Compounding Pharmacy Services Agreement (503B Outsourcing Facility)

COMPOUNDING PHARMACY SERVICES AGREEMENT

THIS COMPOUNDING PHARMACY SERVICES AGREEMENT ("Agreement"), effective as of [__/__/____] ("Effective Date"), is entered into by and between:

FACILITY: [________________________________________], a [________] organized under the laws of [________], operating a [hospital / health system / physician practice / ambulatory surgery center] at [________________________________________] ("Facility").

OUTSOURCING FACILITY: [________________________________________], a [________] organized under the laws of [________], operating a registered 503B outsourcing facility at [________________________________________] ("Compounder").

Facility and Compounder are referred to collectively as the "Parties."

1. RECITALS AND REGULATORY STATUS

WHEREAS, Compounder is registered with the U.S. Food and Drug Administration ("FDA") as an outsourcing facility under Section 503B of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 353b, and is therefore authorized to compound and distribute non-patient-specific sterile and non-sterile drug products to healthcare facilities subject to compliance with current good manufacturing practice ("cGMP");

WHEREAS, Compounder is not a 503A traditional compounding pharmacy under 21 U.S.C. § 353a, and the Parties acknowledge the regulatory distinction: 503A pharmacies require patient-specific prescriptions and are exempt from cGMP if state-compliant, while 503B outsourcing facilities may compound office-stock without patient-specific prescriptions and may distribute interstate to licensed healthcare facilities;

WHEREAS, Facility desires to purchase compounded sterile and/or non-sterile preparations from Compounder for administration to Facility's patients in accordance with applicable law.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, the Parties agree as follows:

2. SCOPE OF SERVICES AND APPROVED FORMULARY

2.1 Compounded Preparations

Compounder shall compound and supply to Facility the drug preparations listed in Exhibit A (Approved Formulary), which the Parties may amend in writing from time to time. Permitted scope:

☐ Sterile preparations (injectable, ophthalmic, irrigation)
☐ Non-sterile preparations (oral, topical, suppository)
☐ Hazardous drug preparations subject to USP General Chapter <800>
☐ Controlled substances (Schedules [____]) — subject to Section 7
☐ Patient-specific preparations on receipt of valid prescription

2.2 Bulk Drug Substances

Compounder represents that all bulk drug substances used in compounding appear on the FDA 503B Bulks List or are the subject of an applicable USP/NF monograph, as required by 21 U.S.C. § 353b(a)(2).

2.3 Exclusions

Compounder shall not supply, and Facility shall not order, any preparation that is: (a) essentially a copy of a commercially available FDA-approved drug except as permitted under FDA shortage guidance; (b) on the FDA "Do Not Compound" list; or (c) outside Compounder's approved formulary or state license scope.

3. QUALITY, USP, AND cGMP COMPLIANCE

3.1 cGMP

Compounder shall comply with cGMP requirements applicable to 503B outsourcing facilities, including FDA's current draft and final guidance on 503B cGMP, facility design, environmental monitoring, personnel qualification, and stability testing.

3.2 USP Compliance

Compounder shall compound in accordance with the current official versions of:

• USP General Chapter <795> (Pharmaceutical Compounding — Nonsterile Preparations)
• USP General Chapter <797> (Pharmaceutical Compounding — Sterile Preparations), including ISO classification of compounding areas, garbing, media-fill testing, and sterility/endotoxin testing
• USP General Chapter <800> (Hazardous Drugs — Handling in Healthcare Settings) for any preparation listed on the NIOSH hazardous drug list

3.3 Pharmacist-in-Charge

Compounder shall maintain at all times a licensed pharmacist-in-charge ("PIC") who is responsible for the operation of the compounding facility under applicable state pharmacy law. PIC name and license number: [________________________________].

3.4 Certificates of Analysis and Batch Records

For each lot supplied, Compounder shall provide or make available within [____] business days of request: (a) a Certificate of Analysis ("COA") documenting potency, sterility (where applicable), endotoxin testing, and pH; (b) the master and executed batch record; and (c) release testing results.

3.5 Beyond-Use Dating

Each preparation shall bear a beyond-use date ("BUD") established in accordance with USP <797>/<795>, applicable stability data, and Compounder's validated processes. Facility shall not administer any preparation after its BUD.

4. ORDERING, DELIVERY, AND LOT TRACEABILITY

4.1 Ordering

Facility shall submit purchase orders identifying preparation, strength, dosage form, quantity, and (if patient-specific) prescription information. Compounder shall confirm acceptance within [____] business hours.

4.2 Labeling

Each container shall be labeled in accordance with 21 U.S.C. § 353b(a)(10) and applicable state law, including: established name and active ingredient strength; statement "This is a compounded drug"; lot number; BUD; storage and handling; and the statement "Office Use Only" where non-patient-specific.

4.3 Shipment and Cold Chain

Compounder shall ship preparations in validated containers maintaining required temperature ranges with continuous temperature monitoring where applicable. Facility shall inspect on receipt and notify Compounder of any visible defect, temperature excursion, or shortage within [____] hours.

4.4 Lot Traceability and Recalls

Compounder shall maintain lot-level traceability records for not less than [____] years. In the event of a recall, market withdrawal, or FDA-requested action, Compounder shall:

(a) Notify Facility's designated contact within [24] hours of initiation;
(b) Provide a list of affected lots, distribution records, and recommended actions;
(c) Coordinate retrieval, replacement, or credit; and
(d) Submit required reports to FDA pursuant to 21 CFR Part 7.

Facility shall reasonably cooperate by quarantining affected stock and providing administration records as needed for patient-level notification.

