The Devil is in the Details:  Requirements for State Boards of Pharmacy under the Draft Standard MOU Regarding 503A Compounding and Intrastate and Interstate Distribution

The FDA estimates that the burden of information collection under their newly revised draft Memorandum of Understanding (MOU) (here) and reporting to the FDA to be about 7600 hours per year per state (assuming approximately 2000 work hours per year; this equates to about four new employees per year per state).  The FDA also estimates no capital costs for the collection, reporting, and storage of this information.  What about office space, desks, computers, software, and other infrastructure costs to be borne by the states – these represent capital costs?  The true costs and burdens may be found in the devil in the details.

For States who decide to sign a final MOU (to be issued by the FDA after reviewing and addressing public comments), they must agree to:

  • Investigate serious adverse events and significant product quality complaints for compounded products compounded within the state and distributed interstate;
  • Take steps to assess whether there is a public health risk and whether such risk is adequately contained;
  • Take action, in accordance with State law, to ensure that the relevant compounding pharmacy investigates the root cause of the problem and addresses any public health risk identified in relation to the complaint; and
  • Notify the FDA no later than three business days, after receiving any of the above complaints.
  • On an annual basis, identify, using surveys, reviews of compounding records during inspections of compounding pharmacies, and physicians that “distribute” inordinate amounts of compounded drug products interstate by using the following:
  • Total number of prescription orders for compounded drug products distributed or dispensed intrastate and interstate;
  • For pharmacies or physicians that have been identified as distributing inordinate amounts of compounded drug products interstate, collect information regarding the following:
  • Total number of prescription orders for sterile compounded drugs distributed interstate;
  • Number of States in which the compounding pharmacy or physician is licensed, or into which states the compounding pharmacy or physician distributes compounded drug products;
  • Provide information whether the State Board of Pharmacy inspected for and found, during its most recent inspection, that the compounding pharmacy or physician distributed compounded drug products without valid prescriptions;
  • Notify the FDA if the State identifies any pharmacy or physician within its jurisdiction that has distributed inordinate amounts of compounded drug products interstate; and
  • Provide the FDA with the name and address, total number of prescriptions following information regarding pharmacies or physicians that distributed inordinate amounts of compounded drug products interstate; total Number of States in which the compounding pharmacy or physician is licensed or into which it distributes compounded drug products.

In the revised draft standard MOU, a pharmacy or physician is considered to have distributed an inordinate amount of compounded drug products interstate if the number of prescription orders for compounded drug products “distributed” interstate during any calendar month is greater than 50 percent (now called “the 50 percent threshold”) of the number of prescription orders for compounded drug products dispensed or distributed both intrastate and interstate by such pharmacy or physician during that calendar month.

After consulting with the National Association of Boards of Pharmacy, considering public and stakeholder comments, and meeting the public health objectives of section 503A(b)(3)(B) of the FD&C Act, FDA has revised the definition of “distribution” to exclude dispensing that occurs at the facility in which the drug was compounded.  When a drug is picked up at the facility, dispensing, but not distribution, occurs for purposes of calculating ‘‘inordinate amounts’’ under the MOU or applying the five percent limit in Section 503A(b)(3)(B)(ii) of the FD&C Act.  By contrast, transactions by mail often have a less direct nexus among the patient.  Under the revised proposed definition, drugs dispensed in-person that are later taken out of State would not contribute to reaching the threshold for inordinate amounts that would need to be reported to the FDA.

The FDA stated that it does not intend to enforce the five percent limit on distribution of compounded drug products outside of the State in which they are compounded until 180 days after FDA has finalized a standard MOU and made it available to the States for their consideration and signature.

Remember, besides the devil in the details above, the FDA may take action in appropriate cases against compounders that violate the provisions for compounding under sanitary conditions or that operate outside of the conditions in Section 503A of the DQSA.

We recommend that stakeholders carefully read the draft MOU and determine its potential impact on their operations and stay aware of upcoming Guidances from FDA in this important public health area.