In this episode of RCA Radio, host Brandon Miller sits down with Jessica Schafersman, a design and development expert at RCA®, to break down the increasingly complex world of combination products—those that blend drugs, devices, or biologics. Jessica shares insights on why these products are uniquely challenging, the regulatory expectations companies must meet, and how the FDA guidance that is intended to make the submission process streamlined. From design controls and quality system integration to the importance of human factors validation and international considerations, this episode is packed with practical advice for any company entering or expanding in the combination product space.
The compounding pharmacy industry plays a critical role in modern healthcare by offering personalized medication solutions that mass manufacturers often cannot provide. But with this important role comes a complex and evolving regulatory landscape. For compounding pharmacies, understanding the distinction between 503A and 503B facilities is essential for ensuring compliance and sustainable operation.
In this blog, we’ll break down the key differences between 503A and 503B compounders, the unique regulatory frameworks governing each, and what pharmacies need to consider if they are operating or transitioning within this space.
What Are 503A and 503B Facilities?
Under the Drug Quality and Security Act (DQSA) of 2013, compounding pharmacies are categorized into two types:
- 503A Compounding Pharmacies: These facilities prepare medications based on individual patient prescriptions. They are primarily regulated by state boards of pharmacy and must comply with the standards set forth in the United States Pharmacopeia (USP), such as USP <797> for sterile compounding.
- 503B Outsourcing Facilities: These facilities can produce larger batches of medications, often without patient-specific prescriptions, and distribute them across state lines. They are regulated by the FDA and must comply with Current Good Manufacturing Practices (CGMPs) under 21 CFR Part 211.
Key Differences Between 503A and 503B
Feature |
503A |
503B |
|
Prescription Requirement |
Required for each compounded medication |
Not required for every unit; can produce in bulk |
|
Manufacturing Standards |
USP Guidelines |
CGMP (21 CFR 211) |
|
Inspection Frequency |
= state-driven |
Risk-based FDA inspections |
|
Distribution |
Intrastate (usually) |
Interstate distribution allowed |
Why the Distinction Matters
The need for stricter oversight of compounding facilities came to the forefront following the 2012 fungal meningitis outbreak traced to the New England Compounding Center. This public health tragedy, which resulted in over 100 deaths, highlighted the dangers of unregulated mass production in pharmacy settings and prompted federal reforms that created the 503B outsourcing facility category.
Today, the 503A vs. 503B divide is more than a regulatory technicality—it’s a fundamental distinction that impacts a facility’s operations, compliance burden, and market reach.
Challenges and Considerations for Compounders
Pharmacies considering a transition from 503A to 503B status must be prepared for a significant shift in operational complexity and GMP compliance requirements. This includes:
- Building and validating cleanroom environments
- Implementing full-scale environmental and personnel monitoring programs
- Data Integrity and GDP requirements
- Complaint handling system and recalls
- Conducting process validation and product stability studies
- Cleaning validation studies
- Establishing robust quality management systems (QMS)
- Preparing for FDA inspections and potential 483 observations
Many 503B facilities also struggle with aseptic processing controls, supplier qualification programs, and adequate documentation practices—common areas cited in FDA warning letters.
Strategic Advice for Compounders
Whether you’re an established 503A pharmacy or considering expansion into 503B territory, here are key recommendations:
- Perform a Proactive Gap Assessment: Understand where your current operations fall short of 503B standards.
- Inspection Readiness
- Invest in Expertise: Consider partnering with consultants who specialize in regulatory compliance and quality systems.
- Stay Informed: Keep up with FDA guidance, warning letters, and industry trends.
- Prioritize Training and Documentation: Ensure your team is well-trained and your processes are clearly documented.
- Plan for Long-Term Compliance: Adopt a continuous improvement mindset to meet evolving expectations.
Final Thoughts
The compounding pharmacy sector is under increasing scrutiny, especially for those operating under 503B provisions. Understanding the distinctions and requirements between 503A and 503B categories is critical to maintaining compliance, avoiding regulatory pitfalls, and ultimately, delivering safe and effective medications to patients.
