sites that are to be serviced by the regional compounding operation, are determined in order to allow the collective group to present an aggregate of the total expected CSP volume to the regional compounder.

Establishing a Regional Compounder
Production of CSPs usually requires a variety of compounding methodologies, and the correct methodology should be matched to each unique CSP to ensure the simplest and most accurate method is being employed. Written compounding documents are required to verify the CSP preparation process, as well as define each ingredient’s lot number and expiry used to prepare the final CSP.

A formal analysis of the computer hardware and software needs should be completed early on. This includes a determination of the number of labels needed, label stock, computer equipment to produce and control labels, backup equipment, maintenance of hardware, software requirements, testing protocols, and documentation. Written policies must be in place for the strict control of labels including printing, counting, and sample processes, as well as the attendant documentation.

A comprehensive quality indicator and monitoring system must be designed to properly test the environment, operations, and equipment on an initial and ongoing basis. Per USP <797>, the compounding supervisor is responsible for quality assurance, so the regional compounder must ensure such a system is in place. This system is paramount to confirming sterility controls are operational and not compromised. USP <797> also stipulates that beyond the simple identification of problems, this system must also be able to assist in the timely correction of problems.

A policy and procedure (P&P) system codifying the relationship between the health system and the regional compounder must likewise be established. This system ensures all operations are completed in a standardized manner, changes are addressed in a timely fashion, CSPs are properly documented, BUDs are standardized, and systemic gaps are addressed. This P&P system should not be static, rather it should be reviewed and updated on an ongoing basis to serve the pharmacy’s needs. USP <797> outlines the minimum requirements for such policies, but the list included in the chapter is not comprehensive enough to be complete.

Finally, production plans should be developed for the evaluation of any pharmacy automation or dose management software intended for use in compounding sterile products. This evaluation ensures consistently safe CSPs and provides the organization with the assurance that they have chosen their compounding methodology to meet its individual needs in terms of the resource inventory and needs assessment completed earlier in the process.

Among the considerations for determining the value of pharmacy automation and software to support CSP production are:

  1. Experience and reputation of the vendor
  2. Lease/purchase cost of any management software
  3. Lease/purchase cost for any pharmacy automation devices
  4. Ongoing cost for device disposables
  5. Service and maintenance costs
  6. Software/device setup and verification time, and its associated cost(s)
  7. Device delivery accuracy and speed
  8. Ability of software/device to promote and support best practice for compounding methodology
  9. Software/device complexity (ease of use)
  10. Device/software integration with other pharmacy systems and technologies (Pharmacy Information Systems, bar codes, etc)

Implementing the Methodology
The real work begins once the organization has assembled the necessary resources, developed and reviewed its plan, and assembled the regionalized team it will depend on to provide CSPs to its network. Health systems should consider the following individual timeframes before committing to firm implementation dates for its plan:

  • Completion of the regulatory compliance checklist for the pharmacy compounding area(s) uncovered by the situational “gap” analysis
  • Completion of the P&P review for pharmacy operations
  • Completion of competency-based learning tools (and documentation) for all compounding personnel
  • Completion of all media qualification testing (including fingertip and thumb plating) for all compounding personnel
  • Final development of the CSP formulary to be offered
  • Final development and approval of all BUD determinations for that formulary
  • Determination of the formulary review interval (quarterly, semi-annually, etc)
  • Development and approval of all compounding documentation (including all package and container labeling)
  • Verification of all processes and documentation to support pharmacy automation
  • Choice of an implementation ramp-up period (offering limited CSPs from the formulary)
  • Scheduling of regular assessment meetings between the production team in pharmacy and the end-user of the CSPs

Assembly of the key elements listed above will assist your organization in formulating a comprehensive action plan for the implementation of a regional compounding program. Whether the coverage area of your organization is several buildings or service areas on one campus, or several campuses in a geographic region, the principles are the same. The proper use of available resources both inside and outside your organization will empower your staff to provide the safe, high quality products your patients deserve.

Regardless of the service model chosen by the health system, there are key issues to recognize and address in ensuring a safe program for compounding sterile products. Challenges occur with all models, and surveys indicate that many health systems use a hybrid program of in-sourcing and outsourcing sterile compounding activities to meet their individual needs. Regionalization of CSP activities can provide an economical and effective alternative to single-facility outsourcing that can be implemented successfully with the appropriate upfront planning. In addition, outside resources (including consultants, pharmacy automation, and software tools) are available to ensure the regional compounding program meets the institution’s organizational goals and patient needs.
Lou Diorio, RPh, is a principal of LDT Health Solutions, Inc, a quality management consulting company specializing in compounded sterile preparations and regional compounding solutions. Lou is a graduate of Long Island University’s Schwartz College of Pharmacy and has practiced in and managed pharmacies in hospital, home care, and retail settings. He can be reached at

David L. Thomas, RPh, MBA, is a principal of LDT Health Solutions, Inc. Dave previously served as director of information technology operations for SoluNet, LLC, and as manager of implementation and technology development for Baxter Healthcare. Before his 15-year tenure with Baxter, Dave held hospital practice and management positions for five years. Dave is a graduate of St. Louis College of Pharmacy and can be reached at

Practice Changes and Cost/Benefit Analysis
When redesigning pharmacy practices to achieve a more efficient model of service, the fundamental question to ask is, how will re-engineering a significant process provide a
solution to present challenges?

More often than not, the impetus for questioning current practices in any organization is the result of either a budget-efficiency review or the detection of negative quality indicators relating to service. If budget efficiency is in question, a comprehensive review of expenditures and process cost/value is in order. It is not satisfactory, nor prudent, to re-engineer a process as complex as the compounding of sterile drugs based simply on a comparison of the drug and the diluent price tags against the pricing quoted by an outsourcing vendor. A clear understanding of all costs impacting the provision of each CSP to the organization is key to determining the true return on investment (ROI) that changing the CSP procurement process will incur.



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