This week, we will continue to review the DQSA and the specific sections that require rulemaking or other action by the FDA:

1. Withdrawn or Removed List
Already covered
2. Bulk Drug Substances List
Already covered.
3. "Demonstrable Difficulties" for Compounding
Will cover next week.

4. Memorandum of Understanding Between FDA and the States
Section 503A states that FDA, in consultation with NABP, will develop a standard MOU for use between FDA and the States that will address the interstate distribution of inordinate amounts of compounded drug products and provide for appropriate investigation by a State agency of complaints relating to compounded drug products distributed outside that State.

An individual or firm in a State that does not enter into an MOU with FDA that distributes, or causes to be distributed, compounded drug products out of the State in which they are compounded, can compound for interstate distribution outside the state only 5% of the total prescription orders dispensed or distributed by the individual or firm.

FDA announced in October 2020 the standard Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products became available for signature by the states. This MOU is an agreement between state boards of pharmacy or other state agencies and FDA. The MOU addresses interstate distribution of inordinate amounts of compounded drugs and complaint investigation by a state regulator relating to compounded drugs distributed outside the state.

FDA developed the MOU in consultation with the National Association of Boards of Pharmacy (NABP), as described in section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act). The MOU is a key public health protection in the law and is anticipated to help enhance communication and maximize federal and state resources for oversight of compounded drugs produced by traditional pharmacies.

Reducing the Risks Associated with Compounded Drugs
States, along with FDA, play a vital role in helping to reduce the risks associated with compounded drugs, while preserving appropriate patient access. For example, if a compounder distributes compounded drugs to multiple states, it can be difficult to gather information about adverse drug experiences and quality issues associated with those drugs, connect them to the compounder and take coordinated action to address a potentially serious public health problem. Close collaboration among states, and between states and the federal government may help prevent serious and widespread problems by helping to better identify adverse drug experiences and drug quality concerns across the country.

Information Sharing Network
FDA has entered into a cooperative agreement with NABP to establish an information sharing network available to the states. Through this network, FDA expects that states will have the option to collect, assess and review information about pharmacies in their states and share information with FDA as outlined in the MOU.

This tool is intended to provide an option for states and potentially reduce the resource burden of reporting under the MOU for states that choose to use it.

Expected benefits of the information sharing network:

• Information access: facilitate information sharing between state regulators and FDA on the distribution of compounded drugs interstate and complaints related to drugs compounded in the state and distributed outside the state
• Facilitate collaboration: enhance state and federal oversight and help regulators focus limited resources on compounders that present the greatest risk
• Streamlined identification: enable state regulators to identify pharmacies that distribute an inordinate amount of compounded drugs interstate and report that information to FDA

Complaint Investigations
Under the MOU, states agree to investigate complaints about adverse drug experiences and drug quality issues related to drugs compounded at pharmacies within the state and distributed outside the state. States then notify FDA about adverse drug experience and drug quality issues relating to a drug compounded at a pharmacy, if serious, or by a physician as soon as possible, but no later than five business days after the state receives the complaint. This timeframe will facilitate collaboration between states and FDA on serious issues that have the potential to affect patients in multiple states.

Inordinate Amounts and the 50% Threshold for Information Sharing
Under the MOU, states agree to share certain information with FDA about pharmacies that distribute more than 50% of their compounded drug prescription orders interstate (see III.b.1 of MOU). The MOU, however, does not place a limit on the distribution of compounded drugs interstate by a pharmacy located in a state that has signed the MOU.

States that sign the MOU also agree to report to FDA if they become aware of a physician who is distributing compounded drugs interstate.

5% Statutory Limit on Distributing Compounded Drugs Out of the State
Section 503A of the FD&C Act limits distribution of compounded drugs outside the state by a licensed pharmacist, pharmacy or physician located in a state that has not signed the MOU to 5% of its total prescription orders dispensed or distributed.