If you’re navigating this complex landscape, now is the time to evaluate your current state and plan strategically for the future. Compliance is no longer just about meeting minimum standards—it’s about building a foundation for long-term success. Contact RCA today to speak with our experts and get the guidance you need to stay compliant and competitive in the evolving compounding pharmacy landscape.
In this article published by Pharmaceutical Technology®, Matt Cushing, VP of Quality and Science, Nelson Labs, and Susan J. Schniepp, distinguished fellow at Regulatory Compliance Associates, discuss PDA/ANSI Standard 06-2025: Assessment of Quality Culture Guidance Documents, Models, and Tools, which was published in February 2025.
Q: How can the new document from the Parenteral Drug Association (PDA), PDA/ANSI Standard 06-2025, help manufacturers and laboratories improve their culture and processes?
A: PDA/ANSI Standard 06-2025 is a consolidation of guidance documents, tools, and models to assess and improve quality culture. Companies have probably seen how the state of the quality culture can impact an organization positively or negatively. This document is a great tool to research the key aspects of culture, assess the status of your culture, and create a strategy to maintain and improve the quality culture of your organization.
Watch our FREE on-demand webinar for a deeper dive into the new Quality Standard. Click here to learn more.
Q: What is a quality culture and what does the term refer to?
A: Quality culture is something seen and felt everyday as an employee and as a consumer in our everyday lives. It is hard to put into words, but it is defined well in the PDA/ANSI 06-2025 standard as “the overriding attitude, both expressed and implied, of an organization towards quality” (1).The document breaks it down into two distinct elements: a culture of shared values, beliefs, expectations, and commitment toward quality and a structural/managerial element with defined processes that enhances quality and coordinates individual efforts. It is the cross-functional ownership of quality at all levels, as well as the beliefs and systems that drive our actions each day.
Q: What factors of a quality culture are important in the pharmaceutical industry?
A: The document has so much information on the key factors of a good quality culture. The consistent themes that stand out are:
- Leadership commitment—quality accountability, recognition, feedback loop, Gemba, visionary, strategic, enablers, respect your team, humility, trust
- Employee engagement and ownership—mission focused, striving for excellence
- Consistent standards and expectations —all sites, all teams aligned and striving for the same outcome, courage to do what is right, communicate the behaviors that you expect
- Collaboration and communication—together, sharing, learning from each other, planning
- Technical excellence—which was a newer way to group concepts that companies are familiar with, such as mature systems, competence, organizational learning, technology/innovation, and agility.
Q: Can you talk about the application of these factors in a laboratory setting and how it may differ from that of a manufacturer?
A: All of the above attributes apply and are critical for a laboratory’s quality culture, but in the authors’ opinion, some items are even more critical for a testing laboratory to succeed. In a laboratory, the main resource is people, not machines or facilities. Scientific competence and a good understanding of why things are done a certain way is paramount to producing quality results and solving problems for customers. Good leadership and employee engagement can make a huge impact on quality culture and the results achieved for clients.
Q: To what extent is the customer perspective incorporated into quality decision making?
A: The customer perspective must be embedded in strategic planning, quality systems, and day-to-day activities. The customers’ product end-users, along with their regulators, determine what good quality looks like in any particular setting. If contractors are not viewing their work through their clients’ eyes, they will miss the mark on quality. Aligning employees’ responsibilities with customers’ expectations, particularly in the pharmaceutical industry, creates employee engagement as they get excited about what customers are doing. This also creates partnerships with customers that are based on achieving mutual success. What customer doesn’t want to be understood by the provider to whom they are going for a solution?
Reference
1. PDA. PDA/ANSI Standard 06-2025: Assessment of Quality Culture Guidance Documents, Models, and Tools (PDA, February 2025).
Article details
Pharmaceutical Technology®
Vol. 49, No. 5
Page: 34
In this episode of the Ask the Expert video series, Susan J. Schniepp, distinguished fellow at Regulatory Compliance Associates, and Siegfried Schmitt, PhD, vice president, Technical at Parexel, discuss how to address an FDA warning letter citation for a failure to establish a quality control unit.