4.5 Adverse Event Reporting

Each Party shall promptly notify the other of any suspected adverse drug event, product complaint, or quality defect. Compounder shall submit reports to FDA via MedWatch (Form 3500A) as required by 21 U.S.C. § 353b(b).

5. LICENSURE AND CONTROLLED SUBSTANCES

5.1 Licensure Representations

Compounder represents and warrants that it holds, and shall maintain throughout the Term: (a) FDA registration as a 503B outsourcing facility; (b) resident-state pharmacy or manufacturer license; (c) non-resident/out-of-state pharmacy or distributor licenses in each state into which it ships, including the state in which Facility is located; and (d) accreditation as required by Facility (e.g., [____]).

5.2 DEA Registration

If any preparation is a controlled substance under the federal Controlled Substances Act, the supplying entity shall hold a current DEA registration of the appropriate class, and orders shall be transmitted via DEA Form 222 or CSOS for Schedule II substances. Both Parties shall comply with 21 CFR Parts 1300–1321 regarding ordering, recordkeeping, security, and reporting.

5.3 State Pharmacy Board Compliance

Compounder shall comply with the pharmacy practice act, regulations, and labeling requirements of the state where Facility is licensed and shall provide copies of current licenses on request.

6. PRICING, INVOICING, AND PAYMENT

6.1 Pricing

Pricing for each preparation is set forth in Exhibit B (Pricing Schedule) and shall remain firm for [____] months from the Effective Date. Compounder may adjust pricing thereafter on not less than [60] days' prior written notice.

6.2 Invoicing

Compounder shall invoice Facility upon shipment. Facility shall pay undisputed invoices within [30] days of receipt. Disputed amounts shall be communicated in writing within [15] days of invoice date.

6.3 Taxes

Pricing excludes applicable sales, use, and excise taxes, which Facility shall pay unless a valid exemption certificate is provided.

7. INDEMNIFICATION AND INSURANCE

7.1 Compounder Indemnification

Compounder shall defend, indemnify, and hold harmless Facility and its officers, directors, employees, and medical staff from third-party claims arising out of: (a) defects in preparations supplied; (b) Compounder's breach of this Agreement; (c) violation of FDA, DEA, or state pharmacy law; or (d) negligence or willful misconduct of Compounder.

7.2 Facility Indemnification

Facility shall defend, indemnify, and hold harmless Compounder from claims arising out of: (a) Facility's storage, handling, or administration of preparations after delivery; (b) Facility's breach of this Agreement; or (c) negligence or willful misconduct of Facility.

7.3 Insurance

Compounder shall maintain commercial general liability and products liability insurance of not less than $[__________] per occurrence and $[__________] aggregate, professional liability of $[__________], and product recall coverage of $[__________]. Certificates of insurance naming Facility as additional insured (where commercially available) shall be furnished annually.

8. TERM AND TERMINATION

8.1 Term

This Agreement commences on the Effective Date and continues for [____] year(s), with automatic [one-year] renewals unless either Party gives written notice of non-renewal at least [60] days before the then-current term ends.

8.2 Termination for Convenience

Either Party may terminate without cause on [90] days' prior written notice.

8.3 Termination for Cause

Either Party may terminate immediately on written notice if the other Party: (a) materially breaches and fails to cure within [30] days; (b) loses any license, registration, or accreditation material to performance, including FDA 503B registration; (c) becomes insolvent or files bankruptcy; or (d) is excluded from federal healthcare programs.

8.4 Effect of Termination

Termination does not affect: (a) obligations for preparations already shipped; (b) recall, traceability, and recordkeeping obligations under Sections 4.4 and 9; (c) indemnification; or (d) confidentiality.

9. RECORDS, AUDITS, AND CONFIDENTIALITY

Compounder shall maintain compounding, distribution, and quality records for not less than [____] years and shall make them available to FDA, DEA, state regulators, and (on reasonable notice) Facility's quality and compliance personnel. Each Party shall protect the other's confidential information and shall comply with HIPAA where protected health information is exchanged in connection with patient-specific orders, executing a Business Associate Agreement if required.

10. GENERAL PROVISIONS

Independent Contractors. The Parties are independent contractors; nothing herein creates a partnership, joint venture, or agency.

Assignment. Neither Party may assign without the other's prior written consent, except to an affiliate or successor by merger.

Governing Law and Venue. This Agreement is governed by the laws of [State], without regard to conflicts principles. Venue lies exclusively in the state and federal courts of [County, State].

Notices. Written notices to the addresses above, by hand, certified mail, or recognized overnight courier, effective on receipt.

Entire Agreement; Amendment. This Agreement, with its Exhibits, is the entire agreement and may be amended only in a writing signed by both Parties.

Counterparts; Electronic Signatures. May be executed in counterparts, including by electronic signature, each an original.

SIGNATURES

EXHIBIT A — APPROVED FORMULARY

EXHIBIT B — PRICING SCHEDULE

SOURCES AND REFERENCES

• 21 U.S.C. § 353a — FDCA § 503A Pharmacy Compounding: https://www.govinfo.gov/app/details/USCODE-2024-title21/USCODE-2024-title21-chap9-subchapV-partA-sec353a
• 21 U.S.C. § 353b — FDCA § 503B Outsourcing Facilities: https://www.govinfo.gov/app/details/USCODE-2024-title21/USCODE-2024-title21-chap9-subchapV-partA-sec353b
• FDA, Human Drug Compounding (503A and 503B): https://www.fda.gov/drugs/guidance-compliance-regulatory-information/human-drug-compounding
• USP General Chapters <795>, <797>, <800> (current official versions)

[END OF COMPOUNDING PHARMACY SERVICES AGREEMENT]