Timeframe for Signature
States may sign the MOU at any time. FDA is providing a period of one year, which concludes on October 27, 2021, for states to consider signing the MOU before it intends to enforce the 5% limit in section 503A of the FD&C Act in states that have not signed the MOU. This timeframe should correspond to a full legislative cycle for most states and allows time for states to modify their laws and regulations, if necessary.

Products Not Covered by the MOU
Products not covered by the MOU include:

• drugs intended for veterinary use
• repackaged drug products
• radiopharmaceuticals
• biological products subject to licensure under section 351 of the Public Health Service Act
• drugs compounded by outsourcing facilities under section 503B of the FD&C Act

Source: Memorandum of Understanding Addressing Certain Distributions of Compounded Drugs | FDA (Accessed May 11, 2021)

FDA is working to respond to questions from states regarding the Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products between state boards of pharmacy or other state agencies and FDA. This web page will be updated as we receive additional questions. Please email questions to compounding@fda.hhs.gov.

1. Will states have an opportunity to negotiate the language of the MOU?

No. FDA has made the standard MOU available for signature. Section 503A of the FD&C Act directs FDA to develop, in consultation with the National Association of Boards of Pharmacy (NABP), a standard MOU for use by states. Developing individualized MOUs would create a patchwork of regulation of distribution of compounded drugs interstate and it would be impractical to have individual MOUs with each state.

The MOU describes, in brackets, the state in the agreement as "State Board of Pharmacy or other appropriate State agency." The bracketed language appearing in the MOU is intended to be substituted with the appropriate name and contact information of the state.

2. Can the state solely rely on pharmacies entering information into an information sharing network to identify pharmacies that distribute inordinate amounts of compounded human drug products interstate under the MOU?

By signing the MOU, the state is agreeing to identify pharmacies that distribute inordinate amounts of compounded drugs interstate. However, the MOU provides flexibility in how the state does this, including use of tools like an information sharing network, such as the one established in cooperation with NABP. If a state that chooses to use an information sharing network is uncertain whether the information it contains is complete, the state may verify information through other means, such as during inspections. FDA will continue to work with states to address questions regarding reporting expectations under the MOU.

3. What will FDA do with information submitted by the states under the MOU?

Protecting patients is our top priority. Information submitted by the states will help inform FDA about potential for patient harm, including whether additional federal oversight is warranted. The information submitted by the states also will help inform the agency's risk-based inspection priorities.

4. What happens if a state does not fulfil the agreements under the MOU?

The MOU may be terminated upon a 60-calendar day notice of termination if a state does not adhere to the MOU provisions.

5. Can states use their established processes to investigate complaints of adverse drug experiences and drug quality issues?

Yes, states can use their established processes as long as those policies and procedures do not conflict with the terms of the standard MOU. The MOU indicates any state investigation will be performed according to the state agency's established investigatory policies and procedures, including those related to prioritizing complaints.

For example, using established procedures, a state board of pharmacy or other appropriate state agency may review an incoming complaint describing an adverse drug experience and determine the complaint does not warrant further investigation. In other cases, a state board of pharmacy or other appropriate state agency may determine that an incoming complaint contains insufficient information and investigate further to determine appropriate action.

6. Can a state that is prohibited by a state law from disclosing a complainant's name and contact information fulfil the agreed upon data reporting under the MOU?

Yes. Under the MOU, the state is agreeing to report the name and contact information of the complainant, if available, to FDA. If providing this information is prohibited by state law, FDA does not consider it to be "available" for purposes of the MOU.

7. Does "prescription order" in the MOU include new and refill prescription orders?

As stated in the September 10, 2018, Federal Register Notice proposing this MOU, "For purposes of this MOU, each refill is considered to be a new prescription order."

Source: Memorandum of Understanding Addressing Certain Distributions of Compounded Drugs: Questions and Answers | FDA (Accessed May 11, 2021)

Loyd V. Allen, Jr., PhD, RPh
Editor-in-Chief
IJPC
Remington: The Science and Practice of Pharmacy Twenty-second edition