Link to the Video and Article on Pharmaceutical Technology
After an FDA inspection of a pharmaceutical manufacturing facility, any deviations the inspector might find during the inspection are reported on a Form 483 and sent to the manufacturer. If the company fails to properly respond to the agency, FDA will follow up with a warning letter. A common theme seen on warning letters is that companies fail to properly establish a quality control unit. So how should a company respond if they receive such a citation?
“Well, you see the mere fact that they actually received a warning letter means that their initial response to the observations by the FDA inspectors were considered inadequate or incomplete,” Siegfried Schmitt, vice president of Technical at Parexel, explains. “I think it’s therefore essential to admit that this shortcoming has happened, and so they should make sure that the response they now give to this warning letter is really a complete and convincing one and provides a remediation plan that will be acceptable to the authorities.
In this episode of the Ask the Expert video series, Susan J. Schniepp, distinguished fellow at Regulatory Compliance Associates, and Siegfried Schmitt, PhD, vice president, Technical at Parexel, discuss what manufacturers should do when they receive a warning letter from FDA for an insufficient quality control unit.
In this episode of RCA Radio, host Brandon Miller is joined by RCA experts Anita Michael and Arie Anahory for a deep dive into the evolving world of compounding pharmacies. Together, they explore the critical role compounders play in personalized medicine, their differences from traditional pharmaceutical manufacturers, and the increasing regulatory scrutiny they face—especially 503B outsourcing facilities.
The discussion covers:
- The origins and types of compounding pharmacies (503A vs. 503B)
- Regulatory challenges post-New England Compounding Center crisis
- Key compliance hurdles including aseptic processing and FDA inspections
- Practical advice for both new and established compounders to stay compliant
Whether you’re entering the compounding space or navigating the latest compliance expectations, this episode offers timely insights and actionable guidance.
Background
In the highly regulated pharmaceutical industry, compliance with FDA regulations is paramount to ensuring product safety and overall quality. When a large pharmaceutical company received a Form FDA 483 and warning letter across multiple of its manufacturing sites, it faced significant operational, quality, and reputational risks. The warning letter cited systemic deficiencies in key quality systems, including environmental monitoring, batch record review, corrective and preventive action (CAPA), Investigations, validation, and shop floor quality.
Recognizing the urgency and complexity of the situation, the company engaged RCA (Regulatory Compliance Associates) to guide its forward efforts for holistic corrective actions across all their sites. What began as a small-scale audit by a former FDA executive after the firm’s initial 483, quickly evolved into a comprehensive, multi-year compliance project involving dozens of RCA consultants at its peak across the various sites.
RCA’s approach emphasized indoctrinating a more robust quality culture, ensuring regulatory compliance, and implementing sustainable process improvements in order to bring the company back into (and strive to exceed) CGMP compliance as efficiently and effectively as possible.
Phase 1: Initial Assessment and Strategic Planning
The engagement began with an RCA ex-FDA executive and team conducting an in-depth audit at one of the impacted sites. This assessment focused on identifying the root causes of non-compliance and evaluating the company’s existing quality systems against FDA’s Current Good Manufacturing Practices (CGMPs).
The initial audit revealed several key systematic deficiencies at the site, which extended to the other sites within the organization. There were issues with the Batch Record Review process, resulting in inconsistencies in product documentation. Additionally, the CAPA (Corrective and Preventive Actions) program showed inadequacies, as corrective actions were either ineffective or not properly followed through. Investigations for environmental monitoring and other issues were also found to be weak, which contributed to recurring quality issues that were not fully addressed. Lastly, gaps in shop floor oversight were identified, which increased compliance risks during manufacturing operations.
Based on the findings from the original scope of work, the RCA expert developed an initial compliance improvement strategy and roadmap. This outlined the necessary interim controls and long-term sustainable system improvements. The plan was designed to prioritize high-risk compliance gaps while maintaining operational continuity.
Phase 2: Deployment of Interim Controls and Scaled Expansion by building an RCA-Led Compliance Team
With FDA scrutiny at other sites increasing, the company agreed to expand RCA’s role. RCA deployed a team of consultants with expertise in compliance, quality assurance, microbiology, and validation. Over the following two years, RCA and the firm had to scale up to the total number of consultants, embedding personnel at multiple sites to oversee the execution of interim controls and systemic improvements.
Interim Controls for Compliance Stabilization.
