What Does It Mean for a Drug to Be Regulatory Approved?

One of the risks I identified when researching For Hims & Hers Health is their reliance and focus in their compounded drugs offering. These drugs are customized formulations of commercial drugs, tailored to patients needs. Regulations do not require these medicine’s tailored versions to be approved by regulatory agencies. In my view, this poses potential health risks, especially in a large-scale compounding scenario, which is central to For Hims & Hers Health's operations.

Last week I asked in X if my followers would be interested in an article dedicated to explain in further detail what differential quality and safety approved drugs have compared to non-approved ones. As you can see below, 70% of the poll participants showed their interest in a write-up about it.

Given the limited dedication to this topic in my previous write-up and the interest expressed by my followers, this article will dive into the key differences, the regulatory safeguards in place for approved drugs, and the potential risks associated with unapproved compounded formulations.

DISCLAIMER: This article is not a recommendation to buy or sell any financial instrument, the content is educational and my personal opinion. Each person has to make his own analysis. Any action or decision you take as a result of viewing this article is your sole responsibility.

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FDA History in Brief

The U.S. Food and Drug Administration (FDA) was founded in 1906 - which makes it the oldest US federal agency dedicated to consumer protection. However, its origins trace back earlier to the work of the Bureau of Chemistry, a division of the U.S. Department of Agriculture (USDA), which was established in the mid-19th century.

The origins of food, cosmetic and medicines regulation can be traced back to the late 19^th century, a time of rapid industrialization in the United States. Industrialization caused the migration of a huge amount of people to cities in order to take industrial jobs. Consequently, time became more scarce for urban workers to fulfill their domestic duties. Already made goods were then demanded by the customers.

For example, before American families typically either produced their own butter at home. However, with the advent of industrialization and urbanization, a growing demand for commercially produced butter emerged. Technological innovations in dairy processing and distribution, coupled with evolving business models, enabled this shift.

As new manufacturing processes and technologies emerged, concerns about the safety and purity of food, cosmetic products and medicines grew, boosted by widespread public health crises caused by unsafe and adulterated food and drug products. Practices like adding harmful substances to food and selling dangerous "patent medicines" were common. Among many other reports, Upton Sinclair's The Jungle exposed the appalling conditions in the meatpacking industry, fueling public outrage and leading to calls for stricter regulations.

Public awareness eventually led to the establishment of regulatory agencies and the implementation of safety standards to protect consumers. Finally, the US government passed the Pure Food and Drug Act in 1906 and the FDA was then founded.

Drugs Approval Process

FDA involvement in an approved drug’s development process can be divided in three distinct phases:

1. Pre-clinical Trials phase

   The FDA provides guidelines on the types of studies needed during the pre-clinical phase. These include pharmacology studies (to understand how the drug works) and toxicology studies (to assess potential safety concerns).

   The FDA’s Good Laboratory Practice (GLP) regulations must be followed during these studies to ensure the quality, integrity, and reliability of pre-clinical data.

2. Clinical Trials phase

   During the clinical trials phase, the FDA plays a much more direct and active role to ensure the safety of participants, the integrity of the data, and the overall compliance with regulatory standards.

   Clinical trials involve testing the drug in human participants, and the FDA oversees this process. The FDA may inspect clinical trial sites to verify compliance with Good Clinical Practice (GCP) guidelines and ensure that data collection is accurate and participants are protected.

3. Drug Marketing Authorization phase

   During the drug marketing authorization phase, the FDA follows a holistics approach: it evaluates all efficacy and safety data from clinical trials and ensures that the drug's manufacturing processes adhere to stringent quality standards (cGMP, current Good Manufacturing Practices). The objective is to confirm that the drug is not only effective and safe but also produced consistently meeting high-quality standards.

   In this phase, the FDA assesses the design of manufacturing facilities and processes, verifying that equipment and processes are both qualified (performing as intended) and validated (consistently operating within established parameters). The FDA ensures comprehensive traceability through meticulous documentation and record-keeping, which tracks every step of the manufacturing process. It also reviews employee training records to confirm competency in manufacturing practices. Additionally, the agency conducts pre-approval inspections (PAIs) to verify compliance with regulatory standards.

   These quality controls extend beyond the core manufacturing process to include all supporting areas, such as analytical methods used in quality control (e.g., laboratory testing), stability studies, raw material control, supply chain oversight, and the qualification of service providers.

It is important to note that the processes and responsibilities described above are not exclusive to the FDA but also apply to other regulatory drug agencies, such as the European Medicines Agency (EMA). Moreover, in some jurisdictions, the requirements may be even more stringent due to the unique phenotypic characteristics of their populations. For example, Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) often imposes additional requirements tailored to the specific needs of its population.

Actual Implications to the Manufacturing Process

Having briefly outlined the FDA's supervisory and guidance role throughout the drug development and approval process, it is relevant to explain what are the implications when compared to non-approved compounded drugs.