These included a comprehensive overhaul of the Batch Record Review process, where RCA trained company personnel on proper documentation techniques, Good Documentation Practices (GDPs), data integrity, investigation rigor, and introduced a real-time review process. In addition, the company and consultant team implemented standardized templates and checklists to ensure uniform documentation through document control systems in alignment with the CGMPS. In strengthening the investigation and CAPA system, RCA consultants helped to establish updated procedures. This included developing a solid escalation process to ensure critical issues were elevated to the executive level of the firm and assessed at all their manufacturing sites. In tandem, the collaborative firm and consultant team worked to ensure investigations and their resultant CAPAs were risk-based, data-driven and effective. They also introduced CAPA effectiveness checks to ensure the implemented CAPAs worked as designed and corrected the problem(s), as well as prevented recurrence.
Specific to investigations, RCA helped define clear workflows for documenting and addressing such issues, helped to implement a root cause analysis framework based on industry best practices, and established cross-functional teams including Quality, Manufacturing, and Quality Control to foster collaboration and improve the rigor of their investigations and CAPAs. RCA also led an initiative to help the firm mitigate a large investigations backlog.
To aid in enhancing shop floor quality oversight, RCA deployed quality experts on-site to provide real-time guidance to operations and quality staff during real-time manufacturing operations. This collaborative coaching proved to help strengthen their shop floor operations. It also helped improve the company’s overall quality culture by helping to educate personnel on the “why” things need to be done a certain way, through informal coaching, as well as formal training. It also helped reinforce CGMP compliance at all levels – from the line-level associates to the supervisors.
An ex-FDA executive and a team also collaborated closely with company executives on their FDA correspondence throughout the entirety of the project. This involved helping to draft comprehensive FDA response letters outlining the company’s remediation efforts, conducting periodic progress reviews to ensure commitments to the FDA were met, and preparing the company for follow-up FDA inspections. By maintaining direct and transparent communication with the FDA, RCA helped the firm demonstrate their commitment to quality, compliance, and continuous improvement.
Phase 3: Culture Shift and Sustainable Compliance
As interim controls stabilized and the firm improved the quality of their operations, RCA shifted focus to long-term compliance sustainability. The goal here was to impart practices which would ensure the company maintained their compliance posture by further embedding quality-centric behaviors across each of the site’s operations and quality units. This, in turn, helped to further bolster their quality culture and led to further reducing the risk of non-compliance and potential future regulatory issues.
To institutionalize best practices, RCA worked closely with executive leadership to integrate compliance objectives into the company’s current quality culture. Standard Operating Procedures (SOPs) and governance structures were developed to maintain inspection readiness, while RCA conducted training to empower internal personnel to independently sustain improvements.
In terms of monitoring and continuous improvement, RCA helped the firm to implement improved quality metrics and compliance dashboards. The dashboards helped provide executives with real-time visibility into the performance of the quality system and progress of the remediation. The result of this effort was the establishment of a strong quality culture helping to ensure implemented improvements remained effective over time.
Further Operational Efficiency Gains:
After RCA worked collaboratively with the company to streamline and improve the batch record review process, the firm was able to reduce review cycle times and improve overall right-first-time reviews. CAPA closure rates also improved, with all tasked corrective actions being completed on a more accelerated schedule, but with better depth, rigor, and overall effectiveness.
Cultural Transformation:
Employee engagement in quality initiatives saw a notable increase, shifting the mindset from compliance and quality being an obligation to it being viewed as a core value. Leadership also adopted a more proactive stance on CGMP expectations, positioning the company for long-term success and growth.
Results
RCA’s involvement in this large-scale compliance remediation effort exemplifies how a collaborative approach with the company, accompanied by expert guidance, strategic interim controls, and an overall focus on quality culture can help transform an organization facing regulatory challenges. By deploying a team of experienced consultants, —including ex-FDA executives for regulatory oversight—RCA successfully guided the company through its difficult compliance journey, helping to restore operational integrity and reinforcing a sustainable quality mindset. This case study highlights RCA’s ability to respond rapidly, scale strategically, and embed long-term quality improvements, positioning its clients for continued compliance and success in the pharmaceutical industry.