Full Lifecycle Supervision

The FDA's supervision of approved drugs begins at the pre-clinical stage, when viable drug candidates are identified, and extends even after a drug has been discontinued, ensuring compliance with established record-keeping requirements such as retaining post-market surveillance data and adverse event records for at least 10 years to support potential investigations.

This holistic oversight enables the integration of Quality by Design (QbD) principles in the manufacturing process, encouraging manufacturers to identify critical quality attributes (CQAs) and control variability in production. Consistency and reliability are further reinforced through clinical development supervision, ongoing oversight, and long-term accountability, safeguarding patient safety and drug efficacy. Additionally, the FDA requires manufacturers to notify the agency of significant process changes through change control measures to maintain product quality.

Manufacturing Process Approval

Manufacturing processes of approved drugs are extremely well defined & tested due to the stringent requirements imposed as part of FDA oversight. An approved drug manufacturing process requires two different well-defined testing phases: qualification and validation.

Qualification is the process of verifying that equipment, facilities, and systems function as intended. It encompasses Installation Qualification (IQ), Operational Qualification (OQ), and Performance Qualification (PQ). These stages of testing help identify Critical Process Parameters (CPPs), establish appropriate operational ranges, and define relevant specifications impacting SISPQ (Safety, Identity, Strength, Purity, and Quality). Additionally, qualification aids in pinpointing and mitigating risks, providing a robust foundation for scaling up manufacturing processes.

Validation is the following step, using qualification as a basis, during validation it is verified that the manufacturing process is reproducible and consistently performed. Moreover, continuous monitoring is established. This ensures standardized and consistent quality across all produced batches.

For compounded drugs, their manufacturing processes are not required to undergo the same level of thorough investigation, testing, and monitoring as those for FDA-approved drugs. This results in limited understanding of which parameters are the most critical, ignoring how their unplanned variation impacts the final drug characteristics. Additionally, there is limited understanding of equipment and system performance and limitations, which often results in fewer meaningful quality checks, the application of less effective or irrelevant controls, and an increased likelihood of overlooked risks due to the lower level of accumulated expertise and knowledge.

Supporting Areas Regulation & Control

The FDA approval process provides substantial aggregated value to supporting disciplines like testing, labeling, supply chain control, data integrity, documentation compliance, and training by enforcing rigorous standards, fostering consistency, and ensuring integration across all functions.

The benefits of adhering to FDA regulations can be understood through examples in some of the above listed areas:

Stability testing

The FDA reviews data from stability studies to determine the drug's shelf life and storage conditions. These studies assess how the drug’s potency, purity, and safety are maintained over time under various environmental conditions.

However, compounded drugs are not required to undergo stability studies to verify how long a compounded formulation remains effective or safe. Instead, manufacturers typically determine shelf life on a case-by-case basis, taking into account factors such as specific formulations, storage conditions, etc. They also rely on heuristic guidelines, such as those outlined in USP <795> (Non-Sterile Compounding) and USP <797> (Sterile Compounding). These guidelines provide general recommendations for beyond-use dates (BUDs), which serve as the de facto shelf life in the absence of comprehensive stability testing. Examples of these heuristic rules include:

• Non-aqueous formulations: Up to 6 months.

• Aqueous oral formulations: Up to 14 days (refrigerated).

• Aqueous topical formulations: Up to 30 days.

Non-Validated QC Testing Methods

Quality control (QC) testing methods for FDA-approved drugs undergo thorough testing to confirm they measure what they intend to and produce consistent results across all batches and conditions. Validation ensures that the active ingredient’s potency, purity, and stability are accurately assessed, contaminants are reliably detected, and products comply with regulatory standards.

In contrast, non-validated QC methods often lack accuracy, consistency and reproducibility, making it difficult to ensure batch-to-batch uniformity. They may even not be suitable for performing the intended analysis, failing to detect contaminants or active pharmaceutical ingredient (API) content, leading to risks of ineffective or unsafe medications. Inaccurate potency measurements can result in under-dosed or over-dosed products, causing therapeutic failure or toxicity.

Lack of Supply Chain Oversight

By enforcing standards for raw materials, conducting regular audits, and maintaining detailed records, the FDA minimizes risks of contamination, counterfeit ingredients, or substandard raw materials.

In contrast, compounded drug manufacturers often lack the rigorous supply chain controls mandated by the FDA, resulting in significant risks, being more susceptible to variability, contamination, and counterfeit materials. Weak documentation and oversight reduce accountability and complicate problem resolution, increasing the likelihood of patient safety concerns.

I am generally not a supporter of government intervention in citizens' lives, including in business operations. However, I believe the strict methodologies and control systems established by various drug and medication regulatory agencies worldwide add significant value for patients. While this approach may not always be the most cost-effective, it ensures that manufacturing standards evolve alongside scientific advancements and regulatory updates. This promotes consistency throughout the lengthy process of developing and commercializing a drug—often spanning several decades—ultimately leaving a lasting positive impact on society.

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